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Interorganizational Exchanges in China: Organizational Forms and Governance Mechanisms

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  • Zhang, Jianjun
  • Keh, Hean Tat

Abstract

This article discusses how organizations exchange with one another in China, focusing on the type of organizational ownership and the form of governance mechanism. The theoretical foundation builds on institutional theory, resource dependence theory, agency theory, and evolutionary theory. Given the three main forms of organizations in China – state-owned enterprises, privately owned enterprises, and foreign-invested enterprises - we show how these organizations choose between two types of governance mechanisms, contracts and guanxi, to manage interorganizational exchanges. We then analyze the possible modes of interaction between organizational forms. We argue that the relative importance of guanxi is likely to decline or that guanxi will shift from being primary in some organizations to complementary in all organizations with the progress of market transition. This conceptual framework is expected to help provide the momentum for further theoretical exploration and empirical study in this area.

Suggested Citation

  • Zhang, Jianjun & Keh, Hean Tat, 2010. "Interorganizational Exchanges in China: Organizational Forms and Governance Mechanisms," Management and Organization Review, Cambridge University Press, vol. 6(1), pages 123-147, March.
    • Handle: RePEc:cup:maorev:v:6:y:2010:i:01:p:123-147_00
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    Cited by:

    1. Zhang, Chuang & Du, Nan & Zhang, Xubing, 2021. "When an interfirm relationship is ending: The dark side of managerial ties and relationship intimacy," Journal of Business Research, Elsevier, vol. 125(C), pages 227-238.
    2. Ziyi Wei & Quyen T. K. Nguyen, 2020. "Local responsiveness strategy of foreign subsidiaries of Chinese multinationals: The impacts of relational-assets, market-seeking FDI, and host country institutional environments," Asia Pacific Journal of Management, Springer, vol. 37(3), pages 661-692, September.
    3. Fang Yao & Kai Zhao & Xiaoyu Xu & Wenfei Liu, 2022. "Can Corruption Facilitate Industrial Structure Upgrade in China? The Moderating Role of Government-Business Relationships," SAGE Open, , vol. 12(3), pages 21582440221, September.
    4. Hu, Chenguang & Li, Jiatao & Yun, Kyung Hwan, 2023. "Re-examining foreign subsidiary survival in a transition economy: Impact of market identity overlap and conflict," Journal of World Business, Elsevier, vol. 58(3).
    5. Hongjuan Zhang & Rong Han & Liang Wang & Runhui Lin, 0. "Social capital in China: a systematic literature review," Asian Business & Management, Palgrave Macmillan, vol. 0, pages 1-46.
    6. Wei, Li-Qun & Ling, Yan, 2015. "CEO characteristics and corporate entrepreneurship in transition economies: Evidence from China," Journal of Business Research, Elsevier, vol. 68(6), pages 1157-1165.
    7. Gao, Yu & Gao, Shanxing & Zhou, Yunyue & Huang, Kuo-Feng, 2015. "Picturing firms' institutional capital-based radical innovation under China's institutional voids," Journal of Business Research, Elsevier, vol. 68(6), pages 1166-1175.
    8. Helen Wei Hu & Jiamin Zhang, 2023. "How do Corporate Social Responsibility and Innovation Co-evolve with Organizational Forms? Evidence from a Transitional Economy," Journal of Business Ethics, Springer, vol. 186(4), pages 815-829, September.
    9. Hongjuan Zhang & Rong Han & Liang Wang & Runhui Lin, 2021. "Social capital in China: a systematic literature review," Asian Business & Management, Palgrave Macmillan, vol. 20(1), pages 32-77, February.
    10. Wenbo Guo & Jing Betty Feng & Brad McKenna & Pengzhu Zhang, 2017. "Inter-organizational governance and trilateral trust building: a case study of crowdsourcing-based open innovation in China," Asian Business & Management, Palgrave Macmillan, vol. 16(3), pages 187-207, July.
    11. Nan Zhou, 2018. "Hybrid State-Owned Enterprises and Internationalization: Evidence from Emerging Market Multinationals," Management International Review, Springer, vol. 58(4), pages 605-631, August.

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