Sources of labor disputes in East Asian invested enterprises in China: from an institutional and organizational perspective

Abstract

This study examines the nature and sources of worker resistance and critical factors that influence labor unrest in East Asian-invested enterprises in China, according to their national origins. Organizational characteristics, institutional arrangements, work conditions, workforce and managerial composition, and managerial styles are considered as major determining factors in labor disputes. The surveys and interviews were conducted at thirty-nine factories in coastal cities (including Dongguan, Shanghai, Kunshan, Qingdao, Tianjin, and others) from 2000 to 2001. Thirty-nine managers and 291 workers were interviewed and surveyed. The findings demonstrate that long work hours and a less regulative managerial style have significant and positive effects on the number of labor disputes in Hong Kong-owned firms. Among Taiwanese-owned firms, authoritarian managerial style and long work hours have significant effects on the frequency of labor disputes, while the lack of unionization has a diminishing effect on labor disputes. Korean-owned firms, on the other hand, often encounter frequent collective actions organized by a homogeneous local workforce, supported by a relatively higher numbers of trade unions. Korean-owned firms, responding to the relatively stringent labor enforcement and institutional arrangements of local governments in northern China, tend to adopt less regulative and less authoritarian managerial styles. Lastly, Japanese-owned firms experience the lowest number of labor disputes compared to their counterparts. The observance of legal work hours and a regulative managerial style has a significantly diminishing effect on the number of labor disputes, although the higher institutionalization of labor relations somewhat positively contributes to the frequency of labor disputes. Finally, comparative historical data also suggest that managerial style as a cultural factor has a differential effect on the frequency of labor disputes, as the market transition proceeds in China. It seems that managers adapt to local labor practices over time. Accordingly, the direct sources of labor disputes are attributed to institutional and economic factors, such as labor contract conditions, pay reduction, and pay held in arrears, and the like, are likely to have stronger influence than cultural factors have.