An Empirical Study On Union Practice’Impacts On Firm Performance

A sizeable literature has emerged dealing with dual commitment in the developed countries suchas the USA, Australia, Japan and Western Europe, and also some newly industrializing countries likeKorea and Singapore; while little research has been done in the mainland of China. It can be mainlyattributed to the entirely different company-union relationships in the field of industrial relationsbetween China and the western countries before reform and opening-up. At that time in China, unionsworked as function-extended organizations of Party and governments in companies to assistcompanies in the development of society, instead of improving working and living conditions ofemployees by means of negotiations and strikes. On such background, research concerning dualcommitment clips its wings in the mainland of China. However, nowadays,30years after reform andopening-up, non-state-run enterprises, private enterprises and foreign companies emerge in largenumbers; labor bargaining, collective negotiations and migrant workers unions spring up; meanwhile,there appears checks and balances, non-cooperation and even antagonism between companies andunions. Unions’ responsibility and function of transition, rectification, reconstruction and protectionof legal rights are re-emphasized. Researches concerning relationships between union practice andfirm performance in foreign countries mainly focus on how union function of safeguardingemployees’ rights and interests influences firm performance.Due to different national conditions and development history, Chinese unions are apparentlydifferent from unions in foreign countries. Besides function of safeguarding employees’ rights andinterests, Chinese unions also bear functions of participating, educating and constructing. Using dataon a sample of320employees in non-state-owned enterprises in Jiangsu province, the paperconstructs a model about the impact of union practice on firm performance through mediating effectof industrial relation climate in the context of China and draws some different conclusions. Thefindings suggest that union practice has a positive effect on firm performance; and compared tofunction of safeguarding, functions of participating and educating insert more significant impacts onfirm performance, while function of constructing has no significant relationship with firmperformance; union practice has a significant positive effect on positive industrial relationshipsclimate; union practice has a significant negative effect on negative industrial relationships climate; apositive industrial relationship climate will have a positive impact on firm performance; a negativeindustrial relationship climate will have a negative impact on firm performance; industrial relationshipclimate plays a partial mediating role between union practice and firm performance.The conclusions lay theoretic and realistic foundations for the researches between union practiceand firm performance. In theory, by referring to the research achievements in foreign countries, thepaper applies advanced theory to the analysis of domestic firms and further perfects the theory whichprovides a theoretical framework for the union practice and opens up a new perspective for theresearches on firm performance. In practice, the analysis of the functions of union and exploration ofrelationship between union practice and firm performance help promote the cooperation betweenunions and firms, further direct their construction and help achieve a win-win situation.