Chinese multinationals and public policy

Purpose – The purpose of this paper is to examine the interaction between large Chinese firms as they internationalize and their home and host governments. Design/methodology/approach – The approach taken is that of an analysis of relevant literature and the application of a popular theoretical framework by Rugman and Verbeke to the case of Chinese firms as they expand abroad. Findings – First, the paper adapts a well-known business-government framework to analyze emerging economy issues, all in a Chinese context. Then the paper relates this analysis to the existing literature on the international expansion process of Chinese firms. The paper finds that in their attempt to seek strategic assets, Chinese multinational enterprises (MNEs) face conflicts with host countries and Western firms in which host government support for international competitiveness can be used as quasi protectionist defense mechanisms. Using the public policy and MNE framework, the paper examines several recent disputes and finds that Chinese MNEs have complementary goals with the Chinese state, but they have conflicting goals with Western governments. Originality/value – These findings have important academic research, managerial, and public policy implications.

International human resource management strategies of Chinese multinationals operating abroad

Strategic international human resource management (SIHRM) is crucial for the effective leveraging of human resources in organizations to achieve the desired business strategies. There is a rich collection of studies on western multinational corporations (MNCs) in China, but few studies that explore the SIHRM of Chinese MNCs operating overseas. This study utilizes cross-level, in-depth interviews to analyse SIHRM of three large Chinese multinationals. The paper contributes to literature by addressing two contextual SIHRM issues, namely the characteristics of the SIHRM for Chinese multinationals and how their SIHRM orientation facilitates their international investment and operation. The findings indicate that organizational transformation is the starting point for latecomers matching their international HRM strategies. Their SIHRM approaches, such as forming learning organizations, reliance on host-country nationals, reconciling both home and host-country effects and promoting ‘best practices’, facilitate their international operations.

Expatriate skills training strategies of Chinese multinationals operating in Australia

Recent years have witnessed a phenomenal growth in outward foreign direct investment (FDI) by Chinese multinationals. In contrast to their developed country counterparts, Chinese multinationals lack experience in foreign expansion and international operation. Although there has been increasing academic attention placed on Chinese outward FDI, little research on expatriate skills training of Chinese multinational enterprises (MNEs) has been conducted. Since the mainstream research focuses on expatriate pre-departure training rather than on learning during assignment, this study aims to bridge this gap by exploring how Chinese MNEs cope with expatriate training and skill enhancement when operating in an advanced economy such as Australia. The study utilises cross-level, in-depth interviews to analyse expatriate training in seven Chinese multinationals. Drawing on social learning theory, some patterns of Chinese expatriate skills training strategies are revealed, such as internationalisation as learning, the use of subsidiaries as a training tool, and learning as belonging.

Perceived factors affecting the integration-responsiveness framework: an analysis from Chinese multinationals operating in Australia

This study extends quantitative and conceptual studies that have clarified and assessed the underlying factorsinfluencing multinational corporations (MNCs) international business strategy choices relating to globalintegration and local responsiveness with the use of cross–level and in-depth interviews. Top managementperceptions from nine Chinese MNCs (CMNCs) with operations in Australia are detailed and it is argued acontingency approach tends to prevail within firms with organisational, industrial, and environmentalcontingencies predominating.

Strategic implications of global integration and local responsiveness for Chinese multinationals: an area for future study

Purpose – Based on the review of extant international business and management literature, this paper aims to examine the global integration (GI) and local responsiveness (LR) paradigm and its impact on the adoption of international business strategy (IBS) by multinational corporations (MNCs); second, discuss determinants that are critical in the process of forming IBS by MNCs; and third identify the lacuna in current research with respect to strategic implications of the framework for MNCs from emerging economies such as Chinese multinational corporations (CMNCs).Design/methodology/approach – Based on the extant literature review, this paper identifies a research gap and proposes several research questions for future study. First, the paper reviews prior studies on the GI-LR model and its impact on and strategic implications for IBS. Second, it examines how MNCs from developed countries adopt different types of IBS and what determinants drive their decision-making. Third, it attempts to discuss why CMNCs should be studied in terms of their choice of IBS based on the GI-LR mode. The paper concludes with research questions for future study.Findings – This paper summarizes determinants of IBS in a three-category table mainly based on prior studies on the GI-LR model from developed countries. As a consequence, it identifies a future research area in the field of international management.Originality/value – This paper is based on a comprehensive review of prior studies related to the GI-LR framework. The aim of the study is to identify a new research area in international management, that is, how MNCs from emerging country contexts, such as China, to co-ordinate GI and LR for their IBS.

Strategic implications of global integration and local responsiveness for Chinese multinationals: an area for future study

Purpose – Based on the review of extant international business and management literature, this paper aims to examine the global integration (GI) and local responsiveness (LR) paradigm and its impact on the adoption of international business strategy (IBS) by multinational corporations (MNCs); second, discuss determinants that are critical in the process of forming IBS by MNCs; and third identify the lacuna in current research with respect to strategic implications of the framework for MNCs from emerging economies such as Chinese multinational corporations (CMNCs).Design/methodology/approach – Based on the extant literature review, this paper identifies a research gap and proposes several research questions for future study. First, the paper reviews prior studies on the GI-LR model and its impact on and strategic implications for IBS. Second, it examines how MNCs from developed countries adopt different types of IBS and what determinants drive their decision-making. Third, it attempts to discuss why CMNCs should be studied in terms of their choice of IBS based on the GI-LR mode. The paper concludes with research questions for future study.Findings – This paper summarizes determinants of IBS in a three-category table mainly based on prior studies on the GI-LR model from developed countries. As a consequence, it identifies a future research area in the field of international management.Originality/value – This paper is based on a comprehensive review of prior studies related to the GI-LR framework. The aim of the study is to identify a new research area in international management, that is, how MNCs from emerging country contexts, such as China, to co-ordinate GI and LR for their IBS.

Multinacionales chinas: ¿cómo influyen los factores institucionales en sus patrones de localización?

[ES] Este artículo analiza la influencia de diversos factores institucionales del país de destino sobre los patrones de localización de 29 grandes multinacionales chinas. A partir de una muestra de 127 decisiones de inversión directa en el exterior (IDE) en 52 países, nuestros resultados indican que una mayor dificultad a la hora de hacer negocios y un elevado riesgo político no condicionan sus decisiones de entrada. No obstante, la presencia de personas de etnia china en el país de destino, un mayor tamaño absoluto del mercado y un mayor volumen de exportaciones chinas hacia ese país influyen positivamente.

Overseas Chinese as expatriate managers in China: is their recruitment a solution to cross-cultural management problems for multinationals operating in China?

This paper examines the issue of diversity in Chinese identity and how it impacts on the operations of multinationals in China who recruit Overseas Chinese to handle cross-cultural issues. China’s rapid economic development and entry into the World Trade Organization in 2001 made her a formidable player in the global economy and direct foreign investment surged. Yet it is acknowledged that for the foreign investor in China, cross-cultural issues create difficulty at every level, from the interpersonal level relating to communication and negotiation, to the organizational level relating to decision making, human resource management practices, corporate legal institutions and liaison with government institutions. Western multinationals have considered the advantages of posting Overseas Chinese from Southeast Asian countries, Taiwan and Hong Kong to their China operations as a solution to cross-cultural management issues. But has this policy been successful? In terms of language expertise this would seem to be a good strategy, yet organizational case material contradicts this in reality. Overseas Chinese, while sharing some elements of Chinese culture with mainland Chinese, the Confucian heritage and other aspects such as language and diet, nevertheless have different world views and values and behave differently from mainland Chinese in areas critical to business management. As a survival strategy, Overseas Chinese have often developed dual identities which operate simultaneously. For political and historical reasons, many of them have had to adapt to the local culture of their country of citizenship or even hide their own ethnicity in order to survive. On the other hand, the mainland Chinese are different in that their behaviour has only had to be Chinese, but overlaid with this has been the experience of participating in a communist political environment for decades, which has left its mark on mainland Chinese culture. On the basis of their different historical experiences, in the current business environment in China, cultural confusion, difficulty and conflict may occur for the Overseas Chinese.

This paper focuses attention on the subtle cultural differences between the Overseas Chinese and mainland Chinese in an organizational context. This problem has yet to be researched in depth within international business and international management studies. It provides evidence that Overseas Chinese are not often favoured by the local Chinese. It gives insights on how to manage the local Chinese for foreign multinationals operating in China.

Overseas Chinese as expatriate managers in China : is their recruitment a solution to cross-cultural management problems for multinationals operating in China?

The rapid economic development has gravitated businesses into the Chinese market. It’s entry into the World Trade Organization in 2001 made her an even more formidable player in the global economy and direct foreign investment surged. Yet it is acknowledged that for the foreign investor in China, cross-cultural issues create difficulty at every level, from the intercultural level relating to communication and negotiation, to the organizational level relating to decision making, human resource management practices, corporate legal institutions and dealing with governments. Western multinationals have considered the advantages of posting overseas Chinese, from Southeast Asian countries, Taiwan Hong Kong and etc. But has this policy been successful? In terms of language expertise and cultural literacy this would seem to be a good strategy, yet organizational case material contradicts this in reality. Overseas Chinese, while sharing some elements of Chinese culture with mainland Chinese, the Confucian heritage and other aspects such as language, diet, etc, nevertheless have different world views and values and behave differently from mainland Chinese in areas critical to business management. As a survival strategy, overseas Chinese often developed dual identities operating simultaneously. For many of them, for political and historical reasons, they have had to adapt to the local culture or even hide their own ethnicity in order to survive. On the other hand, the mainland Chinese are different in the sense that their behaviour has only had to be Chinese, but overlaid with this has been the experience of participating in a communist political environment for decades, which has left its mark on mainland Chinese culture. On the basis of this, in the current business environment in China confusion, difficulties and conflict may occur for the overseas Chinese. This paper aims to provide insights of the cultural differences between the overseas Chinese and mainland Chinese. It provides evidence that overseas Chinese are not often favoured by the local Chinese. This problem has yet to be researched in depth within international business and international management studies. It draws the attention to issues on how to manage the local Chinese.

The impact of employee perceptions of training on organizational commitment and turnover intentions: a study of multinationals in the Chinese service sector

This study examines the impact of employee perceptions of training on organizational commitment, and the latter's relationship with turnover intentions. Structured equation modelling is conducted on survey data from 437 Chinese employees of five multinational enterprises operating in the Chinese service sector. The results of the survey are consistent with social exchange theory. They highlight the importance of training as a tool to enhance the affective organizational commitment of employees, and reduce turnover. The findings differ from that of previous studies in non-Chinese settings. No evidence was found to indicate that motivation to learn and the perceived benefits of training impact on the organizational commitment of employees. This may be explained by three factors: the involuntary nature of employee training, the limited career development opportunities on offer to local employees of multinational enterprises and the difficulty employees face in applying learnt skills given cultural differences. The implications for research and practice are discussed.

Knowledge Transfer within Western Multinationals' Subsidiary Units in China and Finland - The Impact of Headquarter Control Mechanisms, Subsidiary Location and Social Capital (summary section only)

It is suggested that the ability and practices of how the multinational corporation (MNC) manages knowledge transfer among its geographically dispersed subsidiary units are crucial for the building and development of firm competitive advantage. However, cross-border transfer of valuable organizational knowledge is likely to be problematic and laborious, especially within diversified and differentiated MNCs. Using data collected from 164 western multinational companies’ subsidiary units located in China and Finland, this study aims to investigate cross-border knowledge transfer within the MNC. It explores a number of factors that influence the transfer of knowledge among units in the differentiated MNC. The study consists of five individual papers. Paper 1 investigates a range of organizational mechanisms that may positively influence a subsidiary’s propensity to undertake knowledge transfers to other parts of the corporation. Paper 2 explores the impact of subsidiary location on the motivational dispositions of knowledge receiving units to value and accept knowledge from subsidiaries located in economically less advanced countries. Paper 3 examines the influence of social capital variables on knowledge transfer in dyadic relationships between foreign-owned subsidiaries and their sister and patent units. Paper 4 provides some initial insights into potentially different effects of trust and shared vision in intra-organizational vs. inter-organizational relationships. Using a case study setting, Paper 5 explores means and mechanisms used in transferring human resource management practices to Western MNCs’ business units in China from a cultural perspective. The results of the study show that MNC management through choices regarding organizational controls can encourage and enhance corporate-internal knowledge transfer. It also finds evidence that more knowledge is transferred from subsidiaries located in an industrialized country (e.g., Finland) than subsidiaries located in a developing country (e.g., China). While the study has highlighted the importance of social capital in promoting knowledge transfer, it has also uncovered some new findings that the effect of trust and shared vision may be contingent upon different contexts. Finally, in Paper 5, a number of mechanisms used in transferring selected HRM practices and competences to the Chinese business units have been identified. The findings suggest that cultural differences should be taken into consideration in the choice and use of different transfer mechanisms.