Introducing Western-Style Hrm Practices to China:

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Journal of World Business 41 (2006) 328–343 www.socscinet.com/bam/jwb

Introducing Western-style HRM practices to China: Shopfloor perceptions in a British multinational§ Jos Gamble *
School of Management, Royal Holloway, University of London, Egham, Surrey TW20 0EX, United Kingdom

Abstract The management of host country employees is often portrayed as a particularly fraught dimension for multinational firms. The problems involved are considered exponentially greater when there are substantial institutional differences and ‘‘cultural distance’’ between the host country and a multinational firm’s parent country, as is assumed to be the case for Western firms operating in mainland China. Based upon detailed case study research conducted at a UK-invested firm in China between 1999 and 2003 and a comparative study of a Chinese state-owned firm, this paper explores the veracity of such assumptions. The findings indicate that Western human resource management (HRM) practices can be transplanted successfully and questions the degree to which foreigninvested enterprises (FIE) need to adopt ‘‘the Chinese way of doing things’’. Indeed, such practices can be innovative in the Chinese context and provide a competitive source of differentiation for multinationals as employees. # 2006 Elsevier Inc. All rights reserved. Keywords: China; Multinationals; Human resource management; Expatriates; Retail sector

1. Introduction Since the late 1970s, China has sought to attract foreign direct investment (FDI). The intention is that FDI will bring not only updated products, equipment and technology, but also advanced management expertise and human resource management (HRM) systems and practices (Child, 1991). China has been enormously successful in attracting investment: between 1980 and the end of 2004 the country utilised US$ 562 billion in FDI. However, researchers have observed limits to the introduction of new HRM systems (Ding, Goodall, &

This paper is a result of research sponsored by the ESRC/AHRB under its Cultures of Consumption programme award number RES143-25-0028 for the project ‘Multinational Retailers in the Asia Pacific’. * Tel.: +44 1784 414094; fax: +44 1784 276100. E-mail address: j.gamble@rhul.ac.uk. 1090-9516/$ – see front matter # 2006 Elsevier Inc. All rights reserved. doi:10.1016/j.jwb.2006.08.002

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Warner, 2000; Goodall & Warner, 1997; Ilari & La Grange, 1999; Warner, 1999) and Western training practices are regarded as potentially inappropriate in the Chinese context. More generally, the management of local employees has been reported as the greatest challenge facing foreign-invested enterprises (FIE) in ¨ China (Ahlstrom, Bruton, & Chan, 2001; Bjorkman & Lu, 1999; Jackson & Bak, 1998; Sergeant & Frenkel, 1998). To avoid personnel difficulties, analysts advise FIEs to adapt their HRM practices to the local context and to deploy expatriates with appropriate linguistic skills and understanding of Chinese culture. This paper focuses on the instance of a UK-invested retail firm in China that imported a relatively unmodified version of its parent country HRM practices. Moreover, their relatively open and consultative practices, which included a comparatively flat hierarchy and mechanisms whereby managers actively sought workers’ opinions and were responsive

J. Gamble / Journal of World Business 41 (2006) 328–343

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to employee feedback, appeared antithetical to local norms. Despite this, not only does the firm appear to be performing extremely well but also, as will be shown, its local employees responded positively to the imported HRM regime. Given the firm’s apparent disregard of ‘‘received wisdom’’, this paper sets out to investigate the factors that lay behind this intriguing success story. In particular, the paper explores the following questions: can Western multinationals transfer successfully their parent country HRM practices? How do Chinese employees’ experiences of employment in such a firm compare...
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