Routledge Handbook of Human Resource Management in Asia

Fang Lee Cooke, Sunghoon Kim, Fang Lee Cooke, Sunghoon Kim

• Publisher: Taylor & Francis
• Year: 2017
• eBook ISBN: 9781317422839
• Edition: 1
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

Human Resource Management (HRM) is fundamentally shaped by institutional and cultural factors, such as the different political environments and social philosophies of particular countries and regions. By examining the various organizational aspects of business life and systems of people management in Asia, the study of HRM across the continent can, therefore, give us a greater understanding of Asian societies, as well as the contemporary world of work more generally.

This handbook provides an up-to-date and intellectually engaging overview of HRM in the Asian context. Distinctive in its comprehensive coverage of traditional as well as emerging topics of HRM, it analyzes important themes, such as the regulatory framework for work and employment, religiosity, family business, and gender. Using a comparative approach, it also effectively highlights the unique features of each country's attitudes towards HRM. Covering a range of themes and case studies, sections include:

• Institutional and cultural contexts,

• Labour regulation and industrial relations,

• Thematic and functional HRM,

• HRM in selected Asian countries, such as China, Japan, Vietnam, India, and Singapore.

Written in a highly accessible style, this book will be useful to students and scholars of Human Resource Management, Asian Business, Economics, and Sociology.

Chapter 15 of this book is freely available as a downloadable Open Access PDF at http://www.taylorfrancis.com under a Creative Commons Attribution-Non Commercial-No Derivatives (CC-BY-NC-ND) 4.0 license.

PART I

Institutional and cultural contexts

2
STATE AND HRM IN ASIA

Kyoung-Hee Yu and Sung Chul Noh

Introduction

The diversity in the institutional histories and political trajectories of Asian states make it a daunting exercise to theorize the relationship between the state and HRM in Asia. Our objective in this chapter is to review the existing models of the state in Asia critically, to elaborate the existing typologies based on an appreciation for exposure to global forces, and to apply the resulting understanding of state influence to societal outcomes of HRM. Extant classifications of the state have theorized the state with respect to interest organization in society and have neglected the state’s embeddedness in a global environment. Our review embraces recent calls for theorizing the state and the employment relationship in the midst of global financial, organizational, and economic pressures (Crouch, 2011; Lakhani, Kuruvilla, & Avgar, 2013). This chapter is organized in two sections. In the first section, a theoretical framework is developed in which models of the state in Asia are reviewed in conjunction with pressures on the nation state from an increasingly integrated world economy. We conceptualize the latter in terms of influences from supranational institutions, as well as pressures from global value chains and global financial interests acting as constrains on state autonomy. State influence on HRM is then theorized as resulting from an interaction between models of the nation state and global pressures. With respect to outcomes of state influence, our framework examines societal outcomes such as inequality and voice in addition to the extent to which HRM styles provide flexibility in the employment relationship. The theoretical framework thus advanced is summarized in Figure 2.1. In the second section of the chapter, the theoretical framework developed in the first section is applied to Asian countries through a review of empirical works and relevant indexes for selected countries.

Beyond embedded autonomy: models of the state in Asia

Theories of the state have sought to distinguish it analytically from society, presenting the state as both a political system and an organization defined as an “autonomous entity whose actions are not reducible to or determined by forces in society” (Mitchell, 1991: 82). Two models of the state that have emerged from post-war governance in European countries are the regulatory and the welfare states. A regulatory state sets and maintains standards of behavior through regulatory agencies. It adopts a generally laissez-faire attitude to economic activity, not intervening except in instances of market failure, such as regulation of monopolistic behavior and the provision of collective goods (Levi-Faur, 2005). Economies governed by regulatory states are characterized by strong and open financial markets, shareholder governance, and high levels of institutionalized trust. The welfare state’s primary objective is to ensure the social and economic well-being of citizens through various redistributive mechanisms. Economic governance under the welfare state strives for cooperative relationships amongst stakeholders such as owners, managers, employees, and interested social actors, as well as for employment stability and social protection for workers throughout and beyond the employment relationship. The financial system under the welfare state relies more on bank financing than on stock markets (Van Kersbergen, 2003). Societies under the welfare state are characterized by enduring forms of interpersonal trust. Asian states prompted political scientists to theorize about a third model of the state in which the state plays a strong and often interventionist role in economic development by leading, or selectively providing targets and incentives to key businesses (Hancké, Rhodes, & Thatcher, 2007). This understanding of the Asian state as the “developmental state” has characterized Japan since the 1960s and the newly industrialized countries of East Asia since the 1970s (Amsden, 1989, 2001; Wade, 1990). It has also provided a template to which several Southeast Asian countries, most prominently Malaysia, aspired in the 1980s (Carney & Witt, 2014). Historically, developmental states were repressive of labor on the one hand, and on the other hand, they fostered state- and enterprise-based welfare through provision of lifetime employment. The state also acted as a major employer and provided training and education institutions which ensured that the human capital supply for economic development was highly qualified.

Figure 2.1 Model of state and HRM

Source: compiled by the authors.

Although some classifications of Asian states have characterized them as one type—variously termed “Asian capitalism,” “étatism,” or “state-led capitalism”—based on the influence of the developmental state (Amable, 2003; Boyer, 2005; Whitley, 2006), we argue that a unitary treatment of Asian capitalism overlooks the diversity of state models in Asia. It also fails to account for dynamic trajectories as Asian countries are integrated into the global economy through trade, foreign direct investment, and migration. Our own classification recognizes that countries that previously followed the developmental state model as well as its negative counterpart, the predatory state model (Evans, 1995), have each undergone institutional change, resulting in dynamic trajectories. Predatory states are dominated by oligarchic groups that seek to appropriate rent through privileged access to exclusive economic and political resources. Instead of pursuing the national interest and generalized economic advancement, predatory states exploit resources to advance the vested interests of the oligarchy. We include three out of the four typologies of the state—the regulatory, developmental, and predatory states—in type-casting states in Asia. We list these classifications in Table 2.1, with the caveat that in reality many individual countries will fit the mold only partially. Thus, for example, whilst we classify Hong Kong, Singapore, and South Korea as regulatory states, Singapore and South Korea arguably retain developmental state characteristics (Carney & Witt, 2014). We find that no Asian state quite fulfills the typology of the welfare state. Although Japan has adopted some characteristics of the welfare state, particularly when it comes to dealing with an aging population, we argue that it is overall a regulatory state with decentralized industrial relations and a low level of state intervention onto the growing inequality and dualism in the labor market (Song, 2014). Thus, we selectively apply Carney and Witt’s (2014: 546–550) classification of Asian countries, in which they characterized Asian countries into four state typologies of regulatory, welfare, developmental, and predatory. We have further added South Asian and Middle Eastern countries in our three-state typology.

Most theorizations of the role of the state in understanding typologies of economic governance directly apply models of the state to models of capitalism (Hancké et al., 2007; Schmidt, 2009), or to business systems (Carney & Witt, 2014; Walter & Zhang, 2011; Whitley, 1998) to explain variations in the latter. As mentioned above, we believe that doing so omits a crucial context in which states today operate—that of the global institutional and economic environment—which acts to variously enable, constrain, and modify state influence on economic practice. Empirical examination of states in Southeast Asia, for example, has questioned the ability of states in this region to exert control over internal and sectarian conflict, as well as retain independence in the face of pressures from supranational institutions, global financial markets, and trade and foreign investment (Beeson, 2003; Fritzen, 2007). We turn to a discussion of global pressures constraining and enabling nation states next.

Table 2.1 Typologies of Asian states

Source: compiled by the authors based on Carney and Witt’s classification (2014: 546–550).

Global institutional and organizational pressures

The global context that conditions state influence on HRM includes pressures from supranational institutions, norms and standards governing global value chains, and pressures from global financial interests.

Supranational institutions

International organizations such as the International Labour Organization (ILO) seek to directly influence national regulatory frameworks governing issues ranging from hours worked to freedom of association. While developed countries such as the USA often exempt themselves from ratifying international conventions, developing countries in Asia are more susceptible to international norms, especially if they are linked to aid or financing as in the case of loans from the World Bank or the International Monetary Fund. Bilateral and multilateral trade agreements increasingly embody provisions for protecting the wages and bargaining rights of workers in the least developed countries, often triggered through political pressure from organized labor in developed countries that are signatory to the agreements (Abrami, 2003). Trade with members of the European Union entails similar provisions for social responsibility and labor protection (Compa, 1993). Another form of supranational institutional pressure arises from international framework agreements—labor agreements covering more than one national jurisdiction and involving one or more national and/or international trade unions (Hammer, 2005). Increasingly, international framework agreements target the length of the global supply chain. Where government capacity or willingness to monitor and enforce labor standards on corporations is lacking, these supranational institutions can act as incentives for governments and social actors to modify existing practice (Gereffi, Humphrey, & Sturgeon, 2005).

Pressures from global value chains

The vertical disintegration of transnational enterprises has led to the creation of international production networks (Gereffi et al., 2005). The global value chain perspective to economic governance has argued that inter-firm relationships between buyers and suppliers and the quality of jobs are determined by the amount of value added by each firm participating in the global supply network (Gereffi, Humphrey, & Kaplinsky, 2001). The literature on dependent development has pointed out that countries such as Bangladesh, Cambodia, and Vietnam lack the ability to invest in human capital and develop into high-wage welfare economies due to their dependence on foreign investment and their lack of technological capacity. On the other hand, many other Asian countries today have given rise to their own multinational corporations and are large investors in Asia and elsewhere, at the same time as being recipients of FDI themselves. China, for example, is Africa’s second largest trading partner since 2007 after the USA, and the fourth largest investor (Romei, 2015) in the continent.

An emergent stream of research in employment relations (Lakhani et al., 2013) and HRM (Edwards, Tregaskis, Levesque, McDonnell, & Quintanilla, 2013) seeks to re-frame the employment relationship as a relationship that is not only embedded in national institutions and organizations but also in global production systems and organizational relationships. Although no one way of measuring global value chains can predict outcomes for HRM, a significant distinction can be made between buyer-driven and supplier-driven global value chains (Gereffi et al., 2005). In the former, typically found in the garment and agricultural supply chains, buyers control design, pricing, and access to markets; hence, job quality in supplier firms, typically engaged in labor-intensive and low value-added work, is relatively low. In the latter, characteristic of supply chains in electronics and auto industries, brand owners transfer parts manufacturing technologies to developing country suppliers, resulting in relatively high training and development of workers in these firms. A further distinction can be made based on the nature of inter-firm relationships, distinguishing between relational, networked, and hierarchical value chains (e.g., Lakhani et al., 2013). Amongst these, hierarchical value chains arguably offer the least discretion for “upstream” suppliers. The extent to which lead firms can influence suppliers’ HRM practices is an important question. In a typical buyer-driven production chain such as garments, global buyers hold the power to ensure higher levels of protection for workers and professional and merit-based HR practices, but may not always act on this power to do good (Locke, Amengual, & Ma...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of figures
• List of tables
• Notes on contributors
• Introduction
• Part I Institutional and cultural contexts
• Part II Labor regulation and industrial relations
• Part III Thematic and functional HRM
• Part IV HRM in selected Asian countries
• Conclusions
• Index