The influence of internal and external social networks on HRM capabilities in MNC subsidiaries in China

Abstract

In this study we examine the influence of involvement in internal and external social networks on HRM capabilities. We distinguish between technical and strategic HRM capabilities and focus on the capabilities of the HR department relating to four HRM practices – recruitment and selection, training and development, compensation, and performance appraisal. The study is based on data from dual respondents, general managers and HR managers, in 66 European MNC subsidiaries located in China. The results indicate that contact with other MNCs in China regarding HRM issues is positively associated with both technical and strategic HRM capabilities whereas contact with local Chinese companies does not have any significant influence on either strategic or technical HRM capabilities. Contact with MNC headquarters is positively associated with strategic HRM capabilities.

Keywords:

• China
• HRM capabilities
• MNC subsidiary
• social networks

Acknowledgements

We gratefully acknowledge the help of Vesa Suutari and the financial support provided by Liikesivistysrahasto.

Notes

1. Due to changes/cancellations in scheduled interview times or difficulties in finding a suitable time for face-to-face interviews, nine respondents (two HR managers and seven general managers) were interviewed over the telephone.