Hostname: page-component-78c5997874-xbtfd Total loading time: 0 Render date: 2024-11-14T05:21:25.998Z Has data issue: false hasContentIssue false
  • English
  • Français

Between Legitimacy and Socioemotional Wealth: Family Ownership and the Party Branches Building of Chinese Private Enterprises

Published online by Cambridge University Press:  29 April 2022

Xiaobin He  and
Jiankun Liu
Xiaobin He
Affiliation:
Tsinghua University, China
Jiankun Liu*
Affiliation:
Harbin Engineering University, China
*
Corresponding author: Jiankun Liu ([email protected])
Get access Rights & Permissions [Opens in a new window]

Abstract

Since 2012, a large-scale Party branches building campaign intending to regain political influence in the private sector has been sweepingly promoted. Drawing on the Chinese Private Enterprise Survey conducted in 2008, 2012, and 2018, this study investigates private enterprises’ strategies in response to the intensified political pressure by integrating socioemotional wealth theory and neo-institutional theory. It is found that (1) private enterprises with high family ownership tend not to establish Party branches until political pressure is very high; (2) enterprises with high family ownership are more likely to adopt a decoupling strategy of evading the Party's political and social goals; and (3) the owners’ perceptions of a better market and legal environment weaken the negative effect of family ownership on the establishment of Party branches. These results reveal the key logic of preserving the socioemotional wealth and ‘embedded agency’ of Chinese private enterprises when they confront institutional legitimacy mandates. This study also sheds new light on the causes of the decoupling phenomenon and the dynamic interactions between institutional environment and organizational behaviors.

摘要

2012年以来，中国共产党为了获得在私营部门的政治影响，开展了大规模的私营企业党建运动。在这一背景下，我们整合了社会情感财富理论和新制度主义理论，探讨了私营企业在应对加剧的政治压力时所采取的策略。对2008、2012和2018年中国私营企业调查数据（CPES）进行分析之后，我们发现：家族所有权程度与其党建活动密切相关，表现在（1）所有权越高，建立党支部需要越大的政治压力；（2）所有权越高，越可能采取脱耦策略来逃避政治目标。但是，结果也表明，企业家对市场和法律环境的正面感知可以减弱家族所有权对党建的负面影响。本研究的结果对于理解组织脱耦现象的成因，以及组织行为与制度环境的动态互动关系有新的启示。

Keywords

decouplingfamily ownershipinstitutional environmentsocioemotional wealth制度环境家族所有权社会情感财富脱耦
Type
Article
Information
Management and Organization Review , Volume 18 , Special Issue 2: Small and Medium-Sized Enterprises and Family Business in China , April 2022 , pp. 251 - 278
Copyright
Copyright © The Author(s), 2022. Published by Cambridge University Press on behalf of The International Association for Chinese Management Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

ACCEPTED BY Senior Editor Dali Ma

References

REFERENCES

Anderson, R. C., & Reeb, D. M. 2003. Founding-family ownership and firm performance: Evidence from the S&P 500. The Journal of Finance, 58(3): 1301–1328.CrossRefGoogle Scholar
Barontini, R., & Caprio, L. 2006. The effect of family control on firm value and performance: Evidence from continental Europe. European Financial Management, 12(5): 689–723.CrossRefGoogle Scholar
Berrone, P., Cruz, C., & Gomez-Mejia, L. R. 2012. Socioemotional wealth in family firms: Theoretical dimensions, assessment approaches, and agenda for future research. Family Business Review, 25(3): 258–279.CrossRefGoogle Scholar
Bromley, P., Hwang, H., & Powell, W. W. 2012. Decoupling revisited: Common pressures, divergent strategies in the US nonprofit sector. M@n@gement, 15(5): 469–501.CrossRefGoogle Scholar
Cao, Z. 2006. From borrow ‘Red Hat’ to Party committee building-the growth of large private enterprises and the evolution of organizational structure. In Zhang, S. (Ed.), Case studies on the institutional evolution (fifth collection), vol. 5. Beijing: China Finance and Economic Press (in Chinese).Google Scholar
Chen, L., & Wang, H. 2013. Family involvement, political connections and institutional environment - Evidence from Chinese private enterprises. Management World, 241(10): 130–141 (in Chinese).Google Scholar
Chen, D., Wei, G., & Xiao, Z. 2013. Law institution efficiency, financing and family control preference. Economic Research Journal, 10: 55–68 (in Chinese).Google Scholar
Chen, L., Liu, J., & Zhang, S. 2016. Influence of mimetic isomorphism on firms’ internationalization-performance relationship - An empirical study based on legitimacy. China Industrial Economics, 342(9): 127–143 (in Chinese).Google Scholar
DiMaggio, P. J., & Powell, W. W. 1983. The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2): 147–160.CrossRefGoogle Scholar
Fan, G., Wang, X., & Zhang, L. 2001. Annual report 2000 marketization index for China's provinces. China & World Economy, (05): 4–9.Google Scholar
Fukuyama, F. 1995. Trust: The social virtues and the creation of prosperity. New York: Free Press.Google Scholar
Gao, H., & Ye, J. 2018. Rising and prospects of Chinese family offices. Tsinghua Finance Review, 59(10): 42–45.Google Scholar
Gómez-Mejía, L. R., Haynes, K. T., Núñez-Nickel, M., Jacobson, K. J., & Moyano-Fuentes, J. 2007. Socioemotional wealth and business risks in family-controlled firms: Evidence from Spanish olive oil mills. Administrative Science Quarterly, 52(1): 106–137.CrossRefGoogle Scholar
Granovetter, M. 1985. Economic action and social structure: The problem of embeddedness. American Journal of Sociology, 91(3): 481–510.CrossRefGoogle Scholar
Greenwood, R., & Suddaby, R. 2006. Institutional entrepreneurship in mature fields: The big five accounting firms. Academy of Management Journal, 49(1): 27–48.CrossRefGoogle Scholar
Handler, W. C. 1989. Methodological issues and considerations in studying family businesses. Family Business Review, 2(3): 257–276.CrossRefGoogle Scholar
He, X., & Liu, J. 2020. Research on the effects of political connections on economic performance of private enterprises. Management Science Journal (guanlixue bao), 17(10): 1443–1452 (in Chinese).Google Scholar
Liu, S., Sun, J., & Zhu, H. 2016. Socioemotional wealth, institutional pressures and family control. Foreign Economics and Management, 38(7): 3–23 (in Chinese).Google Scholar
MacMillan, J. 2002. Reinventing the bazaar: A natural history of markets. New York & London: Norton Co.Google Scholar
Meyer, J. W., & Rowan, B. 1977. Institutionalized organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83(2): 340–363.CrossRefGoogle Scholar
Miller, D., & Shamsie, J. 1999. Strategic responses to three kinds of uncertainty: Product line simplicity at the Hollywood film studios. Journal of Management, 25(1): 97–116.CrossRefGoogle Scholar
Morck, R. K., Stangeland, D. A., & Yeung, B. 1998. Inherited wealth, corporate control and economic growth: The Canadian disease. National Bureau of Economic Research. Chicago: University of Chicago Press.CrossRefGoogle Scholar
Pierce, J. L., Kostova, T., & Dirks, K. T. 2001. Toward a theory of psychological ownership in organizations. The Academy of Management Review, 26(2): 298–310.CrossRefGoogle Scholar
Scott, W. R. 2013. Institutions and organizations: Ideas, interests, and identities. Los Angeles, CA: Sage Publications.Google Scholar
Shin, H.-H., & Park, Y. S. 1999. Financing constraints and internal capital markets: Evidence from Korean ‘chaebols’. Journal of Corporate Finance, 5(2): 169–191.CrossRefGoogle Scholar
Shleifer, A., & Vishny, R. W. 2002. The grabbing hand: Government pathologies and their cures. Cambridge, MA: Harvard University Press.Google Scholar
Thornton, P. H., Ocasio, W., & Lounsbury, M. 2012. The institutional logics perspective: A new approach to culture, structure, and process. Oxford: Oxford University Press.CrossRefGoogle Scholar
Villalonga, B., & Amit, R. 2006. How do family ownership, control and management affect firm value? Journal of Financial Economics, 80(2): 385–417.CrossRefGoogle Scholar
Welsch, J. H. 1993. The impact of family ownership and involvement on the process of management succession. Family Business Review, 6(1): 31–54.CrossRefGoogle Scholar
Yan, X., & Huang, J. 2017. Navigating unknown waters: The Chinese Communist Party's new presence in the private sector. China Review, 17(2): 37–63.Google Scholar
Zhou, L., & Chen, L. 2009. Family control, firm goals and fund rising decisions-evidence from family firms in Zhejiang and Chongqing. Management and Engineering Academic Journal, 4(23): 6–13 (in Chinese).Google Scholar
Supplementary material: Link

He and Liu Dataset

Dataset

https://doi.org/10.7910/DVN/ZOZ61J
Link