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While the construct of moqi (默契, pronounced ‘mò-chee’) is ubiquitously understood and finds itself in everyday conversations around the home and workplace in China, the theoretical development of moqi has been scarce. In this article, we expand on prior work on moqi and conceptualize moqi as a dyadic level construct that describes a situated state of shared contextualized understanding without saying a word between two counterparties. We further articulate a broader view of moqi as a dyadic communication construct that is both target-specific and situation-specific. We propose a nomological network of moqi that shows how shared contextualized understandings between counterparties are informed by several different layers, including ‘capability’ (a) a generalized proclivity to be able to form such understandings with others, and ‘contributing factors’, (b) how those understandings are formed either (i) through interactions or (ii) without them through overlaps in background characteristics or experiences, and (c) how other factors accentuate the capability and inclination to ultimately achieve moqi. We then discuss several potential consequences of moqi in organizational settings. Finally, we discuss why moqi is a powerful form of effective communication that is meaningful beyond the Chinese cultural context.
Past studies have shown that the flow of knowledge from incumbent firms is associated with the creation of startups and their subsequent performance. While much research has focused on the mechanisms of how incumbent-to-startup knowledge transfer takes place, such as entrepreneurs pursuing opportunities that their previous employers do not want to pursue, we explore with detailed qualitative analysis of six private startups in the Chinese synthetic-dye industry what type of knowledge actually flows and what type is more important for the long-term success of startups. We discover eight types of knowledge that flow from incumbents to new firms during the foundation of startups. Abstracting these eight types of knowledge into two general categories of functional knowledge and strategic knowledge, we find the reception of strategic (not functional) knowledge shapes the long-term competitiveness of surviving startups. Receiving technical knowledge – one type of functional knowledge – during the founding period is necessary for startups’ short-term survival but insufficient for long-term success. Our findings show that the performance implications of initial knowledge flows from incumbents hinge on the type of knowledge, contributing to a more explicit explanation of how incumbent-to-startup knowledge flows affect entrepreneurial performance.
This study examines the impact of language diversity on interpersonal relationships in multinational and national/domestic teams in a multilingual country – India. Specifically, it explores whether and how the influence of language diversity differs in the two types of multilingual project teams. To this end, using direct observations and semi-structured interviews, we conducted a thematic analysis and found that native language-based faultlines and groups exist in both kinds of teams. However, such faultlines and language-based groups can disintegrate into smaller, regional dialect-based subgroups due to the emergence of dialect faultlines. Furthermore, evidence suggests that multilingual managers are more effective as boundary spanners in bridging the faultlines in multinational teams; at the same time, they need to be aware of the distinction between language differences and faultlines. This study provides the required distinction between language diversity and the role of multilingual managers in national and multinational teams in an understudied context, thereby contributing to the literature on language diversity.
Strategic management scholars have shown increasing interest in explaining strategic change from the perspective of cognitive bias. However, most studies focus on individual cognitive bias but pay little attention to group cognitive bias. This study introduces a typical group cognitive bias (group polarization) to explain strategic change decisions made by the board of directors. Following the theory of group polarization, we argue that, when the average prior strategic change experienced in performance decline by board directors is relatively high (or low), the focal strategic change in performance decline will become even higher (or lower). We further contend that the proportion of female directors and board versus CEO power as the contingencies can mitigate this group polarization effect. Our hypotheses were strongly supported by a longitudinal sample of Chinese publicly listed companies during 2008–2018. The study's framework and findings contribute to the contextualization of social psychology research on group polarization in the study of board's strategic decision-making.
Private equity funds implement various management and governance practices in firms they endorse, signaling higher quality of sponsored IPOs (Initial Public Offer). However, the participation of such PE funds comes at a cost for newcomer firms, as they may lose both autonomy and future post-IPO earnings. If they do not choose to signal quality through PE funds, the IPO literature points to the validity of other mechanisms, such as the experience and centrality of the board of directors. We theorize and test the effect of the tradeoff between private equity sponsorship and board centrality and experience on IPO performance. We analyzed the effects of signaling on long-term performance through the one-year cumulative abnormal return in Brazilian IPOs issued between 2004 and 2013. Our results indicate that private equity sponsorship is the most effective signal, completely overtaking the relevance of board centrality and experience to explain IPO performance. However, these latter board characteristics significantly affected the performance of non-private equity-backed IPOs. Between PE-backed companies, there is a reverse effect of the board centrality on the IPO's performance and a substitution effect of the board's previous experience with IPO processes.
Building on recent developments in optimal distinctiveness (OD) research, we identify two dimensions of corporate social responsibility (CSR) practices – CSR scope conformity and CSR emphasis differentiation – and examine the antecedents of both. We theorize that private ownership and enhanced media coverage may increase scope conformity and emphasis differentiation, while such effects may be contingent on industrial context. In socially contested industries, the impact of private ownership on scope conformity will be mitigated, and the impact of media coverage on scope conformity will be amplified. Meanwhile, in highly competitive industries, the impact of private ownership and media coverage on emphasis differentiation will be mitigated. We test our predictions using a database of 942 Chinese publicly listed firms between 2008 and 2016. Our findings imply that the choice of optimal CSR strategy has to be made in accordance with the embedding context. The multidimensionality view of OD enables firms to better orchestrate firms’ strategic positioning along different dimensions of complex practices, which leads to better customization of societal expectations and the industrial competitive landscape.
In this study, we conceptualize the thus far little explored relationship between expatriate and host country as a form of social exchange governed by the norm of reciprocity. Drawing from social exchange theory and our analysis of 451 self-initiated expatriates (SIEs) living and working in the United Arab Emirates, we examine whether the degree of SIEs’ career and community embeddedness explains their host country withdrawal intention via enhanced perceived institutional trust and a more tolerant attitude toward workplace discrimination. Our results provide general support for our theoretical model and most of our hypotheses. In this way, our article makes three contributions. First, it suggests a novel way to conceptualize the relationship between SIEs and host country as a form of social exchange. Second, it differentiates between two dimensions of embeddedness and explicates how the two contribute to SIEs’ intentions to stay in the host country. Finally, the analysis theorizes and empirically tests two previously little explored mechanisms of enhanced institutional trust and a more tolerant attitude toward workplace discrimination through which SIEs’ host country embeddedness influences their host country withdrawal intentions.
Through two in-depth case studies, we compare the approaches of a state-owned enterprise (SOE), Beijing Automotive Industries Holding Co., and a privately owned enterprise (POE), Geely, to acquire and absorb advanced technological knowledge to enhance their innovation capabilities. Each company acquired advanced knowledge from troubled famous Swedish automakers and upgraded their products technologically. Analyzing data mainly collected from secondary sources identifies major differences in approaches and actions at each acquisition step rooted in the type of ownership. We juxtapose these differences with insights from the literature on knowledge acquisition and research on firm ownership. Our findings show that the POE seeks the strategic goal of synergistic technology integration for better innovation and economic performance. In contrast, the SOE pursues national objectives with less regard for market success. This SOE focuses on an independent approach to knowledge absorption and development during their acquisition, whereas the POE emphasizes collaboration in innovation capacity development. This study provides insights into Chinese firms’ positioning on innovation development on the global stage, comparative capitalism, and the particular case of state capitalism in China.
Organizational interactions in fields, including their antecedents and consequences, remain under-researched, in particular with regard to relational distance and transformative skills. Through a comparative study of the German and Japanese wind power sectors, we explore the importance of distance among organizational actors and the development of skills. While in the case of Germany a radical increase in wind energy generation can be witnessed, the situation in the field of Japanese wind power remains largely unchanged. We show how different degrees of distance among organizational actors in these two countries result in the different development of skills that stimulate transformation in the field of energy generation. More precisely, we illustrate the pivotal role of distant challengers with their transformative skills for the successful conversion of already established field structures. Our study contributes to field theory by elaborating on the understanding of the evolution of relational distance, thereby grasping the dynamic interplay between the diversity of actors and their skill formation within a certain strategic action field.
How can a firm apply the appropriate interaction between exploration and exploitation with the goal of either radical or incremental innovation? In this study, we seek to answer this puzzling question by reframing exploitation and exploration as a duality of learning (i.e., two modes that are partial complementary for synergy as well as partial conflicting for tradeoff). Specifically, rather than assuming either a positive or negative interaction between exploration and exploitation as prior literature has done, our study highlights a novel pattern of inverted U-shaped interaction between exploration and exploitation for both radical and incremental innovations. With a Chinese sample of 508 firms, our empirical evidence supports our prediction of two patterns of inverted U-shaped interaction of exploration and exploitation. Such unique findings showcase the unique value of reframing paradox into duality from the meta-perspective of yin-yang balancing to shed new light on organizational ambidexterity and innovation management.
Research on corporate social responsibility (CSR) disclosure recognizes the importance of the government and examines how firms respond to government CSR regulations. However, little attention is given to how government regulations affect firms’ disclosure strategy in multiple fields of CSR. Based on institutional theory, this study proposes that mandatory CSR disclosure increases the legitimacy management cost for firms, and thus firms disclose more CSR scope to gain legitimacy and less CSR emphasis to reduce costs. Using data from Chinese A-share listed firms in 2008–2018, this study finds that mandatory CSR disclosure is positively related to CSR scope but negatively related to CSR emphasis. In addition, firm visibility strengthens the aforementioned positive and negative relations, whereas market competition weakens the relation between mandatory CSR disclosure and CSR emphasis. This study contributes to the literature on CSR disclosure and studies on organizational responses to the government mandate.
To overcome liabilities of foreignness and outsidership during internationalization, board interlock is an effective conduit of foreign knowledge inflows and organizational learning that firms require. We focus on the time dimension of such influence and hypothesize that the tenure of board interlocks with firms with experience in outward foreign direct investment (OFDI) in a country promotes the OFDI decision of the focal firm to that particular country. However, such an effect diminishes as the tenure of interlock ties increases. Moreover, as an alternative knowledge source, OFDI knowledge from the focal firm's neighboring region may weaken the baseline effect. Based on longitudinal data of listed firms in China, our empirical results support the hypotheses. This study enriches the literature on social network learning by identifying its temporal nature and the substitution between different knowledge sources. It also demonstrates the importance of rotating a firm's board members, so that knowledge acquisition and learning remain fresh.
In this research, we explore how supply networks and board interlocks – as distinct, yet parallel interorganizational networks – jointly influence firms’ entry into new technology domains and exit from old technology domains. Drawing from the perspectives of social networks and organizational learning we highlight the relevance of the interdependency between these networks for a firm's technological entry and exit decisions. We argue that a firm that maintains a large number of supplier ties is more likely to enter new technology domains and exit from old technology domains instead. We further find empirical evidence that the degree centrality of a firm in its board interlock network strengthens these effects. Our theoretical arguments are supported through stochastic actor-based modeling analysis for the longitudinal and multilevel networks of 86 firms active in the Chinese automotive during 2011–2015. These findings inform the literature on interorganizational network dynamics as we insert relational pluralism to examine the complexities of organizational relationships as antecedents to a firms’ technological entry and exit. Finally, we imagine the implications of our analysis for management as they shed light on how multiple interorganizational relationships affect firms’ decisions on new technology entry and old technology exit.
In this study, we examine the moderation effect of absorptive capacity on the performance consequences of diversification experiences. We suggest that absorptive capacity positively moderates the performance effects of product and international diversification experiences and those of unrelatedness in product and international diversification experiences. An empirical analysis conducted using a longitudinal dataset of Indian firms, from knowledge-intensive manufacturing sectors, for the period 2008–2018, broadly supports our arguments. Findings imply that firms with superior absorptive capacity can acquire and leverage knowledge from their diversification experiences effectively and mitigate the risks of negative transfer associated with unrelatedness in diversification experiences. Findings contribute to the organizational learning literature by examining the role of absorptive capacity in enabling performance outcomes of diversification experiences.
This study examines Chinese corporations’ responses to a sudden natural disaster in terms of their philanthropic donations. We apply Polanyi's double movement perspective to argue that rapid market expansion in an emerging economy causes social problems such as large-income disparities and environmental degradation. This calls forth counterforces advocating social responsibility and sustainability. Such countermovements can be strengthened by a major disaster, especially in the domain of corporate philanthropy. The resulting increase in corporate philanthropy persists long after the disaster, especially for those firms with large intra-firm pay disparities, operating in socially contested industries and located in regions with more social foundations. Using the context of China's 2008 Wenchuan earthquake, we find support for these arguments in a sample of Chinese public firms.
Open innovation (OI) has been appointed as a key factor to promote innovative performance, but some research gaps remain especially when it comes to SMEs in developing countries. This article deals with (1) the effect of formalization of innovation strategy on OI activities in SMEs, (2) the impact of OI activities on SMEs’ innovative performance, and (3) the moderating role played by control on the relationship between inbound and outbound activities and the innovative performance. OI encompasses a range of innovative methods and procedures in firms to stimulate internal innovation and widen the external use of innovation (inbound and outbound). In this work, an empirical study is carried out on 543 Ecuadorian SMEs. The results show that the formalization of the innovation strategy promotes OI activities, both inbound and outbound. While outbound activities carried out by SMEs enhance innovative performance, this positive effect is only identified for inbound open innovation activities when control exists and increases, acting this variable as a moderating factor. These results have important implications both for the management of companies and the development of public policies aimed at promoting OI in SMEs in developing countries. This research contributes to the literature as it deals with a developing country context and considers a wide range of OI activities.