Opportunism, bounded rationality and governance choices in exploration alliances: the moderating role of boundary spanners' guanxi

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Liang-Hung Lin ◽  
Yu-Ling Ho
Keyword(s):  
Transaction Costs ◽  
Bounded Rationality ◽  
Survey Methodology ◽  
Business Environment ◽  
Boundary Spanners ◽  
Relational Governance ◽  
Content Type ◽  
Chinese Business ◽  
Equity Ownership ◽  
High Level

PurposeBy distinguishing opportunism-based and bounded rationality-based transaction costs, the study examines how firms use equity/relational governance and boundary spanners' guanxi to govern their exploration alliances in a transaction cost economizing way.Design/methodology/approachThis study used a survey methodology for data collection, and the sample consists of 150 exploration alliances formed by large Taiwanese information and electronic firms.FindingsFindings of this study show that exploration alliances incur considerable transaction costs and require high-level equity control and relational governance. The positive exploration of alliance-equity ownership relationship will be weakened by boundary spanners' guanxi when guanxi serves to harmonize conflicts and mitigate opportunism-based transaction costs, thereby reducing the need for using costly equity ownership to govern exploration alliances. In contrast, the positive exploration alliance-relational governance relationship will be amplified when guanxi becomes a source of legitimacy in the Chinese guanxi institution. This relation-augmenting effect will drive more relational governance because guanxi and relational governance together allow alliance managers to obtain sufficient legitimacy in the formation of a common dominant frame, thereby mitigating bounded rationality-based transaction costs.Originality/valueBy distinguishing various moderating effects of boundary spanners' guanxi and separating transaction costs into two forms, this study contributes to the existing literature as well as advances our understanding of alliance governance decisions in the Chinese business environment.

Litigation against clients and audit report lag: an examination of the role of state ownership and regional legal development in China

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hui Liu ◽  
Charles Cullinan ◽  
Junrui Zhang
Keyword(s):  
Financial Statements ◽  
Potential Effect ◽  
Business Environment ◽  
State Ownership ◽  
Audit Report ◽  
Government Ownership ◽  
Content Type ◽  
Legal Development ◽  
Chinese Business

Purpose Companies may be defendants in lawsuits that are unresolved at year-end. This paper aims to consider whether the financial statements of companies facing litigation claims (pending litigation) are more time-consuming to audit due to the complexity and subjectivity of contingent liabilities associated with pending litigation. The authors consider whether auditors tailor their approach to pending litigation based on two distinct factors in the Chinese business environment: the client’s government ownership status and the legal development of the region in which the company is based. Design/methodology/approach Data on litigation against companies and their audit report lags were obtained for 18,029 firm-year observations of Chinese companies from 2008 to 2017. The sample was subsequently divided based on whether the company was a state-owned enterprise (SOE) and based on whether the company was based in a region of China with a more-developed and more market-oriented legal system. Findings The overall results indicate that audits of companies with pending litigation take 2.9 days longer than those of companies without pending litigation. For companies with multiple pending claims, each additional claim is associated with 1.9 more days of audit report lag. These effects are weaker for SOEs and for companies in regions of China with less developed legal systems. The results are consistent with the idea that auditors tailor their response to pending litigation based on the risk profile of the client, including consideration of SOE status and regional legal development. Originality/value This paper is the first to consider the potential effect of pending litigation (including claims not disclosed or recognized in financial statements) on audit report lags and how environmental business factors can influence this relationship.

The supply-side of corruption: a review of scenario, causes and prevention measure

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nurfarizan Mazhani Mahmud ◽  
Intan Salwani Mohamed ◽  
Roshayani Arshad
Keyword(s):  
Private Sector ◽  
Business Environment ◽  
Supply Side ◽  
Public Officials ◽  
Theoretical Understanding ◽  
Content Type ◽  
Preventative Measures ◽  
Prior Literature ◽  
The Government ◽  
High Level

Purpose This paper aims to provide a proper understanding of corruption in the private sector, also known as the supply-side of corruption. It also presents the causes of corrupt practices and points out the corporations’ actions to mitigate corrupt behaviour in the business environment. Design/methodology/approach This study reviews the prior literature on the phenomenon of corruption in the private sector, its causes and the preventive measures that should be implemented. Findings Corruption in the private sector was associated with a firm’s interaction with the public sector, and the most common corruption in the private sector is grand corruption, which is improper contribution made to high-level public officials and politicians. The causes of corruption in the private sector can be explained from several dimensions: economy, psychosocial and legal and regulation. Preventative measures encompass both internal strategies, which are endogenous to business and external strategies like exogenous legislation and restrictions enforced by the government or outside organizations. Originality/value The efficient strategies in combating corruption need active cooperation and participation from the supply-side of corruption. Thus, this study contributes to the literature on the theoretical understanding of the corruption problem from the supply-side and responsibility play by the private sector in global anti-corruption initiatives.

Practice of information systems

2006 ◽  
Vol 17 (2) ◽  
pp. 199-223 ◽  
Author(s):  
Milind Kumar Sharma ◽  
Rajat Bhagwat
Keyword(s):  
Operations Management ◽  
Survey Methodology ◽  
Small And Medium Enterprises ◽  
Business Environment ◽  
Cross Sectional ◽  
Content Type ◽  
Business Operations ◽  
Current Trends ◽  
Day To Day Operations ◽  
Medium Enterprises

PurposeTo provide the outcome of information system (IS) related practice survey designed to identify current trends in Indian small and medium enterprises (SMEs).Design/methodology/approachThis research is exploratory in nature, a survey methodology is used for study and the focus of study is cross‐sectional. Two companies have been selected for detailed case studies. The objective of the study was to become more familiar through survey and information collected to one point in time. The methodology was based on a questionnaire survey and personal interviews.FindingsThe outcomes, based on a survey of 210 SMEs, reveal that though SMEs understand and acknowledge the importance of the IS in day‐to‐day operations management in the present dynamic and heterogeneous business environment but these are yet to implement, operate and exploit it fully in a formal and professional manner so as to enable them to derive maximum business gains out of it. SMEs are not found equipped adequately with the IS resources to suit their needs.Research limitations/implicationsThe target of the study is the SMEs operational in the western part of India and hence it has the limitation in terms of the scope. However, the overall results are encouraging with 70 percent response rare in the survey and underline the need for more such studies. The results have implications for all managers responsible for IS, any SME in the era of globalization.Originality/valueThe paper presents IS‐related practices going on in Indian SMEs. Findings reported in the paper provide SMEs operators the utility of IS in day‐to‐day business operations.

The Anthropocene: age of complexity, foresight and innovation?

foresight ◽  
2018 ◽  
Vol 20 (5) ◽  
pp. 571-582 ◽  
Author(s):  
Jacques G. Richardson ◽  
Walter Rudolf Erdelen
Keyword(s):  
Business Environment ◽  
Problem Analysis ◽  
Trial And Error ◽  
Design Development ◽  
Content Type ◽  
Chinese Business ◽  
Development Evaluation ◽  
Single Field ◽  
The One ◽  
Made In

Purpose Specific examples or brief case-histories in different fields or disciplines illustrate the inventive process from conception to realization. Design/methodology/approach The authors examine predictions made in 2007 by “China experts” about what the Chinese business environment would look like in 2017. Their predictions were accurate in respect of around two-thirds of the issues they were asked to consider. The authors focus on the one-third of issues about which they were wide of the mark and examine the likely reasons. Findings The newly named Anthropocene is a time of increasing conception, research, design, development, evaluation and exploitation of new artifacts and services. Objectivity: careful problem-analysis assures the authors’ understanding of innovating pathways. Research limitations/implications Trial-and-error methods may be disorderly, log-type research records are not kept, accidents not considered relevant. Originality/value Examples cited are transdisciplinary, often requiring inputs from other economic or cultural sectors. These complexities should be of incalculable value to innovators with single-field backgrounds.

Improving predictions of international business environments: China as a case in point

foresight ◽  
2018 ◽  
Vol 20 (6) ◽  
pp. 622-634
Author(s):  
Marina Yue Zhang
Keyword(s):  
International Business ◽  
Global Financial Crisis ◽  
Business Environment ◽  
Delphi Panel ◽  
Strategic Decisions ◽  
Content Type ◽  
Business Environments ◽  
Chinese Business ◽  
The One

Purpose Firms engaged in international business necessarily make predictions about the business environments in which they operate or seek to enter, on the basis of which they make a number of strategic decisions. The purpose of this paper is to consider the difficulties there are in making accurate predictions and how the process might be improved. Design/methodology/approach The paper examines predictions made in 2007 by ‘China experts’ about what the Chinese business environment would look like in 2017. Their predictions were accurate in respect of around two-thirds of the issues they were asked to consider. This paper focuses on the one-third of issues about which they were wide of the mark and examine the likely reasons. Findings The predictions of the 2007 study were accurate in respect of around two-thirds of the issues the China experts on the Delphi panel were asked to consider. The reason that they were wide of the mark on about one-third of issues could be attributed to two main factors: the 2008/2009 Global Financial Crisis and the appointment in 2013 of Xi Jinping as the President of China. These events precipitated changes in direction in the Chinese business environment that had not been (and could not have been) anticipated by the Delphi panel. Originality/value Very few Delphi studies have been subject to a follow-up examination of the accuracy of their predictions. This paper contributes a discussion the various methodologies that firms can use to improve their forecasts of international business environments.

Apparel sourcing in Sub-Saharan Africa

2017 ◽  
Vol 21 (3) ◽  
pp. 203-218
Author(s):  
Ruth Dede Adikorley ◽  
Kristin Thoney-Barletta ◽  
Jeff Joines ◽  
Lori Rothenberg
Keyword(s):  
Raw Materials ◽  
Descriptive Analysis ◽  
Business Environment ◽  
Sub Saharan Africa ◽  
Free Access ◽  
Content Type ◽  
Major Player ◽  
The Usa ◽  
Sub Saharan ◽  
High Level

Purpose The purpose of this study is to examine why Sub-Saharan Africa (SSA) is not currently a major player in producing apparel for the US market and determine if SSA is likely to become one because of several opportunities that the region offers, including relatively low labor wages, an ample labor force and duty-free access to the USA through the 10-year renewal of AGOA. Design/methodology/approach In-depth interviews were conducted with eight high-level executives in apparel sourcing and trade agencies to obtain their views on the opportunities and challenges of sourcing in SSA in relation to other major apparel sourcing regions. A descriptive analysis of the qualitative data was used to answer three research questions. Findings The findings reveal that SSA is a competitive region to source from, because of low labor wages and the duty-free benefits through AGOA. However, several challenges hinder a significant increase in sourcing from SSA. The executives recommended that for SSA to be a significant force in the global apparel market, vertical supply chains should be developed, where raw materials like fabric are sourced from within the country/region and SSA governments should become more involved in business environment improvements. Originality/value At present, there is limited academic literature on sourcing and supplier selection in Africa, particularly in textile and apparel sourcing in SSA. Based on interviews from high-level executives engaged in the sourcing decision-making process, this study reveals the benefits, challenges and opportunities for sourcing apparel from SSA countries.

Arabic business relationship characteristics: a social capital perspective

2019 ◽  
Vol 34 (2) ◽  
pp. 412-425 ◽  
Author(s):  
Hussain Albin Shaikh ◽  
Sharon Purchase ◽  
Gregory Brush
Keyword(s):  
Social Capital ◽  
Business Environment ◽  
Positive Influence ◽  
Business Relationship ◽  
Structured Interviews ◽  
Content Type ◽  
Team Members ◽  
High Level ◽  
The Relationship

PurposeThe purpose of this study is to understand the development of social capital in an Arab business environment, and provide an in-depth description of the nature and role of three key Arabic business relationship characteristics (ehsan,et-mooneandwasta), their impact on each other and key influencing factors.Design/methodology/approachA qualitative research design was used, in which face-to-face semi-structured interviews were conducted with innovation teams (22 team members) at six industrial small and medium-sized enterprises in Saudi Arabia. The interviews were recorded and transcribed, then analyzed (thematic coding) through NVivo.FindingsThe findings suggest thatwasta,ehsanandet-moonealign closely with the three social capital dimensions (structural, cognitive and relational); thus, developing these three relationship characteristics most likely results in developing social capital. The findings also expand the description of the three business relationship characteristics. Moreover,ehsan,et-mooneandwastaappear to influence each other, and are affected by other factors such as an individual’s age and position, and the duration of the relationship.Ehsanhas a positive influence on the development ofet-moone, while the existence ofet-mooneappears to be necessary for the establishment ofwasta-capital. A high level ofehsanmight influence the relationship betweenet-mooneandwasta-use and limit the negative usage ofwasta.Practical implicationsInternational managers can improve the level ofehsanin their organizational and business relationships through assigning incentives and playing the role of moral champion to encourageehsanbehavior. Managers aiming to increaseet-moonemay choose team members with a high level ofehsan, emphasizing the development of personal relationships, and providing opportunities for socialization both inside and outside the workplace. A high level ofehsanandet-moonewill assist managers to develop and usewasta.Originality/valueThis study makes a threefold contribution to the literature. First, it provides an expanded description of the three Arabic business relationship characteristics and how they align closely with the dimensions of social capital.Wastaaligns with the structural dimension andehsanaligns with the cognitive dimension, whileet-moonealigns closely with the relational dimension. Second, it suggests and shows how the three relationship characteristics might interact with each other.Ehsanappears to influenceet-moone, and also the relationship betweenet-mooneandwasta.Et-mooneappears to have a positive influence onwastause. Third, the findings also indicate that there might be other factors (e.g. age and position) that influence the interactions between the three business relationship characteristics.

Boundary spanner closeness to partner firm as relational governance in turbulent versus stable environments

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shaohan Cai ◽  
Xiaoyan Wang ◽  
Yongchao Ma ◽  
Xinyue Zhou ◽  
Zhilin Yang
Keyword(s):  
Three Dimensions ◽  
Environmental Turbulence ◽  
Boundary Spanners ◽  
Relational Governance ◽  
Boundary Spanner ◽  
Content Type ◽  
Partner Firm ◽  
Key Dimensions ◽  
Petroleum Company

Purpose This study aims to explore the overall relationship between a boundary spanner and a partner firm, i.e. boundary spanner closeness to partner firm. Drawing on consumer-service provider relationship literature and the tripartite model of affect-behavior-cognition, the authors identify three key dimensions of such closeness, namely, boundary spanners’ relational ties, customer-specific capabilities and accommodative behaviors, and examine their effects on exchange outcomes in turbulent versus stable environments. Design/methodology/approach The paper examines the effects of three dimensions of boundary spanner closeness on various exchange outcomes (i.e. retailers’ cooperation, satisfaction and willingness for investment) using two industries as exemplars, characterized by distinct levels of environmental turbulence – the retailing networks of a major cell phone company and a petroleum company in China. Findings The results indicate that the three dimensions individually and jointly affect exchange outcomes and the interplay of customer-specific capabilities and relational ties affect exchange outcomes differently across industry turbulence. Originality/value The existing literature lacks a comprehensive understanding of the function of boundary spanners, which serve as a key relational interorganizational governance component. By identifying three key dimensions of boundary spanner closeness and examining their effectiveness in promoting exchange outcomes, this study advances the understanding of the role of boundary spanners in interorganizational governance.

The impact of relational governance on the adaptability of international contractors: a comparative study between China and Korea

2020 ◽  
Vol 27 (10) ◽  
pp. 3235-3259
Author(s):  
Yi-Hsin Lin ◽  
Yanzhe Guo ◽  
Chan-Joong Kim ◽  
Po-Han Chen ◽  
Mingwei Qian
Keyword(s):  
Regression Analysis ◽  
International Development ◽  
Construction Projects ◽  
Survey Methodology ◽  
East Asian ◽  
Primary Data ◽  
Relational Governance ◽  
Environmental Complexity ◽  
Content Type ◽  
The Impact

PurposeIn the process of undertaking overseas construction projects, relational governance has become indispensable for project stakeholders. This study examines how relational governance influences contractors' adaptability to foreign situations and whether such associations are positively moderated by international environmental complexity.Design/methodology/approachA crosssectional survey methodology was applied to collect primary data through questionnaires sent to domestic contractors in China and South Korea (hereafter Korea). Multiple regression analysis was used to test the effects of four dimensions of relational governance on contractor adaptability. Thereafter, the Chinese and Korean subsamples were tested separately through moderated regression analysis to explore differences in the influence of relational governance on adaptability.FindingsThe results showed that quality communication, favor exchange and establishing an emotional relationship significantly and positively affected a contractor’s adaptability. However, there were significant differences between the Chinese and Korean international contractors in terms of the moderating effects of international environment complexity.Research limitations/implicationsEast Asian engagement in international development is not limited to China and Korea alone, and the study should be replicated using large representative samples from more countries, such as Japan, to gain a fuller understanding of the influence of relational governance.Originality/valueThe results have great significance for the managers of international contractors in East Asian countries and contribute to the research on relational governance and contractor adaptability.

The enigma of the Chinese diamond industry

2014 ◽  
Vol 8 (4) ◽  
pp. 665-682 ◽  
Author(s):  
Ron Berger
Keyword(s):  
Business Ethics ◽  
Field Work ◽  
Chinese Economy ◽  
Relational Governance ◽  
Research Attention ◽  
Content Type ◽  
Future Studies ◽  
Chinese Business ◽  
Mitigating Factors ◽  
Over Time

Purpose – The purpose of this paper is to illustrate the evolution of Chinese business ethics over time and how it impacts business. While much research attention has been directed toward China and its various industries, the Chinese diamond industry has been largely neglected. This industry is the second in size and fastest growing globally. It is interesting to examine its evolution over time and how external factors affect the firms’ business ethics behavior. Design/methodology/approach – Exploratory field work involving the interview of major players was undertaken, complemented by extensive desk work, was used to create a base for future in-depth research of the secretive Chinese diamond industry. Findings – A paradox was identified in the Chinese diamond industry, namely, that while Chinese businesses tend to follow a relational governance model, China’s diamond industry tends to use rational mechanisms of governance and exchange, a paradox that is explained by mitigating factors. Research limitations/implications – Future studies should use a quantitative questionnaire with a larger set of Chinese diamond firms to further examine the paradox found. Future studies could also examine whether the transformation from a system based on social networks to a system based on market forces as found in the Chinese diamond industry is an indicator of an ethical and business evolution of the whole Chinese industry. This may illustrate the rationalization of the Chinese economy and its progression toward Western models of exchange as it further opens up to the West. Originality/value – This paper is a pioneering work on the business ethics and strategy implemented by firms in the Chinese diamond industry.

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