The Organizational Evolution of Business Associations: Processes of Change in the Transformation of China.

This paper is an analysis of the process through which a completely new set of business associations have emerged in China over the past two decades. At the end of the 1970s, China's organizational landscape was marked by a nearly complete absence of associations. During the 1980s and 1990s, as part of an effort to reform the economy and the state administration, state officials and agencies set up a large number of business associations. Although in the years immediately following their creation these associations possessed only an embryonic sort of existence, by the beginning of the new millennium a large number of business associations had evolved into distinct and increasingly active and influential organizations. Some associations operated essentially as subsidiary organizations of a government agency, while others had come to possess a measure of de facto independence from the government. This paper develops a new framework for the analysis of the process of organizational evolution and uses it to shed light on two questions. First, why and how have Chinese business associations emerged and evolved from empty shells into real and active organizations? Second, why have these associations evolved in different ways with regards to their relationship with government organizations? These questions are explored through a detailed analysis of two illustrative cases: the China Construction Industry Association and the China Chain Store and Franchise Industry Association. The case studies reveal how government agencies have engineered a transfer of resources to associations, in the process helping to create a new set of "hybrid organizations" standing between state and society. The process of associational evolution sheds light on several aspects of the institutional transformation of the Chinese political and economic system. The paper concludes by arguing that to understand fully this transformation, scholars must recognize the existence of a "third realm", an expansive realm of activity located at the interstices of state and society. [ABSTRACT FROM AUTHOR]