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The Institution of Mingongzhi in Contemporary China and the Strategies of
MNEs: An Institutional Analysis
Mingqiong Zhang 1 , Chris Nyland 1 , & Cherrie J. Zhu 1
1. Department of Management, Building 11, Monash University, Clayton Campus,
Wellington Road Clayton Victoria 3800 AUSTRALIA
From the early 1980s, China has entered into an age of rural-urban migration. Millions of
farmers have flooded into cities and towns for work and significantly reshaped the character
of Chinese society. Confronted with the flood of rural-urban migrants, the central government,
city governments, private and public companies and urban residents have responded on the
various bases. Consequently, a combination of linked rules, values, norms, and patterned
practices that structure the way that rural migrants should be treated in urban areas has
emerged and rural migrants are being socially excluded. From the perspective of
neoinstitutionalism, these linked hukou-based regulative, normative and cognitive elements
demonstrate that a new institution has emerged, which is termed in this study the institution of
mingongzhi. Like the terms slavery and apartheid, the institution of mingongzhi refers to a
social-economic system under which rural migrant workers are socially excluded in urban
areas of contemporary China based on their household registration (hukou) status. As a major
institution of the labour market in contemporary China, mingongzhi has had a profound
influence on China’s urban employment environment, industrial relations (IR) and human
resource management (HRM) practices. It is an ideal variable to conduct analysis of the
strategic response of MNEs to the institutional characteristics of a host country. This is the
more so as international business scholars have accorded little systematic attention to the
relationship between institutions and multinational enterprises (MNEs).
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