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: firstname.lastname@example.org. 1090-9516/$ – see front matter # 2006 Elsevier Inc. All rights reserved. doi:10.1016/j.jwb.2006.08.002
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
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...