Abstract
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.
Original language | English (US) |
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Pages (from-to) | 2169-2197 |
Number of pages | 29 |
Journal | Journal of Management |
Volume | 47 |
Issue number | 8 |
DOIs | |
State | Published - Nov 2021 |
Funding
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).
Keywords
- board of directors
- corporate governance
- enforcement uncertainty
- institutional change
- organizational compliance
- state ownership
ASJC Scopus subject areas
- Finance
- Strategy and Management