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Monday, March 11, 2013

International Banking Risks in China

Back in 1970s, the implementation of various economic reforms was the focus of China. These reforms in turn resulted to a number of effects not only to the country itself but to other foreign countries as well. Before these reforms were implemented, China originally practices the command-type of economy where a significant portion of the Chinese economic outputs are regulated and distributed by the administration. The Chinese government used to be in charge of controlling market prices, establishing production objectives and allocating resources as well. While implementing this economic approach, China encountered several problems especially when the industrial period arrived. In order to cope with this period’s challenges, the country allocated large scale investments on its human and physical resources. Due to this movement, majority of the country’s industrial production was operated by state-owned enterprises (SOE); this however, prevented foreign investors and other private companies to operate in China. The purpose of letting the state own most of the economic resources is to prevent China from depending from foreign support, making the country self-sufficient. International trade was then limited to the importation of goods that was not available or produced in the country.

The constrictive Chinese policies however led to economic inactivity and inefficiency; there were limited profit incentives derived from both business and agricultural sectors. In addition, with this type of economic system, no competition was observed. As a result, progress was unattainable. This system also made the living standards in the country lower than other developing nations. The outcome of the traditional economic system then encouraged the Chinese government to come up with effective reforms that will augment the people’s living standards and the overall economic state. With the implementation of reforms, China’s major economic sectors naturally went through significant changes and development. While the reforms could have resulted to positive outcomes, certain risks are still likely to affect it and its neighboring countries. In this research, focus will be placed on the country’s financial sector, particularly on its foreign banking opportunities. The different risks involved in establishing foreign banks in the country as well as the ways on how to address them will also be highlighted in this discussion.

The Chinese Financial Sector
It was during the early 1980s when China first implemented reforms on its banking sector. This reform was focused mainly on the creation of four specialized banks separate from its central bank. The banks worked under monopolistic operations, concentrating the competition on acquiring more depositors. Eventually, bad loans started to affect the system, which resulted to quality deterioration of assets, excessive risk-taking and inflationary credit expansion (Cheng & Cheng, 1998). China then implemented new banking reforms in 1993. This time, the focus is on asset quality improvement, reestablishment of public confidence and development of genuine commercial banks. Though several analysts noted that the current Chinese banking status and general financial sector are still underdeveloped, the reforms had given the country several benefits like increased GDP and foreign direct investment. With these changes, international countries are very mush interested in putting up businesses like foreign banks in China. In addition, the country’s entry to the World Trade Organization (WTO) further increases the opportunity of foreign countries in accessing the large Chinese market. Nonetheless, analysts warn foreign investors of the different risks involved in establishing banks in the country.

Operational Risks
Among other types of risks, the operational aspect is perhaps the most complex as several factors (e.g. management, political, governance) are involved. One of the main operational risks that foreign investors can encounter in putting up banks in China is the problem on extensive administrative influence as well as the instability of regulations. As claimed by various foreign investors, the success of firms in China appears to be connected to government relations rather than to the market forces. Moreover, due to inadequate rules and regulation, problems such as investment misallocation, financial speculation as well as corruption had been rampant. International firms, particularly those in the west, usually encounter difficulty in operating in China due to lack of consistent laws. The improper enforcement of the contract as well as the lack of protection granted for intellectual properties are typical concerns as well (Morrison, 2005).
While banking entrepreneurs become attracted to the Chinese market economy, they must prepare themselves to various legal risks and issues. As pointed out earlier, the Chinese government has a significant authority over the country’s businesses. Policies and regulations applied in the Chinese business industry are subject to changes; hence, foreign entrepreneurs must be prepared to adjust. Considering that the country’s economic regulations and bureaucratic framework are still developing, changes are then inevitable (Humberg, 2003). The legal and regulatory aspects of the Chinese banking business are relatively unstable despite the reforms and developments conducted (Hu & Hope, 2005). Some legal practices in China are also different from the other common international practices. The issuance of a contract for instance, is a final matter in western cultures. However, contracts can change unexpectedly in China (Overby, 2000).

According to Hu and Hope (2005), the internal operations of Chinese banks are also problematic. The corporate governance of the country’s banks for example, is not very conducive for checks and balance systems. This problem is mainly rooted on the inadequacy of effective board members and independent directors. The banks’ culture on full disclosure should also be developed based on best and effective standards. This problem can greatly affect foreign bank operations since it is likely that its main workforce will be derived from the Chinese workforce pool, considering that it is less costly this way. If this will be done, employees and the board will expect usual corporate governance practices. Though foreign entrepreneurs can do some changes on its own banking governance once they start operating in China; the problem is whether these changes will be allowed or tolerated.

Interest, Credit and Liquidity Risks
China is relatively weak in terms of its credit or loan systems, considering its observed poor performance. The banking sector of the country is neither appropriately regulated nor properly managed. For instance, greater than 22% of the loans held by the state commercial banks are bad; young stock markets are also suffering the same state (Wu, 1998). Due to the poor state of China’s banking sector, Chinese reformers became even more hesitant to offer its banking sector to foreigners. In banking and loans, political connection is an important element; this in turn worsens the corruption within the country’s banking system. In addition, this practice widens the economic inefficiency of China as savings in general are not allocated based on the possibility of returns (Morrison, 2005). If no improvements will be done for China’s financial sector, instability is a possibility.

In order to resolve its problem on bad loans, China had decided to implement a new loan system (five-classification loan-grading system) that is based on international standards. Initially, China practices the four-classification system, which gravely defective. With this old system, endless speculations had been raised primarily on non-performing asset levels and inadequate provision of loans. While the new loaning system may benefit the country and resolve some of its financial issues, the effect of which is yet to be observed and evaluated. The possible success of this new approach is largely dependent on how Chinese regulators can effectively administer its execution (Hu & Hope, 2005). For new entrepreneurs, new systems that are not yet fully tested and guaranteed can be risky. It is then difficult to believe on the efficacy of this alternative unless concrete outcomes have already been obtained.

In terms of interest rate, regulations tightly control this banking aspect for foreign banks, making them less attractive for the market. In addition, the People’s Bank of China, the country’s central bank, is greatly protecting local banks particularly the four major banks developed during the initial reform for the financial sector. This then allows the country to cover about ninety-percent of the total lending activity (The Banker, 2001). The risk for liquidity is also a matter of concern for entrepreneurs planning on investing a banking business in China. Considering that the country had just gone through a major financial crisis during the latter part of the 1990s, liquidity in the country was greatly reduced, along with the decreasing GDP, falling export rate, declining retail price index and the slowing down supply of currency.

Market Risks
The market risks involved in foreign bank establishment in China is mainly caused by the country’s entry to the WTO. Before China joined the WTO, foreign banks that have renminbi (yuan) licenses were only supposed to lend renminbi from their deposits; access of these banks to interbank market was also prohibited, which greatly affects their capability to make loans. However, when China entered the WTO, the right to lend renminbi became limited to foreign banks that had been allowed to do this type of business. The provision of the licenses however, was only given to few selected banks. This in turn, makes the access of foreign banks to the Chinese market very restricted (The Banker, 2001).

The access to market is also greatly affected by China’s protection to its domestic firms. Local companies, including banks, had been complaining to the Chinese government and claimed that the policies implemented by the administration greatly favor foreign firms. For example, if a major foreign bank operates in China, most of the local companies offering similar financial services have no option but to close down. Eventually, as more foreign investors enter the country and operate within its banking industry, majority of the players will be foreigners. The Chinese administration is then concerned that if this will continue, more domestic industries will suffer (Chen, 1998). Hence, the government decided to control the entrance of the foreign firms in the country.

This in turn led the government to reduce the policies in favor of the foreign enterprises. In 1996 for example, the Chinese administration decided to cut down the value-added tax refund among foreign companies for exported goods from 17% to 9%. China has even planned to take out the privileges granted to foreign investors for importing capital equipment tax. This clearly implies that the country’s government has been more selective in accommodating foreign firms, which greatly limits foreign banks’ access to market (Chen, 1998).

Banking Risks in other Nations
Establishing a bank in other parts of the world such as those belonging in the European Union may be more advisable for some entrepreneurs. There are many reasons for this judgment. One of which is the fact that the European Union is a vast region of countries whose level of development varies. This means that EU offers business areas that are less developed than the other, giving better opportunities for foreign banks. Rules and regulations are likely to be more stabilized in some European regions as compared to the Chinese business setting. Tariffs or barriers to entry like taxes may also be lower in other European countries, making foreign entry less difficult. Most importantly, market diversity in EU is far larger than in China, making access to opportunities and market growth easier.

Nonetheless, it should also be considered that certain risks can also hinder the development of a foreign bank within EU. For instance, the presence of higher competition level is likely, considering that multiple local and foreign banks will be operating within the region. Moreover, though laws and regulations may be stable, differences in banking policies, operational practices and other relevant factors may make market access not as easy. From this standpoint, it becomes clear that establishing a bank in any foreign country has its advantages and downsides. This suggests that foreign entrepreneurs must be skilled in handling this possible business risks.

Means of Addressing the Risks
China and its banking sector have a lot to offer for foreign investors; however, the country and its administration must improve some of its banking aspects not only to make China more appealing to entrepreneurs but also to prevent business issues. One of this means would be the stabilization of its business laws and banking legislations. The country must have a definite ruling for both domestic and foreign banks in such a way that both will benefit from. While the Chinese government is protecting its local banking sector, it must also employ means that will make foreign bank investors less cautious. The restrictions should also be implemented at a reasonable level (Chen, 1998).

China has in fact, conducted several changes so as to be more open for foreign banks. For instance, it has attempted to improve its corporate governance by requiring and encouraging banks to introduce governing boards. Moreover, approved accounting firms are now used for auditing. Operational risks are also being handled by strengthening balance sheets; financial statement definitions are also slowly being accomplished based on international standards (Moreno, 2002).

The foreign investors themselves can apply certain means to safeguard their businesses from these recognized risks. One of the important strategies that firms should consider is to operate alongside a local business partner (Overby, 2000). This will help the firm adapt easily to the Chinese business environment. A local partner can also assist in learning the Chinese culture, practices, regulations and means of interaction. More importantly, a Chinese business partner can also help in achieving progress faster. Training the staff becomes even more important in foreign business ventures. The workforce must be supported fully particularly in adapting the business’ new concepts, standards and technologies. The management should ensure that the local staff is also well-adjusted to the new system so as to encourage them to contribute more for the business (Humberg, 2003).

In general, the investors can start off by analyzing the business environment they wish to invest on. It is important that business entrepreneurs are aware of the distinct features of each foreign setting; in this way, the investors will know how to address in the most effective way. If for example the foreign bank entrepreneur is from the West, establishing a bank in China will naturally make western and eastern difference apparent. As discussed by Ambler and Witzel (2003), Western and Chinese origins have distinct differences on various aspects like politics, philosophy, society and history. Hence, it is imperative that entrepreneurs understand their foreign prospects well. From this aspect, learning and adaptation are perhaps the two most important factors that should be present.

China is very appealing for entrepreneurs particularly because it offers low labor costs and a large market; similar factors have also encourages foreign banks to operate and establish branches in the country. Nonetheless, operational, credit, liquidity, interest and market risks are present, which can greatly affect foreign investors’ business goals. If banks will be established to other regions, the type and degree of risks may be different; however, risks in the banking business, irregardless of the environment, are omnipresent. For this reason, the foreign countries open to international trade as well as the investors themselves should have the appropriate qualities that will promote harmonious business relations. In conclusion, successful foreign business operations are not solely dependent on capital, connections and people but on the ability to learn, change and adapt as well.

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Ambler, T & Witzel, M, 2003, Doing Business in China, Routledge, London.

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Tuesday, February 14, 2012

Career Management in an Organisation

Literature Review

With the fast paced and unprecedented development of the workplace, every organisation must grow in correspondence with the changes (Hall & Moss 1998; Metcalf & Briody 1995; Watts 1996). In order for an organisation or industry to be more competitive in the marketplace, the management must always see to it that they use a management system and strategy that would sustain the capability, strength and competitive position (Pearce & Robinson 2000; Thompson & Strickland 2003). Industries which consider changes with their management system or any other critical aspects of their business operation are those industries which are aware of the positive benefits that these changes may bring (Yee 1998). Hence, the emergence of effective career management is vital and goes hand in hand with career development.
Career management (Wikipedia 2006) is the process of making career choices and decisions, managing the organizational and boundless careers, and taking control of one’s personal development. As applied to an organisational level, it is the key to achieve goals of ensuring the skills and competencies of people for future employment and management of new work and life realities (Moses 1995). For organisations need people who are multitalented, effective in managing changes, and adaptive to new organisational directions, career management serves as the key for individual and organisational development.
In view of this, the researcher has referred to several existing articles and studies that have presented different views on how career management affects an organization. The gathered literatures have been compared, collated and referenced by the author. It is greatly believed that the cited literatures have sought to quantitatively and qualitatively analyze the effects of career management, thus they have been included in this review.
By conducting this literature review, the researcher may: discover precise recommendations for further research and thus may find justification for one’s own research objectives; avoid repeating works that has been already done; gain noteworthy insights into the aspects of one’s research objectives; and, discover research approaches, strategies and techniques that may be appropriate to one’s own research (Gall et al. 1996).

Career and Career Management
    Career is a course of a person’s successive situations in his/her work life (Wikipedia 2006). For the past decades, it has been figured out by experts to plan and design career. Hence, career management was innovatively introduced to serve as the blueprint for success.
    On an interview, Rowan Manahan of Fortify Services, he believed that: “full-on career management requires professionalism, total commitment and large reserves of enthusiasm and energy every step of the way.” He added that career management is not an innate talent but a process to be learned. It is not a ‘frivolous luxury’ but a ‘necessity’ in the workforce. Career management is, at its most fundamental level, all about survival in these increasingly uncertain times. It is about carefully building and nurturing people’s skills and reputation (Manahan 2004).
The concept of career management has expanded in recent years because of ‘simple economics’. (Manahan 2004) People recognise a need for it. A comprehensive review of how diversified organizational career management techniques influence business strategy was documented by Stumpf (1988). Literatures on individual and organisation career planning indicate the variation of goals and responsibilities of each. The extent of career management creates stronger organisational incentive to promote efficiency; firms are likely to restructure employment relationship toward more meritocratic distribution of material rewards and career chances (Pfeffer & Salancik 1978). Individual and organisational career management offers advances for career progression. The most excellent career management systems combine these advances in order to achieve its respective objectives (Schein 1978; Vardi 1980). For instance, in building alternative career management systems on future officer (Berends et al. 2001), organizations used variations available to policymakers in the design features of four personnel functions such as accessing, developing, promoting, and transitioning. These personnel functions integrate the individual's capabilities with the requirements of the position and affect outcomes. Manipulating personnel functions can provide variation within a career system depending on the choices made about the system's various aspects.
Furthermore, Ornstein and Isabella (1993) and Chartrand and Camp (1991) presented extensive literature reviews from the employee's perspective, while Feldman (1989) and Russell (1991) provided summaries of the research from the organizational perspective. In connection to the role of human resource management, Vaughn and Wilson (1994) described a technique to help human resource specialists, line managers and interested employees identify previously uncharted career paths for internal transfers using Job Trees. In this article, the authors combined some of the traditional skill identifications with organizational trait characteristics, work flow patterns, and existing internal and external relationships representing how the organization actually operates.
The prevalence of formal employment in the urban economy necessitates a fine-tuned fundamental model that takes organizations into account (Stolzenberg 1978). Although spontaneous routines may indeed emerge in response to state plans and other external demands (e.g., Stark 1986), insofar as bureaucratic control dominates organizational design
    The anthologies of researches and studies on career management obviously tackle to the systematic and progressive growth of people’s and organisation’s careers. It primarily dealt on the subjects of individual and organizational development and improvement. Using such references, it could be supposed that career management is applied as essential aspect of management in order to go along with the current changes of the competitive marketplace.

Planned Happenstance Theory
    In the discussion of career management, the presence of Planned Happenstance Theory is expected. It provides a strong framework from which to research career management. As a career theory, planned happenstance offers an additional dimension to Krumboltz's (1979) career decision-making model (Mitchell, Levin, & Krumboltz 1999). Within this career theory, there are several individual attributes and attitudes acknowledged as potentially helpful in managing careers in the often chaotic world of work. As understood, the ideas of curiosity and openness from this theory is a commitment to continuous learning and skill development–which involves ongoing self-assessment and realistic feedback from others, as well as “benchmarking” skills and keeping them current. This is central to most literature on career management (Bridges 1997; Hill 1998; Kaye 1997; Kidd 1998; Moses 1995, 1999; Porter, Porter, & Bennett 1998; Shahnasarian 1994).
    There are five attitudes that are essential to recognizing, creating, and using chance as an opportunity (Hagevik 2000):
1. curiosity - which will prompt you to explore new learning opportunities;

2. persistence - which means you exert extra effort despite setbacks;

3. flexibility - which enables you to change attitudes and circumstances;

4. optimism - which will allow you to view new opportunities as possible and attainable; and

5. the willingness to take risks, which will enable you to act in the face of uncertainty.

A good career management theory must account for the limited degree to which workers have control over their own career experiences and satisfaction and organizations have control over the work environments that they provide. Gelatt (1991) spoke of approaching careers with an attitude of “positive uncertainty.” Further, Savickas (1997) suggested that “career adaptability” may be the core construct in Super’s life-span, life-space theory. Literature from employer surveys that flexibility, adaptability, and problem solving skills are held in high regard in the corporate world (Business Council of British Columbia 1999; Corporate Council on Education 1992). Many recent articles have recognized the impact of “serendipity” on career management, especially in these times of rapid change (Krumboltz 1998; Watts 1996; Williams et al. 1998).

Effects of Career Management in Organisations
The issues of career mobility and employment relationship cannot be adequately addressed without systematic incorporation of organisations. Given the longstanding theoretical and practical interests in markets and economic development (e.g., Bates 1989; Evans 1995; Sachs 1992), important questions related to the impact of career management on organisational practices in hiring, promotion, and compensation have yet to receive their share of attention. However, career management effects on every organizational environment are undeniably useful.
One persuasive reason on why organizations offer career management is that the process serves as a means to recruit and retain the best employees for the job to sustain competitive advantage. Believing that the most important asset of a business is the people, appropriate recruiting and retention of workforce to achieve sustained business success is vital. Therefore, the crucial role of human resource professionals in career management must include employee recruitment and selection, performance evaluation, compensation and benefits, professional development, safety and health, forecasting, and labour relations (Lipiec 2001). David Baxter (2000 p.1) warned every organisation that “the challenges of retaining and recruiting human resources will become a paramount in the operations” more so that many sectors of every company is entering an era of critical labour shortages. And with effective career management, human resource and its scientific process will not be at risk. Vaughn and Wilson (1994) described a technique to help human resource specialists, line managers and interested employees identify previously uncharted career paths for internal transfers using Job Trees. In this article, the authors combined some of the traditional skill identifications with organizational trait characteristics, work flow patterns, and existing internal and external relationships representing how the organization actually operates.
Recruiting the best person to occupy a position in a company means higher chances of efficiency. Retaining company’s best work assets is sustaining the growing competitive edge of the organisation. Hence, by doing such career management, productivity and progression is ensured. This is another reason why organizations engage in career management is productivity. The quality of the workforce predefines the possible outputs of the organisation. A weak workforce means poor labour while a strong workforce is more. Productivity is the measurement of organizational growth. By utilizing career management systems, the productivity of the organisation is near at hand. Orpen (1994) stated that productivity may come from a dedicated and well-motivated workforce. Through motivation, it can be assumed as the reason or the force behind why a person does well in work. Sometimes, it is also a means to make the person perform better and more efficient. Basically there are three assumptions in human motivation established in research. The first one assumes that motivation is inferred from a systematic analysis of how personal, task and environmental characteristics influence behaviour and job performance (Wiley 1997). The next one infers that motivation is not a fixed trait; but rather it refers to a dynamic internal state resulting from the influence of personal and situational factors (Wiley 1997). This means that motivation may change with changes in personal, social or other factors (Wiley 1997). Finally, motivation affects behaviour, rather than performance (Nicholson, 1995; Wiley, 1997). Wiley explained: “Initiatives designed to enhance job performance by increasing employee motivation may not be successful if there is a weak link between job performance and an employee’s efforts” (p.263). Additionally, productivity also comes from the workforce that is equipped and prepared with the right mixture of talent and skills or ‘hot skills’ to do the work required by an organisation (Cole-Gomoloski 1998; Griffith 1998; Hayes 1999; Young 1999). By means of effective recruitment and employee motivation, development is workable.
Aside from organizational results, career management may also help individuals to balance their work and family life, and link their personal career goals to the emerging needs of their employer, industry, or community (Moses 1995; Simonsen 1997). By means of balancing work and life of employees, the contributions in the progression of the organisation is focused and defined. Since market-dependent firms have more at stake in maintaining a high level of employee competence, these organizations should be more likely than others to adapt effective career management processes in favour of human capital. In order for an organisation to take advantage on the effects of career management, career managers and administration should equip people to benchmark their skills, anticipate upcoming skill demands, and commit to continuous learning (Kaye 1997; Moses 1995; Simonsen 1997). During these rapid and competitive changing times, employees as well as organizations need to help each other to facilitate the achievement of company’s goals and objectives. Organizations must identify specific skills and competencies that will maximize the company’s growth.
Lastly, career management may also help individuals to balance their work and family life, and link their personal career goals to the emerging needs of their employer, industry, or community (Moses 1995; Simonsen 1997). Balance is not so much a career management variable as it is a life management variable that permits one to achieve career success while remaining satisfied. This explanation would support Moses’ (1999) call for workers of the future to take time to recharge. However, the idea that every employee possesses a succinct picture of the goals and objectives s/he wants to achieve is finite.
    Career management affect the organisation in terms of the workforce and its productivity. The bottom line is the effectiveness of the process in making career choices and decisions, managing the organizational and boundless careers, and taking control of one’s personal development.

Career Development vs. Career Management
    Poehnell and Amundson (2000) argued that the term “management”. The term has been traditionally used but it seemed to be problematic when applied to careers. It may entail a degree of control over career development that is unrealistic in today’s climate of unprecedented organizational change. Although the terms career development and career management are used somewhat interchangeably in career-related literature, in the present study the term “career management” is preferred as it tends to emphasize an active, purposeful approach. However, the interconnectedness of the two synonymous terms is both vital. In an organizational perspective, the application of such concepts is equivalent to the nature of the organizational success.
Career development in an organisation is directed on ‘how individuals manage their careers within and between organizations and how organizations structure the career progress of their members’ (Wikipedia 2006).
In developing effective workforce, the management should always bear in mind that they are accountable for the growth and development of the organisation and the employees as well.  Employees must be given a chance to develop their career in the organisation, not only for the advantages that they can get for themselves but also for the organisation.  One of the obligations of the an organisation, specifically the management is to be able understand that the primary goal of career development is to help employees analyze their abilities, skills, and interests to better match personnel needs for growth and development to the needs of the organisation (Johnson & Scholes 1997). Secondly, the company must be able to identify the factors in maintaining a successful career development program. There are three type of planning which is relates to career development: Broad Life Planning, Development Planning and the Performance Planning. The organisation should incorporate each of these into the career development program. Moreover, the human management of the company should be able to identify their general obligations in the area of career development as well as their specific responsibilities to their employer and the organisation (Gallie 1998).The management should also be able to identify methods for improving the harmony between the individual and the organisation related to the development of their career. Lastly, the management should be able to apply career development in the setting of the organisation (Henderson 1996).
There are organisational activities designed to enhance the career development. These include the following: the establishment of the job posting system, the development of career resource centres, the training of managers as career counsellors, the planning, and implementing of career development workshops, human resource planning, and forecasting, utilizing performance appraisals and developing career pathing programs (Eggland, Gilley & Wesley 1998). According to Zenger (1981), the organisation maintains several fundamental responsibilities regarding career development. The organisation must be able to agree that that career pathing is a vital part of the organisation.
    Career development describes the structure and longitudinal nature of career behaviour, as well as the psychological, cultural, economic, and political influences that involvement strategies might transform in order to facilitate more positive and purposeful career behaviour than would likely occur randomly (Borgen & Young 1990). Furthermore, agility, strength, precise movement and the ability to deal with continuous change are key attributes in career development (Aldisert 2000).
    Meanwhile, in a study conducted by Magnuson, Norem and Wilcoxon (2003), professional growth provided support for applying the planned happenstance theory of career development to leadership development. With the presence of the aspect of continuous learning in this theory, learning in the organisation occurs.

Career Management Strategies and Attitudes
    In line with the Planned Happenstance Theory, there are some management strategies and attitudes to be applied in career. Among these are:
    Continuous learning – continuous learning makes work interesting and satisfying. It allows employees to achieve success to some specified points in their careers. However, it may not be directly related in preparing them for upcoming changes in their occupations or organization.
    Planning – appears to be foundational to effective career management (Blustein 1997; De Voe 1998; Kaye 1997; Moses 1995; Orpen 1994; Shahnasarian 1994). Corporate managers have long recognized the importance of planning to the long-term success of their organizations (Wack 1985). It helps individuals and organizations enhanced their coping ability with tumultuous change.
    Risk-taking – risk-taking is another valued attribute for career management (Hakim 1994; Posen 1998). Hakim provided a significant number of examples on employees who set boundary in their career potential by refusing to take risks.
    Flexibility, Optimism, and Persistence – these attributes and attitudes serves a predictors and indicators of a career success (Champy & Nohria 2000;
Posen 1998).
Work-Life Balance – The importance of achieving balance between work and other life roles has also become an emerging topic in the career management literature (DeVoe 1998; Moses 1995, 1999; Shahnasarian1994). This aids the employee to focus on the achievement of the goals imposed by the organisation and to his/her self.
    Networking - networking is an effective strategy used more consistently by individuals who actively engaged in either job search (as promoted in such programs as job clubs) or in building their careers in the organisation where they belong.

The combination of specific individual attitudes, attributes and strategies emerges an effective career management. A dedication to lifelong learning (based on ongoing and realistic self-assessment), alertness to opportunities and the ability to keep diverse options open (adaptability and flexibility), persistence, optimism, the willingness to take risks, and planning are all personal attributes theorized to foster career management success. In addition, networking and balancing work with other significant life roles are seen as important components of a systematic approach to career management. The outcome of effective career management is expected to be successful careers that meet the needs of the individuals, their employers, and the organisation they belong.

    Consultancy is becoming more pervasive in career management in an organisational level for two main reasons. In the first place, it is a trend which reflects the increasing complexity of business. Secondly and partly as a result of this growing complexity, the line which has traditionally separated consultancy advice from management action is becoming blurred (Czerniawska 1999). Career management consultancy is an independent and objective advisory service provided by qualified persons to clients in order to help them identify and analyse management problems or opportunities. Career management consultancies also recommend solutions or suggested actions with respect to these issues, and help, when requested, in their implementation (Barcus & Wilkinson 1995).
Consultancy means taking the ideas, suggestions, recommendations  from those people who are knowledgeable enough in the implementation of change management process or those who have devoted themselves in analysing different approaches and strategies to ensure successful implementation of changes.  In this case, job searchers, employees, or even managers may seek help from other consultancy companies available or establishing a management team which are experienced in this kind of venture.

Suggested Topics of Future Researches
There are several numbers of researches done in career management. These studies are exploratory in nature and offer a fundamental understanding of effective career management in the changing world of work. There are no experimental researches or studies in the interpersonal aspects of career management. Basing it from the records of literatures obtained, there are no indications of any applications or tools used in career management. To this point in time, there has been limited interface between theories in the fields of career counselling and corporate management. As such, there has been little research testing the effectiveness of career management in achieving its stated goals.
Hence, future research on career management should tackle the incorporation of interpersonal variables such as management styles and contextual variables such as personal crises. A qualitative design of research that would facilitate individuals telling their own career management stories is necessary to consider.
Another functional centre for future research would be to development of dynamic, scientific and better measures for career management. It may also include some variables for career success and job satisfaction. It would be helpful for career practitioners and coaches to have an easily available, concise assessment tool to screen effective career management attributes, attitudes and behaviours. Further, it could be useful in directing individuals’ career management involvement or resources that would become the most suited element in promotion and enhancement of their job or career success.

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Implementation of Organizational Innovations

What is Innovation?
          There are three types of innovation (process, product/service, and strategy) each of which can vary from incremental to radical and from sustaining to discontinuous. There are also important relations between these types of innovation. For example, a strategy innovation may necessitate process, and/or product innovations.

General Frameworks for Adoption of Innovations
          The adoption of innovations has been conceptualized in many different ways in the literature, most commonly focusing on culture, processes, or people and roles. A major problem in a change initiative is how to get innovations or new ideas adopted. There are many change models or frameworks presented that try to explain changes in culture, processes, or people.
          Rogers (19xx) takes a systematic approach focusing on four main elements in the diffusion of innovations: (1) innovation, (2) communication channels, (3) change over time, and (4) social systems. The innovation-decision process begins with a knowledge component, proceeding through persuasion or development of an attitude towards or away from the innovation, a decision to adopt or reject the change, implementation of the innovation, and confirmation of the decision to adopt. People in the social system make their choices to adopt, modify, or not adopt changes at different rates thus are classified as innovators, earlier adopters, early majority, late majority, or laggards. The rate of adoption is influenced by the communication channels, degree of homophily in the social system, and time.
          Evans’ (1996) approach is to provide practical advice on problem-solving, communication, and staff motivation by presenting a conceptual framework for understanding human behavior and organizational functioning in regards to a leadership model that builds a framework for cooperation, not conflict, between leaders and the people they depend on to implement innovations. One of his unique contributions is the concept of the authentic leader. According to Evans (1996), "Transformation begins with trust. Trust is the essential link between leader and led vital to, followership" (p 183). The authentic leader exhibits personal ethics, vision, and belief in others and he or she translates these strong values into organizational visions that others buy in to and are inspired to adopt.

Types of Innovation
          There are three main types of innovation (process, product/service, and strategy), each of which can vary in the degree of newness (incremental to radical) and impact (sustaining versus discontinuous).

Process Innovation
          Process innovation became an important topic with the rise of the quality and continuous improvement movements and, then again, with the more recent attention directed at change management, organizational learning and knowledge management. Also, it has been argued that organizational processes and structures oriented to incremental product innovation are not the same as those needed to foster and facilitate new product development. The current wisdom it is necessary to separate these activities and to introduce wholly new process innovations that will help promote and speed-up radical product innovation.

Strategy or Business Concept Innovation
          It is, of course, possible to incrementally improve one’s business strategy but Hamel (1996, 2000) contends that radical business concept innovation is now paramount. He claims that the current environment is hostile to industry incumbents and hospitable to industry revolutionaries. The fortifications that protected the industrial oligarchy have crumbled under the weight of deregulation, technological upheaval, globalization, and social change. What is now required to ensure organizational success is to continually revolutionize the basic organizational strategy, which progressively typically requires: radically re-conceiving products and services, not just developing new products and services, redefining market space, redrawing industry boundaries.

What is the problem? Implementation, not efficacy
          The problem for many of these innovations is not that they didn’t work, but that the organization could not figure out how to implement and sustain the innovations as an organizational change (Repenning 2002)
Why do programs succeed?

1. They have a champion who builds support and assembles the necessary people, skills, training, and resources.
2. The planning process involves the right people (Ansoff, p. 428).
3. Top management offers continuous commitment which creates an adequate foundation of support and power to implement and sustain the proposed change (Ansoff, p. 427, Senge).
4. They gain the support of opinion leaders, top officials, groups likely to adopt (Rogers, pp. 281, 326). Innovators and early adopters support the program. This result is enough power to effect change.
5. Build organizational capabilities: people, budget, time, and training to match the proposed change (Ansoff, p. 428)
6. The program works over time.
7. They become self-sustaining, reaching critical mass (Rogers, p. 313)
8. Behavioral and systematic resistance is managed (Ansoff and McDonnell, 1990, p. 418).
9. Management creates a psychologically safe environment for people to explore and learn (Senge).
10. Early shortcomings are addressed, adaptations made (Rogers, p. 394)
11. Create climate and culture that overcomes organizational defense mechanisms (Argyris, 1990).
12. The program becomes sustained/normalized as part of the organization’s routines (Rogers, 399).

Why does implementation fail?
          One key reason why implementation fails is that practicing executives, managers and supervisors do not have practical, yet theoretically sound, models to guide their actions during implementation. Without adequate models, they try to implement strategies without a good understanding of the multiple factors that must be addressed, often simultaneously, to make implementation work. (Okumus, 2003, p. 871)

Drivers of Innovation
          The primary drivers of innovation include: financial pressures to decrease costs, increase efficiency, do more with less, increased competition, shorter product life cycles, value migration, stricter regulations, industry and community needs for sustainable development, increased demand for accountability, community and social expectations and pressures (giving back to the community, doing good, etc.), demographic, social, and market changes, rising customer expectations regarding service and quality, greater availability of potentially useful new technologies coupled with the need to keep up or exceed the competition in applying these new technologies and he changing economy.
          Although cost reduction has been a major driver of innovation, other drivers are also important. Regulatory drivers have become more important in the last several decades. In addition, companies increasingly feel they must promote their image and this has become a major driver of environmental and sustainable development innovations. A good image can help promote both large organizations have attempted to foster intra-preneurships within the company but, increasingly, large organizations are creating small entrepreneurial spin-offs to enhance their capacity to innovate. Hamel (2000) offers suggestions for larger firms to become incubators of innovation (internally, externally, and via appropriation) and sees no inherent contradiction in being both a large and an innovating organization.

Organizational Impacts and Desired Performance Results
          Undoubtedly organizational innovations will cause some level of change but the extent and effect of this change is no longer a given. In Schumpeter’s original sense of this term, an innovation by definition had a substantial economic impact. An innovation was something that changed the market place in a profound way. The innovating organization was, thus, likely to become the new market leader and to gain an immense advantage over its competitors. With the broadening of the term to include small to radical innovations, sustaining as well as discontinuous innovations, and the capacity to create as well as to quickly adopt new technologies, the impact of innovation is no longer a definitional issue. The impact of innovations has become an empirical for a company to be good at innovation and that, as Hamel (2000) claims, companies need to focus on developing innovation as a core competency. But there are some indications that even those companies that are good at innovation may experience problems in the long run. Christensen (1997) notes that great companies that have sustained innovation over a long period of time can, and do, fail. He refers to this as the innovator’s dilemma, which is the title of his insightful book. As he explains, this dilemma results from the rational business practices of focusing on the most promising markets and listening to one’s customers. Focusing on the most promising markets and listening to its customers can blind a company to discontinuous innovations that, though they may not have a promising market in the near term and may not currently perform as well as the existing, highly perfected products, may nevertheless transform the market in a way that progressively displaces the incumbents. A key feature of this displacement process is that the emerging or transforming market is incompatible with the incumbent’s business requirements (size of project, price, profit levels, facility characteristics, and staff skills).
          To combat this dilemma, innovative companies can try to focus on discontinuous as well as sustaining innovation. An established company can attempt to identify and develop discontinuous innovations, especially through spin-off organizations that are not bound by the contingencies that govern the larger firm. However, this strategy will not ensure that the company will be successful in identifying the next major innovation to affect that industrial sector. An established company can also actively scan potentially relevant developments in order to make sure it responds to and adapts to potentially threatening new technologies in a timely manner. In may be that an established firm, even if aware of potentially threatening changes in its environment, will not be able to change fast enough or dramatically enough. In these cases, the best strategy seems to be for the organization to create a separate organizational entity that has a business model appropriate for the emerging market and external environment.

Adoption by Individuals
          People are not passive recipients of innovations. Rather and to a greater or lesser extent in different persons, they seek innovations, experiment with them, evaluate them, find or fail to find meaning in them, develop feelings positive or negative about them, challenge them, worry about them, complain about them, work around them, gain experience with them, modify them to fit particular tasks, and try to improve or redesign them often through dialogue with other users. This diverse list of actions and feelings highlights the complex nature of adoption as a process and contrasts markedly with the widely cited adopter categories (early adopter, laggard) that have been extensively misapplied as explanatory variables. There is little empirical support for these stereotypical and value-laden terms, which fail to acknowledge the adopter as an actor who interacts purposefully and creatively with a complex innovation.
According to Roger’s extensive overview of the wider literature on adoption (1995), there are seven aspects of adopters and the adoption process.

          General Psychological Antecedents. We identified a large literature from cognitive and social psychology on individual traits associated with the propensity to try out and use innovations (example tolerance of ambiguity, intellectual ability, motivation, values, and learning style). This evidence has been largely ignored by researchers studying the diffusion of innovations and was beyond the scope of our own study, but it is ripe for review in relation to this research question.
          Context-Specific Psychological Antecedents. An intended adopter who is motivated and able (in terms of values, goals, specific skills, and so on) to use a particular innovation is more likely to adopt it (for strong direct evidence, see Ferlie et al. 2001; Gladwin, Dixon, and Wilson 2002; and Yetton, Sharma, and Southon 1999). If the innovation meets an identified need by the intended adopter, he or she is more likely to adopt it (for strong indirect evidence, see Hall and Hord 1987; and Wejnert 2002).
          Meaning. The meaning of the innovation for the intended adopter has a powerful influence on the adoption decision (for strong indirect and moderate direct evidence, see Dearing 1994; and Timmons 2001). If the meaning attached to the innovation by individual adopters matches the meaning attached by top management, service users, and other stakeholders, the innovation is more likely to be assimilated (for moderate indirect evidence, see Eveland 1986). The meaning attached to an innovation is generally not fixed but can be negotiated and reframed, for example, through discourse within the organization or across inter-organizational networks (for strong direct evidence, see Ferlie et al. 2001). The success of initiatives to support such a reframing of meaning is variable and not easy to predict (limited evidence).
     The Adoption Decision. The decision by an individual within an organization to adopt a particular innovation is rarely independent of other decisions. It may be contingent (dependent on a decision made by someone else in the organization), collective (the individual has a “vote” but ultimately must acquiesce to the decision of a group), or authoritative (the individual is told whether or not to adopt it) (Rogers 1995). Authoritative decisions (e.g. making adoption by individuals compulsory) may increase the chance of initial adoption by individuals but may also reduce the chance that the innovation is successfully implemented and routinized (for moderate indirect evidence, see Rogers 1995).
          Adoption is a process rather than an event, with different concerns being dominant at different stages. The adoption process in individuals is traditionally presented as having five stages: awareness, persuasion, decision, implementation, and confirmation (Rogers 1995). However, we found that a lesser-known model, the Concerns Based Adoption Model developed for innovation in schools, better explained the findings of empirical studies of complex service innovations in an organizational context. This model provided three components for our model.
Concerns in Pre-adoption Stage. Important prerequisites for adoption are that the intended adopters are aware of the innovation; have sufficient information about what it does and how to use it; and are clear about how the innovation would affect them personally, for example, in terms of costs (for strong indirect evidence, see Hall and Hord 1987).
Concerns during Early Use. Successful adoption is more likely if the intended adopters have continuing access to information about what the innovation does and to sufficient training and support on task issues (i.e. about fitting the innovation to daily work) (for strong indirect evidence, see Hall and Hord 1987).
Concerns in Established Users. Successful adoption is more likely if adequate feedback is provided to the intended adopters about the consequences of adoption (for strong indirect evidence, see Hall and Hord 1987) and if the intended adopters have sufficient opportunity, autonomy, and support to adapt and refine the innovation to improve its fitness for purpose (for strong indirect evidence, see Rogers 1995).

System Readiness for Innovation
          An organization may be amenable to innovation in general but not ready or willing to assimilate a particular innovation. Formal consideration of the innovation allows the organization to move (or perhaps choose not to move) to a specific state of system readiness for that innovation. The elements of system readiness are as follows:
     Tension for Change. If staff perceive that the current situation is intolerable, a potential innovation is more likely to be assimilated successfully (for moderate direct evidence, see Gustafson et al. 2003).
          Innovation-System Fit. An innovation that fits with the organization’s existing values, norms, strategies, goals, skill mix, supporting technologies, and ways of working is more likely to be assimilated (for strong indirect and moderate direct evidence, see Gustafson et al. 2003; Rogers 1995; and the related concept of “fuzzy boundaries”).
Assessment of Implications. If the implications of the innovation (including its subsequent effects) are fully assessed and anticipated, the innovation is more likely to be assimilated (for strong indirect and moderate direct evidence, see Gustafson et al. 2003; and Rogers 1995). Most of the following implementation issues are amenable to advance assessment and planning:
Support and Advocacy. If the supporters of the innovation outnumber and are more strategically placed than its opponents are, it is more likely to be assimilated (for strong indirect and moderate direct evidence, see Champagne et al. 1991; Gustafson et al. 2003; Rogers 1995; and also “champions” ).
Dedicated Time and Resources. If the innovation starts out with a budget and if the allocation of resources is both adequate and continuing, it is more likely to be assimilated (for strong indirect and moderate direct evidence, see Gustafson et al. 2003; and Rogers 1995).
Capacity to Evaluate the Innovation. If the organization has tight systems and appropriate skills in place to monitor and evaluate the impact of the innovation (both anticipated and unanticipated), the innovation is more likely to be assimilated and sustained (for strong indirect and moderate direct evidence, see Gustafson et al. 2003; Plsek 2003; and Rogers 1995).
Implementation and Routinization
          Meyers, Sivakumar, and Nakata define implementation as “the early usage activities that often follow the adoption decision” (1999, 295). The evidence regarding the implementation of innovations was particularly complex and relatively sparse, and it was difficult to disentangle it from that regarding change management and organizational development in general. Implementation depends on many of the factors already covered in relation to the initial adoption decision and the early stages of assimilation. At the organizational level, the move from considering an innovation to successfully routinizing it is generally a nonlinear process characterized by multiple shocks, setbacks, and unanticipated events (Van de Ven et al. 1999). The key components of system readiness for an innovation are highly relevant to the early stages of implementation. In addition, a number of additional elements are specifically associated with successful routinization.
Organizational Structure. An adaptive and flexible organizational structure, and structures and processes that support devolved decision making in the organization (e.g., strategic decision making devolved to departments, operational decision making devolved to teams on the ground) enhance the success of implementation and the chances of routinization (for strong indirect and direct evidence, see Meyers, Sivakumar, and Nakata 1999; and Van de Ven et al. 1999).
Leadership and Management. Top management support, advocacy of the implementation process, and continued commitment to it enhance the success of implementation and routinization (for strong indirect and moderate direct evidence, see Green 1998; Gustafson et al. 2003; Meyers, Sivakumar, and Nakata 1999). If the innovation aligns with the earlier goals of both top management and middle management and if the leaders are actively involved and frequently consulted, the innovation is more likely to be routinized (for moderate direct evidence, see Gustafson et al. 2003).
Human Resource Issues. Successful routinization of an innovation in an organization depends on the motivation, capacity, and competence of individual practitioners (for moderate direct evidence, see Gustafson et al. 2003). The early and widespread involvement of staff at all levels, perhaps through formal facilitation initiatives, enhances the success of implementation and routinization (for strong indirect evidence, see Meyers, Sivakumar, and Nakata 1999; for moderate direct evidence, see Kitson, Harney, and McCormack 1998). When job changes are few and clear, high-quality training materials are available, and timely on-the-job training is provided, successful and sustained implementation is more likely (for strong indirect and moderate direct evidence, see Green 1998; Gustafson et al. 2003; Meyers, Sivakumar, and Nakata 1999; and McCormick, Steckler, and Mcleroy 1995). Team-based training may be more effective than individual training when the learning involves implementing a complex technology (for moderate direct evidence, see Edmondson, Bohmer, and Pisano 2001).
Funding. If there is dedicated and ongoing funding for its implementation, the innovation is more likely to be implemented and routinized (for strong direct evidence, see Elliott et al. 1998; Fitzgerald et al. 2002; Green 1998; Gustafson et al. 2003; and Hughes et al. 2002).
Intra-organizational Communication. Effective communication across structural (e.g., departmental) boundaries within the organization enhances the success of implementation and the chances of routinization (for strong indirect evidence, see Meyers, Sivakumar, and Nakata 1999). A narrative approach (i.e. the purposeful construction of a shared and emergent organizational story of “what we are doing with this innovation”) can serve as a powerful cue to action (for moderate indirect evidence, see Gabriel 2000; for limited direct evidence, see Bate 2004).
Interorganizational Networks. The more complex the implementation that is needed for a particular innovation, the greater the significance of the inter-organizational network will be to the implementation’s success (for moderate indirect evidence, see Meyers, Sivakumar, and Nakata 1999; and Valente 1995).
Feedback. Accurate and timely information about the impact of the implementation process (through efficient data collection and review systems) increases the chance of successful routinization (for strong indirect and moderate direct evidence, see Green 1998; and Grimshaw et al. 2004).
Adaptation/Reinvention. If an innovation is adapted to the local context, it is more likely to be successfully implemented and routinized (for strong indirect and moderate direct evidence, see Gustafson et al. 2003; Ovretveit et al. 2002; and Rogers 1995).

Linkage among Components of the Model
There is some empirical evidence (and also robust theoretical arguments) for building strong links among the different components.
Linkage at the Development Stage. An innovation that is centrally developed (e.g. in a research center) is more likely to be widely and successfully adopted if the developers or their agents are linked with potential users at the development stage in order to capture and incorporate the users’ perspective (for strong indirect evidence, see Rogers 1995). Such linkage should aim not merely for “specification” but also for a shared and organic (developing, adaptive) understanding of the meaning and value of the innovation in use and should also work toward a shared language for describing the innovation and its impact.
Role of the Change Agency. If a change agency is part of a dissemination program, the nature and quality of any linkage with intended adopter organizations will influence the likelihood of adoption and the success of implementation (strong indirect and moderate direct evidence). In particular, human relations should be positive and supportive; the two systems should have a common language, meanings, and value systems; they should share resources; the change agency should enable and facilitate networking and collaboration among organizations; and the consequences of innovations should be jointly evaluated. The change agency should have the capacity, commitment, technical capability, communication skills, and project management skills to assist with operational issues. This is particularly important in relation to technology-based innovations, which should be disseminated as augmented products with tools, resources, and technical help, and so on (for moderate direct evidence, see Lomas 2000; and Rogers 1995).
External Change Agents. Change agents employed by external agencies will be more effective if they are (1) selected for their homophily and credibility with the potential users of the innovation; (2) trained and supported to develop strong interpersonal relationships with potential users and to explore and empathize with the user’s perspective; (3) encouraged to communicate the users’ needs and perspective to the developers of the innovation; and (4) able to empower the users to make independent evaluative decisions about the innovation (for strong indirect and limited direct evidence, see Rogers 1995).

    For most organizations, innovation simply means managing the elements of the innovation process and maintaining an innovative culture within the company. Actually, managers have been added the responsibility of managing innovation as the premise for doing business in the 21st century. With the proper handling of such a delicate task, the organization is given the edge that it needs to retain or improve its competitive position in the increasingly complex and globalized market. The challenge of today’s organization, therefore, lies in the need to innovate on technology and business models, deal with uncertain environments, cutbacks and massive worldwide economic, political and social shifts (Daft 2003). This wide array of new concerns for the organization’s management may increase the complexity of doing business in this day and age, but it certainly improves the company’s ability to survive in the cutthroat field of enterprise.