Challenges to the Promotion of Employee-Driven Innovation in State-Owned Enterprises: Two Cases from the Automotive Sector in China

Abstract

Employee-driven innovations (EDIs) are increasingly regarded as one of main source of innovation and sustainable competitive advantage, yet many studies indicate that EDIs are often undervalued in state-owned enterprises (SOEs) in China. It remains unclear what the challenges are to the promotion of EDIs in SOEs and how these challenges could be addressed with well-designed managerial practices such as a suggestion system. This study aims to address this research gap by studying two SOEs in the Chinese automotive industry using the multiple-case study method. A total of 12 respondents from the two SOEs have been interviewed as part of a four-year research project. On the basis of the analysis of two cases, it is found that SOEs that appointed a top-manager with firm-specific knowledge and long-term tenure successfully promoted EDIs with a well-designed supporting suggestion system in place. Conversely, the SOEs that appointed a top-manager with little firm-specific knowledge and short-term tenure have not successfully promoted EDIs and its suggestion system is also poorly designed. In conclusion, outsider control and short-term tenure of top manager are two major challenges to promote EDIs in SOEs. This study contributes to the literature by identifying the potential challenges of introducing EDIs and relevant practices in SOEs in China.

Attribute imbalances and innovation implementation based on grounded theory: A case of Chinese enterprises in Gansu Province

“…Due to self‐interest, managers of SOEs have an inherent lack of innovation and entrepreneurship (Zhu et al, 2007). And it is difficult to promote employee‐driven innovation due to outsider control and short‐term tenure of top managers (Miao & Ji, 2020). Third is in terms of institutional theory.…”

Investigating Reciprocity Dynamics in Chinese SOEs: Contextual Impacts on Social Support, HRM Practices, and Employee Attitudes Toward Organizational Change

“…Employers and employees enjoyed the open-ended reciprocal exchange, and SOEs attempted to create a moral bond with employees (Zhu et al, 2012). However, faced with increased competition, HRM practices in SOEs have moved towards so-called "transactional or differentiated" (p. 3964) practices to boost employees' performance (Zhu et al, 2012) and develop positive attitudes toward changes (Miao & Ji, 2020). These HRM practices include performance-based pay (Kehoe & Wright, 2013;Mac-Duffie, 1995), promotion, and increased competition among individuals (Miao et al, 2003).…”

“…Being tightly controlled by the SASAC through stand-ard policies and formalized procedures, management teams in the SOEs and their divisions act more like state administrators than business executives (Miao & Ji, 2020). Their focus is obedience to SASAC rules and efficiency-based coordination to keep the organization functioning smoothly (Ralston et al, 2006).…”

Bekar, Beatrice R; (2022) Building a green learning organisation: how employee-drive innovation can enable organisational sustainability transitions

“…In such a way, we argue that an organisation's capacity to be innovative and prompt a sustainability transition largely depends on its employees' creative ideas. As a matter of fact, studies across fields agree that the promotion of entrepreneurial behaviour -that is, the inclination to identify opportunities and introduce innovative ideas (Shane and Venkataraman, 2000) -within organisations is essential to foster innovation (see NBS, 2010;Weisnburger et al, 2018;Markopoulos, 2019;Miao and Ji, 2020;Hoyrup et al, eds.). On the contrary, if entrepreneurial behaviour is not appropriately harnessed, 'innovation remains little more than an aspirational destination than a sustainable, tangible one' (Coakes et al, 2011, p. 31).…”

“…By analysing existing literature, the study has thus provided a multidisciplinary understanding of employeedriven innovation for organisational sustainability transition, which we referred to as 'employee-driven sustainability innovation' (EDSI) throughout the paper. The study concluded that EDSI could provide organisations with greater resilience against rapid and complex market changes by tapping into their employees' innovative potential and creating organisational cultures that promote continuous learning as well as innovative and intrapreneurial behaviours (for instance, see Høyrup, 2012;Miao and Ji, 2020;Buhl et al 2016 andHartmann, 1997). Secondly, it set out to understand what factors or processes can initiate EDI processes for organisational sustainability transitions.…”