Early global Trotters and their entrepreneurial employment practices

Abstract

Purpose Questions have often been asked of the ethicality of multinational enterprises (MNEs) with the conducts of many being classified as exploitative. This is particularly so the internal context, where MNEs are often reluctant to employ host country nationals at important positions and treat their host and parent countries employees differently. This study aims to examine whether the locals are really getting the raw end of the deal. Design/methodology/approach Utilising a unique record book that is available about the employment details of civil servants in Hong Kong known as the blue book, this study intends to examine whether first-moving multinational organisations treated their local employees in an ethical and reasonable manner, for the employees entering the service between 1845-1850. Findings The data suggests that, overall, host country nationals earn much less than not only the British but also those from third countries. Moreover, parent country nationals were placed at important officer and supervisory roles, as oppose to host country nationals at the bottom, forming a typically ethnocentric governance structure (Perlmutter, 1969). Furthermore, even divided by grade, the starting salary difference between host and parent country nationals remain considerable. However, the reason for this is complex, and the authors do not have a quick and precise answer as to whether there has been discrimination. Research limitations/implications The findings perhaps explain the dilemma faced by the early-movers because they tend to feel the strong need of adopting an ethnocentric approach, which can be extremely costly as a result of the large wage differential. A balance needs to be struck between this and utilising host country nationals, which might not necessarily possess all the essential qualities but might be cheaper. Originality/value This is the first study examining the employment practices of fast-moving MNEs.