Managerial Styles, Workforce Composition and Labor Unrest: East Asian-Invested Enterprises in China

Abstract

This paper investigates how labor disputes have been differentially affected by the interplay of organizational characteristics, institutional structure, work conditions, as well as the characteristics of labor force by country origin of East Asian-owned firms and location of industry in China. It also analyzes how different managerial styles such as personal (arbitrarily regulatory), authoritarian and institutionalized paternalism affect workers' satisfaction with labor relations and the frequency of labor disputes at each country origin of those firms. The survey research was undertaken at thirty-nine factories in coastal cities from 2000 to 2001 with 39 managers and 291 workers as respondents. Contrary to the conventional argument that similar managerial styles of East Asian-owned firms in China give rise to a higher rate of labor disputes compared to Western-owned firms, we find that their managerial styles are significantly different and variously mediated by some other factors (such as unionization) among them. The findings suggest that low wages and long work hours under the condition of authoritarian managerial style have significant effects on labor disputes in Taiwanese-owned firms. Korean-owned firms are, on the other hand, more likely to confront collective action organized by higher proportion of unionized local workers against low wages under normative (unwritten) rules. Hong Kong-owned firms have heterogeneous workforce and personal and paternalistic managerial style that lead to the slightly fewer labor disputes than Taiwanese- and Korean-owned firms, despite of relatively long work hours. Japanese-owned firms have the fewest labor disputes than their counterparts due to the highest wages and the adherence of legal work hours under hybrid or remote paternalistic managerial style, as well as to a moderately heterogeneous workforce that have diluting effects on the frequency of labor disputes.