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Title: Working for laowai: Chinese shopfloor workers perceptions of employment in a Western multinational


1
Working for laowaiChinese shopfloor workers
perceptions of employment in a Western
multinational
  • Research Seminar 26 November 2003 at Royal
    Holloway
  • Dr Jos Gamble
  • School of Management
  • Royal Holloway
  • University of London

2
Abstract
  • There is a growing body of research on human
    resource management practices in China.
    Overwhelmingly, these studies are based upon
    surveys or interviews with managers and
    professionals. Although recent studies portray
    Chinas labour-management system as being in a
    state of transition, relatively little attention
    has been paid to the perceptions and experiences
    of shopfloor employees. This neglect ignores the
    extent to which HRM practices transferred from
    Western countries, for instance, are refracted
    through host-country cultural and institutional
    lenses. We cannot read off from the UK context
    how Chinese employees might respond to any
    particular practice. The ethnographically
    inspired case study approach employed in this
    paper enabled the author to elicit employees
    reports of their own experiences of differing
    employment regimes in actual workplaces and to
    explore the ways in which practices on the
    shopfloor are interpreted and negotiated by
    actors. This paper explores a range of
    questions What motivates Chinese people to work
    in a foreign firm? What expectations do they have
    of such firms? How does their experience of
    employment in these firms compare with that in
    previous firms, especially state-owned
    enterprises? How do Chinese employees respond to
    these differences? The data for this paper are
    derived from research carried out in 1999, 2000,
    2002 and 2003 at stores owned by a British
    multinational retailer during which over 120
    semi-structured interviews were conducted with a
    cross-section of employees.

3
Introduction
  • The spirit of unity here is very good, its like
    one big family, its very stable. Even though
    its a foreign company they respect us and listen
    to our opinions. We get the feeling that this
    company is our family and we all want it to do
    well. First names of expatriate managers
    cannot speak Chinese, but theyre very polite.
    Our foreigners (laowai) are very good, they
    respect us. Service desk supervisor

4
Introduction (2)
  • HRM generally derives data from surveys (e.g.
    Rosenzweig and Nohria 1994) or interviews with
    managers (Monks 1996).
  • Clark et al remark, it is important to focus on
    individuals as consumers of change (1998 7).
  • Organisations suffused with competing interests
    (e.g. Turnbull and Wass 1998).
  • Little phenomenological research in China.

5
Is China still a transitional economy?
  • Ongoing structural changes in economy and nature
    of employees relationship to the workplace.
  • Composition of economy changing significantly
  • - 1980-2000, China utilised 336 bn in FDI.
  • - 1978-2002 approved 427,720 FDI projects.
  • - Foreign invested enterprises contribution to
    the
  • economy, 1 of exports in 1985, 52 in 2002.
  • Private sector - late 1970s under 1 of the
    economy. By early 2000, approximately 38 of
    services output.

6
Chinas transitional economy
  • Shanghai, number of private companies rose from
    under 2,400 in 1991 to 109,974 by 2000.
  • State-owned enterprises (SOE) role contracted -
    1980, 76 industrial output, 25.5 in 1997 (Smyth
    2000).
  • SOEs face intensified competition from domestic
    and multinational firms (Nolan and Wang 1998).
  • Number of SOEs in China fell from 102,300 in 1989
    to 42,900 by mid-2002.

7
The state SOEs are in
  • Since mid-1980s, nature of enterprises roles in
    workers lives has changed considerably.
  • In larger SOEs from mid-1950s-to mid-80s
    centrally planned job allocation, lifetime
    employment, egalitarian reward systems,
    cradle-to-grave welfare benefits (Shenkar 1996
    Lü and Perry 1997).
  • SOEs workers tied into a system of organized
    dependency (Walder 1986).
  • This model steadily eroded (Goodall and Warner
    1997 Benson and Zhu 1999 Warner 1999 Ding et
    al 2000).

8
Cracking rice-bowls
  • - Reward systems being reformed.
  • - Contributory medical schemes, schooling costs
    have risen substantially.
  • - Since 1998, rapid commercialisation of property
    market, e.g. by 2000 over 400,000 Shanghai
    residents had used housing loans to buy their own
    homes (Shanghai Star 2000a).
  • Minimal job mobility (Davis 1990) replaced by
    choice.
  • Morris et al the results of the reforms to
    date are still very far from representing the
    emergence of a real labour market in China
    (2001 701).

9
Choice and insecurity
  • Iron rice bowls replaced by threat of
    unemployment and income insecurity (Cook and
    Maurer-Fazio 1999 Gu 1999 Morris et al 2001).
  • It is reported that 30 million SOE employees were
    laid off between 1998 and 2002.
  • State planners intention is that FDI will bring
    updated products, equipment and technology,
    advanced management expertise and HRM systems
    (Pearson 1991 Child 1994 Hayter and Han 1998).

10
Transfer of HR practices
  • Researchers observe limits to introduction of new
    HRM systems, for example
  • Warner (1999) organizational inertia
    constrains foreign investors from implanting new
    human resource management systems and practices.
  • Ding et al The degree to which foreign
    investment may implant new human resource
    management systems and techniques is constrained
    by the Chinese context, particularly the cultural
    and institutional heritage of the SOE (2000
    219).

11
Getting connected in China
  • Guanxi, connections, extensively explored in
    sociological and business literature (Yang 1994
    Tsang 1998 Gold et al 2002).
  • Guanxi dyadic, personal relations between
    people who can make demands on each other. The
    stronger the guanxi, the more demands can be
    imposed (Tung and Worm 2001 521).

12
Guanxi - making the wrong connection?
  • Tung and Worm conclude guanxi is an integral
    component of doing business in China and guanxi
    is required at all stages in the companys
    operations in China (ibid 525).
  • My findings contradict this assertion, and
    especially with regard to the recruitment and
    management of human resources in China.
  • Firms that too readily adopt the Chinese way of
    doing things, may squander valuable resources
    that differentiate them as employers.

13
Methodology
  • The journey as an analogy for research.
  • HRM literatures focus largely on management.
  • Anthropological accounts focus on workers in
    export-processing factories in S. China (e.g. Lee
    1998).
  • Business and organizational studies that claim to
    focus on labour lack voices of local employees
    (e.g. Benson and Zhu 1999 Morris et al 2001).

14
Anthropology and HRM
  • Anthropology has much to offer studies in HRM,
    but few organisational ethnographies (Rosen 1991
    Bate 1997 Linstead 1997).
  • Factors behind this absence
  • - Time-consuming and difficult nature of
    participant observation
  • - Form of ethnographic writing
  • - Language acquisition
  • - Access dependent upon management cooperation
    (Clark et al 1998 6).

15
The texture of anthropological research (Bate
1997)
  • Historical - interest in living history
  • Contextual, individuals located in temporal,
    physical, and institutional contexts
  • Process orientated
  • Actor-centred a commitment to learning
    something about their world and what they make of
    it (ibid 1160).
  • Inductive and grounded in the everyday reality
    of the people it studies (Linstead 1997 95).

16
Ethnographic research
  • Problematic aspects of ethnographic research
  • - The problem with reality
  • - Insufficient data
  • This paper informed by ethnographic methodology
  • - Use of target language
  • - Relatively long time frame
  • - Inductive approach
  • Research adopted what Marcus (1995) terms a
    multi-sited approach of mobile ethnography

17
Real types and ideal types
  • Typically, analysts compare adoption of Western
    practices against ideal type model of SOE
    practices.
  • FDI provides a means of comparison for those
    workers who can see both foreign and indigenous
    managers in their everyday work lives (Nicols et
    al 2002 740).
  • DStore particularly suitable to comparisons
    since
  • - Strategy to replicate parent country practices
  • - Greenfield sites with no established
    workforce
  • - UK side has full operational control
  • - Preference to recruit those with work
    experience

18
Self criticism
  • Reflexivity merely a rhetorical device?
  • Seeking further interpretations from the
    audience.
  • Conditions under which the knowledge contained
    within this paper was constructed
  • Bias toward better-run firms.
  • Human factors disinclination to take on board
    negative disconfirmatory evidence (cf. Popper).

19
The meaning of is
  • Might informants gloss over negative features?
  • Ethnographer and political struggles in
    workplaces.
  • Retrospective accounts a re-membering of
    history (Hobsbawm and Ranger 1983 Zonabend
    1984).
  • How do we know what people really mean?
  • ?? culture?
  • no one is quite sure what culture is (Geertz
    2000).
  • Steeling at Sainsburys?

20
Introduction to DStore
  • June 1999, StoreCo opened Dstore in Shanghai.
  • Second store, also in Shanghai, opened May 2000.
  • 11 new stores up to September 2003.
  • Intention to open 60 stores by end of 2007.
  • Employees c. 2/3 male, 1/3 female, aged c. 27-28.
  • Since 2000, day-to-day store management
    transferred to local managers.
  • Research undertaken in 1999, 2000, 2002, 2003.
  • Over 120 semi-structured interviews with
    cross-section of employees in Shanghai and Suzhou.

21
Table 1 Grading structure in DStore
  • Grade 2 Customer assistants, receiving desk
    staff, warehouse staff, clerical workers
  • Grade 3 Customer advisors, deputy supervisors
  • Grade 4 Supervisors
  • Grade 5 Assistant store managers (ASM)
  • Grade 6 Store managers (SM)

22
The view from the shopfloor employees
experiences of employment in a MNE
  • Motives to join
  • Ritzer (1993) sees a proliferation of de-skilled
    McJobs in service work.
  • I applied here because I saw that it was an
    Anglo-Chinese joint venture with a management
    that was blazing new trails (chuanzxin de), so I
    came here to learn/study (xuexi). Showroom
    deputy supervisor

23
Work pace
  • You have to walk a bit faster here. Deputy
    supervisor from local hardware store
  • Here work time is work time, in my previous job
    we only worked 2-3 hours per day. Supervisor in
    paint and decoration, formerly in SOE store
  • Communist Party management is comparatively
    relaxed. Customer assistant

24
Company rules and procedures
  • Rules and procedures in SOEs relatively
    uncodified, discipline dependent on
    particularistic relationships.
  • Extensive (jiquan) regularised procedures at
    DStore.
  • Local employees sought more rigorous system of
    discipline than that introduced by British
    managers.

25
Discipline and punish
  • The regulations here are very lax, foreign
    companies take more time to discipline people,
    its a bit too slow. Warehouse employee
  • Management is not strict enough, if an employee
    drops something and breaks it they should be
    fined. Supervisor loss prevention
  • Under pressure from local managers, expatriate
    managers discussed whether to introduce fines for
    breakages.

26
Relationships with co-workers
  • Relations with co-workers generally good in SOEs
    and FIEs, but rivalries and disputes in some
    SOEs.
  • The spirit of unity emanates from the top levels
    down and spreads outwards (huxiang chuanran),
    people help each other. Supervisor
  • There is a spirit of unity with work colleagues
    for example, we go out for meals, and link up
    (goutong). At my last job each person looked out
    for themselves (ge ren guan ge ren), we just
    worked together and then each to her own. Deputy
    supervisor

27
Relationships with superiors
  • In my previous job it was, "Im a leader, youre
    a worker - it was a very clear divide.
    Gardening customer assistant
  • In SOEs the levels in the hierarchy are more
    clearly demarcated. Here people are more equal,
    everybody works together to help each person
    develop their potential. Here leaders help out,
    in a SOE they wouldnt do this. Employees can
    make recommendations via a suggestion box or tell
    first names of SM and ASM. Each level of the
    leadership is quite open. Clerk

28
Relationships with superiors (2)
  • The strongest impression when I came here was
    that the differences between the high levels and
    the lower levels are not clearly demarcated, its
    easy to be close, its people-centred (yi ren wei
    ben). Everyone uses first names, we feel that
    were all in the same company, were all
    co-workers, we all have the same objective. Here
    the management dont issue orders, its very
    harmonious. Its like a large extended family.
    This is due to DStores culture it has entered
    the employees (yi ren lai chufa). Trade desk
    deputy supervisor

29
Relationships with superiors (3)
  • Relations between upper and lower levels are
    very warm and polite. In the SOE, management
    didnt interact (da jiaohu) with the rest of the
    staff. Showroom customer assistant
  • Theres an obvious difference to my former
    retail SOE. There the leaders ordered you to
    work in a department, here you can ask the
    supervisor if you want to move departments.
    Checkout deputy supervisor
  • There is not a feeling of distance between
    workers and leaders, we feel close. Leaders have
    a feeling for us, this encourages workers, it
    makes people willing to work hard. Showroom
    customer advisor

30
Relationships with superiors (4)
  • A warehouse worker described DStores management
    style Very tolerant and warm-hearted, the
    managers show concern for you. In the SOE store,
    even though I was there for one year, the
    managers didnt even know my name, here were
    very familiar with first names of expatriate
    managers. Here workers have a spirit of unity,
    at the old company it always felt that workers
    were workers and managers were managers, but
    here we feel that workers and managers are
    together, its harmonious.

31
Back to the 1950s?
  • Shopfloor staff described workplace relations as
    - - fraternal (xiongdi guanxi)
  • - the firm had a spirit of unity (tuanjie
    jingshen)
  • - extended-family atmosphere (da jiating
    fengwei)
  • - a family-like feel (qinqi ganjue).
  • A supervisor with 30 years work experience,
    commented, Chinese leaders just issue orders,
    here relations between people are equal. I joke
    that DStores way of having no distance between
    people is like China in the 1950s. Then
    everybody tightened their belts and worked
    together.

32
Expatriates self-presentation
  • Local employees impressed by example and
    self-presentation of the expatriate managers.
  • Expatriate manager found that compared to the UK
    everyone here is very conscious of their level,
    they do not question those above them.
  • The UK managers are very polite, we like working
    with them, theyre easy going and treat us as
    equals (pingyi jinren). Chinese managers in
    other companies are separated from the masses
    (tuoli qunzhong), and not willing to interact
    with workers. Deputy supervisor decorative
    materials section

33
Visible symbols of company culture
  • DStores use of a common uniform a reversion to
    practice common during the Maoist era.
  • Chinese companies use formal address - a
    military style approach.
  • In this cultural and institutional context,
    introduction of first-name terms constituted a
    radical innovation.
  • The absence of managerial signifiers extended to
    managers office space.

34
Managerial discontent
  • An ASM expressed some discontent over absence of
    managerial perks
  • Everybody here has the same uniform. In local
    firms managers wear a tie to make a difference.
    Here its confusing for local customers. If a
    customer looks for a manager and they see me
    dressed like this, they wont believe Im a
    manager and theyll think, youre lying, you
    dont look like a manager. Management would
    prefer to wear a more formal tie and suit, like
    they do at Carrefour. But its a company rule.
    I know the companys purpose is to show that
    everyone is equal and that we are all down to
    earth, but people have never had this experience.
    The image is not right, managers should be more
    formal for the customers, its more business
    like. Working with the employees on the
    shopfloor its okay.

35
Relationships with superiors (9)
  • Morning briefings, company magazine and in-house
    consultation system Grass Roots.
  • Grass Roots gives us a feeling of being on an
    equal level (tongdeng), the company wants to know
    what employees think. Trade desk customer
    assistant
  • SOEs have tended to be secretive (Child and
    Markoczy 1993 613-4).
  • An ASM agreed that the company culture is very
    open, but concerned that it can take a longer
    time to reach a decision.

36
Relationships with superiors (10)
  • Experiences of other FIEs firms of different
    national origin placed in a hierarchy of
    desirability.
  • Customer assistant recalled at his previous firm,
    a HK-owned store, there was a feeling, Im the
    one in charge (dangguan de), Im the boss (tou),
    youre the common people (laobaixing) so I look
    down on you.
  • Timber supervisor recalled his former Japanese
    store had been ordering-style (mingling shi).
  • Achieving Maos revolutionary goal in a
    capitalist firm?

37
Favouritism/particularistic ties
  • The work environment here is relaxed
    relationships are just work-based. In SOEs there
    are lots of complicated guanxi here its all for
    work and the customer. Perhaps the reason for
    this is due to training. I followed the example
    of the supervisor. Hardware deputy supervisor
  • At DStore, there are not the Chinese things of a
    guanxi net. With a guanxi net people try to
    bring in friends and relatives. DStore is new,
    people are sent to the jobs theyre good at.
    Loss prevention supervisor

38
Favouritism/particularistic ties (2)
  • The management approach is completely different
    to my last work unit. There everything depended
    on guanxi and human feelings (renqing). Here it
    depends on your brain (kao naozi) and your own
    efforts. Showroom customer advisor
  • Its a different approach here social
    connections (shehui guanxi) are most important in
    a SOE, here its what is inside one (neixin).
    Assistant store manager

39
Favouritism/particularistic ties (3)
  • A new recruit to the checkout, direct from
    school, attracted to the firm since, I didnt
    want to rely upon guanxi and currying favour (pai
    mapi) British management is via competition and
    not guanxi.
  • An ASM who had worked for a SOE department store
    In SOEs relationships are more complicated, but
    here the employees all come from different places
    so there are no conflicts like there are in SOEs.
    In FIEs guanxi is much less relevant, instead
    there is good management its a real nuisance to
    be concerned with who is whos cousin and so on.

40
Favouritism/particularistic ties (4)
  • Employment relations homologous with relationship
    between customer assistants and customers.
  • Tung and Worm (2001) stress need for FIEs to
    adapt to an environment where guanxi is all
    important.
  • But comments from employees show a positive
    endorsement of bureaucratic and market based
    employment relations.
  • Findings concur with Guthries (1999) assertion
    that foreign firms are fostering emergence of
    formal rational structures and systems in China.

41
Walking to market
  • Comments reminiscent of Fei Xiaotongs
    observation that Chinese villagers would walk
    miles to a market where they could exchange goods
    and act without human feelings (1992 126-7).
  • Chinese employees who move to a foreign firm
    place a metaphorical distance between themselves
    and wider Chinese society.

42
Opportunities for promotion and individual
development
  • In a SOE it doesnt matter if you do more or
    less, here it makes a difference if you do well
    or badly. Administration supervisor
  • The most important lesson that the employees
    should take away from the induction training is
    that DStore is performance orientated. You can
    develop (fahui) your ability and should not just
    wait for orders. Training manager

43
Opportunities (2)
  • At this company you can develop your individual
    speciality (fahui geren techan). My former SOE
    was more inflexible they didnt want you to
    think too much. Assistant store manager
  • DStore has a comparatively large space for
    individual development. At the SOE you would
    never feel, I havent finished my work yet, I
    should stay and get it finished. Here there is
    a higher demand on oneself. There were no
    expectations of you at the SOE. Here, when you
    expend more, you get something back. Decorative
    materials deputy supervisor

44
Opportunities (3)
  • An ASM recruited from a rival state store
    described DStore as a study/learning enterprise
    (xuexi qiye), and his former workplace as an
    existence enterprise (shengcun qiye).
  • A customer assistant, a former state restaurant
    kitchen worker In a SOE the master (lao shifu)
    is always the master. In a joint venture good
    people get promotion.

45
Opportunities (4)
  • Aspects of corporate culture interfaced with a
    rising tide of individualism in Chinese society.
  • Employees remarked that
  • - There is a greater expectation of oneself
    (dui ziji
  • yaoqiu yange yi dian)
  • - There is space to develop oneself (ziji
    fahui de
  • yudi)
  • - Each person can develop their own use (fahui
  • mei ge ren de zuoyong).

46
Security of employment
  • The most common questions asked by new recruits
    are Will the welfare benefits improve?, Will
    DStore develop quickly?, and How long can I
    stay in DStore?. Training manager
  • I applied to DStore because I knew it was a
    large international UK company and compared to
    other companies its strong (shili xionghou) and
    stable. Now, as many companies are going
    bankrupt and the employees are laid-off, older
    employees especially want stability. Decorative
    materials customer assistant with 15 years
    experience in a bicycle factory

47
Security of employment (2)
  • Workers feel that if you dont make a big
    mistake you can stay for 3, 5, 8 years... But in
    some companies they throw you out with little
    notice, then workers lack a sense of security
    (anquan gan). People feel that if you have a
    one-year contract here, you can easily renew it.
    Also DStore employees can easily get jobs
    elsewhere as competition between supermarkets
    includes competition for staff. Assistant Store
    Manager

48
Security of employment (3)
  • Factors workers consider when they decide whether
    to work for DStore tended to differ according to
    their age (gender being far less apparent).
  • Younger employees attracted by training and rapid
    promotion opportunities.
  • Older employees desire for stability and
    security extended to concern with improved
    welfare benefits.

49
Security of employment (4)
  • Isomorphic pressures to recreate the relaxed,
    leisurely environment of SOEs with their
    attendant social welfare benefits (cf. Francis
    1996).
  • Employees' benchmarked levels of their salary,
    bonuses and welfare benefits against their former
    workplaces.
  • Employees comparisons had a persuasive force
    that could not easily be ignored (cf. Korczynski
    2002).

50
Conclusions
  • Dangers in reading too much from micro-contexts
  • Are findings dependent upon short time frame,
    specific culture and practices of this company,
    and particular expatriates involved?
  • Rosenzweig and Nohria (1994) suggest when firms
    become more embedded in the local environment
    they increasingly take on practices that prevail
    locally.

51
Power distance revisited
  • Divergence supports notion of substantial
    cultural distance between UK and China (Lockett
    1988 Easterby-Smith et al 1995).
  • Employees representations of SOEs as suffused by
    entrenched hierarchies uphold perspective of high
    power-distance relationship (Hofstede 1984).
  • But cultural distance not an insurmountable
    barrier to transfer of HRM practices from the UK.
  • Firm transferred a management approach apparently
    antithetical to local practices and norms.

52
Cultural dimensions revisited
  • Findings alert us to the processual nature of
    culture.
  • From dialectic of global firms/local labour a
    synthesis emerges.
  • An expatriate manager reflected on managers
    recruited from SOEs Even though people like
    xxx have not been out of China, they have
    adapted very well, they are closer to us in terms
    of how they run things.
  • Stretching the organisation into a new shape.

53
Isomorphing and transforming
  • Isomorphic pressures to recreate environment of
    SOEs most likely to come from older employees.
  • Management practices developed in one cultural
    and institutional environment (Whitley 1992)
    transferred to alien environments do not enter a
    void.
  • Process of consumption inherently dialectical
    transferred practices may both mean and become
    something rather different in a novel context.

54
Power-distance? - No thank you
  • The ordinary and mundane became extraordinary and
    innovative.
  • Hierarchy and Asian values - cultural
    dimensions are not indelible.
  • Persistence of organisational and political
    structures that underpin and maintain high P-D
    relationships does not equate to a positive
    endorsement of such arrangements by those at the
    receiving end.

55
Bridging distances
  • Expatriates with appropriate technical and
    personal skills can reduce the friction of
    cultural distance.
  • Preparation for expatriate posting just get in
    and stop whinging.
  • Scything through the mystique and mythology
    surrounding the complexity of dealing with human
    resources in China.
  • Rather than struggle to develop complex
    adaptations to the Chinese environment, firms
    would be better advised to hone and refine their
    technical expertise.

56
Market-based employment relations how far have
they come in China?
  • Tremendous flux with main props of organisational
    dependency jettisoned or eroded in SOEs.
  • In this region at least, Morris et al.s (2001
    701) conclusion that China lacks a real labour
    market is already outdated.
  • China growing closer to the US model than
    Japanese model of capitalism.

57
An inductive leap (Christmas time for turkeys?)
  • As Guthrie (1999) comments, the diminishing role
    of connections in the labour market process might
    have wider consequences for Chinese society.
  • Changes to workplace-based relationships might
    have mimetic reverberations for social relations
    generally.
  • Ordering of foreign firms into a moral hierarchy
    - suggestive of political preferences?
  • When does transition end and how will we
    recognise this time?

58
References
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