Dual Labour Control in Segmented Labour Market: case study of Japanese Subsidiaries in China

As long standing as the influence of the neo-institutionalism theory in the international human resource management (IHRM) literature, so is the critique of the approach’s tendency to play down actors’ role in shaping employment practices in MNCs. In this paper, the author considers role of actors in re-institutionalising employment practices at subsidiary level. The findings lend support to the argument that actors have considerable space to navigate through institutions, deploy agencies of institutions and manoeuvre employment practices. The research is based on intensive case studies at two Japanese-Chinese joint ventures manufacturing household white goods. Both subsidiaries play the low-cost production functions within the MNCs and developed a core-periphery division of the workforce to enforce labour cost control. Findings of this paper also reveals that labour market segmentation, state institutions of the hukou (residence registration) system and emerging agencies of labour mobility control give rise to distinctive management choice at subsidiary level in terms of re-institutionalising established employment practices to manage the boundaries between the core and the contingency groups of employees.