The Past Speaks

Creating the Post-Colonial Bank: HSBC between 1945 and 1965

There was a marked change in human resource management in the Hongkong and Shanghai Banking Corporation (HSBC) in 1960-5. Heenan and Perlmutter identify four main strategies or approaches that MNCs adopt in managing their workforces: ethnocentric, regiocentric, polycentric and geocentric. In the 1960s, HSBC shifted from being an “ethnocentric” MNC to one that corresponds more closely to the “geocentric strategy”. This paper explains why this change took place. Until the early 1960s, the bank’s workforce in Hong Kong was divided into three ethnic tiers: European or “Foreign Staff” recruited in London; an intermediate tier of Portuguese clerical workers; and native or Chinese workers who operated under the supervision of a comprador.  In the early 1960s, the bank eliminated this system and implemented the modern idea that individuals should be promoted on their individual merits rather than membership in an ethnic group. This article, which is based on oral histories, newspapers, as well as primary sources in the HSBC archives, will situate HSBC’s decision to end the old human resources system within its geo-political and cultural context. Much like other British MNCs faced with decolonization, HSBC understood that ensuring its survival required eliminating all vestiges of colonialism from its employment practices.