TY - JOUR
T1 - When Is a Governmental Mandate not a Mandate? Predicting Organizational Compliance Under Semicoercive Conditions
AU - Xie, Xuanli
AU - Shen, Wei
AU - Zajac, Edward J.
N1 - Funding Information:
We would like to thank our editor William Wan for his insightful guidance and support throughout the review process. We are also grateful for the valuable inputs from two anonymous reviewers on earlier versions of this article. The study benefitted from funding from the Ministry of Education of China (16JJD630001).
Publisher Copyright:
© The Author(s) 2020.
PY - 2021/11
Y1 - 2021/11
N2 - While institutional theorists have long viewed governmental mandates as a prototypical coercive pressure generating homogeneous organizational compliance, we suggest that such mandates are often subject to enforcement uncertainty, resulting in a pressure more aptly characterized as “semicoercive” and a compliance result more aptly characterized as heterogeneous. We advance and test a theoretical framework to predict the specific form of heterogeneous compliance in semicoercive contexts, with particular attention to the differential sensitivity of firms to pressures to comply, based on differences in their specific legal, political, and social context. We use the setting of a mandated corporate governance reform in China requiring listed Chinese firms to add independent directors and find general evidence of noncompliance and more specific evidence consistent with the predictions from our sociopolitical framework. We discuss the implications of our theoretical approach and findings for future research on institutional environments, governmental regulations, organizational compliance, and corporate governance.
AB - While institutional theorists have long viewed governmental mandates as a prototypical coercive pressure generating homogeneous organizational compliance, we suggest that such mandates are often subject to enforcement uncertainty, resulting in a pressure more aptly characterized as “semicoercive” and a compliance result more aptly characterized as heterogeneous. We advance and test a theoretical framework to predict the specific form of heterogeneous compliance in semicoercive contexts, with particular attention to the differential sensitivity of firms to pressures to comply, based on differences in their specific legal, political, and social context. We use the setting of a mandated corporate governance reform in China requiring listed Chinese firms to add independent directors and find general evidence of noncompliance and more specific evidence consistent with the predictions from our sociopolitical framework. We discuss the implications of our theoretical approach and findings for future research on institutional environments, governmental regulations, organizational compliance, and corporate governance.
KW - board of directors
KW - corporate governance
KW - enforcement uncertainty
KW - institutional change
KW - organizational compliance
KW - state ownership
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U2 - 10.1177/0149206320948579
DO - 10.1177/0149206320948579
M3 - Article
AN - SCOPUS:85089556825
SN - 0149-2063
VL - 47
SP - 2169
EP - 2197
JO - Journal of Management
JF - Journal of Management
IS - 8
ER -