MOR Abstracts

MOR 14.3 Abstract

1. Revisiting the Relationship between Justice and Extra-Role Behavior: The Role of State Ownership

Xi Chen

ABSTRACT State ownership is an important phenomenon in the world economy, especially in transition economies. Previous research has focused on how state ownership influences organizational performance, but few studies have been conducted on how state ownership influences employees. I propose that different ownership structure triggers different relational schemas among employees, who pay attention to organizational justice consistent with their schema to guide their extra-role behavior. Specifically, state-owned organizations reinforce employees’ relational concern and direct employees’ attention to procedural justice, whereas privatized organizations highlight the instrumental concern and direct employees’ attention to distributive justice. I leverage a sample of organizations in China to explore how different ownership structure activates different relational schemas among employees and alters the relationship between organizational justice and employees’ extra-role behaviors. I find that state ownership attenuates and even reverses the positive relationship between distributive justice and extra-role behaviors. Conversely, state ownership exaggerates the positive relationship between a critical procedural justice dimension (participation in decision making) and employee extra-role behaviors. Implications for the micro-foundations of corporate governance and institutional change, organizational justice literature, and cross-cultural research are developed. This study also generates new insights for the transition economies such as China.

KEYWORDS distributive justice, extra-role behavior, procedural justice, relational schema, state ownership

2. Institutional Forces and Environmental Management Strategy: Moderating Effects of Environmental Orientation and Innovation Capability

Yuanfei Kang and Xinming He

ABSTRACT We examine the mechanisms through which firm capabilities moderate the impact of institutional forces upon firms’ adoption of environmental management strategy (EMS). Viewing the limitation of institutional perspective in explaining the heterogeneity in firms’ EMS, we suggest that an important source of variation is the idiosyncratic capabilities of the firm in acquiring and allocating resources. Based on the strategic response theme of institutional theory and resource-based view, we argue that the influence of institutional forces on EMS is contingent on the presence of environmental orientation and innovation capability. Using data collected from China, we test these notions. Our empirical results suggest that both environmental orientation and innovation capability positively moderate the effect of institutional forces on firm’s EMS. By demonstrating how institutional forces and firm capabilities interact with each other, we enhance understanding of how firms succeed in developing EMS.

KEYWORDS China, environmental management strategy, environmental orientation, innovation capability, institutional theory, resource-based view

3. The Influence of Top Management Team on Chinese Firms’ FDI Ambidexterity

Yi Li and Lin Cui

ABSTRACT Strategic ambidexterity has been under researched in the context of Chinese outward foreign direct investment (FDI). An ambidextrous FDI, balancing between exploratory and exploitive activities, is strategically desirable but managerially challenging. We examine the role of top management team (TMT) functional diversity in influencing Chinese firms’ degree of FDI ambidexterity, and its boundary conditions in relation to the informal and formal institutional environments within which the TMT operates. Based on a panel of Chinese outward-investing manufacturing firms, our empirical analyses show that a marginal positive effect of TMT functional diversity on a firm’s FDI ambidexterity is strengthened by the social faultline presence in the firm’s TMT, but is weakened by the development of formal institutions in the firm’s external environment.

KEYWORDS ambidexterity, China, foreign direct investment, functional diversity, institutional context, top management teams

4. How Domestic Firms Absorb Spillovers: A Routine-Based Model of Absorptive Capacity View

Cheng-Hua Tzeng

ABSTRACT Extant spillover literature explains domestic firms’ productivity change mainly by the presence and attributes of foreign direct investment. In contrary, this paper, by adopting a routine-based model of absorptive capacity, intends to explore how domestic firms absorb spillovers over time. Based on a qualitative study of a domestic firm in China’s silicone adhesive industry, the findings show that unbounded by geographical constraints, domestic firms enact their external absorptive capacity routines to actively search for spillovers from multinational enterprises (MNEs) at both national and international levels. Moreover, rather than searching for what is available, domestic firms are selective for spillovers that are coherent with their business strategies. The most unexpected finding is that domestic firms diligently acquire spillovers from MNEs and from local competitors in combination. Spillovers acquired from local competitors are used to increase the inferential accuracy of spillovers acquired from MNEs about strategic successes. Further, instead of absorbing spillovers from MNEs which pose moderate technology gaps, domestic firms target at MNEs which exhibit wider technology gaps, and undertake organizational learning and develop complementary assets to enhance their internal absorptive capacity routines. Socially enabling mechanisms are found to facilitate domestic firms’ absorption of spillovers by employee turnover.

KEYWORDS absorptive capacity, case study method, foreign direct investment, international management, private-owned enterprises, qualitative methods, spillovers