ABSTRACT
The use of social networks is not unusual in business and is certainly not confined to the East Asian region. There are numerous studies, from all quadrants of the globe, which show that people prefer to do business with those with whom they have existing ties of friendship or kinship (Borgatti and Foster, 2003; Burt, 2000; Uzzi, 1996). Personal connections are universally valuable for gaining access to jobs and enhancing career prospects and for providing organisations with access to a wider range of markets, suppliers and information (Bian and Ang, 1997; Davidsson and Honig, 2005; Granovetter, 1974; Kotabe et al., 2003; Uzzi, 1996). On the downside, if they become too exclusive, networks can stifle innovation as certain core assumptions and work practices become habituated, closing off potentially more productive alternatives. All that said there are those who argue that the form of networking used in China – guanxi – is distinctly different from those found in other societies because of its deep cultural roots in the Confucian philosophical tradition (see chapter 3).
