Influences on Human Resource Systems in the Service Contexts: Evidence from Chinese Firms

Abstract

In spite of ample evidence that the adoption of high involvement human resource systems leads to better organizational performance, very little research has examined why their diffusion in China has been limited. To explore this question, we investigate the effects of owner identities, stock market listings, customer service strategies, and regional differences. Based on a national sample consisting of 247 call centers operating in over twenty provinces in China, our results indicate several interesting findings. First, compared to that in private businesses, the adoption of high involvement human resource systems is significantly higher in foreign companies, central state-owned enterprises, and local state-owned enterprises. Second, non-listed firms and those listed on foreign stock exchanges make more intensive use of high involvement human resource systems than companies listed on Chinese stock exchanges. Third, business strategies that focus on high value customer segments and customers in large geographic regions are positively associated with the use of high involvement human resource systems. Lastly, the adoption of high involvement human resource systems is more common among companies operating in southern, eastern, and northeastern coastal regions than those in inland regions. Overall, these findings strongly suggest that incorporating indigenous constructs which capture unique and context- sensitive characteristics of Chinese organizations is particularly important for this discussion.