Frontiers of Business Research in China

ISSN 1673-7326

ISSN 1673-7431(Online)

CN 11-5746/F

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, Volume 4 Issue 3

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Embedded Guanxi Networks, Market Guanxi Networks and Entrepreneurial Growth in the Chinese Context
Xinchun Li, Li Liu
Front Bus Res Chin. 2010, 4 (3): 341-359.  
https://doi.org/10.1007/s11782-010-0101-4

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Entrepreneurial networks create an important entrepreneurial opportunity and facilitate resource acquisition. However, there has been little research on the correlation between the types of guanxi networks and entrepreneurial growth. This paper divides entrepreneurial/managerial networks into embedded guanxi networks based on social relationship and non-economic trade contracts, and market guanxi networks based on market negotiation. Hypotheses are proposed on how the embedded/market guanxi networks evolve with enterprise age and size. Data from 270 Chinese enterprises are used to empirically test the above classification and hypotheses. The results justify the new dichotomy for guanxi networks. It is also shown that, as an enterprise grows in age and size, its utilization of embedded guanxi network tends to decrease while its reliance on market guanxi network increases. In addition, as an enterprise grows in size and age, the impact of embedded guanxi network on enterprise performance remains significant, while the impact of market guanxi network keeps increasing.

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Managerial Power, Perquisite Consumption and the Efficiency of Property Right System: Evidence from Chinese Listed Companies
Rui Lu, Minghai Wei, Wenjing Li
Front Bus Res Chin. 2010, 4 (3): 360-379.  
https://doi.org/10.1007/s11782-010-0102-3

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This research uses data of Chinese listed companies during 2001– 2004 to test the effects of managerial power on perquisite consumption and firm performance from the perspectives of CEO duality, ownership dispersion and long-term tenure of top executives. Results show that companies with higher managerial power tend to incur higher perquisite consumption, while their performance does not improve accordingly. Moreover, perquisite consumption fails to offer effective incentives to managers, and non-state-controlled listed companies have greater managerial power, higher perquisite consumption, and worse performance than that of their state-controlled peers. Results also show that managerial power is an important factor influencing compensation incentive.

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Research on Satisfaction Recovery from Service Failure Due to Attitude Defect and Unfair Price: A Dynamic and Longitudinal Evaluation Model Based on Customer Win-Back Management
Xiaofei Tang, Jianmin Jia, Tingrui Zhou, Hongjuan Yin
Front Bus Res Chin. 2010, 4 (3): 380-408.  
https://doi.org/10.1007/s11782-010-0103-2

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Customer win-back is a cognitive process of satisfaction changing from a low level to a high level with service recovery strategies as the stimulus. Because prior research tends to view service recovery strategies as a static antecedent, it is difficult to analyze and observe how the recovery strategies affect satisfaction and repurchase intention dynamically. Moreover, not enough attention has been directed to the relationship between reasons of customer loss and recovery strategies. This research conducted a field experiment involving a 2 × 2 between-subjects design (defects of service attitude and unfair price ×tangible recovery and intangible recovery strategies). From a longitudinal and dynamic perspective, this study has produced the following key results: First, there are significant differences in satisfaction and purchase intention between the four groups categorized by specific reasons of customer loss. Second, recovery strategies may have non-linear effects on customer’s satisfaction. Lastly, based on the prospect theory and disappointment theory, we discuss important managerial implications of the function curves fitted between customer satisfactory (before customer loss and after implementation of customer winback strategy) and purchase intention.

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Team Learning, Transactive Memory System and Team Performance: A Longitudinal Study Based on the IMOI Approach
Shenjiang Mo, Xiaoyun Xie
Front Bus Res Chin. 2010, 4 (3): 409-422.  
https://doi.org/10.1007/s11782-010-0104-1

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This study examines how team learning behaviors transfer into team effectiveness, and analyzes the dynamic mechanism of team learning within a time series framework. 99 teams were recruited as our initial sample at the first stage, and 55 teams were traced at the second stage. We employed the input-mediator-output-input (IMOI) approach as proposed by Ilgen et al. (2005), instead of the traditional input-process-output (I-P-O) model in industrial and organizational psychology. Results show that the mediating effect of transactive memory system (TMS) on the relationship between team learning and performance is significant at both stages, which means TMS can adequately account for how team learning influences team performance as a mediator. Team performance, as an output received at the end of stage one, also acts as an important input variable at stage two, which in turn positively influences the subsequent team learning process. The circular causal model based on path analysis shows that the IMOI approach can be used to explain organizational mechanisms better than the classic I-P-O approach; the result is consistent with the new trends within the team relevant IO psychological understanding. Findings suggest that developing and maintaining a TMS is critical to achieving team outputs under a team learning setting. In addition, performance evaluation and feedback are also important factors within team learning processes. We argue that organizational behavior research based on an IMOI approach would have more generalizability and ecological validity than the traditional I-P-O model.

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Do Continuous and Categorical Measures Capture the Same Construct of Diversity? Evidence from China
Liangding Jia, Guoguang Wan, Jieyu Zhou, Qian Lu
Front Bus Res Chin. 2010, 4 (3): 423-450.  
https://doi.org/10.1007/s11782-010-0105-0

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Chinese researchers have long preferred substantive research (i.e., examination of relationships among variables) to construct validation research, while failing to realize that construct validation research is the foundation of substantive research. This paper endeavors to answer a question: Do Rumelt’s (1974) categorical and Standard Industrial Classification (SIC) and skill-based continuous measures capture the same construct of diversity in the context of China? We take two steps to investigate the question. First, are continuous measures (SIC & skill-based entropy and Montgomery product count) appropriately differentiated among Rumelt’s categories? Second, are the categories converted from SIC & Skill-based measures convergent to Rumelt’s categorical measures? Results show that the two measures are consistent with each other.

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An Empirical Study on the Influencing Factors of Supplier Involvement in New Product Development
Suicheng Li, Shanshan Gu, Qiao Wang
Front Bus Res Chin. 2010, 4 (3): 451-484.  
https://doi.org/10.1007/s11782-010-0106-z

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This research identifies six driving factors and twelve enabling factors for supplier involvement in new product development (SINPD) in China via a meta-analysis of the extant literature and a survey of over 100 Chinese manufacturing enterprises. Results show that most suppliers of Chinese manufacturing enterprises engage in new product development at middle or later phase, and the degree of involvement is usually high. Moreover, there are differences in the implementation of SINPD in enterprises of different sizes, types, and industries. The impact of different driving factors and enabling factors on SINPD implementation also varies with enterprise types.

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The Effect of Win-Back Investment on Lost Consumers’ Intention of Reinitiating Relationship
Jing Huang, Wei Xiong
Front Bus Res Chin. 2010, 4 (3): 485-497.  
https://doi.org/10.1007/s11782-010-0107-y

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This research studies the effect of win-back strategy on reinitiating brand-consumer relationship (BCR) by examining three commonly adopted strategies, namely apology, tangible reward, and privilege. Empirical findings demonstrate that these strategies have different effects on consumers’ intention of reinitiating relationship (CIRR). More specifically, whereas consumers will show positive CIRR if a transgression brand employs the strategies of apology, tangible reward and privilege, consumers’ perception of apology has the most significant effect. In addition, this study also tests the moderating role of brand relationship quality on CIRR. Results show that if the brand-relationship quality prior to brand transgression is high, win-back strategies will have more positive effects on CIRR, and vice versa.

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Do Entrepreneurial Social Networks Boost Enterprise Growth? Evidence from the Pearl River Delta in China
Xihong Qian, Wanli Xu, Kongyue Li
Front Bus Res Chin. 2010, 4 (3): 498-513.  
https://doi.org/10.1007/s11782-010-0108-x

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Against the backdrop of China’s traditional culture and economic transition, the effect of entrepreneurs’ social networks on enterprise growth has become an important topic attracting attention from both academics and practitioners. This paper decomposes entrepreneurs’ social networks into three dimensions: the external horizontal social network representing inter-firm relationship, external vertical social network in the form of interactions between enterprises and the government, and internal vertical social network referring to entrepreneurs’ control over enterprise operation. Results based on data from the Pearl River Delta reveal that all of the three dimensions of social network exert a positive impact on enterprise growth. The external horizontal social network plays the most influencing role, while the effects of the other two kinds of networks cannot be neglected either.

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8 articles