The Empirical Research Of The Effects Of Social Ties On Long-term Orientation

Social ties, as an important theme of the governance theory of exchange-relationship between organizations, have attracted a number of academic researchers and practitioners. Most studies of social ties focus on output performance, but less attention is really on these ties themselves. Social ties are divided into business and political tie. The nature of business tie is different from that of political tie. So, when firms establish business ties with business organizations and political ties with government agencies, does the difference between development trends of these two ties exist and how do corporate executives view their future? Social ties are embedded in the transition economy which is characterized by the uncertainty. Then, how does the uncertainty affect the sustainability of social ties? Chinese advocate collectivist cultures which emphasize in-group and out-group. When corporate executives establish social ties with in-group members, what impacts will be haven on the ties’ sustainability?Based on the above questions, this article from the perspective of the governance relationship examines the impacts business and political ties in long-term orientation; it divides the uncertainty of institutional environment in industry uncertainty and political uncertainty based on the institutional theory and examines theirs moderating effects on the relationship between social ties and long-term orientation; similarly, it examines how schoolmate relationship as a variable of collectivist cultures moderate the above relationship. Finally, the article proposes six hypotheses.In this study, we collect survey data from 301 private high-tech firms by sending and mailing questionnaires, of which 225 firms give valid response. Through processing and analyzing the data collected, we test six all hypothesis, of which 4 hypothesis been proven. The empirical results indicate that business tie positively effects long-term orientation, and political tie negatively effects long-term orientation. The study findings also show that the schoolmate relationship between business partners positively moderates the relationship between business tie and long-term orientation, and political uncertainty have same effect on political tie and long-term orientation.Different from previous studies, this paper examines social tie in Chinese transition economy from the perspective of relationship development, which broadens the scope of the study of social ties and enrich the content of the relationship governance theory and institution theory. At the same time, those study findings provide references and suggest for practitioners. Especially, for private firms lacking in resources, they should put more emphasis on the establishment and maintenance of business tie, given business tie will last longer than political tie and the uncertainty of institutional environment can undermine the stability of political tie.