We synthesize the literature on Chinese multinational enterprises (MNEs) and find that much of the prior research is based on as few as a dozen case studies of Chinese firms. They are so case-specific that it has led to a misplaced call for new theories to explain Chinese firms’ internationalization. In an attempt to better relate theory with empirical evidence, we examine the largest 500 Chinese manufacturing firms. We aim to find out the number of Chinese manufacturing firms to be true MNEs by definition, and to examine their financial performance relative to global peers using the financial benchmarking method. We develop our theoretical perspectives from new internalization theory. We find that there are only 49 Chinese manufacturing firms to be true MNEs, whereas the rest are purely domestic firms. Their performance is poor relative to global peers. Chinese MNEs have home country bound firm-specific advantages (FSAs), which are built upon home country-specific advantages (home CSAs). They have not yet developed advanced management capabilities through recombination with host CSAs. Essentially, they acquire foreign firms to increase their sales in domestic market, but they fail to be competitive internationally and to achieve superior performance in overseas operations. Our findings have important strategic implications for managers, public policy makers, and academic research.

In commenting on the articles in this Editors' Forum, three questions are addressed: (i) how should we operationalize and measure creative outputs to enable a sound analysis of cross-cultural differences in creativity; (ii) could it be that culture impacts not only the valuation of originality and usefulness but also the psychological processes through which original yet useful ideas and insights are achieved; and (iii) does culture impact the domains in which individuals are more or less motivated to perform creatively? Using recent work on creativity as a starting point, and the key findings reported in this Editors' Forum, I propose that new research on culture and creativity would benefit from separating creative products from creative processes, and would do justice to the nature and functionality of cultures by asking not only when and how individuals and groups achieve creativity, but also why they would bother to be creative in the first place.

Chinese firms are grappling with the four paradigm shifts around electric, connected, shared, and autonomous vehicles that are roiling the rest of the global auto industry. This article, which follows my earlier MOR article about the auto industry (Teece, 2018a), looks briefly at the development of capabilities in these fields by Chinese firms. It then analyzes the prospects for Chinese firms to use them to gain a stronger foothold in the global market, and for multinationals to continue to prosper in China. The paradigm shifts are creating new entry points for Chinese firms to capture value in the industry, and some potential global contenders have demonstrated solid dynamic capabilities in electric vehicles (Geely), shared vehicles (Didi Chuxing), and autonomous vehicles (Baidu). However, multinationals are also moving forward in the same fields and have strong complementary assets such as respected brands and well-honed dynamic capabilities.

Issues of ethics, justice, and social responsibility are as fundamental to organizational behavior as they are to society at large. As contracts are forged, individuals employed, and power differentials created, opportunities for exploitation, oppression, and victimization emerge. In contrast, as social structures evolve, coordinated opportunities arise for imparting positive social change at the community, environmental, and societal levels. Inherent to all of these phenomena is the application of norms surrounding moral behavior. Norms about what is considered fair and ethical underlie how individuals perceive and evaluate the behaviors and decisions of others; how groups and societies define acceptable behavior; and how individuals, groups, and societies evaluate the decisions and actions of organizations. In addition to defining standards, these norms also drive the reactions (or sanctions) against those who violate them.

Indigenous Chinese management research has attracted much academic attention in recent years. This study examines the mechanism through which Zhong Yong thinking influences employee adaptive performance from a self-regulation perspective. Using two-wave data of 361 subordinates in 62 teams from Chinese firms, job complexity was found to moderate the direct effect of Zhong Yong thinking on cognitive adaptability and emotional control, and the indirect effect on adaptive performance (via cognitive adaptability and emotional control). The direct and indirect effects of Zhong Yong thinking were found to be stronger with a higher level of job complexity. The study explores an important Chinese indigenous construct and its association with adaptive performance, and adds value to the indigenous management literature.

This study proposes an initial and a revised model of government-oriented public relation (PR) strategies based on the results of two content analyses of website news regarding the PR activities of 76 firms in general and six well-known firms in China in more depth. With the perspective of resource dependence theory, this model reveals that firms in China employ six types of formal PR strategies, including visitation, philanthropy, participation, publicity, party involvement and political propaganda, to manage their dependence on government for resources. Further, the implementation of such strategies involves a four-step process: organizing PR activities with economic, social and political significance; obtaining the involvement and recognition of the government; building firms' resource, moral and cultural legitimacy in the government's eyes; and interacting with the government on the issues of firms' dependence to influence government policies relative to firms. We also explore the differences that exist among firms with different ownership structures in the use of these PR strategies, the level of government involved and the issues pursued.

Firms from transforming economies can leverage the characteristics of their location to develop innovative business models before internationalizing. This note showcases ByteDance's innovative business model for its TikTok app, which became one of the most downloaded apps globally. ByteDance used its large and increasingly demanding home market to experiment with creative combinations of business model elements to develop a unique business proposition that positions the TikTok app as a hybrid of social networking and video-sharing. In addition, TikTok benefitted from China's IT strength supported by national high-tech policy to an AI-based recommendation algorithm as a non-location bound resource. TikTok shows that firms from transforming economies can launch successful global products through business model innovation.

To complement Barney and Zhang's as well as Whetten's articles in this issue of Management and Organization Review, we offer ways to develop indigenous management theory to explain unique Chinese management phenomena. We first briefly review the imbalance of developing theories of Chinese management versus developing Chinese theories of management in Chinese research societies. We then describe a five-step research process that uses an indigenous research approach to theory development: discovery of interesting phenomena, field observations, construction of the theoretical framework, empirical examination, and theory refinement. This process may be useful not only in the Chinese context, but also in any other context. We identify several challenges in both Chinese and international academic societies that must be overcome to facilitate learning across the two approaches proposed by Barney and Zhang: the need for high quality journals in the Chinese language, international journals' efforts to ease the imbalance between the two approaches, and collaboration between Chinese and Western management schools.

This article explores the dynamic interactions between entrepreneurs and politicians in transitional China through the lens of management buyouts. Specifically, we identify two contrasting outcomes of entrepreneur–politician alliances: privatization buyouts by entrepreneurs implying sustainable original alliances and failed management buyouts implying the collapse of the original alliances. Drawing on the rent appropriation literature, we treat Chinese management buyouts as bargaining, clarification, and redistribution of organizational rent between entrepreneurs and the government agencies represented by local politicians. We further develop a model of entrepreneur–politician bargaining that identifies the determinants of varying rent bargaining and management buyout outcomes.

Presenting post hoc hypotheses based on empirical findings as if they had been developed a priori seems common in management papers. The pure form of this practice is likely to breach research ethics and impede theoretical development by suppressing the falsification process. Two other forms may be more tolerable: deletion of rejected hypotheses and refinement of hypotheses inspired by empirical findings. To address this problem, the field should provide stronger recognition of replication, descriptive research, rejected and post hoc hypotheses, and critical tests of competing hypotheses. These positive changes require the concerted effort of researchers, management associations, and journal editors and reviewers.

Prior research and the articles included in this special issue demonstrate that in emerging markets in general and in China in particular, knowledge spillovers exist between foreign firms and domestic firms. As domestic markets become more sophisticated, and competition between domestic firms and foreign firms becomes stronger, knowledge is flowing to and being sourced in many different directions: from overseas head offices to foreign firms then on to domestic firms; from domestic firms to domestic firms; and from domestic firms to foreign firms, and back to the multinational corporations' head offices in the form of reverse spillovers and reverse innovation. We propose that knowledge spillovers, search, and creation in an emerging market are a dynamic and reciprocal process with knowledge flowing between and among foreign and domestic firms. This represents a fertile field for future research and we have identified a number of areas ripe for study.

Using a social exchange perspective and responding to prior calls to separate resources exchanged from the relationship between parties, we develop a relationship typology based on rights and responsibilities arguments. We begin with the idea that various levels and types of rights and responsibilities are the exchange currency utilized by the employer and employee, respectively. Further, the degree to which an organization grants rights to an individual and the degree to which the individual voluntarily accepts responsibilities results in four distinct organizational membership profiles (i.e., peripheral, associate, detached, and full). We believe this membership typology is an important theoretical mechanism that may be used to link the exchange between the employee and employer (as represented by psychological contracts) to psychological attachment (as represented by perceived membership) between these two parties. Specifically, members in each profile will tend to have certain kinds of psychological attachments to the organization, causing them to (i) perceive membership in certain ways and (ii) behave in a manner consistent with that perception. The article concludes by discussing the implications of the propositions for both researchers and practitioners, as well as making suggestions for future research efforts.

As China shifts its development model from focusing on economic growth at all costs to a model in which economic growth is balanced with solving pressing societal and environmental problems, there is an increasing need for management research on building sustainable organizations in China. This collection of papers focuses attention on the role of business in promoting sustainable economic development, highlighting a number of key processes including: the factors that foster transparency and CSR reporting, how stakeholders can influence corporations to abandon their CSR commitments, the benefits of environmental branding and labeling, and the antecedents and performance consequences of proactive environmental strategies. In this introductory essay we reflect on recent trends in sustainability research in China, and to encourage this important movement, provide recommendations for future research directions.

As a scholarly field matures, theories emerge that guide paradigms and shape consensus in academic discourse. Management theories reflect a shared consensus on how individual behaviors or organizational actions result in a certain set of outcomes and under specific conditions. Clearly, theory is paramount to guiding whether models of potential relationships bear out and how and why we would expect a relationship or specific outcome. Yet much of this theory is derived from cumulative empirical evidence from a ‘context’ that has remained a silent partner in our quest for a theoretical contribution. A growing number of papers emphasize the theoretical contribution as disembodied from the context in which the empirical evidence of a causal relationship was gleaned. As an applied field, the emphasis on theory with disregard to the context of management practice presents a challenge for progress both as a scholarly domain and for credibility in what we teach and how we consult, or how we effect positive social change. This guest editorial joins a chorus of recent editorials in this journal (e.g., Tsui, 2013) and elsewhere (e.g., George, 2014) that suggest we rethink management scholarship, rejuvenate our ideas for research, and embed a nugget of practice in scholarly discourse.

This article addresses corruption as a negative practice displaying the ‘darker side’ of social capital in Chinese guanxi and Russian blat/svyazi networks. It presents a conceptual framework integrating several research streams to establish a conceptual linkage between social network characteristics and three forms of corruption between business persons and public officials: cronyism, bribery, and extortion. We argue that the forms of corruption in a society are determined by the nature of social network ties and their underlying morality, with particularistic and general trust being key factors. Our framework depicts networks as three concentric circles representing three types of corruption resulting from their corresponding types of reciprocity: open, closed, and negative. We then apply the framework to the practice of guanxi in China and blat/svyazi in Russia. We propose that different network characteristics and different forms of corruption may help explain what we label the ‘China-Russia paradox’ of why corruption and high economic growth have co-existed in China, at least in the short term, but less so in Russia. We conclude with ethical and legal implications for doing business in those two transforming economies and offer suggestions for future research.

After reading Jacobides, MacDuffie, and Tae (2016), the success of Tesla in launching a new automobile company in a crowded sector puzzled us. Jacobides, MacDuffie, and Tae (2016) had convinced us that developing the capabilities to become the manufacturer of a complete, safe automobile system would be quite difficult. Since the establishment of the dominant design for the auto in the 1920s, the industry has operated on the premise of massive economies of scale. Original equipment manufacturers’ (OEMs) role in taking responsibility for the legal liability of the whole automobile, combined with their extensive supply and marketing chains, has ensured they remained dominant in the sector despite some missteps with modularisation and outsourcing efforts (Jacobides, MacDuffie, & Tae, 2016; Schulze, MacDuffie, & Taube, 2015). No major component supplier has succeeded in forward integrating into becoming an OEM and no new entrants have challenged the dominance of the incumbent OEMs since the earliest days of the auto industry (Jacobides & MacDuffie, 2013).

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.

This study investigates the differential effects of internationalization on two dimensions of family firms’ performance: growth and profitability. Drawing on the contingency theory, we argue that the successful implementation of internationalization strategy requires an appropriate organization structure, which is usually absent in Chinese family firms. To the extent that such a structure is established, these firms can realize greater benefits from internationalization. From a sample of 225 family firms in China, our predictions receive empirical support. We find that internationalization has a positive impact on growth but a negative impact on profitability. The negative internationalization–firm profitability relationship highlights the challenges internationalizing Chinese family firms face. The positive moderating effect of corporate governance, a critical component of organization structure, underscores the need for appropriate corporate governance to support the implementation of strategy. The findings have important practical implications for the internationalization of Chinese family firms.