Managing Market, Hierarchy, and Network: The Jiuda Salt Industries, Ltd., 1917–1937

Abstract

As China underwent industrialization during the Republican period, how did companies deal with the problems of expansion, competition, and relationship with the state? Using the concept of network capitalism, this article demythologizes the “enigma” of Chinese network by analyzing the experience of the Jiuda Salt Industries, Ltd. Fan Xudong, the company’s founder, deftly managed his network portfolio for information and other resources. Kith and kin as shareholders, interlocking directorates, and cross-shareholding, as well as hierarchical management and cartels, were utilized to raise capital and manage local markets. Market, hierarchy, and network thus constitute three complementary organization principles in explaining Jiuda’s success.