The Institutional Influence on the Location Strategies of Multinational Enterprises from Emerging Economies: Evidence from China’s Cross-border Mergers and Acquisitions

Peter J. Buckley, Pei Yu, Qing Liu, Surender Munjal, Pan Tao

This study investigates the institutional influence on the location strategies of Chinese cross-border mergers and acquisitions (M&A) during the period 1985–2011 across 150 economies using Heckman’s two-stage model. The results suggest that Chinese Multinational Enterprises (MNEs) are ‘shortsighted’ and show perverse behaviour towards host country risk when deciding on the location of host country and volume of investment undertaken through M&As, which may damage the firm’s long-term profitability.

Hybrid Strategies, Dysfunctional Competition, and New Venture Performance in Transition Economies

Yunzhou Du, Phillip H. Kim, Howard E. Aldrich

Conventional wisdom suggests that new ventures can employ a combination of two general strategies to confront the challenges of operating in transition economies or regions known for their weak institutional conditions: These ventures may succeed by enacting a market-orientation strategy, which focuses on providing value to customers and implementing rapid responses to competitive situations. They can also engage in a more traditional political-networking strategy that engages government officials, which may yield public resources and enhance their organizational legitimacy. However, research results are inconclusive regarding the effectiveness of these strategies when they are combined in a hybrid form. We argue that the advantages of a hybrid strategy are contingent on the perception of a specific condition: dysfunctional competition. In our analysis of new venture performance in China, we show that political networking indeed amplifies the positive influence of market-orientation strategies on performance, but only in contexts where dysfunctional competition is perceived to be low. When such competition is high, political networking becomes counterproductive, diverting attention away from swift responses to market demands. By addressing how multiple strategies work together, we offer insights into the extent to which the effectiveness of hybrid strategies – incorporating both market-orientation and political-networking – depend on the context in which they are implemented.

Sustainable Development of Human Resources Inspired by Chinese Philosophies: A Repositioning Based on François Jullien’s Works

Sybille Persson, Paul Shrivastava

This paper provides a philosophical repositioning of human resource management (HRM) to further sustainable human resources development (HRD). We use a conceptual process, based on the work of French philosopher and Sinologist François Jullien. Despite its growing and diversified academic production, HRM research has become increasingly isolated from practice, from alternative views of human life, and from nature. This is at least partly due to its failure to self-question its Western centric roots. This paper describes some key conceptual innovations that deal with efficacy and ‘vital nourishment’ which are of particular interest for sustainable HRD. The question of how to feed life (or nourish it) in the workplace is illustrated by a gardening metaphor for managing human potential. In contrast to cross-cultural studies, this metaphor emerges from a dialogue between Western and Eastern philosophies, and offers alternative approaches to HRD based on some core insights from the Chinese tradition.

A Dynamic Typology of Informal Institutions: Learning from the Case of Guanxi

Sven Horak, Katja Restel

Currently, the mechanism in which informal institutions, recently discovered as an influential, new paradigm in business and management studies interact with and shape formal institutions remains unclear. Helmke and Levitsky (2004) proposed an outcome-based typology for the interaction of informal institutions with formal ones. By using a structured approach for literature aggregation, we test the proposed typology of Helmke and Levitsky by applying this method to 74 empirical studies to investigate the influence of guanxi on formal institutions. We conclude that guanxi fits into none of the proposed categories perfectly. As a result, we propose the relationship between guanxi and formal institutions as auxiliary as well as competing concurrently, leading to convergent and divergent outcomes, respectively. Moreover, we propose a third category to add to the existing typology, namely ‘formal institutions in transition’. We furthermore incorporate a dynamic aspect to the model by adding two further categories, concerned with the direction of the development. We believe the resulting extension to the original typology of Helmke and Levitsky accurately accounts for the dynamic nature of informal institutions as well as their important role in shaping effective formal institutions.

When Money Makes Employees Warm and Bright: Thoughts of New Money Promote Warmth and Competence

Aurelia Mok, David De Cremer

Warmth and competence are two important dimensions that facilitate career success (e.g., building relationships, providing novel solutions to problems). We investigated how situational reminders of money affect warmth and competence. Specifically, we propose that reminders of new (vs. used) money increase people’s warmth and competence. In five studies of working adults, inducing participants to think about new (vs. used) banknotes promoted creative idea generation (Study 1) (reflecting competence), increased concern for coworkers (Study 2), decreased self-serving behavior (Study 3), and increased helping intentions (Study 5) and behavior (Study 4) (reflecting warmth). Study 4 showed that the effect of priming new money on warmth occurs by activating a norm of social conscientiousness. Our findings suggest that money’s appearance can impact problem solving, prorelationship behavior, and perceived norms. We discuss implications for research on money, norm salience, and organizational behavior.

It’s Not Just a Visit: Receiving Government Officials’ Visits and Firm Performance in China

Weiwen Li, Eric W. K. Tsang, Danglun Luo, Qianwei Ying

Drawing upon signaling theory, we propose that a specific form of non-market action, receiving government officials’ visits, reduces transaction costs between firms and their potential exchange partners and thus contributes to firms’ competitive advantage in China. We also contend that severity of information asymmetry and availability of alternative ways of reducing transaction costs moderate the relationship between receiving government officials’ visits and company financial performance in opposite directions. The former factor increases the ex ante value of receiving government officials’ visits and strengthens its positive impact on financial performance, while the latter factor decreases the ex post value of receiving government officials’ visits and reduces its positive impact. Our conceptual framework is supported by analyses that draw on a sample of listed manufacturing firms in China. Our study contributes to a more in-depth understanding of non-market actions in emerging economies, their contingencies, and their performance implications.

Why Firms Perform Differently in Corporate Social Responsibility? Firm Ownership and the Persistence of Organizational Imprints

Yi Han, Enying Zheng

This article analyzes the effects of firms’ founding ownership in shaping their corporate social responsibility (CSR) performance in China. Drawing on a nationwide survey of 1,037 representative manufacturing firms in 12 cities, we specify the imprinting effects of firms’ founding ownership on labor and environmental protections, two important CSR practices. Our results show that state-owned enterprises (SOEs) founded during the state socialist period, regardless of their restructuring experience in the market reform era, continued to implement pro-labor practices. Moreover, even the SOEs founded in the market reform era provided better labor protection than non-SOEs founded during the same time. In contrast, the founding imprints of environmentalism in the reform era for non-SOEs, especially the de novo private firms, explain why they spent more than SOEs in environmental protection. We extend the organizational imprinting theory by highlighting the importance of firms’ founding ownership imprints and in shaping their current CSR performance.