Publication Type: Conference Paper/Unpublished Manuscript
Abstract: We extend the neoinstitutional theory of organizations to examine how China’s foreign-invested enterprises (FIEs) manage their labor relations by adopting four specific formal structures. Two of these structures have indigenous origins, while the other two are imports from Western capitalist economies. Empirical evidence is drawn on original data collected in a national survey of Chinese FIEs. Our analysis shows that a significant proportion of FIEs have localized their labor practices by adopting Chinese-style structures and that these indeginous structures prove more effective than imported structures in reducing the tension and conflict between labor and management. The extent of FIE adaptation is shaped by both institutional processes and strategic considerations. These findings support our view that FIEs as transnational organizations are capable of significant adaptation to distinct institutional environments across national boundaries, and that organizational interests interact with institutional forces to shape their structures and practices. This study also sheds light on the emerging institutional order in transitional economies.