What factors should be taken into consideration when MNEs formulating and implementing effective Ihrm policies and practices?

1.1 Introduction

Since the 1980s, China has moved from a closed, centrally planned system to a more market-oriented one. Several reforms led to this situation in domains such as agriculture, fiscal decentralization, state-owned enterprises (SOE) autonomy (Li, 2011), growth of the private sector and small- and medium-sized enterprises (SMEs), creation of a diversified banking system, development of stock markets and opening up to trade and foreign direct investment (FDI). The commensurate shifts in management, marketing, accounting, as well as mergers and acquisitions, SOEs and SMEs have been noted (see Rowley & Cooke, 2010), as have those regarding labor and management, human resource management (HRM), business relations and trust, corporate social responsibility (CSR) (Dyllick and Hockerts, 2002), and bank–corporate relationships (Warner & Rowley, 2011) and financial services, impression management, institutional isomorphic pressure on internationalization, international HRM, competitive strategy choices, and innovative performance of start-ups (Warner & Rowley, 2014).

The reforms and changes were undertaken gradually in order to make the transition toward a form of market capitalism. This development can also be placed in the context of different types of capitalism (see Rowley & Oh, 2016a, 2016b; Rowley & Yukongdi, 2016) and business relations. Indeed, it is commonly noted that Chinese firms are characterized by the inclination to incorporate personal relationships in decision making among which personal control, guanxi (Warner & Rowley, 2011, 2014, 2016) and interpersonal trust or xhinyong are the most well-known.

In terms of business organization, China has renewed its support for SOEs in sectors it considers important to “economic security”—explicitly looking to foster globally competitive national champions. There were reforms of SOEs from late-1990s onwards, with the worst closed or privatized and their employment halving from 70 million in 1997 to 37 million by 2005 (Wildau, 2016). This, however, ended with the government’s stimulus responding to the 2008 Global Financial Crisis through massive lending by government fiat to SOEs acting in the national interest. This consequently fueled the construction boom for factories, housing, and infrastructure, which in turn increased demand for output from SOEs. Now reform is in the air again, this time by mergers—with 6 SOEs having merged in 2015 and 1.8 million coal and steel jobs to be cut, although the government remains wary of job losses with the fear of social, unrest (Wildau, 2016).

In terms of the finance area, after keeping its currency tightly linked to the US dollar for many years, in 2005 China revalued it by 2.1% against the US dollar. From then until late 2008 the cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the 2008 Global Financial Crisis until mid-2010. The government’s financial intervention produced economic growth, although the rate of increase has been declining. This calls into question the veracity of the once-vaunted China business model, requiring an examination of its underpinnings and elements. Chinese firms are characterized by specific characteristics in their business model.

Our introductory chapter will present the current situation and subsequent changes, underlining the originality and limits of the China business model. The different compositional factors of business management and organization, culture, and finance and investment will be taken into account to help make the reader more aware of the ongoing transformations of the China business model.

1 Introduction

International human resource management (IHRM) is defined as “the set of distinct activities, functions, and processes that are directed at attracting, developing, and maintaining multinational enterprises’ human resources” (Taylor, Beechler, & Napier, 1996, p. 960). Since the publication of the pioneering study of Perlmutter (1969) in mainstream international business (IB) journal— the Journal of World Business, the five decades have witnessed a rapid development of IHRM theories and practices. Based on scholars’ early contributions (Black & Mendenhall, 1990; Dowling, 1999; Harris & Brewster, 1999; Taylor et al., 1996), the boundaries of the field of IHRM became established with a focus on HRM within multinational enterprises (MNEs), management of cross-cultural work practices, and comparative IHRM among various institutions.

As one of the IB sub-fields, IHRM addresses a key challenge for MNEs in practice, and for IB theory broadly—how organizations can attract, develop and retain highly talented individuals to lead in international operations, and implement their growth strategies (Stahl, Miller, & Tung, 2002). Yet it is not assumed that training and developing such a capable global workforce can be achieved through established processes designed for more conventional local workers. These people with global mindsets cannot be simply trained through domestic education and work experience; they must be “grown” with hands-on experience in a variety of different cultural environments (Meyer & Xin, 2018). Further, recent developments such as the rise of populist nationalism, the global health emergency, and security threats create substantially increased uncertainty and risks to firms and individuals for conducting international businesses (Caligiuri, De Cieri, Minbaeva, Verbeke, & Zimmermann, 2020; Cooke, Wood, Wang, & Veen, 2019; Cooke, Schuler, & Varma, 2020; Horak, Farndale, Brannen, & Collings, 2019). Thus, it is time for all of us as members of a community of a shared future for humankind to reflect and extend the accumulated wisdom generated from the IHRM field to increase the capacity of society to cope with the increasingly adverse economic and social conditions worldwide. In this context, this review work addresses two research questions: What is the current state of knowledge of IHRM research, and how can this growing body of research be fruitfully extended?

While a growing and substantial body of knowledge, the past fifty years of IHRM research have surprisingly witnessed only a handful of review articles (Cooke et al., 2019). Moreover, with only a few exceptions, these either focus narrowly on one particular aspect of IHRM, such as global staffing in Collings, Scullion, and Dowling (2009); global careers in Shaffer, Kraimer, Chen, and Bolino (2012), expatriates’ cross-cultural adjustment in Takeuchi and Chen (2013), and research logics and paradigms in IHRM (Primecz, 2020); or concentrate only on a certain time period, such as 1990–2010 in Welch and Björkman (2015), and 1993–2007 in Schuler and Tarique (2007). Since it would be of great value to integrate all of these elements, scholars (e.g. Cooke et al., 2019; De Cieri, Cox, & Fenwick, 2007) have called for a more holistic review and synthesis in the IHRM field.

Responding to this call, we perform a unique in-depth bibliometric analysis to map the terrain of the IHRM research field in the past fifty years. This review not only provides the structures and the dynamics of IHRM research, but also paves new avenues for future studies in relation to the various emerging areas identified. Compared with the conventional structured review method, bibliometric analysis has gained an edge in handling massive numbers of articles to construct a scientific structure of research topics, identify areas of interests, and elucidate the internal relationships of the focal literature without interference from a potential bias of researchers (van Eck & Waltman, 2010; Zupic & Čater, 2015). VOSviewer, as a specific mapping technique, is adopted in this review to analyze the conceptual structure of IHRM because of its powerful user graphic-interface that can generate maps to describe the connections of each analytical theme.

In our extensive review, we begin by setting up a time frame of studies in the IHRM field as the years from 1956 (the starting year from which the Social Sciences Citation Index collects data) to 2020 (February), and identify and map the clusters that comprise IHRM research (expatriation management, global human capital, and human resource policies and practices). Then, we conduct a segmental co-occurrence analysis to validate the robustness of our main clusters and sub-themes within them. Using the highest impact articles in IHRM, we further review and analyze the evolving process of each specific theme of IHRM research. Finally, we draw together observations from our analysis and propose a future research agenda, which includes managing global work practices to cope with social-economic adversity, and assisting emerging market MNEs (EM-MNEs) to adapt to host countries; building global human capital towards sustainable development, and value creation in digital MNEs; developing new perspectives on transferring IHRM policies and practices; and embracing rigorous and innovative analytical techniques in IHRM research.

4.1 Theory-related problems in international HRM

Like IB, the IHRM literature draws on psychology, economics, and sociology. However, IHRM research has been less involved in inter-disciplinary dialogue owing to its distinct industrial sociology and psychology traditions, even though the growth of the field has led to more accounts that juxtapose or synthesize such approaches. In practice, many theories have been deployed. Over time, applied theories common in the IB literature, such as resource based theory, dependency theory, and life-cycle approaches to internationalization (Sparrow & Braun, 2007) have made some headway. In fact, Sparrow and Braun (2007) suggest there has been a transfusion of theory between the fields.

Agency theory has only made limited inroads into the international HRM literature. This is because most HRM specialists are unlikely to suggest that the core subjects of their enquiry are unidimensional, selfish individuals, as much of HRM is about finding ways of promoting effective workplace collaboration and teamwork. Resource based perspectives have been more successful. Other popular sub-theories include cross-cultural approaches, the most influential being that of Hofstede (1982). However, critics of Hofstede (1982) (e.g., McSweeney, 2002) point to his dubious empirical basis and unverifiable claims of distinguishing cultural facts. Others have noted that the measures used by the various ‘cultural theorists’ are incompatible (Avloniti & Filippaios, 2014), so that where a country stands on a particular facet of culture depends on which measure is used. These critics also suggest that the data explains very little of the variance among countries (Gerhart & Fang, 2005). Nevertheless, cultural theories do point to a basic (albeit unmeasurable) truth—there are spatially demarcated broad distinctions in national values, globalization notwithstanding.

A more serious shortfall is one that sometimes also besets IHRM’s use of the literature on comparative capitalisms: a tendency to seek to identify favorable HRM practices associated with a particular national or institutional good without taking systemic evolution or change into account. Both cultural sociology and the literature on comparative capitalisms have increasingly acknowledged that national-level features are evolving, dynamic, and prone to mutation or recombination, and that societal evolution is non-linear (Hollingsworth, 2006). In other words, national systems or cultural environments are neither rigid nor completely path dependent.

While this view may be superior to the general pessimism that pervaded strands of the literature on comparative capitalisms in the early 2000s (see Streeck, 2009), a need to take account of broader changes in the global physical and capitalist ecosystem remains. Again, this may reflect an inherent weakness in the literature. Just as in the more general HRM literature, the dominant strand of publications attempts to show a causal connection between HRM policies and firm performance. Therefore, many IHRM scholars promote ‘progressive’ ideas about treating workers well on the utilitarian grounds that such behavior is good for the bottom line. It is assumed that rational arguments about shareholders’ ultimate interests may compensate for regulatory shortfalls. Yet, just as many commercial fishermen will persist in overfishing even when faced with the collapse of fish stocks, and farmers will continue to plough down their land’s contour lines while lamenting soil erosion and flooding, there is a natural tendency for firms to default towards lower value-added practices. Without a theoretical framework that can provide some understanding of these tendencies as well as the role of regulation in maintaining a basic floor of social decency and economic sustainability, IHRM may be a dismal project focused on cataloguing wrongs while hoping that people will come to their senses and do the right thing.

Despite the psychological basis of much of the literature and the fact that a significant portion of research focuses on individual employees or employees as an agglomerated mass (e.g., ‘expatriates’, ‘global talents’), as noted above, the IHRM literature rarely discusses notions of rational decisions and profit-maximizing individuals. Moreover, the IHRM work that covers context either over-generalizes to a country or market-economy level or ignores features that have figured more prominently in the IB literature (e.g., country size, location, education system, regulatory frameworks). For instance, although some work takes the role of trade unions into account, they are treated as passive subjects (see Aoki, 2010). This indicates that inadequate attention has been paid to informal modes of internal corporate governance.

As guidelines for future IHRM research, a first priority could be to explore strategic choice, and the organizational, regional, and national variations in how firm performance is defined. Second, firms enter markets not only to resolve HRM challenges and access new pools of labor, skills and talent, but also for a host of other reasons. As such, there is a significant amount of room to develop a more integrated understanding of the interplay among such factors as well as the organizational and contextual determinants and the relative weights assigned to them. Finally here, although comparative institutional analysis has eroded the dominance of cross-cultural perspectives, a dialogue between the two is needed, especially with respect to understanding the role of national and regional cultural and institutional differences, and how those differences respond to institutional and eco-systemic change.

3 Integrative review

Building from this resource perspective on talent, we present here an integrative literature review that combines insights from IB, international HRM, global staffing, and (global) talent management fields to address the emergent topic of foreign-owned MNE subsidiaries gaining access to HCN talent in uncertain emerging economies. Although such reviews lack a standard format (Torraco, 2005), we aim to examine critically a broad set of relevant literature to identify perspectives that could be integrated to inform future research. The review culminates in a preliminary theoretical framework for future research (Snyder, 2019; Torraco, 2005).

To start the review process, we conducted a broad literature search of peer-reviewed scholarly journals for articles published between 1999 and 2019 that included the theme keywords of global talent management, global staffing, international human resource management, and international business related to MNEs. We searched the ProQuest and EBSCO Business Source Premier databases, including seventeen relevant journals covering the relevant fields (see Table 1). We did not include books or book chapters in the search. Because we address a novel area of research, the integrative review approach permitted a broad examination of potentially relevant articles, which resulted in an initial list of 1,912 articles.

Table 1. Literature search keywords and journals.

To preselect articles more relevant to our topic, we scanned the title of each article for relevant focused keywords related to staffing strategies, talent, access, or that adopted a resource perspective, as detailed in Table 1. Where the title was unclear, we also reviewed the abstract for further information. For example, if an article included a keyword of ‘global talent management’, this was included in the initial selection. We then checked the relevance of the article to the themes related to staffing strategies, talent, access, or resource perspective. If the article indicated content relevant to one or more of these themes, it was kept for further consideration. Consequently, 796 articles were preselected.

In a final selection step, we reviewed the abstracts of the remaining articles, selecting only those that were most relevant to our topic of interest. For example, if an article on GTM focused on high-potentials and was related to accessing talent, it was retained. If instead the emphasis was on talent retention, for example, it was no longer included in the review. This resulted in 120 relevant articles for inclusion including both empirical and non-empirical work. Appendix I indicates the primary focused keyword clusters relevant to each article.

We subsequently coded the remaining articles using the focused keywords from the literature search noted in Table 1 to create an organizing framework for the review (Parmigiani & King, 2019). This involved grouping together information occurring under each keyword to identify themes recurrent in the literature. For example, if an article mentioned HCN talent sourcing, we would note the pertinent inside-out and outside-in themes identified in the study. Relevant information might include, for example, ‘being knowledgeable about preferred managerial styles’ or ‘having access to HCN talent networks’. This process was conducted by each author coding a subset of the articles and this coding subsequently being checked by the remaining authors. The pertinent codes were then grouped across all articles according to the underlying themes. For example, the talent sourcing example above would be coded as ‘context-specific nature of talent management in emerging economies’ and ‘HCN talent availability in emerging economies’.

To recap, our review addresses the following questions in line with the purpose of the study: Why and how do foreign-owned MNE subsidiaries operating in uncertain emerging economies seek access to HCN talent?; What context-specific factors affect foreign-owned MNE subsidiaries operating in uncertain emerging economies gaining access to critical (HCN talent) resources? In addressing these questions, five core themes emerged from the extant literature: (1) the characteristics and roles of HCNs in MNE subsidiaries; (2) the context-specific nature of subsidiary operations in emerging economies; (3) the context-specific nature of talent management in emerging economies; (4) HCN talent availability in emerging economies; and (5) MNE embeddedness in uncertain external resource contexts. We present here the emergent themes, for each of which we conducted an iterative process of reverting to the broader literature to seek further empirical examples from different country or regional emerging economy locations to provide illustrations to support our synthesis of the literature. Such illustrations are noted as such in the text that follows.

3.3 The interplay between organizational context and migrants

For migrant employees, organizational context provides the purpose, resources, norms, and meanings that shape their behavior (Hackman, 1999). The context of an organization includes its patterns of social integration, organizational climate and culture, diversity history, strategic focus, and the presence of specific practices for managing migrants (Hajro, Zilinskaite et al., 2017; Jackson, Joshi, & Erhardt, 2003; Zikic, 2015). Whether transient or enduring, organizational contextual factors play a key role in shaping workplace dynamics. Yet scant literature exists on the organizational drivers of migrants’ integration (Zilinskaite & Hajro, 2020). The two greatest challenges to future advancement may be (a) the large number of potentially important contextual factors to consider in combination with (b) the lack of a strong theory to guide researchers in the search for contextual factors to study. Four important contextual aspects deserve our scholarly attention and should be considered in future research.