Management and Organization Review

The mission of Management and Organization Review, founded in 2005, is to publish research about Chinese management and organizations, foreign organizations operating in China, or Chinese firms operating globally. The aspiration is to develop knowledge that is unique to China as well as universal knowledge that may transcend China. Articulated in the first editorial published in the inaugural issue of MOR (2005) and further elaborated in a second editorial (Tsui, 2006), the question of contextualization is framed, discussing the role of context in the choices of the research question, theory, measurement, and research design. The idea of ‘engaged indigenous research’ by Van de Ven, Meyer, and Jing (2018) describes the highest level of contextualization, with the local context serving as the primary factor guiding all the decisions of a research project. Tsui (2007: 1353) refers to it as ‘deep contextualization’.

Perkins and Murmann (2018) advance a provocative thesis, based on Tesla Motors, that ‘a well-funded company could develop a new electric vehicle (EV) from scratch and move it into production within 3 to 5 years. . . .’ This thesis of feasibility – indeed likelihood – of more new entrant EV automakers is at odds with my recent work (e.g., Jacobides, MacDuffie, & Tae, 2016; MacDuffie, 2013) which argues that automotive OEMs have been able to prevent extensive value migration to suppliers and new entrants due to their structural role as system integrators with the capabilities to manage a primarily integral product and organizational architecture. This role is bolstered by societal demands for OEMs to meet regulatory requirements for safety and handle legal liability claims. These structural features have helped automotive OEMs avoid the fate of IBM, which saw massive value migration, after introducing the modular PC, to Intel and Microsoft (suppliers of key components). These same features, I argue, will position these OEMs for continued centrality, forestalling a wave of successful new entrants despite many new, disruptive changes in technology and business models.

I've been asked to comment on this collection of three papers, each of which offers deep insights into the forces affecting the auto industry, particularly as concerns the relative positions of incumbent auto firms with respect to new electric vehicle entrants. Taken as a whole, the papers open a lens on the changes roiling the automotive sector. In this essay, I'll attempt to widen the aperture and provide a framework for a more systemic analysis of the forces reshaping the industry and the prospects for new entrants.

Management and Organization Review (MOR) is announcing a renewed initiative that seeks to encourage and publish research reporting engaged indigenous scholarship in China. MOR invites empirical as well as conceptual studies of indigenous phenomena related to management and organizations. MOR welcomes exploratory studies of new, emerging, and/or poorly understood indigenous research questions that employ abductive reasoning and creative hunches, as opposed to testing hypotheses deduced from non-indigenous Western theories. Data on indigenous phenomena can come from any source, including qualitative and quantitative data from case studies, field surveys, experiments, and ethnographies.

After reading Jacobides, MacDuffie, and Tae (2016), the success of Tesla in launching a new automobile company in a crowded sector puzzled us. Jacobides, MacDuffie, and Tae (2016) had convinced us that developing the capabilities to become the manufacturer of a complete, safe automobile system would be quite difficult. Since the establishment of the dominant design for the auto in the 1920s, the industry has operated on the premise of massive economies of scale. Original equipment manufacturers’ (OEMs) role in taking responsibility for the legal liability of the whole automobile, combined with their extensive supply and marketing chains, has ensured they remained dominant in the sector despite some missteps with modularisation and outsourcing efforts (Jacobides, MacDuffie, & Tae, 2016; Schulze, MacDuffie, & Taube, 2015). No major component supplier has succeeded in forward integrating into becoming an OEM and no new entrants have challenged the dominance of the incumbent OEMs since the earliest days of the auto industry (Jacobides & MacDuffie, 2013).

In the age of disruption, affecting the restructuring of industries, social organizations, the organization of work, globalization, international trade, and technological innovations, this issue showcases two disruptions. The Perspective Essay ‘Opportunities and Challenges of Engaged Indigenous Scholarship’, by Andrew H. Van de Ven, Alan D. Meyer, and Runtian T. Jing, followed by the commentary of Anne Tsui, confronts management scholars with the imperative to break out of the straitjacket of testing hypotheses derived from the dominant Western economic, management, and psychological theories with indigenous data. Tsui and Van de Ven, Meyer, and Jing challenge us to rediscover scholarship, which starts with observing actual indigenous phenomena, and employ eye-opening insights and abductive reasoning to arrive at new or different explanatory mechanisms. Data on indigenous phenomena can come from observations of actual phenomena relating to individuals, families, and organizations addressing the limitations of bounded rationality, finding the way, preserving harmony, and so forth, and moderated by indigenous institutional envelopes, history, cultural roots, and national aspirations. Indigenous scholarship welcomes applications of diverse approaches, including qualitative and quantitative data from actual case studies, field surveys, experiments, and ethnographies. This call for indigenous engaged scholarship dovetails with MOR's initiative in favor of the preapproval of research ideas and empirical plans (https://doi.org/10.1017/mor.2017.37), and we hope it will provide scientific legitimacy for indigenous research, which observes actual phenomena and eschews predetermined lenses of Western theories.

China, the world's largest market for electric vehicles (EV), has put in play a state industrial policy that is seeking to upend global automakers (see Financial Times, October 12, 2017 and May 20, 2018). Exemptions from taxes and subsidy programs have favored the purchasing of an EV, which are also exempt from driving restrictions in large cities such as Beijing and Shanghai. Policies that target manufacturers include meeting production targets for EVs (the so-called dual-credit policy by the Ministry of Industry and Information Technology). China may be on the verge of becoming a global disruptor in an industry that has home market advantages of scale, lower fossil fuel imports, and significant reduction of air pollution in cities while exploiting related technologies such as lithium batteries where China has world class industrial competence. It is in China's national interest to be a game changer in the global automotive industry from fossil fuel to electricity. And building infrastructure – supercharging stations included – fits the government-directed approach that aspires to establish the country as an undisputable global leader in a high-tech sector of global significance.

This interview contributes to the conversation around the automobile industry by focusing on the Chinese electric vehicle (EV) sector. Both of the discussants’ research interests encompass China's industrial competitiveness, innovation, science and technology policy, and the evolution of Chinese manufacturing industries. Professor Feng Lu, the interviewee, has conducted continuous and substantial fieldwork tracing the development of the Chinese automobile industry. He was one of the first experts to urge the Chinese government to help local automobile manufacturers develop innovation capabilities and proprietary products. Further, his 2005 book, The Policy Choice to Develop China's Automobile Industry with Independent Intellectual Property Rights, profoundly influenced the national policy transition toward emphasizing in-house innovation.

We examine the mechanisms through which firm capabilities moderate the impact of institutional forces upon firms’ adoption of environmental management strategy (EMS). Viewing the limitations of the institutional perspective in explaining the heterogeneity in firms’ EMS, we suggest that an important source of variation is the idiosyncratic capabilities of the firm in acquiring and allocating resources. Based on the strategic response theme of institutional theory and the resource-based view, we argue that the influence of institutional forces on EMS is contingent on the presence of environmental orientation and innovation capability. Using data collected from China, we test these notions. Our empirical results suggest that both environmental orientation and innovation capability positively moderate the effect of institutional forces on firm's EMS. By demonstrating how institutional forces and firm capabilities interact with each other, we enhance our understanding of how firms succeed in developing EMS.

State ownership is an important phenomenon in the world economy, especially in transition economies. Previous research has focused on how state ownership influences organizational performance, but few studies have been conducted on how state ownership influences employees. I propose that different ownership structures trigger different relational models among employees who pay attention to organizational justice consistent with their model to guide their extra-role behavior. Specifically, state-owned organizations reinforce employees’ relational concern and direct employees’ attention to procedural justice, whereas privatized organizations highlight employees' instrumental concern and direct their attention to distributive justice. I leverage a sample of organizations in China to explore how different ownership structures activate different relational models among employees and alter the relationship between organizational justice and employees’ extra-role behaviors. I find that state ownership attenuates and even reverses the positive relationship between distributive justice and extra-role behaviors. Conversely, state ownership exaggerates the positive relationship between a critical procedural justice dimension (participation in decision making) and employee extra-role behaviors. Implications for the micro-foundations of corporate governance and institutional change, organizational justice literature, and cross-cultural research are developed. This study also generates new insights for transition economies such as China.

Strategic ambidexterity has been under researched in the context of Chinese outward foreign direct investment (FDI). An ambidextrous FDI, balancing between exploratory and exploitive activities, is strategically desirable but managerially challenging. We examine the role of top management team (TMT) functional diversity in influencing Chinese firms’ degree of FDI ambidexterity, and its boundary conditions in relation to the informal and formal institutional environments within which the TMT operates. Based on a panel of Chinese outward-investing manufacturing firms, our empirical analyses show that a marginal positive effect of TMT functional diversity on a firm's FDI ambidexterity is strengthened by the social faultline presence in the firm's TMT, but is weakened by the development of formal institutions in the firm's external environment.

Extant spillover literature explains domestic firms' productivity change mainly by the presence and attributes of foreign direct investment. In contrary, this paper, by adopting a routine-based model of absorptive capacity, intends to explore how domestic firms absorb spillovers over time. Based on a qualitative study of a domestic firm in China's silicone adhesive industry, the findings show that unbounded by geographical constraints, domestic firms enact their external absorptive capacity routines to actively search for spillovers from multinational enterprises (MNEs) at both national and international levels. Moreover, rather than searching for what is available, domestic firms are selective for spillovers that are coherent with their business strategies. The most unexpected finding is that domestic firms diligently acquire spillovers from MNEs and from local competitors in combination. Spillovers acquired from local competitors are used to increase the inferential accuracy of spillovers acquired from MNEs about strategic successes. Further, instead of absorbing spillovers from MNEs which pose moderate technology gaps, domestic firms target at MNEs which exhibit wider technology gaps, and undertake organizational learning and develop complementary assets to enhance their internal absorptive capacity routines. Socially enabling mechanisms are found to facilitate domestic firms' absorption of spillovers by employee turnover.