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Strategic human resources, innovation and entrepreneurship ﬁt
A cross-regional comparative model
Zhongming Wang and Zhi Zang
Center for Human Resources and Strategic Development, Zhejiang University, Hangzhou, People’s Republic of China
Purpose – Strategic human resource management (SHRM) is seen as crucial for innovation and entrepreneurship in China. An empirical research was carried out to investigate main dimensions of the model of human resources management (HRM), practices and their effects on organisational performance in relation to innovation and entrepreneurship. Design/methodology/approach – The research has two parts. The ﬁrst part is a ﬁeld survey on human resource management practices and its main dimensions. The study was conducted in the Chinese local companies and joint ventures across different partnerships. The second part is an in-depth case-set analysis of Chinese entrepreneurship models from a strategic HRM perspective. Findings – The results showed that both functional and strategic dimensions of HRM could be identiﬁed which had differential effects upon organisational performance and that the most successful local entrepreneurial ﬁrms were among the collective-based and globally-oriented ones. Originality/value – This study demonstrated that the ﬁt between strategic HRM practices, innovation strategy and entrepreneurship model was signiﬁcantly contributed to entrepreneurial performance. A regional comparative model of SHRM and entrepreneurship was proposed for sustainable business developments and organisational change. Keywords Innovation, Human resource management, Organizational performance, China, Entrepreneurs Paper type Research paper
International Journal of Manpower Vol. 26 No. 6, 2005 pp. 544-559 q Emerald Group Publishing Limited 0143-7720 DOI 10.1108/01437720510625458
1. Introduction Under the new challenges from China entering WTO, developing IT, promoting organisational reform, and encouraging innovation and entrepreneurship in the recent years, the focus of manpower practices has shifted from employee-level of personnel management to the core-employee and managerial levels of strategic human resources management (HRM) (Wang, 2000; Tsui and Lau, 2002). There has been an increasing demand for more integrated strategies of HRM practices, innovation, and entrepreneurship in Chinese organisations (Wang, 2003). Among recent developments in China, several signiﬁcant changes need to be noticed in order to understand the key issues in strategic HRM, innovation and entrepreneurship. First, international entrepreneurship has become one of the major approaches to business development. While international companies are increasingly
The research work was supported by the Chinese NSF Key Project No. 70232010 and the GRC grant. Thanks for graduate students/colleagues, and entrepreneurs from 180 Chinese companies.
multi-business strategy and intrapreneurship. joint ventures. among most Chinese companies. Most of recent studies called for strategic planning to be used to identify and improve those organisational decisions and actions for integrating human resource functions into the organisational and innovation strategy in order to support and implement the strategic plan to achieve a competitive advantage (Wofford. Cross-cultural studies on SHRM practices under the Chinese settings One important question is what the SHRM dimensions are and how they differentiate across different nations and cultures. strategic human resource management (SHRM) strategies were urgently needed for supporting organisational change. The focus of this interview research was on ﬁve aspects of HRM practices: HRM functions. They interviewed HRM directors from those companies by telephone with semi-structured questionnaires. more than 6600 overseas ventures from Chinese companies were formally established. However. technological innovation and entrepreneurial development. Therefore. 2. acquisitions. performance appraisal.000 foreign invested enterprises (FIEs). However in many cases of mergers. 2002). technological innovation. the international entrepreneurship approach is an effective strategy not only for expending new markets and introducing overseas funds and managerial skills for enhancing competitiveness but also for more and more local companies to introduce and recruit foreign knowledge-managers and technicians for their joint ventures and/or key local facilities for their business development. Braun and Warner (2002) used a qualitative case methodology and studied 12 multinational companies about the differentiation of their HRM practices across different equity stake percentages of ownership forms with their Chinese partners. 1999). Therefore. innovation and entrepreneurship 545 . both strategic and cross-cultural HRM has become a crucial supporting approach. There is a signiﬁcant shift in mergers and acquisitions from the SOEs’ acquisition of private companies in 2002. to the private company’s acquisition of SOEs in 2003. training development. So far. there is a lack of strategy-level integration of SHRM with entrepreneurship and therefore the intrapreneurship was often less effective in terms of sustainability (Wang and Mobley. companies are establishing their business branches overseas as a competitive entrepreneurship strategy. strategic HRM becomes a crucial approach for small and entrepreneurial ﬁrms in China. The purpose of this study is to review recent research ﬁndings about the key dimensions of Chinese entrepreneurship and to differentiate SHRM practices and their effects upon organisational performance. Because of the recent developments in international entrepreneurship. Many of them incorporated with company-level technological innovations.entering China with a ﬁgure of more than 450. The results showed that there was Strategic HR. Second. 2003a). and compensation. Meanwhile. corporate entrepreneurship and strategic entrepreneurship (Wang. Third. and business alliances. the secondary entrepreneurship transformation is the main business-driven strategy in connection with intrapreneurship. for most of the Chinese ﬁrms. recruitment and selection. Then a multi-level model of strategic HRM and Chinese entrepreneurship is built on the basis of recent in-depth studies across regions and ownerships. HRM was a bottleneck for effective integration. technological innovation and entrepreneurial networking are among the most popular strategies for business development in China through a variety of cross-regional mergers.
responsibility. concerning HRM practices in terms of HR methods. H1. some HRM practices are more related to the daily operations while others are more linked with long-term effects on performance. especially relational capital based on “guanxi” provided a framework for business dealings in many Asian countries particularly in China (Hitt et al. German-Czech. The results showed that the HRM practices were considerably more similar to those of the MNCs than to those of local manufacturing companies. Among most of HRM practices. professional training. The HRM functions in the MNE’s PRC operations had a high strategic importance though integration of international HRM practice with the local culture and entrepreneurial models might be still a further task for many MNEs and local companies. The results showed that there were similar positive effects of HRM and employees were satisfactory about the training they have received but dissatisﬁed with salary in those joint ventures. As summarized in an interview study key success factors of multinational ﬁrms in China. In discussing about how resources could be managed more effectively. Swedish-Hungarian JVs. wholly owned MNC strategy. there are mainly two dimensions: functional HRM practices and strategic HRM practices. The former is more related with the daily operations while the later is more linked with company-level progress or organisational performance. Also the HRM practices were dependent upon the establishment of joint ventures on the basis of existing Chinese manufacturing operations. Simon and Hitt (2003) proposed a three-component model that can lead to a competitive advantage: resource inventory (evaluating. partner search strategy. using extensive semi-structured interviews with senior managers and other employees as well as survey questionnaires and participant observations to measure strategy. patience and persistence strategy. HRM practices are different across business ownerships and joint venture partnerships which links with organisational performance indicators. social capital. adding. solid training and feasibility strategy. compensation and bonus. nine strategies were proved to be crucial: top management commitment strategy.IJM 26.6 546 a diffusion of HRM practices across different ownership forms and there were few variations across cases. How do SHRM practices affect other aspects of organisational capacity and performance? White (2000) used a database from the Chinese Ministry of Public Health and demonstrated signiﬁcant effects of external environment and internal capacities on technology decisions among the Chinese state-owned enterprises. and shedding). In another recent study. resource bundling. Bjorkman and Lu (2001) conducted semi-structured interviews and a questionnaire survey and collected data among managers from 63 manufacturing Chinese-Western joint ventures. Apparently. recruitment criteria. Cyr and Schneider (1996) compared HRM practices in east-west joint ventures including companies such as French-Polish. In fact. Apparently. the last one was of vital source of competitive advantage. HRM practices and culture. brand image strategy. trust strategy.. and resource leveraging. H2. overseas Chinese strategy. and criteria for promotion as well as the educational and experience background of HR/personnel managers and MNC ownership. . communication. Among them. and effective HRM strategy. HRM practices are somewhat different cross-cultures. 2002).
Mueller and Thomas (2000) also discovered that culture as deﬁned by the Hofstede’s cultural model had signiﬁcant inﬂuence on entrepreneurial potential. the role of HRD in the process of international technology transfer as an approach to international entrepreneurship was studied and identiﬁed (Osman-Gani. the nation-wide technological Strategic HR. low uncertainty avoidance cultures than in collectivistic. This characterisation of the dynamics of knowledge accumulation proved to be crucial for enhancing the competitive advantages. we need to clearly understand the impact of cultural differences for successfully transfer of technology across cultures on HRD and management policies.The authors see the need to create an environment in which local and foreign employees can work effectively together. there has been a shift of the focus of Chinese organisational reform and changes from large-group and state-based business re-structuring to the high innovative and entrepreneurial development. McElwee and Warren (2000) also found that for many fast growth SMEs. the main problem is ﬁnding and retaining high-quality employees and that HRM approach in the pursuit of quality is critical to success. Marsili (2002) applied a typology of technological regimes to examine the sources and obstacles to entrepreneurial entry and noticed that innovation in technologies of opportunities could be effectively associated with entrepreneurial behaviour by the knowledge and HRM support. high uncertainty avoidance cultures. 3. Especially. Michie’s study (1999) focused upon HRM practices and R&D innovation and noticed that short-term HRM practices such as short contracts are negatively correlated with new-tech investment whereas long-term and high-commitment HR practices are positively correlated with investment in R&D and new technology. internal locus of control orientation combined with innovativeness is more likely in individualistic. Shrivastava and Shaw. However. As part of technology innovation globally. So SHRM can be an important part of the technology innovation cycle (James. Many recent studies indicated that SHRM could be an effective facilitator for both technological innovation and entrepreneurship. entrepreneurial planning and HR support. 2002). 2004). Many studies demonstrated that technology and HR are closely linked for competitive advantage (Wang. There has been a dramatic shift in the focus of industrial R&D strategies from general quality programs in 1980s and early 1990s to the re-engineering design with synonymous downsizing. Speciﬁcally. Clark (1998) carried out a case study to examine how a leading American project management ﬁrm responded to the competitive pressures through a process of entrepreneurial change. In a study on the technological determinants of entrepreneurial behaviour. HRM and entrepreneurship has been an active area of research. The study concluded that the corporate human resource functions could become entrepreneurial in integrating to line managers’ functions and that the “design failure” of strategic HRM was the main reason for low competitive conditions. generating differences across national and regional boundaries. Entrepreneurship and its relationship with technology innovation and SHRM The relationship between technology innovation. innovation and entrepreneurship 547 . What is the situation related to Chinese manufacturers? In the recent years. Culture may condition potential for entrepreneurship. 1999). The results showed that in the process of the transfer. human resource development plays a signiﬁcant role in improving the effectiveness of management technology and in achieving organisational objectives. 2000.
Another recent study by Thakur (1998) on investment. and entrepreneurial teams. (4) parento with parents and children in control. Motowidlo and Dunnette (1990) categorized it into two dimensions: task performance and contextual performance. dedication and diligent (Wang. As to the performance. 2000). H3..IJM 26. especially the innovation performance. Different kinds of methodology were adopted in conducting research on dimensions of SHRM and entrepreneurship (Geringer et al. Among the different types of entrepreneurship models. opportunity choice and human resources in new venture growth tested a path-based typology model of new venture growth and human resource management for integrating important aspects of entrepreneurship such as family labour or supervisory resources. Under the Chinese context. a multi-ownership model of enterprise systems transformation was developed among Chinese companies while in the early 2000s. Entrepreneurship could be categorized into two dimensions: functional versus strategic HRM and individualistic versus collectivistic entrepreneurship. and (5) geno with generations involving more relatives. H4. The results showed that marketing competence was ranked high by Chinese managers while human resource competence has been found to be signiﬁcantly correlated with performance. Both functional and strategic HRM practices in turn inﬂuence their effectiveness.6 548 innovations and organisational systems innovation call for more effective strategic HRM support. Li (2000) presented an exploratory model of competence and performance from a survey in 72 companies. As Poutziouris et al. 4. The former is more based on how the short-term task objectives are achieved whereas the latter refers to the dedication and extra efforts at work which lead to long-term outcomes. many local farmers started their own business “outside of” the central planning systems though these were mostly individual business or collective township business. (2) solo-entrepreneurial with single owner-manager. They proposed ﬁve classiﬁcations of entrepreneurial class for the Chinese family business community: (1) bourgeois entrepreneurial with generational family business. (3) marital (co-entrepreneurship with husband/wife as founders and managers). Entrepreneurship models and its requirements for HRM support Entrepreneurship has been one of the major relevant areas in human resources and innovation. (2002) pointed out. the Chinese small family ﬁrms made important contributions to the acceleration of business development across the social and industrial sectors as well as the geographic boundaries of the Paciﬁc Rim. So it was traditionally seen as part of local culture. companies under collective entrepreneurship has a closest link between strategic HRM and . In the early 1970s and 1980s. empathetic leadership style. entrepreneurial meant hard-working. These kinds of entrepreneurship were conﬁgured by a two-dimension axis of family participation-family development versus political market economy-business growth. In the 1990s. 2002). entrepreneurship became a focus of business development in the country.
A ﬁeld-structured interview was conducted among HR managers and supervisors at 25 international joint ventures and 22 local companies in China. and levels of analysis. concepts. individual level performance indicators are more closely related to functional HRM practices. Chandler and Lyon (2001) summarized a signiﬁcant trend toward more multivariate analysis and emphasis on reliability and validity in research methodology and called for the development of more sophisticated theoretical models and more longitudinal research. 5. Table I presents the ten-category list of HR practices. Davidsson and Wiklund (2001) focused upon the level of analysis in entrepreneurship research and suggested to use new-enterprise as a new level of analysis and regard entrepreneurship as a broad research domain with more precisely deﬁned issues. (2) Chinese-Japanese joint ventures. and (5) Chinese township and private ﬁrms. Study 1: Dimensions of SHRM and its models across joint venture partnerships 5. Also. The total score of each practice is 20. 358 managers from 75 companies participated in the ﬁeld survey from the ﬁve types of companies: (1) Chinese-western joint ventures. Each practice item is scored 1 and scaled by 1-5 points to measure the degree of application.1 Participants This study was carried out among 97 local Chinese enterprises and international joint ventures and the main purpose was to ﬁnd out the characteristics of HRM practices and their relationship with entrepreneurial performance. They were asked to describe the most frequently used HR practices in their companies in relation to technological innovation and organisational changes. 5. In reviewing the past decade of entrepreneurship research methods.2 Measurement A check-list scale of HRM practices was then developed. (4) Chinese state-owned enterprises. Twenty-two HR managers and supervisors generated a list of 56 typical HR practices which are categorized into ten areas of HR practices. Among them. a ﬁve-point scale of HRM practice check-list was developed with a scale of organisational performance by the following seven indicators: (1) Market performance: How does the company have a higher market share compared with other companies in the similar industrial sector? (2) Proﬁtability: How is this company proﬁtable in comparison with other companies in the similar industrial sector? (3) Competitiveness: How is this company competitive in comparison with other companies in the similar industrial sectors? Strategic HR. (3) joint ventures with Hong Kong or Taiwan regions. Also.organisational level performance whereas under individual entrepreneurship. innovation and entrepreneurship 549 .
Ten category of HR practices (4) Task accomplishment: What is the company’s task fulﬁlment compared with other companies in the similar industrial sectors? (5) Personnel turnover: How high is the personnel turnover in this company compared with other companies in the similar industrial sectors? (6) Employee satisfaction: How do employees satisfy in comparison with employees in other companies in the similar industrial sectors? .6 Category Personnel selection and placement Indicators Actions for adaptation of formal procedures Use of tests in personnel selection and placement Development of job descriptions for key positions Speciﬁc job requirements for applicants Speciﬁc orientation training programs Periodic training needs analysis Regular evaluations of training programs Evaluations on training results and outcomes Regular performance appraisal activities Formal procedures and evaluation forms Tailor-made criteria for performance appraisal Speciﬁc rules for rewards by performance Regular promotion planning Developmental opportunities for employees Periodic internal employee position transfer Regular channels for external transfer Speciﬁc pay link with performance Bonus link with monthly performance Pay link with company proﬁts Bonus link with different position Formal regulations for employee participation Regular meeting by trade union participation Employee participation program in management Regular communication with employees Organizing formal quality control teams Regular quality circle activities Quality as performance indicator Regular quality control training programs Speciﬁc work/performance goals Employee participation in goal setting Speciﬁc plans for implementing objectives Formal appraisal for goal accomplishment Procedures for role speciﬁcation in teams Speciﬁc team goal setting Formal evaluation on team performance Team selection and training Inter-departmental coordination meetings Conﬂict resolution meetings Regular cultural activities Meetings to discuss company vision 550 Personnel training and development Performance appraisal and management Career development and promotion Pay and bonus systems management Employee participation program Quality control program Management by objectives program Team management Corporate culture development Table I.IJM 26.
67 2.14 * * Note: CH SOEs: Chinese state-owned enterprises.95/0.41 * * 10.06 2.79 3. JP IJVs: Japanese joint ventures.65 2.75 2. TS Firms: Township ﬁrms.80/0.02 2.62 3.30/0.06/0.48 3.98/0.84 3. same tendency was shown with Euro/US joint ventures and local companies having a signiﬁcantly higher scores.24/0.09/0. Chinese township (private) companies. however.02 3. the ten categories of HRM were grouped into two key dimensions: functional human resources and strategic human resources.47 3.53 2.61 2.95 3.00/0.30/0.99 3.52 2.13/0.77 3.88 2.05 3.71 1.02/0.45/1.75 3. With these HR practices. quality control activities and corporate culture development activities as well motivational systems.93/1. Japanese joint ventures and Taiwan/HK overseas joint ventures. Euro/US Means across ownerships CH SOEs M/SD (N ¼ 62) 2.15/0. average correlation coefﬁcients was 0.95 Euro/US IJVs M/SD (N ¼ 30) 3.66 3. using both ratings and coding from the business performance.28/0.58/1.63 3.35/0.13/0.15/0.03/1. Table II shows the differences in means across the ﬁve kinds of ownership: Chinese State companies.95 2.75/1.51/0.00 3. western joint ventures.75/1.13/0. signiﬁcant differences were found among long-term HRM practices such as career development packages.84 1.80/0.71 2. Tables II and III present the means for ten HRM practices and the two dimensions of HRM.97 4.83 2.86.54 2.05/0.18/0.54 3.00/0.54 3.17/1.46/1.59 3. The HRM practices among SOEs were among the intermediate level. Euro/US: European and American joint ventures.12 * * 1. As we can see from the results. SOEs showed higher level of those HR indicators of performance appraisal. and N: Number of companies Table II.88 2.42 * 1.71 3. quality control and team development.85 TS ﬁrms M/SD (N ¼ 14) 3.82/0.36 0.23 3.40/0.60 3.05/0.91/0.30/1.(7) Innovation performance: How is the performance under technological and managerial innovation in comparison with other companies in the similar industrial sectors? These indicators of organisational performance were ﬁrst tested by industrial bureau ofﬁcials.87/0.13/0.05/0.90 1.67 3.81/0.76 1.38/0. Using factor analysis and in-depth interview.99 3.75 2. Means of ten HR practices across SOEs and joint ventures . HK/TW JVs: Joint ventures with Hong Kong and Taiwan ﬁrms. Across various of HR practices.41/0.75 3.84 2.55/1.57 2.10/0.63/0.48 Strategic HR.46 JP IJVs M/SD (N ¼ 10) 2. European and American joint ventures and Chinese local companies had generally higher level in HR practice indicators whereas joint ventures with Japanese and Hong Kong/Taiwan partnerships had generally lower level of HRM practices.63/0.58/1.47 3.50/0.69 3.38/0. 5.3 Main results The analysis showed that there were signiﬁcant differences in human resource practices across ﬁve types of companies.76 3.75/0.38 HK/TW JVs M/SD (N ¼ 46) 3. Across the ten HR practices.60 3. innovation and entrepreneurship 551 HRM practices Personnel selection Training development Performance appraisal Career development Pay and bonus systems Employee participa tion Quality control program MBO program Team management Corporate culture F 1.96 2. These ratings and coding were highly correlated and proved to have high internal consistency reliability.00/0. among the four kinds of ownerships and partnerships.
both Chinese township companies and Japanese joint ventures had more formal HRM practice especially in terms of orientation training and results evaluation.63/1. team-based Personnel training and Orientation.54 3. The results showed that the Taiwan and Hong Kong joint ventures had the lowest level of employee participation whereas both western. It is important to note that the sub-samples of the township companies were those large and more productive township ﬁrms around Wenzhou area.IJM 26. actual . development program design. evaluation Strategic human resources Career development and Promotion. team goals.03/0.78/0. The two dimensions of HR practices Formal procedure. needs analysis.01 3.32/0. speciﬁc criteria. Western joint ventures were similar to Chinese township companies.77 3. using tests. indicator.84 2.84 3. conﬂict resolution. description Regularity. Chinese township companies had more practices in job requirements while Chinese state-owned companies used very fewer test instruments. proﬁt-based. worker congress. opportunities.transfer Employee participation Regulations.62/0. training Corporate culture Coordination. The results of career development and promotion further informed that both western joint ventures and Japanese joint ventures had more HR practices in terms of regular promotion. goal objectives accomplishment/evaluation Team management Team roles.74 2.and Japanese-joint ventures had the highest levels of participation in management. speciﬁc rules Pay and bonus systems Performance link.88 2. although the formality of participation. Chinese township companies showed lower level of practices in regularity and formality while other joint ventures had more formal practices.96 552 Table III. In terms of compensation practices.01/0. the trade union organisation. The results showed that the use of performance appraisals in the Chinese companies focused more on positions and the whole company.61/0. with Japanese joint ventures again revealing higher means. In the Chinese state-owned enterprises and township companies. bonus-system. performance evaluation.10/0. new opportunities and turnover while the Chinese state-owned companies appear relatively weak on these career development aspects of HRM. formal forms. the hometown of Chinese entrepreneurship ﬁrms (both township and private companies). communication Quality control program QC teams. Again. activity. and the knowledge of the company were all relatively high. internaldimension promotion and external.98 3. goal setting. participation. QC circle. job analysis.70 2. TQM training activities Management by Speciﬁc goals.00/0. Japanese ﬁrm were higher in terms of quality control and performance. whereas performance appraisal in the joint ventures was more focused on actual performance.23/0.6 Dimensions Functional human resource dimension Indicators Personnel selection and placement Performance appraisal Measures M/SD 3. vision discussion Note: N=162 ﬁrms were good at selection and quality control activities.
5. Corporate culture development practices were shown to be at a similar level across-partnership. Management by objectives is more formal in the Japanese companies and township companies whereas it was very low in the Taiwan and Hong Kong enterprises. At this stage of development. innovation and entrepreneurship 553 Figure 1. the higher levels of functional HRM practices lead to superior performance on all seven indicators.4 Relationships between organisational performance and HRM practices The results showed that there is a close relationship between the HRM practice indicators evaluated by HR managers and the organisational performance independently rated by industrial bureau ofﬁcials. functional HRM seemed playing a crucial role on general performance whereas strategic HRM affected more innovation performance and task accomplishment. The results largely supported the hypothesis that functional and strategic HRM practices inﬂuenced organisational performance. Strategic HR. Figure 1 presents the results of multiple regression analysis of the effects of both functional and strategic HRM on organisational performance.participation was low. As it is shown. Quality control was formal in both Japanese and township ﬁrms and relatively low in the Chinese state-owned companies and western joint ventures. except that western and Japanese joint ventures had more emphasis on company vision. Figure 1 presents the relationships between the different HRM practices and performance. Effects of HRM on organizational performance (b) .
innovation and entrepreneurship strategies. We therefore proposed that the Chinese international entrepreneurship model may represent a combination of local ownership with international approach to culture and national/international business strategies. Transferred and grown from a small and local nutritional food school factory. 6.6 554 6.2 Hengdian group growth: Multi-business entrepreneurship and intrapreneurship model The ﬁeld study also focused upon how already-successful-local companies started their second-round of entrepreneurship through business innovation and strategic HRM. An in-depth multi-case study was conducted to investigate the models of Chinese entrepreneurship and innovation as it is related to key dimensions and HRM. JVs and alliance partnerships.IJM 26. With a progressive cross-regional entrepreneurial strategy. 1 beverage producer in China. process and key events of the business development? What are the key KSAOs for successful and failure of the business? HRM practices and business strategies in the context of Chinese culture? How do innovative activities facilitate and enhance entrepreneurship? What are the entrepreneurial performance in relation to HRM and innovative strategies? 6. 40 subsidiary companies across 16 provinces or cities in China are developed by Wahaha group with approaches of acquisitions. Our interview revealed that the company was developed from a small countryside village factory producing silk products.e. three overseas subsidiaries. the Wahaha group has now more than 10. What are the context. Now it has more than 37. However. the other was to produce so-called “Future Cola” (2000) to compete with multinationals such as Coca Cola with a national brand strategy. Study 2: SHRM. and six international joint ventures. Field structured interview was carried out among CEOs and HR managers from 24 local companies in the Yangtze Delta Region (Zhejiang. mergers. there is a lack of models for representation of the relationship between SHRM. innovation and entrepreneurship modelling The development of HRM practices has been closely related to innovation and entrepreneurship activities in Chinese companies. i. Two (1) (2) (3) (4) (5) (6) . Shanghai and Jiangsu provinces).000 employees and is ranked as No. Altogether 52 people were interviewed. Here are the main questions: General background of business development and services.900 employees who are working in 30 subsidiaries. We interviewed CEO and HR managers of the famous local company Wahaha group.1 Wahaha group growth: International entrepreneurship model Many successful companies in China adopted an international entrepreneurship model. developing new business ventures through joint-venturing with foreign ﬁrms and competing well-known international brands through similar business approach and strategy. One example was the Hengdian group located in Zhejiang province. Two kinds of important international entrepreneurial actions were made in the last ten years by the Wahaha group: one action was to develop ﬁve subsidiaries of Danone Group joint venture (1996) with a cross-regional corporate culture strategy. The interview guide includes questions relating to key issues in entrepreneurship.
joint-ownership with community. (2) Team-based. innovation and entrepreneurship 555 . Field interview showed that there were four signiﬁcant entrepreneurial features from those collectively owned companies: (1) High growth. Functional HR are most popular in Wenzhou with an emphasis on product marketing while generally recruiting knowledge workers from cross-regions to support rapid business development. As we interviewed CEOs and HR managers/supervisors from four key ﬁrms there. (3) Multi-business. (2) intrapreneurship (developing new ventures) by internationalisation HR strategy: 36 foreign managers and technicians (knowledge workers) were hired to work in their new start-ups and subsidiaries. it was noticed that although the Wenzhou model was widely seen as the Chinese entrepreneurial model. Both Lenovo group (IT sector) and Haier group (Home appliances sector) are among the most successful collectively owned entrepreneurial ﬁrms in our interview sample. (4) Cross-regions. commonly adopted cross-regional business models to expand their competitiveness and innovativeness. 6. and joint-shareholding with employees which created a collective entrepreneurship platform for innovative business development. chemical products.4 Family business: Wenzhou individual entrepreneurship model This is mainly based on of family business in areas of garments. renew their HR strategies and develop high-performance culture. These practices have brought into the group innovative managerial practices and technology transfer. While many Wenzhou ﬁrms have invested in the western region of China. and shoes. usually started from a small group-based collective ﬁrm and quickly grew into a group with several thousands of employees with rapid business. 6. joint welfare with townships. it is shifting toward an innovative version of corporate entrepreneurship and introducing more strategic HRM practices especially for core employees. mechanical components. largely diversiﬁed business models and new forms of organisations.key components of Hengdian group’s international entrepreneurship were mostly reported during the interview: (1) a four “J core values” approach of joint-venture entrepreneurship with overseas companies and local community: joint-venture with other ﬁrms. Strategic HR. many local ﬁrms in Chongqing area have hired foreign knowledge workers and adopted more SHRM practices in terms of group packages and training. mostly transformed from collective-systems to shareholding ﬁrms with entrepreneur team development.3 Lenova group and Haier group: Transformational entrepreneurial model The ﬁeld interview showed that most of Chinese collectively-owned enterprises are under transformation into shareholding or multiple-ownership systems with entrepreneurial approaches to start their new business.
and reward/ compensation on satisfaction ðb ¼ 0:31. 0:05Þ. starting new business through collectively-oriented HR strategies. 0:01Þ. p . Figure 2 summarizes the interview study by a two dimensional model of entrepreneurship and SHRM practices. the ﬁrst dimension is individual entrepreneurship versus collective entrepreneurship and the second dimension is functional HRM versus strategic HRM. 0:05Þ. Most of Suzhou enterprises were collectively owned and using lots of collective entrepreneurship approach.5 Township entrepreneurship: Suzhou collective model This model was formed during 1970s when township enterprises were ﬂourishing near Suzhou area near Shanghai. there is a clear trend of moving toward strategic HRM and multi-ownership. 0:01Þ and career satisfaction ðb ¼ 0:20. However. Figure 2. An entrepreneurship-SHRM model . strategic HRM practices affected signiﬁcantly the organisational level performance indicators such as core employee turnover ðb ¼ 20:23. leadership performance ðb ¼ 0:24. p .6 556 6. i. As we can see. in the recent years. Multiple regression analysis showed that among companies under individual entrepreneurship model. p . p .IJM 26. 0:01Þ: Among companies under collective entrepreneurship. Eight models of entrepreneurship and strategic HRM are presented in Figure 2. performance appraisal on task performance ðb ¼ 0:16.e. individual performance such as operational employee turnover. p . task accomplishment and individual satisfaction was signiﬁcantly affected by functional HRM practices such as recruitment on turnover ðb ¼ 20:14.
team. HRM practices showed to be differentiated across business ownerships and joint venture partnerships particularly among strategic HRM such as career development. I. pp. The results showed that there are mainly two dimensions among HRM practices in most Chinese companies: functional HRM practices and strategic HRM practices. individual level performance indicators are more closely related to functional HRM practices. 22 No. D. (2001). Entrepreneurship could be categorized into two dimensions: functional versus strategic HRM and individualistic versus collectivistic entrepreneurship. and Lu. especially the innovation performance by strategic HRM. Also. W. Conclusion The results of the above-two studies largely supported or modiﬁed the four hypotheses. Y. 7. “Strategic human resource management in western multinationals in China: the differentiation of practices across ownership forms”. Vol. References Bjorkman. The former proved to be more related with most of performance indicators while the later was more linked with innovation performance and task accomplishment across levels. 3. In this aspect. Third. 51-70. Vol. 553-643. collective entrepreneurship modelling is more suitable to the Chinese context of both manpower and business development. Second. pp. M. innovation and entrepreneurship. innovation and entrepreneurship 557 . However. Among the different types of entrepreneurship models.p . First. Braun. and Warner. Entrepreneurship: Theory and Practice. Organisation Studies. the relationship between HRM practices and performance indicators are largely enhanced.N. Fourth. Personnel Review. (2001). “Issues of research design and construct measurement in entrepreneurship research: the past decade”. more empirical research and case study are underway to ﬁnd out the key mechanism in relation to the rapid growth of the Chinese entrepreneurship. Summer.H. pp. 4 No. 1. pp. “Institutionalisation and bargaining power explanation of HRM practices international joint ventures: the case of Chinese-western joint ventures”. (1998). (2002). 101-13. These results have several important implications to HRM strategies. 491-512. G. quality control activities and corporate culture. culture plays a crucial role in formulating HRM practices such as team and corporate culture activities. Chandler. Clark. and Lyon. companies under collective entrepreneurship has a closest link between strategic HRM and organisational level performance whereas under individual entrepreneurship. International Journal of Entrepreneurial Behavior & Research. technological innovation could moderate the effects of HRM on entrepreneurship. Both functional and strategic HRM practices signiﬁcantly inﬂuence organisational effectiveness. Vol. team compensation. if we take technological innovation indicator as a joint predictor. “Designing and sustaining an entrepreneurial role for the human function: strategic choice or competitive conditions? Evidence from engineering process plant contracting”. 0:01Þ which functional HRM practices had marginal effects on performance indicators. I.and career-based strategic HRM practices have long-term effects on organisational performance among the Chinese companies. Strategic HR. 31 Nos 5/6.W.
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Wofford. Industrial and Corporate Change. Further reading Michie.D. T. pp. 135-47. Journal of Applied Management and Entrepreneurship. 211-34. 8 No. J. pp. “Competitive advantage: strategy and human resources”. 2. R&D expenditure and innovative investment: evidence from the UK’s 1990 workplace industrial relations survey”. Strategic HR. 7 No. Vol. innovation and entrepreneurship 559 . “HRM practices. (1999). Vol. (2002). 1.
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