Institutional Complexity, Internal Conflict and IPOs of China’s Education and Training Organizations

• In Event: 1184 - Section on Organizations, Occupations, and Work Refereed Roundtable Session
  In Refereed Roundtable 100min: Table 10. Institutions and Institutional Change

Abstract

Through reconstructing the detailed history of internal conflict and decision-making in China’s largest and the first education corporation to go IPO, this paper builds a process model of how institutional-complexity-induced internal conflicts lead to strategic decisions. Existing literature describes institutional complexity during China’s market transition as a single-dimensional tension between state socialism versus market capitalism. This paper demonstrates that China’s transition brings about institutional complexity on multiple dimensions. Under multi-dimensional institutional complexity, internal conflicts not only unfold between coalitions divided along the line of ownership, but conflicts are also made intense and prolonged due to high level of ambiguity, internal actors’ interpretation in one’s favor and fluid coalition lines. Conventional solutions that are supposed to solve one conflict can trigger more intense conflicts along other lines. This paper identifies two mechanisms through which intense internal conflicts contribute to IPO decisions: organizational lock-up and professionalization of financial management. Both mechanisms capture unintended consequences and choice due to exhaustion of alternative choices. I also use comparative case studies to illustrate the generalizability of my findings in similar institutional environment.

Author

• Le Lin, University of Hawaii-Manoa