Content area
Abstract
Recent reviews have recommended more contextualized analysis of economic systems, and the business systems theory of Whitley is taken as exemplary in this regard. Three slight amendments are prosed to his main framework: acknowledgement of the 'prior' nature of culture in the shaping of institutions; the introduction of the question of rationale as a component to culture; and the mediating role of government in the flow of influence between culture and the formation of institutions. This model is applied to a description of the private sector in China. Rationale is treated in Weberian terms, but after disaggregation of the rationality concept into categories of formal calculation, ends, and means. The emergence of a distinct business system is examined for its historical path dependence and its current internal dynamics, using the notion that the business system is embedded in an institutional fabric, which is in turn embedded in societal culture.