The Taiwanese scholar Cheng Bor-Shiuan was among the first to apply Fei Xiaotong’s differential mode of association to Chinese organizations. He proposed the concept of chaxu shi lingdao (差序式领导), differential leadership. In a study published in 1995, he named a typical sign of favoritism among Chinese leaders. They are “generous and understanding toward insiders, strict and demanding toward outsiders.”
A 2018 review in the journal Foreign Economics and Management sums up the concept. Such a leader divides subordinates into “insiders” and “outsiders” by how close the relationship is, how loyal they are and how capable they are.