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Publication year

2006

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Author(s) : Marleen Dielemann Wladimir Sachs,

Oscillating Between a Relationship-based and a Market-based Model: the Salim Group

Abstract

As institutional transitions in emerging economies intensify, the basis for competition is theorised to move from relationship-based to market-based. An in-depth analysis of the strategy of the Salim Group, one of the largest ethnic Chinese conglomerates in the Asia-Pacific region, supports the view that the strategy of this conglomerate can be understood as moving between the extremes of crony capitalism (the relationship-based model) and the existing Western norms for multinational business (the market-based model). Both models are essential for its success, but the former, relationship-based model seems more important in early times and the latter, market-based model becomes more significant during recent institutional changes. We also find evidence that the strategic movement between those extremes takes the form of irregular oscillatory dynamics.

Keywords

• Crony capitalism

• Oscillatory dynamics

• Salim Group

Asia Pacific Journal of Management, vol. 23, no. 4, pp. 521-536.