Showing papers in "Chinese Management Studies in 2016"

Exploring the relationship among human resource flexibility, organizational innovation and adaptability culture

Abstract: Purpose Human resource (HR) flexibility is a firm-level capability that consists of employee skill flexibility, employee behavior flexibility, and HR practice flexibility. HR flexibility allows organizations to adapt and be responsive to changes in their environments. Findings from this paper indicate that if the organization is highly innovative and has flexible HR policies, then that influences organizational culture, risk-taking and experimentation within a firm. This paper has also revealed that process innovation mediates between adaptability culture and product innovation. It also revealed that managers should emphasize processes to improve efficiency for resource exploitation. The lessons learned from process innovation activities indicated that having a strong knowledge base assists a firm in developing innovative technology such as automation for manufacturing, handling and testing or simply smart manufacturing. Design/methodology/approach Questionnaires were sent to employees at 23 Taiwanese companies in high-tech industries, where innovation is the key to their survival, and 293 valid surveys were collected. Structural equation modeling, (SEM) using IBM SPSS Amos, was used to test the hypotheses. Findings The results fully support the hypotheses that HR flexibility positively influences adaptability culture and contributes to organizational innovation. Furthermore, it was found that adaptability culture has a direct impact on process innovation and an indirect impact on product innovation through process innovation. Originality/value The critical role of HR flexibility and adaptability culture on organizational innovation in the high-tech sector were highlighted. The importance of HR flexibility is emphasized to provide managerial hints to top managers.

Constraints to growth: a cross country analysis of Chinese, Indian and Pakistani SMEs

Abstract: Purpose This paper aims to identify the barriers that are linked to the institutional, external and social environmental factors in the emerging economies of South-East Asia (SEA). Through a comparative analysis of China, India and Pakistan, this study attempts to understand the constraints that might inhibit small and medium-sized enterprises (SMEs) in this region from becoming more successful. Design/methodology/approach This study proposes an empirical research framework to identify the constraints to determinants of SMEs’ growth (the CDSG model) in an important geographic and industrial cluster of SEA countries including China, India and Pakistan. Six propositions are tested, using data from 1,443 SMEs obtained from Enterprise Survey Data Repository database from the World Bank. Ordinary least-squares estimation is applied for statistical analyses and testing of the research propositions. Findings The results show the differential effects of the proposed CDSG model in China, India and Pakistan. Access to external finance is found to be irrelevant to the growth of SMEs in China, while it has a positive influence in India and Pakistan. Furthermore, in terms of the innovation process, partial mediation is traced. Using the tax rate factor, negative mediation is found between CDSG variables and SMEs’ growth. Both mediators play different roles in firm growth activities, while the level of significance of some variables is found to be more relevant to a specific region rather than to all. Practical implications The prudent management of the proposed CDSG variables could revolutionize the constraints facing SME growth, making them into success factors. This could invigorate the growth of SMEs’ in SEA countries. The paper concludes with practical implications for policymakers and investors. Originality/value This SMEs’ theoretical framework is the first to use innovation and tax rate mediators to highlight the determinants of business growth in three SEA regional economies (China, India and Pakistan).

Do SOEs outperform private enterprises in CSR? Evidence from China

Abstract: Purpose The purpose of this paper is to explore the relationship between firm size, the nature of ownership and corporate social responsibility (CSR) performance in China and to figure out the reason that state-owned enterprises (SOEs) usually perform better in CSR activities than private enterprises. Design/methodology/approach The authors conducted two studies of CSR in China. In the first study, the authors developed and assessed a CSR measure; second study was to investigate the difference of CSR behavioral performance between SOEs and private enterprises. Findings The authors found that the differences in CSR performances between SOEs and private enterprises were not caused by the nature of ownership as most Chinese scholars used to believe. Actually, the differences came from the differences of firm size, which had been ignored in prior studies on factors influencing CSR performance. The size of SOEs is usually much larger than private enterprises, and larger enterprises often perform better in the field of CSR. In a word, the size rather than the nature of ownership is the main reason that CSR performances of SOEs are better than private enterprises. Originality/value Though many papers in China suggested that SOEs performed much better than private enterprises in CSR activities, the authors proved that this belief was a misunderstanding. It was found that SOEs were usually larger than private enterprises, which might have confused their efforts to find the real reason that SOEs and private enterprises perform differently in CSR. The authors also developed a measuring tool of CSR based on the Stakeholder Theory, which would be a new measurement tool for future studies, especially for emerging market economies and unlisted companies.

A knowledge-based theory of the firm: managing innovation in biotechnology

Abstract: Purpose Based on the knowledge-based view (KBV), the purpose of this study is to explore the impact of scientific knowledge resources on innovative performance, as well as the mechanisms, in the science-based innovation practice of biotechnological industry. How scientific knowledge influences the firms’ innovative performance and how external scientific knowledge flows into the firms efficiently are important issues every high-tech firms must consider. Design/methodology/approach The authors chose biopharmaceutical firms in China as the sample of this study to empirically test the hypotheses. Findings The study introduces a framework combining scientific knowledge resources, technological capabilities and innovative performance and, then, follows with an empirical investigation on firms in Chinese biotechnological industry. Survey data from biopharmaceutical firms in China prove the significantly positive impact of both stocks and flows of scientific knowledge on firms’ innovative performance, as well as the significant mediation effect, of technological capability. Practical implications From the results of this study, the authors derive the important managerial implications that talent exchange, purchasing external knowledge directly and establishing R&D alliances are three effective ways leading external scientific knowledge to flow into the firms. Originality/value The study finds that technological capability plays an intermediary role between scientific knowledge resource and innovative performance; tacit scientific knowledge stock and R&D alliance influence innovative performance through technological capability totally among them.

Managerial power, agency cost and executive compensation – an empirical study from China

Abstract: Purpose Based on the theory of “optimal contracting approach” and “the managerial power approach”, this paper aims to investigate whether senior executives of listed companies in China make use of their power to gain their own private benefits. The paper also compares compensation contracts between state- and private-owned enterprises to test whether there is a significant difference between senior executives from different ownership types of enterprises in terms of compensation contracts. Design/methodology/approach The paper raises four hypotheses based on the theories of “company agency”, “optimal contracting approach” and “managerial power approach”. After that, 5,680 A-share-listed companies of stock market in Shanghai and in Shenzhen Stock Market from 2008 to 2012 were taken as research samples to conduct a series of research analysis, including t-test, reliability analysis and regression analysis, with the help of SPSS 18.0. Findings The senior executives of listed companies in China could make use of their power to increase their own salary to gain power pay and, at the same time, company performance, company size and other factors that are important to influence the executive compensation. This paper further argues that senior executives of private-owned listed companies are more likely to use their power to obtain power pay and increase their own compensation. Additionally, the agency costs of Chinese listed companies are negatively related to the performance pay of senior executives, whereas there is no obvious negative correlation with the power pay of senior executives. Practical implications This paper takes multiple, in-depth approaches to study the relationship among managerial power, agency cost and executive compensation and to find out the differences in compensation contracts of senior executives between private-owned listed companies and state-owned companies. It also provides necessary suggestions to ensure the interests of stockholders, such as: optimizing the management structure of listed companies; improving the transparence of information disclosure of listed companies; establishing effective mechanism of incentive and constraint; and improving and standardizing the market of professional managers. Social implications The compensation contract of senior executives in China is critical to enhance enterprises’ performance, and it will become an important factor that will facilitate the interests of stockholders and management. However, this paper argues that some phenomena of over-payment of senior executives in listed companies cannot be explained by the theory of “optimal contracting approach”, but it is necessary and important to compare the differences of compensation contract of senior executives between private-owned listed companies and state-owned companies. A series of findings are proposed in this paper. Originality/value This paper made use of a principal analysis to extract the main factors that could represent the managerial power from different angles. In addition, this paper also compared the differences between compensation contracts of senior executives between private-owned listed companies and state-owned companies. Additionally, in this paper, the compensation of senior executives was divided into “power compensation” and “performance compensation”, which were used to test the relationship with the management cost of companies.

Board size, ownership concentration and future firm risk

Abstract: Purpose The purpose of this paper was first to find out whether the negative relationship between board size and future firm risk persists in China while contemplating all sorts of endogeneity. Second, the authors have investigated the role of large shareholders in influencing the managerial decisions concerning future firm risk via board size. Finally, the authors examined whether the moderating role of large shareholders is any different in state-owned enterprises (SOEs) and non-state-owned enterprises (NSOEs) in China. Design/methodology/approach The sample included all the A-listed firms listed on the Shanghai and the Shenzhen stock exchanges over a sample period from 2008 to 2013. The authors used fixed effects regression and the generalized method of moments (GMM) to test the three hypotheses. Findings The authors found that board size is negatively associated with future firm risk when measured as volatility in future stock prices and future cash flows. Second, large shareholders directly influence managerial decisions about future firm risk, irrespective of board size. Third, the moderating role of ownership concentration is insignificant in both SOEs and NSOEs. Originality/value To the best of the authors’ knowledge, this is the first study which has analyzed the role of large shareholders in the relationship between board size and future firm risk. This study provides valuable insights, particularly in the context of a developing country, into the role played by large shareholders in influencing managerial decisions concerning future firm risk.

Joint effects of creative self-efficacy, positive and negative affect on creative performance

Abstract: Purpose The purpose of this study is to test a model connecting Chinese employees’ positive and negative affect and creative self-efficacy with supervisor-rated creative performance in Chinese business. Building on the cognitive tuning theory, this paper answers several calls for research to examine the joint effects of positive and negative affects on creative performance in the China business environment. Design/methodology/approach The participants were drawn from one of the largest petrochemical companies in China. We drew 459 leader-subordinate dyads across different jobs situated in multiple divisions to complete our surveys. The authors used hierarchical linear modeling to test the hypotheses. Findings The findings suggest that creative self-efficacy has a positive influence on creative performance during low PA scenarios. The authors also demonstrated that for employees in China, creative self-efficacy has a positive influence on creativity when employees experience both low levels of positive affect and high levels of negative affect. Originality/value As the findings suggest, Chinese employees who experience positive affect may engage in heuristic, top-down cognitive processes. Furthermore, findings from the present study also serve to extend the scope of the cognitive tuning model by testing the informational roles of positive and negative affects in self-regulatory processes rather than focusing directly on the main effects of employee affect. An important finding in this study is the three-way interaction indicating that individuals experiencing low positive affect and high negative affect will see a strong connection between creative self-efficacy and creative performance.

The Chinese banks’ directors and their risk-taking behavior: A corporate governance and finance perspective

Abstract: Purpose The purpose of this paper is to examine the impact of the directors’ socioeconomic backgrounds on the risk-taking behavior of the listed commercial banks in China. Design/methodology/approach The generalized least square method and Arellano and Bover’s (1995) generalized method of moment were used to study the relationship between the directors’ socioeconomic backgrounds and bank risk-taking behavior. The sample studied consists of 16 listed commercial banks in China from 2003 to 2011. Findings It was found that smaller board sizes and higher percentage of independent directors contribute to lower risk-taking. The results also indicate that banks are better off with boards that have gender diversity, government affiliation and higher average age because they enhance problem-solving and market insights facilitate adherence to government or regulatory policies and help reduce the banks’ risks. Research limitations/implications Future studies may consider including non-public-listed banks, pre-2003 data and analyses of the agencies to which the government-affiliated directors are or were attached. Practical implications The paper suggests that corporate governance reform initiatives with closely monitored implementation and phased liberalization contributed toward the banking industry’s resilience. Implications for management include that boards of directors with better quality, sufficient independence, gender diversity, government affiliation and maturity will help reduce risks. Social implications This study may facilitate the decision-making for the bank management and policymakers on the selection of best directors in the Chinese banking sector. The Chinese banking system serves as a plausible role model for consideration, given that four of its banks have now leapfrogged to be among the top ten largest banking institutions after the global financial crisis. Originality/value The study covers a wide range of socioeconomic backgrounds of the board of directors which are crucial in influencing the behavior of the board in banking operations.

Culture, expatriation and performance: case of Chinese multinational enterprises

Abstract: Purpose The purpose of this paper is to comprehensively explore the dimensions of Chinese culture and further investigate the underlying mechanisms via which the Chinese culture, in various dimensions, affect the overseas performance of Chinese multinational enterprises (CMNE) expatriates. Along with the awakening of China, not only CMNEs but also the Chinese culture have infiltrated the world market. The uniqueness of Chinese culture has attracted considerable attention of a majority of practitioners, while relevant research on how it affects CMNE expatriates’ performance sounds rare. In contrast to domestic employees, the performance of CMNE expatriates is more likely to be influenced by Chinese culture because of the potential cross-border cultural conflicts between the home and host countries. Additionally, the impact of Chinese culture on CMNE expatriates’ performance may vary according to different cultural dimensions. Design/methodology/approach Comparative case study is adopted for this research. After sufficient literature review and interviews with human resource (HR) staff, this paper structured the research, and then conducted 30 in-depth interviews with Chinese expatriates from both state-owned enterprises and private-owned enterprises. Findings This paper identifies that the Chinese culture do affect CMNE expatriates performance; however, the degree of its effect diversifies according to different cultural dimensions, namely, individual-level culture including Reniqng, Mianzi and social-level culture including power distance, Guanxi, Yinyang, Hexie and collectivism. Research limitations/implications A limitation of this study is that the sample is not big enough and empirical tests are needed to validate or refute the model. Nevertheless, due to the fact that it is still during the period of initial study, the conceptual development raised by this paper would help us to gain good insights from these important and unexplored areas of national culture, which is being thought to affect performance in CMNEs. Practical implications Through reviewing the relevant literature and deeply analyzing Chinese culture, this paper attempts to help young Chinese MNEs to build up and/or improve performance appraisal method and system according to the unique Chinese culture, and to supply a theoretical support for HR personnel to make related policies for the sake of improving expatriate performance overseas. Social implications This paper is the first attempt to dig and explore the whole picture, and refine the dimensions of Chinese culture from individual level and social level. It aims to lay a foundation for the research related to Chinese culture, and to some extent, supply a theoretical support to motivate more researchers to explore more ways to improve the performance of expatriates from young CMNEs. Originality/value This paper presents the whole frame of Chinese culture and from an integral Chinese perspective digs the Chinese cultural dimensions from individual level and social level for the first time. According to the social cognitive theory, this paper provides a firm foundation for scholars to understand Chinese culture as well as to analyze the related relationship with performance, and for CMNEs to develop and utilize the effect of national culture to improve the performance of expatriates overseas. So far, the research on Chinese culture and the effect of national culture overseas have not yet been well considered.

A theory of multi-dimensional organizational innovation cultures and innovation performance in transitional economies: The role of team cohesion

Abstract: Purpose This study aims to construct a theory of multi-dimensional organizational innovation cultures and innovation performance in transitional economies and explore the moderating effect of team cohesion on this theoretical relationship. Design/methodology/approach Using data collected from 175 manufacturing firms in transitional economies, this study constructs a new theory framework of multi-dimensional organizational innovation cultures (knowledge sharing, organizational innovation atmosphere, team decision-making and organizational change) and firms’ innovation performance and also explores the moderating effect of team cohesion on this theoretical relationship. Findings The findings show that there are positive relationships between knowledge sharing, organizational innovation atmosphere, team decision-making, organizational change and innovation performance of firms. Furthermore, team cohesion plays a positive moderating role in this relationship. Practical implications It extends the general understanding of multi-dimensional organizational cultures management in the context of transition economies by exploring the differences between the Chinese and Vietnamese firms in terms of the impact of organizational innovation culture on innovation performance. Originality/value This study constructs a new theory framework of multi-dimensional organizational innovation cultures along the four dimensions of knowledge sharing, organizational innovation atmosphere, team decision-making and organizational change. These factors together have rarely been examined before. Hence, the findings extend existing research on organizational cultures management. Moreover, a new idea for this study is that the authors consider team cohesion as a moderating variable between organizational innovation culture and innovation performance of firms, hence providing both theoretical discussion and empirical validation of the impact of team cohesion on this relationship. It thus extends existing research on the team theory.

Antecedent factors of business planning in the new venture emergence in China

Abstract: Purpose The purpose of this paper is to build a research model from the perspectives of entrepreneur and entrepreneurial opportunity examining the effects of entrepreneurial growth aspiration and the innovativeness of entrepreneurial opportunity and their interactive effect on the business planning in the new venture emergence. Design/methodology/approach Six hypotheses are put forward and examined by hierarchical multiple linear regression and multiple logistic regression. The data of this paper are based on the first two rounds of survey data from Chinese Panel Study of Entrepreneurial Dynamics. Findings The empirical results show that entrepreneurial growth aspiration has significant positive effects on the business planning, namely, compared to the comfortable size entrepreneurs, the growth-oriented entrepreneurs are more likely to do the business planning in the new venture emergence. Different from prior discoveries, the innovativeness of opportunity has no effect on the business planning, but it positively influences the time of doing business planning, and entrepreneurial growth aspiration has a positive moderate effect on this relationship. Research limitations/implications Entrepreneurial growth aspiration in this paper is divided into growth-oriented entrepreneur and comfortable size entrepreneur from the single perspective of scale. Future research should define growth aspiration as a continuous variable in light of several dimensionalities. Practical implications The findings are useful for entrepreneurs to make rational and effective decisions whether to do business planning and when to do on the basis of their growth aspiration and the innovativeness of opportunity. The growth-oriented entrepreneur should do the business planning in the new venture emergence. The higher innovative the opportunity is, the latter the entrepreneur had better do the business planning. Besides, it provides the theoretical foundation for entrepreneurship training courses about business planning offered by governments, educational institutions and social training institutions. Originality/value This paper absorbs growth aspiration into the analysis framework about business planning based on expectancy theory, making up for deficiencies that prior researches excessively focus on entrepreneurial experience and opportunity. Additionally, the study will inspire scholars to research the mechanism of action relative to business planning from the interactive relationship between entrepreneur and entrepreneurial opportunity.

The determinants of family business owners’ intrafamily succession intention: An interplay between business owners and institutional environment

Abstract: Purpose The purpose of this paper is to explore the determinants of family business owners’ intrafamily succession intention based on the theory of planned behavior and neo-institutional theory. Design/methodology/approach National survey data were collected from Chinese private firms in 2010, and a sample of 804 family firms was used to test the hypotheses. Findings At the micro level, familism, intrafamily succession regulation and family control have positive effects on owners’ intrafamily succession intention. At the macro level, district succession orientation, which is the district prevalence of intrafamily succession practice, has a positive effect on owners’ intrafamily succession intention. Additionally, the district succession orientation weakens the positive effects of intrafamily succession regulation and family control. Originality/value The paper contributes to the understanding of family business owners’ intrafamily succession intention from both micro and macro perspectives. Besides, it also contributes to the integration of micro and macro research by examining the interaction effects.

Impact of political, guanxi ties on corporate value: Evidence from the technology-intensive firms in China

Abstract: Purpose Guanxi is an influential factor of doing business in China. This research focuses on a specific guanxi type, political connection and studies the impact of political connection on corporate value. Moreover, in the technology innovation studies, few studies have examined the impact of politics on technology innovation of firm. This paper aims to examine the relations among political connection, technology innovation and corporate value by an empirical study. Design/methodology/approach A sample of listed technology-intensive firms in China is used. This research examines the impact of political connection and technology innovation on corporate value with two dimensions, namely, the owner type of firm and the political connection level of firm. Findings Based on an empirical study, this research has four main findings. First, technology innovation has positive impact on corporate value. Second, compared to non-connected firms, politically connected firms value more. Third, political connection to a government of higher administrative level contributes more to corporate value. Finally, the relations among political connection, technology innovation and corporate value differ by the owner type of firm. Originality/value This research contributes to the study of guanxi by considering the specific guanxi type, political connection, as well as to the study of technology innovation by considering the impact of politics.

Differential leadership, team conflict and new product development performance: An empirical study from R&D team in China

Abstract: Purpose The purpose of this paper is to investigate the impact of native Chinese R&D team directors’ differential leadership on team performance, so as to understand whether and how the directors’ differential leadership impacts team conflict, whether and how team conflict impacts new product development performance of the R&D team and whether team conflict plays full mediation on the relationship between directors’ differential leadership and new product development performance. Design/methodology/approach A literature review on differential leadership and team conflict provided the model and hypothesis. Two-wave data collected from 103 directors and 344 subordinates from 103 R&D teams of high-tech enterprises from China’s Pearl River Delta Area were used as empirical study samples. Hierarchical multiple regression analysis was conducted to test the model and hypothesis. Findings First, the team director’s differential leadership would cause significant team relationship conflict and team task conflict in the R&D team. Second, team relationship conflict and team task conflict would produce significantly bad new product development performance in the R&D team. Third, team relationship conflict would significantly mediate the relationship between the team director’s differential leadership and the team’s new product development performance. Research limitations/implications To yield broader conclusions and to show to that the results can be replicated in other areas or in other types of organizations, further empirical research should expand the sampling by choosing high-tech enterprises from Beijing and Shanghai that have strong innovative abilities. Moreover, to extend the differential leadership theory, few more related variables of consequences, such as team communication, team cooperation and team knowledge share, should be included in future studies. Practical implications In general, the native Chinese R&D department director needs to try their best to avoid the use of differential leadership style. In addition, reasonable incentive measures, promotion mechanisms and fair team work culture are needed so as to reduce the negative impact from the director’s differential leadership. Originality/value The paper is original in its investigation on how Chinese indigenous organizational factor – differential leadership – influences the R&D team’s conflict and new product development performance, and provides theoretical contribution and managerial implications for the R&D team management.

Public service motivation and organizational performance in Chinese provincial governments

Abstract: Purpose This paper aims to examine different hypotheses concerning the effects of public service motivation (PSM) and other attitudinal or institutional dimensions on organizational performance (OP). Specifically, based on the experience of Chinese provincial governments, this study provides new evidence about how PSM may affect OP. Design/methodology/approach This study collected data from a survey of different provincial government departments in Sichuan Province, Hubei Province, Hunan Province and Chongqing Municipality in 2011. Using data from 761 respondents, Pearson correlation analysis and regression analysis were used to explore the relationships between related factors. Findings PSM, job satisfaction, affective commitment and job involvement have statistically significant effects on OP, and these results are consistent with the findings of previous researches that PSM positively affected OP at a significant level. The results suggest that, if civil servants have a strong PSM, the performance of their organizations will be high. Research limitations/implications Future research should look for additional factors that affect OP, comparing employees’ perceptions of an organization’s performance with objective data to determine whether, and to what degree, subjective measures of performance are valid measures of OP in the public sector. Practical implications In the process of improving government performance, it is significant to give attention to the government employees’ mentality. The government training and promotion system should encourage civil servants to care about the public interest. A more flattened organization should be considered as part of the next steps in government reform, and more opportunities should be provided to involve more government employees in policy making. Originality/value This study helps to clarify the effects of individual factors of PSM on OP in China in a tightly controlled bureaucratic environment, where related data are hardly accessible.

Effects of positive incentive and negative incentive in knowledge transfer: carrot and stick

Abstract: Purpose Employees play a central role in firms’ knowledge transferal, but knowledge-sharing brings significant costs for employees. Thus, this study aims to explore the components of firms’ incentive systems and how these influence employees’ knowledge-sharing, and also to test whether employees’ knowledge-sharing intentions transform into better knowledge transfer performance at the firm level. Design/methodology/approach This study collected data in China, and 219 usable questionnaires were collected. Then, this study used a structure equation model by LISREL for hypotheses testing. Findings This study finds that positive economic incentives, positive relational incentives and negative relational incentives all increase employees’ knowledge-sharing intentions, contributing to firms’ improved knowledge-transfer performance. Thus, both positive and negative incentives and both economic and relational incentives exert influences on employees’ knowledge-sharing activities. Practical implications Because employees have both material and emotional needs and always want to approach good things and avoid bad things, firms should take measures to make their incentive systems more comprehensive. Then, employees can be motivated to share their knowledge effectively. Originality/value Existing studies have mainly explored the effects of positive economic incentives on knowledge transferal. Because individuals have both a promotion self-regulatory focus associated with an approach motivation and a prevention self-regulatory focus associated with an avoidance motivation, and because they have both material and emotional needs, this study classifies incentives into three types and confirms their effectiveness for motivating employees to share knowledge.

Are political ties only based on interpersonal relations? The organizational political tie and its role in firms' innovations in China

Abstract: Purpose Despite most studies on political ties focusing on the interpersonal relationships between firms and government officials, this study suggests that local party committees (LPCs) create special forms of political ties in China – i.e. organizational political ties. The purpose of this paper is to examine the influences that these organizational political ties have on Chinese firms’ innovative activities. Design/methodology/approach Drawing upon data based on a nationwide survey of Chinese firms in 2013, this study uses a structural equations model to examine the relationship between LPCs and firms’ innovations. Findings This study found that LPCs do affect firms’ innovations positively, including both radical innovations and incremental innovations. Research limitations/implications By suggesting that LPCs are a form of political tie particular to China – i.e. an organizational political tie – this study’s findings may shed fresh light on the research into political ties in other emerging economies. Originality/value Compared to traditional political ties, maintaining the organizational political ties fostered by LPCs benefits firms’ innovations significantly in China, making them less costly and more stable.

The resource evolution of standard alliance by technology standardization

Abstract: Purpose This paper aims to explore the evolution mechanism of resources in a standard alliance that are matched with resources required at different standardization stages from the viewpoint of dynamic matching. How core enterprises in an alliance allocate resources, select member enterprises and maintain the normal operation of an alliance, according to the resource evolution of a standard alliance, is an important issue when dealing with the implementation of technology standardization. Design/methodology/approach The authors have chosen the Intelligent Grouping and Resource Sharing (IGRS) standard alliance of computer companies in China as the object of this study. The authors have built indices to identify core enterprises in the alliance from the viewpoint of network organization. The authors also collected data from authoritative news websites concerning patents and cooperative projects undertaken by 216 enterprises in the IGRS alliance during the period from 2002 to 2016, and they have computed and analyzed these data by using UCINET 6.0 software and social network analysis methodology to identify core enterprises at different standardization stages, thus revealing the evolution mechanism for resources in the standard alliance. Findings Technology standardization is divided into R&D, industrialization and marketization stages, and the standard alliance requires different resources to satisfy what is required at each of those different standardization stages. While technology standardization is a process during which technology systems standards are continuously being perfected and the standard product market is continuously expanding, the development of technology standardization affects the evolutionary processes of the core enterprises and affects the selection of member enterprises in the standard alliance. Practical implications The results obtained will assist the standard alliance to select proper member enterprises and dynamically match the alliance’s resources with the resources required at different standardization stages to speed up the implementation of independent standardization in China. Originality/value This study demonstrates the evolution mechanism of resources in technology standard alliances at different standardization stages by using quantitative analysis methodology, and it enriches the research on which elements are influential for technology standardization’s development in the context of China’s social, economic and cultural characteristics.

Does the reputation mechanism of media coverage affect earnings management?: Evidence from China

Abstract: Purpose This paper aims to investigate the relationship between earnings management and media reports, assess the roles played by the media in determining the reputation mechanism and examine whether the media has an influence on executives’ behavior in the case of earnings management. Design/methodology/approach This paper uses Chinese A-share listed firms from the period 2008 to 2012 to test the research questions using regression analyses. Findings Although the Chinese Stock Markets are still immature compared to those of developed countries, the media seems to play a role in affecting executives’ decisions about dabbling in earnings management. Specifically, firms receiving more media attention are more likely to undertake earnings management. Furthermore, negative media reports result in even higher levels of earnings management activities, indicating that managers tend to use earnings management to achieve earnings goals to reduce or relieve the pressure they feel from the media and to remedy any reputation loss. Moreover, the authors have found that firms whose CEOs have higher reputations are more likely to manage earnings and they are more likely to be affected by negative media reports. Similar results were found for state-owned enterprises (SOEs). Originality/value This study analyzes how the level and tone of media coverage affect earnings management rather than just assessing the overall effect of media coverage on earnings management. This paper verifies that the reputation mechanism of the media works in China, but it leads to different results than those experienced in developed countries. Reputational benefits have been introduced into the equation for measuring the governance effect of the media to derive a more in-depth analysis of the reputation mechanism. This paper is among the first to link news coverage and state ownership with earnings management.

A theory of creative expressiveness: empirical studies in Chinese universities

Abstract: Purpose The purpose of this paper is to explore the role that the emotional expressions (i.e. emotional masking and emotional sharing) of students play in fostering positive implicit abilities, as indicated by learning, interpersonal skills and the ability to acquire a supervisor’s support. By introducing a new theory of creative expressiveness, the authors have further examined whether college students’ creative thinking is significantly associated with their emotional expression. Design/methodology/approach This paper establishes a conceptual framework to map the relationships between students’ emotional expressions, their implicit abilities and their creative abilities. Scale measures of these constructs were built, and a total of 400 questionnaires were distributed at universities in Hefei and Nanjing. Finally, ordinary least squares estimations were conducted to provide quantitative estimations. Findings The empirical results show that emotional sharing is significantly positive for college students’ implicit and creative abilities, while emotional masking is negatively related to students’ implicit abilities and creativity. Moreover, the effects of emotional sharing by college students on their creative abilities are partially mediated by students’ implicit abilities. Practical implications It is necessary to emphasize emotional sharing in education and to create a friendly atmosphere for students, in which they can feel comfortable expressing themselves in class. Likewise, students should learn to improve their expressive abilities, particularly how to express and share their inner feelings and emotions, since this will contribute to their creative thinking. Originality/value It is increasingly being recognized in organizational science that emotions and the way they are experienced and expressed by employees in work environments have fundamental impacts on work-related outcomes. However, limited attention has been given to the impacts of emotional expression on students’ learning performances and creativity abilities, especially in the Chinese context where students are more reluctant to express their emotions and ideas. Thus, by introducing a new theory of creative expressiveness to examine the benefits of emotional expression for students’ implicit abilities and creative thinking, the authors have sought to extend prior research on the cultivation of college students’ creative abilities.

A research on the cluster competitiveness evaluation of the Chinese automobile industry based on cuckoo-AHP

Abstract: Purpose The purpose of this study is that on the basis of the competitive edge theory, source mechanism and evaluation approaches of industrial cluster competitiveness, combined with international trends in the automobile industry and the features of Chinese automobile industrial cluster development, an evaluation index system about cluster competitiveness of auto industry is built with comprehensive consideration of factors such as cluster development environment, external scale effect and internal competitiveness from the perspective of value chain of automobile industry. Design/methodology/approach An evaluation index system for automobile industrial cluster competitiveness was realized by integrating current strengths and future growth capacities with multidimensional, dynamic and comprehensive characteristics, which included 3 second-level, 10 third-level and 16 fourth-level indices. In the light of evaluation methods, a group intelligence optimization algorithm – (cuckoo search) – and traditional methods of complex decision-making system – analytic hierarchy process (AHP) – were combined to propose the cuckoo-AHP evaluation method. It was applied for the calculation and optimization of weight values in an automobile industrial cluster competitiveness evaluation index for the purpose of obtaining better scientific and more reliable results. Findings The research might further enrich the evaluation theory of automobile industrial cluster competitiveness and also can be useful for showing how traditional evaluation methods can be combined with intelligent algorithms to carry out better automobile industrial cluster competitiveness evaluations. In addition, studies of channels for kick-starting Chinese auto industrial cluster competitiveness are expected to provide references for how to enhance the cluster competitiveness of the Chinese automobile industry. Practical implications Changsha and Liuzhou, the Guangxi automobile industrial clusters as the two empirical analysis objects selected for this paper, are geographically adjacent to each other. The automobile industries of the two cities are local pillar industries with the strong support of the local government. Both clusters have their own advantages and weak points with different characteristics of cluster development, and they enjoy a representative significance amongst China’s numerous auto industrial clusters that are taking shape. Comparative analysis of both clusters serves as a good reference for the objective evaluation of the competitiveness of Chinese automobile clusters in terms of their real and practical developments and in respect of the success of reasonable scientific and industrial cluster policies. Originality/value Multidimensional, dynamic, integrated evaluation index systems are constructed around automobile industrial cluster competitiveness, which has taken into account developments in current strengths and future growth capacity. The cuckoo-AHP evaluation method has been formed by combining the traditional decision-making method known as AHP with a new meta-heuristic optimization algorithm called “cuckoo search”. Both have been used in evaluations of automobile industrial cluster competitiveness in Liuzhou and Changsha, which will be beneficial for enriching automobile industrial cluster competitiveness evaluation theory and new evaluation methods that will enable better evaluations of automobile industrial cluster competitiveness.

Relational capital, strategic alliances and learning

Abstract: Purpose The purpose of this paper is to portray and analyze the importance of learning and knowledge transfer in strategic alliances created in the context of emerging markets, Russia and Taiwan in particular, and to identify the influence of relational capital factors on the effectives of learning in strategic alliances. Strategic alliances are one of the main tools companies resort to learn, acquire and develop new knowledge and skills. Design/methodology/approach This research is conducted by case study with four international strategic alliances between Taiwanese and Russian companies. Findings The results showed that the main driver determining the propensity of the companies located in the emerging markets to establish strategic alliances is learning intent. More specifically, the companies are willing to acquire partner’s managerial, marketing and production knowledge and skills. Relational capital created between partners, and presented through the existence of trust, communication and openness proved to have a determinant influence on the effectiveness and quality of learning process in the strategic alliances, especially in the context of the emerging markets. However, there is an inverted-U relationship between the learning potential of an alliance and the strength of relational involvement of the alliance partners, who utilize the certain means to prevent the negative effects of over-embeddedness. Originality/value The major contributions that were made by the study are the following: the authors made an attempt to synthesize different approaches and investigate what are the primary factors affecting strategic alliances formation and operation in the emerging markets context. The authors extended the previous research by reviewing, not only the impact of the relational capital on the process of learning among the partners in the strategic alliances but also by analyzing the forces influencing the strength of these ties. The authors further investigated whether the continuous strengthening of the relational ties is necessary and always beneficial for the companies.

In search of the roots of HRM in the Chinese workplace

Abstract: Purpose The purpose of this paper is to trace back the roots of US-driven “Human Resource Management” (HRM) school of thought which now become widely institutionalized in China, up to the present day. Design/methodology/approach It looks at the diffusion of management knowledge over the period to Chinese business, which involved in turn scientific management (SM), human relations (HR) and HRM, respectively, from the interwar years onwards, by using a bibliometric analysis of Chinese language sources, searching a number of databases now available. Findings The authors scanned the international, as well as Chinese, literature to support a conjecture of a HR route towards China and how it morphed into HRM and went on to conclude that there was by the end of the year 2015 still a significant output of academic publications with references to both HR and HRM, respectively, but that we must be cautious in asserting a firm conclusion. Originality/value This paper traces back the roots of Chinese HRM back to the US-driven HR school of thought.

The standardization model of innovation: case of high-technology enterprises

Abstract: Purpose The purpose of this paper is to explore the core elements and their constitutive activities of innovation of high-technology enterprises (HTEs) in the context of China to embrace effective management processes for dealing with standards setting. Design/methodology/approach The basic methodology of the empirical investigation is a single case study of ZTE Corporation (ZTE), a leading Chinese manufacturer in the telecommunication industry. Interviews were conducted from November 2008 to July 2009 with ZTE’s managers and senior R&D employees, as well as with R&D personnel from ZTE’s partners. Interviews were carried out face to face or by emails and supplemented by telephone calls and online communications. Secondary data provide complementary information. Findings The key to innovation for HTEs pursuing dominant positions in high-technology industries is standardization-oriented innovation. To deal with special requirements raised by the peculiarities of standardization for HTEs’ innovation management, HTEs need to emphasize three core elements in innovation, i.e. strategic innovation planning, internal R&D practices and external co-operative innovation, and focus on their key component activities. Moreover, through the case study of ZTE, three enabling factors for standardization-oriented innovation – intellectual property rights (IPR) management, market focus and co-operation along industry chains – are identified. Originality/value This paper is an attempt to understand and configure key innovation activities within a standards setting. It proposes a model for innovation management of HTEs in the Chinese economy, with three critical elements and their key constitutive activities being highlighted and three enabling factors being identified.

Competitive pressure and managerial decisions: Product market competition and earnings quality in China

Abstract: Purpose This study aims to examine the impact of product market competition (PMC) from existing rivals and potential market entrants on earnings quality (EQ) in China. Design/methodology/approach This study examines the impact of PMC on EQ by using the EQ measure of Kothari et al. (2005), and it uses measures for competition from existing and potential rivals. This study analyzed Chinese firms for the period of 2000-2014 and also examined the impact of International Financial Reporting Standards (IFRS) adoption and state ownership on the relationship between PMC and EQ. Findings This study found a positive relationship between PMC and EQ. It also documents that competition from existing rivals does not improve EQ by reducing real activity manipulation, but competition from potential entrants does. The findings propose that market competition from existing rivals is a relevant factor for determining EQ before and after IFRS adoption, but competition from potential entrants improves EQ only after IFRS adoption. Moreover, the results suggest that market competition plays no role in improving the EQ of state-owned enterprises (SOEs). Originality/value The results support the argument that PMC acts as a governance mechanism and influences managerial decisions regarding financial reporting. Our study also helps to understand the impact of change in the regulatory regime, i.e. IFRS adoption, on the relationship between PMC and EQ. This study also helps demonstrate the impact of competition on management decisions with respect to the EQ of SOEs.

Managing reputation loss in China: in-depth analyses of financial restatements

Abstract: Purpose This paper aims to investigate, in China stock market, whether the reputation loss of a firm caused by financial restatements will lead to significant economic consequences such as financial distress and how a firm should respond to such a crisis. Design/methodology/approach This paper uses Chinese A-share listed firms from 2004 to 2013 as research samples to test research hypotheses using regression analyses. Findings This paper finds a significant relationship between restatements and financial distress, and such a relationship will be affected by both the type and the magnitude of restatements. More importantly, we find joint effects of restatements and state ownership on financial distress, which provides a unique contribution to the extant literature in restatement, financial distress and crisis management using Chinese stock markets data. It shows that ownership structure, affecting the firm reputation and crisis responses strategies, plays a significant role in consequences of restatements, and it is more important for state-owned enterprises (SOEs) to undertake an appropriate crisis response strategy to reduce the negative impact of restatements. Practical implications The results suggest that the damage to a firm’s reputation caused by restatements is affected by restatement type and state ownership. To reduce the negative consequences and avoid financial distress, firms should consider both the restatement type and their firm characteristics when deciding different actions to respond to restatements. In particular, SOEs should act in a more timely manner and take reputation-rebuilding actions such as taking the responsibility and making apologies and taking prompt remedial actions after restatements to regain the public trust and avoid more serious economic consequences. The Chinese government should strengthen their supervisions of SOEs and put more effort to help SOEs reduce administrative procedures, and to improve the efficiency of the implementation of recovery plans after restatements to reinstate firm credibility. Originality/value First, this paper is among the first to link financial restatement, including the type and magnitude of restatements, with financial distress, and the authors find a significant relationship between restatement type and financial distress in China stock markets. Second, this paper is the first to examine whether there is a joint effect of state ownership and restatements on financial distress. Third, this study examines how the magnitude and pervasiveness of restatements influence financial distress and find that both result in an increase of financial distress. Finally, this paper is among the first to connect crisis management and accounting literature to explain how a reputation loss caused by financial restatement may damage a firm’s value and subsequent performance, and based on which to suggest crisis-responses strategies.

A theory of managerial tax aggression: evidence from China, 2008-2013 (9702 observations)

Abstract: Purpose This paper aims to investigate the economic consequence of the tax reductive strategy on stock price. The authors’ theory, empirically reinforced, suggests managerial tax aggressiveness endangers the corporation through a heightened risk in stock price crashing. Information opacity worsens the situation by reinforcing the relationship. Policymakers should emphasize two aspects: market openness and tighter institutional monitoring. The evidence shown in this paper demonstrates that these two weaken the tax aggressiveness impact on risk of a crashing stock price. Design/methodology/approach The sample in this paper consists of 9,702 observations from listed firms from 2008 to 2013 in China. The tax rate is manually collected and all the other original data used in this study are sourced from Wind and China Capital Market and Accounting Research databases. Both logistic regression and ordinary least squares regression methods are used to test the hypothesis in this paper. Findings One key insight is in tax aggressiveness to be strongly correlated with a greater risk of future stock price crashing. The authors also found information opacity to exert a positive moderating effect. That is, the higher the information opacity, the stronger and more positive the correlation between tax aggression and stock price crash risk. However, the market process and an institutional investor have opposite, negative impacts. An open market environment reduces their correlativeness. Similarly, stronger institutional vigilance leads to an attenuation of such a co-relationship. Practical implications The findings of this paper have wide policy implications for management and control by authorities of listed corporations. Aggressiveness in management of corporate taxes accentuates the risks borne by stockholders. If so, internally within the corporation, such aggression shown by management, if not proscribed, could be subject to scrutiny, possibly by an independent committee. Externally, this may be countered by the authority in emphasizing three key factors: openness in information sharing, the market environment and tighter institutional monitoring. Originality/value This study provides a consequential theory of aggressive management of tax, rigorously analyzed and strongly, empirically supported. Overall, aggressiveness in tax management is related with assumption of higher risks in the crashing of stock price. The relationship is enhanced through information opacity, but reduced via market environment and institutional monitoring.

Factors affecting the food firm’s intention to control quality safety in China: The moderating effect of government regulation

Abstract: Purpose This study aims to examine the factors shaping food firms’ intentions to control quality safety in the context of government regulation in China. Design/methodology/approach Based on 180 usable data samples collected via a survey, structural equation modeling and moderated multiple regression analysis were used to examine the research model. Findings It was found that quality safety capability, corporate social responsibility, collaboration between parties along supply chains and information-sharing among supply chain members have had different impacts on the intentions of food firms to control quality safety. It was also found that government regulation has a positive moderating effect on corporate social responsibility and on collaboration between organizations in a supply chain. Research limitations/implications This research is limited to a particular sample: i.e. the managers of food firms from Guangdong Province in China. Thus, the results need to be generalized to encompass wider samples. Originality/value Previous studies have not explained well the mechanisms by which quality safety control has been established among China’s food firms. This study builds a theoretical framework for the factors affecting intentions to control quality safety by examining issues from the perspectives of food firms and by taking into account the characteristics of food supply chains. This approach addresses the gaps in current understanding and provides practical support to promote quality safety among food firms in China.

A reversal theory in internationalization: case of Korean jewelry inside China

Abstract: Purpose This paper aims to examine Korean jewelry manufacturers operating in China to assess the relationship between their perceptions of external risks and their intentions to relocate. The authors hypothesize that foreign firms finding risk in the current external environment are more likely to consider moving their facilities outside China. In particular, this paper explores whether firm performance and technological capability moderate the relationship between perceived external risk and relocation intentions. Design/methodology/approach Korean jewelry manufacturers were among the first Korean firms entering China in the early 1990s to avoid Korea’s rising labor costs. After 20 years, they face similar external risks in China. The authors collected and analyzed 238 survey samples from Korean jewelry manufacturers operating in China to determine whether perceived external risks affect decisions to relocate. Logistic regression was used to examine the hypotheses. In addition to an empirical method, five case studies related to empirical results have been included. Findings Analysis results suggest that firms perceiving riskier managerial and competitive environments are more likely to have relocation intentions. Perceptions of risks from the governmental/political environment and macroeconomic environment have no significant relationship with relocation intentions. Also, firms’ performance and technological capability negatively moderate the relationship between perceptions of managerial competitive environment risks and relocation intentions. Originality/value This study contributes to the literature on international business relocation strategies by examining perceptions of external risks that determine whether foreign manufacturing firms will relocate. In addition, the research sheds light on the transformation of Chinese economics from labor-intensive to capital-, technological- and knowledge-intensive structures. By applying multi-methods, this research further elaborates empirical results with five case studies.

Frontiers of research on Chinese management

Abstract: Purpose The purpose of this paper is to provide a brief yet insightful survey of papers in the first issue of Chinese Management Studies. In the process, the founding Editor focuses on the key concepts and how scholars may further extend and build on the research undertaken. Design/methodology/approach The Editor provides a snapshot of the research undertaken in the papers selected for this issue. Instead of simply summarizing the work undertaken, the Editor, where it is highly appropriate, incorporates aspects of underlying Chinese culture. For instance, how the Confucian concept of the doctrine of mean – very broad as it is in scope – is supported in research reported here. Also, in contradiction to what authors may have argued on meaningfulness of work per se, to highlight an old Chinese adage: for example, 工字不出头 (gong-zhi-bu-chu-tuo). A literal translation into English will fail to render the true intent of the phrase. What it means is that the Chinese character for “work” implies a much deeper meaning: The horizontal line on top of the vertical limits the potential of future growth. Other concepts are visualized for ease of readers grasping the key concepts. Findings The series of papers here highlight the significance of research into managerial behaviors (negatively, tax aggression and abuse of power for self-enrichment), meaningfulness of work, reading of timeless Chinese novels, innovation (ZTE) and the knowledge organization, changing and transforming China and of Russian-Chinese (Taiwan) strategic alliances. The insights gained through these intensive research efforts ought to be shared with scholars globally. Social implications The research in this issue has wide practical relevance as in highlighting the critical importance of a range of topics: Jiang Hu organizing theory, managerial behaviors, innovation and knowledge, Russo-Chinese strategic alliances, fit in strategic management and China-in-transition. This paper ties these together for the reader. Originality/value Through a review of these papers, the Editor provides insights for scholars on the possibilities for extending the frontiers of research on Chinese management. Where relevant the Editor highlights additionally, perspectives from deeply rooted Chinese beliefs, values and philosophy.