Barry M. Mitnick and Martin Lewison
Despite the existence of a variety of approaches to the understanding of behavioral and managerial ethics in organizations and business relationships generally, knowledge of…
Abstract
Despite the existence of a variety of approaches to the understanding of behavioral and managerial ethics in organizations and business relationships generally, knowledge of organizing systems for fidelity remains in its infancy. We use halakha, or Jewish law, as a model, together with the literature in sociology, economic anthropology, and economics on what it termed “middleman minorities,” and on what we have termed the Landa Problem, the problem of identifying a trustworthy economic exchange partner, to explore this issue.
The article contrasts the differing explanations for trustworthy behavior in these literatures, focusing on the widely referenced work of Avner Greif on the Jewish Maghribi merchants of the eleventh century. We challenge Greif’s argument that cheating among the Magribi was managed chiefly via a rational, self-interested reputational sanctioning system in the closed group of traders. Greif largely ignores a more compelling if potentially complementary argument, which we believe also finds support among the documentary evidence of the Cairo Geniza as reported by Goitein: that the behavior of the Maghribi reflected their deep beliefs and commitment to Jewish law, halakha.
Applying insights from this analysis, we present an explicit theory of heroic marginality, the production of extreme precautionary behaviors to ensure service to the principal.
Generalizing from the case of halakha, the article proposes the construct of a deep code, identifying five defining characteristics of such a code, and suggests that deep codes may act as facilitators of compliance. We also offer speculation on design features employing deep codes that may increase the likelihood of production of behaviors consistent with terminal values of the community.
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The phenomenon of the ethnically homogeneous middleman group (EHMG) or ethnic trade network – the Chinese merchants in Southeast Asia, the Gujarati-Indians merchants in East…
Abstract
The phenomenon of the ethnically homogeneous middleman group (EHMG) or ethnic trade network – the Chinese merchants in Southeast Asia, the Gujarati-Indians merchants in East Africa, the Jewish merchants in medieval Europe, etc. – is ubiquitous in stateless societies, pre-industrial and in less-developed economies (Curtin, 1984). Neoclassical (Walrasian) theory of exchange cannot explain the existence of merchants let alone the phenomenon of the EHMG. This is because Neoclassical theory of exchange is a static theory of frictionless, perfectly competitive markets with the Walrasian auctioneer costlessly coordinating the plans of anonymous producers (sellers) and consumers (buyers) so as to achieve equilibrium. There is no role for merchants in the Neoclassical theory of exchange.
Liying Xia, Jianbo Zhang and Xuelin Ma
With the rising of “religious fever” in China rural area, the authors inquire the reason why it happened. First, the authors explore the group characteristics which could affect…
Abstract
With the rising of “religious fever” in China rural area, the authors inquire the reason why it happened. First, the authors explore the group characteristics which could affect both happiness and the religion belief of Chinese rural elderly. The authors analyze the micro-data of “thousand village surveys” data of Shanghai University of Finance and Economics by using Order Logit and Propensity Score Matching (PSM) method. These results show that when the elderly people have the following features related to health such as: feeling psychological loneliness, not obtaining the good management of chronic disease in the village, and not being participated in new rural cooperative medical system are more likely to believe in religious in the rural areas. And the authors also find these Chinese rural elderlies who believe in religion are less happy than atheism elderly actually (by PSM). Believing in religion is not the solution and maybe the way these elderly resorts to when they encounter health problem.
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The complex interplay of religion, reputation and repeated transactions among trade and business communities that dominate the Indian intermediary markets are detailed. Using…
Abstract
The complex interplay of religion, reputation and repeated transactions among trade and business communities that dominate the Indian intermediary markets are detailed. Using prior historical sociological and ethnographic accounts, the author highlights some unique aspects of Indian merchant communities and the common elements that these share with other business communities in Asia. The analysis lends credit to the notion that marketing theory can gain substantially from a focus on identity, family and other forms of kinship relations. Strategic implications drawn from the analysis show that while foreign consumer goods firms cannot afford to ignore the large and growing Indian market, their success will depend to a large extent on their understanding of the intricacies of the Indian merchant communities that dominate various marketing channels.
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R. Larry Reynolds and Chuck Skoro
Presents some of the economic forces which are shaping the transformation of management thought. Examines the views of Polanyi and Anderson, stating that the reciprocal aspects of…
Abstract
Presents some of the economic forces which are shaping the transformation of management thought. Examines the views of Polanyi and Anderson, stating that the reciprocal aspects of community and social relationships are necessary if the benefits of exchange are to be realized. Concludes that the idea that a simple, new concept will enable managers to control and optimize commercial endeavours is a myth.
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Fangcheng Tang and Xinsheng Ke
The aim of this paper is to examine how the co‐evolution of two order systems‐guanxi networks and legal system, i.e. a dual order system‐has shaped the growth of China's SMEs…
Abstract
Purpose
The aim of this paper is to examine how the co‐evolution of two order systems‐guanxi networks and legal system, i.e. a dual order system‐has shaped the growth of China's SMEs. From an institutional perspective, one proposition suggested has been that building guanxi networks can facilitate the growth of China's SMEs when institutions change in unpredictable ways. Another proposition claims legal institutions become guarantors of the growth of China's SMEs as a result of competition in increasingly market‐oriented environment.
Design/methodology/approach
Over a nine‐year period (1998‐2006), this study conducts in‐depth interviews with 18 top managers of three Chinese SMEs in Wenzhou, a city located in south of China. To identify potential research subjects, SMEs that had been operating for a period of at least five years and privately‐owned were chosen. Since institution evolution is characterized with a longitudinal nature, the authors gathered data from three different time periods in order to capture the richness of the phenomenon.
Findings
Dual order mechanisms consisting of guanxi networks (informal institutions) and codified laws (formal institutions) are both relevant in the growth of SMEs: guanxi networks are more significant at earlier stages of growth whereas legal systems are more influential in later stages. This argument is supported with data collected from three longitudinal case studies of SMEs in China.
Research limitations/implications
Data were obtained from three companies in Wenzhou of China, thus findings might not be generalizable across the country.
Originality/value
Three longitudinal case studies are unique. According to Pettigrew, longitudinal methods may be the only way to uncover processes of institutional change. The paper investigates the role of dual order system consisting of guanxi and legal systems in the growth of China's SMEs. The research not only contributes to the guanxi literature but also enables managers and investors to better understand the guanxi practice and role of legal systems in the growth of SMEs.