PurposeThe purpose of this study of Google and Baidu in mainland China is to identify the key contingencies to firm strategic responses to technical and institutional pressures. From an institutional logic perspective and Hirschman's model of exit, voice, and loyalty, this research proposes a few propositions which are intended to explain why foreign and local companies adopt different responses to similar institutional requirements or under similar institutional pressures.Design/methodology/approachThis study applies a historical chronological method by the recognition of certain types of events and key strategic activities conducted by two sample organizations from their foundations in mainland China till March 2010 when Google exited from China's internet search market. These activities were identified as the measurement of firm strategic responses to institutional pressures. Data were gathered from various sources, including documents published by sample organizations, online and media reports, etc.FindingsIt is found that firms adopted similar responses to technical pressures which were determined by characteristics of the internet industry. However, their responses to institutional pressures, which were driven by the state logic for control of the internet, were dramatically different. As a multinational corporation, Google was faced with inherent tensions between home and host institutional requirements. When the state control pressures increased, Google eventually selected a voice and exit strategy. Baidu, as a local leading player in China's internet market, adopted a loyalty strategy through closer collaboration with local institutional constituents, including government agencies and clients, in addition to its investment in creating corporate images and reputation among local internet users.Originality/valueThis research explores the dynamic and diverse responses of foreign and local companies to institutional pressures and advances our understanding of political properties in firm strategies and the importance of firm nationality in strategy making.

Purpose – The purpose of this paper is to investigate the effects of cultural beliefs on governance in a business network without a legal institutional framework. Particular emphasis is placed on the cross-country remittance mail operating network in Chaoshan, China, during the period 1860-1949. This investigation builds on Greif’s business governance theory and develops an analytical framework that considers cultural beliefs, agency relationships and multilateral punishment mechanisms. Furthermore, it uses the institutional analysis method to identify the institutional factors that sustained the remittance mail operating networks and their underlying mechanisms. Design/methodology/approach – This paper adopts the qualitative research method. First, it investigates the history of the remittance mail operating network and agency relationships by searching through the contents of the relevant historical documents preserved in the official archives and information found in other records. Thereafter, it summarizes and demonstrates the cultural beliefs inferred from that research. The archival materials permit analysis of the interactions between cultural beliefs, agency relationships and multilateral punishment mechanisms by the institutional analysis method. Findings – Due to the lack of legal institutions in China during the period under review, cultural beliefs played a central institutional role in cross-country business relations. Network governance was coupled with clan cultural beliefs in the remittance mail operating network. This relationship was the key to sustain the efficient operation of the remittance mail network. Originality/value – In the West, corporate governance has been influenced by and has become an integral feature of Western culture and values. This is not necessarily so for the corporate governance in terms of Chinese culture and values. Thus, instead of mimicking the modes of developed countries, it is important for Chinese enterprises to seek a mode of corporate governance that is in accord with their local cultures. This may be an important focus for enterprise development.

In researching for corporate performance as described in the main source of theme literatures, current researches presume that countries have the same environment in different regions within a country regardless if it is the environment of one country or multiple countries in which does not consider the impact of regional influences on firm performance. This paper collects data from Taiwan’s conglomerates in mainland China as a sample, which decomposed subsidiary performance into industry effects, regional effects, parent company effect, subsidiaries effects and annual effects to analyze the source of performance variance. Studies have shown that regional factor is one of the important factors affecting the performance of subsidiaries and regional effects and industry effects jointly affect the performance of the subsidiary. In the comparative study of the different regions, we find that in the explanation of company performance variance, the internal effects (the parent company and the subsidiary effects) are more important in a higher level of institutional development of the region (Yangtze River Delta (YRD)); on the contrary, the external effects (regional and industry effects) are more important in a higher level of institutional development of the region (Pearl River Delta (PRD )).