An Institutional Perspective on the Role of Culture in Shaping Strategic Actions by Technology-Focused Entrepreneurial Firms in China

Abstract

Economic reforms in China over the past 20 years have led to a steady economic transformation that has created many opportunities for entrepreneurial firms. A central focus in this economic development has been to encourage the founding of more technology-related entrepreneurial firms, and the creation of joint ventures between Chinese and foreign firms that employ advanced technologies. However, the interactions between these private high-technology entrepreneurial firms and the Institutional forces In their environment are somewhat different from what occurs in traditional Western high-technology businesses. These differences are due principally to the culture present in the Chinese environment. In turn, these cultural differences lead managers of high-technology entrepreneurial firms to employ tactics not well known in the West in order to successfully navigate China's often hostile institutional environment. This article develops the theoretical understanding of these actions grounded with observations from managers in China.