Strategic human resource management in western multinationals in China

Abstract

In the past two decades, the way enterprises in the People’s Republic of China (PRC) manage their human resources has changed dramatically. Multinational enterprises (MNEs) have entered into the “strategic investor” phase, where now the integration of PRC operations into the MNE network receives growing attention. For these companies HRM is often of high strategic importance. This article seeks to explore how differences in HRM practices in such businesses vary with their ownership forms. The study is based on in‐depth interviews with HRM managers – on the PRC country‐level – in 12 MNEs. The large majority of the participating companies clearly stated that today the HRM function is of high strategic importance for their operations in the PRC and is predominantly controlled by the MNE partner. Although equity ownership stake is an important variable influencing HRM policies and practices, it is shown that it needs to be seen in conjunction with other possibly non‐equity control‐mechanisms.