How do foreign R&D units in China manage their Chinese R&D staff? An empirical exploration

Whereas extant literature has explored the question of why foreign R&D is present in China, we still know almost nothing about how these R&D operations are managed. This applies specifically to the management of Chinese R&D staff who conventionally are not known for their respect of foreign firms’ intellectual property rights (IPR). However, foreign R&D units in China are likely to have developed management techniques to deal with such problems. In this paper, we engage in qualitative and quantitative exploration of how foreign R&D units in China manage their Chinese R&D staff. For exploration we develop a conceptual framework on the basis of agency theory and the theory of trusted relationships. Our findings show that those R&D units that have developed adequate measures to manage their Chinese R&D staff have succeeded in making Chinese employees loyal to the R&D unit. These results have important implications for both practitioners and future empirical research.

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