This Editors' Forum – ‘Made in China: Implications of Chinese Product Recalls’ – presents four perspectives on Chinese product recalls: supply chain management, moral degradation or the decline of traditional business ethics, evidence based management and free riding on the ‘Made in China’ brand. Extended supply chains and uncertain ethical standards almost certainly contribute to lapses in product quality as do cost pressures facing most Chinese firms. Product quality issues, moreover, will be most significant for goods posing hidden risks to health and safety, such as food and toys, and less significant for goods like computers and consumer electronics whose conformity to specifications can be readily monitored.

Our paper conceptualizes and highlights the role of the supply chains in China's product recall problems. We raise questions about the interrelationships of the focal manufacturer and the supplier firms and the consequences of these relationships. We address some of the causes of the current situation, including a discussion of deep supply chains, the importance of relationships, the role of trust and the impact of cultural misunderstandings. We suggest many future research questions to further understand how the supply chain can cause or deter product recalls.

Although product recalls are neither new nor unique to China, China bears much of the bitter criticism from the media and negative reactions from the public. This essay discusses the reasons behind recalls from a moral degradation perspective, grounded in the larger framework of anomie theory. While making remarkable economic progress, China is also moving toward a society with degraded moral standards. This moral degradation propels illicit and immoral business practices. This essay further presents an analysis of recall from the organizational control perspective, tackling the issue of how safety and quality problems damage a firm's long-term corporate credibility, legitimacy, trust and governance in a competitive environment. Strategic repercussions of recalls include impairing capability building, organizational learning and resource allocation. The essay ends with a call for action by the Chinese government, firms and management researchers to address and further understand this complex issue.

Product recalls in 2007 raised serious questions about the safety of products made in China and resulted in widespread outrage. Our analysis of toy recalls in the USA between 1988 and 2007 revealed that the vast majority of recalls were due to flaws in product designs, conducted in the corporate headquarters of toy companies, rather than to poor manufacturing by factories in Asian countries. We also found that the recalls have increased over the years, due both to design and manufacturing flaws. Our findings generated widespread interest and influenced the course of debate on import product safety. Our findings and experiences have significant implications for the research on product quality in international operations and the role that systematic research evidence can play in shaping management practice and public debate.

Company brands signify a message to consumers about the quality and value of a product. Countries can also be branded. However, unlike the brands of individual firms, country brands are collective goods. The nature of country brands creates the possibility of free riding, where individual firms benefit – in terms of price or access – from the promise made by a country brand but deliver at a level lower than what is promised by the brand. Such free riding threatens the stability of what the country brand represents unless legal, governmental, or other institutions engage in activities to reduce these adverse effects. In this paper, we investigate the Chinese brand – once standing for average quality at a low price – in the light of recent recalls. We examine how country brands emerge and the incentives that firms operating in a country have to either support or not support a country brand. We also explore the implications of diese incentives for the role of various institutions, including the government, in developing, maintaining and changing a country brand and in developing and enforcing the policies, such as protection of intellectual property, necessary to support firms' efforts toward reinforcing a trusted country brand.

Prior research has suggested a number of potential benefits to firm membership in business groups. These benefits include availability of capital and other resources not readily accessible in an open market, the facilitation of entrepreneurship, plus information and risk sharing advantages. We suggest that another important benefit is the assistance of group control systems in helping the firm to manage conflicting pressures in the institutional environment and facilitate coevolution of these conflicting pressures. To empirically demonstrate the relevance of this viewpoint, we examine the case of China where business groups facilitate institutional transition, actively balancing market pressures to increase levels of innovativeness in firms with institutional pressures emanating from the government to maintain high employment levels. Using data from a broad sample of more than 1,000 Chinese affiliate firms in more than 200 business groups, we find that government policy, ownership and managerial mindset influence the political goal of maintaining high employment levels, while interdependence among group affiliate firms is related to lower employment levels. However, while government ownership and the government managerial mindset were negatively related to market innovation activities, group financial and cultural control systems positively affected the tendency of affiliate firms to focus on market innovation.

The analysis of societies, and of systems of business within them, has tended to be heavily influenced by institutionalist perspectives. Many scholars using this approach include culture as a subset of institutions, but often without specifying the logics of doing so. Others remove culture from the account, or acknowledge its significance without placing it clearly in their models. Culturalists, however, tend not to venture into the details of economic coordination and action. To resolve the theoretical challenges posed by this set of contrasting views, it is necessary to specify how culture works and how it is different from institutions. As ‘the societal effect’ is the influence of culture on institutions, it may thus be easier to study its workings. Here culture is seen, following Sorge, as meaning relevant within a series of semantic spaces, each related to a field of action, the total integrated coherently by social axioms binding the spaces and the meanings within them into a total societal fabric of meaning. The private sector of the Chinese economy is analysed, drawing from recent extensive empirical reports as to its functioning. Theory development is in line with business systems theory.

In this paper, I review the history and current practices of enterprise culture management in China from an insider's perspective. Based on a systematic analysis of case study reports on enterprise culture published in the academic and practitioners' journals, I analysed how enterprise culture was understood and implemented in organizations of different ownership forms. I also discuss the Chinese characteristics and the influence of Western management techniques in the manifestation of Chinese enterprise culture. I argue that the configuration of Chinese organizational culture is heavily influenced by societal culture, in that there is a relatively heavier focus on relationship management than on performance management, at least based on the rhetoric of the enterprise managers.