Portal de Periódicos da CAPES

Why C hina Shall Not Completely Transit from a Relation Based to a Rule Based Governance Regime: A C hinese Perspective

2013; Wiley; Volume: 21; Issue: 6 Linguagem: Inglês

10.1111/corg.12037

1467-8683

Alex Lau, Angus Young,

Family Business Performance and Succession

Abstract Manuscript Type Perspective Research Question/Issue This paper argues that C hina shall not completely transit from a relation‐based into a rule‐based governance regime because the C hinese system of governance is the product of its rich heritage and entrenched value system. Research Findings/Insights Relation‐based governance has two dimensions. This first is apparent from the emphasis on reciprocity and mutual obligations fostered between individuals and groups. The second is evident from inside an organization, where governance is hierarchical and paternalistic. This system of governance was influenced by Confucian doctrines that are moral centered precepts used to regulate human behavior and relationships. Given that this governance regime is interlinked to the C hinese culture, it is doubtful that C hina would completely abandon it in favor of a rule‐based system from the W est. Theoretical/Academic Implications There are two key implications drawn from this article. First, in the absence of the moral underpinnings of relation‐based governance, this system is susceptible to exploitation. Individuals could take advantage of relationships and relational networks to commit mischief or achieve personal gains through tunneling or expropriation of company assets. Therefore, it is imperative to reinforce the ethical ideals of relation‐based governance in C hina. Second, since relationalism from C hina's past and the laws transplanted from the W est are key features of C hina's governance regime, it is important to explore hybrid solutions to lessen the possibility of bottlenecks and incongruities emerging. Practitioner/Policy Implications Any proposed hybrid governance solution ought to be able to deal with potential differences between the C hinese and the W estern value systems as well as combine both regimes into an integrated framework.