This article examines the evolution of trust, control, and learning in a joint venture relationship. Using a coevolutionary approach, we develop a framework that shows how initial joint venture conditions give way to evolved conditions as joint venture partners develop an understanding of each other and adjust the collaborative process. We explore the relationship between trust and control in joint ventures and identify how these two critical concepts impact joint venture processes. We argue that trust, along with partner collaborative objectives, creates the initial climate that shapes partner interactions. In turn, these interactions lead to subsequent decisions about the nature of controls. We then examine linkages between alliance learning and the trust and control concepts, and argue that learning processes are central to evolving joint venture dynamics. Once the joint venture is formed, and if the initial conditions support continued collaboration, then learning processes will be central to evolving alliance dynamics. As initial conditions give way to evolved conditions, learning and trust will coevolve and impact decisions about control. Propositions linking the concepts are provided as guides for future empirical research.

The stock market convulsions and corporate scandals of 2001 and 2002 have reignited debate on the purposes of the corporation and, in particular, the goal of shareholder value maximization. We revisit the debate, re-examine the traditional rationales, and develop a set of new arguments for why the preferred objective function for the corporation must unambiguously continue to be the one that says “maximize shareholder value.” We trace the origins of the debates from the late nineteenth century, their implications for accepted law and practice of corporate governance in the United States, and their reflection in shareholder versus stakeholder views in the organization studies literature and contractarian versus communitarian views in the legal literature. We address in detail possible critiques of the shareholder value maximization view. Although we recognize certain boundary constraints to our arguments, we conclude that the issues raised by such critiques and constraints are not unique to the shareholder value maximization view, but will exist even if the firm is managed on behalf of nonshareowning stakeholders.

This article represents a contribution to the conceptualization of organizational complexity. The first part of the article relates the concept of complexity to the production tasks of the organization by deriving measures of the complexity of production and planning tasks within the organization. This move allows us to analyze organizational activities in terms of the computational complexity of the tasks that the organization carries out. Drawing on concepts from theoretical computer science, the article introduces a taxonomy of production tasks based on their computational complexity and shows how to use the notion of computational complexity to analyze organizational phenomena such as vertical integration disintegration, the choice between markets and organizations as performers of particular production tasks, and the internal partitioning of organizational tasks and activities. The article then relates the complexity of the production function of the organization to the ways in which organizations structure themselves. It attempts to bring theorizing about organizational behavior based on complexity theory closer to the conceptual realm of "mainstream" organization theory and to make the concepts of complexity theory more useful to empirical examinations of firm dynamics and organizational behavior.

Freeman et al. (2004) offer a spirited rebuttal to our paper “The Corporate Objective Revisited” from the perspective of stakeholder theory. However, they fall short in making a case against the logic of shareholder value maximization. The authors confound issues of “value” and “values,” ignore the rich history of scholarship on related questions, and perhaps misinterpret some of our core arguments. Most importantly, proponents of stakeholder views such as Freeman et al. appear to be unable to go beyond critiques of the shareholder view by failing to offer an empirically supportable alternative theory.

The ownership restructuring of Chinese state-owned enterprises, launched in 1992, has been one of the most radical and far-reaching market-oriented reforms in the Chinese economy. We studied the effects of ownership reform and individuals' collectivist values on rewards-allocation preferences of employees in Chinese state-owned enterprises, and how these relationships were mediated by employees' productivity goal orientation. We predicted the effects of ownership reform and collectivism on rewards-allocation preferences based on the model of allocation goal priority and the conceptual distinctions of vertical and horizontal collectivism. With data from four pairs of public state-owned enterprises (i.e., listed on the stock market) versus pure state-owned enterprises, we found the following results. First, employees of enterprises that had experienced a greater degree of ownership reform expressed stronger preferences for differential allocation rules (e.g., job position and performance) but weaker preferences for equalitarian allocation rules (e.g., group and individual equality). Second, vertical collectivism was positively related to preferences for differential allocation rules, but horizontal collectivism was positively related to preferences for equalitarian allocation rules. Third, the effects of both ownership reform and vertical collectivism on differential allocation preferences were mediated by productivity goal orientation. Research and practical implications for ownership reform and vertical-horizontal collectivism are discussed.

Taking a procedural justice perspective, we examined the effect of guanxi practices in human resources management (i.e., making human resources management decisions on the basis of personal relationships) on employees' trust in management in Chinese organizations. Two studies were conducted. In the first, a survey study, we found a negative effect of guanxi practices on trust in management, which was mediated by perceived procedural justice. In the second, an experimental study, we found that the negative effect of guanxi practices varied as a function of guanxi bases: favoring a nephew or a hometown fellow lowered trust, but favoring a college schoolmate or a close friend did not. Theoretical and practical implications are discussed.

Stakeholder theory begins with the assumption that values are necessarily and explicitly a part of doing business. It asks managers to articulate the shared sense of the value they create, and what brings its core stakeholders together. It also pushes managers to be clear about how they want to do business, specifically what kinds of relationships they want and need to create with their stakeholders to deliver on their purpose. This paper offers a response to Sundaram and Inkpen's article “The Corporate Objective Revisited” by clarifying misconceptions about stakeholder theory and concluding that truth and freedom are best served by seeing business and ethics as connected.

This paper examines how the inconsistency of organizational conditions affects people's willingness to engage in experimentation, a behavior integral to innovation. Because failures are inevitable in the experimentation process, we argue that conditions giving rise to psychological safety reduce fear of failure and promote experimentation. Based on this reasoning, we suggest that inconsistent organizational conditions—when some support experimentation and others do not—inhibit experimentation behaviors. An exploratory study in the field, followed by a laboratory experiment, found that individuals under high evaluative pressure were less likely to experiment when normative values and instrumental rewards were inconsistent in supporting experimentation. In contrast, individuals under low evaluative pressure responded to inconsistent conditions with increased experimentation. Our results suggest that evaluative pressure fundamentally alters an individual's experience of and response to uncertainty and that understanding experimentation behavior requires examining effects of multiple organizational conditions in combination.