E-Book, Englisch, 328 Seiten
Reihe: Chandos Asian Studies Series
Institutions, Ingredients, Mechanisms and Modus Operandi
E-Book, Englisch, 328 Seiten
Reihe: Chandos Asian Studies Series
ISBN: 978-1-78063-221-6
Verlag: Elsevier Science & Techn.
Format: EPUB
Kopierschutz: 6 - ePub Watermark
Nir Kshetri is Professor of Management at University of North Carolina-Greensboro. He is the author of 9 books covering such topics as big data, cloud computing, and cybersecurity, plus author of more than 150 journal articles. He has won several awards for his work, including IEEE IT Professional's Most Popular Paper Award in 2019 and 2018, Outstanding Contribution in Authorships award in 2019, and the Blockchain Connect Conference's Most Influential Blockchain Research Paper in 2019. His editorial roles include Computing Economics editor of Computer, IT Economics editor of IT Professional and Associate Editor of Electronic Commerce Research. Nir and his work have been featured in the Wall Street Journal, Foreign Policy, Scientific American, Fortune, Time, Christian Science Monitor, Bloomberg TV, and CBS News.
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2 The Chinese e-business industry
The Chinese e-business industry has a number of idiosyncratic and unusual features. Institutional factors such as strong nationalism, the state’s entrenchment in the economy, political cognitive and political normative factors, regulative uncertainty, professional associations’ roles, and the importance of business and social networks are deeply reflected in China’s e-business development pattern. We argue that by approaching the Chinese e-business industry from the standpoint of institutional theory, we can capture the complex factors facilitating and hindering China’s rapidly growing e-business industry. The findings presented are broadly consistent with existing theories on institution-technology diffusion nexus. Nonetheless, this chapter reveals unique mechanisms associated with Chinese institutions in shaping the country’s e-business landscape. Introduction
The scale of e-business development in China is large enough to be noticed at the global level. China’s first online transaction took place in 1996 (Business Wire, 2007). Estimates suggest that there were 135 million internet users in 2006 (AFX International Focus, 2007) and the country’s online transactions crossed US$127 billion that year (Asia Pulse, 2006a; Rein, 2007). According to a report released by the Chinese government in January 2008, there were 210 million internet users in the country1 (Jesdanun, 2008). By mid-2006, about one-quarter of China’s internet users were regularly engaged in e-commerce activities (Xinhua News Agency, 2006a). Estimates have suggested that in the first 10 months of 2007, e-shopping accounted for 0.8 per cent of the total national consumption, which was significantly greater than the 0.25 per cent recorded in 2006 (CCID, 2007). A study released by CCID Consulting in December 2007 estimated China’s search engine market at 2.93 billion yuan (US$407 million), which was 77 per cent bigger than in 2006 (CCID, 2007). Like many other economic sectors (Terrill, 2005), the internet and e-business industries in the Chinese economy have many unusual and idiosyncratic features. The effects of institutional factors such as strong nationalism, the state’s entrenchment in the economy, political cognitive and political normative factors, regulative uncertainty, professional associations’ roles, and the importance of business and social networks are deeply reflected in China’s e-business development pattern. Despite a sizable and growing body of research devoted to the Chinese internet industry, we lack satisfactory explanations for the development pattern of the Chinese e-business landscape. While internet control in China has been examined from various angles, it is not clear whether and how the Chinese government’s internet control may influence the e-business industry. The literature also lacks satisfactory explanations of companies’ highly government-centric activities related to e-business. Moreover, the effect of social and business networks on organisations’ e-business adoption is not examined. These are only a handful of the numerous institutional issues facing the Chinese e-business industry. We argue that approaching from the standpoint of institutional theory, we can capture the complex factors facilitating and hindering the country’s rapidly growing e-business industry. The institution-technology diffusion nexus: a theoretical perspective
In this chapter, we employ the institutional pillars proposed by Scott (1995, 2001) as an analytical tool. This approach allows us to analyse the impacts of a wide range of factors on an organisation’s e-business adoption as well as the width and depth of adoption. Scott defines institutions as ‘multifaceted systems incorporating symbolic systems – cognitive constructions and normative rules – regulative processes carried out through and shaping social behaviour’ (Scott, 1995: 33). He argues that proper understanding of an organisation requires decoding social and cultural contexts that create regulative, normative and cognitive infrastructures, which ‘constrain and support the operations of individual organizations’ (Scott, 1995: 151). Institutions can be described in terms of three pillars: regulative, normative and cognitive (Scott, 1995, 2001). Regulative institutions and technology diffusion
Regulative institutions consist of ‘explicit regulative processes: rule setting, monitoring, and sanctioning activities’ (Scott, 1995: 35). Regulatory bodies (e.g. the Ministry of Information Industry) and existing laws and rules influencing an organisation’s e-business behaviour fall under this pillar. These institutions focus on the pragmatic legitimacy concerns in managing the demands of regulators and governments (Kelman, 1987). The state is arguably the most important external institutional actor and powerful driver of institutional isomorphism as a violation of laws can have harsh sanctions (Bresser and Millonig, 2003). Normative institutions and technology diffusion
Normative components introduce ‘a prescriptive, evaluative, and obligatory dimension into social life’ (Scott, 1995: 37) and help us understand how ‘values and normative frameworks structure choice’ (Scott, 1995: 38). To be successful, practices should be consistent with value systems of the national cultures (Schneider, 1999). Normative institutions are concerned with procedural legitimacy and require e-commerce providers and online shoppers to embrace socially accepted norms and behaviours (Selznick, 1984). Elements of normative institutions also include trade associations or professional associations that can use social obligation requirements to induce certain behaviour within the e-business industry. Cognitive institutions and technology diffusion
Scott (1995: 40) suggests that ‘cognitive elements constitute the nature of reality and the frames through which meaning is made’. Although all components of institutions are intertwined with culture (Neale, 1994: 404), cognitive institutions are arguably most closely associated with culture (Jepperson, 1991). Cognitive legitimacy concerns are based on subconsciously accepted rules and customs as well as some taken-for-granted cultural accounts of technology use (Berger and Luckmann, 1967). Although carried by individual members, cognitive programmes are elements of the social environment and are thus social in nature (Berger and Luckman, 1967). Compliance in the case of cognitive legitimacy concerns is due to habits (Grewal and Dharwadkar, 2002). To put things in context, when internet users and online sellers behave in certain ways, they may not even be aware that they are complying. The nature of and relationship between the three pillars
It is worth noting that each institutional pillar both reflects as well as determines the nature of the other pillars (Hayek, 1979). It is therefore often difficult to to isolate them in the real world. North (1996: 344) defines institutions as ‘formal constraints (rules, laws, constitutions), informal constraints (norms of behaviour, conventions, and self-imposed codes of conduct), and their enforcement characteristics’ and observes that informal rules provide legitimacy to formal rules (North, 1994). Likewise, Axelrod (1997) comments on the relationship between regulative and normative institutions, describing that ‘social norms and laws are often mutually supporting. This is true because social norms can become formalized into laws and because laws provide external validation of norms.’ Of these three pillars, normative and cognitive components are more likely to explain interorganisational differences as regulative influences are likely to apply uniformly in a given industry (Miller, 1996: 287). For instance, the government’s internet control and regulative uncertainty affect all organisations more or less equally. E-business organisations, however, differ on normative and cognitive institutions. For instance, organisations may have different approaches to ethical decision making in their interactions with other businesses and the government (Whitcomb, Erdener and Li, 1998). For instance, while Yahoo complied with the Internet Society of China’s (ISC) codes of conduct on self-censorship, Google and Altavista did not. Likewise, organisations differ in terms of their attitudes towards guanxi networks and the need to enhance ‘Chineseness’ in their e-business models. Institutional processes in the Chinese e-business industry
Table 2.1 presents various constructs used in this chapter and mechanisms associated with their impacts on organisations’ e-business adoption in China. Table 2.1 Institutional factors affecting the diffusion of e-business in China Construct Mechanisms Government...
