The Great Leap Forward: The Transition from Relation-Based Governance to Rule-Based Governance

Organizational Dynamics, Vol. 33, No. 1, pp. 63-78, 2003

16 Pages Posted: 25 May 2006

See all articles by Shaomin Li

Shaomin Li

Old Dominion University

Seung Ho Park

Nanyang Technological University (NTU)

Shuhe Li

City University of Hong Kong (CityU) - Department of Economics & Finance

Abstract

This paper introduces a cost-based, dichotomous theoretical framework of governance to the studies of strategic management and international business. Our paper compares the nature and dynamics of relation-based governance with those of rule-based governance. The framework is applied to provide new insights into international and firm-level differences in industry structure, management systems, strategic practices, innovation, and the international flow of capital, human assets, and trades. We also discuss the evolutionary transformation of relation-based systems of governance into rule-based systems of governance under conditions of economic development and intensified competition. Policy and strategic recommendations are made based on the theory.

Keywords: Rule-based, relation-based, governance

Suggested Citation

Li, Shaomin and Park, Seung Ho and Li, Shuhe, The Great Leap Forward: The Transition from Relation-Based Governance to Rule-Based Governance. Organizational Dynamics, Vol. 33, No. 1, pp. 63-78, 2003, Available at SSRN: https://ssrn.com/abstract=904336

Shaomin Li (Contact Author)

Old Dominion University ( email )

Norfolk, VA 23529-0222
United States

Seung Ho Park

Nanyang Technological University (NTU) ( email )

S3 B2-A28 Nanyang Avenue
Singapore, 639798
Singapore

Shuhe Li

City University of Hong Kong (CityU) - Department of Economics & Finance ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong
+11 852-278-87298 (Phone)
+11 852-278-88806 (Fax)

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