(Press-News.org) HOUSTON – (April 29, 2014) – For state-owned companies in China, the significant detriment in employing innovation may be linked to the company's ownership structure, according to a new study on Chinese entrepreneurship by Chinese business experts at Rice University, the University of Hong Kong, Texas Christian University, Jilin University and Shantou University.
The researchers found that the more equity the state owned of a company, the less likely the company was to engage in strategic entrepreneurship (investing in research and development and other innovations) to gain market share. This emphasis on strategic entrepreneurship in transition economies is critical as nations seek to revitalize existing state-owned companies. However, such efforts must be thought out and designed well, the authors said.
The findings are the result of the authors' study of 1,095 Chinese business-group-affiliated companies during a period of institutional friction in 1999; the researchers expected to find a potential conflict between emergent institutions encouraging strategic entrepreneurship and those still creating pressure for maintenance of the status quo. The authors examined how such institutional friction impacts firms' strategic choices regarding corporate entrepreneurship and innovation. The paper will be published in Strategic Entrepreneurship Journal.
"Although both formal systems designed to reward strategic-entrepreneurship activities and informal systems to develop new cultures are important in creating the desired strategic outcomes, their effectiveness is hampered by the embedded state philosophy," said Robert Hoskisson, one of the study's co-authors and the George R. Brown Professor of Strategic Management at Rice's Jones Graduate School of Business. "We believe that the results of this study provide insights for managers and policymakers in transition economies by highlighting the means and constraints that are available to encourage strategic entrepreneurship."
A transition economy is an economy that is shifting from a centrally planned structure toward a more free market. China is doing so very gradually. The former Soviet Union used the so-called "big bang" approach of very quickly privatizing state-owned firms, often through auction.
The researchers studied competing institutional philosophies measured through a company's founding leadership and ownership history and through the impact of formal and informal controls emphasized in newly formed business groups and how they influence company actions. Formal systems were manifested in the use of objective financial control measures to reward and discipline member firms; informal control efforts to indoctrinate new values and norms were represented by the socialization and development of a strong group culture.
The authors found that the original institutional philosophy of state control and ownership remained a potent factor among the Chinese companies, while the new institutional philosophy in support of strategic entrepreneurship took place through business groups' informal and formal organization controls.
They also found that state philosophy caused rigidity and inflexibility for companies to react to the new institutional demands, thus weakening the positive effects of business groups' formal and informal controls on strategic entrepreneurship.
The authors advocated that managers and policymakers of state-operated enterprises need to be cautious about the consistency between the institutionalization of new organizational practices and governance and control of the firms. "Although the use of formal controls that rely on structuration to sanction and set norms for appropriate behaviors may be more effective in the short run, for long-term effectiveness, a supportive cultural change for an emphasis on strategic entrepreneurship is needed," the authors said.
Transition economies are a significant part of the world economy, the authors emphasized. "However, forward economic movement in such nations will require a greater understanding of strategic entrepreneurship in former state enterprises," they said. "This research has helped lay the foundation for a greater understanding, but more research is still required."
INFORMATION:
For a copy of the study, "Dueling Institutional Logics and the Effect on Strategic Entrepreneurship in Chinese Business Groups," e-mail jfalk@rice.edu.
Follow Rice News and Media Relations via Twitter @RiceUNews.
Related materials:
Hoskisson bio: http://business.rice.edu/Robert_Hoskisson.
Located on a 300-acre forested campus in Houston, Rice University is consistently ranked among the nation's top 20 universities by U.S. News & World Report. Rice has highly respected schools of Architecture, Business, Continuing Studies, Engineering, Humanities, Music, Natural Sciences and Social Sciences and is home to the Baker Institute for Public Policy. With 3,920 undergraduates and 2,567 graduate students, Rice's undergraduate student-to-faculty ratio is 6.3-to-1. Its residential college system builds close-knit communities and lifelong friendships, just one reason why Rice has been ranked No. 1 for best quality of life multiple times by the Princeton Review and No. 2 for "best value" among private universities by Kiplinger's Personal Finance.
Rice U. study: How state ownership hampered entrepreneurship in Chinese companies
2014-04-29
ELSE PRESS RELEASES FROM THIS DATE:
Anti-smoking TV ads should use anger, Dartmouth-Cornell study suggests
2014-04-29
Anti-smoking television advertisements that appeal to viewers' emotions are more persuasive when they use anger rather than sadness, a Dartmouth-Cornell study suggests.
The study appears in the Journal of Health Communication. A PDF is available on request.
Previous studies have shown emotional expression is a crucial part of persuasion, and that audience members' perceptions of emotions affect their attitudes and behaviors. Previous research also has shown anti-smoking TV ads that convey negative emotions such as anger and sadness are more effective than non-emotional ...
'Feel good' factor higher when you own, not just use, luxury items
2014-04-29
It means more to people to own a luxury product or brand than to have the privilege of simply using one. Just using an affordable luxury item you don't own can, in fact, dampen the feel good factor that normally surrounds such products, say Liselot Hudders and Mario Pandelaere of Ghent University in Belgium. The research was published in Springer's journal Applied Research in Quality of Life.
To test the link between luxury consumption and subjective well-being, the researchers presented 307 study participants with luxury and ordinary versions of either a durable pen, ...
Solving a mystery of thermoelectrics
2014-04-29
CAMBRIDGE, Mass-- Materials that can be used for thermoelectric devices — those that turn a temperature difference into an electric voltage — have been known for decades. But until now there has been no good explanation for why just a few materials work well for these applications, while most others do not. Now researchers at MIT and elsewhere say they have finally found a theoretical explanation for the differences, which could lead to the discovery of new, improved thermoelectric materials.
The findings — by MIT graduate student Sangyeop Lee; Gang Chen, the Carl Richard ...
UNC researchers discover 'master regulator' role for little-known protein in cancer cells
2014-04-29
CHAPEL HILL, N.C. – Researchers in the UNC School of Medicine found that the protein DAZAP1 plays a key role in the regulation of many genes through a process known as alternative splicing, and when highly expressed in cancer cell line experiments, DAZAP1 was shown to inhibit several types of cancer cells from dividing and moving.
The discovery, published in the journal Nature Communications, marks the first time this little-known protein has been characterized in relation to cancer development and tumor growth.
"If you knock down DAZAP1, then most of the genes involved ...
Study yields potential drug targets for preeclampsia patients
2014-04-29
Preeclampsia, the most common complication of pregnancy, is a major cause of premature delivery and both maternal and fetal death, yet what causes the syndrome remains unclear. A new study indicates that molecules that send detrimental signals are abundant in certain tissues in preeclampsia patients. The study also documented some of the complications experienced by babies born to mothers with preeclampsia.
"Preeclampsia is a multifaceted complication found uniquely in the pregnant patient and one that has puzzled scientists for years," says the leader of the study, ...
CNIO team presents a new strategy to personalise cancer therapies
2014-04-29
Tumour cells can accumulate hundreds or even thousands of DNA mutations which induce the growth and spread of cancer. The number and pattern of mutations differs according to the type of tumour, even among those that are classified as part of the same type of tumours. This complexity, which researchers were not aware of just a few years ago, calls for new tools to filter relevant genetic information for the implementation and development of personalised therapies targeted at specific characteristics within each individual tumour.
Researchers led by Manuel Hidalgo, Vice-Director ...
Mathematicians trace source of Rogers-Ramanujan identities, find algebraic gold
2014-04-29
Mathematicians have found a framework for the celebrated Rogers-Ramanujan identities and their arithmetic properties, solving another long-standing mystery stemming from the work of Indian math genius Srinivasa Ramanujan.
The findings, by mathematicians at Emory University and the University of Queensland, yield a treasure trove of algebraic numbers and formulas to access them.
"Algebraic numbers are among the first numbers you encounter in mathematics," says Ken Ono, a number theorist at Emory "And yet, it's surprisingly difficult to find functions that return them ...
Proving uncertainty: New insight into old problem
2014-04-29
WASHINGTON D.C., April 29, 2014 -- Nearly 90 years after Werner Heisenberg pioneered his uncertainty principle, a group of researchers from three countries has provided substantial new insight into this fundamental tenet of quantum physics with the first rigorous formulation supporting the uncertainty principle as Heisenberg envisioned it.
In the Journal of Mathematical Physics, the researchers reports a new way of defining measurement errors that is applicable in the quantum domain and enables a precise characterization of the fundamental limits of the information accessible ...
Poor QOL doesn't predict low survival in high-risk lung cancer patients undergoing surgery
2014-04-29
Toronto, ON, Canada, April 29, 2014 – Quality of life (QOL) is rarely reported in surgical publications, yet it can be an important metric that can be of use to physicians and patients when making treatment decisions. Prior studies of average-risk patients undergoing lobectomy suggested that low baseline QOL scores predict worse survival in patients undergoing non-small cell lung cancer surgery. The results of a multi-center, longitudinal study of high-risk lung cancer patients who underwent sublobar resection counters this idea, finding that poor baseline global QOL scores ...
Mother's diet affects the 'silencing' of her child's genes
2014-04-29
A mother's diet before conception can permanently affect how her child's genes function, according to a study published in Nature Communications.
The first such evidence of the effect in humans opens up the possibility that a mother's diet before pregnancy could permanently affect many aspects of her children's lifelong health.
Researchers from the MRC International Nutrition Group, based at the London School of Hygiene & Tropical Medicine and MRC Unit, The Gambia, utilised a unique 'experiment of nature' in rural Gambia, where the population's dependence on own grown ...