Regional differences in HRM practices- the case of family businesses in the People’s Republic of China

Despite the increasing significance of Chinese family businesses (CFBs) as an important sector in China’s fast-growing economy, family businesses in China have received little research attention in the literature. The aims of this study are two-fold. First, the study examines the current human resource management (HRM) practices of selected family businesses in the country in areas of recruitment and selection, training and development, performance appraisal, and rewards. Second, it investigates differences in HRM practices of CFBs between the eastern-coastal and inland regions of the country.From a questionnaire survey of 205 CFBs operating in seven cities in two regions, this study has found that CFBs combine their traditional informal, relationship-based HR practices with western-style HR practices. Furthermore, both univariate and multivariate analyses have demonstrated significant regional differences in HRM, thus supporting the argument that a firm’s HR practices are shaped by institutions in which the firm operates.The findings of this study make important contributions to both research and practice. First, the findings have provided further evidence to the applicability of institutional theory to the explanation of HRM practices. Second, the study has also provided some practical implications for HR managers of firms, both domestic and foreign, in China. However, results of this study need to be interpreted with caution because external validity is sacrificed to an extent given its focus on family businesses, a non-probability sampling method and relatively small sample size. In addition, the cross-sectional approach adopted in the study fails to identify changes in HRM over time.Despite the limitations, however, this study has contributed to the body of knowledge by enhancing our understanding of CFBs in China and their HRM that have been under-researched empirically