Hybrid organizing for collaborative delivery of real estate development projects in China

Abstract

According to the World Bank’s 2023 report, China’s economy continues to confront a structural slowdown and the real estate sector downturn persisted. Some Chinese real estate firms (REFs) are encountering changes in the resource environment and regulatory reforms, such as heightened financial constraints, mounting challenges in acquiring Land Use Rights (LURs), and increased market concentration. Against this background, an increasing number of REFs are turning to collaborative delivery. However, due to the different or even competing organizational management structures and project delivery strategies, these REFs are encountering considerable institutional complexity in collaborative delivery. To ensure successful delivery, firms must respond to the complexity. This study thus seeks to explore how Chinese REFs structurally organize their activities (structural responses) and manage conflicts (strategic responses) in response to institutional complexity in collaborative delivery. A qualitative research strategy with the abduction approach is adopted for this study. Specific data collection methods include field-level interviews and a case study. The field-level interviews aim to identify major delivery logics employed by REFs and examine the institutional complexity caused by interfirm logics differences in collaborative delivery. The findings from field-level interviews reveal two major delivery logics in the market: “build-and-hold (long-term investment)” and “build-and-sell (short-term investment).” The behaviors of REFs influenced by these two logics are examined in detail. Moreover, the data show that institutional complexity can be approached by logics incompatibility and logics centrality. The former can be manifested through conflicts over goals/means, while the latter concerns logics adherence and resource dependence. A Chinese REF-G, which owns three collaborative projects with distinctive organizational arrangements, is selected for the case study. The aim of the case study is to examine how REF-G structurally organizes its activities (structural responses) and strategically manages internal conflicts (strategic response). Data collection methods include case interviews, participant observation, and archival documents. Key findings show that: 1) REF-G combines differentiation and integration of delivery logics on its structural management structure, contrary to previous research, 2) REF-G adopted strategies of eliminating, reining, and forging a new logic in three collaborative projects respectively, and 3) through comparison of these projects, it is found that the structural responses can configure the power relations between collaborative parties, thereby influencing strategic responses. Differing from some studies that emphasize responses of acquiescence, compromise, avoidance, defiance, and manipulation, this study contributes to hybrid organizing as a response to institutional complexity. Theoretically, several propositions regarding how to achieve structural and strategic responses in hybrid organizing are generated. Practically, this study provides insights into possible organizational management structures and conflict management in collaborative deliveries.