ABSTRACT
This chapter considers the relationship between cultural values, capitalist development and patterns of global divergence in economic action. It discusses the key institutional perspectives that have been used to explain China's economic and organizational reforms. The chapter explains contemporary critiques of 'new' institutionalism which argue that the urgent need to develop more nuanced understandings of power relations at the organizational level. It argues that the reason for 'convergence' on Western forms of management did not occur simply because managers believed these systems were more 'rational' and efficient. The chapter explains the widespread interest in studying cultural values and capitalist development, and it demonstrated the important contributions made by institutional perspectives, especially as they relate to debates around convergence and divergence in social and economic action. The transition from communist central planning to state-controlled capitalism in China has often described as a gradual, experimental process; in the words of Deng Xiaoping, China is 'groping for stones to cross the river'.
