ABSTRACT
The ethnic Chinese distribution channels so dominant within the region are founded primarily upon flexible, informal but highly resilient networks (often referred to as “bamboo” or guanxi networks). Whereas Western business contacts are based upon professional referrals and legal contracts, these are far less of an issue to the indigenous supply chain conglomerates. Within Southeast Asia, friendships, mutual trust and familial contacts are the essential pillars upon which business relationships are based. Such informal but morally binding “agreements” come with an unwritten obligation to maintain them throughout the bad times as well as through the good. Further, and unlike in the West, these relations tend to be personal between individuals rather than between organizations. Hence, so long as the individuals remain within their respective functional roles, the agreement is expected to continue. Even nonfamilial customer links are usually bound at a level beyond what was considered the “norm” at Western head office. Not surprisingly, the great majority of expatriate managers working in the region have serious difficulty in understanding the deceptively complex forms of social etiquette and are therefore almost entirely precluded from building any kind of local patronage network.
