Abstract
Using the case of Chinese Family Business Groups (FBGs) in East Asia, this paper examines the relationship between the strategic behaviour exhibited by an organisational form and it's administrative heritage. To do so, we trace the origins of the strategic behaviour that scholars commonly attribute to FBGs to the environmental conditions prevailing during their emergence in the turbulent post-Colonial era of East Asia. We explain how fundamental changes brought about by shifts in the post-Cold war environment of East Asia have confronted FBGs with new opportunities and organising imperatives which their administrative heritages have left them ill-equipped to deal with. In concluding, we explain how the lack of fit between a dominant organisational form and contemporaneous environmental conditions may have significant implications for the organisations themselves and the economies whose landscapes they dominate.
Similar content being viewed by others
References
Akyuz, Y. and C. Gore. (1996). “The Investment-Profits Nexus in East Asian Industrialisation.”World Development 24, 461–470.
Ampalaver-Brown, Ruth. (1995). “Introduction: Chinese Business in an Institutional and Historical Perspective.” In R.A. Brown (ed.), Chinese Business Enterprise in Asia 1–26. London: Routledge.
Andrews, K.A. (1971). The Concept of Corporate Strategy. Homewood, IL: Richard D. Irwin.
Backman, M. (1999). Asian Eclipse: Exposing the Darkside of Business in Asia. Singapore: Wiley.
Bartlett, C.A. and S. Ghoshal. (1989). Managing Across Borders: The Transactional Solution. Boston: Harvard University Press.
Baum, J. and J.V. Singh. (1994). “Organization-Environment Co-Evolution.” In J. Baum and J.V. Singh (eds.), Evolutionary Dynamics of Organizations. New York: Oxford University Press, pp. 379–402.
Bebchuk, L.A. and M.J. Roe. (1999). “A Theory of Path Dependence in Corporate Governance and Ownership.” Columbia Law School, Centre for Law and Economic Studies Working paper No. 131.
Boyer, R. and J.R. Hollingsworth. (1997). “From National Embededness to Spatial and Institutional Nestedness.” In J.R. Hollingsworth and R. Boyer (eds.), Contemporary Capitalism: The Embededness of Institutions. Cambridge: Cambridge University Press.
Carney, M. (1998). “A Management Capacity Constraint? Barriers to the Development of the China Family Business.” Asia-Pacific Journal of Management 15(2), 137–162.
Carney, M. and E. Gedajlovic. (2000). “East Asian Financial Systems and the Transition from Investment Driven to Innovation Driven Economic Development.” International Journal of Innovation Management 4(3), 253–276.
Carney, M. and E. Gedajlovic. (2002). “Coupled Ownership and Control and the Allocation of Financial Resources: Evidence From Hong Kong.” Journal of Management Studies 39(1), 123–146.
Chan, Wellington, K.K. (1982). “The Organisational Structure of the Traditional Chinese Firm and its Modern Reform.” Business History Review 56, 218–235.
Chandler, A.D. (1962). Strategy and Structure. Cambridge, MA: The MIT Press.
Chandler, A.D. (1990). Scale and Scope: The Dynamics of Industrial Capitalism. Cambridge, Mass: Harvard University Press.
Chandler, A.D. (1997). “The Functions of the HQ in a Multibusiness Firm.” In R. Rumelt, D. Schendel, and R.J. Teece (eds.), Fundamental Issues in Strategy: A Research Agenda. Boston: Harvard Business School Press, pp. 323–360.
Chirot, D. and A. Reid. (1997). Essential Outsiders: Chinese and Jews in the Modern Transformation of Southeast Asia and Central Europe. Seattle: University of Washington Press.
Chu, Y. (1994). “The Re-Alignment of Business-Government Relations and Regime Transition in Taiwan.” In A. MacIntyre (ed.), Business and Government in Industrialising Asia. Ithaca: Cornell University Press.
Chu, T.C. and T. MacMurray. (1993). “The Road Ahead for Asia's Leading Conglomerates.” McKinsey Quarterly 3, 117–126.
Claessens, S. (1998). Systematic Bank and Corporate Restructuring: Experience and Lessons for East-Asia. Washington: World Bank.
Claessens, S., S. Djankov, J. Fan, and L. Lang. (1999). Expropriation of Minority Shareholders: Evidence from East Asia. Washington: World Bank.
Claessens, S., S. Djankov, and L. Lang. (2000). “The Separation of Ownership and Control in East Asian Corporations.” Journal of Financial Economics 58, 81–112.
Claessens, S., J.P.H. Fan, and L. Lang. (2002). “The Benefits and Costs of Group Affiliation.” World Institute for Development Economics Research Discussion Paper No.2002/47.
Dyers, G.W. (1986). Cultural Change in Family Firms: Anticipating and Managing Business and Family Transitions. San Francisco: Jossey-Bass.
East Asian Analytical Unit. (1995). Overseas Chinese Business Networks in Asia. Department of Foreign Affairs and Trade, Australia.
Fairbank, J.K. (1994). China: A New History. Cambridge, Mass: Belknap Harvard University Press.
Fama, E.F. and M. Jensen. (1983). “Agency Problems and Residual Claims.” Journal of Law and Economics 26, 301–325.
Fukuyama, F. (1995). Trust: The Social Virtues and the Creation of Prosperity. London: Penguin Books.
Garran, R. (1998). Tigers Tamed: The End of the Asian Miracle. Honolulu: University of Hawaii Press.
Gereffi, G. (1994). “The Organization of Buyer-Driven Global Commodity Chains: How US Retailers Shape Overseas Production Networks.” In G. Gereffi and M. Korzeniewicz (eds.), Commodity Chains and Global Capitalism. Westport, CT: Greenwod Press.
Gilson, R.J. (2000). “Globalizing Corporate Governance: Convergence of Form or Function.” Columbia Law School, Centre for Law and Economic Studies Working paper No. 174.
Glasmeir, A. (1994). “Flexibility and Adjustment: The Hong Kong Watch Industry and Global Change.” Growth and Change 25, 223–246.
Goldstein, M. (1998). The Asian Financial Crisis: Causes, Cures, and Systemic Implications. Washington: Institute for International Economics.
Greenwood, R and C.R. Hinings. (1996). “Understanding Radical Organizational Change; Brining Together the Old and the New Institutionalism.” Academy of Management Review 26, 1022–1054.
Haggard, S. (1994). “Business, Politics and Policy in Northeast and Southeast Asia in Business and Government.” In A. Macintyre (ed.), Industrializing Asia. Ithaca, NY: Cornell University Press, pp. 268–301.
Hamilton, G.G. (2000). “Reciprocity and Control: The Organization of Chinese Family-Owned Conglomerates.” In H.W.-C. Yeung and K. Olds (eds.), Globalization of Chinese Business Firms. New York: St. Martin's Press, pp. 55–74.
Hamilton, G.G. and N.W. Biggart. (1988). “Market Culture and Authority: A Comparative Analysis of Management in the Far East.” American Journal of Sociology 94, S52–S94.
Henderson, C. (1998). Asia Falling: Making Sense of the Asian Crisis and its Aftermath. New York: Business Week Books.
Hobday, M.L. (1994). Technological Learning in Singapore: A Test Case of Leapfrogging.” Journal of Developmental Studies 30(3), 851–858.
Hobday, M. (1995). “East Asian Latecomer Firms: Learning the Technology of Electronics.” World Development 23, 1171–1193.
Hobday, M. (2000). “East vs. South East Asian Innovation Systems: Comparing OEM and TNC-Led Growth in Electronics.” In Technological Learning and Economic Development: The Experience of the Asian NIEs. Cambridge: Cambridge University Press.
Hobday, M., A. Cawson, and R.S. Kim. (2001). “Governance of Technology in the Electronics Industries of East and Southeast Asia.” Technovation 21, 209–226.
Hodder, R. (1996). Merchant Princes of the East: Cultural Delusions, Economic Success and the Overseas Chinese in Southeast Asia. New York: Wiley.
Hofer, C. (1975). “Toward a Contingency Theory of Business Strategy.” Academy of Management Journal 18, 784–810.
Hu, Y.S. (1995). “The International Transferability of the Firm's Advantages.” California Management Review 73–88.
Huang H.Z. and C.G. Xu. (1999). “Financial Institutions and the Financial Crisis in Asia.” European Economic Review 43(4), 903–914.
International Monetary Fund. (1998). “The Asian Crisis and the Region's Long-Term Growth Performance” Washington DC: World Economic Outlook, pp. 82–106.
Johnson, S., P. Breach Boone, and E. Friedman. (2000). “Corporate Governance in the Asian Financial Crisis.” Journal of Financial Economics 58, 141–186.
Kao, J. (1993). “The Worldwide Web of Chinese Business.” Harvard Business Review 71(2), 24–36.
Khanna, T. and K. Palepu. (1997). “Why Focused Strategies May be Wrong for Emerging Markets.” Harvard Business Review July–August, 41–51.
Khanna, T. and K. Palepu. (1999). “The Right Way to Restructure Conglomerates in Emerging Markets.” Harvard Business Review 77, 125–134.
Koike, K. (1993). “Introduction: Business Groups in Developing Economies.” Journal of Developing Economies 31(4), 363–378.
Lasserre, P. and L. Probert. (1998). “Competing in Asia Pacific: Understanding the Rules of the Game.” Long Range Planning 31(1), 30–50.
Lasserre, P. and H. Schutte. (1995). Strategies for Asia-Pacific. London: Macmillan.
Lecraw, D.J. (1993). “Outward Investment by Indonesian Firms: Motivation and Effects.” Journal of International Business Studies 24, 589–600.
Leung, C.K. and C.T. Wu. (1995). “Innovation Environment, R&D Linkages and Technology Development in Hong Kong.” Regional Studies 29(6), 533–546.
Lim, L. (1996). “Southeast Asian Business Systems: The Dynamics of Diversity.” In A.E. Safarian and W. Dobson (eds.), East Asian Capitalism: Diversity and Dynamism. Toronto: University of Toronto Press.
Lui, T.L. and S.A. Chui. (1994). “A Tale of Two Industries: The Restructuring of Hong Kong's Garment-Making and Electronic Industries.” Environment and Planning 26, 53–70.
MacIntyre, A. (1994). “Power, Prosperity and Patrimonialism.” In A. Macintyre (ed.), Business and Government in Indonesia in Industrializing Asia. Ithaca, NY: Cornell University Press, pp. 244–267.
Mackie, J. (1992). “Changing Patterns of Big Business in Southeast Asia.” In R. McVey (ed.), Southeast Asian Capitalism. New York: Cornell University Southeast Asia Program, pp. 161–190.
Maher, M. and T. Andersson. (1999). Corporate Governance: Effects on Firm Performance and Economic Growth. Paris: OECD.
Mathews, J.A. (1997). “A Silicon Valley of the East: Creating Taiwan's Semiconductor Industry.” California Management Review 39, 26–54.
Mathews, J.A. (1999). “A Silicon Island of the East: Creating a Semiconductor Industry in Singapore.” California Management Review 41, 55–78.
McVey, R. (1992). “The Materialization of the Southeast Asian Entrepreneur.” In R. McVey (ed.), Southeast Asian Capitalism. New York: Cornell University Southeast Asia Program, pp. 7–34.
Meyer, J.W. (1994). “Rationalized Environments.” In R.W. Scott and J.W. Meyer (eds.), Institutional Environments and Organizations: Structural Complexity and Individualism. Thousand Oaks, CA: Sage Publications, pp 28–54.
Miller, M.H. (1998). “Financial Markets and Economic Growth.” Journal of Allied Corporate Finance 11, 8–14.
Mintzberg, H. (1979). The Structuring of Organizations. Englewood Cliffs, NJ: Prentice Hall.
Nelson, R.P. and S.G. Winter. (1982). An Evolutionary Theory of Economic Change. Cambridge, MA: Harvard University Press.
Newman, K.L. (2000). “Organizational Transformation During Institutional Upheaval.” Academy of Management Review 25, 602–620.
Noble, G.W. (1998). Collective Action in East Asia: How Ruling Parties Shape Industrial Policy. Ithaca: Cornell University Press.
North, D.C. (1990). Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.
Numazaki, I. (1993). “The Tainanbang: The Rise and Growth of a Banana Shaped Business Group in Taiwan.” The Developing Economies 31(4), 485–510.
OECD. (1999). “Foreign Direct Investment and Recovery in Southeast Asia Paris.” Organization for Economic Co-Operation and Development.
Oliver, C. (1991). “Strategic Responses to Institutional Processes.” Academy of Management Review 16(1), 145–179.
Pangarkar, N. (1998). “The Asian Multinational Corporation: Strategies, Performance and Key Challenges.” Asia Pacific Journal of Management 15(2), 109–118.
Peng, M. (2002). “Institutional Transitions and Strategic Choice.” Academy of Management Review, in press.
Pfeffer J. and G.R. Salancik. (1978). The External Control of Organizations: A Resource Dependence Perspective. New York: Harper and Row.
Porter, M.E. (1990). The Competitive Advantage of Nations. New York: Free Press.
Prowse, S. (1996). “Corporate Finance in International Perspective: Legal and Regulatory Influences on Financial System Development.” Federal Reserve Bank of Dallas Economic Review Third Quarter, 2–16.
Prowse, S. (1998). Corporate Governance: Emerging Issues and Lessons from East Asia. Washington: World Bank.
Rajan R.G. and L. Zingales. (1998). “Which Capitalism? Lessons from the East Asian Crisis.” Journal of Applied Corporate Finance 11(3), 40–48.
Redding, S.G. (1990). The Spirit of Chinese Capitalism. New York: De Gruyter.
Redding, S.G. (2000). “What is Chinese about Chinese Family Business? and How Much is Family and How Much is Business?” In H.W.-C. Yeung and K. Olds (eds.), Globalization of Chinese Business Firms. New York: St. Martin's Press, pp. 31–55.
Schein. (1996). Strategic Pragmatism: The Culture of Singapore's Economic Development Board. Cambridge, MA: The MIT Press.
Shieh, G.Y. (1992). “Boss” Island: The Subcontracting Network and Micro-Entrepreneurship in Taiwan's Development. New York: P. Lang.
Singh, A. (1998). “Savings, Investment and the Corporation in the East Asian Miracle.” The Journal of Development Studies 34(6), 112–138.
Starbuck, W.H. (1965). “Organizational Growth and Development,” In J.G. March (ed.), Handbook of Organizations. Chicago: Rand McNally, pp. 451–533.
Stubbs, R. (1999). “War and Economic Development: Export Oriented Industrialisation in East and Southeast Asia.” Comparative Politics 31(3), 337–355.
Thong, G.T.S. (1991). “Foundations of Human Resource Management Practise in Japanese Companies in Malaysia.” In S. Yamashita (ed.), Transfer of Japanese Technology and Management to the ASEAN Countries. Tokyo: University of Tokyo Press.
Twang, Peck Yang. (1998). The Chinese Business Elite in Indonesia and the Transition to Independence 1940– 1950. Kuala Lumpar: Oxford University Press.
UNCTAD. (1994). World Investment Report: Transnational Corporations, Employment and the Workplace. New York: United Nations Conference on Trade and Development.
UNCTAD. (1998). The Growth of Domestic Capital Markets, Particularly in Developing Countries, and its Relationship with Foreign Portfolio Investment. New York: United Nations Commission on Trade and Development.
Vogel, E. (1991). The Four Little Dragons: The Spread of Industrialisation in East Asia. Cambridge: Harvard University Press.
Wade, R. (1990). Governing the Market: Economic Theory and the Role of Government in East Asian industrialisation. N.J. Princeton: Princeton University Press.
Weidenbaum, M. and S. Hughes. (1996). The Bamboo Network: How Expatriate Chinese Entrepreneurs are Creating a New Economic Superpower in Asia. New York: Free Press.
Westwood, R. (1997). “Harmony and Patriarchy: The Cultural Basis for ‘Paternalistic Headship’ Among the Overseas.” Chinese’ Organization Studies 18(3), 445–480.
Whitley, R. (1992). Business Systems in East Asia: Firms, Markets and Societies. London, Sage.
Whitley, R. (1999). Divergent Capitalisms: The Social Structuring and Change of Business Systems. Oxford: Oxford University Press.
Williamson, O.E. (1975). Markets and Hierarchies: Analysis and Antitrust Implications. New York, NY: Free Press.
Williamson, P.J. (1997). “Asia's New Competitive Game.” Harvard Business Review Sept–Oct, 55–67.
Wong, G. (1996). “Business Groups in a Dynamic Environment; Hong Kong 1976–1986.” In G. Hamilton (ed.), Asian Business Networks. Berlin: De Gruyter.
Wong, S.L. (2000). “Transplanting Enterprises in HongKong.” In H.W.-C. Yeung and K. Olds (eds.), Globalization of Chinese Business Firms. New York: St. Martin's Press, pp. 153–166.
Wong, S.L. (1985). “The Chinese Family Firm: A Model.” British Journal of Sociology 36, 58–72.
World Bank. (1993). The East Asian Miracle: Economic Growth and Public Policy. Oxford: Oxford University Press.
World Bank. (1996). Managing Capital Flows in East Asia. Washington, DC: World Bank.
Wu, Yuan Li and C. Wu. (1980). Economic Development in Southeast Asia: The Chinese Dimension. Stanford: Hoover Institution Press.
Yeh, A.G. and M.K. Ng. (1994). “The Changing Role of the State in High-Tech Industrial Development: The Experience of Hong Kong.” Environment and Planning C 12, 449–472.
Yeung W.C.H. (1994). “Hong Kong Firms in the Asean Region; Transnational Corporations and Foreign Direct Investment.” Environment and Planning 26, 1931–1956.
Yoshihara, K. (1988). The Rise of Ersatz Capitalism in South-East Asia. Oxford: Oxford University Press.
Zutshi, R.K. and P.T. Gibbons. (1998). “The Internationalization Process of Singapore Government-Linked Companies: A Contextual View.” Asia Pacific Journal of Management 15(2), 219–247.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Carney, M., Gedajlovic, E. Strategic Innovation and the Administrative Heritage of East Asian Family Business Groups. Asia Pacific Journal of Management 20, 5–26 (2003). https://doi.org/10.1023/A:1022062428231
Issue Date:
DOI: https://doi.org/10.1023/A:1022062428231