Building from below: subsidiary management moderation of employment practices in MNCs in China

The international human resource management literature has a long tradition of examining the impact of institutional differences on the employment practices adopted by multinational corporations (MNCs). The question of how actors make sense of institutional differences, however, has received less research attention. This study examines the enactment of employment practices as institutional differences are translated, contextualized and deployed by managers at subsidiaries of MNCs. Based on intensive case studies at two Japanese–Chinese joint-venture manufacturing plants, the study first shows that distinctive employment practices were adopted to manage the boundaries between employee groups. These distinctions are then explained by the institutional difference between the home country (Japan) and the host country (China) as well as the way that institutional differences were represented by the managers in the process of designing, developing and executing employment practices. The study therefore argues that country differences are not only assumed spaces, but are also a reservoir of management resources that are moderated, in the case of employment practices, by actors’ strategic choices and political actions before they are enacted in the subsidiary.