Abstract

The purpose of this study is to comprehensively examine the structural relationship between cooperative labor relations and localization of labor management of Korean subsidiaries entering emerging markets on business performance. Localization of international labor management was defined as cooperative labor-management relations and localization of labor management policies, and the effect on management performance was verified. The subject of this study is a company with a labor union established among Korean companies that have entered China and Vietnam, and data were collected from 82 subsidiaries. The empirical analysis proved the path analysis and mediating effect through the structural equation model. The summary of the analysis results of this study is as follows. First, the cooperative labor-management relations of overseas subsidiaries were found to have a positive effect on the improvement of labor-related performances of overseas subsidiaries, such as reduction of job satisfaction and turnover rate, and improvement of quality. Second, cooperative labor-management relations were found to have a positive effect on the management performance of overseas subsidiaries by mediating labor-related performance. Third, the positive effect of labor-related localization on improving labor-related performance of overseas subsidiaries was partially supported, but the mediating effect on management performance through labor-related performance was not statistically significant. In conclusion, this study is meaningful in that it empirically identified the importance of forming cooperative labor-management relations that have been relatively neglected in the localization of labor management of overseas subsidiaries. Previous studies have focused on finding out the effect of localization of international labor management or personnel management policies on the management performance of overseas subsidiaries. On the other hand, this study presented implications that it is important not only to establish personnel management policies, but also to improve organizational commitment through organic cooperation and communication with local subsidiary labor unions. The results of this empirical analysis are expected to provide a meaningful direction for efficient labor management of Korean subsidiaries in emerging countries such as China and Vietnam.

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