IDEAS home Printed from
   My bibliography  Save this article

Wary managers: Unfavorable environments, perceived vulnerability, and the development of trust in foreign enterprises in China


  • Lai Si Tsui-Auch

    (Nanyang Business School, Nanyang Technological University of Singapore, Singapore)

  • Guido Möllering

    (Max Planck Institute for the Study of Societies, Cologne, Germany)


Vulnerability is salient among international managers, who tend to be wary when operating in transition economies like China. Systematic research is lacking, though, on how the local environment influences foreign managers’ perception of vulnerability, and how foreign managers can develop trust even when their perceived vulnerability is high. We conducted in-depth case studies of two foreign-controlled enterprises in China, and developed a theoretical model that links perceptions of the macro-level environment to micro-level management. Our results illustrate the antecedents and consequences of perceived vulnerability and the processes of trust building in unfavorable environments. Through comparative analysis of the two cases, we found that the foreign managers’ perceived vulnerability was shaped by the institutional, technological, and market conditions of the local environment, and we learned how this perceived vulnerability influenced their trust in the local workforce and the joint investment in formal and social control they used in building trust. The effect of perceived vulnerability on trust was moderated over time when the implementation of control was combined with active investments in trust, which led to behavioral changes on the part of the local employees, which in turn increased their trustworthiness. The implications of these findings are discussed.

Suggested Citation

  • Lai Si Tsui-Auch & Guido Möllering, 2010. "Wary managers: Unfavorable environments, perceived vulnerability, and the development of trust in foreign enterprises in China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(6), pages 1016-1035, August.
  • Handle: RePEc:pal:jintbs:v:41:y:2010:i:6:p:1016-1035

    Download full text from publisher

    File URL:
    File Function: Link to full text PDF
    Download Restriction: Access to full text is restricted to subscribers.

    File URL:
    File Function: Link to full text HTML
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Wong, Tommy & French, Linda & Wickham, Mark, 2016. "Knowledge-management issues in China’s hotel industry," Annals of Tourism Research, Elsevier, vol. 57(C), pages 257-259.
    2. repec:eee:worbus:v:53:y:2018:i:2:p:280-289 is not listed on IDEAS
    3. repec:eee:jbrese:v:76:y:2017:i:c:p:98-107 is not listed on IDEAS
    4. repec:spr:grdene:v:24:y:2015:i:5:d:10.1007_s10726-014-9422-6 is not listed on IDEAS
    5. repec:eee:touman:v:48:y:2015:i:c:p:439-454 is not listed on IDEAS

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jintbs:v:41:y:2010:i:6:p:1016-1035. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.