Trustworthiness and ethical considerations: a review of personal connections in China

This study is to assess the significance of guanxi or personal connections in Chinese management, its contribution to trust in business dealings, and its relation to ethical judgement in Chinese management. The paper begins with a background to the term Guanxi where it argues that personal connections would be an adequate and preferable term for guanxi, since although the phenomenon in practice is specific to China it is not unique to China. Guanxi or personal connections in China should be seen as part of China’s traditional culture, but without attaching a mystical value to the concept. Understanding of the phenomenon and awareness of how to deal with Chinese business is fundamental to trust both domestically and in foreign business dealings. However it is through a grasp of ethical considerations and a deeper awareness of morality that personal connections can be soundly based and goes beyond the rule of law to meet China’s potential for socio-economic success.     

Multinational Management Strategy and Human Resource Decision Making In the Single European Market*

There has been considerable academic interest in the consequences of European integration for multinational companies and their subsidiaries, and the co-ordination and control of human resource decision making. Against the backdrop of this debate, this paper examines the impact of European integration on management organization and human resource decision making in 13 British multinational companies. Although there were partial moves towards the development of European managers, a European-wide approach to human resource matters was not yet a conspicuous feature of this sample of multinationals. the global preoccupations of the companies, as well as the persistence of national variations in consumer markets and modes of product regulation, were clearly major constraints on the emergence of European forms of corporate organization and underpinned the lack of enthusiasm for distinctively European approaches to employee management.     

The changing role of guanxi in influencing the development of entrepreneurial companies: a case study of the emergence of pharmaceutical companies in China

“Guanxi” is a term in Chinese referring to the reciprocal nature of interpersonal relationships. Its attributes, which are specific to Chinese culture, have been the focus of recent literature. Whereas the impact of guanxi seems to be quite similar to that of general relationships, ties or connections, it is characterized by a number of different dimensions. In this paper, we studied 44 entrepreneurial companies in the pharmaceutical industry in China to examine these attributes in greater detail. We use a system dynamics model to simulate the influence of various guanxi variables – the strength, scale and structure of guanxi – on the development of entrepreneurial companies.     

How work-related capabilities influence job performance: a relational perspective

Employee relationships with supervisors can be based upon both work-focused activities and outcomes, as exemplified by leader–member exchange (LMX), and personal, non-work activities, as exemplified by Chinese guanxi. The purpose of this study is to examine the mediating role of supervisor–subordinate guanxi (SSG) and LMX in the relationship between the work-related human and social capital of employees and supervisors’ ratings of their job performance. Data were collected from 372 employees and 127 supervisors in a range of companies in China. The study demonstrates how human and social capital might play differing roles in influencing SSG and LMX. In particular, LMX partially mediated the relationship between human capital and job performance, and the relationship between social capital and job performance was fully mediated by SSG and LMX. The findings enrich understanding of how personal capabilities influence work and non-work relationships and assessments of job performance. The unique content of the Chinese construct of guanxi has implications for research and practice in modern organizations where the barriers between work and non-work are permeable and relationships include affective attachment as well as instrumental considerations.     

Executive development in China: is there any in a Western sense?

A recurring theme in the literature on Chinese management has been the impact of culture and, in particular, the influence of values derived from Confucianism on Chinese management practices. The reforms that led to foreign direct investment (FDI), the problems of State-owned enterprises (SOEs), the social, political and economic changes and analyses of Chinese managerial styles and performance have been the major concerns. There has been less attention specifically paid to Chinese managers' characteristics and to managerial career patterns, which may be shaped by national culture and values. In contrast, in the West, there is a vast body of literature covering career theories and managerial growth, dealing variously with personal values and other factors, such as family upbringing, education, social background and employment structure, that have major impacts on managers' career pathways. This paper explores how far executive career development in modern China (PRC) corresponds to Western notions, and also tries to determine whether there are specific factors relating to Chinese executives' personal biographies and career paths. A pilot study was carried out to identify the variables that might shed light on career patterns and, if possible, to profile the Chinese manager. A number of emergent themes are described. They derive from the experience of individual interviewees who took part in the pilot research, which was conducted in Beijing and Shanghai and in which forty-nine managers in forty-two companies were interviewed. These pilot interviews revealed a complex interplay of biographical data and career themes. Of clear importance was the guanxi mechanism (direct or indirect personal relationship to solicit favours) which has no exact comparison in the West and which does not figure in Western career theories. A preliminary tentative Chinese executive career model has been developed.     

HRM and IR in multinational corporations in Denmark: uneasy bedfellows?

As multinational corporations operate in multiple countries, headquarters must take into account differences in local settings when seeking the means to coordinate and control subsidiaries. The local system of industrial relations sets the framework for what kind of human resource management a multinational corporation can implement. Yet another question is whether the still stronger multinationals can change the existing systems of industrial relations, directly or indirectly.

The paper analyzes four Danish enterprises over a 10-year period. This longitudinal study shows that none of the multinationals directly try to interfere in local industrial relations. However, by exercising their management prerogative in a way that differs from the Northern European tradition of industrial relations, they do influence the cooperation between employers and employees. In particular, the results show, that a shift from a stakeholder to a shareholder management style and an increased degree of HQ control have an effect on the whole cooperative atmosphere in each of the companies. In the long run, they may affect the collective bargaining system as such.     

Effect of supervisor–subordinate guanxi on supervisory decisions in China: an empirical investigation

As China is becoming an important market and there are a lot of foreign ventures operating there, different lines of research have been providing useful information for foreign ventures to manage effectively in China. In this paper, we discuss one of the critical factors leading to successful management of Chinese subordinates, i.e. building and maintaining good guanxi (i.e., interpersonal connection) with them. We conducted an empirical investigation to illustrate (1) the supervisor-subordinate guanxi concept is different and unique when compared to other similar concepts in the Western literature such as leader-member exchange (LMX) and commitment to supervisor; (2) the supervisor-subordinate guanxi will affect the Chinese supervisor's administrative decisions; (3) guanxi can be measured by concrete behaviour/activities. Data on 189 supervisor-subordinate dyads were collected in the People's Republic of China (PRC). Results indicated that supervisor-subordinate guanxi is a distinct concept from LMX and commitment to supervisor. It also has additional explanatory power over supervisory decisions on promotion and bonus allocation after controlling for performance. Implications for foreign ventures and expatriates are discussed.     

The Americanisation of the European business system?

This article examines the impact of contemporary business practices within the American business system on established patterns of industrial relations (IR) management in European subsidiaries of US multinationals, specifically how established firm‐level settlements for the management of IR may or may not combine with host‐country effects to constrain such innovations. The empirical material leads us to evaluate subsidiaries of US multinationals as a contingent factor indicating that institutional effects at the level of the national business system are likely to be more embedded than the effects of ownership on employment and IR at firm level.     

The human resource barriers to managing quality in China

China has one of the fastest growing economies in the world. The challenge for the future is likely to be the extent to which Chinese operations can utilize modern management techniques to improve product and service quality. This paper explores some of the problems that were affecting the management of quality within two foreigninvested enterprises (FIEs) based in the Shenzhen region of China. The paper argues that the provision of new factories and machinery was not sufficient in itself to ensure the maintenance of quality standards. Quality management in the West has become synonymous with increased employee involvement and developing customer-orientated cultures (Rees, 1998). The success or otherwise of quality management initiatives therefore depends upon the co-operation and enthusiasm of employees (Wilkinson et al ., 1998; Oliver and Wilkinson, 1992). Quality management within the case companies was hampered by the prevailing work ethic and was hindered by inadequate human resource and management systems. The study highlighted poor standards of training, dissatisfaction over levels of remuneration, and poor communication within the case companies. The paper argues that the problems experienced by the companies were inextricably linked to aspects of China's historical development. This history has helped to engender employee attitudes and behaviours that are poorly understood. Models of quality management are needed which are sensitive to the Chinese operating context.     

Towards a cross-cultural framework of strategic international human resource control: the case of Taiwanese high-tech subsidiaries in the USA

Due to the growing expansion of newly emerging multinational companies (MNCs) in the USA market, it seems pertinent to explore how to manage their Western industrialized subsidiaries in terms of human resource management. This study combines the institutionalism, resource dependence perspective, and control theory to provide an integrative framework in an attempt to investigate the cross-cultural determinants of strategic international human resource control over MNCs' subsidiaries. By a qualitative analysis of 10 Taiwanese top high-tech manufacturing companies operating in the USA, our findings are as follow: In order to perform subsidiary's value-added activities, multinationals need to identify the value and capabilities need for these activities. At the same time, subsidiaries also need to compare the cultural advantage of the home country in terms of these activities. In addition, from the perspective of cross-cultural influence, input control is designed to respond to high integration and high adaptation; output control is executed in the case of low integration and high cultural adaptation; while behavioural control is used to respond to high integration and low adaptation, simultaneously in the case of low value of subsidiary's activities.     

National influences on European Works Councils in UK‐ and US‐based companies

The view that the role of European Works Councils (EWCs) is shaped predominantly by national industrial relations (IR) traditions in the company's country of origin derives largely from the experience of EWCs in companies based in continental Europe. This article argues that a more differentiated approach to the influence of national IR factors on EWCs needs to be developed to take account of the circumstances of companies headquartered in the UK and the US, whose national IR arrangements do not provide a strong institutional model for the EWC and, in the case of US‐based companies, where headquarters management has little or no direct involvement in the EWC. Findings from comparative case studies of EWCs in eight UK‐ and US‐based multinationals suggest that their character is shaped by the interplay between ‘country‐of‐origin’ factors,‘country‐of‐location’ factors and structural, company‐specific considerations.     

Overcoming the liability of smallness by recruiting through networks in China: a guanxi-based social capital perspective

We investigate the role of guanxi in Chinese entrepreneurial firms’ recruitment practices in attempting to overcome the liability of smallness. Combining insights from the social capital and guanxi literature, we theorize the guanxi-based social capital perspective and use it to analysis 96 in-depth interviews with multiple members (entrepreneurs, senior managers and factory workers) from 15 die-casting entrepreneurial firms in Guangdong province, China. We find that the use of guanxi in recruitment practice can overcome the liability of smallness because it makes the hiring process more convenient, improves firms’ attractiveness to jobseekers and enhances the person-organizational fit between new hires and firms. We discuss how Chinese entrepreneurs and their senior managers use guanxi strategically to achieve these advantages. On the other hand, our findings suggest that jobseekers can also use guanxi to increase their options, improve their bargaining power and distract firms’ attention away from hiring the most appropriate candidate for the job in order to undermine the effectiveness of Chinese entrepreneurial firms’ recruitment procedures. We explore the implications of these findings for academic research and managerial practice.     

现代跨国企业管理中的中西文化冲突刍议

本文从EMC“电邮事件”引发的网络争论切入,就当前常见的跨国企业管理中的中西文化差异观进行了分析,从中西方管理文化的指导思想、价值观和外方经验在本土实施上的实践操作几个层面展开探讨,得出基本结论：东西方文化都为多元文化,你中有我,我中有你,文化差异在全球化背景下的商业环境中尤为淡化,应警惕夸大跨国企业管理中的中西方文化冲突的趋势。     

Managing the Post-acquisition Integration Process: How the Human Iintegration and Task Integration Processes Interact to Foster Value Creation

The paper reports a study of the post-acquisition integration process in three foreign acquisitions made by Swedish multinationals. Detailed interview data and questionnaire responses in both acquiring and acquired firms are presented. The sub-processes of task integration and human integration are separated out and it is shown that effective integration in these cases was achieved through a two-phase process. In phase one, task integration led to a satisficing solution that limited the interaction between acquired and acquiring units, while human integration proceeded smoothly and led to cultural convergence and mutual respect. In phase two, there was renewed task integration built on the success of the human integration that had been achieved, which led to much greater interdependencies between acquired and acquiring units.     

Guanxi Management in Lean Production System—An Empirical Study of Taiwan‐Japanese Firms

While the emphasis in the West is on “what you know” refers to technological expertise, including the price and quality of tendered product or service, the emphasis in Confucian societies is on “who you know,” which refers to personal connections with the appropriate authorities or individuals. These connections are known in Chinese as guanxi, on which as the basis Chinese exchange a lifetime of favors, resources, and business leverage. This study seeks to study guanxi mechanism, the unique Chinese social‐cultural element and its impact on the managerial effectiveness of Taiwanese firms with lean implementation in practice, and an empirical study is constructed to verify our proposal. Results suggest that guanxi and its networks function as the lubrication that eases interpersonal conflicts and as the buffer in solving problems, which in turn upgrades the cooperative efficiency both inter‐ and intragroups. This article provides an inner view of cultural value, which offers insights that should prove helpful to academics in management and related disciplines as well as to practitioners engaged in Chinese production management.     

Career success across 11 countries: implications for international human resource management

This qualitative study examines perceived meanings of career success across 11 countries. The results show that people define career success in ways that enrich and illuminate the basic dichotomy of objective and subjective career success and establish their relative strengths across countries. Juxtaposing our data with human resource management (HRM) practices, we contribute to the universalist versus contextualist debate in HRM by adding the career management angle. We shed light on the relative importance of cultural and institutional factors for HRM in the area of careers and add a global perspective to the discussion about agentic careers. In our discussion we offer practical suggestions for multinational companies including how to individualize HRM to address diverse views of career success.     

East meets West: the case of Polish expatriates in the UK

This paper attempts to redress the balance in research on expatriation by exploring the experiences of an under-researched group of expatriates in an under-researched destination. Although there has been an increase in research on the adjustment of expatriates, the focus of IHRM research has, to date, tended to view the expatriation process through a narrow lens, emphasising the role of managers from affluent ‘Western’ countries working in less affluent countries. The growing numbers of multinationals and therefore expatriates from other countries means that the research agenda must be broadened, in this case to the experience of Poles in the UK. By focusing on expatriates from a former socialist economy we highlight the differing motives and experience of adjustment that they face. We show how the economic and social benefits of this East–West transfer can be a powerful motivating factor and may override adjustment difficulties. Furthermore, the analysis of East to West European expatriate transfers, from less to more developed nations, contributes to and widens the range of parent and host countries studied within the realm of expatriate adjustment.     

Overcoming the main barriers in initiating and using purchasing-BSCs

The Balanced Scorecard (BSC), as a strategic management and control tool with an integrated set of leading and lagging performance measures, can secure successful implementation of purchasing strategies. However, the quality of the BSC itself as well as the effectiveness of the process to set up, implement, and use the BSC are crucial. Recognizing the growing importance of the purchasing-BSC (P-BSC) combined with the problems companies are facing, the authors emphasize the necessity for a better management process for purchasing strategies, introduce the P-BSC concept as a means to improve implementation success, and study the main barriers companies are facing when they initiate and use P-BSCs. This study and the recommendations how to overcome these barriers are based on seven in-depth case studies which derived from an action research project with European multinational firms.     

A different perspective of expatriate management

Based on a total of 243 papers and theses published in Taiwan and the West, this study provides a different perspective on expatriation management. The investigation includes selection criteria, staffing, training, the female expatriate, the expatriate spouse, and international adjustment. Research reveals that there are similar core concerns, such as an expatriate's professional knowledge, personality, adaptability, and international adjustment. Context-specific concerns also emerge. Taiwanese companies care more about expatriates' personal skills and willpower compared to the West, where companies care more about an expatriate's past performance, adaptability, and spousal adjustment. As more and more resource conscious SMEs are moving to compete in the international arena, attending to their international management needs becomes a pressing issue. This study provides the form, as well as the essence of Taiwanese expatriation management, especially with FDIs based in Taiwan playing a crucial role in the recent economic development of Asia. Taiwan's past successful international expansion certified the value of its expatriation management, particularly under severe resource constraints. The findings of this study may have policy and practical implications for relevant parties and emerging economies.     

Reverse Diffusion in US Multinationals: Barriers from the American Business System

abstract    This paper addresses the issue of 'reverse diffusion' of employment practices in multinational companies, which is defined as the transfer of practices from foreign subsidiaries to operations in the country of origin. It adds to the literature by examining the influence of the parent business system in multinationals. Specifically, it addresses how the dominant institutions and established organizational structures and practices in the home country affect the extent and impact of reverse diffusion of employment practices. Drawing on fresh evidence from American-owned multinationals in the UK we argue that there is considerable potential for reverse diffusion to occur among this group of firms. However, we highlight a number of barriers to reverse diffusion that the American business system presents, demonstrating that these constrain both the prevalence and the impact of it in practice.