What determines the adoption of employee empowerment practices by MNE subsidiaries in China?

Abstract

PurposeThis paper aims to explore how institutional factors determine the adoption of employee empowerment practices by multinational enterprises (MNEs) subsidiaries in China.Design/methodology/approachThis paper examines the effects of MNE subsidiaries’ external and internal institutional factors on the degree of employee empowerment practices adopted by these subsidiaries. Using hierarchical regression analysis, hypotheses were tested with a sample of 99 MNE subsidiaries operating in China.FindingsThe results show that both the informal institutions of the host country and the subsidiary’s characteristics play an important role in shaping the degree of empowerment practices adopted by MNE subsidiaries in China.Originality/valueEmployee empowerment practices have been increasingly used by MNEs to leverage human resources for organizational competitive advantage. Although a large body of work has studied a bundle of HRM practices as a whole adopted in MNE subsidiaries, there is a paucity of research on the specific empowerment practices in MNE subsidiaries. This research fills this important gap in the literature by investigating the institutional forces that influence the empowerment practices in MNE subsidiaries in China.