In this work, we examine and integrate the research streams on learningbehaviours of both local firms and foreign entrants in emerging markets. Wepropose that local firms and foreign entrants differ in the types oflearning pursued and in the learning processes used. While emerging marketfirms engage in a significant amount of exploratory learning, they alsoattempt to exploit the newly gained knowledge in their current markets.Furthermore, foreign entrants engage in exploitative learning as expectedbut also must participate in exploratory learning to acquire knowledge ofculture, institutional norms, and important social relationships. While muchof the learning occurs through cooperative processes with both partners,they also each engage in experiential learning. We argue that emergingmarkets also differ; firms in the more mature emerging markets seekdifferent types of learning and the learning processes used vary compared tothose in less mature emerging markets. Our research suggests that emergingmarkets represent learning laboratories and provide a base to catalysefuture research.

Over the two and a half decades of economic reform in China, two types of Chinese firms have consistently outperformed their peers. In the 1980s, it was the firms at the lower levels of the industrial hierarchy, the township and village enterprises that were closely monitored by local governments. In the 1990s and beyond, the top performers have been those Chinese firms that have formal relationships with foreign investors. While many studies on the economic reforms in China have focused on the hardening of budget constraints and the transfer of technology from foreign to Chinese firms, I focus here on the stability created by relationships with local government offices and with powerful foreign investors. Where advocates of shock therapy have argued that a rapid transition to market institutions was the best path to building a market economy, I argue that the successful practices of the market are learned gradually over time, and the Chinese firms that are stabilized by attention from local government offices and relationships with foreign investors are well-positioned to successfully navigate China's emerging markets. A quantitative analysis of 81 firms in industrial Shanghai and three case studies help illuminate the mechanisms behind these relationships.

The organizations research community is a multidisciplinary, multinational and multilingual association of scholars with all the paraphernalia of international exchange. Nevertheless, it is a community that is organized in a geographically fragmented way, with linguistic, national, cultural and regional boundaries separating relatively autonomous scholarly communities. Although this fragmentation limits the integration of organization studies, it serves an adaptive role in making the resistance of deviant ideas to the homogenizing tendencies of dominant scholarly groups easier. The effective use of such differentiation, however, requires linkages among the fragmented parts of the field. We consider some ways of thinking about how research boundaries can be both sustained and violated, with particular attention to the emergence of Chinese scholarship in the study of organizations.

This paper examines the patterns of, and motives for, internationalizationby prominent market-seeking Chinese firms. Case studies of these firmsindicate that they are seeking technological and brand assets to create acompetitive position in international markets. While mainstream theory tendsto assume that firms internationalize to exploit competitive advantages,Chinese firms are generally making such investments in order to addresscompetitive disadvantages. They are engaging in ‘inward’internationalization by means of original equipment manufacture (OEM) andjoint venture partnerships, and ‘outward’ internationalization by means ofacquisition and organic expansion abroad. Each of these routes offerscertain benefits coupled with its own challenges or risks. The paperconcludes that the Chinese case offers an opportunity to extend presenttheorizing in four primary areas concerning the latecomer perspective andcatch-up strategies, institutional analysis with reference to the role ofgovernment, the relations between entrepreneurs and institutions, and theliability of foreignness.

This paper examines how the rise of a market economy in urban China redefines the rules governing economic activities and affects on earnings inequality. We identify three causal mechanisms linked to institutional change that are transforming the firm's employment practices: the higher marginal productivity of a private enterprise economy relative to state-owned enterprises, competition by firms for skilled and semi-skilled labor following emergence of labor markets and the end of state monopoly on labor allocation, and increased emphasis on merit-based reward systems in firms. Analyses of survey data from urban China show how these three causal mechanisms stemming from the transition to a market economy contribute to new patterns of earnings differentiation that increase income returns to human capital and private-sector entrepreneurship.

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.

This paper examines the status of boundaries in organizational theory. Tacitly if not explicitly, most researchers view organizations as bounded, tightly coupled and more or less rational systems. Yet organizations may also be open, loosely coupled, hierarchically nested systems whose boundaries are indefinite. In the case of China, incomplete separation of firms from the state, incomplete integration of firms and partial listing of assets have left most Chinese firms with indefinite boundaries. While many Chinese firms are disadvantaged by indefinite boundaries, some have managed their boundaries advantageously. The Chinese group corporation described here has resisted interference from its state owners, one of whom tried but failed to turn it into a captive supplier. It has secured full operational and financial control of subsidiaries despite their independent legal status, fractional local government ownership, and local government representation on their boards. And it has successfully funded and executed an aggressive acquisition strategy and now dominates its industry globally. There are lessons specific to the Chinese context. The most important is that boundaries should be assumed indefinite unless shown otherwise. And there are lessons about firms in emerging economies. Indefinite boundaries are characteristic of such firms; indefinite boundaries pose either threats or opportunities depending on the strategic response; lastly managing indefinite boundaries will be a key strategic priority and a precondition of finding and exploiting market opportunities.

In this study, we examine culture-specific relationships between individual differences and distributive negotiations. We measured individual characteristics and their effects on distributive negotiations in both American and Chinese cultures, using a Western-based scale (the ‘Big Five’) and a Chinese-based scale (CPAI). We found that agreeableness and extraversion (from the ‘Big Five’) affected negotiations for Americans, but not for Chinese. We found that harmony, face and Ren Qing (from the Chinese-based scales) affected negotiations for Chinese, but not for Americans. Specifically, we found that in the American culture, those higher in extraversion and agreeableness achieved lower economic gain, whereas in the Chinese context that those high in harmony, face, and Ren Qing were more likely to be influenced by opening offers and achieve lower economic gain in distributive negotiations. Our study highlights the need to examine negotiations using culturally sensitive constructs and measures.

This paper applies Dunning's eclectic paradigm of Ownership, Location andInternalization (OLI) advantages to the international activity andperformance dynamics of the Chinese family enterprise (CFE). Through thelens of Dunning's paradigm, we trace the role of cultural and economicfactors in the success of this important form of organization. Indemonstrating the relevance of a theory that originated in the analysis ofWestern multinational firms to this indigenous Chinese type of firm, thepaper supports the larger effort to expand the scope of received theory toinclude Chinese as well as other non-Western forms of organization.

Everyone knows about China's huge population and the fast-growing economy. Although macro-level sociological and economic analyses have given some attention to the linkage between the two, at the micro level, the relationship between human resources and, more specifically, psychological capital of Chinese workers and their performance has been largely ignored. Within the context of three factories (two private and one state-owned) in the People's Republic of China, this exploratory study examined the relationship of a sample (n = 422) of Chinese workers’ positive psychological capital states and their performance. Results indicated the workers’ positive states of hope, optimism, and resiliency, separately and when the three were combined into a core construct of psychological capital, significantly correlated with their performance, as rated by their supervisors. An analysis of workers in one of the factories (n = 272) also found a significant relationship between the workers’ positive psychological capital and the performance outcome of relative merit-based salary. Limitations, future research, and practical implications conclude the article.

This paper investigates the effect of decision-makers' culture on their implicit choice of how to make decisions. In a content analysis of major decisions described in American and Chinese twentieth-century novels, we test a series of hypotheses based on prior theoretical and empirical investigations of cross-cultural variation in human motivation and decision processes. The data show a striking degree of cultural similarity in the relationships between decision content, situational characteristics and the decision mode(s) employed, but also support several hypotheses about cultural differences. As predicted, Chinese decision-makers more frequently used role-based logic (a form of recognition-based decision-making) to arrive at decisions, by virtue of their greater awareness of and need for relational obligations. The hypothesis (based on conjectures about Chinese thinking style and personality differences) that Chinese decision-makers would show more rule-and case-based decision-making (two other variants of recognition-based decision-making) than decision-makers in American novels was also supported. After controlling for other predictor variables, there also was support for the hypothesis (based on comparative analyses of Chinese and Western philosophy) that analytic modes which base decisions on the calculation of best consequences would be used less frequendy by Chinese decision-makers. There was no evidence of greater prevention focus in Chinese decisions. These and other observed cultural similarities and differences in the dynamics of decision mode selection have implications for the study and practice of decision-making in managerial settings.

In this paper, I examine the structural positions in two different types ofnetworks and their relationship to trust. I propose two types of trust:particularistic which is trust in specific other individuals and generaltrust in colleagues and the organization as a whole. The findings suggestthat both centrality in the friendship network and the go-between positionin advice networks are related to particularistic trust towards the otherindividuals in the networks. Particularistic trust, in turn, is associatedwith the two kinds of general trust. I introduce the Chinese concept of pao to explain the Chinese dynamic of trust formation ininterpersonal networks.

Group citizenship behaviour (GCB) is conceptualized as a distinct group-level phenomenon concerning the extent to which work groups engage in behaviours that support other work groups and the organization as a whole. These behaviours are different from task performance; they enhance and maintain the social and psychological environment in which task performance occurs. Based on the referent-shift consensus model (Chan, 1998), we developed a GCB scale and examined its nomological network. In a sample of 148 work groups in the Hong Kong office of a multinational bank (a total of 743 employees), between-group differences in GCB were greater than within-group differences. GCB was positively associated with procedural justice climate and work group leadership support. Work group cohesiveness and group-organizational goal congruence interactively predicted GCB, as did the negative affective tone of the group and the group's negative affectivity homogeneity. In addition, GCB was positively related to group performance, and negatively related to employee turnover intentions. The theoretical and empirical implications of this study are discussed in the context of Chinese organizations.

An organizational view of corruption is a frontier and challenging issue in the realm of management and organization research. This article elucidates four interrelated yet sequential issues that collectively constitute organizational explanations of corruption: (i) corruption and organizational environment; (ii) corruption and organizational behaviour; (iii) corruption and organizational consequences; and (iv) corruption and organizational architecture. Specifically, it (1) offers taxonomic metaphors that identify different corrupt organizations on the basis of corruption scale and hierarchical involvement; (2) defines task environments (oligopoly intensity, regulatory control and structural uncertainly) and institutional environments (opaqueness, injustice and complexity) that stimulate illicit acts; (3) confers a typology of corrupt behaviors that align with these task and institutional environments and correspond to different metaphors (system malfeasance, procedural malfeasance, categorical malfeasance and structural malfeasance); (4) develops the logic that corruption impedes organizational development through quadri-damages (evolutionary hazard, strategic impediment, competitive disadvantage and organizational deficiency; and (5) illuminates a corruption-resisting architecture comprising corporate culture, organizational structure and compliance system.

We investigated the relationship between the national cultural value ofpower distance and collective silence as well as the role of voice-inducingmechanisms in breaking the organizational silence. Using data from 421organizational units of a multinational company in 24 countries, we foundthat both formalized employee involvement and a participative climateencouraged employees to voice their opinions in countries with a small powerdistance culture. In large power distance cultures, formalized employeeinvolvement is related to employee voices only under a strong perceivedparticipative climate.

Yasheng Huang's Selling China: Foreign Direct Investment during the Reform Era is the first book to be reviewed in Management and Organization Review. Other books bearing on Chinese management that the editors judge to be significant and provocative will be reviewed on an ad hoc basis. Selling China, to be sure, is not about the practice of management in China. Rather, it is about the policies that have created two economies and two managerial systems in China, one domestic and one foreign-invested, and the consequences of these policies. The existence of these two economies and managerial systems lurks in the background of virtually all management research in the Chinese context.