A Theoretical Framework on the Peculiarity of Doing Business in China—An Extensive Review on HBSP China Business Cases

Abstract

After reviewing 397 Asia-Pacific Region business cases studies, published by Harvard Business School Publishing (HBSP) from 2005 to 2013, and by comparing the 166 China cases and the 231 non-China cases, this paper proposes a theoretical framework, namely, the peculiarity of doing business in China. Despite their great contribution in fulfilling the urgent need for China case studies in business education, and revealing the pivotal role of business and government relationship as the vital challenge of doing business in China, however, the mechanism of how this relationship has been leveraged as a peculiar and decisive competitive advantage for indigenous business (inferior resources) to outperform those FDIs (superior resources) in China, has remained as an unanswered, or not even been acknowledged question. The combination of the three identified cognitive weaknesses has been the prevailed barrier, hindering Western scholars to acknowledge the peculiarity of doing business in China and to understand China politically-dominated and culturally-oriented business environment, and consequently, leading to the stereotyped application of Western framework of management in perceiving, observing and interpreting pseudo-socialist business environment and behaviors in China, in which, business is by nature NOT market-oriented like in those Western countries. The fact being ignored is that, the combination of government and Guanxi Network constitutes the backbone of business environment, in which, what you can do depends on who you know, is the core determinant of organizational and individual behaviors, supporting and protecting the peculiarly structured chain-of-beneficiaries in China. Lastly, given the lag between business education and practice, the proposed framework may timely serve to enrich the paradigm of international business management.