Turning Japanese ?

It might seem that nothing more remains to be said on the subject of Japanese firms’ transfer of HRM practices to their overseas affiliates. Before Japan’s economic bubble burst in the early 1990s, Japanese-style HRM was widely regarded as a key source of the nation’s competitive strength. This assumption was seized upon by a plethora of researchers who produced a library of research on ‘global Japanization’ and related topics. However, the spread of multinational enterprises and the varieties of experience they provide are a defining feature of the modern world economy and will continue to provide innovative and vital contexts for research. Moreover, specifically with regard to Japanese firms, there remain untapped and fruitful avenues of research. Most of the research undertaken to date has focussed on manufacturing firms, much less attention has been devoted to service sector firms. Additionally, while qualitative case studies have been undertaken these have mainly derived from European and American locations. In the context of China, for instance, little empirical work has been conducted on the reception of Japanese management practices (or those of any other nation for that matter) by shopfloor level staff. This paper seeks to address these themes by exploring the transfer of HRM practices from Japan to China by multinational retail firms. The data for this paper are derived from research carried out in 2001, 2002 and 2003 in Japan and 2002 and 2003 in China. Research in Japan focussed primarily upon company policy and strategy. In China, semi-structured interviews were conducted at six stores in different cities with a cross-section of local employees and expatriate managers. A quantitative survey of employees was also conducted. A case study approach enabled the author to explore a range of questions: Do Japanese retailers attempt to transfer their home country practices to China or do they perceive in such greenfield sites an opportunity to experiment with their approach to HRM? What factors facilitate or hinder the transfer of practices? How do local workers’ experiences of employment in these firms compare with that in previous firms, especially state-owned enterprises? How are transferred practices interpreted and understood by local employees? The paper sets these questions in context through a discussion comparing Japanese HRM practices with those in China. Japan is an economically developed nation with a settled political economy. China, by contrast, is a developing economy that is undergoing profound changes in its economic structure. In the post-war years, both nations developed systems of lifetime employment; whilst this tradition remains strongly entrenched in Japan’s large firms, in China’s state-owned enterprises the practice has eroded over the past two decades. Associated with this, China has increasingly flexible and fluid labour markets where skills are highly marketable; meanwhile Japanese firms continue to rely heavily upon internal labour markets. Japanese investment and the transfer of practices from Japan to China are also located in the context of complex attitudes in the host country towards its smaller neighbour. In addition to overlapping cultural forms and traditions, there is envy at Japan’s economic success and persistent and deeply ingrained suspicion, derived especially from the enduring legacy of the Anti-Japanese War (1937-1945).