Industrial Relations and HumanResources Management: A ComparativeAnalysis of Cultural Barriers in ChineseCompanies

Abstract

Given the impact of global commercialization, this research focuses on the multinational corporations (MNCs) and their subsidiaries in the newly developing transition economy in China, on the different forms of foreign direct investment (FDI) and joint-venture companies (JVCs). The conceptual models on which this research is based show that, in terms of industrial relations (IRs) and human resources management (HRM), culture and languages, as invisible and forgotten factors, play important roles in promoting or hindering managerial efficiency. The research objective is to determine whether or not the linguistic and cultural barriers have a significant influence on the MNCs in particular， IRs and HRM. As China transforms its economy, MNCs play a strategic role and, in order to acquire international competitive advantages, search for efficient IRs and HRM systems and practices. The research has identified a conceptual model that allows a hypothesis to be formed. The model has the advantage of combining cultural and linguistic factors, a synthesis so far largely ignored by researchers. It is designed to explain the shape of industrial relations institutions in the fields of bargaining, the amount of federal and government involvement, the existence of works councils, the payment structure, etc. It is suggested that, in the light of what has been learned from empirical studies (Warner, 1993; Greif, 1994; Globe, 1994; Child, 2003; Feely, 2003; Black, 2005), the research will explore how cultural factors in different stratifications have had an impact on FDI and JVCs industrial relations and HRM strategies in China. The empirical work mentioned has demonstrated a deficit of research focusing on culture and language so this research will make a valuable contribution to the field. To answer what role culture/language play and how and why, both quantitative and qualitative research methods are deemed suitable. Two typical MNCs, one located in Shanghai, the Yangtze Delta Zone and the other in Canton, the Pearl River Delta Zone, are planned to be used as subjects of case studies. The research also includes a survey by using questionnaires focusing on the mass FDIs and JVCs in east and south China. We therefore have two goals: first, to build up theories of culture and language functions in international management and present evidence scientifically for further research; second, to provide references for practitioners dealing in international business, especially those who work as expatriates in transition economies. This research is expected to contribute to both theory and practice in IRs and HRM management for Anglo-Saxon culture based MNCs in China.