Meyer, S: Informal Modes of Governance

The Greater Pearl River Delta (China) is one of the world's mega-city regions. Its electronics industry is an important driver for economic growth and prosperity in China with firms that are highly flexible and quickly adapting to changing markets. The objective of this volume is to understand how informal modes of governance in customer and producer relations contribute to a flexible production network. It investigates whether informal interactions make up for constantly changing formal regulations in China or smooth business operations as an innovative mean to manage a firm's network. The findings show that firms in the Greater Pearl River Delta organise their network by using a combination of formal and informal means in recruiting, contracting and enforcing processes. This research contributes to a better understanding of the complex business model in China and its implications for organisational novelty as such.