This introduction traces the disappearance of Chinese family businesses from 1949 to 1978, their revival since then, and their future challenges. It then summarizes the three papers included in this Special Issue and proposes an agenda for family business studies in China. The article first focuses on the nonmarket social and political network strategies that these family-centered business organizations have had to adopt in order to overcome the difficulties they faced in accessing opportunities and resources as a result of Chinese culture's traditional low esteem for merchants and the government's continuing preference for a state-dominated economy. Family firms have so far been able to grow disproportionately rapidly in China's economy because, by leveraging the shared interests and dedication of immediate and extended family members, they have been able to achieve lower cost and higher efficiency, respond quickly to market changes, and expand social and political networks. These nonmarket strategies, however, also have a dark side. Furthermore, as the liberalization of China's economy deepens, competition must rely critically on market strategies such as innovation, alliances, and internationalization. The proposed research agenda addresses these future challenges as well as some research questions unique to Chinese family businesses.

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.

Although development in China is quite heterogeneous across regions, little research has explored how the value of Chinese firms’ political ties is contingent on the institutional and economic development of firms’ regional environment. This article explores some of the factors that moderate the benefit of political ties, differentiating between ties to central and local government. The study investigates how benefits of ties to central and local government are moderated by regional market and economic development, respectively. The study is based on a quantitative analysis of 858 listed Chinese firms. The results suggest that firms enjoy a positive effect of political ties but mainly ties to central government. The analysis, furthermore, finds these ties to be less valuable in economically well-developed regions. Market development, on the other hand, does not moderate the effects of local or central government ties.

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.

This paper seeks to reconcile and synthesize the diverse views about the township–village enterprises (TVEs) and local corporatism in the context of ongoing institutional changes in China as a transition economy. Specifically, I attempt to integrate the economic, political, cultural, and social explanations for TVEs, especially the two competing views of market competition and political corruption. I focus on the puzzle of TVE efficiency as well as the paradox of local corporatism as a government–business partnership with both a positive function of public alliance for wealth creation and a negative function of private collusion for wealth transfer. I argue that the key to both the puzzle of TVEs and the paradox of local corporatism lies in China's dual-track reform paradigm (i.e. a market-for-mass track and a state-for-élite track). Lastly, I discuss the critical implications for theory building and policymaking regarding economic transition in general.

In this article we seek to explore the contextual antecedents of organizational trust. In light of the complex links between organizational contexts and organizational behaviours, we focus on the effects of the three most critical contextual antecedents, i.e., leadership role, structural rule, and cultural norm at the organizational level, on organizational trust direcdy, and their behavioural outcomes at the individual level indirectly, using organizational trust as a cross-level mediator. The empirical results, based on a hierarchical linear model with a sample of 444 employees from 82 firms in China, lent support for our multidimensional cross-level model of context–trust–behaviour link. We extend the research on organizational trust by treating it as a cross-level phenomenon and by specifying its core contextual antecedents and behavioural consequences.

The management paradigms in the West mainly rely on legal contracts and explicit rules (formality), while the management traditions in the East emphasize social relationships and implicit norms (informality). In an era of ‘West-meets-East’, balancing formality and informality is becoming critical for firms, especially those facing institutional differences in transnational contexts and institutional transitions. In this research, we conducted a comparative multicase study on returnee entrepreneurs and local entrepreneurs in China. We found that at the early stage of venturing, returnee entrepreneurs emphasized formality more than informality, while local entrepreneurs stressed informality more than formality. However, the formality-informality balance among both returnee and local entrepreneurs converged over time in line with the institutional transition in China. Returnee entrepreneurs increased the emphasis on informality (but kept the dominant position of formality), whereas local entrepreneurs gradually shifted from informality to formality. The spatial pattern of asymmetrical balancing and the temporal pattern of transitional balancing are both rooted in the Chinese philosophy of Yin-Yang balancing.

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.

This commentary offers several directions for the development of Chinese management research based on the penetrating analyses provided by Barney and Zhang (2009) and Whetten (2009). First and foremost, Chinese management researchers can develop novel, seminal ideas and theories that are not necessarily tied to the Chinese cultural context but are applicable in diverse cultural contexts. The success of this approach depends on the merit of the ideas and theories proposed. A fusion, or combined emic–etic approach, can also be attempted, which integrates elements from Western and indigenous theories. Finally, the synergistic approach involves a dynamic interplay of Chinese and Western management research, which will eventually lead to innovative, culture-general theories. This article argues that all three approaches should be emphasized in Chinese management research.

Management and Organization Review (MOR) is announcing a renewed initiative that seeks to encourage and publish research reporting engaged indigenous scholarship in China. MOR invites empirical as well as conceptual studies of indigenous phenomena related to management and organizations. MOR welcomes exploratory studies of new, emerging, and/or poorly understood indigenous research questions that employ abductive reasoning and creative hunches, as opposed to testing hypotheses deduced from non-indigenous Western theories. Data on indigenous phenomena can come from any source, including qualitative and quantitative data from case studies, field surveys, experiments, and ethnographies.

This study seeks to resolve a puzzle of the coexistence of follower cooperative voice and cooperative silence (expressing/withholding work-related ideas, information, and opinions based on collective, cooperative motives) in the presence of transformational leadership. A sample of 193 bank employees under 52 managers revealed that in the presence of group-focused transformational leadership, both voice and silence based on cooperative motives increased through the mediation of value congruence between leaders and followers. However, cooperative voice was more likely to be the main response to a high level of value congruence when followers under the same leader perceived individual-focused transformational leadership uniformly. Under a high level of differentiated individual-focused transformational leadership, value congruence was likely to result in more cooperative silence. We discuss implications for future research on both leadership and employee voice.

Prior research has suggested a number of potential benefits to firm membership in business groups. These benefits include availability of capital and other resources not readily accessible in an open market, the facilitation of entrepreneurship, plus information and risk sharing advantages. We suggest that another important benefit is the assistance of group control systems in helping the firm to manage conflicting pressures in the institutional environment and facilitate coevolution of these conflicting pressures. To empirically demonstrate the relevance of this viewpoint, we examine the case of China where business groups facilitate institutional transition, actively balancing market pressures to increase levels of innovativeness in firms with institutional pressures emanating from the government to maintain high employment levels. Using data from a broad sample of more than 1,000 Chinese affiliate firms in more than 200 business groups, we find that government policy, ownership and managerial mindset influence the political goal of maintaining high employment levels, while interdependence among group affiliate firms is related to lower employment levels. However, while government ownership and the government managerial mindset were negatively related to market innovation activities, group financial and cultural control systems positively affected the tendency of affiliate firms to focus on market innovation.

The principal–principal (PP) perspective of corporate governance shows that multiple large shareholder (MLS) structure has competing monitoring and entrenchment governance effects. We argue that the dominant effect depends on contest for control among large shareholders and the number of large shareholders involved. Using data from Chinese family listed companies from 2004 to 2007, this study shows inverse U-shaped relationships between contest for control and corporate market value, as measured by Tobin's Q, and between the number of large shareholders and corporate market value. Findings indicate that at low to medium levels of contest for control or number of large shareholders, formal institutions can strengthen MLS structure's monitoring effect and can help this effect last longer. As a whole, the findings extend the institution-based view in the context of family corporate governance by showing that formal institutions can shape the ability of MLS structure to exert governance.

As Peng, Ahlstrom, Carraher, and Shi (2017) rightly noted, Intellectual Property Rights (IPR) protection in a country is not static. It evolves over time. Peng et al. (this issue) revealed through their historical analysis that during the 19th century, the US was not a leading IPR advocate but a leading IPR violator. It was only when indigenous inventors, authors, and organizations of the US emerged and demanded protection of their IPR in foreign countries in the late 19th century that the US passed the International Copyright Act (the Chace Act) in 1891 to extend IPR protection to foreign works. The US case illustrated that a country's IPR system as an institution evolves as its economy and society develop. If we examine this evolution over a relatively long time span, the change can be quite dramatic. Therefore, when reviewing a country's IPR system, an important question to be asked is in which direction the country's IPR system evolves.

This article offers a synthesis of understandings of wasta, seen as a form of social network prevalent in the Arab Middle East. Whilst there has been increasing interest in this practice, research remains fragmented and has been criticised for its limited theoretical rigor. To address this issue, a systematic review of peer-reviewed journal articles exploring wasta published between 1993 and 2019 was conducted. We analysed the identified papers according to the theoretical lens from which wasta was viewed, creating a bridge between a theoretical focus on the macro aspect of wasta and an alternative focus on its micro aspects, leading to the development of a holistic model of wasta. The model also helps us to understand the complexity of wasta, both as the network itself and as the social ties that exist among its members, and sheds light on the complex nature of the role and interactions of the wasta. The findings respond to calls for more holistic and inclusive research to inform social networks research and bridge the micro–macro divide. This article offers recommendations to future researchers to build on the holistic and emic approach to wasta research adopted here.

Despite the prevalence of global diffusion, little is known about the processes by which international practices are adopted and adapted within organizations around the world. Through our qualitative research on the introduction of corporate social responsibility (CSR) reporting at two leading Chinese companies, we identify a unique set of political mechanisms that we label state-mediated globalization, whereby powerful nation-state actors influence the ways in which corporations adopt and adapt global norms and practices. We find that businesses’ needs for political legitimacy from a key stakeholder, in this case the government, leads them to deviate systematically from the global practice in both form and content. These intentional practice adaptations are then legitimized by the government to create internationalization tools and localized standards to aid adoption by other organizations. Our findings illustrate previously unidentified mechanisms by which powerful stakeholders such as the Chinese government may mediate, and thereby direct, the ways in which corporations adopt and adapt global CSR practices. Contributions to understanding the political processes of institutional translation in the context of globalization are discussed.

Drawing on institutional theory, this study empirically examines the relationship between a firm's levels of ownership concentration and product innovation and the mediating effect of learning orientation, using a sample of 351 Chinese firms. Does ownership concentration hinder or promote firm innovation? Perspectives on this relationship are divergent. This study examines the link between ownership concentration and product innovation and further examines whether and how ownership influences firm innovation through organizational learning. The results suggest that ownership concentration has an inverse U-shaped relationship to product innovation and to learning orientation. In addition, learning orientation mediates the curvilinear relationship between ownership concentration and product innovation. We discuss the study's contributions, managerial implications and directions for future research.