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”. International HRM theory (Nankervis et al., 2012) emphasises
the challenges associated with the transference of Western management strategies and systems to
non-Western and emerging country contexts.
IHRM in America
There is a variety of environmental conditions that can influence the approaches organizations
use to manage their human resources. These conditions include exogenous factors such as the
legal environment, industry dynamics, institutional pressures, economic and political conditions,
and country cultures (see the work of Hofstede, 2001; House et al., 2004; Sparrow and Brewster,
2006; Trompenaars, 1993). Thus, it seems apparent that international human resource
management needs to include a constant scanning and understanding of these factors.
In North America, particularly the US, the practice of human resource management has long
been shaped by legal regulations, which provide to employees a variety of rights and protections
against unfair and unsafe employment practices (Florkowski, 2006). Monitoring the legal and
regulatory environment to ensure that a firm’s HRM policies and practices comply with this
aspect of the organization’s environment has long been a primary responsibility of HRM
professionals.
North American HRM professionals are becoming more sensitive to cultural and institutional
variations. In doing so, they are recognizing that there are important differences in the cultures
and institutional environments of North America and other countries (e.g. Madhok and Liu,
2006; Rousseau and Schalk, 2000; Sparrow et al., 1994; Tung, 1990). Understanding and using
these cultural differences, however, are a necessary challenge to meet for North American
MNEs, particularly in aligning their HRM systems with other elements of the external
environment – the laws, economic conditions, and political trends in each country of operation (
IHRM in China
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.
Employment relations in America
In accord with the relatively strong role that market forces have played in American economy
history, the United States has long been noted for a high degree of diversity in the conditions
under which employees work. As large corporations expanded in the twentieth century in the
United States, structured and bureaucratic ‘internal labour markets’ appeared within those
‘primary sector’ enterprises. This included well-defined job progressions and formal pay and
fringe benefit policies. In the non-union sector, employers have devised a set of management
practices to determine pay and conditions of work systematically. In terms of pay, a combination
of job evaluation and individual performance evaluation systems is widespread. The range of
possible pay rates to be paid to workers in, say, a clerk’s job is determined by an assessment of
the worth of the job to the firm (i.e. job evaluation). In the union sector, the structure of
collective bargaining is highly fragmented, and this fragmentation is increasing. As is the case in
many other DMEs, trends discussed in more detail below suggest the locus of collective
bargaining is shifting downward towards the enterprise or workplace level
Employment relations in China
Economic and Cultural aspects in HRM (America)
Globalization and free trade are the biggest realities and have many supporters and critics . There
are huge disparities in income and standards of living worldwide . The biggest markets for
products and services are increasingly global . There are increasing demands on energy, raw
materials and infrastructure . Concern by societies for worldwide competitiveness and job
creation . Growth in foreign direct investment (FDI)
Economic and Cultural aspects in HRM (China)
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).
Hard and Soft Management in HRM
One of the things we need to talk about is hard and soft management, hard management is for
example strict management of employees through systems like clocking in and things like that
but the pay is dead wage.
Soft management is for example, there is no limit to where you work and no one cares about you
but the higher your performance, you will be linked to the company and you will get a certain
share and that is the incentive mechanism to motivate employees to work independently.