Generational Differences and Perceived Subjective Well-Being in Multinational Corporations in China

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Table of Contents

Introduction
Literature Review
Methodology
Findings and Discussions
Reference List

Introduction

The Open Door Policy launched in 1978 denoted the commencement of a new era in the economic development of China. The country’s gross domestic product (GDP) level remains high, averaging approximately ten percent, which shows that it is a developmental state (Knight 2014). Accordingly, many multinational corporations (MNCs) consider China as a valuable partner and the target for investment. One of the key challenges associated with the operation on the Chinese market is the attitudes of local employees towards their workplace and career.

Most importantly, the generational differences that exist due to the historic events, social events and other local factors need to be taken into account. There are various studies that focus on the Western countries and the views of their employees, yet few authors explored the Chinese specifics related to the given area of interest (Yi, Ribbens & Morgan 2010).

The most significant differences can be noted among those who was born after the 70s, 80s and 90s. In this connection, it is evident that further research on the generational attitudes of employees in China in MNCs is relevant and necessary in order to provide practical recommendations.

Research question: What are the determinants that mainly affect the workplace attitudes of employees due to the generational differences for MNCs in China?

This dissertation aims to explore the current literature and the answers of the Chinese respondents who will be interviewed in the course of the study. The following goals were formulated in order to address the abovementioned research questions in a detailed manner:

To overview the contemporary academic literature that discusses the employees work values in China;
To specify the determinants that identify the work attitudes within each of the generational groups: the 70s, 80s and 90s;
To analyse the data collected from the participants and compare it with the literature based on such dimensions as gender, a work-family balance, career choice satisfaction, et cetera;
To draw pertinent conclusions and provide recommendations to MNCs operating in China, paying attention to its local environment.

This dissertation is structured in a classical way, including the introduction, literature review, methodology, analysis and discussion, conclusions, further research directions and recommendations. The critical literature review is used to collect information related to key theories, concepts and events associated with the 1970s, 1980s and 1990s.

Based on data collected from the recent evidence as well as the answers of the study participants in the course of interviews, findings are presented. The qualitative method analysis is applied to interpret the findings and provide relevant recommendations to MNCs operating in China. In addition, the paper discusses the gaps existing in research and practice in terms of a generational approach to managing employees in the workplace.

Literature Review

Identifying Major Concepts

A multinational corporation is defined as a for-profit organisation that operates in at least one more country other than its home country. The two key characteristics of MNCs include its large size and the worldwide presence, which is expressed in export and import of produced goods. These corporations make significant investment in foreign economies and open manufactures to transfer operations in their countries. In China, MNCs substantially contributed to the growth of the local market: “in 2004, 28% of China’s industrial output and 19% of its tax revenue was accounted for by MNCs” (Park & Vanhonacker 2007, p. 8). Today, approximately 85 percent of the intellectual property is possessed by MNCs, while they brought a lot of cash transfers along with managerial knowledge. The concerns regarding the behaviours of multinational enterprises with regard to employees are reported as foremost and least developed (Park & Vanhonacker 2007). Various conflicts occur in the Chinese workplaces due to a lack of proper understanding the local culture and, most importantly, differences between generations.

One of the key trends in the area of the economic development of China refers to the fact that both local companies and multinationals consider launching more joint ventures and supporting the existing ones. This collaboration is mutually beneficial: one the one hand, the Chinese firms are looking for the ways to enter the markets abroad; on the other hand, MNCs need assistance in succeeding on the interior markets. As reported in the study by the KPMG, one of the Big Four accounting organisations, such a development needs to be encouraged by all the stakeholders since it is a path to overcoming the economic crisis (The future for MNCs in China: a KPMG study 2012). Namely, many Chinese organisations plan to double their workforce to meet the growing demands of the multinationals.

In order to better understand the attitudes of Chinese employees on their career and the place of work, it is essential to apply the concept of subjective well-being (SWB). It is a multifactor construct, reflecting an individual’s idea of himself or herself, his or her life and social status. Most studies on SWB are generalised, and according to Diener, Lucas and Oishi (2018), this is due to the fact that the concept of SWB is developed at the intersection of economics and psychology and uses quantitative and qualitative approaches that reveal the socio-economic status and emotional responses of a person. The socio-economic approach to investigating the views of people determines the level of subjective well-being through the levels of national income per capita and GDP. The core of the majority of the recent studies is the question of how much subjective well-being is rising with the growth of social welfare (Diener, Lucas & Oishi 2018).

One of the most important complexes of SWB is responsible for relations in the professional sphere: profession, professional identity, income, et cetera. The well-being of the subject in labor has a great influence on the experience of subjective well-being. Work-related values of an employee reflect his or her perceptions of professional activity, including internal values associated with self-realization, motivation, burnout, and results of labour. The concept of SWB in the context of career is a criterion of professional identity and a reflection of a subject’s attitude to the results of the work. The main criteria for SWB in the professional sphere are job satisfaction, professional health, quality of working life, financial health and satisfaction, subjective economic status and income adequacy to individual needs. The components of well-being of representatives of various professions are studied, and attempts are made to identify factors of the professional environment that contribute to increase the level of SWB.

The first important attempt to represent the concept of a generation as a social group was initiated by Karl Mannheim, who raised the question of understanding the relations connecting people from one generation. The author argued that the generation is not a social group as the latter is a union of individuals interacting on the basis of naturally formed or pre-established relationships (Cassell 2017; Burnett 2016). Generations, according to Mannheim, do not correspond to these two signs, and, therefore, they cannot be considered a group, but they are a special social phenomenon. However, Kim et al. (2018) argue that Mannheim defined the criterion of belonging to a generation as a class fitting, such as a place, position of a person in society. Class affiliation is an objective reality regardless of whether a given individual is aware of it and whether he or she recognises it. Thus, he defined membership in a generation as a type of social position. However, the author did not exclude the formation of subgroups within the same generation, which result from personal contacts between people who are members of a specific group.

Exploring the Key Characteristics of the 1970s, 1980s and 1990s

Never before, companies encountered such a quintessence of accumulated knowledge, professional experience and youthful maximalism. Different views, misunderstandings, conflicts, contradictions, intrigues and other difficulties can be regarded as the signs of the modern workplace in MNCs (Lyons & Kuron 2014; Lyons et al. 2015). In combination, the employees of different generations are likely to redraw their perceptions about the workspace and the future of the work process. Digital transformation widens the gap between generations and sharply raises the question of adaptation to new environments. The representatives of the late Millennials generation are the fastest to navigate under the conditions of rapid changes, while technology for them is an integral part of life: a smartphone, laptop and headphones.

On the contrary, people of the older generations, despite their professional experience and high competencies, sometimes do not even know which way to approach the printer. Wen, Muthuveloo and Ping (2018) assume that such a gap in worldviews is inevitable, and it is inexpedient to gather all the unskilled enthusiasts or merely qualified workers in one company: this will damage the microclimate in the team and the entire work process. Costanza and Finkelstein (2015, p. 320) argue that “Scanning the environment, identifying workforce trends, developing appropriate HR policies and practices, and evaluating those policies and practices are long-established organisational best practices”. In an era of digitalisation, MNCs are expected to be prepared to transform their workspace, staffing structure and work culture so that they can confidently enter the future.

The People’s Republic of China (PRC) was founded in 1949 and formerly known as the dynastic empire. Since its proclamation, the country experienced various important and dramatic events that significantly changed the values of its people. Yi, Ribbens and Morgan (2010) distinguish between the three main eras, including “Republican (born 1930-1950), Consolidation (born 1951-1960), Cultural Revolution (born 1961-1970) and Social Reform (born 1971-1976)” (p. 603). The assumptions of these authors are grounded on the idea of perceptional differences elaborated by Egri and Ralston (2004), who explore the cross-cultural changes and generational differences of people in the United States (US) and China. It is stated that the understanding of how the employees perceive their work is helpful to anticipate their resistance or receptivity of new interventions (Egri & Ralston 2004). In many respects, the social and political changes affected the views of different populations, whose perceptions vary depending on gender, career choice satisfaction, a work-family balance, et cetera. It should be stressed that people born at the intersections of the decades tend to adopt the characteristics of both them, which makes it much more difficult to predict their future decisions.

The 1960s were marked by the onset and heyday of the Cultural Revolution, when the traditional Buddhist principles were extensively criticised. The official task of implementing the Cultural Revolution stumbled out of following the Marxist-Leninist strategy of building socialism by the Chinese Communist Party (CCP). However, Mao Zedong, being afraid of growing dissatisfaction with his policies on the part of officials, gave this concept a different meaning. The Confucian heritage was ruined and regarded as the outdated ones, while the power of a single political leader was proposed as the way to future success of the country (Yang 2016). The general movement towards communism made parents to educate their children in the devotion to being a part of the society in its aspiration to common good and acting like a Little Red Guard. Perry (2018) claims that children and adolescents who lived in the 1960s witnessed this dramatic drama, which unavoidably left an imprint on their entire lives. Yi, Ribbens and Morgan (2010) agree with the mentioned scholar, adding that this generation also encountered natural disasters and poverty, which stimulates them to consider any changes with great caution.

The self-sacrifice of the Chinese as a national feature was also suppressed at the beginning of the 1960s led by a shift towards the individualistic interests. Even though the period of the Cultural Revolution lasted till Mao Zedong’s death in 1976, the 1970s are regarded as the most influential years. In order to understand the modernisation of China better, one should consider it as a process of change, a long-term transition from one state of society to another. As for the modernisation of China, this is a process of conversion from a traditional agricultural society to a modern industrial society. It is assumed that the generation of the 1970s faced more tragic events than any other subsequent population (Edge 2014). Due to their critical situation, they tended to obtain higher education and count only on their own efforts in life and career. High wisdom and college education also allowed people to boost their skills and knowledge in order to apply at the workplace and become a competent professional.

Until the 1980s, the Marxist understanding of social development dominated in many respects in the PRC. Even the processes of pre-revolutionary China were widely considered as went in line with the formation theory, which reduced the struggle of workers and peasants with Chinese landlords, foreign capital and Manchu domination to the explanation of the reasons and nature of its socio-historical dynamics. The concept of building socialism with Chinese characteristics that was put forward by the Chinese leadership in the early 1980s expanded the scope of research, focusing on the pursuit of new approaches. The recognition of the uniqueness of the ancient Chinese civilization and social thought, as well as their impact on modern development, became significant (Wang 2014). By the mid-1970s, it turned out that successful modernisation was not possible while maintaining the tradition, yet the attempts to completely abandon it also did not lead to success.

In the view of the identified situation, it was necessary to empirically find the conditions for the synthesis of the traditional and modern national values. Giving the modernizing role to traditional culture has become the main task of the CCP, which has managed to find a solution to it based on the Chinese interpretation of the ideas of socialism. In other words, the central conflict of political development of the PRC of the 1970s: between the universalism of economic transformation and the characteristics of historical development and national culture. As a result of the struggle of opinions, the priority of the productive forces and Chinese conditions was balanced by the course towards building a socialist spiritual culture and openness to the outside world. Moreover, loyalty to Marxism was still proclaimed the main ideological and political constant determining the attitudes of people.

The agenda of modernisation and One Child policy were the core characteristic of the generation of the Social Reform that was born in the 1970s. They were often mentioned as modern realists due to the fact that the government encouraged them to seek the financial well-being, which was driven by the most drastic rates of rejuvenation in China. The country’s course on the economic development became more pronounced during this period, thus affecting people in a way that made them pragmatic and less emotional compared to the previous generation. At the same, the poverty was reduced, and hunger was not a dominant factor in life of those who was born between 1970 and 1979. Peacefulness and silence can be noted as the most vivid signs of this generation that preferred concentrating on the financial side of life rather than the political one.

The radical political movement is another core issue that meaningfully changed the views of the Chinese population in the early 1980s. The influx of foreign companies pushed the popularity of the Western ideology among the local youth. A lot of students feverishly promoted the ideas of democracy, equality, free markets and neoliberalism, and the government westernised China. However, the military actions as well as political chaos during mourning services regarding the departed leader in Tiananmen Square in 1989 showed their failure. In particular, the death of Hu Yaobang, a pro-reform Communist leader, demonstrated that the social and policy changes led to anxiety in social consciousness (Edge & Armstrong 2014). As a result, people turned to become more conservative and focused on the financial achievements through building their careers. The intellectual progress of youth lived in the 1980s is discussed by Cherrington (1997), who mentions that the protection of the intellectual property in China became one of the main concerns.

People born in the 1980s and 1990s are referred to as Millennials in this study. This group, known in China as the new generation, unlike the previous generation that was born before 1980 have an increasing impact on the consumption and habits in the workplace. The younger generation of China seeks to see the world, and many of them postpone the traditional stages of life (for example, creating a family) to travel more all over the globe. Millennials born in the 1990s, especially those who do not yet have income, are largely influenced by their parents. In their turn, the parents also tend to be affected by their enterprising and technically sophisticated children. Recreation and entertainment are the main reasons for the trips of all Chinese tourists (Radaev 2018). Particularly, it is pertinent for people born in the 1960s, many of whom fly the nest left by children, and the Millennials of the 1990s looking for new experiences.

The 1990s are more often interested in the culture and heritage of the region. Today, Millennials turned into the most active and important part of the population, being the key consumers, distributors and users of modern technologies. At the same time, growing up in the era of the technological revolution, they are the most active users of social networks, blogs, instant messengers and services. Millennials tend to buy less traditional attributes of success, such as cars, real estate and luxury goods compared to previous generations. For them, lifestyle, convenience and experience seem to be more significant than the fact of owning an object. Sharing (co-consumption) is on the Time magazine’s list of ideas that will change the world in the near future, and it is gaining momentum in development due to its proximity to the values of the Millennials. They have made car sharing, sharing of umbrellas in China (Sharing E Umbrella) or sharing of paid but temporarily unused parking spaces (Justpark) popular.

By the end of the 1990s, migrants from the rural areas moving to urban regions dramatically changed the composition of the Chinese labor force. Chan and Nadvi (2014) state that the so-called Mingong primarily worked in factories, construction sites, agriculture and in the field of services (security guards, cleaners). Of all the population, 37 percent worked in the manufacturing industry, while the rest mainly in construction (14 percent), restaurants (12 percent) and in other services (12 percent) (Chan 2014; Warner & Zhu 2018). Today, they account for 57.5 percent of all those employed in industry, 37 percent of those employed in the service sector and they make up the majority of 20 million homeworkers. The problems faced by this category of the Chinese workforce are associated with low wages and poor working conditions. In addition, a lack of skills and insufficient language knowledge makes them seek for low-paid jobs.

Methodology

In management and sociology, an individual is considered as a representative of a social type. If one strives to understand the attitudes of a person, his or her perception of external reality and the world of his or her self-consciousness, the rational language of categories and abstractions is insufficient. It is necessary to approach an appropriate comprehension of the meanings that a person puts into various judgments and actions. In addition, an individual’s actions are not always completely realised by him or her, and in order to understand their deep meaning, it is essential to make a lot of efforts to decipher the externally observable behaviours and statements and interpret them in sociological terms. The rationalisation of ideas about human behaviour also requires certain theories within which these actions can be explained. Therefore, a qualitative method of research that is primarily aimed at studying the problems of social interaction between people, structures, social institutions and organisations is selected for this dissertation.

The two key methods of data collection are applied to obtain relevant information based on the literature review identified in the previous section and interviews with the representatives of the 1970s, 1980s and 1990s. The evidence from scholarly articles published within the last 15 years was targeted as it vividly focuses on the trends of the mentioned periods. In particular, data related to the 1970s and 1980s is extensively discussed by researchers at the beginning of the 21st century. Accordingly, the generation of Millennials is a subject of the growing interest as their behaviours significantly differ from those of other categories. The official reports of both local and global reliable organisations were also used as sources. The literature analysis was conducted by means of the critical synthesis as well as an objective presentation of various opinions.

The interviews as the most common method of collecting quality data is another method of obtaining necessary information utilised in this dissertation. The essential feature of this method is the purposeful and predetermined communication of the interviewer with the respondent. This is due primarily to its versatility: one can gather information about the past, present and future of the people studied, as well as subjective and behavioural information. The main purpose of a formalised interview is to obtain the same type of information from each respondent.

In order to contact the potential respondents, one MNCs operating in China was reached, and consent forms were provided to employees of various generations, including the 1970s, 1980s and 1990s. The consent forms involved a brief explanation of study intent, research questions, and significance of the findings to them and their organisation. Convenience sampling method was used to ask the employees to take part in the study, and the inclusion criteria identified for participants were their age, nationality, the willingness to contribute to the study and work for a MNC. In total, 15 respondents, both males and females, were identifies, of which 5 persons born in the 1970s, 5 persons born in the 1980s and 5 persons born in the 1990s. The interview questions were elaborated based on the review of the studies exploring the attitudes of the Chinese employees of various ages.

In order to conduct the interview analysis, a map of topics and concepts that are important in this interview and may have something in common with other topics or concepts from the books and articles studied will be created. The interviews with all the 15 participants will be documented by using audio recording technology, which will be clarified to the participants in advance. After that, the parts and quotes that reveal and supplement the assumptions are marked, assigning them a specific code (a word related to a particular topic). Furthermore, the concept map will be refined and complicated, thus replenishing with new ideas. The researcher extended the topics to find connections, gaps, tendencies, limitations and contradictions. In this way, several key collective topics will be discussed in order to answer the main research question.

Findings and Discussions

The employees of different generations have their own characteristics and approaches to work. Some of them value progressive careers and stability such as Cultural Revolution generation, while others (Social Reform generation) consider that the balance between personal life and work is essential, and there are people that do not prioritise work. The latter, Millennials believe that the key issue is to enjoy their life, but, at the same time, there is sufficient reason to state that in their free time, they strive to change the world for the better. This tendency is due to the cultural, economic and technological codes in which the mentioned generations formed as individuals and began their professional activities (Sadykova, Khairullina, Ustinova, Pelkova, & Efremova 2015). Speaking more precisely, these are people of different eras with diverse attitudes to life. For example, the parents of generation born in the 1970s employees raised them strictly in an authoritarian manner, as a result of which their grown up children are still used to receiving directives at the workplace.

At the same time, one should emphasise the fact that the 70s is a rather resourceful generation. Hardened by historical ups and downs, they are stress resistant and used to work a lot. They often perceive problems as a natural form of existence. For instance, if an employer finds an approach and builds relationships based on recognition of their merits, they will be a reliable framework for the team of any MNC. This population is accustomed to rely on themselves in completing tasks and making decisions, taking the responsibility for the consequences. Nevertheless, they are sensitive to innovations and criticism, and it is quite difficult for them to adapt to the translation of the workflow into instant messengers, social networks and mobile applications. It should also be identified that their attitudes to colleagues are much more friendly compared to younger generations, which is caused by the intention to work in cooperation and achieve common goals.

The work of employees of different ages in the same office can be compared with a meeting in the family of representatives of several generations. In particular, a mother will not impose on her son a pickle that he dislikes, make coffee for her husband that he does not drink or offer her sister a salad that she did not like last time (Beutell & Behson 2018). On the contrary, she would try to think through entertainment and refreshments so that everyone is comfortable, which is pertinent to a working environment. If an employer observes that the employee is burdened by the office work, he or she can be offered to work at home several days a month. To offer a promotion that is completely uninteresting for him or her is pointless in this situation (Beutell & Behson 2018). If an employee is focused on building a career like the representative of the 1970s, it hardly makes sense to transfer him or her to a remote work, yet assigning new tasks in which he or she will show the result is an excellent option.

It should be emphasised that the Chinese employees are committed to the cultural values of their national, in particular, collectivism. Despite the differences, all three generations complement and positively influence each other, united by the values of the company in which they work. In other words, it means that management should convey these values to everyone in an easily understandable manner. In addition, it is important that the representatives of generations want to listen and hear each other, and then the result and success are likely to be more positive. In general, the foremost task of the management of the MNC, where employees of various generations work, is not to try to remake one of the others, but to get the maximum effect from combining experience with non-standard solutions and the speed of younger generations.

Technology and Innovations

Millennials set the trend for thinner and lighter devices, the reason of which is not only aesthetic, but also practical – such laptops can be carried almost everywhere. This generation also have special preferences in design of the workplace area, which a component of their SWB. For example, as shown by social polls, the younger generation prefers technology in bright buildings (Berkup 2014). Younger employees actively use computers for voice communications, popularizing this approach among colleagues. As a result, approximately 65% of MNCs’ workers use personal computers as a telephone (Berkup 2014).

Therefore, it is necessary to pay attention to the audio component of computers – for instance, the presence of several microphones allows to better perceive the voice, avoiding extraneous noise, and the presence of buttons for controlling voice communications simplifies the corresponding actions of users. Employees of the older generations are less interested in the mobility of devices and feel comfortable at their personal desktop, with an individual working chair and a personal smartphone or PC. When choosing a desktop computer for employees, one should pay attention to the presence of built-in proprietary protection systems and discrete graphics, which are valued by the 1970s.

Gender

Women who have received higher or secondary education, but have not achieved career success present a vivid fact in the Chinese recent history. The further growth of these women was taken into account when developing the state plan, and they enjoyed many privileges from the state. For instance, the state provided them with employment and support in the field of healthcare along with the equal suffrage with men. However, since the end of the 1980s, this group of women has changed due to the development of a market economy and enterprise restructuring.

Women over the age of 40 who worked in the corporate and commercial sectors were dismissed for various reasons in the 1990s and became the first victims of corporate restructuring. According to statistics, in 1997, Chinese women employees constituted 56 million – 38.8% of the total number of workers; there were 2.48 million women dismissed from work – 45% of the total number of people who lost their jobs. If these women were unable to find work, they could only live on cash benefits. It should be noted that women aged 20-30 who have received secondary and higher education also often could not find work in the 1990s (Tatli, Ozturk & Woo, 2017; Xia et al. 2014). From the point of view of Marxism, the liberation of women is a measure of universal human emancipation. Women in workplace are the main symbol of achieving equal status for both men and women, which is an important indicator of the level of political and social culture of any country. One of the weakest issues in the gender situation worldwide is the career position of women and China is not an exception.

The strong pressure on women over marriage leads to negative economic consequences since many are afraid to get away from an unequal financial status compared to their husbands. Such an attitude in the era of market reforms leads to a new gender gap in income (Fincher 2016). This is evidenced by failures in protecting the rights of married women to property, a sharply increasing gender income gap and reports on domestic violence as well as an information campaign organized by the state that stigmatized educated unmarried women.

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