Upholding Justice while Pursuing Interests: Community-Based Labor Sharing Incentive of Chinese Classical Enterprises—A Case Study Based on Shanxi Merchants Qiaojiazihao

Abstract

The modern equity incentive system, which takes shareholders’ interests first as the logic of governance, is based on material reward and short-term behavior, making it difficult to fundamentally build an economic interest community between enterprises and employees. How to avoid opportunistic behavior in equity incentive and stimulate employees’ prolonged sense of organizational identity for enterprise sustainability is an important governance problem of modern enterprises. Based on the theory of social embeddedness, this study uses constructing grounded theory to explore the incentive theory of Qiaojiazihao, which means an exceptional family business owned and run in Shanxi Province but well known throughout China by a family surnamed Qiao in the Qing Dynasty. Qiaojiazihao takes the Confucian community thought as its foundation of social values, the Confucian concept of righteousness and interests as its business ethics, and the social factors, such as emotion and trust, are embedded in its economic organization. The labor sharing incentive thus forms the pathway to Geo-cultural community-social identity community-economic interests community. On this basis, it abstracts the internal mechanism of value generation-system coupling-interest strengthening as the logic of the community based labor sharing incentive of Chinese classical enterprises. This study deepens the understanding of the equity incentive system of Chinese classical enterprises, and is enlightening for revising the institutional logic of rational calculation of equity incentive based on material interests and improving corporate governance and employee shareholding methods from the perspective of social embeddedness. Therefore, this study is helpful to understand the role of employee incentive in securing for employment stability, comprehensiveness, and loyalty.

Keywords

Qiaojiazihao, concept of righteousness and interests, community, equity incentive, constructing grounded theory

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