Sponsor(s): Development Research Center of The State Council
CN：11-1235/F
12 issues per year
Current Issue: Issue 09, 2020
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Journal official website:http://www.mwm.net.cn/web/
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Management World is supervised by Development Research Center of The State Council, and sponsored by Development Research Center of The State Council. It aims to reflect the multi-field and multi-disciplinary research on China’s economic and social management issues, and to provide services for China’s economic reform and development. Its scope covers fiscal and financial research, rural economics, macroeconomic management, public management, business management, industrial and regional development. The journal, included in CSSCI and JST, has been in the top list in the field of economic management for many years, and achieved a very high reputation from readers all over the world.
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Editor-in-Chief
Li Kemu
Deputy Editor-in-Chief
Tian Yuan,He Shaohua, Lu Jian, Jiang Dongsheng
Editorial Board
Ma Xiaogang, Qiao Renyi, Li Jiping, Li Menggang, Li Peiyu, Zhang Xinmmin, Shen Bainian, Chen Dongsheng, Cheng Quansheng, Zhao Jie,Tuo Zhen
Recognition of implicit local public debts: views based on the accurate definition of local government financing vehicle and financial potential
XU Junwei;MAO Jie;GUAN Xinghua
Management World,2020,Vol 36,No. 09
In recent years, the implicit local public debts (ILPD) have become a major risk and peril that may easily lead to systemic fiscal and financial risks, even hinder the sustainable and healthy development of economy and society in China. The main way to generate ILPD is that local government financing vehicles (LGFVs) borrow debts that local government may undertake expenditure or guarantee liability in the future. Therefore, clearing up or specification of LGFVs is the key to prevent and defuse the risks from ILPD. However, there are few studies focus on how to define LGFVs scientifically and accurately, and there are also lacking of research on the expansion of debts of LGFVs from the perspective of micro-dynamic mechanism. This paper attempts to make an in-depth analysis of the problems and risks of ILPD in China from the two aspects above. First, based on a systematic review of various definitions of LGFVs given by government departments and industry institutions, we redefine LGFVs and urban investment bonds (UIBs), and establish a new database of UIBs (2571 LGFVs from 2006 to 2018). Using the new database, we analyze the trends of UIBs and find that UIBs have the characteristic of policy bonds. Second, combined with the existing literature (including borrowing motivation, institutional space, asset tools and sources of funds), we extract the micro-dynamic mechanism of LGFVs to borrow heavily, which is financial potential that refers to the advantages that LGFVs have in the process of transforming their own resource endowment (including asset increasing capacity and risk control) into financial credit. The roots of financial potential are local government’s asset extension and risk joint guarantee for LGFVs, which cause the asymmetry between assets and risks. Third, with help of the new database of UIBs and Wind database, we use the financial statement data of domestic bond-issuing companies (distinguishing between LGFVs and general market companies) to quantify and identify asset extension, risk joint guarantee and financial potential, respectively. We find that LGFVs have obvious and unreasonable financial potential advantages over general companies. Forth, in order to prevent and dissolve the risks of ILPD effectively, targeted policy measures should be taken to curb the asset extension and risk joint guarantee, and to eliminate the unreasonable financial potential advantages of LGFVs. The marginal contributions of this paper are as follows. First, the accurate definition of LGFVs clarifies its concept connotation and standardizes the different or fuzzy cognition of LGFVs among all walks of life. Second, we build and share the new database of UIBs (including the logic and steps to build it) in this paper. Third, for the first time, we extract the micro-dynamic mechanism of LGFVs to borrow heavily, namely, financial potential, which provides a new perspective for the following study on the ILPD in China.
Some important theoretical problems of borrowing Western economics in the new era
FANG Fuqian
Management World,2020,Vol 36,No. 09
The goal of China’s economic system reform is to establish a socialist market economy system (SMES). Under this system, the development of market economy needs an appropriate economics, which is the economics with Chinese characteristics (ECC) that Chinese economists are trying to create. To establish ECC, we need to borrow Western economics, and how to correctly borrow Western economics needs to solve several important theoretical issues. First of all, why should we borrow Western economics for creating ECC? Marxist political economy mainly studies the problems of where to come from and where to go of the capitalist market economic system, while Western economics mainly studies the general problems of market economy such as how to allocate resources by market mechanism, economic stability and growth. ECC not only needs to study the problems of where to come from and where to go of the SMES, but also needs to study the resource allocation and stable economic growth under this system. Therefore, we need to borrow Western economics. Secondly, how to treat the ideological elements in Western economics? The basic wishes of private capital are profit seeking, freedom and privatization, which are embodied in privatization, profit maximization and liberalization in Western economics, which constitute the mainstream ideology of capitalism. The SMES does not exclude private capital and private ownership of production results, nor does it deny the willingness of capital to pursue profit, freedom and private ownership. What China’s mainstream ideology rejects is the privatization of all means of production, the liberalization outside the economic field, and the transformation of self-interest into selfishness. ECC should distinguish private property from privatization, freedom from liberalization, self-interest from selfishness. Thirdly, how to treat Western economics without studying production relations? Marx once regarded the economics that does not study the relations of production but only studies the superficial connections of economic phenomena as vulgar economics. We believe that Western economics does not study where to come from and where to go of the capitalist system, which has its vulgar and one-sided aspects. However, many problems it studies are coexistence of market economy under different systems, such as the relationship between price and supply and demand, the causes of unemployment and inflation, and the determinants of economic growth. ECC needs to study not only the nature and characteristics of economic system, but also the cause behind economic phenomena and the relationship between the phenomena. Finally, how to treat the spontaneity, blindness and lagging of market regulation? At present, there is a view in Chinese academic circles that market adjustment is spontaneous, blind and lagging, so the market economy will periodically break out the economic crisis of overproduction. This view does not realize that market economy is essentially a free and decentralized decision-making economy. Economic activities motivated by self-interest can lead to the promotion of social interests and the efficient allocation of resources through free competition. This spontaneous mechanism is better than man-made control. Market adjustment is not blind, but to adjust the market disequilibrium towards the equilibrium and to maximize the returns of all trading parties. Market adjustment is a process of correcting market disequilibrium. It is a process of survival of the fittest. It is a good rather than bad adjustment function and regulation way, just like the body’s immunity and regulation ability. Market mechanism is a good one, which does not mean that market mechanism is a universal one. In reality, the market economy always suffers from unemployment, economic fluctuation, unfair distribution and excessive pollution. China’s SMES needs to deal with the relationship between the market and the government.
From cooperatives to cooperative associations: the economic logic of contract selection between leading enterprises and farmers under market expansion
DENG Hongtu;ZHAO Yan;YANG Yun
Management World,2020,Vol 36,No. 09
This paper studies the contracting structure and its evolution of two economic entities, namely farmers and leading enterprises, in the process of agricultural industrialization, both theoretically and practically. When the leading enterprises expand their production scale, they are constrained by factors such as credit, labor force and land. In order to reduce the production cost and transaction cost in expanding the production scale, leading enterprises and farmers tend to choose more incentive compatibility mechanism of investment in land and labor contract, which is named “leading enterprises + farmers + cooperative.” This mechanism can strengthen market bargaining power, reduce operating costs, eliminate or control the management risk and market risk, and improve the profitability of the organization for economic cooperation. The cooperative in which land and labor become shareholders in this paper has the dual nature of labor-employed capital and capital-employed labor. From “leading enterprises + farmers” to “leading enterprises + farmers + cooperative” is a fundamental change in governance mechanism. Under this framework, farmers and leading enterprises share residual control rights and claim rights, which not only improves farmers’ economic status, but also satisfies leading enterprises’ expectation of seeking profits. Therefore, this is a structural transformation with the nature of Pareto improvement. Induced by the increasing market demand, cooperatives will not only expand the scale of production, but also develop more detailed internal division of labor consistent with the market demand. In order to give play to professional advantages and improve operational efficiency, cooperatives gradually split into cooperative branches that produce different kinds of seedlings. These cooperative branches coordinated with each other and they transformed into cooperative cooperatives in an integrated way. This paper found that due to the unique nature in the process of agricultural industrialization of leading enterprises, although the cooperative sharing land and labor appeared some alienation phenomenon compared with the principle of Rochdale of international cooperative, it internalized the external market relationship in the traditional “leading enterprise + farmer” mode into different members of cooperative organizations, and improved the efficiency of resource allocation and the scale efficiency of agricultural economic development. By the change of contracting structure, the enterprise can break through the constraints of land, labor, capital and market, and is compatible with cooperatives. Leading enterprises transfer land and employ employees through vertical integration, while cooperatives combine more farmers through horizontal integration, which encourages more farmers to join the cooperative by means of land ownership and labor ownership, and establishes the contractual structure of “leading enterprise + cooperative association + cooperative + farmers.” This contractual structure locks bilateral investment in specific assets, reduces production costs and transaction costs, and inserts incentive compatibility mechanism into the internal governance structure of cooperatives. The case investigation and theoretical analysis show that the company-led cooperative extends the industrial chain on the basis of horizontal association, integrates vertical integration and horizontal integration, and speeds up the historical process of agricultural industrialization and modernization.
Reduce complexity to simplicity: how can Chinese multinational teams manage conflicts under cross-cultural situation?
XU Hui;WANG Yajun;SHAN Yu
Management World,2020,Vol 36,No. 09
Throughout the global market, more and more multinational enterprises, such as Volvo, GE and Siemens, have adopted the form of project teams to successfully operate globally. How overseas project teams manage conflicts under cross-cultural circumstances has become a hot issue of common concern in both the academic and the industry circles. Regarding the research topic of cross-cultural conflict management, the existing literature believes that the main source of cross-cultural conflicts is the heterogeneity of cultural values at the national level, and focuses more on the cultural value dimensions such as power distance, uncertainty avoidance, individualism and collectivism. No literature has yet fully explained the cross-cultural conflicts at the level of overseas project teams. This paper focuses on the core question of how to manage conflicts among overseas project teams of Chinese enterprises under cross-cultural context, and specific research conclusions are as follows. Firstly, under the cross-cultural context, overseas project teams of Chinese enterprises often face challenges brought by the cultural heterogeneity conflict, but the teams have a different heterogeneous source of cross-cultural conflict. Based on the case study of cross-cultural conflicts at the level of overseas project teams, this paper finds that cross-cultural conflicts originate from the heterogeneity of value orientation and management norms. Secondly, when conducting cross-cultural conflict management and control, overseas project teams of Chinese enterprises need to consider the internal and external priority of cultural embedding. When team culture is embedded internally and externally, they should pay more attention to achieving a balance of internal and external cultural embedding to achieve effective management and control of cross-cultural conflicts. Thirdly, the overseas project teams of Chinese enterprises manage cross-cultural conflicts through structural, functional and hybrid strategies under different cultural embedding. Specifically, when cultural embedding is focused internally, overseas project teams will choose a structured conflict management strategy. When cultural embedding is focused externally, overseas project teams will choose functional conflict management strategies. When embedded culture is focused internally and externally at the same time, overseas project team will choose conflict of hybrid control strategy, constantly adjust the coupling of structural control and functional control degree that reach the state of the mutual coordination between the management culture embedded in the internal and external equilibrium at the same time, and achieve the goal of intercultural conflict control. Theoretical contribution of this paper is mainly focused on three aspects. Firstly, in this paper, the source of cross-cultural conflict from two aspects, management norms and value orientation of deconstruction, also explained the value guidance and management standard level of the microcosmic basis of the formation of cross-cultural conflict, expanded and extended the Hofstede classic cross-cultural analysis framework, and contributed to the migration and deepening of the cross-cultural dimensions theory. Secondly, this paper explored the key role of culture embedded in the selection of conflict management strategies for China’s overseas project teams, and provided a new theoretical perspective for the follow-up research on the management and control of cross-cultural conflicts. Thirdly, structural, functional and hybrid conflict control strategies which were refined based on different culture embedded situations, further extended the research of Tjosvold (2006) on cross-cultural conflict control of China teams, broke through the traditional cross-cultural conflict control theory frame, revealed the micro mechanism of the cross-cultural conflict control, and provided important theoretical basis for the deconstruction of the cross-cultural conflict control study at the team level.
A multilevel sequential mediation model of vigilant leadership’s effects on role performance in a team context
GAO Zhonghua;ZHAO Chen;FU Yue;LIU Yonghong
Management World,2020,Vol 36,No. 09
Vigilant leadership has attracted much attention in management practice. However, existing literature on leadership has failed to answer whether and how vigilant leadership enhances performance. Therefore, our research aims to unveil the multilevel effects of vigilant leadership on team and individual role performance in a team context. Three hypotheses are proposed. First,we argue that influenced by vigilant leadership, teams are more likely to become prevention focused, rather than taking bold and aggressive measures to avoid potential failure. Thus,we hypothesize that vigilant leadership is positively related to team prevention focus. Moreover, prevention focused teams tend to reflect on and communicate with team goals, strategies and processes, which are core activities in team reflexivity. Thus,we hypothesize that vigilant leadership is positively related to team reflexivity through the mediating role of team prevention focus. Finally, as a core team function, team reflexivity has been found to help identify and define problems, a critical stepping stone to enhance performance. Thus, we propose that vigilant leadership is positively related to role performance at both team and individual levels. We tested our hypotheses using two independent team samples. Our first sample was from 72 teams including 372 team members in two IT companies in southern China.Team members evaluated vigilant leadership of their direct leaders at time 1, and rated team prevention focus and team reflexivity at time 2. Team leaders evaluated the overall team role performance at time 2. Our second sample was from 75 teams including 343 team members in five companies from different industries in northern China. Team members evaluated vigilant leadership at time 1 and rated team prevention focus and team reflexivity at time 2. Team leaders rated each individual team member’s team role performance at time 2. Our statistical results suggest that vigilant leadership has a direct positive effect on team prevention focus, an indirect positive effect on team reflexivity through team prevention focus, and indirect positive effects on team and individual role performance through team prevention focus and team reflexivity sequentially. These findings provide several managerial implications. First, vigilant leadership can be an optional model for team leadership development given its demonstrated effectiveness in a team context. Second, team leaders should facilitate the development of team prevention focus through the use of vigilant leadership behaviors, especially in an era of increased environmental uncertainty. Third, team leaders should guide their teams to make reflections from a preventive perspective in their goal attainment. Finally, team leaders may consider complementing vigilant leadership with other leadership styles such as relation-or task-oriented leadership behaviors to promote team interpersonal and task execution processes. Our research makes the following theoretical contributions. First, we contribute to the regulatory focus literature by demonstrating that vigilant leadership can help shape team members’ prevention focus. Such a finding provides direct empirical support for the differences between vigilant leadership and other existing leadership styles. Second, little attention has been paid to the role of team shared regulatory focus in transmitting the effects of leadership on team outcomes. Our finding has filled this theoretical void. Third, we enrich the leadership literature by demonstrating that team prevention focus and team reflexivity are two critical mechanisms in enhancing team effectiveness.
Partitioning of property rights and the innovation of state-owned enterprises: a quasi-natural experiment of bonus incentive reform in central government-owned enterprises
CAO Chunfang;ZHANG Chao
Management World,2020,Vol 36,No. 09
The debate on privatization has a major impact on academics and practice, but these studies are discussed under the assumption that the property right is complete. Theoretically, property is a bundle of rights, which can be divided to the right to own, the right to use, the right to reward, and the right to transfer, and the partitioning property arrangement can improve the efficiency of resource allocation to a certain extent. We attempt to test the effectiveness of the partitioning property arrangement in the setting of state-owned enterprise (SOE) reform. In 2010, the State-owned Assets Supervision and Administration Commission (SASAC) issued the Notice on Bonus Incentive Reform Pilot Project in Some Central Government-Owned Enterprises (No. 148) to implement the bonus incentive reform in some central government-owned enterprises, which is an excellent quasi-natural experiment setting to test the effectiveness of the partitioning property arrangement in SOEs. First, the bonus incentive reform intents to improve firm innovation by sharing part of profits with research workers who have made outstanding contributions to the development of the enterprise, which is a typical property partitioning arrangement keeping the ownership unchanged, but dividing the right to reward partly and transferring to the research employees. Second, the bonus incentive reform, which is a new incentive scheme proposed by the SASAC, is an relative exogenous shock, and provides an opportunity to construct differences-in-differences models to identify the causality. Taking the bonus incentive reform as an exogenous shock, we find the following results. (1) After the bonus incentive reform, the treated central government-owned enterprises have more innovation output. This conclusion is still valid after a series of robustness tests. (2) The channels of the bonus incentive reform promoting treated firms’ innovation output are improving expectations, strengthening supervision, and encouraging employee’s specific-investment input. We found that the effect of bonus incentive reform is mainly concentrated in the group with lower employee salary premium, lower internal control score and higher monopoly degree, and can inspire more inventions which contain more R&D risk. (3) The bonus incentive reform is important and relatively exogenous. The treated firms had significantly higher CAR after the announcement, but there is no significant difference in the CAR between the treated firms and controlled firms before the announcement of the scheme. The actual impact is also reflected on the increasing investment in R&D activity, higher innovation efficiency and higher innovation quality, and the policy’s impact is mainly concentrated at the level of subsidiaries corresponding to the content of the scheme. Compared with existing literature, this study intends to make several contributions. First, it responds to the theoretical controversy of privatization from the perspective of property partitioning arrangement. The bonus incentive reform we discussed is a division of the right to reward, and does not change the ownership of firms. Our result also has its unique policy implication: property partitioning arrangement may be an important supplementary approach in the reform of SOEs in China, especially for the monopolistic SEOs that are difficult to imply mixed ownership reform. Second, we expand the research on the reform of SOE from the perspective of employees. Existing studies discuss the efficiency improvement of SOEs mainly from privatization, SASAC, management, and the allocation of control power, and We provide a supplement perspective of employees based on the bonus incentive reform. Third, we expand the research on employee incentives affecting corporate innovation from the usefulness of bonus incentive reform,which is a special employee incentive scheme.
How can Internet interactive strategies improve the efficacy of interorganizational governance: task-technology fit (TTF) approach
LU Tingyu;ZHUANG Guijun;FENG Chao;LI Ruqi
Management World,2020,Vol 36,No. 09
Transaction cost theory (TCT) and relational exchange theory (RET) have been taken as two major theoretical bases in the literature. TCT acknowledges that firms may utilize contractual governance to suppress interfirm opportunism, while RET maintains that relational governance is essential for the stabilization of the interfirm relationships. Recently, researchers began to explore the possible impact of information technology (IT) or Internet tools on interorganizational governance. However, this stream of literature treats IT or Internet tools only as a variable that can be measured from multiple dimensions. It neither classifies the tools into different types, nor examines the effects of different tools on one governance task or the different effects of one tool on different governance tasks. On the other hand, a recent study dichotomized the ways that firms use Internet tools to communicate and interact with their stakeholders, namely Internet interactive strategies, into interorganizational system (IOS)-enabled interactions and social media (SM)-enabled interactions, and explored the different roles they played in interfirm collaboration based on the task-technology fit (TTF) model. We propose and test the TTF effects between the Internet interactive strategies and interfirm governance tasks, answering the question how Internet interactive strategies could improve the efficacy of interorganizational governance. Following the essential logic of TTF model and taking Internet interactive strategies as the usage of IT, interorganizational governance as tasks, and partners’ opportunism and firm’ s performance as consequences, we develop two hypotheses. Based on the argument that IOS-enabled interactions fit contractual governance more, while SM-enabled interactions fit relational governance in need for information more, H1 predicts that IOS-enabled interactive strategy is more helpful than SM-enabled interactive strategy to increase the efficacy of contractual governance in (a) inhibiting partners’ opportunism and (b) improving a firm’s own performance; and H2 predicts that SM-enabled interactive strategy are more helpful than IOS-enabled interactive strategy to increase the efficacy of relational governance in (a) inhibiting partners’ opportunism and (b) improving firm’s own performance. We use two sets of data collected respectively from the side of 550 and 501 manufacturers to test hypotheses. We conclude that since IOS-enabled interactive strategy fits contractual governance but not relational governance, it is more effective in promoting the efficacy of contractual governance, while it weakens or shows the non-significant effect on the efficacy of relational governance. In contrary, since SM-enabled interactive strategy fits relational governance but not contractual governance, it is more effective in strengthening the efficacy of relational governance, while it weakens or shows the non-significant effect on the efficacy of contractual governance. Our major contribution is proposing, testing and confirming TTF effects between Internet interactive strategies and interorganizational governance mechanisms. Our findings not only enrich the literature of interorganizational governance, but also imply a new perspective for considering and investigating the issues on interorganizational governance in the Internet context. In practice, the results of this paper may help firms to alleviate their concerns toward the utilization of Internet tools. Firms are suggested to choose certain Internet tools that best fit their governance tasks, especially suggested to adopt social media when trying to enhance the efficacy of relational governance.
Productivity and trade barrier: evidence from anti-dumping encountered by Chinese firms
WANG Xiaosong;LIN Faqin;LI Le
Management World,2020,Vol 36,No. 09
This article examines the causes of anti-dumping encountered by Chinese export companies at the manufacturer level, and empirically tests the impact of company characteristics on their anti-dumping lawsuits. The results show that productivity is an important influencing factor for Chinese companies encountering anti-dumping lawsuits. Generally speaking, low-productivity companies are more likely to incur anti-dumping lawsuits from trading partners in the international market. When companies are charged anti-dumping duties, low-productivity companies are often taxed heavily. The larger the export scale of a company is, and the smaller the financing constraints are, the more vulnerable it is to anti-dumping lawsuits. The slower the economic growth rate of the importing country is, and the faster the growth rate of the imported goods from China is, the more they tend to initiate anti-dumping lawsuits against Chinese companies. The measurement results steadily show that productivity factors have a significant effect on anti-dumping. The results of the mechanism inspection show that low-productivity enterprises often export products with lower unit value and are therefore more vulnerable to anti-dumping lawsuits in the international market. In terms of technical intensities, in low-tech industries, the probability of anti-dumping by exporting companies is negatively related to productivity. However, in the middle- and high-tech industries, the higher the productivity of the company is, the greater the probability of encountering anti-dumping is.This article focuses on the productivity factor, not only because productivity is the core variable in the heterogeneous trade theory of manufacturers, and the difference in productivity is the most important manifestation of the difference between manufacturers, but also because in reality that productivity can affect the export behavior and competition mode of enterprises through multiple channels. This affects the probability and intensity of companies encountering trade barriers in the international market, which provides a good realistic basis for us to examine the relationship between productivity differences and anti-dumping. In general, for exporting companies that choose developed markets, the lower the productivity is, the more likely they are to adopt a strategy of low-price competition to make up for defects in product quality and sales channels, showing the characteristics of dumping, and it is easier for them to be the object of anti-dumping complaints. For export companies that choose developing markets, due to the similar development stage and industrial structure, the market competition between companies in the same industry is fiercer, making them more vulnerable to anti-dumping lawsuits than companies exporting to developed markets. Finally, they will first choose the companies that complain about lower productivity. Not only because low-productivity companies selling goods at a price closer to production costs in the international market, which meets the conditions for the establishment of dumping and higher tax rates, but also because low productivity companies are relatively weak in responding, it is easier for the complainant to achieve the anti-dumping goal and to shut out Chinese exports. The situation of the low-tech industry is consistent with the full sample, while the high-tech industry shows the opposite pattern. In the future, uniformly enhancing export firms’ productivity is an important countermeasure to trade barrier and also the fundamental method to promote industries’ competitiveness. Chinese firms need to enforce diversification of export market to open up new markets and jump over trade barriers. In meantime, Chinese high-tech firms need to promote technological upgrading and develop autonomous brands to make their products non-substitutable.
Research on the antecedent configuration and performance of strategic change
ZHANG Ming;LAN Hailin;CHEN Weihong;ZENG Ping
Management World,2020,Vol 36,No. 09
Firm strategic changes are not only a powerful measure to improve worsening performance and sustain competitive advantages, but also an effective way to transform economic growth mode and push forward industries’ transforming and upgrading. However, in reality, firms are faced with the dilemma of waiting for death without changes or dying faster from changes. Therefore, how to effectively change has become an important theoretical and practical issue. This paper explores the following two interrelated research questions. (1) What are the paths leading to strategic changes? Based on the integrated framework of strategic changes, we argue that environmental complexity, prior performance, CEO origin, CEO power and TMT heterogeneity will jointly lead to strategic changes. (2) Which paths can lead to good performance to the firm? The paths shaped by different factors reflect different motivations and mechanisms of changes. Therefore, they may have different effects on firm performance. Based on samples of Chinese publicly listed manufacturing firms from 2008 to 2014, since the first research question involves interaction between more than three factors, we adopt fuzzy-set qualitative comparative analysis (fsQCA), an analysis method designed for configuration thinking, which helps to study the aforementioned interaction. The second research question extends the first research question in exploring the net effect of different paths on firm performance. The empirical results show that three different paths can lead to strategic changes: passive changes, proactive changes, and brainstorming changes. Passive changes refer to the strategic changes initiated by a firm when the CEO comes from outside, when the CEO has little power, when prior performance is poor, and when environment complexity is high. Proactive changes refer to the strategic changes initiated by a firm when the power of the CEO is strong, when prior performance is good, and when environmental complexity is high. Brainstorming changes refer to the strategic changes initiated by a firm when the power of the CEO is strong, when TMT heterogeneity is significant, and when environmental complexity is high. Furthermore, we find that the three paths have different impacts on firm performance. Specifically, compared with the control group, passive changes cannot significantly improve the firm’s poor performance in the early stage; proactive changes can help firms gain and maintain their competitive advantages; while brainstorming changes have a negative impact on firm performance. This paper contributes to the current literature in three ways. First, we contribute to the integrated framework of strategic change by identifying interaction among four different types of factors. Existing research neglects the links among the four types of factors. To the best of our knowledge, this is the first study to examine interaction among the four types of factors in the integrated framework of strategic changes. Second, leveraging the categorization function of the set theory, we address the inconclusiveness in the relationship between strategic changes and firm performance. We find that different types of strategic changes have different effects on firm performance. Therefore, differentiating between types of strategic changes may help to understand the inconclusiveness in existing studies. Finally, the research design of this paper provides an alternative solution to simultaneously exploration of the antecedents and consequences of specific firm behaviors.
Commitment paradigm of socialist economics with Chinese characteristics
JIN Bei
Management World,2020,Vol 36,No. 09
Similar to advances in other scientific disciplines, academic development in economics is characterized by evolving academic paradigms. Since 2018, studies on a paradigm shift in economics and the realm paradigm have aroused extensive interest and discussions among Chinese academia. This paper discusses the academic status of Chinese socialist economics from the perspective of a paradigm shift, which contributes to the development of economics. This paper reviews the emergence and development of economics, and finds that the basic path of its paradigm shift is an evolving process, moving from historical perspectives to micro, macro and more recently realm economics. In classical political economics, the paradigm commitment relates to the view of history. Neoclassical microeconomics places a premium on deductive logic and ceases to be a subject of history. The birth of macroeconomics marks another paradigm shift, and establishes the micro-macro paradigm in modern mainstream economics, known as the neoclassical synthesis. Further development in economics will naturally find expression in the evolution of academic paradigms. In economic paradigms, modern economics has developed largely along the metaphors of Newtonian physics or mechanics. That is to say, economies and market systems are imagined to be similar to the physical world. Such a way of perceiving economics formed the basic framework of academic paradigms for microeconomics and macroeconomics. The flaws and limitations of such systems are manifested in two aspects: the assumption of economic activity’s spatial nature; and the assumption of individual behaviors and the abstract goals of individualism. The realm paradigm can be introduced to supplement the micro-macro paradigm of modern mainstream economics, and bring about a paradigm shift, forming a system of micro, macro and realm paradigms. China’s unique national conditions help propel paradigm innovations in economics. The development of economics in China is characterized by unique realm attributes. Since 1949, Chinese academia has introduced the two major theoretical paradigms of political economics: political economics (capitalist part) created in accordance with Karl Marx’s Das Capital and political economics (socialist part) in the Soviet Union’s Textbook on Socialist Political Economics. Since the reform and opening up in 1978, China’s political economics has drawn upon the empirical results of the reform and opening up and important ideological elements reflecting change in China’s economic policy-making. However, there has been no fundamental change in the basic academic paradigm of political economics. Instead, the biggest change in economics in China has been the introduction of Western economics through learning, absorption, assimilation and localization, which has resulted in a large system of economic disciplines in China. Amid the great achievements of development in Chinese economics, limitations have also appeared. The future innovation and development of economics in China may focus on two key directions: (i) to reach the world-class level of modern economics under the existing economic paradigms; (ii) to seek a paradigm shift and blaze a new trail of academic progress, thus opening a “blue ocean” of development in economics. Key to the establishment of Chinese socialist economics is examination of the fundamental realm attributes of China’s economy. By incorporating the logical framework of economic thinking of the Communist Party of China, we may provide a more profound theoretical understanding and academic description of China’s economy, which is a fundamental realm attribute of the paradigm commitment of China’s socialist economics. In investigating Chinese socialist economics, we must have a proper grasp of basic facts about China, develop abstract concepts accordingly, and form an academic system based on the realm paradigm commitment.
