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Corporate governance and organizational survival under punctuational change

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  • Sunny Li Sun
  • Yanli Zhang

Abstract

Purpose - – How do different corporate governance structures fare under conditions of fundamental environmental transformations? Treating governance structure as a knowledge distribution mechanism embedded in institutional frameworks, the paper aims to propose that the efficiency of this knowledge diffusing process will increase organizational survival under a punctuational change. Design/methodology/approach - – Using the case of Chinese banking industry during 1897-1927, a period of rapid technological, economic, and regulatory shifts. Findings - – Money shops (qianzhuang) with decentralized, open and extended governance structure were better able to adapt to rapid changes in the environment and had a higher survival chance than ticket stores (piaohao) with centralized, closed and internalized governance structure. Research limitations/implications - – When exogenous shocks dramatically change the environment, decentralized, open and extended governance structures can more easily discover new habitats in which a modified form of organization can thrive. Originality/value - – By examining the Chinese banking industry during the fundamental shift of the environment at the turn of the twentieth century, this paper sheds new wisdom on the understanding of the current turbulent world and helps us discover new solutions to cope with the institutional transition necessary to survive and prosper in the new world environment and pave the road ahead.

Suggested Citation

  • Sunny Li Sun & Yanli Zhang, 2013. "Corporate governance and organizational survival under punctuational change," Nankai Business Review International, Emerald Group Publishing Limited, vol. 4(4), pages 268-289, November.
  • Handle: RePEc:eme:nbripp:v:4:y:2013:i:4:p:268-289
    DOI: 10.1108/NBRI-07-2012-0003
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    Citations

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    Cited by:

    1. Victor Zitian Chen & Sunny Li Sun, 2019. "Barbarians at the Gate of the Middle Kingdom: The International Mobility of Financing Contract and Governance," Entrepreneurship Theory and Practice, , vol. 43(4), pages 802-837, July.
    2. Sunny Sun & Jigao Zhu & Kangtao Ye, 2015. "Board Openness During an Economic Crisis," Journal of Business Ethics, Springer, vol. 129(2), pages 363-377, June.
    3. Sumita Sarma & Sunny Li Sun, 2017. "The genesis of fabless business model: Institutional entrepreneurs in an adaptive ecosystem," Asia Pacific Journal of Management, Springer, vol. 34(3), pages 587-617, September.

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