Advertisement

Journal of International Business Studies

, Volume 34, Issue 3, pp 255–265 | Cite as

Does human resource management matter in a transitional economy? China as an example

  • K S Law
  • D K TseEmail author
  • N Zhou
Article

Abstract

This paper investigates the significance of how firms manage their human resources (HRs) within the confines of powerful social institutions in a transitional economy, the People's Republic of China (China). We propose that two dimensions, the role of human resource management (RHR) and followers' perception of the leader (TOP), are important contributors to firm performance as are the influences of the regional economy and firm ownership. We tested our hypotheses with a survey of 180 firms from nine cities in China. We found that both role of HRM (RHR) and follower's perception of top-level management (TOP) are important to firm performance. The study confirms that while social institutions remain powerful in a transitional economy, effective HRM is important to firm performance.

Keywords

human resource management perception of top management China Chinese management 

Notes

References

  1. Bae, J. and Lawler, J.J. (2000) ‘Organizational and HRM strategies in Korea: impact on firm performance in an emerging economy’, Academy of Management Journal 43: 502–517.CrossRefGoogle Scholar
  2. Barney, J. (1991) ‘Firm resources and sustained competitive advantage’, Journal of Management 17: 99–120.CrossRefGoogle Scholar
  3. Beamish, P.W. (1993) ‘The characteristics of joint ventures in the People's Republic of China’, Journal of International Marketing 1: 29–48.Google Scholar
  4. Becker, B.E. and Huselid, M.A. (1998) ‘High performance work systems and firm performance: a synthesis of research and managerial implications’, Research in Personnel and Human Resources Management 16: 53–101.Google Scholar
  5. Boal, K.B. and Hooijberg, R. (2001) ‘Strategic leadership research moving on’, The Leadership Quarterly 11(4): 515–549.CrossRefGoogle Scholar
  6. Boisot, M. and Child, J. (1988) ‘The iron law of fiefs: bureaucratic failure and the problem of governance in the Chinese economic reforms’, Administrative Science Quarterly 33: 507–527.CrossRefGoogle Scholar
  7. Boisot, M. and Child, J. (1996) ‘From fiefs to clans and network capitalism: explaining China's emerging economic order’, Administrative Science Quarterly 41: 600–628.CrossRefGoogle Scholar
  8. Burton, G.D., Lan, H. and Lu, Y. (2000) ‘China's township and village enterprises: Kelon's competitive edge’, The Academy of Management Executive 41(1): 19–31.Google Scholar
  9. Child, J. and Tse, D.K. (2001) ‘China's transition and its impact on international business’, Journal of International Business Studies 32(1): 8–21.CrossRefGoogle Scholar
  10. China Staff, May 2002, p. 4.Google Scholar
  11. Delaney, J.T. and Huselid, M.A. (1996) ‘The impact of human resource management practices on perceptions of organizational performance’, Academy of Management Journal 39: 949–969.CrossRefGoogle Scholar
  12. Gioia, D.A. and Thomas, J.G. (1996) ‘Identity, image, and issue interpretation: sensemaking during strategic change in academia’, Administrative Science Quarterly 41: 370–403.CrossRefGoogle Scholar
  13. Hui, C., Law, K.S. and Chen, Z.X. (1999) ‘A structural equation model of the effects of negative affectivity, leader–member exchange and perceived job mobility on in-role and extra-role performance: a Chinese case’, Organizational Behavior and Human Decision Processes 77: 3–21.CrossRefGoogle Scholar
  14. Huselid, M.A. (1995) ‘The impact of human resource management practices on turnover, productivity, and corporate financial performance’, Academy of Management Journal 38: 635–672.CrossRefGoogle Scholar
  15. Huselid, M.A., Jackson, S.E. and Schuler, R.S. (1997) ‘Technical and strategic human resource management effectiveness as determinants of firm performance’, Academy of Management Journal 40: 171–188.CrossRefGoogle Scholar
  16. Kornai, J. (1992) The Socialistic System: The Political Economy of Communism, Princeton University Press: Princeton, NY.CrossRefGoogle Scholar
  17. Lau, C.C. (1997) ‘Social system change in China since the reform’, China Studies 3: 101–110.Google Scholar
  18. Lau, C.M., Tse, D.K. and Zhou, N. (2002) ‘Institutional forces and organizational culture in China: effects on change schemas, firm commitment and job satisfaction’, Journal of International Business Studies, 33(3): 533–550.CrossRefGoogle Scholar
  19. Law, K.S., Wong, C.S., Wang, D. and Wang, L. (2000) ‘Effect of supervisor–subordinate guanxi on supervisory decisions in China: an empirical investigation’, International Journal of Human Resource Management 11(4): 751–765.CrossRefGoogle Scholar
  20. Li, S. (1998) ‘Success in China's industrial market: an institutional and environmental approach’, Journal of International Marketing 6(1): 56–80.Google Scholar
  21. Li, L. and Tan, L. (1997) ‘Social origin and social transformation of private entrepreneurs: structure impediment and structural preponderance’, China Studies 3: 25–44.Google Scholar
  22. Lin, Z. (1998) Memorandum of China's Reform 1989–1997, East Publishing Center: Shanghai.Google Scholar
  23. Lin, J.Y., Fang, C. and Zhou, L. (1996) ‘Creating an Environment for Fair Competition is the Core of Enterprise Reform’, in D. Xu and G. Wen (eds.) Reform Of State-Owned Enterprises in China, China Economic Press: Beijing, 49–89.Google Scholar
  24. Luo, Y. and Peng, M.W. (1999) ‘Learning to compete in a transition economy: experience, environment, and performance’, Journal of International Business Studies 30(2): 269–296.CrossRefGoogle Scholar
  25. Nee, V. (1992) ‘Organizational dynamics of market transition: hybrid forms, property rights and mixed economy in China’, Administrative Science Quarterly 37: 1–27.CrossRefGoogle Scholar
  26. North, D.C. (1990) Institutions, Institutional Change and Economic Performance, Cambridge University Press: Cambridge.CrossRefGoogle Scholar
  27. O'Reilly III, C.A. and Pfeffer, J. (2000) Hidden Value, Harvard Business School Press: Harvard.Google Scholar
  28. Ouchi, W.G. (1977) ‘The relationship between organizational structure and organizational control’, Administrative Science Quarterly 20: 95–113.CrossRefGoogle Scholar
  29. Pan, Y., Li, S. and Tse, D.K. (1999) ‘The impact of order and mode of market entry on profitability and market share’, Journal of International Business Studies 30: 81–103.CrossRefGoogle Scholar
  30. Pan, Y. and Tse, D.K. (2000) ‘The hierarchical model of market entry modes’, Journal of International Business Studies 31(4): 535–554.CrossRefGoogle Scholar
  31. Peng, M.W. (2000) Business Strategies in Transition Economies, Sage: Thousand Oaks, CA.Google Scholar
  32. Peng, M.W. and Heath, P.S. (1996) ‘The growth of the firm in planned economies in transition: institutions, organizations, and strategic choice’, Academy of Management Review 21: 492–528.Google Scholar
  33. Ralston, D.A., Egri, C.P., Stewart, S., Terpstra, R.H. and Yu, K. (1999) ‘Doing business in the 21st century with the new generation of Chinese managers: a study of generational shifts in work values in China’, Journal of International Business Studies 30(2): 415–430.CrossRefGoogle Scholar
  34. Scott, W.R. (1995) Institutions and Organizations, Sage: Thousand Oaks.Google Scholar
  35. Shipper, F. and Davy, J. (2002) ‘A model and investigation of managerial skills, employee's attitudes, and managerial performance’, The Leadership Quarterly 13(2): 95–120.CrossRefGoogle Scholar
  36. Sjobberg, O. and Zhang, G. (1996) ‘Soft budget constraints in Chinese township enterprises’, Mimeo, Stockholm School of Economics.Google Scholar
  37. State Statistical Bureau (1992–1996) China Statistical Yearbook, China Statistical Publishing Company: Beijing, 1992 to 1996.Google Scholar
  38. Taylor, S., Beechler, S. and Napier, N. (1996) ‘Toward an integrative model of strategic international human resource management’, Academy of Management Review 21: 959–985.Google Scholar
  39. Tjosvold, D., Law, K.S. and Sun, H.F. (2003) ‘Collectivism and individualistic values: their impact on group dynamics and productivity in China’, Group Decision and Negotiation 1: 2–5 (conditional acceptance).Google Scholar
  40. Tse, D.K. and Lau, C.M. (1999) ‘New ownership forms in transitional economies: emergence, characteristics and performance of China's joint stock companies’, Working paper, Chinese Management Centre, University of Hong Kong.Google Scholar
  41. Tse, D.K., Pan, Y. and Au, K.Y. (1997) ‘How MNCs choose entry modes and form alliances: the China experience’, Journal of International Business Studies 28: 779–806.CrossRefGoogle Scholar
  42. Twomey, D.F. and Harris, D.L. (2000) ‘From strategy to corporate outcomes: aligning human resource management systems with entrepreneurial intent’, International Journal of Conflict Management 10(3): 43–55.Google Scholar
  43. Walder, A.G. (1995) ‘Local governments as industrial firms: an organizational analysis of China's transitional economy’, American Journal of Sociology 101: 263–301.CrossRefGoogle Scholar
  44. Wong, C.S., Wong, W.T., Hui, C., and Law, K.S. (2001) ‘The significant role of Chinese employees' organizational commitment: implications for managing employees in Chinese societies’, Journal of World Business 36(3): 1–15.CrossRefGoogle Scholar
  45. Wright, P.M. and McMahan, G.C. (1992) ‘Theoretical perspectives for strategic human resource management’, Journal of Management 18: 295–320.CrossRefGoogle Scholar
  46. Yan, A. and Gray, B. (1994) ‘Bargaining power, management control, and performance in United States–China joint ventures: a comparative case study’, Academy of Management Journal 37: 1478–1517.CrossRefGoogle Scholar

Copyright information

© Academy of International Business 2003

Authors and Affiliations

  1. 1.School of Business Management, Hong Kong University of Science and Technology
  2. 2.School of Business, Hong Kong University
  3. 3.Marketing DepartmentCity University of Hong Kong

Personalised recommendations