Managerial skills shortages and the impending effects of organizational characteristics. Evidence from China
| DOI | https://doi.org/10.1108/PR-04-2016-0093 |
| Date | 06 November 2017 |
| Pages | 1689-1716 |
| Published date | 06 November 2017 |
| Author | Ramudu Bhanugopan,Ying Wang,Pamela Lockhart,Mark Farrell |
| Subject Matter | HR & organizational behaviour,Global HRM |
Managerial skills shortages and
the impending effects of
organizational characteristics
Evidence from China
Ramudu Bhanugopan and Ying Wang
School of Management and Marketing, Charles Sturt University,
Wagga Wagga, Australia
Pamela Lockhart
School of Management and Marketing,
Charles Sturt University, Albury-Wodonga, Australia, and
Mark Farrell
Graduate School of Business and Law, College of Business,
Royal Melbourne Institute of Technology University, Melbourne, Australia
Abstract
Purpose –The purpose of this paper is to examine the perception of skills shortages, namely, skills scarcity
and skills deficiencies among managers, and its relationship with organizational characteristics.
Design/methodology/approach –The study used a quantitative approach and data were collected
from 243 managers working in China. Multivariate analysis of variance and box plots were employed for
data analysis.
Findings –The results revealed that organizational characteristics were found to have a significant positive
impact on managers’skill levels, and hard-to-fill vacancies caused by skills shortages were found in all types
of organizations. Existing and deficient skills were also identified as affecting all organizations.
Practical implications –The resultssuggest that organizationswould benefit from the adoptionof a system
supporting internal retention, trainingand development and external recruitment to close the skills gaps.
Originality/value –This is an empirical study that provides an insight into the skills shortages from a
multi-organizational context. It highlights the effects of organizational characteristics in relation to
skills shortages and provides a foundation to support the skills needed in the context of national and
global organizations.
Keywords China, Quantitative, Skills shortages, Organizational characteristics, Skillsscarcity and deficiency
Paper type Research paper
Introduction
Research examining the skills shortage has not advanced significantly, despite the fact that
organizations all over the world are affected across a wide range of occupational fields and
the impact is often far reaching (Galagan, 2010; Cappelli, 2008; Collingsa and Mellahi, 2009;
Hartmann et al., 2010; Warner and Zhu, 2010; Zhu et al., 2011; Chatterjee et al., 2014).
Organizations have come to realize that the knowledge, skills and abilities of their
employees represent a critical source for competitive advantage and they need to prepare for
and manage a growing shortage of talented human resources.
Associated with this, researchers have identified the need for a systematic examination
of managers’skills shortages and the impact on organizational success (Beech, 2000;
Economist, 2005; Li and Sheldon, 2010; Warner and Zhu, 2010), with the extant literature
suggesting that managers’skills influence their performance (Gilkeson and Michelson, 2005;
Gottesman and Morey, 2006; Pillay, 2010; Rousseau, 2012; Unger et al., 2011). Skilled
managers will perform better as they are more capable of discovering and exploiting
business opportunities and allocating resources (Gilkeson and Michelson, 2005;
Personnel Review
Vol. 46 No. 8, 2017
pp. 1689-1716
© Emerald PublishingLimited
0048-3486
DOI 10.1108/PR-04-2016-0093
Received 25 April 2016
Revised 9 November 2016
17 January 2017
Accepted 28 March 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0048-3486.htm
1689
Managerial
skills shortages
McKinsey Global Institute, 2005; Purdum, 2005; Bae and Patterson, 2014). According to
Hellriegel et al. (2005), managerial competencies are sets of knowledge, skills, behaviors and
attitudes that a person needs to be effective in a wide range of managerial jobs and various
types of organizations and these significantly impact organizational success.
A number of researchers have argued about the factors that influence skills shortages,
such as organizational size, age, type of ownership, industry and geographic locations,
which need to be collectively investigated to determine skills shortages (Green et al., 1998;
Marchante et al., 2006; Shah and Burke, 2005; Watson et al., 2006a, b; Genny, 2015). However,
prior studies examining the relationship between organizational characteristics and skills
shortages have largely focused on single organizations and a growing concern has been
expressed about the generalizability of the findings which are contextual, occupational or
industry specific (Shah and Burke, 2005; Watson et al., 2006a, b).
Despite research linking the performance of organizations to manager’s skills (Gilkeson
and Michelson, 200 5; Gottesman and Morey, 20 06; Pillay, 2010; Rou sseau, 2012; Unger et al.,
2011) and the need to address the growing problems of skill shortages and their causes
(Green et al., 1998;Marchante et al., 2006; Shah and Burke, 2005; Watson etal., 2006a, b), there
has been far lessresearch undertaken to examine the contingent effect of skillshortages in the
organizational environment. Research has revealed that the way in which human capital is
perceived, used and developed is viewed as central to building and maintaining competitive
advantage and is in the interests of both the employer and employee; however it ignores the
situation where the skills shortages occur (Noe et al., 2013; Bae and Patterson 2014).
To address this deficiency, this study aims to investigate the skills shortages from a
multi-organizational perspective. In doing so, it examines the effects of organizational
characteristics on the facets of skills shortages: skills scarcity and skills deficiency. It also
aims to further the understanding of skills shortages by exploring a number of existing and
deficient skills by focusing on their commonalities across organizations. The study
identifies skills shortages of Chinese managers working in state-owned, private and
foreign-invested organizations. The remainder of this paper is set out as follows. The study
begins by reviewing the literature on skills shortages and advocates the need for an
understanding of human capital theory (HCT) to assist in the continued development of
management skills, which provides theoretical support for the hypotheses development.
Subsequently, the sampling strategy and data analysis methods are described. This is
followed by results and discussion of findings. Finally, theoretical and managerial
implications are presented along with the avenues for future research.
Literature review
Since the mid- to late-1990s there have been reports about the shortage of skilled labor
although much of this was associated with specific employment areas such as nursing
(Hanlon, 1998), engineering, construction, mining and tourism (Kennett, 1998). Since then
debate surrounding skill shortages has become gradually “more prominent”in the academic
literature (Watson et al., 2006a, p. 37), and is recognized as a widespread global problem with
the OECD indicating significant shortfalls in talent or skilled employees in both western and
Asian economies (Dainty, 2008).
Despite some attempts at clarification, identification of what constitutes a “skills
shortage”remains substantially ambiguous (Chan and Dainty, 2007; Richardson, 2007;
Shah and Burke, 2005; Haskel and Martin, 2001), perhaps due to the difficulty of defining a
skill. A useful discussion by Shah and Burke (2005, p. 45) describes a skill as “an ability to
perform a productive task at a certain level of competence”which can be acquired through
formal education and training or through informal means and on-the-job training. Skills
have been further differentiated to include: basic (literacy, numeracy and computer literacy);
generic (problem solving, team working, aptitude for learning and performance); vocational
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