Institutions as constraints and enablers: Changes in human resource management practices of foreign companies during economic reform in China

Wei Lu*

*Corresponding author for this work

Research output: Contribution to journalReview ArticleScientificpeer-review

63 Downloads (Pure)

Abstract

This article demonstrates how the development of labour market institutions alongside economic reform has impacted the human resource management (HRM) practices of foreign companies in China. A historical approach is applied to examine the transformation of China from a centrally planned labour administration system to a market-based labour institution. The HRM practices of foreign companies are seen being embedded in China's macro-institutional environment, which constrains and/or enables foreign companies to exercise people management. Drawing on previous research, the study shows that HRM practices in the early reform period were primarily constrained both by formal and by informal institutions. The evidence from Finnish companies operating in China shows that HRM practices in the late reform period are largely enabled by formal institutions; however, foreign companies face the need for adaptation to the demands of informal institutions. Furthermore, the scarcity of human resources and rapid yet heterogeneous socio-economic development pose additional challenges for people management in China today.

Original languageEnglish
Pages (from-to)52-74
Number of pages23
JournalCopenhagen Journal of Asian Studies
Volume36
Issue number2
DOIs
Publication statusPublished - Feb 2018
MoE publication typeA2 Review article in a scientific journal

Keywords

  • China
  • Economic reform
  • Foreign companies
  • Human resource management (HRM) practice
  • Institutional transition
  • Labour market institution

Fingerprint Dive into the research topics of 'Institutions as constraints and enablers: Changes in human resource management practices of foreign companies during economic reform in China'. Together they form a unique fingerprint.

Cite this