Guanxi as complex adaptive system : definition, description and underlying principles

Guanxi has become a common term in the wider business community and has attracted an increasing attention of researchers. However, a consistent understanding of the concept continues to be elusive. We critically review the extant guanxi literature to identify the major inconsistencies in the way guanxi is currently conceptualized and develop a conceptualization of guanxi which views guanxi as a complex adaptive system formed by the strategic establishing, evolving, utilizing, and maintaining of personal relationships based upon social norms of trust and reciprocal obligation unique to the Chinese culture. This study contributes to research of guanxi and to the field of Chinese management in several ways. First, we identify four levels of inconsistency surrounding the conceptualization of guanxi in the literature, thus clarifying the current common sources of confusion. Second, this study deconstructs the level and core values of guanxi to provide a more transparent picture, enabling researchers to develop more robust measures of guanxi. Finally, we made progress towards a more comprehensive understanding of guanxi by introducing the complex adaptive system perspective into the guanxi research.

From strategic design to design integration

Within a growing awareness of design as central to the strategic success and the sustained competitive advantage of firms, this paper examines how companies pursue design driven innovation (Verganti, 2008, 2009) and respond to design led innovation initiatives (Matthews & Bucolo 2013). Specifically, this paper reports the findings of a collaborative research project where CEO sponsored senior managers from five multi-national organisations, met regularly over a twelve-month period, to discuss their progress on applying a design led approach in their firms. This longitudinal research project traced the process and progress of change instigated by the senior management representatives, as well as the deeper investigation of the barriers and challenges to re-frame design more strategically in their organisation. Data were collected through workshops and interviews throughout the twelve-month period, regarding the firms’ journeys and also the barriers and challenges firms faced in order to become design led. The findings present a novel set of implications for both designers and management scholars. This paper seeks to contribute to research and practice by investigating the processes and outcomes of a design led innovation program and to propose implications for practice for designers and management.

Alternative modes of entrepreneurial opportunity exploitation

While entrepreneurship research has taken firm formation to be the predominant mode of opportunity exploitation, entrepreneurship can take place through many other types of organizational arrangements. In the present article, we consider one such alternative arrangement, namely the formation of inter-organizational projects (IOPs). We propose a multi-level contingency model that suggests that uncertainty both at the level of the firm and at the level of the environment makes the exploitation of opportunities through IOPs more likely. The model is tested by telephone survey data collected amongst a panel of 1725 SMEs and longitudinal industry data. Our findings provide strong support for the industry-level part of the model, but interestingly, only partial support for the firm level part of the model. This indicates that the effects of uncertainty need to be dissected into different levels of analysis to understand the conditions under which alternative modes of opportunity exploitation can be a prominent entrepreneurial alternative to new firm formation.

Bricolage as a path to innovativeness for resource constrained new firms

Evidence suggests that both nascent and young firms (henceforth: “new firms”)—despite typically being small and resource-constrained—are sometimes able to innovate effectively. Such firms are seldom able to invest in lengthy and expensive development processes, which suggests that they may frequently rely instead on other pathways to generate innovativeness within the firm. In this paper, we develop and test arguments that “bricolage,” defined as making do by applying combinations of the resources at hand to new problems and opportunities, provides an important pathway to achieve innovation for new resource-constrained firms. Through bricolage, resource-constrained firms engage in the processes of “recombination” that are core to creating innovative outcomes. Based on a large longitudinal dataset, our results suggest that variations in the degree to which firms engage in bricolage behaviors can provide a broadly applicable explanation of innovativeness under resource constraints by new firms. We find no general support for our competing hypothesis that the positive effects may level off or even turn negative at high levels of bricolage..

Management issues in developing a sustainable model for supporting entrepreneurs in Africa

Small and micro-enterprises play a significant part in economic growth and poverty alleviation in developing African countries. There are, however, a range of management issues that arise when looking at the support required for local enterprise development, the role and management style of the local support agency and the role and style of the, usually Western, funding body. This paper explores the management philosophy required to establish and resource micro-enterprise development and compares the local management processes with those expected by a Western funding body.

ACE research vignette 025 : Is business planning important for entrepreneurial success?

This series of research vignettes is aimed at sharing current and interesting research findings from our team of international Entrepreneurship researchers. This vignette, written by Professor Per Davidsson, takes a closer look at the value of business planning.

ACE research vignette 026 : Do Entrepreneurs’ Personal Networks Influence Small Firm Performance?

This series of research vignettes is aimed at sharing current and interesting research findings from our team of international Entrepreneurship researchers. This vignette, written by Dr. Rene Bakker, examines the evidence on the effects of a entrepreneurs’ personal networks on small firm performance, and the factors that moderate this relationship.

ACE research vignette 028 : Does it pay for established firms to be entrepreneurial?

This series of research vignettes is aimed at sharing current and interesting research findings from our team of international Entrepreneurship researchers. This vignette, written by Professor Per Davidsson, examines the evidence on the effects of a firm’s level of “entrepreneurial orientation” on business performance, across different contexts.

ACE research vignette 030 : Is venture capital investment the key to success?

This series of research vignettes is aimed at sharing current and interesting research findings from our team of international Entrepreneurship researchers. This vignette, written by Professor Per Davidsson, reports on a paper which synthesizes available research on the effects of VC funding on the performance of the funded firm.

A micro perspective analysis of capability renewal through knowledge integration within product innovation projects

The aim of this paper is examine how firms renew their organisational capabilities based on micro organisational processes. Organisational capability development literature points to firms’ failure in capability renewal process. To overcome this inefficiency, it is proposed to integrate dynamic capability and ambidexterity perspectives by studying knowledge integration within product innovation. In this relation, applying micro perspective in studying technology diffusion within Iranian Auto industry revealed micro co-evolutionary relationships between knowledge integration within product innovation and capability development. Furthermore, based on near decomposability principals, the analysis suggested relationships among modularity of product architecture, modularity of organisational modularity and modularity of industry architecture in downstream and upstream value chain. Based on these micro-macro co evolutionary effects, capability development process underlying successful corporate entrepreneurship may be verified.

Capturing opportunities for business and innovation in knowledge intensive services

Research on opportunity has been extensively studied in contexts of new firm or new venture creation (Choi & Shepherd, 2004; Mullins & Forlani, 2005; Ozgen & Baron, 2007) where start-ups and new ventures use both opportunity discovery and opportunity creation (Alvarez & Barney 2005, 2007). Less research is found on examining the relationship between opportunity and innovation in existing firms (with Drucker (1985) an exception). In large firms, opportunity recognition has been analysed in terms of antecedent conditions, elements and outcomes (Ireland, Covin & Kuratko, 2009), but to date less attention has been given to how small and medium enterprises capture and use opportunities to remain competitive. Little research has been carried out regarding how smaller firms use opportunities to create new business with existing customers or use technological advances with new customers to create new economic activity, growth and competitive advantage. This study presents findings from a comparative case analysis of 20 diverse firms in the spatial information industry and identifies constructs associated with identifying opportunities that lead to better business performance and firm level innovation.

The relationship of entrepreneurial orientation, Vincentian values and economic and social performance in social enterprise

This study focuses on the managerial question “should social enterprises become more entrepreneurial?” It adapts the Covin and Slevin (1989) entrepreneurial orientation scale to measure the adoption of entrepreneurship by a social enterprise, and develops a scale that combines a Vincentian based focus to serve the poor with a propensity to take a more entrepreneurial approach toward business as a measure of a social value orientation (SVO).

Academia Accommodating Plagiarism? Surely Not!

In April 2010, Senior lecturer A discovered a new article on strategic entrepreneurship that contained her own words and paragraphs, published under the name of two complete strangers. Over the next eight months, in search of a just outcome, A contacted various people and institutions involved: the journal editor and publisher, and more than 20 academics and academic managers at five universities located in four different countries, including vice chancellors, rectors, and university professors. While nobody disputed the plagiarism (which involved at least three documents and more than 50 pages of text, tables, and figures), most were reluctant to act. Disillusioned by institutional responses, A had to decide whether to continue pursuing a just outcome at the risk of damaging professional relationships (and her future career), or whether to accept the status quo. She wondered what it would take to change the system to genuinely reject plagiarism.

The Role of Social and Human Capital Among Nascent Entrepreneurs

This study examines nascent entrepreneurship by comparing individuals engaged in nascent activities (n=380) with a control group (n=608), after screening a sample from the general population (n=30,427). The study then follows the developmental process of nascent entrepreneurs for 18 months. Bridging and bonding social capital, consisting of both strong and weak ties, was a robust predictor for nascent entrepreneurs, as well as for advancing through the start-up process. With regard to outcomes like first sale or showing a profit, only one aspect of social capital, viz. being a member of a business network, had a statistically significant positive effect. The study supports human capital in predicting entry into nascent entrepreneurship, but only weakly for carrying the start-up process towards successful completion.

Does Venture Opportunity Variation Matter? Investigating Systematic Process Differences Between Innovative and Imitative New Ventures

The central thesis in the article is that the venture creation process is different for innovative versus imitative ventures. This holds up; the pace of the process differs by type of venture as do, in line with theory-based hypotheses, the effects of certain human capital (HC) and social capital (SC) predictors. Importantly, and somewhat unexpectedly, the theoretically derived models using HC, SC, and certain controls are relatively successful explaining progress in the creation process for the minority of innovative ventures, but achieve very limited success for the imitative majority. This may be due to a rationalistic bias in conventional theorizing and suggests that there is need for considerable theoretical development regarding the important phenomenon of new venture creation processes. Another important result is that the building up of instrumental social capital, which we assess comprehensively and as a time variant construct, is important for making progress with both types of ventures, and increasingly, so as the process progresses. This result corroborates with stronger operationalization and more appropriate analysis method what previously published research has only been able to hint at.