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.

As the largest and fastest growing transition economy in the world, China's entrance onto the global stage has been swift and dramatic. As such, almost every facet of entrepreneurship, from the identification of nascent opportunities to the challenges of managing triple-digit growth to the transformation of firms from dying to emerging industries, can be studied as natural experiments. The four papers in this issue are dedicated to exploring entrepreneurial innovation in the Chinese private economy. They include two clinical studies, one on the impact of the Beijing Olympics on entrepreneurship, and the other on the co-evolution of guanxi networks and entrepreneurial growth. Two studies test theories explaining the organizational drivers of innovation and entrepreneurship. In the best traditions, these four studies offer theoretical insights on the broader implications of entrepreneurship research in the Chinese context. We locate the findings offered by these four papers in the systems, organizational and social contexts of creativity, innovation, and entrepreneurship research. Finally, we offer some suggestions for future research and ways in which advances in the theoretical conversation should proceed.

Chinese firms are grappling with the four paradigm shifts around electric, connected, shared, and autonomous vehicles that are roiling the rest of the global auto industry. This article, which follows my earlier MOR article about the auto industry (Teece, 2018a), looks briefly at the development of capabilities in these fields by Chinese firms. It then analyzes the prospects for Chinese firms to use them to gain a stronger foothold in the global market, and for multinationals to continue to prosper in China. The paradigm shifts are creating new entry points for Chinese firms to capture value in the industry, and some potential global contenders have demonstrated solid dynamic capabilities in electric vehicles (Geely), shared vehicles (Didi Chuxing), and autonomous vehicles (Baidu). However, multinationals are also moving forward in the same fields and have strong complementary assets such as respected brands and well-honed dynamic capabilities.

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.

We synthesize the literature on Chinese multinational enterprises (MNEs) and find that much of the prior research is based on as few as a dozen case studies of Chinese firms. They are so case-specific that it has led to a misplaced call for new theories to explain Chinese firms’ internationalization. In an attempt to better relate theory with empirical evidence, we examine the largest 500 Chinese manufacturing firms. We aim to find out the number of Chinese manufacturing firms to be true MNEs by definition, and to examine their financial performance relative to global peers using the financial benchmarking method. We develop our theoretical perspectives from new internalization theory. We find that there are only 49 Chinese manufacturing firms to be true MNEs, whereas the rest are purely domestic firms. Their performance is poor relative to global peers. Chinese MNEs have home country bound firm-specific advantages (FSAs), which are built upon home country-specific advantages (home CSAs). They have not yet developed advanced management capabilities through recombination with host CSAs. Essentially, they acquire foreign firms to increase their sales in domestic market, but they fail to be competitive internationally and to achieve superior performance in overseas operations. Our findings have important strategic implications for managers, public policy makers, and academic research.

This study proposes an initial and a revised model of government-oriented public relation (PR) strategies based on the results of two content analyses of website news regarding the PR activities of 76 firms in general and six well-known firms in China in more depth. With the perspective of resource dependence theory, this model reveals that firms in China employ six types of formal PR strategies, including visitation, philanthropy, participation, publicity, party involvement and political propaganda, to manage their dependence on government for resources. Further, the implementation of such strategies involves a four-step process: organizing PR activities with economic, social and political significance; obtaining the involvement and recognition of the government; building firms' resource, moral and cultural legitimacy in the government's eyes; and interacting with the government on the issues of firms' dependence to influence government policies relative to firms. We also explore the differences that exist among firms with different ownership structures in the use of these PR strategies, the level of government involved and the issues pursued.

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.

Indigenous Chinese management research has attracted much academic attention in recent years. This study examines the mechanism through which Zhong Yong thinking influences employee adaptive performance from a self-regulation perspective. Using two-wave data of 361 subordinates in 62 teams from Chinese firms, job complexity was found to moderate the direct effect of Zhong Yong thinking on cognitive adaptability and emotional control, and the indirect effect on adaptive performance (via cognitive adaptability and emotional control). The direct and indirect effects of Zhong Yong thinking were found to be stronger with a higher level of job complexity. The study explores an important Chinese indigenous construct and its association with adaptive performance, and adds value to the indigenous management literature.

Using a social exchange perspective and responding to prior calls to separate resources exchanged from the relationship between parties, we develop a relationship typology based on rights and responsibilities arguments. We begin with the idea that various levels and types of rights and responsibilities are the exchange currency utilized by the employer and employee, respectively. Further, the degree to which an organization grants rights to an individual and the degree to which the individual voluntarily accepts responsibilities results in four distinct organizational membership profiles (i.e., peripheral, associate, detached, and full). We believe this membership typology is an important theoretical mechanism that may be used to link the exchange between the employee and employer (as represented by psychological contracts) to psychological attachment (as represented by perceived membership) between these two parties. Specifically, members in each profile will tend to have certain kinds of psychological attachments to the organization, causing them to (i) perceive membership in certain ways and (ii) behave in a manner consistent with that perception. The article concludes by discussing the implications of the propositions for both researchers and practitioners, as well as making suggestions for future research efforts.

Issues of ethics, justice, and social responsibility are as fundamental to organizational behavior as they are to society at large. As contracts are forged, individuals employed, and power differentials created, opportunities for exploitation, oppression, and victimization emerge. In contrast, as social structures evolve, coordinated opportunities arise for imparting positive social change at the community, environmental, and societal levels. Inherent to all of these phenomena is the application of norms surrounding moral behavior. Norms about what is considered fair and ethical underlie how individuals perceive and evaluate the behaviors and decisions of others; how groups and societies define acceptable behavior; and how individuals, groups, and societies evaluate the decisions and actions of organizations. In addition to defining standards, these norms also drive the reactions (or sanctions) against those who violate them.

Corporate social responsibility (CSR) disclosure is becoming increasingly important for modern corporations. Focusing on voluntary CSR disclosure and drawing on upper echelons theory, we propose that voluntary CSR disclosure is the manifestation of managerial preferences (e.g., managers’ professional ethical values and standards). Specifically, we argue that top executives with an academic background tend to have higher professional and ethical standards than their non-academic counterparts. These standards lead them to act with self-restraint and to perceive CSR disclosure as an opportunity rather than a threat. Compared with non-academic executives, therefore, top executives with an academic background provide stakeholders with more CSR information. Based on a sample of publicly listed firms in China, we find a significant difference in voluntary CSR disclosure between firms led by academic executives and firms without academic top executives. This difference is smaller for firms that are state-owned, firms that are audited by large audit firms, and firms with greater analyst coverage. We contribute to the literature on CSR voluntary disclosure by providing an in-depth analysis of the effects of top management teams’ academic backgrounds.

In commenting on the articles in this Editors' Forum, three questions are addressed: (i) how should we operationalize and measure creative outputs to enable a sound analysis of cross-cultural differences in creativity; (ii) could it be that culture impacts not only the valuation of originality and usefulness but also the psychological processes through which original yet useful ideas and insights are achieved; and (iii) does culture impact the domains in which individuals are more or less motivated to perform creatively? Using recent work on creativity as a starting point, and the key findings reported in this Editors' Forum, I propose that new research on culture and creativity would benefit from separating creative products from creative processes, and would do justice to the nature and functionality of cultures by asking not only when and how individuals and groups achieve creativity, but also why they would bother to be creative in the first place.

As China shifts its development model from focusing on economic growth at all costs to a model in which economic growth is balanced with solving pressing societal and environmental problems, there is an increasing need for management research on building sustainable organizations in China. This collection of papers focuses attention on the role of business in promoting sustainable economic development, highlighting a number of key processes including: the factors that foster transparency and CSR reporting, how stakeholders can influence corporations to abandon their CSR commitments, the benefits of environmental branding and labeling, and the antecedents and performance consequences of proactive environmental strategies. In this introductory essay we reflect on recent trends in sustainability research in China, and to encourage this important movement, provide recommendations for future research directions.

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 article addresses corruption as a negative practice displaying the ‘darker side’ of social capital in Chinese guanxi and Russian blat/svyazi networks. It presents a conceptual framework integrating several research streams to establish a conceptual linkage between social network characteristics and three forms of corruption between business persons and public officials: cronyism, bribery, and extortion. We argue that the forms of corruption in a society are determined by the nature of social network ties and their underlying morality, with particularistic and general trust being key factors. Our framework depicts networks as three concentric circles representing three types of corruption resulting from their corresponding types of reciprocity: open, closed, and negative. We then apply the framework to the practice of guanxi in China and blat/svyazi in Russia. We propose that different network characteristics and different forms of corruption may help explain what we label the ‘China-Russia paradox’ of why corruption and high economic growth have co-existed in China, at least in the short term, but less so in Russia. We conclude with ethical and legal implications for doing business in those two transforming economies and offer suggestions for future research.

Presenting post hoc hypotheses based on empirical findings as if they had been developed a priori seems common in management papers. The pure form of this practice is likely to breach research ethics and impede theoretical development by suppressing the falsification process. Two other forms may be more tolerable: deletion of rejected hypotheses and refinement of hypotheses inspired by empirical findings. To address this problem, the field should provide stronger recognition of replication, descriptive research, rejected and post hoc hypotheses, and critical tests of competing hypotheses. These positive changes require the concerted effort of researchers, management associations, and journal editors and reviewers.

To complement Barney and Zhang's as well as Whetten's articles in this issue of Management and Organization Review, we offer ways to develop indigenous management theory to explain unique Chinese management phenomena. We first briefly review the imbalance of developing theories of Chinese management versus developing Chinese theories of management in Chinese research societies. We then describe a five-step research process that uses an indigenous research approach to theory development: discovery of interesting phenomena, field observations, construction of the theoretical framework, empirical examination, and theory refinement. This process may be useful not only in the Chinese context, but also in any other context. We identify several challenges in both Chinese and international academic societies that must be overcome to facilitate learning across the two approaches proposed by Barney and Zhang: the need for high quality journals in the Chinese language, international journals' efforts to ease the imbalance between the two approaches, and collaboration between Chinese and Western management schools.

This article explores the dynamic interactions between entrepreneurs and politicians in transitional China through the lens of management buyouts. Specifically, we identify two contrasting outcomes of entrepreneur–politician alliances: privatization buyouts by entrepreneurs implying sustainable original alliances and failed management buyouts implying the collapse of the original alliances. Drawing on the rent appropriation literature, we treat Chinese management buyouts as bargaining, clarification, and redistribution of organizational rent between entrepreneurs and the government agencies represented by local politicians. We further develop a model of entrepreneur–politician bargaining that identifies the determinants of varying rent bargaining and management buyout outcomes.

As a scholarly field matures, theories emerge that guide paradigms and shape consensus in academic discourse. Management theories reflect a shared consensus on how individual behaviors or organizational actions result in a certain set of outcomes and under specific conditions. Clearly, theory is paramount to guiding whether models of potential relationships bear out and how and why we would expect a relationship or specific outcome. Yet much of this theory is derived from cumulative empirical evidence from a ‘context’ that has remained a silent partner in our quest for a theoretical contribution. A growing number of papers emphasize the theoretical contribution as disembodied from the context in which the empirical evidence of a causal relationship was gleaned. As an applied field, the emphasis on theory with disregard to the context of management practice presents a challenge for progress both as a scholarly domain and for credibility in what we teach and how we consult, or how we effect positive social change. This guest editorial joins a chorus of recent editorials in this journal (e.g., Tsui, 2013) and elsewhere (e.g., George, 2014) that suggest we rethink management scholarship, rejuvenate our ideas for research, and embed a nugget of practice in scholarly discourse.