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Most executives and business students are familiar with how the rule-based system functions; few understand how relation-based system works (which accounts for the majority of the countries in the world). Many dismiss it as backwards and attribute it to cultural traditions and norms (such as the Chinese guanxi tradition). This book dispels these myths and shows that people rely on the relation-based system not owing to specific cultural factors, but because of the stage of development in these countries. When the market is limited in scale and informal networks are thick, the relation-based system can be quite effective and efficient. The author applies this line of thinking to explain why business practices differ and how business people should interact across the two governance systems.
About the author
Shaomin Li is the Haislip-Rorrer Fellow and Professor of International Business at Old Dominion University, Norfolk, Virginia, and Associate Editor for Corporate Governance: An International Review. Li has written or co-authored a number of journal and executive-oriented articles on this topic, which are published in California Management Review, Corporate Governance: An International Review, Human Resource Management Review, Information Technology for Development, Journal of Business Ethics, Journal of World Business, Organizational Dynamics, and Review of International Political Economy, The Economist, The Asian Wall Street Journal, Far Eastern Economic Review, South China Morning Post and The Harvard Business Review. In 2008 Virginia Governor Timothy Kaine awarded Li the Outstanding Faculty Award, the Commonwealth's highest honor for faculty at Virginia's universities, for his work on international political economy and the governance environment. Li has worked in five countries and visited twenty-eight countries in Asia, Europe, North America, and Oceania. In the 1990s he served as a director of AT&T EastGate Services to oversee the development of the Chinese market. From 1999 to 2002 Li was the founding CEO of iEast.com, Ltd., an advertising solution platform serving Hong Kong and China. Li has provided strategic consulting for AT&T, Fidelity Investments, Johnson & Johnson, AIG, and the United Nations. Li graduated from Peking University in economics and received his Ph.D. in sociology from Princeton University, and was a post-doctoral fellow in East Asian studies at Harvard University.
Summary
When the market is limited in scale and informal networks are thick, the relation-based system can be quite effective and efficient. This title shows that people rely on the relation-based system not owing to specific cultural factors.
