ABSTRACT
The Chinese family firm, which still makes up the great majority of all Chinese business enterprises today, remains vigorous and profitable because it is both flexible and tenacious. Flexible in adapting to the challenges of each new environment, yet tenacious in holding on to a set of core cultural values and institutional frameworks. This chapter shows how contemporary Chinese business is already breaking loose from certain areas of the institutional, organizational, and cultural molds imposed by the past. The ability of the family firm to re-create itself into a new mix of various elements—cultural, institutional, and organizational—in order to optimize opportunities within each new environment is what makes it such a potent force in the reemerging economy of East and Southeast Asia. This refutes one major thesis advanced by Francis Fukuyama in his recent book, Trust: The Social Virtues and the Creation of Prosperity, where he argues that Confucianist China, with its low level of social trust.
