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The Dynamics of Corporate Co-evolution

A Case Study of Port Development in China

  • Organisation and Strategy: Case Studies in their Context

John Child, Kenneth K.-T. Tse and Suzana B. Rodrigues

Offering insights of unusual richness, this book examines one of the world’s most important business environments to determine the way that organizations can develop through interaction with their environments. It fills a gap in our understanding of the evolution of the Chinese business environment and throws light on the theory of co-evolution in order to inspire management practice.
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Chapter 7: Relationship management – creating a relational framework

John Child, Kenneth K.-T. Tse and Suzana B. Rodrigues


YICT’s management consciously set out to develop its relational frame- work with governmental and regulatory authorities through what it called ‘relationship management’. It concentrated its efforts on three areas. The first was with the Chinese partner (effectively the Shenzhen SEZ government) to create a good working relationship. The second was with Chinese government ministries in an effort to secure timely approval for port development and expansion. The third area concerned the management of relationships with the governmental regulatory authorities operating in the port. This was aimed at producing an efficient service for the port’s customers. In each of these areas, YICT management orchestrated a programme of developing the company’s external relationships in a continuing effort to learn about, adapt to, and influence its specific environment. This was an intentional activity on the part of managers which serves to demonstrate that a relational framework does not simply emerge by chance. During the course of the company’s evolution, its managers learned that they had to handle the institutional constraints they faced in a proactive manner which required the fostering of appropriate relationships. At the time when they were first confronted with these constraints, they struggled and tried to achieve results through a common sense approach. A more systematic approach, involving conscious relationship management, evolved only as a result of repeated learning and review. It is commonly recognized among those concerned with joint ventures based in China that managing relationships or ‘guanxi’ is a critical success factor.

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