• business systems;
  • China;
  • culture;
  • institutions;
  • semantic spaces

abstract  The analysis of societies, and of systems of business within them, has tended to be heavily influenced by institutionalist perspectives. Many scholars using this approach include culture as a subset of institutions, but often without specifying the logics of doing so. Others remove culture from the account, or acknowledge its significance without placing it clearly in their models. Culturalists, however, tend not to venture into the details of economic coordination and action. To resolve the theoretical challenges posed by this set of contrasting views, it is necessary to specify how culture works and how it is different from institutions. As ‘the societal effect’ is the influence of culture on institutions, it may thus be easier to study its workings. Here culture is seen, following Sorge, as meaning relevant within a series of semantic spaces, each related to a field of action, the total integrated coherently by social axioms binding the spaces and the meanings within them into a total societal fabric of meaning. The private sector of the Chinese economy is analysed, drawing from recent extensive empirical reports as to its functioning. Theory development is in line with business systems theory.