Subsidiary responses to the institutional characteristics of the host country: strategies of multinational enterprises towards Hukou-based discriminatory HRM practices in China

Research output: Contribution to journalArticleResearchpeer-review

Abstract

Purpose
In this paper we examine the strategic responses of multinational enterprise (MNE) subsidiaries in China toward a unique institutional characteristic - the structural discrimination against rural migrant workers

Design/methodology/approach
Based on surveys of 181 firms and 669 rural migrant workers, as well as a case study of eight firms in Jiangsu and Shanghai, we examined and compared the HRM policies of MNE subsidiaries and domestic Chinese firms toward rural Chinese migrant workers.

Findings
Our study found that MNE subsidiaries are more likely to accept local discriminatory HRM practices when managing migrant workers. In response to the institutional environments of host countries, MNE subsidiaries tend to share similar behavioral characteristics with local firms and are reluctant to show leadership in initiating institutional change in host countries.

Originality/value
This study is important since it enables us to investigate some prevailing assumptions in the literature. Contrary to common wisdom that MNEs are change agents that proactively engage in institutional entrepreneurship in host countries, our study found that MNEs’ responses to the institutional environment of host countries are shaped by their entry modes and the institutional environment in their home countries. MNEs are as diverse as their home countries and far from forming a unified organizational field with similar behavioral characteristics.
Original languageEnglish
Pages (from-to)870-890
Number of pages21
JournalPersonnel Review
Volume46
Issue number5
DOIs
Publication statusPublished - 2017

Cite this

@article{dc026524758f4cd1abe6a2c4c8eca8ec,
title = "Subsidiary responses to the institutional characteristics of the host country: strategies of multinational enterprises towards Hukou-based discriminatory HRM practices in China",
abstract = "PurposeIn this paper we examine the strategic responses of multinational enterprise (MNE) subsidiaries in China toward a unique institutional characteristic - the structural discrimination against rural migrant workersDesign/methodology/approachBased on surveys of 181 firms and 669 rural migrant workers, as well as a case study of eight firms in Jiangsu and Shanghai, we examined and compared the HRM policies of MNE subsidiaries and domestic Chinese firms toward rural Chinese migrant workers.FindingsOur study found that MNE subsidiaries are more likely to accept local discriminatory HRM practices when managing migrant workers. In response to the institutional environments of host countries, MNE subsidiaries tend to share similar behavioral characteristics with local firms and are reluctant to show leadership in initiating institutional change in host countries.Originality/valueThis study is important since it enables us to investigate some prevailing assumptions in the literature. Contrary to common wisdom that MNEs are change agents that proactively engage in institutional entrepreneurship in host countries, our study found that MNEs’ responses to the institutional environment of host countries are shaped by their entry modes and the institutional environment in their home countries. MNEs are as diverse as their home countries and far from forming a unified organizational field with similar behavioral characteristics.",
author = "Zhang, {Mike Mingqiong} and Zhu, {Cherrie Jiuhua} and Peter Dowling and Di Fan",
year = "2017",
doi = "10.1108/PR-08-2015-0222",
language = "English",
volume = "46",
pages = "870--890",
journal = "Personnel Review",
issn = "0048-3486",
publisher = "Emerald Group Publishing Limited",
number = "5",

}

TY - JOUR

T1 - Subsidiary responses to the institutional characteristics of the host country

T2 - strategies of multinational enterprises towards Hukou-based discriminatory HRM practices in China

AU - Zhang, Mike Mingqiong

AU - Zhu, Cherrie Jiuhua

AU - Dowling, Peter

AU - Fan, Di

PY - 2017

Y1 - 2017

N2 - PurposeIn this paper we examine the strategic responses of multinational enterprise (MNE) subsidiaries in China toward a unique institutional characteristic - the structural discrimination against rural migrant workersDesign/methodology/approachBased on surveys of 181 firms and 669 rural migrant workers, as well as a case study of eight firms in Jiangsu and Shanghai, we examined and compared the HRM policies of MNE subsidiaries and domestic Chinese firms toward rural Chinese migrant workers.FindingsOur study found that MNE subsidiaries are more likely to accept local discriminatory HRM practices when managing migrant workers. In response to the institutional environments of host countries, MNE subsidiaries tend to share similar behavioral characteristics with local firms and are reluctant to show leadership in initiating institutional change in host countries.Originality/valueThis study is important since it enables us to investigate some prevailing assumptions in the literature. Contrary to common wisdom that MNEs are change agents that proactively engage in institutional entrepreneurship in host countries, our study found that MNEs’ responses to the institutional environment of host countries are shaped by their entry modes and the institutional environment in their home countries. MNEs are as diverse as their home countries and far from forming a unified organizational field with similar behavioral characteristics.

AB - PurposeIn this paper we examine the strategic responses of multinational enterprise (MNE) subsidiaries in China toward a unique institutional characteristic - the structural discrimination against rural migrant workersDesign/methodology/approachBased on surveys of 181 firms and 669 rural migrant workers, as well as a case study of eight firms in Jiangsu and Shanghai, we examined and compared the HRM policies of MNE subsidiaries and domestic Chinese firms toward rural Chinese migrant workers.FindingsOur study found that MNE subsidiaries are more likely to accept local discriminatory HRM practices when managing migrant workers. In response to the institutional environments of host countries, MNE subsidiaries tend to share similar behavioral characteristics with local firms and are reluctant to show leadership in initiating institutional change in host countries.Originality/valueThis study is important since it enables us to investigate some prevailing assumptions in the literature. Contrary to common wisdom that MNEs are change agents that proactively engage in institutional entrepreneurship in host countries, our study found that MNEs’ responses to the institutional environment of host countries are shaped by their entry modes and the institutional environment in their home countries. MNEs are as diverse as their home countries and far from forming a unified organizational field with similar behavioral characteristics.

U2 - 10.1108/PR-08-2015-0222

DO - 10.1108/PR-08-2015-0222

M3 - Article

VL - 46

SP - 870

EP - 890

JO - Personnel Review

JF - Personnel Review

SN - 0048-3486

IS - 5

ER -