Tuesday, March 8, 2016

How Middle Managers Manage the Political Environment to Achieve Market Goals: Insights from China's State-Owned Enterprises

GUO Yidi, HUY Quy, XIAO Zhixing
Access the publisher's website
Strategic Management Journal (forthcoming)

Research Summary

Although the middle management literature has identified various bridging roles performed by middle managers in the market environment, it is relatively vague about whether and how they manage the political environment to achieve market-related goals. In an inductive field study of four large state-owned enterprises based in mainland Communist China, operational middle managers were found to take an active role in dealing with political actors to achieve market efficiency in their local environments, performing two distinct bridging strategies. Our field study suggests that middle managers are better equipped than their bosses (top executives) as well as their subordinates (frontline employees) to perform the bridging function between competing market and political imperatives in various local settings. 

Managerial Summary 

For firms that operate in diverse geographies, it is challenging for a handful of top executives to deal with numerous political actors. This burden could be shared with operational middle managers, who play a bridging role by drawing on their operational knowledge and local networks. Our research on middle managers who work under the scrutiny of political actors in China found that they bridge market and political ideology by conveying common features that seem legitimate to both. They also bridge market goals and political actors with personal affect. Compared to top executives and front line employees, middle managers have unique advantages in performing these bridging functions. Firms can enhance their strategy execution ability by training middle managers in dealing with political actors in diverse contexts.