Ambidexteritv Of Legitimacy, Resource Acquisition And Growth Of Affiliated Firms In Business Group

Business group is a ubiquitous organization form in emerging economy. And so is it in China. However, whether the affiliation is positive to the performance of affiliated firms or not is still a controversial question nowadays. In the early stage, researchers took macro view and used the development of institutions to explain the controversial result of affiliation by comparing of business groups in developed economy and emerging economy. Later, scholars began to focus on business groups in emerging economy. And they still found a controversial result of affiliation. This pushes researchers to take a microscopic perspective for further understanding of this question. That is, we have to ask whether the performance effect of affiliation is a firm specific question. Actually, several world wide famous scholars, Carney et al., point out in theiry paper,"Who can benefit from the affiliation, why and how?" is a valuable research direction in this field. And this thesis is the result of systematic researches focus on the above questions.In order to answer these questions, we develop the following four research designs. Firstly, what does membership mean to affiliated firms and how it results in the difference of performance? Research one is designed to the above questions. In this research, we view the affiliation as intra-group resource acquisition from the perspective of resource based view. And we analyze the effect of intra-group resource acquisition, outer resource acquisition, resource heterogeneity of group and capability of resource combination to the growth of affiliated firms which can answer the focal questions in a multi-level way. Secondly, based on the research one we explore the antecedents of intra-group resource acquisition or outer resource acquisition. Research two is designed to the above questions. In research two, we analyze the relationship between dual legitimacy, intra-group legitimacy and outer legitimacy, and resource acquisition, and also the moderating role of environmental uncertainty and environmental munificence between them. Thirdly, based on research one and research two we begin thinking how dual legitimacy influences the growth of affiliated firm. Research three is designed to the question. In this research, we aimed to find the path from intra-group legitimacy to growth. This may show us a preliminary legitimacy mechanism of affiliated firms’growth. Fourthly, as affiliated firm has dual identity, member firm and legally independent firm, we are interested in whether it is suitable to apply paradigm of organizational ambidexterity to analyze the ambidexterity of legitimacy. Research four is designed for this purpose. In this research, we discuss the relationship between ambidexterity of legitimacy and resource acquisition, and the moderating role of environmental uncertainty and environmental munificence as well. We also discuss the relationship between ambidexterity of legitimacy and growth of affiliated firms, and the mediation role of resource acquisition as well. This eventually makes up the prior preliminary legitimacy mechanism of affiliated firms’growth and helps us to better understand why some affiliated firms can benefit from affiliation and how.Through the four sub researches we push the research project step by step and get five principal results as follows.Firstly, we identify two factors, resource heterogeneity of group and capability of resource combination of affiliated firm, and analyze their moderating roles on the relationship between resource acquisition and performance of affiliated firms. The concept of resource acquisition is divided into two dimensions, intra-group resource acquisition and outer resource acquisition. Results show:(l)Resource heterogeneity of group plays positive moderating role in the relationship between intra-group resource acquisition and affiliated firms’growth, while it plays negative moderating role in the relationship between outer resource acquisition and growth;(2)Affiliated firms’capability of resource combination plays mediation role between intra-group resource acquisition and growth, while it plays both mediation and moderating roles in the relationship between outer resource acquisition and growth;(3)Intra-group resource acquisition, resource heterogeneity of group and capability of resource combination can form a configuration effect on affiliated firms’growth, which means intra-group resource acquisition contributes most to the growth of affiliated firm on condition that there are high level of intra-group resource acquisition, resource combination and resource heterogeneity. As for outer resource acquisition, there is no configuration effect.Secondly, we explore the legitimacy mechanism of affiliated firms’resource acquisition, identifying the moderating effects of environmental uncertainty and environmental munificence on the relationship between legitimacy and resource acquisition, the legitimeacy of affiliated firms is divided into two dimensions, intra-group legitimacy and outer legitimacy. Results show:(1)Intra-group legitimacy is closely related to intra-group resource acquisition, while outer legitimacy is closely related to outer resource acquisition;(2)Environmental uncertainty plays positive moderating role in the relationship between intra-group legitimacy and intra-group resource acquisition, while environmental munificence plays negative moderating role in the relationship between them;(3)Environmental uncertainty plays positive moderating role in the relationship between outer legitimacy and outer resource acquisition, while environmental munificence plays negative moderating role in the relationship between them;(4)There exits a configuration impact of legitimacy, environmental uncertainty and environmental munificence on resource acquisition of affiliated firms, which means in condition of high environmental uncertainty and low environmental munificence, legitimacy contribute most to the resource acquisition.Thirdly, we examine the transfer effect of legitimacy within business group. Generally, when affiliated firms obtain intra-group legitimacy, it is easier for them to obtain outer legitimacy. But things are not always like this. Institutional distance may disturb the effects. In this paper, we divide institutional distance into two dimensions, formal institutional distance and informal institutional distance. Results show that both of them play significant negative moderating roles in the relationship between intra-group legitimacy and outer legitimacy. That is to say, intra-group legitimacy is more beneficial to the acquisition of outer legitimacy in condition of short institutional distance. However, intra-group legitimacy can’t contribute much more to the acquition of outer legitimacy while there is long insititutional distance.Fourthly, we try to unfold the legitimating mechanism of affiliated firms’growth. To be specific, there are double mediators between intra-group legitimacy and growth. Both intra-group resource acquisition and outer resource acquisition play mediating role partly in the relationship. While between outer legitimacy and growth, outer resource acquisition acts as the mediator. Based on the above mentioned, we could find four routes from legitimacy to growth. The first is what we called intra-group legitimacy route, which tells us how affiliated firms get better intra-group resource availability by building intra-group legitimacy and fulfilling good growth. The second is what we called outer legitimacy route, which means affiliated firms can get better outer resource availability through the way of constructing outer legitimacy, and eventually stimulate their growth. The third is a long route, from intra-group legitimacy to intra-group resource acquisition, then to outer resource acquisition, and lastly to the growth of affiliated firms. The fourth is also a long route, which begins with intra-group, via outer legitimacy and outer resource acquisition, and then to growth performance of affiliated firms. Fifthly, we develop the concept of ambidexterity of legitimacy, building the model to show how it does matter to affiliated firms’growth. We divide ambidexterity of legitimacy into two dimensions, the balanced dimension and the combined dimension. Results show:(1) The combined dimension is positively related to the growth of affiliated firms, and resources acquisition plays significant mediation role in the process. The balanced dimension is threorectically related to the growth of affiliated firms, but this is not statistically significant.(2) Environmental uncertainty plays significant positive moderating role in the relationship between the combined dimension and resource acquisition, while it plays negative moderating role in the relationship between the balanced dimension and resource acquisition.(3) Environmental munificence plays signifiancant negative moderating role in the relationship between the combined dimension and resource acquisition, while it plays positive moderating role in the relationship between the balanced dimension and resource acquisition.