ABSTRACT
Organizational dependence on personal relationships as a means to operate without facilitative governments may have many effects (e.g., financial and strategic), that are beyond the scope of this work (see excellent descriptions of strategic implications in Redding, 1990; Khanna & Palepu, 1998). In this chapter the effects of relationship-based organizing on organizational form are discussed. It is proposed that organizing based on personal relationships results in highly centralized organizations that, whether large or small, undermine performance-focused meritocracy and disempower employees. Furthermore, these organizational practices are best illustrated by distortions in human resources management departments.
