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Managing corporate crisis in China: Sentiment, reason, and law

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  • Yang, Zhilin
  • Jiang, Ling (Alice)

Abstract

Why has the incidence of corporate crisis risen markedly in China? Why are foreign firms frequently targeted by the Chinese authorities and how should they deal with it? Addressing these pivotal questions is essential for effective management of corporate crisis in the Chinese market. Herein, we describe the background of relevant institutional and market environments in China. Then we introduce three prominent principles deeply rooted in Chinese thinking and business practice—sentiment, reason, and law—and pinpoint how they relate to crisis management. Several cases drawn from well-known corporate crises are utilized to illustrate the dynamic relationships among these three fundamental principles. We proceed to highlight the importance of sentiment and emphasize the delicate balance between sentiment and law. Finally, we elaborate how different forms of institutional capital and social media can be employed to manage sentiment, reason, and law so as to curtail and tackle corporate crisis.

Suggested Citation

  • Yang, Zhilin & Jiang, Ling (Alice), 2015. "Managing corporate crisis in China: Sentiment, reason, and law," Business Horizons, Elsevier, vol. 58(2), pages 193-201.
    • Handle: RePEc:eee:bushor:v:58:y:2015:i:2:p:193-201
    DOI: 10.1016/j.bushor.2014.11.003
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    References listed on IDEAS

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    Cited by:

    1. Wang, Yijing & Laufer, Daniel, 2020. "How does crisis management in China differ from the West?: A review of the literature and directions for future research," Journal of International Management, Elsevier, vol. 26(1).
    2. Young, Michael N. & Bruton, Garry D. & Peng, Mike W. & Yu, Xiaoyu, 2022. "U.S. corporations are from Mars, Chinese corporations are from Venus," Business Horizons, Elsevier, vol. 65(4), pages 505-517.
    3. Margherita, Alessandro & Heikkilä, Marikka, 2021. "Business continuity in the COVID-19 emergency: A framework of actions undertaken by world-leading companies," Business Horizons, Elsevier, vol. 64(5), pages 683-695.
    4. Sáenz, María Jesús & Revilla, Elena & Acero, Beatriz, 2018. "Aligning supply chain design for boosting resilience," Business Horizons, Elsevier, vol. 61(3), pages 443-452.
    5. A. J. Guerber & Vikas Anand & Alan E. Ellstrand & Matthew A. Waller & Iris Reychav, 2020. "Extending the Situational Crisis Communication Theory: The Impact of Linguistic Style and Culture," Corporate Reputation Review, Palgrave Macmillan, vol. 23(2), pages 106-127, May.

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