Institutional Change Driven by Corporate Political Entrepreneurship in Transitional China: A Process Model

By Gao, Yongqiang | International Management Review, January 1, 2008 | Go to article overview

Institutional Change Driven by Corporate Political Entrepreneurship in Transitional China: A Process Model


Gao, Yongqiang, International Management Review


[Abstract]

Corporate political entrepreneurship is one of the important political strategies used by corporations to seize the business opportunities that have emerged from the political arena. This strategy is more popularly used in transitional countries, since in such countries, the social and economic transition force of business entrepreneurs' abilities to change the existing, unreasonable governmental policies or regulations. China is just such a country. Although the theory of institutional change has been studied extensively in the field of institutional economics in the past fifty years, the process and actions used by corporate political entrepreneurs to change present institutions have been overlooked. This article wants to discuss that. In this article, a three-phase process model and four approaches to institutional change are proposed. Then, a case study is used to illustrate the process model. This study will help foreign companies understand the institutional environment and the game rules of institutional change in transitional China.

[Keywords] Approach; case study; corporate political entrepreneur; institutional change; process model

Introduction

Corporate political strategy, as a complement to business strategy, has received much attention in organization and management research (Baron, 1997; Gao, 2006; Getz, 1997; Hansen and Mitchell, 2001; Hillman and Hitt, 1999; Schuler et al., 2002; etc.). This is mainly attributed to the increase of the government's involvement in business operations in the last three decades. As a result, businesses have had to take strategies or actions to avoid the negative effects of policies or regulations, as well as to gain competitive advantage against industrial rivals by strategically using government policies or regulations (Gao, 2007; Shaffer, 1995; Vining et al., 2005).

Among various political strategies and actions, political entrepreneurship is identified as an effective strategy in dealing with government agencies (Noth, 1990; Scott, 2001; Seo and Creed, 2002; Yoffie, 1985). This strategy has become more widely used since the 1970s and needs special attention from business leaders (Yoffie and Bergenstein, 1985). For example, Bill McGowan, the former president of MCI (Micro Communication Inc.), acts as a political entrepreneur. He successfully sued AT&T for its monopoly in the telecommunications industry in 1974, which lead to the breakup of AT&T and the change of industrial regulations in the American telecommunications industry.

However, though corporate political entrepreneurship is widely used in practice, theoretical studies fall far behind. Campbell (2004) argued that an important but under-examined issue with respect to institutional theory has been the patterns of institutional changes. Scholars have not paid much attention to "when, why, and how" organizational actors influence institutional changes (Burns and Nielsen, 2006). In corporate political action (CPA) literature, corporate political entrepreneurship is only mentioned as a political strategy, and the behaviors of political entrepreneurs and the process of institutional change is far from being discussed. In institutional economics, researchers focus mainly on the generalized mode of institutional change/change and not on the micro behavior of political entrepreneur. The strategies or tactics of corporate political entrepreneurs are not discussed. Moreover, different nations form different institutional contexts (Busenitz et al., 2000; Calori et al., 1997; DiMaggio and Powell, 1983; Harper, 2003), and companies face different options (strategies and actions) in changing institutions. This means that research on corporate political entrepreneurship should be a condition in the special institutional context of a given country. Accordingly, companies should develop country-specific political strategies. In other words, strategies should be tailored to the specific issues, institutions, and interest that prevail in a country (Baron, 1995, 1997; Hillman and Keim, 1995; Murtha and Lenway, 1994). …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Institutional Change Driven by Corporate Political Entrepreneurship in Transitional China: A Process Model
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.