The paradox of control: organizational innovations in the Chinese doctoral education system

How do organizations innovate under tight state control? This study examines this paradox through the lens of cross-border joint doctoral programs (CJDPs) developed by Chinese research institutes to circumvent strict doctoral admission quotas. Despite operating within one of the world's most centralized higher education systems, Chinese research institutes have created CJDPs with cross-border universities to enable expanded doctoral enrollment outside formal planning mechanisms. We integrate innovation theory, institutional entrepreneurship, and gray-zone governance perspectives to analyze how organizations navigate systemic constraints in highly regulated environments. Using an exploratory qualitative case study of a large public research institute and its partnerships with four cross-border programs, we trace the initiation, implementation, and eventual regulatory challenges of CJDPs from 2019 to 2025. Our findings reveal that organizations can leverage institutional heterogeneity across regulatory jurisdictions, utilizing strategic positions and relationship networks to establish innovative programs that simultaneously comply with and circumvent centralized control. However, the strategic exploitation of regulatory ambiguity ultimately triggered policy intervention. In 2025, degree certification failures forced program termination, demonstrating the double-edged nature of ambiguity-based compliance. Nevertheless, it did not eliminate the underlying organizational pressures that drove innovation. This research contributes to understanding how organizations pursue strategic innovation in centralized systems globally and illuminates the tensions between organizational entrepreneurship and regulatory stability.