The impact of Chinese cultural values on human resource policies and practices within transnational corporations in China

Abstract

This study focuses on key cross-cultural issues that transnational corporations (TNCs) face when formulating and implementing human resource (HR) policies and practices in their Chinese affiliates. The aim of this study is twofold. First, to investigate how Chinese employees perceive HR policies and practices that have been transferred from parent enterprises of TNCs. Second, to explore the extent to which Chinese cultural values influence these HR policies and practices. These aims are addressed through an exploratory research design using in-depth qualitative interviews with 66 participants across 21 Western wholly owned TNCs in China. The findings of this study demonstrate a variation between global HR policies and practices of TNCs and their implementation at local level. Moreover, the authors find that there are three national cultural values with Chinese characteristics, which can affect HR policies and practices within TNCs in China; these are guanxi, valuing seniority and the importance of ‘human factor’. This study indicates that Chinese cultural values are far more sophisticated than the ones being conceptualized in previous literature, as these three cultural values appear to be interlinked and be embedded within the Chinese collectivist culture.

Keywords:

• China
• Chinese cultural values
• collectivism
• cross-cultural management
• international human resource management
• transnational corporations

Notes

1. ‘Transnational Corporations’ refer to the internationalized companies that own or control business activities in their home countries and in more than one foreign country. As there is no agreed definition of the internationalized companies, the authors choose the definition of ‘transnational corporations’, which is defined and used by the United Nations Conference on Trade and Development (UNCTAD 2011).

2. To preserve confidentiality and to maximize ease of reading, the Western TNCs, where the 66 participants were from, are coded as ‘WTNCs’.

3. The authors have been trying to reflect the verbatim record of the interview interactions by using the following notes. The words in ( ) were the proposed explanation added by the authors. The words and phrases in [ ] were added by the authors in order to form the proper grammatical sentences. The words and phrases emphasized by the participants were bold. The deleted interview conversations were marked as…. Punctuation had been added and it was hoped in a way that was faithful to the delivery of the quotes, to make the quotes more readily intelligible to readers.