East Asian Business in the New World

East Asian Business in the New World

Helping Old Economies Revitalize
2016, Pages 13-30
East Asian Business in the New World

Chapter 2 - Western Rules Versus Eastern Relations: A Fundamental Framework to Understand East Asia*

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This chapter introduces the framework of rule-based (the Western way) versus relation-based (the Asian way) governance, and compares the costs and benefits of the two governance systems. The author shows that the difference between the Western and the Asian ways is not primarily cultural; it is fundamentally political and economic. The chapter discusses how the relation-based way is the driving force behind the “East Asian Miracle” and how it will hinder East Asia’s further development. The chapter concludes by showing how the United States and Western firms can successfully learn from and navigate the relation-based way.

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Adopted from Li, S. (2009). Managing international business in relation-based versus rule-based countries. New York, NY: Business Expert Press.

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