Publicly traded Chinese firms recently reformed their ownership structuresby converting non-tradable shares, which constituted two-thirds of sharesoutstanding and were held largely by the state, into shares that could tradeon domestic exchanges. To facilitate this reform, tradable shareholders werecompensated with stock grants from non-tradable shareholders. Our analysisfocuses on the level of compensation, the compensation ratio, the ratio of new tradable shares granted to tradableshares outstanding before the reform. Contrary to the predictions ofasset-pricing models, most firms set the compensation ratio around 0.3. Weexplain this surprising convergence using institutional theory. In doing so,we analyze the power and interests of all relevant actors – not just owners,but also state regulators, executives, and other agents — and draw oninsights from resource-dependence and agency theories. We find strongevidence of coercive and mimetic isomorphism, but no evidence of normativeisomorphism. Because our dependent variable is continuous (a ratio), we areable to show that the mimetic effects we observe cannot be attributed tocoercion or norms. Thus, we not only explain an empirical puzzle, we alsoadvance institutional analysis of isomorphism by clearly distinguishingthree isomorphic forces that have been conflated in much previousresearch.

Transformation is a vital challenge for Chinese state-owned enterprises(SOEs) and their top managers. To explore this increasingly important topic,we first summarize the institutional context of SOE transformation and theconflicting interests and interdependent relationships of six major actorsas inside/outside stakeholders. Based on the strategic action view ofinstitutional analysis, we emphasize the role of the change agent's level ofaspiration and political skills in transforming an SOE. Then, throughinductive case studies on the transformation of three SOEs, we address howtop managers, acting as change agents, can initiate and engage ininstitutional change through strategic actions such as negotiation,manipulation, and coercion; we also illustrate how they adopt differentactions to influence different actors. Based on the inductive results, wedevelop a theoretical model, which we refer to as the ‘strategic actionmodel’ that shows how the aspiration level, political skills, strategicactions, and change outcomes interrelate and offer insights into thestrategic action of top managers as change agents. Our most importantcontribution is revealing the interplay between the proactive role of insideactors as change agents and the enabling condition of institutionalcontext.

This study seeks to explain why firms respond in different ways to similarexternal administrative pressures, such as government demands for charitablegiving, particularly in a transitional economy such as China's. Taking theperspective of the CEO's representation on external demands, the studyexplores the relationship between political affiliation and corporategiving, stimulated by powerful and politically affiliated CEOs, who are thegovernment's natural constituency and who comply with governmental demandsfor donation. The study introduces contingent factors that influence theCEO's perception of how to satisfy government demands, and that moderate therelationship between political affiliation and corporate giving. Usingfirm-level data of corporate contributions following the Sichuan earthquakeof May 12, 2008, we find that corporations with CEOs who hold politicalaffiliations have a significantly higher probability of donation and alsomore cash giving. This relationship is moderated by contingent factors suchas government ownership, financial condition, and concentration of votingrights.

The manner in which technological capability and marketing capability can besuccessfully leveraged is an important research issue. Based on theresource-management model, this study aims to answer two research questions:(1) whether technological capability and marketing capability arecomplementary or supplementary capabilities; and (2) how technologicalcapability and marketing capability can be used appropriately to respond toenvironmental turbulence. Based on a face-to-face interview survey of 212Chinese firms, we find that technological capability and marketingcapability have synergistic effects. We also find that technologicalturbulence enhances the performance effect of technological capability, butimpedes that of marketing capability; whereas market turbulence advances theperformance effect of marketing capability, but impedes that oftechnological capability. Thus, the appropriate way to leveragetechnological capability and marketing capability is to integrate them andto deploy technological capability to respond to technological turbulenceand marketing capability to respond to market turbulence.

Management scholars and practitioners emphasize the importance of the sizeand diversity of a knowledge worker's social network. Constraints onknowledge workers' time and energy suggest that more is not always better.Further, why and how larger networks contribute to valuable outcomesdeserves further understanding. In this study, we offer hypotheses to shedinsight on the question of the diminishing returns of large networks and thespecific form of network diversity that may contribute to innovativeperformance among knowledge workers. We tested our hypotheses using datacollected from 93 R&D engineers in a Sino-German automobile electronicscompany located in China. Study findings identified an inflection point,confirming our hypothesis that the size of the knowledge worker's egocentricnetwork has an inverted U-shaped effect on job performance. We furtherdemonstrate that network dispersion richness (the number of cohorts that thefocal employee has connections to) rather than network dispersion evenness(equal distribution of ties across the cohorts) has more influence on theknowledge worker's job performance. Additionally, we found that thecurvilinear effect of network size is fully mediated by network dispersionrichness. Implications for future research on social networks in China andWestern contexts are discussed.

In this article we review research on Chinese guanxi andsocial networking in the past twenty years and identify the majorperspectives, theories, and methodologies used in guanxiresearch at micro and macro levels. We summarize the main findings of over200 journal articles on guanxi research in terms of itsconceptual definitions and measurements, its antecedents and consequences,and its dynamics and processes. Furthermore, we identify the gaps betweendifferent levels of guanxi research and discuss futuredirections to advance our understanding of the complex and intricate guanxi phenomenon.