Summary of Developing Theory from Strategic Management Research in China

Summary of Developing theory from strategic management research in China by Yuan Li and Mike W Peng, 2008

The research issue presented in this paper is a theoretical gap between the global theory developments with that of China in the field of strategic management. This is despite the fact that Chine being the most studied country as indicated in the high presence of articles in the Asia Pacific Journal of Management (58%). This paper attempts to map the most common approaches of theory development in China context, identifying recent efforts on it and also recommended approach deemed suitable to bridge between China and the global theory development.

The author classifies 3 approaches of theory development in Chin, summarized in the following figure:

Approach Advantages Disadvantage

Chinese local scholars: China-specific theories Highly unique and indegenious theories may be developed Lacks theoritical background, unlikely to be tested universally, lack of support on scientific methodology

Chinese trained in the West returned to Chinese Business Schools: validating western theories in China Broaden range of western theories, enhance understanding of Chinese realties from western perspective, likely to be tested by non Chinese speaking scholars Possible misfit between western (mostly US) theories and Chinese realilities e.g: on private firms in the US and state-owned enterprises in China.

Scholars familiar with western theories and ware of Chines uniqueness: Integrative (hybrid) Investgating systematic different assumptions between western and Chinese frameworks, English publications and set vocabs understandable by non-Chinese speaking, likely to be tested Require long time to observe, Reviewers may reject the proposed approach for preference of existing framework, lack of appreciation by Chinese speaking scholars not familiar with Eglish

The proposion offered by the authors of an integrative approach is based two streams which have been developed in the past decade. The first one focuses on the relationship between culture, strategic action and firm performance which have indicated unique characteristics, different that those in developed economies. This stream recognizes the uniqueness of China which has a major emphasize on guanxi (social relationship and connection), while increasingly adopting formal contracts. This blend between guanxi contractual governance may achieve better firm performance in strategic alliance.

The second stream of the integrative approach is the institution-based of strategy. It suggests to put institution-based view. In the western research, institution-based views are often placed as background. In China context it needs to be brought in the forefront, counting the dynamics and complexity around institutions.This shall be placed at par with the more established