IDEAS home Printed from https://ideas.repec.org/p/wop/calsec/9601.html
   My bibliography  Save this paper

Inter-Organizational Relationships In China: Changes In Governance Structures For Raw Material Procurement, 1988-1993

Author

Listed:
  • Laura L. Whitcomb
  • Cheng Li

    (Department of Management)

Abstract

This paper examines the evolving modes of organization used by Chinese enterprises to ensure reliable supplies of raw materials during a period when China's economic system was undergoing a transformation from centrally planned to market allocation of resources. Due to the lack of reliable legal constraints on opportunistic behavior, personal connections (guanxi) were cultivated as a means to reduce transaction costs in inter- enterprise relationships during the late 1980s. In transactions characterized by extreme uncertainty and asset specificity, these informal safeguards were supplemented with new forms of governance, including compensation trade and minority ownership, in order to more formally cement buyer-supplier relationships. As continued economic reforms in the 1990s decreased the level of uncertainty associated with raw materials transactions, some of these new modes of governance began to be phased out. This longitudinal case study illustrates how various informal and structural safeguards may be used to reinforce inter-organizational relationships under uncertainty and provides support for the universality of transaction cost sensitive development of inter-organizational relationships.

Suggested Citation

  • Laura L. Whitcomb & Cheng Li, 1996. "Inter-Organizational Relationships In China: Changes In Governance Structures For Raw Material Procurement, 1988-1993," Working Papers 96-01, California State University, Los Angeles, School of Business and Economics.
    • Handle: RePEc:wop:calsec:9601
    as

    Download full text from publisher

    File URL: http://web.calstatela.edu/academic/business/rawmat.pdf
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wop:calsec:9601. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Krichel (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.