Corporate human rights governance across borders: insights from a German MNC operating in China

Purpose

This paper aims to examine how multinational corporations (MNCs) organise labour governance and manage labour-rights risks in global supply chains when operating in politically constrained host-country labour regimes. Focusing on China, it analyses how a German automotive MNC navigates tensions between politically bounded workplace representation and extra-territorial due diligence expectations linked to European markets.

Design/methodology/approach

A qualitative, in-depth case study methodology was used. Evidence is drawn from 21 semi-structured interviews, conducted between June 2024 and March 2025, complemented by corporate documents, media reporting and NGO materials. Data were analysed inductively using a Gioia-informed coding process to develop an empirically grounded analytical framework.

Findings

The case study reveals a dual configuration of labour governance. Firstly, the firm practices minimalist adaptation in day-to-day employment relations by operating within China’s enterprise union and contract-centred regime, where collective bargaining is legally present but organisationally non-central. Secondly, it deploys progressive compliance measures – risk assessment, audits, grievance channels and supplier standards – consistent with home-country institutional expectations and mandatory due diligence regimes. These approaches are coordinated through cross-border organisational mechanisms, including transnational engagement involving the German works council, which functions as an internal accountability channel that can trigger investigation and escalation when credible risk signals arise. The analysis also shows persistent limits: due diligence tools can expand monitoring and responsiveness, yet they cannot readily substitute for autonomous worker representation and remedy under political constraint.

Originality/value

This paper develops an empirically grounded analytical configuration linking host-country political constraints, home-country labour institutions and mandatory due diligence expectations. It clarifies how due diligence-oriented corporate governance is operationalised in practice in China and specifies the organisational conditions under which such governance expands responsiveness while remaining structurally constrained.