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Overcoming liabilities of origin: Human resource management localization of Chinese multinational corporations in developed markets
Abstract
Despite the rapid growth of Chinese outward foreign direct investment in developed markets, many Chinese multinational corporations (MNCs) suffer from liabilities of origin (LOR)—capability‐ and legitimacy‐based disadvantages associated with the country of origin. This study identifies localization as a strategic mechanism through which Chinese MNCs overcome their LOR. With a specific focus on human resource management (HRM), we examine how factors associated with firms' perceived LOR, including springboard intent, local competition, and host country regulatory pressures, affect Chinese MNCs' adoption of local HRM practices in developed markets. We differentiate HRM practices that managers intend to adopt from those that are actually implemented and explore how state ownership affects the intention–implementation gap. Based on a sample of Chinese MNCs in the United States, we find that springboard intent, local competition, and host country regulatory pressures are positively associated with intended, but not implemented, HRM localization. Further examination demonstrates that springboard intent and local competition have significant effects on implemented HRM localization among private businesses but not in state‐owned enterprises (SOEs). The managerial constraints and resource endowment of Chinese SOEs may hinder their overseas subsidiaries from implementing local HRM practices to address LOR.
... According to previous research, managers are more likely to implement HRM practices effectively when they comprehend and agree with the intended goals of the practice, have the necessary political acumen to do so, or have a significant amount of discretion in choosing the best methods of implementation (Sikora et al., 2015;Oh et al., 2017). Therefore, to effectively internalise HRM practices in Africa, it becomes pertinent for Chinese MNCs to ensure that managerial competence matches their business strategies and localised HRM practices in the host country (Ouyang et al., 2019). Nevertheless, the degree of convergence or divergence of HRM practices in China and Africa may also affect the extent to which managers operate successfully (Horwitz, 2015;Xing et al., 2016). ...
... Furthermore, Chinese MNCs may use standardised HRM procedures, such as their counterparts from developed countries, to capitalise on their current competitive advantages in other developing markets (Ouyang et al., 2019). For instance, they impose standardised HRM practices such as flexible employment, three-shift manufacturing, and hard labour, as well as bringing to the workplace the work principles of their home country, which emphasise sacrifice and diligence (Lee, 2009;Tung, 2016). ...
... According to previous studies (e.g., Haasis & Liefner, 2019;Parente et al., 2019), Chinese businesses make an effort to align their HRM procedures with the legal framework and institutional norms of their host nations. Chinese businesses actively adapt to foreign business environments in an effort to overcome challenges such as the unfavourable country-of-origin effect (liability of origin) and the lack of acceptance of the Chinese working culture in foreign markets, supporting the success of their global operations (Zhu et al., 2014;Ouyang et al., 2019). ...
The emerging literature on China–Africa cooperation has provided some insight into human resource management (HRM) and organisation studies. More research is therefore needed, and this necessitates a deeper comprehension of how Chinese MNCs’ development and their increasingly apparent strategic interest/intent and capabilities could be conceptualised with implications for HRM. Therefore, this chapter explores international HRM practices in Africa and the implications of Chinese firms operating on the continent. The chapter reviewed the extant literature that has examined Chinese operations in Africa and the emerging implications of these operations for HRM research and practice. Specifically, we found that while resource-seeking remains the primary motive for Chinese internalisation in Africa, these internalisational strategies tend to vary in different industries and may also be determined by MNCs’ ownership structure. Moreover, given the similar cultural attributes (Chinese Confucianism and African Ubuntu) and differences in labour participation, there appears to be a crossvergence of HRM practices in Chinese MNCs operating in Africa, as well as the different adaptive measures implemented by Chinese MNCs to maintain their internationalisation intent.KeywordsChinaAfricaInternational HRMInternationalisation
... We further contend that state-owned firms respond to legitimacy challenges originating from their home country's institutional image differently compared to their private counterparts. Although the extant studies have documented unique characteristics of state-owned firms, such as resource dependence on the government, and pursuance of multiple objectives (social and political), that make them less responsive to environmental pressures (e.g., Miska et al., 2016;Ouyang et al., 2019), we argue that state-owned firms are more likely to adopt GDM to offset the strategic disadvantages associated with the negative country image. First, state-owned firms face severe legitimacy challenges in developed countries due to their association with home-government . ...
... which suggests that EMNEs internationalize to acquire knowledge and strategic resources (e.g., technology, brand) from developed countries and transfer them back to their home countries. More precisely, we show yet another vital resource (knowledge of GDM practices) that emerging markets' firms acquire from developed economies.Lastly, our research setting of emerging economies' firms in developed countries contributes to the nascent literature on HRM practices of EMNEs (e.g.,Cooke, Wood, et al., 2019;Ouyang et al., 2019;Zhang & Fan, 2014;Zhu, 2019). Previous cross-institutional studies have largely focused on developed country MNCs operating in emerging economies ...
Numerous studies have documented the existence of legitimacy challenges that emerging markets multinational enterprises (EMNEs) face in foreign markets due to their national origin. However, there is limited understanding of the EMNEs' strategic responses to offset these country‐of‐origin related disadvantages. In this study, we conceptualize gender diversity management (GDM) as a strategic response of EMNEs to mitigate the legitimacy challenges in developed countries. Specifically, we argue that emerging markets firms increase women's representation in top management teams to overcome the liability of origin. We use legitimacy perspective to examine the effect of pervasiveness of institutional voids in emerging markets on women's representation in top management teams of EMNEs. Based on subsidiary‐level panel data of EMNEs from 20 emerging markets operating in developed countries from 2010 to 2019, our results show strong and robust evidence indicating that the pervasiveness of institutional voids at home is positively related to women's representation in top management teams of emerging markets firms. Additional analyses demonstrate that duration in the foreign market, market‐seeking intent, and state ownership further magnify this effect. These findings, besides significantly adding to the international human resource management literature, have managerial implications.
... Some studies have indicated that not only essential infrastructure-relevant services are difficult for local farmers to access, but that there were also strong links between opium poppy cultivation and rural poverty [28,29]. Furthermore, many scientists hold the view that institutional infrastructure, efficient management [4], the localization of human resources [30,31], corporate social responsibility [32,33], and cross-cultural communication [34] are helpful for the promotion of foreign investors' performance and to increase the possibilities of investment success. Based on the above, what is the profile of the agricultural companies conducting the OPA project? ...
... The surveyed companies emphasized the improvement in employee skills in farming and management, and applied competitive payments and incentives to increase the initiative of local employees. This finding supports the view that the localization of human resources is crucial for a multinational business [30,31], especially in terms of being a bridge between multinational companies and host countries, helping to boost performance, facilitating market development [39], and reducing institutional pressure [40]. Furthermore, we found that the employees' understandings of local laws and regulations, environmental awareness, and customs and cultures were essential, highlighting the important role of cross-cultural communication in exerting positive impacts on investment outcomes under multinational investment scenarios [34]. ...
Cross-border agricultural investments (CBAIs) are considered to be an essential strategy that is expected to bridge the gap between poverty reduction and rural development in marginalized regions. Agricultural investments serve as a necessary indicator of the performance of international cooperation in China’s Belt and Road Initiative. It is of great significance to summarize the success factors of Chinese investors under this initiative and, more importantly, to improve the sustainability of CBAI projects and associated rural development. Extensive opium poppy cultivation is a barrier to poverty reduction in marginalized communities in less-developed countries such as Laos and Myanmar. The CBAIs in the opium poppy alternative (OPA) project conducted by Chinese agricultural companies aim to reduce drug crop cultivation and rural poverty based on a perspective of economic development. However, little is known about how participating companies cooperate with ex-poppy farmers to achieve investment success. In this study, we adopted case interviews and questionnaire surveys from Chinese agricultural companies in the China–Myanmar–Laos border region, with the aim to explore the success factors of CBAIs in the OPA project under China’s Belt and Road Initiative. The results indicated that the success of agricultural companies involved in the OPA project depended on three key factors, including (1) institutional and employee capacity building, (2) responses to policy and market incentives, and (3) support for the participation of ex-poppy farmers and community development. Our findings contribute to the theoretical and practical understanding of capacity improvements for foreign investors in China’s Belt and Road Initiative and shed light on the support of international agricultural cooperation for rural livelihood improvement.
... For example, in countries influenced by Confucian culture, paternalistic leadership style is salient which has important implications for performance (Lau, Li, and Okpara 2020). In addition, effective HRM in China may take different practices from those of the West (Cooke et al. 2019;Ouyang et al. 2019). For example, high control HRM practices are found to be significantly and positively associated with firm performance in China (Su and Wright 2012;Su, Wright, and Ulrich 2018). ...
... However, explanations for this perceptual discrepancy between HR professionals and line managers and how to narrow or eliminate the discrepancy have been rarely investigated. Also, the discrepancy between intended and implemented HRM practices exists in organizations (Khilji and Wang 2006;Makhecha et al. 2018;Ouyang et al. 2019;Wright and Nishii 2013), but few studies have explored the antecedents and consequences of the discrepancy and how to measure and reduce such discrepancy. Thus, future research on how the HR-line manager discrepancy arises and how to eliminate the discrepancy is also encouraged. ...
Leadership and human resource management (HRM) have attracted growing interest among researchers worldwide. However, existing studies tend to examine the two interrelated variables separately, which may result in potential biases when estimating their effects and miss important implications of their interaction. Drawing on the relevant literature, we articulate the relationship between leadership and HRM and offer conceptual and empirical insights into the opportunities for integrating the two streams of research. We also highlight the importance of contexts when studying leadership and HRM and present an overview of the twelve papers in this special issue that focus on leadership and HRM issues in China. Finally, we propose an agenda for future research to further integrate leadership and HRM.
... It can be obtained by showing that they are contributors involved in the local community (Liao & Yu, 2012;Suchman, 1995). For example, firms gain pragmatic legitimacy by satisfying stakeholders' basic financial needs, creating jobs, or contributing to the public good (Ouyang, Liu, Chen, Li, & Qin, 2019;Palazzo & Scherer, 2006). ...
... The institutional LOE raises more concerns about the negative impact of EMNEs' acquisitions in their own countries. Previous studies have demonstrated that, when EMNEs invest in a high-income country, local stakeholders can be conscious about political influence, national security and nontransparent business practices (Agnihotri & Bhattacharya, 2016;Ouyang et al., 2019;Zhang et al., 2011). Thus, in a host country with well-developed institutions, the institutional LOE causes more socio-political legitimacy concerns about EMNEs. ...
This paper contributes to the literature on emerging multinational enterprises (EMNEs) by revealing how the conditions in their home countries influence their cross-border acquisitions. The study focuses on the liability of emergingness (LOE). It develops an integrative theoretical framework based on neo-institutional theory and the concept of legitimacy to explain the relationship between LOE and EMNEs’ cross-border acquisitions completion and the situational conditions that shape this relationship. The study uses data on 27,648 announced acquisitions conducted by EMNEs from 24 emerging economies in 175 host countries to estimate the relationships. The results reveal that, while two types of LOE (economic and institutional) have negative impacts on cross-border acquisition completion, the negative impacts become less important or disappear when the host country’s unemployment rate is too high, and the host country’s institutional quality is too low. This finding suggests that EMNEs can mitigate the negative effect of the LOE by carefully choosing a good time and a suitable location to enter into these transactions.
... Most Chinese MNEs tend to pursue two contrasting expatriate staffing approaches. In advanced economies, Chinese MNEs tend to adopt the polycentric approach by filling key positions using HCNs, but the ethnocentric approach by transferring expatriates nondiscriminatively to subsidiaries in developing economies (Liu & Woywode, 2013;Ouyang, Liu, Chen, Li, & Qin, 2019;Shen & Edwards, 2013;Zhu, 2019). In both scenarios, they face adaptation problems in meeting so-called "international standards" (Cooke, 2011;Khan, Wood, Tarba, & Rao-Nicholson, 2019). ...
... In the former, they implement their own GTM practices, e.g. ethnocentric staffing (Liu & Woywode, 2013;Ouyang et al., 2019;Shen & Edwards, 2013;Zhu, 2019). Transferring home TM practices to international subsidiaries in developing nations is often a reason for Chinese MNEs being criticized for low labor standard practices (Cooke, 2011;Cooke et al., 2018). ...
Within a short time, China, Japan, and Korea have produced worldwide leading multinational enterprises (MNEs). As they expand globally, these companies face major challenges in global talent management (GTM). This article provides a comparative analysis of the major GTM challenges MNEs from these countries experience and the underlying reasons thereof. Our comparative overview reveals similarities in ethnocentric staffing, traditional headquarters-driven organizational cultures, and home-country language policies. While there are striking differences in performance appraisal, reward and compensation, and promotion and career advancement, these GTM practices of Chinese, Japanese, and Korean MNEs are converging to Western style global best practices, though at different levels. Building on and enriching the convergence debate and the distance literature, we identify organizational and country characteristics that help better understand the reasons for these similarities and differences.
... These include their attempts to internationalize without strong managerial resources (Peng, 2012) to manage, with limited organizational capabilities, the demands of highly developed host countries (Barnard, 2010), and a lack of experience and established practices from their home base-plus their selfdoubt regarding the legitimacy of their own practices (Ramachandran & Pant, 2010). The home country institutional links can also often lead to liabilities for EMNEs, including those due to their close links with home country governments (Khan, Wood, Tarba, Rao-Nicholson, & He, 2018), their perceived low standards of corporate governance and transparency (Ouyang, Liu, Chen, Li, & Qin, 2019), and institutional voids that constrain the development of critical competencies (Meyer & Xin, 2018). To overcome the liability of origin, they may pursue rapid internationalization to catch-up quickly with MNEs from developed economies (Luo & Tung, 2007;Madhok & Keyhani, 2012) by exploiting available resources from the globalized economy (Ramamurti, 2012), such as HRM practices. ...
... This vulnerability we observe in the ability of an MNE to implement its global policies in subsidiaries is different from what may occur in other contexts where such an implementation may have been unproblematic due to a dominant position in the industry (Aguzzoli & Geary, 2014). This highlights the need for much more extensive inquiry into EMNEs in different circumstances, building especially on the rapidly growing research on Chinese MNEs in both developed economies (Ouyang et al., 2019) and less developed economies, notably those in Africa (Cooke, Wood, & Horwitz, 2015;Xing, Liu, Tarba, & Cooper, 2016). We note the variability in the way EMNEs may transfer home country practices and the form hybridization of HRM practices may take (Patel et al., 2018). ...
There is increasing evidence that multinational enterprises (MNEs) from less dominant economies tend to mimic and disseminate human resource management (HRM) practices sourced from a dominant economy, usually the United States, to overcome their “liabilities of origin.” However, our understanding of the specific challenges involved in the implementation of such practices by firms across different national and subsidiary contexts remains limited. Drawing on evidence from a case study of a South Korean MNE, we examine the extent to which, and ways in which, global HRM policies mimicking U.S. practices are implemented across its sales, manufacturing, and research and development subsidiaries in the United States and India. We find discernible differences in the implementation of the global policies both between the two host country sites and across the three function‐specific subsidiaries in each country, identifying a range of national and subsidiary‐specific factors that inform these variable implementation outcomes. In addition to legitimacy challenges related to the source, appropriateness, and process of transfer, we note a unique form of legitimacy challenge—“the liability of mimicry”—whereby local actors can challenge head office policies on the basis of a claim to superior expertise in the dominant practices, as a particular concern of MNEs from emerging economies.
... Emerging markets multinationals face strategic disadvantages of origin when the work environment of these firms is perceived inferior to developed markets firms by potential employees. Studies related to the country-of-origin effect in the literature of human resource management have shown that in developed countries, job seekers often recognize the workplace environment of emerging markets multinationals as inferior (Chang et al., 2009;Ouyang et al., 2019). Therefore, EM-MNCs are generally perceived to be the less attractive employers in host markets (Alkire, 2014). ...
This study examines the competitive disadvantages rationale behind the pursuing of Sustainability Development Goals (SDGs) by emerging market multinational corporations (EM‐MNCs) in foreign markets. We argue that EM‐MNCs may pursue gender equality goal in host markets as a legitimation strategy to offset their strategic disadvantages inherited from the home markets. Based on a sample of foreign subsidiaries from 10 major emerging countries from 2010 to 2020, this study finds strong evidence demonstrating that the institutional quality of home markets exerts a positive effect on the representation of women in leadership positions of EM‐MNCs. Additional analyses demonstrate that international experience and institutional ownership further magnify this effect.
... contributes to the literature that focuses on the usage of HRM practices of foreign affiliates as a legitimacy building strategy in foreign markets (Forstenlechner & Mellahi, 2011;Mellahi, Frynas, & Collings, 2016;Mellahi, Frynas, Sun, & Siegel, 2016;Ouyang, Liu, Chen, Li, & Qin, 2019;Rosenzweig & Nohria, 1994;Zhu, 2019). In a broader sense, we show that EMNCs do not only gain legitimacy in foreign markets by engaging in CSR activities (Fiaschi et al., 2017), CSR reporting (Marano et al., 2017;Zamir & Saeed, 2020) developing personal ties with powerful government actors (McGuire et al., 2012;Rodgers et al., 2019), and creating alliances with local stakeholders (Kolk & Curran, 2017), but they also do by enhancing the presence of women in TMTs. ...
This study examines the association between the pervasiveness of institutional voids in emerging markets and the inclusion of women in top management teams (TMTs) by emerging market multinational corporations (EMNCs) as a legitimation strategy. Leveraging institutional theory, we argue that EMNCs increase women presence in TMTs as a legitimation strategy to overcome the challenges of stakeholders' skepticism in foreign markets by disassociating themselves from the image of their home markets. Using a subsidiary level dataset of 1047 EMNCs from 26 emerging countries between 2009 and 2018, we find robust evidence indicating that the pervasiveness of institutional voids at home is positively related to the percentage of women in TMT's EMNCs' foreign units. This effect is particularly stronger for firms operating in countries with high institutional gender parity and low level of corruption.
... In the case of Chinese MNEs, studies have found that property rights protection in host countries negatively impacts FDI from China (Kolstad and Wiig, 2012). The rationale behind this is that given the institutional voids of China (low property rights protection), Chinese MNEs suffer from legitimacy-based disadvantages (Ouyang et al., 2019), especially in countries with high property rights protection; however, in countries with low property rights protection, Chinese MNEs have advantages in handling these institutional deficits (e.g., Child and Rodrigues, 2005). These studies suggest that besides policy stability, property rights protection resulting from governing party fractionalization influences the location choice of Chinese FDI. ...
Based on real option theory and transaction cost theory, we hypothesize that a high level of governing party fractionalization in the host country’s government fosters FDI because high governing party fractionalization is associated with low economic policy uncertainty. By using the data of governing party fractionalization in 135 host countries and greenfield FDI projects from China from 2003 to 2015, the findings of the study confirm the positive effect of governing party fractionalization on FDI. Moreover, the results of our studies confirm that the positive effect of governing party fractionalization on FDI is weakened for investing firms with experience in host countries and with central government ownership, for FDI projects conducted in natural resource industries, and in host countries with high GDP growth and low capital abundance. We further confirm that economic policy uncertainty is a mechanism through which governing party fractionalization influences FDI.
... To narrow the gap, this article investigates a critical component of that adaptive capacity-corporate legal managers-and seeks to draw out the factors shaping its development. The article helps to explain how developing country MNCs attempt to overcome the liability of foreignness, particularly in the legal and regulatory ground, and will assist in understanding their internalization of service production in other areas such as accounting and human resource management (Smith and Zheng 2016;Ouyang et al. 2019). The findings also underscore the tension between the institutional influence of the home state and the pressure the Chinese MNCs endure in the host state. ...
The “in-house counsel movement” of the past few decades, with its far-reaching implications for the legal profession, the legal service market, and corporate governance, has attracted a great deal of academic attention. Few scholars, however, have examined the global expansion of emerging market companies and their in-house legal capacity. To narrow the gap, this article investigates the in-house legal capacity of Chinese firms in the United States. In doing so, it focuses on two important yet underexplored questions: (1) whether and how institutions in China influence the capacity building; and (2) whether the Chinese investors’ ownership structure makes a difference in that regard. By analyzing a unique set of survey data and 122 interviews with lawyers, in-house counsel, and business executives, this article uncovers evidence of both multi-institutional influence and state-ownership effects. The findings contribute to theoretical and policy debates about the legal profession, the legal service market, and the ramifications of expanding Chinese multinational companies.
... For example, in countries influenced by Confucian culture, paternalistic leadership style is salient which has important implications for performance (Lau, Li, and Okpara 2020). In addition, effective HRM in Asia Pacific may take different practices from those of the West (Cooke et al. 2019;Ouyang et al. 2019). For example, high control HRM practices are found to be significantly and positively associated with firm performance in China (Su & Wight, 2012;Su, Wright, and Ulrich 2018). ...
... 3 | DATA AND METHODOLOGY EMNEs are developing strong capabilities to bypass institutional voids (Ouyang, Liu, Chen, Li, & Qin, 2019), and global stakeholders pay more attention to sustainability issues (Kang, 2013;Park, 2018a ...
Corporate sustainability (CS) is receiving considerable attention from emerging market multinational enterprises (EMNEs), playing an important role in the globalized market. However, theoretical and empirical knowledge about how EMNEs address CS is still scant, and the relationship between internationalization and CS has not been widely explored. This study aims to fill this gap, evaluating the relationship between an international ambidexterity strategy and CS in EMNEs, which highlighted the paradox perspective. Then we develop three hypotheses in which we argue how the dynamic capabilities underpinning international ambidexterity could be considered a driver of CS in EMNEs. We test the developed hypotheses against data from 300 Chinese EMNEs obtained by a survey. Our results contribute to shape ambidextrous international strategies and to consider CS as a springboard for the strategic intent to systematically and recursively outperform global competition. Testing a measurement scale of international ambidexterity, we suggest structural ambidexterity as a strategic option of internationalization that allows the achievement of economic, social, and environmental sustainability objectives.
This study investigates what attracts career‐oriented women to foreign subsidiaries and how they experience this work context. Based on 125 interviews with career‐oriented women in Japan, we find that their frequent choice of foreign employers is not only motivated by professional aspirations but also by identity‐related aspirations. Japanese women who embraced an internationalist orientation experience a confirmation of their identity by working for foreign subsidiaries; by contrast, those who still felt bound by traditional role expectations, undergo a liberating identity transformation. Based on the perceptions of these particular employees, we develop recommendations for gender diversity management in foreign subsidiaries. We further argue that women, who are disadvantaged in the local employment context, often desire that foreign subsidiaries implement standardized home country human resource management practices, instead of adopting local practices. By focusing on the recruitment of highly qualified women, foreign subsidiaries may turn their liability of foreignness into a competitive advantage.
Although emerging market multinational enterprises (EMNEs) face substantial liabilities of origin (LoO) that hinder their global expansion, under-researched is whether trust-building with foreign partners in host markets can help them reduce these liabilities and enhance their subsidiary performance. Drawing on the relational exchange view and institutional theory, our study examines how interfirm trust affects EMNEs’ subsidiary performance in host countries, and how this effect is moderated by factors reflecting the regulative, normative, and cognitive institutional pressures that confront EMNEs in host countries. The results from a survey of 146 senior managers of overseas subsidiaries of Chinese multinational enterprises show that interfirm trust is positively related to subsidiary performance, and this positive effect is stronger when host countries’ legal systems are deficient but financial markets are munificent, and when EMNEs partner with state-owned foreign firms or possess rich international experience.
The field of International Business (IB) has traditionally focused on the crossing of national boundaries. In this Perspective, we argue that organizational, knowledge domain, and language boundaries are equally important for understanding translation activities in cross-border business. We integrate three kinds of translation (organizational translation and knowledge translation from Organization Studies and interlingual translation from Translation Studies) to deepen our understanding of core IB phenomena and pose new research questions. We introduce the framework of a translation ecosystem for integrating the micro perspective of translating agents, the meso perspective of organizational units, and the macro perspective of the larger social and linguistic contexts that influence translation. This framework allows IB scholars to identify important but invisible boundaries in cross-border business. The translation ecosystem requires the kind of multi-level research that has been recognized as crucial for taking the field forward and offers the potential for making contributions both to IB and to translation research beyond the disciplinary boundaries of IB.
Research has documented labor conflict within foreign-owned, and especially Chinese-owned, manufacturing firms in sub-Saharan economies. Yet, systematic comparisons of foreign versus domestic firms are rare, and it remains unclear whether labor conflict is a phenomenon that affects emerging industries or is specific to foreign firms. Drawing on a large firm survey in Ethiopia, we show that foreign firms hire similarly educated and experienced workers. They also offer comparable salaries, benefits, and hours than domestic firms, after controlling for firm size and age. Nevertheless, they experience more complaints, strikes, and protests, with Chinese-owned firms reporting particularly high rates of labor conflict. To scrutinize these findings, we conduct case studies of labor management in six domestic and eight foreign-owned firms around Addis Ababa, Ethiopia. We observe antagonistic labor relations in five foreign-owned firms, four of which are Chinese-owned. In these firms, managers perceive employees as using labor laws to take advantage of them, whereas employees see labor laws as a basis for harmonious labor relations. In the remaining firms, managers frame their firm policies as consistent with employee perceptions of labor laws. We conjecture that the visibility of formal labor institutions leads employees to interpret disagreements as intentional disrespect, rather than ignorance. Our findings suggest that misaligned perceptions about the role of local labor institutions may be an important driver of conflict in foreign-owned firms.
Purpose
The environment of international business (IB) and the capabilities of emerging market multinational enterprises (EMNEs) as well as their home countries have changed significantly, leading to some new features of liability of origin (LOR). This paper aims to extend the LOR literature by particularly focusing on the LOR of Chinese multinational enterprises (MNEs) and by taking into account the heterogeneity among industries and across individual MNEs.
Design/methodology/approach
Based on the stereotype content model and organizational legitimacy perspective, this study explores how LOR influences Chinese MNEs’ cross-border acquisition completions. Several hypotheses were tested by using a binary logistic regression model with panel data techniques based on data of 780 Chinese MNEs’ acquisition deals between 2008 and 2018.
Findings
The results of this study show that when the competence dimension of China’s LOR is perceived as high in the host country, Chinese MNEs are less likely to complete cross-border acquisitions. Moreover, deals are less likely to be completed when the warmth dimension of China’s LOR is perceived to be low. Global experience and the foreign-listed status of individual Chinese MNEs can alter the relationship between the LOR and deal completions.
Originality/value
This study advances and enriches the LOR research. It shows that a high level of competence in the home country has led to LOR for Chinese MNEs rather than the low level of competence proposed by existing LOR studies; and the LOR for Chinese MNEs is also determined by the perceived low level of warmth in the home country resulting from the geopolitical conflicts between two countries. In addition, the LOR suffered by EMNEs could vary based on certain industry- and firm-level characteristics. The findings of this study provide important practical implications for emerging economy governments and for firms intending to go abroad.
International staffing policies and practices of Chinese enterprises in Africa have given rise to a number of observations, critical comments, empirical support and rebuttals. One of the areas of research and critique has been the implications of the staffing policies and practices for knowledge and skills transfer to their African hosts. The availability of local skills and talent as constraints to change employment practices by Chinese enterprises has also received attention of researchers. We argue that the dominant international staffing models and theories are inadequate for a comprehensive understanding and critiquing of staffing practices of Chinese MNEs in Africa. Therefore, this paper adopted Zoogah, D. B., Peng, M. W., and Woldu, H. (2015a. Institutions, Resources, and Organizational Effectiveness in Africa. Academy of Management Perspectives, 29(1), 7–31) dynamic African business environment context to interrogate the utility of the dominant international staffing models and theories in order to understand and explain Chinese staffing policies and practices in Africa. The paper also used Chinese Multinational Construction Enterprises (CCMNEs) as a lens through which to examine the relevance of the African context. The paper advances a series of questions to guide future research. We argue that if pursued, the questions can help further our understanding of why the staffing policies and practices of multinational companies from emerging economies in Africa might focus on recruiting PCNs and the casualization of African workers.
Standardization and localization are two debatable concepts in human resource management of Multinational Companies (MNCs) subsidiaries. Standardization involves conducting subsidiaries HRM practices in similar ways as conducted at headquarters of Multinational Companies while localization is adaptation of subsidiaries HRM practices to ways used by local firms in the host countries of subsidiaries. The objective of this paper was to explore determinants associated with standardization and localization of HRM practices in Multinational Companies’ subsidiaries. Method used was a review of literature retrieved from Google, Google Scholar and Jstor as electronic data bases. Interpretation of findings from the literature showed that there were various determinants associated with standardization and localization of HRM practices in Multinational Companies’ subsidiaries and mostly included: cultural and institutional factors, country-of-origin dominance and HRM approaches adopted by Multinational Companies for overseas subsidiaries. It was concluded that the national contexts of the parent and host countries as reflected in the individual determinants had a huge role to play in standardization and localization of HRM practices such as staffing, training and development, compensation, communication, job design, promotion, recognition, job security, industrial relations, and performance management among MNCs’ subsidiaries. The paper also provided implications to international human resource management practitioners. KEY WORDS: HRM practices, Localization, Standardization, Subsidiaries
The aim of this article is to investigate, through a systematic review of the literature, what has been studied and published in the international academic literature regarding the integration between human resources management (HRM) and corporate governance (CG).
We accomplished it answering two research questions: How has evolved the academic publications regarding the integration between HRM and CG? and Under which theoretical perspectives the integration between HRM and CG has been studied? The research covered the publications from 2000 to 2017, and the analysis comprises 79 articles from relevant international journals. The results revealed the predominance of a shareholder theoretical perspective and the apparent legitimation of HRM as an important variable of CG, but with a secondary position, as consultant or processes provider. Besides exploring and exposing the state of the art in this area of knowledge, through a critical analysis of the literature, this study highlights the gaps in the literature and provides suggestions for future studies.
Over the past two decades, a growing body of research on human resource management (HRM) has analyzed the relationship between international HRM and institutions. This work has primarily been informed by two leading streams of theory—organizational institutionalism and comparative institutionalism. However, these two dominant streams have seen much juxtaposition, but little logical integration. Moreover, scholars have paid little attention to the dynamics of contextualization (more specifically, institutional development and evolution), which limits the relevance of extant research. In this article, we review the extant literatures and their intellectual origins and develop an integrative research agenda that emphasizes the multilevel nature of HRM and evolution under external institutional change.
Strategic human resource management (SHRM) has been an important strand of research in the HRM field for over three decades, and has attracted heated debates in recent years. One main critique of the state of SHRM research is its increasing detachment from HRM practice, in the pursuit of more theoretical rigor and methodological sophistication. Our review article has two main tasks. First, we review SHRM research published in two leading HRM journals—Human Resource Management and Human Resource Management Journal—in the light of the criticisms on SHRM research and use this as a backdrop of our second task. Second, we critically examine SHRM research conducted in the Chinese context by drawing on a systematic review on extant literature. In doing so, we draw on a wider range of HRM journals such as Human Resource Management Review, The International Journal of Human Resource Management, and so forth. We find that while the trend of psychologization in SHRM research is gathering pace, the range of theoretical perspectives mobilized to inform the studies is actually expanding. We call for SHRM research to be more contextualized and more practical phenomenon‐driven SHRM research. We indicate several avenues for future research, using China as an example.
In this article, we review similarities and differences in articles in the research field of international and comparative human resource management (HRM), published in Human Resource Management over the past 60 years. The extensive review and analysis, based on 189 conceptual articles, reviews, and empirical studies, identified several trends. First, the two distinct research streams in this research field (HRM in MNEs and comparative HRM) have grown over the decades and moved from conceptual articles in the beginning to almost exclusively empirical studies in more recent years. Second, in addition to the two research streams, in more recent years we identified a third research stream that combines elements of HRM in MNEs and comparative HRM research. Third, the research field has become more feminized, with an increasing number of female (first) authors, and has become more international, with more authors affiliated with non‐US universities in the more recent time periods. Finally, while the research streams show some differences in the content of their research, we do not find evidence that the streams developed in isolation. Based on our analysis, we provide suggestions for future research on international and comparative HRM and identify current implications for HR practitioners.
The expansion of the Chinese and Indian firms’ global footprints in recent years reveal their growingly evident strategic intent and emerging capability, and calls for the need to (re)examine how emerging multinational enterprises’ (EMNEs) internationalization strategies could be conceptualized with implications for human resource management (HRM). This chapter reviews patterns and strategies of internationalisation of Chinese and Indian firms. It assesses their role in the global economy by, for example, leading innovation in products and services. The chapter also identify challenges they are likely to encounter in entering and performing in the global market, as well as implications for organisational and HRM capability building. We identify a set of research avenues for future investigation to shed light on how institutional and cultural factors at various levels and Chinese and Indian multinationals’ strategy may impact various aspects of HRM practices. Further, the likelihood of collaborative business development initiatives between Chinese & Indian multinationals will be considered with reference to the potential impacts on the global economy.
The purpose of this article is to provide an overview on the state of research in the field in human resource management (HRM) issues in multinational corporations (MNCs) in and from China. We integrate previous studies from multiple disciplines to articulate the contextual importance of research on this topic, and suggest overarching themes to expand the field of research. HRM research in the intercultural, interinstitutional context of MNCs in and from China has the potential to provide contextualized insights for longstanding debates in the field such as HRM standardization versus localization and convergence versus divergence and contextual factors behind these patterns. To this end, we call for future research to center on the changing cultural, institutional, technological, and globalization context in understanding HRM and industrial relations issues in these MNCs. Practically, knowledge in this area can help global managers and top management teams in multinational organizations navigate various context complexity, foster more productive coordination and cooperation across borders, and gain legitimacy and MNCs in and from China additional competitive edge in the global marketplace.
This study investigates the effect of state ownership on Chinese firms’ foreign direct investment (FDI) ownership decisions. It adopts a political perspective to extend the application of institutional theory in international business research. Specifically, it examines firms’ heterogeneous responses to external institutional processes during foreign market entry, while taking into consideration the political affiliation of firms with the external institutions. We argue that state ownership creates the political affiliation of a firm with its home-country government, which increases the firm’s resource dependence on home country institutions, while at the same time influencing its image as perceived by host-country institutional constituents. Such resource dependence and political perception increase firms’ tendency to conform to, rather than resist, isomorphic institutional pressures.
Line managers play a central role in HRM practices, but research and theory on how their role is enacted remains underdeveloped. This paper presents a case study of a large U.K.-based fashion retailer and uses managerial discretion theory to develop a novel understanding of line managers' contribution to the implementation of HRM practices. We describe three distinct ways in which line managers engage with HRM policies and procedures, and propose that line managers make an important contribution to the effective implementation of HRM systems through exerting their cognitive and political abilities to bring about decisions that are well suited to their local situations. Moreover, we find that HR specialists design and manage HRM policies and procedures to afford different levels of managerial discretion in different areas of HRM.
Chinese firms are internationalizing at an unprecedented speed. One profound phenomenon linked to this active Chinese firms internationalization process is that the process tends to be confronted with negative media coverage of China and Chinese firms in Western countries. How to understand and cope with the negative image of China and Chinese firms, as they are often seen in the Western media, emerges as a relevant and timely research topic in the study of the internationalization of Chinese firms. The purpose of this article is to stimulate ideas for further research on the relations between the internationalization of Chinese firms and the media coverage. We use the case of Geely's acquisition of Volvo Cars, which was to a large extent negatively reported in the Swedish media during 2008-2013, as inspiration to identify the interesting research themes and questions. Given the increasing anti-globalization trend, we hypothesize that Chinese firms will have to face up to the reality of negative media coverage in many Western countries for the foreseeable future, at least in the firms' initial establishment phases. We end our paper with the managerial implications.
With an increasing importance of outward foreign direct investment ( OFDI ) by multinationals ( MNCs ) from
China in advanced economies, there is a need for deepening our knowledge of these Chinese MNCs
not simply regarding their benefi ts and concerns, but more importantly regarding their dynamic and complex
contexts. In this article, we investigate challenges that Chinese investors face in managing multiple
embeddedness across heterogeneous contexts and why this multiple contextual embeddedness is particularly
evident when Chinese fi rms acquire Western fi rms for competitive catch-up. We contend that the
interaction of Chinese investors with various local contexts depends on the extent to which these contexts
are not only interrelated, but also overlain by temporal and spatial dimensions of context. Accordingly,
contextualizing globalization of Chinese companies temporally and spatially will allow us to better understand
their international expansion. More generally, we stress the need to place Chinese OFDI research
in its broader context, temporally and spatially, and go beyond the mere institutional or cultural distance
variables. Finally, we outline the key contributions from the six articles in this special issue and discuss
the future research agenda stimulated by the issues raised in these articles.
Drawing on a dataset constructed from a parallel series of nationally representative surveys of multinational companies (MNCs), we compare the performance management (PM) practices of MNCs in the UK, Ireland, Canada, Spain, Denmark and Norway. In each country we analyze data relating to MNCs from that country and of the foreign affiliates of US MNCs. We argue that there is evidence of standardization in the nature of practices across countries, particularly evident in the analysis of US MNCs. Standardization of practices among MNCs is also evident in the rather limited variation in practices between US and indigenous MNCs within each country. Moreover, even where there is evidence of variation across and within countries, this cannot be fully explained by adaptation to local institutional constraints but rather can be seen as the product of how distinct national contexts can promote the take-up of practices.
Embracing the convergence–divergence–crossvergence debate in the field of international human resource management (IHRM) and linking it to the context of emerging market multinational enterprises (EMNEs), our key contribution is to provide a precise and feasible architecture of convergence–divergence–crossvergence response that takes into account the global versus local dilemma, as well as the headquarters–subsidiary relationship. By incorporating the latest theoretical development and case observations of EMNEs, we identify localization as a strategic goal and autonomy as a control means that foster EMNEs’ choosing their own paths in managing international human resources. Under the architecture, the two types of crossvergent IHRM strategies – deliberate and emergent – are further distinguished. Propositions are developed for future empirical testing.
The country-of-origin effect (COE) on employment practices in multinational enterprises (MNEs) has become an important area of international human resource management research. However, research on the mechanisms of the COE, a fundamental and critical aspect of the country-of-origin phenomenon, is scant. This study seeks to empirically explore the mechanisms through which country-of-origin influences Chinese MNEs’ approach to host-country employer associations. Analysis of qualitative data from 13 Chinese MNEs revealed that country of origin affected the approach of Chinese MNEs to host-country employer associations in the form of transfer of managerial norms. It also revealed that it was the mindset of those home-country nationals who were key decision-makers at subsidiaries that enabled the COE in Chinese MNEs. This paper highlights the importance for future studies of international strategic human resources management to pay attention to micro-foundations of cross-border practice transfer and to incorporate analyses of managerial cognition in the investigation of MNEs’ management practices.
Does the use of HRM practices by multinational companies (MNCs) reflect their national origins or are practices similar regardless of context? To the extent that practices are similar, is there any evidence of global best standards? The authors use the system, societal, and dominance framework to address these questions through analysis of 1,100 MNC subsidiaries in Canada, Ireland, Spain, and the United Kingdom. They argue that this framework offers a richer account than alternatives such as varieties of capitalism. The study moves beyond previous research by differentiating between system effects at the global level and dominance effects arising from the diffusion of practices from a dominant economy. It shows that both effects are present, as are some differences at the societal level. Results suggest that MNCs configure their HRM practices in response to all three forces rather than to some uniform global best practices or to their national institutional contexts.
Many international firms have found China a difficult market in which to prosper. In spite of this, many local private Chinese enterprises are succeeding. although they face an institutional environment that can be quite hostile. One of the principal reasons many local private firms have been able to succeed in a challenging environment where many multinationals have struggled is that they pursue strategic actions that establish their legitimacy in the society. The result is that the negative impact of meddlesome officials and the lack of well-codified and enforceable laws is reduced. This article identifies nine legitimacy-building strategies that local private firms have employed in China's transition economy. International firms entering these markets would be well served by observing and creatively replicating the local private firms' behaviors that helped to establish legitimacy.
Strategic human resources management (SHRM) scholars recently have suggested that high-performance work practices (HPWP) implementation might serve as a critical mediator between HPWP and workplace outcomes. This study proposes and tests a model that positions line managers' perceptions regarding the extent to which they implement their organization's HPWP as a mediator of relations between HPWP and employee attitudes (i.e., turnover intentions and participative decision-making perceptions) and behavior (i.e., job performance). Using data from 507 line managers and 109 matched line manager-subordinate response sets, the results suggest that line managers' HPWP implementation perceptions fully mediate relations between HPWP and employee outcomes. The authors also found that line managers' human resources competency and political skill affect their HPWP implementation perceptions. Overall, these findings contribute to a more informed understanding of relationships between HPWP and work outcomes and suggest that additional SHRM research is needed to better understand whether and how HPWP are implemented. (PsycINFO Database Record
(c) 2015 APA, all rights reserved).
Emerging economy enterprises nowadays relentlessly scale the value chain in a quest to compete on the world stage in part by copying the products of others. They develop new products and services that are dramatically less expensive than their Western equivalents. In this article we discuss what these copycats are and how they have grown in their unique trajectory. We emphasize their unique capabilities and weaknesses, internal and external conditions that foster growth, and strategies and paths that transform them along a continuum from duplicative imitators to creative imitators and ultimately to novel innovators. To this end, we present the CHAIN Framework (combinative, hardship-surviving, absorptive, intelligence, and networking) capabilities to showcase the copycats' capabilities and discuss STORM conditions (social, technological, organizational, regulatory, and market) that spur their growth. Finally, we present four case studies of copycats and discuss future research on this issue.
State-owned (SO) enterprises are subject to more complex institutional pressures in host countries than private firms. These institutional pressures arise from a weak legitimacy of “state ownership” in some countries, which arises from a combination of ideological conflicts, perceived threats to national security, and claimed unfair competitive advantage due to support by the home country government. These institutional pressures directed specifically at SO firms induce them to adapt their foreign entry strategies to reduce potential conflicts and to enhance their legitimacy. Testing hypotheses derived from this theoretical argument for subsidiaries of listed Chinese firms, we find that SO firms adapt mode and control decisions differently from private firms to the conditions in host countries, and these differences are larger where pressures for legitimacy on SO firms are stronger. These findings not only extend institutional theory to better explain differential effects on different entrants to an organizational field, but demonstrate how foreign investors of idiosyncratic origins may proactively build legitimacy in host societies.
The globalization of state-owned multinational companies (SOMNCs) has become an important phenomenon in international business (IB), yet it has received scant attention in the literature. We explain how the analysis of SOMNCs can help advance the literature by extending our understanding of state-owned firms (SOEs) and multinational companies (MNCs) in at least two ways. First, we cross-fertilize the IB and SOEs literatures in their analysis of foreign investment behavior and introduce two arguments: the extraterritoriality argument, which helps explain how the MNC dimension of SOMNCs extends the SOE literature, and the non-business internationalization argument, which helps explain how the SOE dimension of SOMNCs extends the MNC literature. Second, we analyze how the study of SOMNCs can help develop new insights of theories of firm behavior. In this respect, we introduce five arguments: the triple agency conflict argument in agency theory; the owner risk argument in transaction costs economics; the advantage and disadvantage of ownership argument in the resource-based view (RBV); the power escape argument in resource dependence theory; and the illegitimate ownership argument in neo-institutional theory. After our analysis, we introduce the papers in the special issue that, collectively, reflect diverse and sophisticated research interest in the topic of SOMNCs.
Bringing together leading authorities and emerging young researchers, this edited textbook is aimed at students and scholars interested in the Chinese workplace and the impact that China is having on work internationally. Part of the Critical Perspectives on Work and Employment series, it is the first textbook to use labour process analysis to examine work and employment in China. This book discusses key features and contrasts in employment and labour conditions within China, as well as reviewing the impact of Chinese firms operating outside of China.
As the first collection to explicitly use labour process theory as an orienting perspective, this book is ideal for students and scholars interested in what is becoming the most significant country in the global economy.
This study investigates the effect of state ownership on Chinese firms’ foreign direct investment (FDI) ownership decisions. It adopts a political perspective to extend the application of institutional theory in international business research. Specifically, it examines firms’ heterogeneous responses to external institutional processes during foreign market entry, while taking into consideration the political affiliation of firms with the external institutions. We argue that state ownership creates the political affiliation of a firm with its home-country government, which increases the firm’s resource dependence on home country institutions, while at the same time influencing its image as perceived by host-country institutional constituents. Such resource dependence and
political perception increase firms’ tendency to conform to, rather than resist, isomorphic institutional pressures.
What drives the outward foreign direct investments (OFDIs) by emerging market firms (EMFs)? Drawing on a strategy tripod framework, this article proposes a theoretical model to predict OFDI by EMFs from China. Specifically, we use institution- and industry-based views to examine two facets of home country environment, namely, the supportiveness from home government and unfavorableness from home industry, as important determinants of OFDI, and compare the relative strength of these effects. Further, we use the resource-based view to argue that the effect of the home country environment is contingent on the international experience portfolios of EMFs.
Our original 2007 Journal of International Business Studies article, “The determinants of Chinese Outward Foreign Direct Investment”, was the first theoretically based empirical analysis of the phenomenon. It utilised internalisation theory to explain the internationalisation of Chinese state-owned enterprises. This paper showed that we had failed to ask sufficiently challenging questions about the effects of home country institutions on outward foreign direct investment (OFDI). This Retrospective builds on the extensive subsequent research to show the importance of context in constructing satisfactory theoretical explanations of OFDI. Building on these foundations, we propose research challenges for the next decade on Chinese OFDI that transcend the Chinese context and have wider theoretical applicability. Examining alternative forms of social and economic organisation allows the creation of special theories of foreign direct investment nested within the general theory. Following such a strategy would enable International Business research to make a contribution across the social sciences.
Buckley et al.’s (J Int Bus Studi 38(4):499–518, 2007) pioneering work concluded that the determinants of outward foreign direct investment (OFDI) from China were similar to those observed in developed countries – but with a few modifications. In this commentary, we suggest continuing their effort to understand what is distinctive about Chinese multinational enterprises (CMNEs). We look for underlying explanations that are analytically useful and potentially generalizable, unlike a firm’s nationality, which is a catch-all variable with no analytical value. Based on prior research and Ramamurti (Glob Strategy J 2(1):41–47, 2012a), we argue that the following variables help explain distinctive aspects of CMNE internationalization: (1) their “stage of evolution as a multinational enterprise,” with most CMNEs being infant MNEs rather than mature MNEs; (2) the “global context for internationalization,” which has helped CMNEs internationalize faster than it was possible in earlier decades; (3) “government-created advantages,” which complemented China’s natural endowments and for the most part improved CMNEs’ international competitiveness; and (4) “leapfrogging advantage,” which allowed late-mover Chinese firms to gain a competitive advantage in smokestack industries and some sunrise industries. These variables may also explain the behavior of MNEs from other emerging economies and are therefore candidates for inclusion in general models of the internationalization process.
This study explores patterns of human resource management (HRM) practices across market economies, and between indigenous firms and foreign MNE subsidiary operations, offering a novel perspective on convergence and divergence. Applying institutional theorizing to improve our understanding of convergence/divergence as a process and an outcome, data collected from nine countries at three points in time over a decade confirm that convergence and divergence occur to different extents in a nonlinear fashion, and vary depending on the area of HRM practice observed. Patterns of adoption and convergence/divergence are explained through the effect of institutional constraints, which vary between liberal and coordinated market economies, and between indigenous firms and foreign MNE subsidiaries. Specifically, we expected, and largely found supporting evidence confirming that compensation and wage-bargaining level practices show more evidence of being institutionally constrained, and hence were less likely to converge, than contingent employment, training, and direct information provision practices. The study contributes a more graded conceptualization of convergence/divergence (from constant no difference, through robust convergence, non-robust convergence, non-robust divergence, and robust divergence to constant difference), allowing us to tease out the subtle manifestations of the process that can incorporate the complex dynamic reality of international business.
While China’s outward direct investments continue to soar, many Chinese firms reportedly face social resistance in host countries during the internationalization process. We explore this phenomenon from a country-of-origin (COO) perspective using Fiske and colleagues’ (Fiske, Cuddy, Glick, & Xu, 2002; Fiske, Xu, Cuddy, & Glick, 1999) stereotype content model. Our findings from a recent case in New Zealand show that China’s COO emerges as a key variable influencing how local actors view Chinese investors. Specifically, despite China’s significant economic and social develop- ments over the past decades, it suffers from a somewhat negative country image in two stereotype dimensions: competence and warmth.This leads to a perception by local actors that Chinese firms are of low quality, which explains the source of resistance in society. To address such a liability of origin, Chinese firms must learn to deal with this form of stereotypical judgment encountered in a host environment. Further contributions and limitations of the study are discussed in the article.
We define the ‘Chinese way’ of internationalization as oriented toward experimental learning, in contrast to traditional internationalization models, such as the Uppsala model. Analyses of survey data of private Chinese firms that have made outward foreign direct investments (OFDI) show that only 50 percent follow the Uppsala model in which firms follow a staged approach. The other 50 percent follow more risky explorative OFDI approaches in which the firms learn on the ground experimentally from their OFDI. We further investigate how the founders’ congenital learning, firms’ inward international experience, potential absorptive capabilities, and motivations to learn, influence OFDI performance and how learning outcomes mediate these relationships. We show that the relationship between the firm’s potential absorptive capacity and its OFDI performance is fully mediated by what the firm learned from the OFDI project. Also the firm’s motivation to learn directly affects performance and is partially mediated by what the firm has learned.
This paper examines the differences between the stream of international HRM that focuses on comparative HRM and the one that focuses on HRM in multinational enterprises (MNEs). More specifically, we review how the aspects of time, process and context have been treated within the two streams and argue that the streams have largely developed in isolation as opposed to informing one another. Drawing on this analysis we propose a research agenda that illustrate how the crossing of these streams can advance theory and empirical research in both HRM in MNEs and comparative HRM, to the benefit of both.
In this article, we highlight the significance and need for conducting context-specific human resource management (HRM) research, by focusing on four critical themes. First, we discuss the need to analyze the convergence-divergence debate on HRM in Asia-Pacific. Next, we present an integrated framework, which would be very useful for conducting cross-national HRM research designed to focus on the key determinants of the dominant national HRM systems in the region. Following this, we discuss the critical challenges facing the HRM function in Asia-Pacific. Finally, we present an agenda for future research by presenting a series of research themes.
Recently, capturing within-organization variability during the implementation of high performance work systems (HPWS) has received considerable attention; however, the source of such variability has rarely been considered. If the utilization of HPWS is positively related to performance outcomes, examining factors contributing to an effective implementation may yield significant theoretical and practical implications. For this purpose, this study extends the extant HPWS literature in two ways. First, we attempt to conceptualize team-level HPWS intensity and identify antecedents of variance across teams. Specifically, we regard the visible role of team managers in the process of HPWS implementation as a primary interpretive filter that makes team members perceive differences in HPWS intensity, which in turn affects team performance. Second, we posit that if human resources (HR) policies are viewed as an exchange agreement between the organization and its employees, then a team manager more actively enforcing espoused HR practices may positively influence the sense of human resource management (HRM)–induced psychological contract fulfillment of team members, which in turn influences individual in-role performance and organizational citizenship behavior (OCB). Our hypotheses are tested with data from 183 matched responses from 51 teams, and the results generally support both the team-level and multilevel hypotheses. We discuss the theoretical and managerial implications of our study.
The implementation of human resource (HR) practices (HRPs) is increasingly regarded as a cornerstone in the achievement of overall HRM effectiveness. This article addresses the role of the HR department in contributing to line managers' (LMs) effective implementation of HRPs. It does so by comparing the actions of HR departments in both effective and ineffective implementation processes in different firms. Its findings reveal that HR departments can make a difference by taking initiatives that foster LMs' implementation abilities, motivation and opportunities, such as deploying in-the-field HR specialists, framing practices in appealing ways, involving LMs in the development of HRPs and seeking CEO support, among others. By fleshing out these HR initiatives and linking them to the AMO framework, we build an inductive model that offers a more nuanced view of what HR departments can do to have their proposals effectively implemented by LMs.
In the introductory article to a special issue on multinational corporations (MNCs) and employment practices, the authors highlight the key features of an international survey research project. Research teams carried out parallel surveys in four countries: Canada, Ireland, Spain, and the United Kingdom. These surveys are the most comprehensive investigations of the employment practices in MNCs in their respective countries. In framing the comparative analysis of these data, the teams had four objectives: (1) to explore the processes of integration and differentiation in MNCs, including the interactions among MNCs and nation states and their impact on employment practices; (2) to chart the influence of foreign direct investment (FDI) and systems of industrial relations; (3) to outline the key elements of the research design and chart the process of collecting data; and (4) to provide a summary of the patterns of integration and differentiation found among MNCs.
The approach to managing human resources has changed significantly in China over the last twenty-five years as its transformation from a state planned economy to a market-oriented economy continues. By adopting a broad notion of HRM, while remaining sympathetic to the strong emphasis on relationship management in the Chinese culture, Fang Lee Cooke builds on the foundations of traditional Chinese HRM practice and brings it right up to date, including analysis of currently under-explored issues such as diversity management, talent management, new pay schemes, and performance management.
Exploring a unitarist and pluralist Human Resource Management (HRM) perspective, we propose a more nuanced view on Bowen and Ostroff's (2004) concept of strong HRM processes. More specifically, we investigate whether strong HRM processes contribute positively or negatively to line managers' effective HRM implementation. The results of a multi-level model with data from 125 line managers and 899 employees of five organisations show a complex picture. In line with unitarist thinking, we find a positive indirect effect of strong HRM processes on HRM implementation effectiveness via line managers' ability. In accordance with pluralist thinking, we find a negative direct relationship between strong HRM processes and HRM implementation effectiveness. We discuss the tensions in HRM that might explain these ambiguous findings.
In the introductory article to a special issue on multinational corporations (MNCs) and employment practices, the authors highlight the key features of an international survey research project. Research teams carried out parallel surveys in four countries: Canada, Ireland, Spain, and the United Kingdom. These surveys are the most comprehensive investigations of the employment practices in MNCs in their respective countries. In framing the comparative analysis of these data, the teams had four objectives: (1) to explore the processes of integration and differentiation in MNCs, including the interactions among MNCs and nation states and their impact on employment practices; (2) to chart the influence of foreign direct investment (FDI) and systems of industrial relations; (3) to outline the key elements of the research design and chart the process of collecting data; and (4) to provide a summary of the patterns of integration and differentiation found among MNCs.
Interest in the problem of method biases has a long history in the behavioral sciences. Despite this, a comprehensive summary of the potential sources of method biases and how to control for them does not exist. Therefore, the purpose of this article is to examine the extent to which method biases influence behavioral research results, identify potential sources of method biases, discuss the cognitive processes through which method biases influence responses to measures, evaluate the many different procedural and statistical techniques that can be used to control method biases, and provide recommendations for how to select appropriate procedural and statistical remedies for different types of research settings.
Human resource (HR) managers’ commitment to their occupation (HR) leads to the proper delivery and implementation of HR practices and, therefore, is deemed as a critical factor for the success of HR practices. Based on socio-cognitive, human capital, and signaling theories, this study examines: (a) HR managers’ own and their chief HR officer’s (CHRO) HR-specific human capital as antecedents of their commitment to HR, and (b) the mediating mechanism through which the CHRO’s HR-specific human capital positively influences HR managers’ commitment to HR. Based on 146 HR managers from 146 organizations in South Korea, the findings of the current study suggest that HR managers with higher levels of HR-specific human capital and those working with CHROs with higher levels of HR-specific human capital tend to have higher levels of commitment to HR. In addition, CHROs with higher levels of HR-specific human capital positively influence HR managers’ commitment to HR by signaling to them that HR and its function are valued and cared about by their organizations. Theoretical and practical implications of this study are discussed along with study limitations and further research directions.
We study HRM practice implementation in subsidiaries of multinational corporations (MNCs) and diverge from extant research by focusing on alignment, which we conceptualize as the degree to which subsidiary implementation of HRM practices corresponds with the subsidiary-specific transfer intentions of corporate headquarters. In explaining alignment we examine different aspects of the headquarters–subsidiary relationship, namely, the extent of formal control, interpersonal relationships and subsidiary strategic HRM capabilities. Based on a sample of 105 subsidiaries from 12 Nordic MNCs, the results highlight the importance of expatriates, trust and the strategic HRM capabilities of the subsidiary HR function. We conduct post hoc analyses to shed further light on (i) the relationship between our independent variables and the two separate components of alignment – corporate intentions and subsidiary implementation, and (ii) two different types of misalignment – excessive and insufficient.
With the publication of his best-selling books "Competitive Strategy (1980) and "Competitive Advantage (1985), Michael E. Porter of the Harvard Business School established himself as the world's leading authority on competitive advantage. Now, at a time when economic performance rather than military might will be the index of national strength, Porter builds on the seminal ideas of his earlier works to explore what makes a nation's firms and industries competitive in global markets and propels a whole nation's economy. In so doing, he presents a brilliant new paradigm which, in addition to its practical applications, may well supplant the 200-year-old concept of "comparative advantage" in economic analysis of international competitiveness. To write this important new work, Porter and his associates conducted in-country research in ten leading nations, closely studying the patterns of industry success as well as the company strategies and national policies that achieved it. The nations are Britain, Denmark, Germany, Italy, Japan, Korea, Singapore, Sweden, Switzerland, and the United States. The three leading industrial powers are included, as well as other nations intentionally varied in size, government policy toward industry, social philosophy, and geography. Porter's research identifies the fundamental determinants of national competitive advantage in an industry, and how they work together as a system. He explains the important phenomenon of "clustering," in which related groups of successful firms and industries emerge in one nation to gain leading positions in the world market. Among the over 100 industries examined are the German chemical and printing industries, Swisstextile equipment and pharmaceuticals, Swedish mining equipment and truck manufacturing, Italian fabric and home appliances, and American computer software and movies. Building on his theory of national advantage in industries and clusters, Porter identifies the stages of competitive development through which entire national economies advance and decline. Porter's finding are rich in implications for both firms and governments. He describes how a company can tap and extend its nation's advantages in international competition. He provides a blueprint for government policy to enhance national competitive advantage and also outlines the agendas in the years ahead for the nations studied. This is a work which will become the standard for all further discussions of global competition and the sources of the new wealth of nations.
What explains why high-performance work systems (HPWSs) are not adopted more widely by firms that would appear to benefit economically by adopting them? We address this question by drawing on the upper-echelons perspective to consider the role of the top managers’ beliefs concerning the financial payoffs from investments in HR (“HR cause-effect belief”) as well as their employee-centered value-based beliefs (labeled “HPWS values”). We propose a conceptual model in which top management HPWS values moderate the relationship between HR cause-effect beliefs and the intensity of HPWS programs reported by managers as well as the relationship between HPWS programs and employees’ perceptions of implemented HPWS practices. We test our model using a unique multisource data set collected from 120 hotel franchisees that includes survey responses from 648 managers and 1,293 employees. We find that firms’ ability to translate top managers’ cause-effect beliefs about the economic value of HR investments into adoption of HPWS programs, as well as their ability to effectively implement these HPWS programs, is significantly affected by the value-based HR beliefs held by top managers. © 2014 Wiley Periodicals, Inc.
There is a very extensive body of literature on how multinationals manage their people in different national contexts. However, the bulk of this literature focuses on the case of multinationals from the advanced industrial economies, and to a considerable extent, the United States. Very much less has been written on multinationals with their country of origin being an emerging market, and what little there is has focused on a very limited number of preferred cases. The growing importance of emerging economies has led to an upsurge of strategy research on the topic (Wright, Filatotchev, Hoskisson, & Peng, 2005); however, research on human resource management has not paid enough attention to emerging market multinational enterprises (EMNEs). Many EMNEs tend to be smaller in size with considerably fewer resources and less international experience than their counterparts from developed markets, limiting their ability to transfer management practice across their subsidiaries (Thite, Wilkinson, & Shah, 2012), although there are important exceptions to this rule. This introductory article seeks to contribute to the emerging body of literature in this area, through seeking to encourage fresh insights, particularly on the varieties of people management encountered in different national contexts. © 2014 Wiley Periodicals, Inc.
In this paper, we build on the standard resource dependence theory (RDT) and its departure suggested by Vernon to offer a novel explanation for why state-owned entities (SOEs) might seek a global footprint and global cash flows: to achieve resource independence from other state actors. In the context of SOEs, the power use hypothesis of standard RDT can be used to analyze the dependence of SOEs on other state actors, such as government ministries and government agencies that have ownership and control rights in the SOE. Building on Vernon, we argue that the SOE can break free from this power imbalance and establish resource independence from other state actors by becoming a multinational firm and/or by generating global cash flows. We leverage a natural experiment in India and outline both quantitative and qualitative evidence from 42 Indian state-owned laboratories to support this argument.
This paper argues that it is crucial to take account of both home and host country contexts in order, adequately, to understand their implications for Chinese enterprises investing into foreign countries. This calls for an analysis that is sensitive to both home and host country contexts, and that takes into account how the institutions and political systems in those contexts establish institutional and resource capital needs for the overseas-investing firm. We discuss and illustrate three different combinations of Chinese and host country characteristics, and the firm-level learning and adaptation required in the light of the relevant capitals likely to be available to Chinese firms. The analysis draws upon insights from resource-based, institutional and political perspectives. While it is developed with specific reference to China, we also suggest that this form of analysis can be applied more generally to the implementation of outward foreign direct investment from any country.
This study examines the impact of customizing (as opposed to standardizing) human resource management (HRM) practices on subsidiary performance in multinational corporations (MNCs). We examine how this relationship is influenced by environmental uncertainty. Hypotheses were tested using data from 92 subsidiaries of a large MNC operating in 27 countries. The results showed an interactive relationship between the customization of HRM practices and subsidiary environmental uncertainty on both financial (net profit) and nonfinancial (customer satisfaction) objective measures of subsidiary performance. The results of this study provide important empirical insights for researchers and practitioners into how HRM can be best configured to drive multiple performance outcomes for MNC subsidiaries. © 2014 Wiley Periodicals, Inc.
In this article, we explore what determines the decisions of emerging-market multinational corporations (MNCs) to invest in Africa and whether this is any different from their counterparts in mature markets, focusing on the HRM context. More specifically, we explore the effect of potential host-country wages, local capabilities, and the relative rights of owners versus workers on foreign direct investment (FDI) decisions, as well as other relevant factors such as mineral resources and corruption. We found that emerging-market MNCs were not deterred by relatively weak property owner rights (as indeed, was also the case for their counterparts from mature markets); hence, any weakening of countervailing worker rights is unlikely to unlock significant new FDI. However, emerging-market MNCs were more likely to invest in low-wage economies and did not appear to be concerned by local skills gaps; the latter would reflect the relative de facto ease with which even partially skilled expatriate labor can be imported into many African countries. At the same time, a reliance on low-wage, unskilled labor, coupled with the extensive usage of expatriates, brings with it a wide range of challenges for the HR manager, which a firm committed to cost-cutting may lack the capabilities to resolve. © 2014 Wiley Periodicals, Inc.
Interest in the internationalization of Chinese firms has soared in recent years. However, studies that compare Chinese multinational corporations (MNCs) in different industries and their human resource management (HRM) remain limited. This study fills this research gap by examining the HRM practices of Chinese MNCs and the extent to which these are shaped by the institutional factors that are specific to industries. It focuses on the Chinese operations in the South/Southeast Asian and African regions because Chinese firms tend to have various competitive advantages in these regions. The article draws on a number of theoretical perspectives, particularly the political economy and institutional perspectives, to make sense of the different contexts under which Chinese MNCs invest and operate. It argues that in examining Chinese MNCs, it is important to contemplate the role of the government and a wider range of institutional actors in order to understand how the dynamic interactions of these actors may shape the HRM of these firms with broader economic and social impacts. © 2014 Wiley Periodicals, Inc.