What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

In “Probing Theoretically into Central and Eastern Europe: Transactions, Resources, and Institutions,” we outlined the contributions of research in Central and Eastern Europe (CEE) to theoretical debates in business research. In this retrospective, we reflect upon the evolution of the field over the past decade. With the fading impact of CEE’s distinct shared history, we suggest that CEE best be analyzed as emerging economies, rather than as a distinct geographic entity. Emerging economy business research is converging on common themes and shared theoretical ideas, while identifying critical variations that constrain generalizations among and beyond emerging economies. This research thus highlights the need to develop a better understanding of the boundary conditions of scholarly theories of business knowledge. Over the past decade, the institution-based view has emerged from distinct intellectual traditions in institutional economics, organizational theory, and the analysis of business–government bargaining. Research in these converging lines of theorizing places contextual variations at the center of explanations of business phenomena around the world. We suggest that the institution-based view is evolving toward a paradigm, and offer suggestions on how to advance this research agenda further, in particular by exploring how firms engage with different sets of potentially conflicting institutions at multiple levels and locations.

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Theoretical foundations of emerging economy business research

Much of the prior research on interorganizational learning has focused on the role of absorptive capacity, a firm's ability to value, assimilate, and utilize new external knowledge. However, this definition of the construct suggests that a firm has an equal capacity to learn from all other organizations. We reconceptualize the firm-level construct absorptive capacity as a learning dyad-level construct, relative absorptive capacity. One firm's ability to learn from another firm is argued to depend on the similarity of both firms' (1) knowledge bases, (2) organizational structures and compensation policies, and (3) dominant logics. We then test the model using a sample of pharmaceutical–biotechnology R&D alliances. As predicted, the similarity of the partners' basic knowledge, lower management formalization, research centralization, compensation practices, and research communities were positively related to interorganizational learning. The relative absorptive capacity measures are also shown to have greater explanatory power than the established measure of absorptive capacity, R&D spending. © 1998 John Wiley & Sons, Ltd.

Relative absorptive capacity and interorganizational learning

El artículo tiene como objetivo evaluar el nivel de desarrollo de la capacidad de absorción realizada (RACAP) en las Pyme colombianas. Se parte de una muestra de 363 Pyme colombianas (Dane,2012), se usa una revisión de literatura con apoyo del análisis de contenido y un modelo de regresión lineal, que permiten mostrar la existencia de una correlación lineal positiva entre la adquisición y asimilación del conocimiento externo en las organizaciones objeto de estudio,. Palabras clave: Capacidades de absorción, capacidades de absorción potencial, medición de las capacidades de absorción ABSTRACT:

Measurement of potential absorption capacity in Colombia's innovative companies [Medición de la capacidad de absorción potencial en las empresas innovadoras de Colombia]

/pdf/xiaotong-fei-from-the-soil-the-foundations-of-chinese-39zlvqlntr.pdf

Xiaotong Fei, From the Soil: The Foundations of Chinese Society

Since the mid 1990s the State-Owned Assets Supervision and Administration Commission (SASAC) has emerged as a key institution governing firm ownership in China, but its impact on firm performance is understudied. Through an analysis of Chinese firms listed on the Shanghai and Shenzhen stock exchanges from 1994-2003, we examine how the changing ownership patterns following the rise of SASAC influenced firm performance. We have three findings. First, contrary to the popular view that state ownership in China's listed firms has declined, we find that the state shares have been moved from the original state offices to the SASAC in the format of ‘state institutional shares’. Second, compared with the old state shares, the SASAC institutions affect firm performance more positively. Third, after controlling for state and SASAC ownership, ownership concentration is a strong positive factor in firm performance. Our findings fit squarely within a long tradition of agency theorists who argue that ownership concentration helps solve the free-rider problem and thus has positive effects on firm performance. However, we focus on the ways in which ownership concentration allows firm owners to monitor and stabilize firm behaviour, which has more important implications for emerging economies such as China's domestic capital markets.

The Rise of SASAC: Asset Management, Ownership Concentration, and Firm Performance in China's Capital Markets

Stability, asset management, and gradual change in China’s reform economy

This article analyzes how China’s increasing engagement in the global market induced significant institution-building in China’s tobacco industry and enabled a power shift from the local authorities to the central authority in controlling this market. During this process of “getting onto the international track,” the central government reorganized the industrial tobacco system and broke up the “monopolies” set up by local governments in order to enhance the competitive capacities of China’s tobacco industry in the global market. Given such a concrete institutional change in China’s tobacco industry, I propose the theory of “global-market building as state building” to explain the interactions among the global market, the nation-states, and the domestic market-building projects. I suggest that nation-states strategically seek to engage themselves in the global market and that, under certain circumstances by taking advantage of their global market engagement, the nation-states can enhance their abilities to govern the domestic market.

Global-market building as state building: China's entry into the WTO and market reforms of China's tobacco industry

Across the social sciences, agency theory has become one of the basic frameworks through which to analyze the organizational problem of aligning interests between owners (principals) and those who carry out the work of the corporation (agents). Less often analyzed within this framework is the problem of multiple principals with different incentives and agendas. In today's global economy, this is a problem that institutional investors from around the world encounter on a regular basis. We argue that ownership concentration holds the key to dealing with the collective action problems that emerge in these circumstances. To provide empirical insight into these issues, we analyze the impact of ownership concentration in multiple-principal firms that have been listed on the Shanghai and Shenzhen stock exchanges over the last decade. Through these data, we show that the strongest factor shaping performance among this population of firms is ownership concentration: the higher a firm's ownership concentration, the better it performs, both in terms of profitability and in terms of efficiency. Further, as markets in this context have become more competitive over the last decade, overall profitability has declined, but the effect of ownership concentration has increased, suggesting that ownership concentration becomes even more important for achieving corporate goals as markets become more competitive.

https://papers.ssrn.com/sol3/Delivery.cfm/2451_26062.pdf?abstractid=1281944&mirid=3

Aligning the Interests of Multiple Principals: Ownership Concentrationand Profitability in China's Publicly-Traded Firms

For two-and-a-half decades, China’s transition to a market economy has produced remarkable growth rates and fundamental changes in the organization of economic action.1 Though lacking the fundamental institutional shifts that have defined many transforming socialist economies around the world, China’s gradualist reforms have nevertheless been radical and deep (Naughton, 1995; Guthrie, 1999, 2003, 2005; Nolan, 2004). The emergence of business organizations in China has played a key role in the transformation of the Chinese economy. In order to understand the emergence of the capitalist business organizations in China today, we must first examine the varieties and types of organizations that have come to function like business organizations. Once we have identified the organizational forms that fall under the rubric of business organizations in China, it is also crucial to examine the forces that have brought about this process of change. This chapter will take up both agendas. In the Chinese context, it is far too simplistic to think of business organizations as only covering private enterprises in the economy; this sector, while important, comprises only one of the organizational types that are behaving like business organizations in China today. In this chapter, we focus our attention on four types of organizations that comprise the category mainland Chinese business organizations. State-owned enterprises (SOEs), township and village enterprises (TVEs), private enterprises and foreign-funded enterprises are all part of the group of Chinese organizations that behave, to varying degrees, like business organizations China. We also focus our attention on the institutional changes that have shaped business organizations in China today. Specifically, we look at (1) the evolution of government–enterprise relationships, (2) the impact of foreign direct investment (FDI), (3) the transformation of social relationships in China’s market economy, and (4) the emergence of business associations. Through each of these areas of change, we address the question of the forces that have shaped the emergence of Chinese business organizations.

Junmin Wang

Papers

The Rise of SASAC: Asset Management, Ownership Concentration, and Firm Performance in China's Capital Markets

Stability, asset management, and gradual change in China’s reform economy

Global-market building as state building: China's entry into the WTO and market reforms of China's tobacco industry

Aligning the Interests of Multiple Principals: Ownership Concentrationand Profitability in China's Publicly-Traded Firms

Business organizations in China