Inter-organizational Paradox Management: How National Business Systems Influence the Spillover of Paradox Management Practices in Global Value Chains

This study discusses how and whether paradox management practices spill over between organizations along a global value chain. Based on case study evidence related to a global value chain from the footwear industry between Germany and China, we study how different actors coped with the paradoxical tension between providing living wages to workers and upholding financial performance. Our findings show: (a) that the German national business system created an institutional context in which the living wage paradox was evaluated in a proactive manner, while the Chinese national business system favored a defensive response and (b) that Chinese organizations framed a proposed paradox management practice (living wage audits) in a way that it lost its intended meaning. Based on this, we theorize a sensemaking model, which highlights that relevant sensemaking activities in the Chinese context were impeded and therefore did not reinforce the proactive framing of the paradox management practice.