Balancing Formality and Informality in Business Exchanges as a Duality: A Comparative Case Study of Returnee and Local Entrepreneurs in China

Applying a Yin-Yang Perspective to the Theory of Paradox: A Review of Chinese Management

This paper examines the paradox in management through the yin–yang lens and how to apply the yin–yang perspective in Chinese indigenous management research through a literature review. Compared with several western philosophical perspectives, yin–yang places more emphasis on the interaction of interdependent contradictions and better describes the complex dynamics of both contradictions. Our review finds that the scholars propose yin–yang as a supplement to and an optimization of western management. The review focuses on connecting the yin–yang perspective with the paradox in management, cross-cultural management, and practice of organizational management.

In Search of Optimal Distinctiveness: Balancing Conformity and Differentiation via Organizational Learning

Firms in a nascent industry need to search across various technological trajectories and market opportunities with limited prior knowledge. While inter-firm learning (e.g., imitation) helps the focal firm adapt in the process of conformity, intra-firm learning (e.g., independent experimentation) helps a firm stand out from rivals in the process of differentiation, both of which can gain competitive advantages. This study investigates how the conformity-differentiation balance can be achieved from the cross-level learning perspective. Adopting a mixed-method design, we first conduct a case study on the Chinese photovoltaic industry. The case suggests that firms are inclined to conform in upstream and bottleneck technological domains but differentiate in the downstream market applications. We then extend the case findings through a computational simulation based on March's learning model. When experimentation and imitation are possible, the balance between conformity and differentiation can be reframed as the classical balance between exploitation and exploration across the firm and industry levels: while experimentation is often exploitative at the firm level but exploratory at the industry level, imitation is often exploratory at the firm level but exploitative at the industry level. The study makes a new attempt to bridge the optimal distinctiveness literature with the organizational learning literature.

The Eastern construction of paradoxical cognitive framework and its antecedents: a Yin–Yang balancing perspective

Purpose

In the face of external paradoxical requirements, the cognitive framework of managers and employees use to perceive, interpret and reconstruct information is important to ease anxiety and improve job performance. The Yin-Yang balancing of eastern philosophical thought is particularly good at explaining and predicting changes and conflict environments. For this reason, this study aims to propose the eastern construction of the paradoxical cognitive framework based on the Yin-Yang balancing theory and its antecedent framework.

Design/methodology/approach

This paper contrasts the similarity and differences between Chinese and Western philosophy’s thoughts on paradoxes. On this basis, the eastern construction of the paradoxical cognitive framework is proposed. Then, the paper puts forward the antecedent framework of managers’ cognitive framework and employees’ paradoxical cognitive framework.

Findings

This paper proposes the eastern construction of the paradoxical cognitive framework includes the following three dimensions: the unity-in-diversity of paradoxical elements, the asymmetric balance of paradoxical elements and mutual transformation of paradoxical elements. In addition, this paper proposes an antecedent framework of the eastern construction of the paradoxical cognitive framework – the paradoxical requirement of organizational environment exerts a direct impact on managers’ and employees’ paradoxical cognitive framework; managers’ paradoxical cognitive framework has a positive impact on paradoxical leadership; paradoxical leadership exerts an indirect impact on employees’ paradoxical cognitive framework through the collective paradoxical cognitive framework; paradoxical leadership directly affects employees’ paradoxical cognitive framework.

Research limitations/implications

This paper focuses on comparing the similarities and differences of the individual paradoxical cognitive framework in Chinese and Western cultures and proposes the eastern construction of the paradoxical cognitive framework and its antecedent framework. Future research needs to further verify the theoretical framework proposed in this paper.

Originality/value

This paper makes a detailed comparison of the paradox views in Chinese and Western philosophy. It is the first to propose the eastern construction of the paradoxical cognitive framework and its antecedent framework, laying a theoretical foundation for future empirical research.

Opportunism, Identification Asymmetry, and Firm Performance in Chinese Interorganizational Relationships

Extant literature focuses on within-dyad opportunism (i.e., transgression of the norms of a specific business relationship) while neglecting pro-relational opportunism (i.e., transgression of societal norms to benefit the relationship), resulting in limited understanding of their different effects. We argue that opportunism is a significant threat to the identity of business partners and boundary spanners which results in different relational dynamics at different levels, that is, Type-I (i.e., interorganizational identification squeezing out interpersonal identification) and Type-II identification asymmetry (i.e., interpersonal identification dominating interorganizational identification). Identification asymmetry further mediates the effects of opportunism on exchange performance. Based on a matched manufacturer–supplier sample, we find strong support to the hypotheses. Moreover, distributive fairness aggravates the effect of pro-relational opportunism on identification asymmetry, while interactive fairness mitigates it. Our research provides more nuanced between-level findings on identification in interorganizational settings, and cautions against firms’ tendency toward Machiavellian reasoning when they face the temptation of complicit behavior for organizational gains.

A Zhong-Yong perspective on balancing the top-down and bottom-up processes in strategy-making

Purpose

The purpose of this paper is to propose an alternative perspective on Zhong-Yong that is different from the notion of “Yin-Yang balancing” and apply it to understand the issue of balancing the top-down and bottom-up processes in strategy making.

Design/methodology/approach

The authors adopt a “West meets East” mindset and approach to develop an alternative perspective on Zhong-Yong, and then apply this perspective to understand the issue of balancing the top-down and bottom-up processes in strategy making. There are three steps in the process of developing the alternative perspective. First, the authors argue that the essence of “Yin-Yang balancing” is a ratio-based solution to paradoxical balancing, which is in fact equivalent to Aristotle’s doctrine of the mean and compatible with some western management scholars’ approaches to solving paradox. Second, the authors identify a different generic solution to paradoxical balancing implicit in the western management literature. Third, the authors find in the original text of Zhong-Yong equivalent ideas to the identified different generic solution and then propose an alternative perspective on Zhong-Yong that is fundamentally different from the notion of “Yin-Yang balancing.”

Findings

Applied to the issue of balancing the top-down and bottom-up processes in strategy making, the new perspective on Zhong-Yong provides us with the following prescriptive insights from the life-wisdom of eastern philosophy: first, top management (e.g. Shun as the sage-king) must listen to various views and opinions also from employees and low-level managers at the bottom of the organization to be better informed about complex issues. Second, top management must analyze the diverse elements of the various views and opinions they collect and synthesize by taking the good from the bad to find smarter solutions and make decisions with better outcomes. Third, abiding by a set of (more or less) cohesive values help top managers be open and receptive to information and insights from low-level organizational members and enhancing unbiased information.

Research limitations/implications

This paper is mainly a theoretical perspective. Empirical work is needed to test the prescriptions offered in this paper.

Practical implications

Practitioners may learn new perspectives from ancient Chinese philosophies on how to balance.

Originality/value

This paper applies a new perspective on Zhong-Yong to an important paradox in strategic management.

Reconceptualizing and Redirecting Research on Guanxi: ‘Guan-Xi’ Interaction to Form a Multicolored Chinese Knot

Guanxiis one of the most popular topics in Chinese and Western scholarship concerning social ties in China. However, several problems in research onguanxipersist, and multiple debates are still ongoing without much consensus in sight. This study has two goals. First, we offer a systematic review of the current literature onguanxi, especially by differentiatingguandyads fromxinetworks. This reconceptualization ofguanxienables us to clarify the concept ofguanxiby differentiating its two dimensions. Second, based on this literature review, we propose a redirection of future research onguanxisuch thatguandyads andxinetworks are not examined in isolation; rather, their holistic and dynamic interaction is the most fruitful avenue for future research, especially the four mechanisms of their interaction. The proposed reconceptualization and redirection are our two contributions to the literature.

Institutional Bridging for SME High-Distance Internationalisation to China: A Contextualised Explanation

This article offers a contextualised explanation of the process of institutional bridging by Delta, a British SME, in order to internationalise to China across high institutional distance. The study uncovers three novel mechanisms of ‘Cross-institutional Dissonance Mitigation’, ‘Multi-level Strategic Embedding’, and ‘Cross-institutional Consonance Retuning’ to explain how and why a failing SME with limited resources and networks was able to bridge the institutional distance and internationalise to the challenging Chinese market. This article contributes to the literature on SME internationalisation across high institutional distance by opening the ‘black box’ of SME institutional bridging, hence demonstrating the benefits of contextualised explanations to extend research into internationalisation phenomena that span multiple institutional boundaries.

Is Yin-Yang superior for paradox research?

Purpose

The paper debunks Peter P. Li’s assertion that Yin-Yang is superior to any other cognitive frames or logical systems for paradox research. The purpose of this paper is to alert the Chinese indigenous management researchers to the danger of Chinese exceptionalism and over-confidence.

Design/methodology/approach

To show that Peter P. Li’s assertion is doubtful, the authors identify the flaws in his analysis.

Findings

The authors find that there are three serious flaws in Peter P. Li’s analysis. First, there are four defects in the typology of cognitive frames he built in order to compare Yin-Yang with the others. Second, his understanding of dialectics in general and Hegelian dialectics in particular is flawed. And finally, without resorting to Yin-Yang, many scholars can develop theories that are equivalent to those derived from Yin-Yang.

Research limitations/implications

Due to the page limit, this paper only focuses on arguing that Yin-Yang is not superior to other cognitive frames or logical systems without going one step further to explain in which situations Yin-Yang are valuable and might be more suitable than others for helping us understand some research issues.

Practical implications

This paper implies that we should not blindly believe that the Chinese way of thinking and acting is superior to other people’s. Chinese people should be open-minded in the globalized era, not only promoting their own culture but also appreciating and learning from other cultures.

Social implications

The reduction of cultural exceptionalism and ethnocentrism can make cross-cultural communication and interaction smoother.

Originality/value

This paper is a rigorous critique on the “Yin-Yang being superior” assertion of Peter P. Li.

Zhong-Yong as dynamic balancing between Yin-Yang opposites

Purpose

The purpose of this paper is to comment on Peter Ping Li’s understanding of Zhong-Yong balancing, presented in his article titled “Global implications of the indigenous epistemological system from the East: How to apply Yin-Yang balancing to paradox management.” Seeing his understanding of Zhong-Yong balancing being incorrect and incomplete, the author proposes an alternative perspective on Zhong-Yong as dynamic balancing between Yin-Yang opposites.

Design/methodology/approach

The author first explain why Peter P. Li’s “asymmetry” and “superiority” arguments are flawed by referring to the original text of the classical book of Zhong-Yong (中庸) and a comparison between Zhong-Yong and Aristotle’s doctrine of the mean. The author then propose an alternative approach to Zhong-Yong balancing that is embedded in the original text Zhong-Yong but somehow has been neglected by many Chinese scholars. The author concludes the commentary by unifying the two alternative approaches to Zhong-Yong balancing under the inclusion-selection-promotion-transition (ISPT) framework of Zhong-Yong balancing.

Findings

There are three main findings. First, as the original text of Zhong-Yong does not prescribe asymmetry, Peter P. Li’s notion of “Yin-Yang balancing” is ironically unbalanced or anti-Zhong-Yong due to his emphasis on asymmetry to the exclusion of symmetry. Second, due to the equivalency between Zhong-Yong and Aristotle’s doctrine of the mean, Peter P. Li’s assertion that “Yin-Yang balancing” is superior as a solution to paradox management is flawed. Third, his “Yin-Yang balancing” solution is only (the less sophisticated) one of two alternative approaches to Zhong-Yong balancing, i.e., ratio-based combination of Yin-Yang opposites. What Peter P. Li and many other Chinese have neglected is another approach to Zhong-Yong that is embedded in the original text of Zhong-Yong, which I call “analysis plus synthesis.”

Research limitations/implications

As it is a commentary there are no specific limitations except for what can be covered in the space available.

Practical implications

The “analysis plus synthesis” approach to Zhong-Yong can be adopted by practitioners who are demanded to balance between opposite forces in daily life and work.

Social implications

The rejection of the “Yin-Yang balancing being superior” assertion facilitates reduction of friction and non-cooperation between intellectual traditions.

Originality/value

This commentary contributes to the “West meets East” discourse by debunking Peter P. Li’s assertion that Yin-Yang balancing is superior as a solution to paradox management and his prescription that balancing between Yin-Yang opposites must be asymmetric. It also contributes to the Chinese indigenous management research by identifying a largely neglected approach to Zhong-Yong balancing (i.e. “analysis plus synthesis”) that is alternative to the commonly understood ratio-based combination approach (e.g. “Yin-Yang balancing”). In addition, it contributes to the management literature by proposing the ISPT framework of Zhong-Yong balancing.

Trust-distrust balance: trust ambivalence in Sino-Western B2B relationships

Purpose

The purpose of this paper is to explore how Chinese and Finnish managers in cross-cultural supply-chain relationships evaluate their business partners’ trustworthiness and distrustworthiness.

Design/methodology/approach

Representatives of two Finnish companies and their Chinese and Finnish suppliers were interviewed to collect qualitative data from 23 managers.

Findings

The Chinese managers emphasized relationship-specific, personalized trustworthiness. They highlighted personalized communication and benevolence, which manifested in respect and reciprocity, rooted in the Chinese notion of “guanxi” as personal ties. In contrast, the Finnish managers’ view of trustworthiness was more associated with depersonalized organizational attributes. They emphasized the dimension of integrity, especially promise-keeping. In addition, tentative signs of trust ambivalence, as a balance between trust- and distrust-related factors, were identified for both the Chinese and the Finns.

Research limitations/implications

Due to the exploratory nature of this study the validity of the findings is limited to these data and context. Future studies could explore other national contexts as well as the effects of industry, market position, and position in the supply chain.

Practical implications

The findings of this study bring a valuable understanding of the potential pitfalls and unique challenges in cross-border inter-firm transactions. These can enhance inter-firm trust building in a cross-cultural context.

Originality/value

This study enriches the view of trust as a holistic process of simultaneous evaluation of both trustworthiness and distrustworthiness. In this process, trust ambivalence could serve as the intermediate construct between trust and distrust. These two contrary yet complementary opposites constitute a duality to be managed from the perspective of yin-yang balancing.

Global implications of the indigenous epistemological system from the east

Purpose

– The author argues and explains that the indigenous Eastern epistemological system of Yin-Yang balancing should be taken as a novel system or frame of thinking, which is deeply rooted in the indigenous Eastern culture traditions, but it has significant global implications, especially in the domain of paradox management. The purpose of this paper is twofold: first, to provide a detailed elaboration of the indigenous Eastern epistemological system of Yin-Yang balancing in contrast to the Western logic systems; and second, to provide a roadmap for applying the system of Yin-Yang balancing to complex issues in the area of management, in general, and paradoxical issues, in particular.

Design/methodology/approach

– This is a conceptual paper with a focus on theory-building.

Findings

– The author elaborates on the indigenous features of Yin-Yang balancing, in contrast to Aristotle’s formal logic and Hegel’s dialectical logic in the West, to further explore the former’s global implications for the increased attention to research on paradox management. In particular, the author posits that Yin-Yang balancing appears to be better suited for paradox management than the more commonly used logics available in the Western literature. Built upon the Yin-Yang balancing, a practical tool of Duality Map for paradox management is proposed.

Research limitations/implications

– The system of Yin-Yang balancing proposed in this paper has the potential to embrace logical systems available in the West into a geocentric (East-meeting-West) meta-system. This paper further shows how to apply Yin-Yang balancing with the tool of Duality Map to the most salient paradoxes in the domain of management, including value-profit balance (triple bottom lines), exploration-exploitation balance (ambidexterity), cooperation-competition balance (co-opetition), globalization-localization balance (glocalization), institution-agency balance (institutional entrepreneurship), simultaneously positive and negative attitudes toward an entity (ambivalence), and etic-emic balance (geocentric) across all domains of management research.

Originality/value

– The primary challenge for management researchers is to find a way to achieve a geocentric integration between the West and the East at the fundamental level of philosophy. The hope is that the philosophical traditions in the East will facilitate such integration. In particular, the Eastern philosophy of wisdom has a unique capacity to reframe paradox from a negative problem (i.e. a problem of inconsistency to be resolved by dualism in terms of separating opposite elements) to a positive solution (i.e. a solution of completeness or holism to be achieved by duality in terms of partially separating and partially integrating opposite elements).