The management of labour in Japanese manufacturing plants in China

While there is now considerable scholarship concerning Japanese management practices in their overseas production operations in Europe and North America, little is known about Japanese investment in other parts of the world, especially in Asia. This paper draws on on-going research into the nature and operations of Japanese manufacturing investments in China. The paper focuses on interviews primarily with Chinese managers in twenty plants in three locations within China, to examine their personnel polices and practices, and draw from this their overall industrial relations strategies. The main findings were, first, that, despite claims of cultural similarity between China and Japan, personnel management practices were generally not transferred from Japan to the plants in China. Second, practices that may appear as Japanese inspired were often informed by local practices. Third, there was diversity in the forms of practices used, indicating neither sophistication nor a singular recipe of management methods. Thus, the paper seeks to challenge proponents of Japanization who claim, essentially, that Japanese management techniques are predicated on the construction of particular forms of social relations around work that allow sophisticated, and integrated, production-management systems to function. Instead, depending on a complex interrelation between location industry and the history of each plant, managers sought to use various local and 'universal' (generic to capitalism) strategies and practices to control and utilize labour.     

Localizing management in foreign-invested enterprises in China: practical,cultural, and strategic perspectives

The business case for the rapid localization of management has often been argued. This paper takes a critical look at the assumptions underlying such arguments. This exploration utilizes data gathered from a variety of Japanese, Korean, Hong Kong, and European ventures in China. Evidence from these case studies is incorporated within a broader exploration of Chinese cultural values and attitudes derived from ethnographic research and approaches to the strategic management of multinational enterprises. It is suggested that localization is likely to proceed at a much slower pace than its main advocates may wish or anticipate, and that there are practical, cultural, and strategic factors which may, and perhaps should, inhibit rapid localization. Such factors range from the lack of suitably qualified local managers, to control and surveillance functions and expatriates' roles as trainers, co-ordinators, and relatively neutral 'outsiders'. It is proposed that the development of a core of culturally literate expatriates can become a valuable resource for MNEs and that their selection, support, and compensation packages should be considered as an investment in firms' long-term strategic development.     

Expatriate staffing in foreign subsidiaries of Japanese multinational corporations in the PRC and the United States

This study examines expatriate staffing in foreign wholly-owned subsidiaries and joint ventures of Japanese firms located in the People's Republic of China and the United States. Expatriates are conceptualized as performing two primary functions. The first is a control function in which the expatriate works to align the operations of the subsidiary with that of the Japanese parent. The second function is a knowledge role. In this role, either the expatriate acts to transfer the Japanese parent's knowledge to the subsidiary or the expatriate is an agent for the acquisition of host-country knowledge. We tested for these two functions using subsidiary-level data on Japanese firms' operations in China and the US. Our results indicate that the control function was more prominent in joint ventures in China than in the US. The results also indicate that expatriates played a more significant knowledge-transfer function role in technology and marketing-intensive industries in China than in the US. A lack of MNC experience in China was found to be associated with limited use of expatriates. Finally, expatriate employment was negatively related to the number of subsidiaries of the parent company worldwide.     

Coping with an emerging market competition through strategy-human resource alignment: case study evidence from five leading Japanese manufacturers in the People's Republic of China

This paper documents how PRC-based Japanese affiliates can align their human resource management (HRM) policies and practices with their business strategies based on in-depth interview surveys of the five leading Japanese manufacturers in China. In particular, using a multiple-informant research design to interview both top and human resource managers in each site, the study has attempted to clarify the strategic fit between the business strategies pursued and HRM practices adopted in China. Our interviews with top management for each affiliate revealed three types of business strategies that the PRC-based affiliates adopt to gain competitiveness in the Chinese market. Separate interviews with HR managers further clarified that affiliates' HRM efforts are aligned with the strategy each affiliate is pursuing. The findings are used to suggest several hypothesized relationships between the particular strategies pursued and the HRM practices adopted in China. Furthermore, this study has provided some important insights as to how the choice of affiliate-level business strategies in China affects the ‘hybridization’ processes of the HRM policies and practices used in the cross-national business environment.     

Farewell to HRM? Personnel practices in Japanese manufacturing plants in the UK

While Japanese manufacturing investment burgeoned in the UK in the 1980s and 1990s, its relative size remained small. Nevertheless, its impact was greater than its size. At its extreme it was championed by the 'new right' as the way forward for industrial practices, while manufacturing organizations in the UK were quick to attempt to emulate Japanese management practices. Core to these practices was the management of human resources. Coincidentally in the 1980s a new model of personnel management was being championed, namely human resource management (HRM). This was eagerly embraced by UK academics and was translated into two distinct forms, 'hard and soft'. Despite appearing mutually incompatible, the hard and soft forms were forged into a unified model. This paper, drawing on an empirical analysis of personnel practices in Japanese manufacturing plants in the UK, searches for a conjuncture between the HRM model and 'Japanese' models. It concludes that, while there are similarities between the two, there are also distinct differences. Moreover, where similarities exist they are with the hard variety of HRM.     

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.     

Effective Japanese leadership in China: co-operative goals and applying abilities for mutual benefit

In the global marketplace, managers and employees must work together even though they may have suspicions based on their different countries' historical rivalry. Social psychological research suggests that co-operative goals and applying abilities for mutual benefit can strengthen the leader relationship between Japanese managers and their Chinese employees. Working in Japanese enterprises in Shanghai, China, 100 employees in private Japanese companies in China indicated their goal interdependence with their Japanese and Chinese managers, their applying abilities for mutual benefit and their conclusions that their manager had valuable abilities and was an effective leader. Structural equation analysis suggested that applying abilities for mutual benefit mediates the relationship between goal interdependence and leader resourcefulness and effectiveness, especially when the manager is Chinese and less so when their manager is Japanese. These results, coupled with previous research, were interpreted as suggesting that co-operative goals and applying abilities for mutual benefit contribute to effective leadership even when managers and employees have different nationalities.     

Job transfers and job-bid systems in restructuring Japanese and American firms

When Japanese firms restructured their operations in the 1990s, Japanese employees were not fired and were often transferred together in groups inside firms or to related outside firms. Undergoing similar business restructuring from the late 1980s on, American firms fired low-performing white-collar employees, and excess midoodle-performing white-collar employees were fired if they could not locate other jobs in the firms by using 'job-bid' systems (systems that identifyopenings and allow individuals at their own choosing to 'bid' for those openings). American unionized blue-collar workers were laid off based on seniority rules. Although similar job-bid systems were introduced into Japanese firms in the 1990s, they were used only for certain white-collar jobs. In the United States, job-bid systems commonly were used for both blue- and white-collar employees. Overall, the Japanese employment system was characterized by management control and stable employment in contrast to the active role played by individual choice in an environment of unstable employment in the United States.     

The transfer of HRM policies and practices to a transitional business system: the case of performance management practices in the US and Japanese MNEs operating in Vietnam

This paper focuses on employee performance management (PM) to explore how multinational enterprises (MNEs) localise their human resources within their subsidiaries in a developing country. It uses qualitative research methods to examine four US and four Japanese MNEs operating in Vietnam. The paper identifies both home and host country effects as significant factors in the transfer of MNEs' PM policies and practices. The US firms emphasised financial and non-financial measurements and utilised a wide range of PM management tools and techniques. These techniques, despite being unfamiliar in Vietnam and possibly considered incompatible with Vietnamese culture, were transferred successfully to the Vietnamese subsidiaries. The Japanese firms' PM approach was characterised by a more informal form of regular performance review, within a strictly top-down process and which suffered from accusations of bias and lack of transparency by Vietnamese respondents. This paper argues that the transitional period in Vietnam from a centrally planned economy to a market-oriented one has made the national business system more receptive to new and seemingly contrasting practices. It provides no evidence to support the argument that transfer of practices is more likely, where the cultures of the countries involved are relatively similar.     

Management Accounting Practices in the U.S. and Japan: Comparative Survey Findings and Research Implications*

In recent years, the success of Japanese firms in the global market has prompted efforts to understand the sources of their competitive advantage. It has been suggested that one such source is the Japanese firms' management accounting systems, and a number of articles have claimed that important differences do exist between U.S. and Japanese firms in this area. However, these claims have tended to be supported by anecdotal, rather than systematic, evidence. The objective of this article is to contribute further insights into similarities and differences between U.S. and Japanese firms' management accounting practices. Exhaustive searches of published surveys in the U.S. and Japanese literatures (much of which is in Japanese) provided the basis for U.S.-Japan comparisons on six aspects of management accounting practices. In turn, these comparisons were used for deriving implications for future research. Two major limitations of extant research and, thus, directions for future research are identified. First, future research needs to go beyond the simple use or non-use of techniques to investigate more detailed aspects of technique use. Second, since management accounting is only one component of a firm's total management system, attention also needs to be devoted to the organizational context, process, and goals of a firm's management accounting practices.     

'The persistent myth of high expatriate failure rates': a reappraisal

While there is now a mature literature on many aspects of the management of employees on international assignments (IAs), there is still considerable controversy about the numbers of expatriates who actually fail in these. Traditionally, this has been defined as the number of staff who return home before the agreed end of an IA, because of poor work performance and/or personal problems. Employing this definition, the research described in this paper supports the view that expatriate failure rates (EFRs), among UK employees are, indeed, very low (on average, around 8 per cent). However, this article argues that this traditional definition has limitations and does not reveal the true extent of the problems which IAs can cause to some expatriates and their dependants both during their time abroad and after returning to the UK. The paper then goes onto argue that a broader definition of 'failure' is needed, which includes: an acknowledgement of the considerable stresses and strains experienced by a minority of staff who are under-performing on IAs; the 'poaching' of successful managers by other companies while they are abroad or at the end of their IAs; the often negative outcomes of repatriation experienced by many employees in recent years; the negative (and largely unreported) effects on some families and the career prospects of partners and negative views about the prospect of overseas postings in the future.     

Flexibility,labour subcontracting and HRM in the construction industry in Singapore: can the system be refined?

Labour subcontracting is an important labour-use strategy in the construction industry. In their search for labour-market flexibility, employers in the construction industry in Singapore rely extensively on the Kepala (labour subcontracting) system. The Kepala system offers a 'convenient' way of managing operative (skilled, semi-skilled and unskilled) construction workers. Essentially, this paper discusses the merits and demerits of the Kepala system. It is argued that, although employers in the construction industry derive some strategic benefits from the use of labour subcontracting, on the whole, the system has some adverse consequences for workers, companies, the industry and HRM functions. But, in the absence of any better system that the employers can turn to, it is necessary for the Kepala system to be refined. Thus, it is suggested that the Japanese model of labour subcontracting offers lessons, but will require modifications and adaptations before being applied in Singapore.     

Self-renewal of the Japanese firm and the human resource strategy

Traditional “Japanese personnel management” that has long been considered as the key for Japan's competitive success now needs fundamental restructuring in order to meet the challenges of a stagnant economy, matured domestic market, and the rise of NICs (Newly Industrialized Countries) in international markets. The self-renewal of Japanese firms can be achieved by a paradigm shift at the corporate strategy level: from a production orientation to a product orientation. In accordance with this paradigm shift, leading Japanese firms have started reforming their Human Resource Management (HRM) function from a productivity-centered to a creativity-centered one— creative HRM. Creative HRM has three pillars: (1) the creation of the strategic vision through commitment of the employees, (2) an entrepreneurial middle management as a key strategic node, and (3) multi-dimensional personnel management. Creation and realization of the strategic vision through the active commitment of an entrepreneurial middle management is necessary for the self-renewal of the firm. “Japanese Personnel Management” that might have been overadapted to the traditional strategic paradigm is now transforming itself from a “group-centered” personnel administration to an “individual-centered” one. While Western companies have been adopting Japanese “groupism” to reconstruct their production systems, Japanese companies have started introducing Western “individualism” to encourage creative self-transformation. But no system or technique is truly effective without human commitment, and this requires a fundamental paradigm shift for Japanese firms.     

Managing Consultants in a Small Firm: A Case Study

There remains a paucity of research on Japanese investment in Asia, especially on Japanese management practices in China. The paper draws predominantly on interviews with Chinese managers in 31 Japanese wholly owned and joint-venture manufacturing plants. In order to account for any differences in the perception of operations between Japanese and Chinese managers, interviews were conducted with Japanese managers in three case-study plants. The purpose was to examine the structure and pattern of managerial control in different locations and industries, and with different patterns of share ownership, size and age of investments. The paper argues that the patterns of control in Japanese manufacturing investment in China are not unique, and as a consequence call into question much of the current conventional wisdom concerning the internationalization of Japanese management practices. Instead of Japanese seeking to maintain strong control over overseas plants and attain high degrees of 'Japanization' (a term used to indicate the dynamics of the transfer process), a complex and varied array of patterns of control are identified. On the one hand, production appears highly Japanized, but personnel management is not. On the other hand, Japanese multinationals make investment decisions that necessitate ceding a high degree of control to local managers. Moreover, it is shown that such 'localization' of control is willingly ceded, if not actively sought, by Japanese multinationals     

Multinational Retailers in China: Proliferating ‘McJobs’ or Developing Skills?*

abstract Much has been written on the nature of skills and the extent to which there is increased skills development or a deskilling of workers in modern workplaces. This paper broadens the debate and explores these issues in the novel context of UK‐ and Japanese‐
invested retailers' operations in China. Data derived from over two hundred interviews at twelve retail stores in six Chinese cities and questionnaires completed by almost eight hundred employees elicited contextualized accounts of interactive service workers' own perceptions of their training and skills development. It was found that these firms made a substantial contribution to skills development, fostered and enhanced both directly by company training and also through experiential workplace‐based learning. It might be, however, that this constitutes an essential but ‘one‐off’ increase in skills in transitional economies such as that of China.     

Japanese–American Joint Restructuring of National Steel Corporation

In 1984, NKK corporation, a leading Japanese steel maker, acquired from the National Intergroup Inc. (NII), an American holding company, its 50% equity interest in National Steel Corporation (NSC), the fourth largest integrated steel firm in the US. In spite of the US economic recovery that began in 1992, NSC continued to operate in deficit and in June 1994 NKK brought in a new management team consisting of six American executives and one Japanese executive. Since the third quarter of 1994, NSC has turned its financial performance around. In this paper, using Bayesian estimation procedures, we estimate the join point or the time at which the productivity of NSC's major production lines experienced an upward shift; if the join point occurs after an appropriate gestation period of the new management team, NSC's recovery may be said to be due to the efforts by the new management team. After confirming that indeed this is the case, we discuss how the management team achieved the turnaround. The organization of the paper is as follows. The next section presents the background. In the third section Bayesian procedures for estimating a join point are presented. In the fourth section we discuss restructuring at NSC and the Japanese Total Quality Control system. Conclusions are given in the final section. © 1997 John Wiley & Sons, Ltd.     

THE TRANSFER OF JAPANESE MANAGEMENT STYLES IN TWO US TRANSPLANT INDUSTRIES: AUTOS AND ELECTRONICS

Japanese industry is characterized by a unique set of industrial relations and management styles. the ability to transfer these relations overseas has been the object of much scholarly and popular debate. This paper examines this transfer to the United States in the automobile and electronics industries.
It was found that Japanese automobile manufacturers had been able to transfer most of the central features of the system with some adaptation. the most successful firms were using teams, quality control activities, rotation and quite egalitarian management styles. On the other hand, most of the electronics transplants examined had not transferred Japanese style industrial relations. the electronics firms seemed to be content to accept many of the prevailing US practices.
It is concluded that the transfer of Japanese style relations is possible, but that this occurs only where Japanese managers make a considered and sustained effort to implant their system. In many electronics operations it appears as though Japanese managers never seriously attempted to implement the Japanese system. Thus, the record of transfer is mixed at the moment.     

Breaking the mould? Innovation as a strategy for corporate renewal

In contrast to studies of HRM and innovation within hi-tech industries or greenfield sites, this paper uses longitudinal data to analyse the attempts of two mature corporations to shift from business strategies of 'cost reduction' and 'growth by acquisition' towards organizations that compete through innovation. The case studies describe how human resource management interventions and the structure of the HR function itself are used as change levers to support the shift in business strategies. By analysing the different organizational contexts, the paper identifies the complex microprocesses that either facilitate or constrain such organizational change. Its contribution lies in considering strategies concerned with innovation in both product and sales and marketing; in tracking these change processes over time using in depth case studies; and in considering innovation as a strategic trigger for corporate renewal.     

The ‘country-of-origin effect’ in employee turnover intention: evidence from China

The increasing presence of foreign direct investment in China has boosted the competition for talent among different multinational corporations (MNCs) from diverse national backgrounds. This article investigates the differences in the human resource management (HRM) approaches adopted by the US, European, and Japanese MNC subsidiaries operating in China and explores the relationships between employees' perceptions toward the HRM approaches and turnover intention. Significant differences in the HRM approaches and employees' level of turnover intention were found, indicating a ‘country-of-origin effect’ in HRM approaches that subsequently influences employees' attitudes. In addition, this article produces evidence suggesting that the perception of HRM characteristics predicts employees' intentions to quit. Implications for HRM convergence or divergence debate are discussed.     

A longitudinal investigation on the factors affecting newcomers' adjustment: evidence from Japanese organizations

Using the longitudinal survey data of newcomers working for Japanese firms, this study demonstrates that the socialization tactics used by Japanese firms were positively related to the degree of socialization of newcomers, which eventually correlated positively with the time-series differences in organizational commitment and achievement motivation from the first year (T1) to the second year (T2) of their organizational entry, and negatively with the longitudinal change in turnover intention from T1 to T2. In addition, the results show that the newcomers' attitudes toward their pre-entry job search efforts, as with their entry (T1), had a negative influence on the change in value commitment from T1 to T2, indicating that those who rated their past job search activities as successful tended, as of their entry into the organization, to diminish their level of acceptance of their organization's values over a year. Findings are used to discuss how firms can effectively manage their entry-level employees to facilitate their adjustment and retention.