Qian, Roland, and Xu (2005) and Roland (2000:56-65) capture the stylized difference of Russian and Chinese coordination in their modeling of U-form and M-form organizations. Soviet, vertically-integrated branch divisions represented U-form structures formed along functional lines, while in China, regionally-decentralized, M- form structures could coordinate activities across all industries in a single region. These decentralized arrangements reduced information costs, facilitated small-scale experimentation, and contributed to China’s increased flexibility. However, in the absence of horizontal product and input markets, decentralization led to wasteful duplication and barriers to the movement of goods between provinces. Still, Qian, Roland, and Xu.
