managing people in global markets—the asia pacific perspective
TRANSCRIPT
Journal of World Business 48 (2013) 171–174
Managing people in global markets—The Asia Pacific perspective
Peter J. Dowling a,*, Noelle Donnelly b
a Department of Management, La Trobe University, Bundoora, VIC 3086, Australiab School of Management, Victoria University of Wellington, Wellington 6140, New Zealand
A R T I C L E I N F O
Keywords:
Asia Pacific century
IHRM, MNEs
A B S T R A C T
In this introductory note to the Special Issue, we examine the growing discourse surrounding the ‘Asia
Pacific century’. We outline the growth in importance of this region and the challenges that MNEs face in
managing people within and from these increasingly diverse markets. The eight papers in this SI are
briefly summarized under four emerging themes: Increasing Competition for Skilled Workforces;
Managing International Assignments in the Asia Pacific; The Challenge of Integration and Alignment of
HR Practices; and HR Implications of a ‘New Competitive Order’.
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1. Asia Pacific – ‘from the Atlantic to the Pacific century’
In the 1980s, Adler, Doktor, and Redding (1986) proclaimed thatthe 21st Century would move from ‘‘the Atlantic to the PacificCentury’’ and called for greater contextualization of managementresearch. Nearly two decades later, amid reports of its risingeconomic power the ‘Asia Pacific century’ discourse has resurfacedbut this time with less concern for the spatial aspects of the regionand more attention centered on the temporal and ideological basesof the discourse (Wilkins, 2010).
‘Asia Pacific’ is a term increasingly being used to describe an ‘eraof development’ that captures the economic, political and socialchanges taking place in this region (Budhwar & Debrah, 2009).Trade in this region grew faster than the world average between2005 and 2010 and this has led many to note both the shift ineconomic activity from the ‘transatlantic to the transpacific’ andthe rise in the economic and political power of China (UnitedNations, 2011). As the largest recipient and fifth largest source ofdirect investment, China has contributed to predictions that a‘‘new epoch of Pacific power and prosperity’’ will dominate the 21st
Century (Wilkins, 2010).The economic rise of this region, and in particular the Chinese
economy, has led some to question the Anglo-Saxon model andpromote the Asia Pacific region as a ‘viable alternative’ (Warner,2000, 2002). While western economies face financial anddemographic challenges including an ageing population andfalling birth rates, the United Nations Population Division reportsthat in 2011, 4.2 billion people lived in the Asia Pacific region,
* Corresponding author.
E-mail addresses: [email protected] (P.J. Dowling),
[email protected] (N. Donnelly).
1090-9516/$ – see front matter � 2012 Elsevier Inc. All rights reserved.
http://dx.doi.org/10.1016/j.jwb.2012.07.001
accounting for 61% of the world’s population. Reports also suggestthat the Asia Pacific region is host to 53 million migrantshighlighting that temporary labor migration is a prominentfeature of many countries in this region (United Nations ESAP,2011).
Asia Pacific refers to a range of countries that, according tosome, have little more than a ‘passing family resemblance’ – inothers words, a region whose diverseness can be seen in terms ofits geography, politics, cultural values, economic policies, employ-ment systems and institutional frameworks (Warner, 2000).Extending from India in the west, to China in the north, thePacific islands of the east, and Australia and New Zealand in thesouth, the Asia Pacific region covers over one-third of the world’stotal land mass. Economic development remains a distinguishingfeature of Asian countries with some authors categorizing Asiancountries and their HR systems into developed, developing andtransitional countries (Rowley & Warner, 2007). Multinationalenterprises (MNEs) need to understand these differences in termsof implementing their international human resource management(IHRM) policies and practices.
Given the context-specific nature of this region, it is notsurprising that many have built on Adler et al.’s (1986) earlier callto contextualize their research. One of the main limitations ofmuch of the research in the Asia Pacific region is that it is based ontheories created in the U.S. or on Western-oriented research. Inresponse, researchers have called for increased importance to beplaced on Asian perspectives. A number of writers adopt theposition that theories developed in Western countries are noteasily adapted to Asia (Budhwar & Debrah, 2009; Meyer, 2006). In arecent Special Issue of the journal Management and Organization
Review on Indigenous Chinese Management Research, Leung(2012:2) notes that ‘‘given the trajectory of the Chinese economy,we are entering an era in which indigenous Chinese findings and
P.J. Dowling, N. Donnelly / Journal of World Business 48 (2013) 171–174172
theories, regardless of whether they are cultural-general or not, areimportant in their own right’’.
2. HRM in an Asia Pacific context
The study of ‘people issues’ in global markets is a relativelywell-established field of study (De Cieri & Dowling, 1997; De Cieri,Hutchings, & Dowling, 2005; Donnelly & Dowling, 2010). Devel-opments in the field are both indicative of the growing importancethat academics and practitioners alike place on the role of humanresource management (HRM) in international performance andgreater awareness of the context-dependent nature of HRM(Budhwar, 2004). While the field of IHRM has grown substantially,little attention has focused on determining what HRM means froman Asia Pacific perspective (the exceptions of which will now beoutlined).
Speculation on the emergence of an ‘Asia Pacific’ model of HRMhas largely dominated research on HRM in this region (Warner,2000). An emerging group of writers predict that a ‘hybrid’ modelof Asian HRM will emerge whereby Western practices areintegrated in Asian countries, with traditional approaches remain-ing (Benson & Rowley, 2003; Rowley & Warner, 2007). A relatedidea is that ‘bounded’ convergence will occur as globalizationcreates similarities, with national business systems continuing toshape HRM systems. As research builds towards convergence,others strongly caution against formulating an ‘Asian model’ giventhe diversity of this region. Studies show that diversity of HRMsystems between countries in Asia remains considerable. Theimpact of differences in and interrelationship of cultures andinstitutions are often cited as factors that constrain convergenceboth within the region and with Western HRM practices. Thecontext-specific nature of HRM in Asia is therefore very important.
Another emergent theme within the literature is the process ofchange in Asian HRM. This comes as many Asian countriesexperiment with Western HRM practices and question the viabilityof traditional practices. External factors shaping this changeinclude globalization, the Asian financial crisis and increasedcompetition, while internal factors identified include the openingup of Asian economies to the global market and other governmentpolicies that concentrate on developing the domestic labor market.
One issue that this literature raises is whether or not change isbeing accepted in Asian countries. It is clear that change is occurringand practices are being transferred. It is less clear whether or notthese changes are accepted by the working population. In countrieslike Japan and South Korea, it is evident that attempts are beingmade to introduce more flexible and individual based employmentpractices. However, it appears that these changes are not beinginternalized because seniority and lifetime employment remaindistinguishing characteristics of their HRM systems.
A related issue is the recognition that change can occur atdifferent levels. Change can occur at the practice level, policy level orat system architecture level. Many articles state that changes inHRM are occurring at the practice level, but this is rarely reflectedin any deeper changes to policy or system architecture. Thisindicates that changes thus far may not have been internalized. Atthis stage, change appears to be in an experimental phase wherethe final outcome is not known.
3. The Special Issue
In our call for papers for this Special Issue, we noted that whilemanaging people within diverse and dynamic global environmentsis critical for MNEs, it is the highly varied and variable context ofthe Asia Pacific region that presents a set of unique challenges thatare largely under-researched. This special issue seeks to addressthis significant new set of challenges. This transformation of the
‘new competitive order’ has presented MNEs with a new-found setof international human resource challenges. It is against thisreshaping of the ‘global landscape’ that this Special Issue exploresthe IHRM challenges that MNEs face in the Asia-Pacific. Wereceived a total of 30 submissions for this Special Issue. After anextensive review process involving a truly ‘global group ofreviewers’ the following eight papers were accepted for thisSpecial Issue.
4. Emerging themes
There are four main themes or HR challenges that this SpecialIssue speaks to. The first of these examines ‘Increasing Competitionfor Skilled Workforces’.
4.1. Increasing Competition for Skilled Workforces
One of the implications of the impact of economic globalizationand the opening up of countries to foreign investment and foreignmarkets is the enhanced competition for skilled labor. Papers inthis Special Issue indicate that organizations are responding to thatchallenge. It is against this background of increasing competitionfor skilled resources in global markets that Matthias Baum andRudiger Kabst explore the feasibility of MNEs adopting a globalpositioning approach to employer branding. Testing the impact offacets of employer images on job applicant interests acrossGermany, Hungary, China and India, the authors found that whilesuch facets of an employer image as career opportunity andworking atmosphere demonstrated little cross-national variation;task attractiveness, work–life comfort and payment attractivenesswere less suitable for an international employment brandingposition. Based on these findings, the authors build a case for theinternational co-ordination of employment branding activities.Highlighting one of the key strategic challenges that MNEs facewithin emerging Asian economies, Peter Sheldon and Yiqiong Liexamine the issue of employee poaching within China’smanufacturing hub – the Suzhou Industrial Park (SIP). Drawingupon case and survey analysis of foreign-invested enterprise (FIE)experiences, their findings reveal that employers with skillshortages and a more highly skilled workforce are more likelyto engage in inter-firm constructive responses through enhancedtraining and remuneration provision. Finally, they find employerresponses to be dependent on local labor market conditions, theirbusiness strategies, their workforce skill levels and the role thattheir HR departments play.
4.2. Managing International Assignments in the Asia Pacific
Managing international assignments across any region remainsa dominant concern for many MNEs. Looking at internationalassignments from a volunteer perspective or examining the factorsthat shape adjustment and performance represent new lines ofargument in this subject area. Three papers speak to this theme.How do expatriates learn? What features of an internationalassignment contribute to their learning? Can these types of skillsbe codified and taught? The paper by Anthony Fee and SidneyGray draws attention to these issues by providing insights into theunder-researched topic of international volunteer experiences.Comparing the work-related experiences of ‘traditional’ expatri-ates with that of international volunteers (IVs) deployed within amultinational NGO in the Asia Pacific region, the authors find thelearning experiences of IVs to be more transformational than thoseof traditional expatriates and involve changes that were frequentlytriggered by cultural differences. Building on their results, theauthors present a framework that embodies the key characteristicsof the learning process experienced by IVs.
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At a time when MNEs are exploring alternatives to traditionalglobal staffing approaches, the paper by Yvonne McNulty, HelenDe Cieri and Kate Hutchings looks for the first time at whatexpatriates themselves gain from an international assignment.Employing psychological contract theory to a sample of long-termexpatriate managers across 10 Asian countries, the authorscompare individual ROI to that of corporate ROI and show howpatterns of global mobility are changing in the Asia Pacific. Incontrast to corporate ROI, their research found individual ROI forexpatriates in the Asia Pacific to be based on career development –i.e. non-financial, value-based returns. Rather strikingly, they alsofound parent country national managers (PCNs) were typicallyemployed on third country national (TCN)-like employment termsthat included ‘‘local-plus’’ contracts and little HR support or long-term career support. These findings indicate potentially significantchallenges for the future role of international assignments in theAsia Pacific.
In a similar vein, Marlin Abdul Malek and Pawan Budhwarexamine the influence of cultural intelligence on expatriateadjustment and performance. Drawing from a sample of 134expatriate managers working in Malaysian-based MNEs, theauthors find cultural intelligence to facilitate cross-culturalinteraction and adjustment in host environments. By reducingthe uncertainty and anxiety that is associated with culturallydiverse environments, their results show positive contextual andtask performance outcomes. In highly diverse environments likethe Asia Pacific region, this paper highlights the importance ofcultural awareness and intelligence in the improvement ofexpatriate performance.
4.3. The Challenge of Integration and Alignment of HR Practices
One of the key strategic challenges for MNEs operating in bothgeographically and culturally distant environments is the globalor regional integration of practices – particularly in hostenvironments. Based on an analysis of 76 European subsidiariesoperating in China, Adam Smale, Ingmar Bjorkman and JennieSumelius analyze the mechanisms that MNEs employ to globallyintegrate HRM practices across their foreign subsidiaries.Drawing on control and institutional theory, their findingsreveal that MNEs are more likely to use centralization mecha-nisms for the integration of financial compensation, formaliza-tion mechanisms for the integration of performance appraisalpractices and people-based integration mechanisms across allHRM practices. In effect, their findings reveal the use ofintegrative mechanisms to be dependent on the global integra-tion/local adaptation aim of each individual HRM practice. Inconclusion, they call for greater examination of the purpose ofintegration in relation to each HRM practice and the internalcongruence of the HRM system.
Similarly, Cherrie Zhu, Brian Cooper, Di Fan and Helen DeCieri explore the appropriateness and effectiveness of WesternHRM policies and practices in China. The authors note from theoutset that the gaps that might exist between intended, actual andperceived effectiveness of HR practices will inform the HRM-Performance relationship. Based on qualitative and quantitativesampling, their findings identified a lack of alignment betweenmanagers and their employees in terms of their knowledge,experiences with and perceptions of effectiveness across a range ofHR practices. These reflect the transitionary stage of developmentthat the HRM model is currently undergoing in China. Theirfindings demonstrate the diffusion of indigenous practices on HRpolicies and the possible role of geopolitical factors in determiningthe effectiveness of HRM practices. Having revealed differencesbetween the perception of managers and employees, the authorscall for further research to address these challenges.
4.4. HR Implications of a ‘New Competitive Order’
In this final paper of the Special Issue, Nigel Haworth takes aninnovative macro approach to the topic of the Special Issue andcharts the shift in ‘competitive orders’ from one based on atraditional late development model to one that promotes acompressed development approach. This paper provides an eth-nographical account of developments in an important political andeconomic grouping of Asia Pacific nations known as APEC (AsiaPacific Economic Cooperation; www.apec.org). By examiningchanges in the approach of APEC to human resource development,Haworth looks at the HRD consequences of the more compresseddevelopment approach in the Asia Pacific region.
5. Future challenges and research agenda
We noted in our Introduction to this Special Issue that there isclear evidence of a reshaping of the global business landscapetowards a focus on the Asia Pacific region. This trend is not onlyapparent in business and economics, it is also apparent in a geo-political sense with developments such as the emergence of theG20 (www.g20.org) with strong Asia Pacific representation andPresident Obama’s announcement in 2012 that the United Stateswould switch its foreign policy and military focus to the AsiaPacific region. Management scholars may need to take a strongerinterest in both the geo-political environment and the interna-tional business environment to better understand the context forthe four trends identified in this Special Issue.
6. Reviewers for this Special Issue
Special Issues rely heavily on the goodwill and efforts ofreviewers. We would like to thank the following scholars whogenerously gave of their time and expertise to review manuscriptsfor this Special Issue:
Torben Andersen, University of Southern Denmark, Denmark.Jim Arrowsmith, Massey University, New Zealand.Tim Bartram, La Trobe University, Australia.Ishaq Bhatti, La Trobe University, Australia.Rozhan Bin Othman, Universiti Kebangsaon Malaysia.Stephen Blumenfeld, Victoria University of Wellington, NewZealand.John Boudreau, University of Southern California, USA.Brendan Boyle, University of Newcastle, Australia.Sue Bruning, University of Manitoba, Canada.Jane Bryson, Victoria University of Wellington, New Zealand.Jillian Cavanagh, La Trobe University, Australia.Mei-Tai Chu, La Trobe University, Australia.Stephen Cummings, Victoria University of Wellington, NewZealand.Allen Engle, Eastern Kentucky University, USA.Majella Fahy, University College Dublin, Ireland.Anthony Ferner, De Montford University, UK.Greg Fisher, Flinders University, Australia.Hongzhi Gao, Victoria University of Wellington, New Zealand.John Geary, University College Dublin, Ireland.Barry Gerhart, University of Wisconsin-Madison, USA.Hosein Gharavi, La Trobe University, Australia.Mark Gilman, University of Kent, UK.Sid Gray, University of Sydney, Australia.Pashaar Halteh, La Trobe University, Australia.Andres Hatum, IAE Argentina.Peter Holland, Monash University, Australia.Rob Jack, Macquarie University, Australia.Boris Kabanoff, Queensland University of Technology, Australia.
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Dodo zu Knyphausen-Aufsess, Technische Universitat Berlin,Germany.Sam Kovacevic, La Trobe University, Australia.Peter Lamb, La Trobe University, Australia.Yih-teen Lee, IESE Business School, Spain.Jenny Martinez-Bar, La Trobe University, Australia.Ashish Malik, University of Newcastle, Australia.Fiona Moore, Royal Holloway, University of London, UK.Michael Morley, University of Limerick, Ireland.Nicola McNeil, La Trobe University, Australia.Anthony O’Donnell, University of South Australia, Australia.Andre Pekerti, University of Queensland, Australia.Geoff Plimmer, Victoria University of Wellington, New Zealand.Chris Poulson, California State Polytechnic University, USA.W.K. Roche, University College Dublin, Ireland.Huaichuan Rui, Royal Holloway, University of London, UK.Cathy Sheehan, Monash University, Australia.Jie Shen, University of South Australia, Australia.Andrew Smith, University of Ballart, Australia.Karen Smith, Victoria University of Wellington, New Zealand.Max Smith, Flinders University, Australia.Bruce Stening, Peking University, China.Bridgette Sullivan-Taylor, University of Warwick, UK.Stephen Teo, Auckland University of Technology, New Zealand.Adam Weaver, Victoria University of Wellington, New Zealand.Catherine Welch, University of Sydney, Australia.Cherrie Zhu, Monash University, Australia.Mike Zhang, La Trobe University, Australia.
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