Employment Relations and Ethnic Minority Enterprise

An Ethnography of Chinese Restaurants in the UK

Xisi Li

• Publisher: Routledge
• Year: 2019
• ISBN:
  9781000727425
• Edition: 1
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

This book is the first piece of extensive research in studying employment relations in ethnic Chinese small businesses in Britain. It contributes to existing knowledge in three respects. Empirically, it examines the nature of employment relations in the ethnic Chinese restaurant sector in the UK context, a hitherto under-explored area. The study adds new knowledge to the study of employment relations in ethnic minority small firms. Theoretically, it draws out the concept of 'ethnic twist', which denotes how the conflict between different group members from the same ethnicity shapes patterns of shop floor behaviours, revealing the heterogeneity of people from the same ethnic origins. Methodologically, the research demonstrates the continued importance of the ethnographic approach in studying workplace relations.

Additionally, we see lots of literature discussing overseas Chinese businesses in terms of cultural resources, business development, level of integration and structural constraints. Surprisingly little is published on interpretations of small firm workplace relations. This book might illuminate future studies to explore management practices and employment relationships in ethnic Chinese small businesses in different national environments and industry sectors. It will be of interest to researchers, academics and students in the fields of employment relations, human resource management and organisational behavior.

1
Setting the Background

Small and medium-sized enterprises (SMEs) are independent businesses with limited size, managed by its owner or co-owners and having a small market share. BIS (2014) defines small firms as those with a maximum of 49 employees and medium-sized firms as those with between 50 and 249 employees. According to BIS (2018), small and medium-sized businesses accounted for 99.9% of all enterprises in the UK. SMEs provided 16.3 million jobs, making up 60% of all private sector employment. China’s SMEs comprised nearly 98% of all firms, accounting for 80% of employment and 58% of total GDP (Ecovis, 2017). In America, firms with fewer than 50 employees made up over 99% of all businesses (ASE, 2016). Given the essential role of small firms in modern economies, the study of management practices and employment relationships in small firms is a crucial component in understanding work and organisations.

Shaping Employment Relations in Small Firms

The focus of small firms with distinct importance from larger companies emerged at the beginning of the 1970s. Early studies presented two polarised perspectives around how employment relationships and working lives are experienced in small firms, which is the ‘small is beautiful’ versus ‘bleak house’ (Wilkinson, 1999). The ‘small is beautiful’ scenario was represented by the Bolton Committee Report (1971). This view suggested that small firms could facilitate close and harmonious working relationships. The physical environment in small firms might be worse than in big companies, but most people still preferred to work in a small firm as there were fewer problems in communication and management practices would be adjusted to match individuals. Additionally, small firms provided more intrinsic rewards. Although their average wage was lower than in large organisations, harmonious social relationships and low levels of conflict led people to gain an alternative type of satisfaction and motivation (Ingham, 1970).

The second is the bleak house scenario represented by Sisson (1993). This perspective suggested that workers in small businesses generally received fewer financial rewards than in big firms. Due to lack of resources, small businesses could rarely employ rigorous and integrated management practices. Without pressure from the trade union, workers were often treated in unfair ways. Scott and Rainnie (1982) argued that the context of small firms was not a ‘better environment’ for workers as depicted by the Bolton Report.

These two contrasting perspectives laid the foundation in exploring working lives and employment relationships in small firms. However, they both widely shared the understanding that size itself determined how behaviours in small firms were different from large companies. With further research into studying employment relations in small firms, it suggested that relations between owner-managers and workers are complex and contested, rather than size-determined (Wilkinson, 1999; Marlow, 2002; Tsai et al., 2007; Atkinson, 2008). A variety of factors, both external and internal, contribute to shaping employment relationships and management practices in small firms.

Rainnie (1989) classified small firms into four types according to the extent of their dependence on large firms. The dominant market position of large companies could exert significant influence on labour management practices in small businesses, directly or indirectly. Owner-managers’ choices in these small businesses were considerably constrained. They were forced to conduct tight control and brutal management over labour in response to the market pressure, which limited the scope for employees to contest management. Such product market environment determined how labour was managed in small firms. Goss (1991a) emphasised the essential role of the labour market in the management process in small firms. He identified four types of control strategies based on the dependence of employers and employees. Workers’ abilities to resist management and the dynamics of workplace relations were contingent upon their labour market positions.

The models advanced the understanding of employment relations in small firms by considering the influences of both size and external variables. However, they have been criticised as being extremely deterministic by stating that structural factors dominated the management practices (Ram, 1994; Holliday, 1995; Moule, 1998). The internal forces played a central role in shaping shop floor dynamics and workplace relations. Ram’s (1994) research illustrated how orders were negotiated between owners and workers during the day-to-day life on the shop floor. He demonstrated that employment relations in small firms were largely shaped by the nature of informal, ongoing everyday negotiations. The struggle between owners and workers during the bargaining process was inherent in small firms, and negotiation between the two parties was continuous and contingent upon diverse situations. Moule (1998) further suggested that in situations where small firms were dominated by larger companies and competitive pressures, there remained scope for owner-managers and workers to engage in informal bargaining. The impact of external structures was mediated through the shop floor dynamics on a bargaining basis.

Ram et al. (2001) defined the informality as the working process based mainly on unwritten customs and the tacit understandings arising from the interaction between employers and employees at work. It is possible to identify that informality distinguishes employment relations in small firms from those in larger organisations (Marlow, 2003; Gilman and Edwards, 2008). Human resource management practices in small firms show procedural informality on ad hoc bases in organising and completing tasks (Barrett, 1999; Wapshott and Mallett, 2013). Orders are subject to a constant informal negotiation between owner-managers and workers, which revealed the nature of the internal political process of management (Scase, 2005; Dundon and Wilkinson, 2009). As the order is negotiated in an informal environment, these ongoing, everyday interactions produce forms of mutual adjustment between owner-managers and workers (Nadin and Cassell, 2007; Ram, 1999). The bargained nature shapes the dynamics of accommodation with influences under varying degrees of both internal and external pressures (Wapshott and Mallett, 2016).

Apart from the market constraints, studies also have examined how laws and regulations influence small firms’ behaviours (Heyes and Gray, 2004; Kitching, 2006; Carter et al., 2009). These studies examined how and why small firm owners adapted to regulatory change and the subsequent consequences on labour management practices and employment relations. Edwards et al. (2004) indicated that two main structural reasons explained why small firms might experience considerable effects following the introduction of types of regulations. First, small businesses are likely to pay workers lower wages than larger firms. As a result, it is expected that particular laws, such as the NMW, would affect small businesses more significantly. Second, because small firms usually have little to deploy in terms of capital and human resources, they would be more vulnerable in the face of the pressures caused by regulatory laws compared to larger companies. Additionally, the decision to operate formally to comply with the laws was strictly dependent upon firms’ profitability, which itself was not common in the small firm economy (Ram et al., 2007). Management in small firms are affected by laws and regulations to various extents according to their market positions, internal structures, resources, etc. (Gilman et al., 2002; Edwards et al., 2006; Carter et al., 2009). Regulatory impacts interact with the specific business context to shape patterns of responses. It is necessary to integrate the regulations, the environment and the dynamics of informality to examine management practices and employment relationships in small firms (Arrowsmith et al., 2003).

Employment relations in small firms are, therefore, complex and heterogeneous (Marlow, 2005). Understanding employment relations in small firms requires sensitivity to external constraints while acknowledging how internal forces shape the process. Although external factors might have a strong influence on labour management practices, they interact with informality and negotiated order in shaping shop floor dynamics and employment relationships in small firms. The tensions between factors are negotiated on their everyday practices, which leaves space for strategic choice (Child, 1997).

Having realised the influence of both external and internal factors, an integrated approach to analyse employment relations in small firms has been developed (Harney and Dundon, 2006; Gilman and Edwards, 2008). The core argument of the integrated approach is to focus on the interplay between the internal dynamics within a firm and their external constraints. The frameworks synthesise key dimensions that influence labour management in small firms. These analytical frameworks serve to guide empirical research in understanding how the context of the different firms can shape patterns of employment relations, which reflects the context-sensitive view in interpreting shop floor behaviours and employment relationships in small firms (Ram and Edwards, 2010).

Employment Relations in Ethnic Minority Small Firms

The study of ethnic minority businesses has been playing a significant role in advancing knowledge in the field of employment relations in small firms. For instance, research conducted by Ram (1994) and Holliday (1995) revealed the bargained nature on the shop floor. Among all the ethnic minority groups, the South Asian community (mainly Indian, Pakistani and Bangladesh) has been mainly studied. There was a tradition for South Asians working in the restaurant sector (Ram et al., 2000; Barrett et al., 2002). The reason why so many South Asians engaged in the restaurant sector was believed to be the result of a historical disadvantage and the discrimination that ethnic minorities had been facing (Ohri and Faruqi, 1988; Ram, 1994). Due to the kinds of racism and discrimination, ethnic entrepreneurs often found their choices constrained by the white-dominated society (Ram, 1992). The historical reason pushed them into particular sectors because of the absence of alternatives; the restaurant sector was one of them (Ram et al., 2002). The racial context functioned and influenced the traditions of ethnic minority small firms to significant degrees.

Employment in these ethnic minority restaurants was largely organised by kinship and family ties. Kinship and family ties were regarded as the primary resource for the development of South Asian ethnic enterprises (Ward, 1987; Jones et al., 2006; Carter, 2011). This was seen as an essential factor for ethnic minority firms to survive due to lack of resources (Ram and Holliday, 1993). Family members worked as providers of capital and labour, which was crucial to prepare and operate a restaurant (Ram et al., 2000). Familial networks could effectively facilitate firms to cope with the competitive and unpredictable pressures from the product market and the uncertainties deriving from labour supply (Ram et al., 2007). Family members and kinship ties were a means of overcoming racial obstacles in the market externally and a source of cheap and flexible labour in supporting business development internally.

Apart from the support from family members, another key feature within the ethnic minority restaurant sector is the ethnicity network and community support. Co-ethnic workers were widely recruited within South Asian restaurants (Ram et al., 2000). Werbner (1994) demonstrated that the establishment of networks in Pakistani enterprises was always largely dependent on the community itself. Members of their communities shared common needs and cultures, which helped to consolidate employer-employee relationships to ease the management (Ram and Hillin, 1994). One of the dramatic advantages arising from their social networks and community support was ‘trust’. Co-ethnic employees were often deemed to be more ‘trustworthy’ than other employees, and this facilitated the labour control process (Werbner, 1984; Ward, 1991).

There is no doubt that the ethno-cultural factors had considerable influences on labour management practices in ethnic minority small firms. However, it is also argued that ethnic businesses are shaped by the wider political-economic environment (Barrett et al., 2002). The study of employment relations and entrepreneurship in ethnic minority small firms should take a ‘mixed embeddedness’ view (Kloosterman et al., 1999; Kloosterman, 2010). The key point of the concept is that ethnic businesses must be examined under the wider political-economic environment as well as in the social-cultural capital of their own communities. Research should not isolate ethnic enterprises from the surrounding environment. Activities in ethnic minority small firms arise from the interaction between economic and political processes rather than a distinct cultural issue for developing their businesses and managing labour (Ram et al., 2017a). Analysis of employment relations in ethnic businesses has to be integrated with socioeconomic-political factors to explain their practices.

By locating ethnic minority firms in a wider context, the effect of informality significantly interacted with ethnicity in shaping shop floor behaviours. As ethnic small firms generally operated in marginal sectors with strong market competition and low profitability, family and kinship ties reduced their economic pressure and sectorial constraints to a large extent, and the employment of family members facilitated informal practices in management (Ram et al., 2002). Because ethnic workers normally had either no or very low-level formal qualifications, they faced a substantial barrier in the labour market. The ethnic ties provided them with the opportunity to get employed and meanwhile gave owner-managers advantages to tighten the control and deploy the low-paid ethnic workers as resources (Ram, 1994; Edwards et al., 2016). In the face of laws and regulations, some of the ethnic minority small firms in order to survive paid workers significantly less than the NMW (Jones et al., 2006). Some businesses have responded to the NMW by employing undocumented workers from ethnic backgrounds (Ram et al., 2017b). Informality took different forms within the ethnic background in responding to the introduction of NMW and other external pressures. Thus, it is necessary to integrate informality with ethnicity to understand how these two variables interact with each other in shaping workplace behaviours and management practices in ethnic minority businesses.

The number of businesses owned by other ethnic minority communities in the UK has grown substantially during the past few decades (Ram and Jones, 2008). However, academic research has yet to extensively explore these new groups, and people had a limited understanding of their business development and employment structures (Jones et al., 2010). The conventional understanding of Britain’s migrant and ethnic minority population represented by the South Asian community should give way to an increased number of diverse groups (Vertovec, 2007).

In responding to the call, Jones et al. (2010) examined the dynamics of Somali business formation and development in Leicester; Sepulveda et al. (2011) focused on the economic activities of six communities in London to explore their economic positions and social activities. It is suggested that ethnic minority businesses not only contributed to economic growth, but also facilitated social processes by providing employment for local people and supporting community needs (Hall et al., 2017; Jones et al., 2019). These studies improved both empirical and conceptual understandings of diverse new migrant enterprise activities in Britain. Future studies to explore ethnic minority businesses, therefore, should focus on a wider range of ethnic communities and compare the experiences of different ethnic minority groups (Jones et al., 2006).

The Ethnic Chinese Community in the UK Context

The Chinese Diaspora in the UK

The Chinese in Britain have diverse origins and cultural backgrounds. Seamen were the first group of Chinese to the UK during the 1850s. They were recruited to develop maritime trade in Asia. A large number of Chinese people from Hong Kong started to arrive in Britain after the Second World War. The immigration wave was believed to be due to economic deterioration in Hong Kong’s rural areas (Chiu, 1991). More Hong Kong immigrants arrived in Britain between the late 1950s and the late 1960s. They came to Britain mainly to earn a living. Against this background, Hong Kong people became the largest Chinese group in Britain (Chan and Chan, 1997). According to the 1991 Census (OPCS, 1992), the total number of people in Britain with Chinese origin in 1991 was 156,900. Those who were born in Hong Kong were the largest group and accounted for one-third of the population. British-born Chinese accounted for 28%. The percentage of people from mainland China was only 12%.

The UK Chinese community has increased significantly in recent years and become more diverse. By 2011, the Chinese population grew to 400,000 in England and Wales, accounting for 0.7% of the entire population (ONS, 2015). This was primarily explained by the labour immigration from China’s Fujian and Guangdong provinces. Furthermore, there had been increased number of Chinese students. The Chinese student population generally kept stable from 1995 to 2000, around 5,000 per year. However, the student number began to increase significantly from 2001: from 20,000 in 2001 to 50,000 in 2004. In 2016, it jumped to 95,090 (UKCISA, 2019). According to the statistics, 79% of the ethnic Chinese population rise between 2001 and 2011 was due to immigration from Mainland China (Mok and Platt, 2018). As most of the migration was from Mainland China, the Chinese community traditionally dominated by Hong Kong people has shifted to a society in which Mainland Chinese has become the majority.

Early first generation ethnic Chinese in the UK mainly operated their businesses in the food and catering industry, which was the survival strategy for the historical discrimination they had encountered (Mok and Platt, 2018). Since then, they have been in the tradition of working in the restaurant sector with less ethnic embeddedness and integration to the mainstream economy. Ninety percent of Chinese workers took part in the catering industry by self-employment (House of Commons, 1985). Based on a recent survey, it was found that over three-quarters of male Chinese worked in the restaurant sector (Clark and Drinkwater, 2010). In large cities, they located together to form a group-based ‘China Town’ to mainly attract Chinese customers. For those who run their restaurants in small cities, it was believed to be the strategy to avoid co-ethnic competition (Luk, 2009). Chan et al. (2007) suggested that by organising their businesses in the catering industry, ethnic Chinese could g...

Table of contents

• Cover
• Half Title
• Series Page
• Title
• Copyright
• Contents
• Acknowledgements
• Preface
• 1 Setting the Background
• 2 Methodology
• 3 Influences From the Product Market
• 4 Influences From the Labour Market
• 5 Multi-Cultural Workforces
• 6 Interaction Between Informality and Ethnicity
• 7 Discussion
• Bibliography
• Index