Managing Sustainably- views from or about China

HRM Forum- discussion (sorry but some of the formating has been lost when posting. If you would like a clearer document please email me and I will send a word document with formating etc)
Below I have made a swift review of the themes and issues which may be present when people, organisations and countries attempt to manage sustainably. If this review prompts your interest, or causes you to agree or disagree can you send your views and comments on the HRM Forum site or to my personal email address (wesharry@btinternet.com). Theresa will consider developing this topic for a discussion paper in the HRM journal.

Managing for sustainability
The resources of the world are not shared equally by nature or by the human race. These resources are insufficient for all or even most human beings to have the material standards of living of the richest people. The resources are insufficient for the industrialising and urbanising countries to have the same standards of material wealth as the already industrialised (and post industrialised) and urbanised countries. The access and distribution of resources to people creates challenging dilemmas for politicians, commercial interests and to the human race.
We believe that there is scope for HRM practitioners and academics to contribute to understanding of these challenges and through understanding and debate enable potential solutions to be considered and maybe even implemented. We will value the responses and suggestions from members of the HRM forum to the challenges and dilemmas discussed below.

No growth for rich countries
The challenges for HRM in the industrialised and urbanised countries (mainly those described as being the ‘Western’ countries of Europe and North America but including Japan and Australia) are different from those challenges facing the poorer countries and are likely to involve managing with less or at least managing with no more. Western countries will have to find ways for their population and organisations to manage with the same or less while the rest of the world strives to catches up in material standards of living.
So much of HRM is driven by expansion with occasional bouts of shrinkage while organisational or economic re-structuring takes place. Westerners finding ways of managing with no growth in material standards of living might contribute to sustainability but will these people and organisations be willing to manage with no growth? Below we have highlighted the possible impact on western management (specifically but not only HRM) of a period of no growth in the West to enable some closure of the gap in material standards of living between the ‘developed’ and ‘developing’ nations?
No growth would have implications for:
• REWARD.
With no growth there will not be a ‘bigger pie’ of resources (dividends, profit and pay) to be shared with stakeholders such as shareholders, management and workers faced with no regular pay increases.
How can HRM adjust reward strategies and operational management to meet static resources and no general pay increases?


• STAFFING
With no growth there are unlikely to be increases in the size of organisations so there will be a reduced need for recruitment, fewer promotion opportunities and less demand to outsource functions.
How can staff be motivated and enthused when they might beheld in the same job or at least the same organisational level for long periods of time?
• LEARNING, TRAINING AND DEVELOPMENT
With no growth in organisations and many resources being diverted to the industrialising and urbanising non-Western countries learning, training and development might become focused on doing more with less or the same levels of skills rather than expanding skills.
Will staff become disillusioned and decided not to improve their knowledge and capability?
Will education and learning be seen as a waste of time for the citizens of rich countries who will see most resources being spent on those who are endeavouring to catch up by increasing their knowledge and abilities?
• SATISFACTION
With no growth the owners, managers, workers and populations in general will have to learn to ‘do more’ rather than to ‘have more’.
Will people in the West be happy and content to ‘do more’ for the benefit of humanity and the world?
Will the people of the West resist sharing for the common good?
Will work lose its purpose and its value?
There must be other implications for no growth in the West and we welcome suggestions of what these might be along with potential questions and solutions?

Slower growth for poor countries
For many in the industrialising and urbanising countries (especially in China, India, Brazil and South-east Asia) life is getting better and changes are happening fast. But the improvements come at serious environmental, economic and human costs. The elites of these countries are doing very, very well while the mass of the population struggles to survive and try to prosper. Although China probably is the world’s third or fourth largest economy the Gross Domestic Product of 1.3 billion people is similar to that of the 60 million living in the UK- so the material standard of living of these Chinese is much, much lower than that of the average Briton.
The majority of the population in the non-Western countries aspire to achieve the standard of living of the richest nations- if not for themselves then for their children and grandchildren. But the rapid growth of the past decade is ruining the environment and using up resources fast so that it has become difficult to feed and maintain the health of the children of the majority of the poor people.
Although the media in the West suggests that the developed world might suffer from the impact of shortages of commodities and the environmental damage and although consumers in the USA might complain about the $4 gallon of gas it is the poor in the developing world where the most polluting industries and process have been located that suffer- today. It is the poor who have to deal with the price of staple foodstuffs doubling in a year and for whom food forms the bulk of their daily expenditure.
The poor hope that they will soon have the same material standards as those of the Western workers but this is not a sustainable expectation. The world’s resources cannot be used or redistributed so quickly. So the growth in material wellbeing, for the majority of the populations, in the developing countries will slow down within the next 5-10 years.

Slower growth has implications for:
• HEALTH SAFETY AND ENVIRONMENT
The abuse of HSE is a theme which the Western media, Non Government Organisations and Trade Unions focus their attention upon in relation to ‘unfair work practices’ and Western employers are cynically claimed to view as ‘unfair competition’. The population of Western countries have grown used to the removal of risk from work life and if an incident or accident occurs then someone is blamed (and sued). In the developing world risk is accepted (or an acceptable) part of life. This willingness to risk HSE hazards is often driven by poverty but is exploited by employers and governments. The damage being done to the environment which all humans share is a major factor in causing Westerners to think of managing sustainably.
If environmental damage continues to rapidly increase even while growth slows in the poorer countries will Westerners (and the population of developing countries) successfully argue that managing sustainably is a waste of effort- so encouraging rapid expansion in the developed and developing countries?
If developing countries do take HSE issues seriously will this lead to improvements in work practices and / or loss of competitive advantage?
Will workers, in developing countries, continue to accept short term material benefits for longer term harm t their health?

• WORKERS’ RIGHTS.
So much of the competitive advantage of the industrialising and urbanising countries is based on masses of workers entering the workforce from rural and poor areas and on the abuse of workers by employers. Where trades Unions exist they are usually lacking in power or their power is used for political ends unconnected with the interests of their members.
Workers are regularly played off against each other by employers who say that there are lots of workers available in the rural areas, in other countries or with other employers who will be glad to take over their job if they insist on their rights being recognised. What will be the implications for the workers and employers of continuation of harsh employment practices but with a lesser expectation of growth in living standards?
Employers regularly abuse the limited rights of workers by bullying, exploiting and not paying promised amounts or making unfair deductions from wages. Will the Western nations put pressure on those aiming to catch up to share the benefits more widely- and would pressure succeed?
Trade Unions and government labour officials support employers and rarely seek enforcement of workers’ rights. Will more affluent and maybe better informed workers seek more support from their Trade Unions and from the consumer and activist groups in the home and other countries?

• REWARD AND DEFERED REWARD
Employers base their reward policies and practices on cheap labour. Quality is of little importance compared to quantity so high production targets, piece-working, payment by (narrow, short term, quantified) results are the norm. Cost control is the driver of worker reward (and cost pressure usually originates from foreign purchasers). Added value through application of skills is not encouraged.
As developing nations improve their standards of living will the rewards be shared with the workers?
Will workers (and employers) invest in long term productivity by rewarding contribution?
Incentives currently are short term (based on recent production) because workers do not trust the employer to meet commitments over the longer term (beyond the next month) and employers are not sure of still being in business in the long term. Will a longer term orientation (by employers and workers) result from improving standards of material standards of living?
• LEARNING AND PERSONAL DEVELOPMENT
For most people there are insufficient reserves of capital to enable time to be taken to acquire skills and knowledge. Even educating children means depriving a family of income- hence the continued prevalence of child labour (although often hidden in the family smallholding or small business enterprise). If adults are to take time off from earning a wage to increase their learning this will be in the expectation that they will be able to recover the lost opportunity costs of the time spent learning by having higher wages on return to the labour force.
If growth slows might workers and potential decide that the opportunity costs of learning are not recoverable?
If workers acquire higher learning levels might the employers decide that they are overqualified (or are potential troublemakers) so will not employ these candidates?
Will ‘thinking workers’ be encouraged or will they be considered a threat to employers’ power?
If the workforce in developing countries improve their learning and personal development might this be seen as a greater threat to the Western workers by enabling their employers to move up the ‘value chain’ of production so encourage further barriers to trade against the developing countries?
• SAVINGS AND SPENDING
With a lack of consumer goods and attractive services (especially outside the major cities) in developing countries and with a fear of the cost of unexpected crises, especially in health or infirmity, workers in the developing world tend to save much higher proportions of their wages than those in the West.
Will increased moderate affluence cause high savings be replaced by high spending?
If savings are reduced what will be the implications of such higher spending- including seeking jobs with less employment stability but higher immediate reward.
There must be other implications for slower growth in the developing countries and we welcome suggestions of what these might be along with potential questions and solutions?

Dealing with disappointment

The gap between the rich and poorer countries will not close as quickly or as fairly as people imagine and hope. Where people will struggle hard for a short time to have improvements and will put up with abuse (by employers and governments) with the expectation of much better material standards of living in the future they will be bitterly disappointed if the benefits of their efforts continue to go to the rich local elites and consumers in the rich Western countries.
The effort to catch up, and the slower than hoped for benefits of these efforts, will have implications for the politicians, owners, managers, workers and the population in the developing countries. A lack of progress by the majority of people in these countries will be seized upon by Westerners as a reason, or excuse, not to live a sustainable lifestyle themselves as their forgoing of benefits does not help the majority of humanity but only helps the elites in the West and the elites in the developing countries.
The disappointment of uneven benefits of managing sustainably would have implications for:
• CONSUMER BEHAVIOUR
At the present time Western consumers gain much by having cheap products from the developing world. Inflation is kept lower in the West due to reducing prices for electrical goods, clothes and other products from the developing world while wages are kept in check due to fear of jobs being lost to foreign locations. However the main benefits of current unsustainable developments have been the rich (including the relatively rich such as Western consumers) rather than the poor. Although it must be said that for the poor rural worker in India or China a factory job with all its bullying and HSE risks is probably better than a job tilling fields or breaking stones.
If the rich are the main beneficiaries of managing sustainably will Western consumers refuse to forgo increased material standards of living?
If the majority of the population in developing countries have no faith in the future being better will they chose to spend today rather than saving for tomorrow?
• PURCHASING DECISIONS BY BUSINESSES
In the drive to cut costs (for the benefit of owners, shareholders and senior management) work tasks have been moved to ever cheaper locations- so, for example, trainer shoe production moved from the USA to Indonesia to Vietnam to Cambodia often at short notice with little regard to the impact on the host community of creating jobs then discarding jobs.
Will host countries accept cost driven purchasing decisions or will they (as Singapore has done over the past 25 years) drive up the cost of employing local labour so that employers and buyers are focused on quality and moving up the value chain- and employees seek to improve their learning and capability to earn higher wages?
Will sub-contractors and outsourcing continue to be used as a means of driving costs and avoiding responsibility for abuse of workers?
• POLITICAL MOVEMENTS
In the West many within political movements assume that if the population in foreign countries gains from attempts to manage sustainably then the population in the West must be losing from these attempts (losing increased material standards of living, lost opportunities or lost jobs). Conversely some with political movements in the developing world believe that managing sustainably is an attempt by Westerners (whose ancestors destroyed their own environment and polluted the earth) to maintain their gains and prevent the rest of the world’s population catching up.
Is managing sustainably sustainable? Will short term self interest prevail in developed and developing countries?
Can there be a world consensus on what is a reasonable share of the world’s resources and a reasonable material standard of living for all?
There must be other implications for slower growth in the developing countries and we welcome suggestions of what these might be along with potential questions and solutions?

Thank you for reading this document.
Wes
wesharry@btinternet.com