Oscillating between a relationship-based and a market-based model: The Salim Group

As institutional transitions in emerging economies intensify, the basis for competition is theorised to move from relationship-based to market-based. An in-depth analysis of the strategy of the Salim Group, one of the largest ethnic Chinese conglomerates in the Asia-Pacific region, supports the view that the strategy of this conglomerate can be understood as moving between the extremes of crony capitalism (the relationship-based model) and the existing Western norms for multinational business (the market-based model). Both models are essential for its success, but the former, relationship-based model seems more important in early times and the latter, market-based model becomes more significant during recent institutional changes. We also find evidence that the strategic movement between those extremes takes the form of irregular oscillatory dynamics.

Wladimir SachsEmail:

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Marleen Dieleman   is Assistant Professor and Assistant Dean at the Leiden University School of Management in The Netherlands. She is currently finishing her PhD on the Salim Group at Leiden University. Her research interests include global strategy, intercultural management and Asian management. She presently focuses on ethnic Chinese business groups. Marleen holds a master degree in business administration from the Rotterdam School of Management, Netherlands, and has previously worked as a management consultant and as a project manager for international development cooperation programmes for the Dutch ministry of Foreign Affairs. Wladimir M. Sachs   is Director of Research at ESC Rennes School of Business, and Visiting Professor at the Leiden University School of Management. He was director of TEMA School of Technology and Management, an undergraduate business program jointly operated by Reims Management School and Ecole Nationale des Ponts et Chaussées. Previously he was on the Faculty of Wharton School and of Rotterdam School of Management, as well as high-tech entrepreneur, manager and management consultant to companies and other organisations in the United States, Latin America and Europe. He holds a PhD in management from the Wharton School and a DEA (advanced post-masters degree) in mathematics from the University of Paris at Orsay. Dr. Sachs lived in seven countries, speaks six natural languages and several computer dialects.