Challenging the Chinese managerial paradigm: Global relations over-ride the traditional market model
Georgina Murray
Griffith University, QLD
Kate Hutchings
Queensland University of Technology, QLD
PP: 129 - 142
Abstract
This paper questions what is distinct about the formation of business networks in the Chinese capitalist leap forward at the turn of the twenty-first century? Existing literature suggests that it is a business culture based on strong family networks, or cultural ties secured in quanxi connections that are underpinned by strong Confucian ethics.
Agreeing with the identification of these distinctive cultural attributes, we argue that Chinese business, like business elsewhere, may have cultural attributes that are distinctly national (and foreigners looking to succeed there will ignore them at their peril) but we suggest that networking power still resides in underlying patterns of ownership.
We use empirical data from Australian registered companies operating in Shanghai and Chinese companies operating in Shanghai to test this theory and to draw conclusions about the difference and similarity of corporate organisations in different regions.
Keywords
business networks, quanxi, cultural differences, Chinese companies, Australian companies
References
Barton CA (1983) Trust and Credit: Some Observations Regarding Business Strategies of Overseas Chinese Traders in South Vietnam, in LYC Lim, and P Gosling (eds) The Chinese in Southeast Asia 1, Singapore: Maruzen Asia.
Beamish P (1998) Equity joint Ventures in China: Compensation and Motivation, Ivey Business Quarterly 63(1): 67-69.
Bevan S (ed in chief) (1998) Jobson's Year Book of Public Companies 1997-98, Sydney, Dunn & Bradstreet.
Bian Y and Ang S (1997) Guanxi networks and job mobility in China and Singapore, Social Forces 75(3): 981-1007.
Blackman C (2000) China Business: The rules of the game, St Leonards NSW, Allen & Unwin.
Blackman M (1995) Overseas Chinese business networks in Asia. Canberra: The East Asia Unit. Department of Foreign Affairs and Trade. The Commonwealth of Australia: Canberra.
Bond MH and Hwang KK (1986) The Social Psychology of Chinese People, in MH Bond (ed) The Psychology of Chinese People, Hong Kong: Oxford University Press.
Bryan D and Rafferty M (1999) The Global Economy in Australia: Global Integration and National Economic Policy, Allen & Unwin: St Leonards
Buttery EA and Wang YH (1999) The development of a guanxi framework, Marketing Intelligence and Planning 17(3): 147-154.
Carroll B and Alexander M (1999) Finance Capital and Capitalist Class integration in the 1990s: Networks of Interlocking Directorships in the Canada and Australia, The Canadian Review of Sociology and Anthropology 36(3): 331-350.
Chan K (ed) (1995) Chinese Business Networks: State, Economy and Culture, Singapore, Prentice-Hall.
Cheng L and Rosett A (1991) Contract with a Chinese Face: Socially Embedded Factors in the Transformation from Hierarchy to market 1978-1989, Journal of Chinese Law 5(2): 143-244.
Cheng L-K (1985) Social Change and the Chinese in Singapore: A Socio-economic Geography With Special Reference To Bang Structure, Singapore: Singapore University Press.
Crawford D (2000) Chinese capitalism: cultures, the Southeast Asian region and economic globalisation, Third World Quarterly 21(1): 69-87.
Cui G and Liu Q (2000) Regional market segments of China: opportunities and barriers in a big emerging market, Journal of consumer Marketing 17(1): 55-72.
Davis G (1991) Agents without Principles? The Spread of the Poison Pill through the Intercorporate Network, Administrative Science Quarterly 36: 583-613.
Dooley P (1969) The interlocking directorate, American Economic Review 59(3): 314-323.
Dwyer FR, Schurr PH and Oh S (1987) Developing buyer-seller relationships, Journal of Marketing 3(2): 7-23.
East Asia Analytic Unit (1992) Australian and North-East Asia in the 1990s: Accelerating Change, Department of Foreign Affairs and Trade, Canberra.
Fei X [1949] (1992) From the Soil, the Foundations of Chinese Society: A Translation of Fei Xiatong's Xiangtu Zhongguo (with an Introduction and Epilogue by GG Hamilton and W Zheng), University of California Press.
Fennema M and Van der Pijl K (1987) International Bank Capital and the New Liberalism (eds) M Mizruchi and M Schwartz, Inter-corporate Relations, The Structural Adjustment of Business, Cambridge, Cambridge University Press, pp.298-320.
Firth M (1996) The Diffusion of Managerial Accounting Procedures in the People's Republic of China and the Influence of Foreign Partnered Joint Ventures, Accounting, Organizations and Society 21(7-8): 1-8.
Fligstein N and Brantley P (1992) Bank Control, Owner Control or Organizational Dynamics: Who Controls the Large Modern Corporation? American Journal of Sociology 98: 280-307.
Fried MH [1953] (1969) Fabric of Chinese Society: A Study of the Social Life in a Chinese Country Seat. Octagon Books.
Glasberg D (1987) The Ties that Bind? Case Studies in the Significance of Corporate Board Interlocks with Financial Institutions, Sociological Perspectives 30(1): 19-48.
Gluyas R (1999) Utopian Agenda, The Australian January 22: 32.
Granovetter M (1982) The Strength of Weak Ties, a Network Theory Revisited, in P Marsden and N Lin, Social Structure and Network Analysis, Beverly Hills, Sage.
Hamilton G (1996) Competition and organization: a re-examination of Chinese business practices, Journal of Asian Business 12(1): 7-20.
Hamilton G (1991) Business networks and economic development in East and Southeast Asia. Hong Kong: University of Hong Kong Press.
Higley J and Deacon D and Smart D (1979) Elites in Australia, Cumbernauld, Routledge Keagan & Paul.
Hilferding R (1910) Finance Capital, London Routledge, Keagan & Paul, reprinted 1981.
Hu HC (1944) The Chinese Concepts of 'Face', American Anthropologist 1: 45-64.
Hutchings K, Shadur M and McEllister R (2000) ‘Geographical Contingencies'. Academy of Management Conference Proceedings Publication. Paper presented in Symposia titled ‘Low Context Assumptions, High Context Solutions: Contingencies for Predicting Expatriate Adjustment in Asia', August 2000, Toronto, Canada.
Hwang KK (1987) Place and Favor: The Chinese Power Game, American Journal of Sociology 92: 944-74.
Kienzle R and Shadur M (1997) Developments in business networks in East Asia, Management Decision 35(1): 23-32.
Kiong TC and Kee YP (1998) Guanxi bases, Xinyong and Chinese business networks, British Journal of Sociology 49(1): 75-96.
Klein C and Alchain (1978) Vertical integration, appropriable rents and the competition contracting process, Journal of Law and Economics 21: 291-326.
Landa JT (1983) The Political Economy of the Ethnically Homogeneous Chinese Middleman Group in Southeast Asia: Ethnicity and Entrepreneurship in a Plural Society, in LYC Lim and P Gosling (eds) The Chinese in Southeast Asia 1, Singapore: Maruzen Asia.
Larner R (1970) Management control and the large corporation. Cambridge: Dunellen.
Lever-Tracy C, Tracy N and Yi D (1996) The Chinese Diaspora and Mainland China. London: Macmillan.
Li and Wright PC (2000) Guanxi and the realities of career development: a Chinese perspective, Career Development International 5(7): 369-378.
Lowe S (1998) Culture and Network Institutions in Hong Kong: A Hierarchy of Perspectives. A Response to Wilkinson: Culture, Institutions and Business in East Asia, Organization Studies 19(2): 321-343.
MAC (Mainland Affairs Committee) (1992) Taishang Fu Dalu Touzi Shibai Anli zhi Yanjiu (Research into Cases of Failed Taiwanese Investments in Mainland China) Taiwan, Executive Yuan.
Mintz B and Schwartz M (1985) The Power Structure of American Business, Chicago, University of Chicago Press.
Mintz B and Schwartz M (1981) Interlocking directorates and interest group formation, American Journal of Sociology 46(6): 851-868.
Mizruchi M (1996) What Do Interlocks Do? An Analysis, Critique and Assessment of Research on Interlocking Directorates, Annual Review of Sociology 22: 271-302.
Mizruchi M (1996) What Do Interlocks Do? An analysis, Critique and Assessment of Research on Interlocking Directorates, Annual Review of Sociology 22: 271-302.
Mizruchi M (1987) Why do corporations stick together, in G William Domhoff and TR Dye (eds) Power elites and organizations, pp.204-218. Newsbury Park: Sage.
Murray G (1990) Corporate capitalism in New Zealand, Auckland, Auckland University PHD.
Murray G (2001a) Black Empowerment in South Africa - a Corporate Black Wash, Critical Sociology, refereed US, in press.
Murray G (2001b) Interlocking Directorates: What do they tell us about Corporate Power in Australia? Journal of Australian Political Economy, November, refereed Australia, in press.
Murray G (2001c) Interlocks or Ownership: New Zealand Boardroom Power, New Zealand Sociology, refereed NZ, in press.
Nowark L and Dong D (1997) Intercultural Differences between Chinese and Americans in Business, Business Communication Quarterly 60(1): 115-124.
Olds K and Yeung HW-C (1999) (Re)shaping 'Chinese' Business Networks in a Globalising Era, Environment and Planning 17: 535-555.
Ouchi W (1980) Markets, bureaucracies and clans, Administrative Science Quarterly 25: 129-62.
Palmer D, Friedland R and Singh J (1986) The ties that bind, American Sociological Review 51(6): 781-796.
Peng D (2000) Ethnic Chinese Business Networks and the Asia Pacific Economic Integration, Asian and African Studies 35(2): 229.
Pennings JM (1980) Interlocking directorates. San Francisco: Jossey-Bass.
Pfeffer J and Salancik G (1978) The external control of organizations. New York: Harper and Row.
Ratcliffe R (1980) Banks and Corporate Lending: An Analysis of the Impact of the Capitalist Class Lending Behaviour of Banks, American Sociological Review 45: 553-570.
Redding SG (1990) The Spirit of Chinese Capitalism, DeGruyter, New York NY.
Redding SG (1980) Cognition as an Aspect of Culture and its Relation to Manage Processes: An Exploratory view of the Chinese case, Journal of Management Studies 17: 127-48.
Redding SG and Wong G (1986) The Psychology of Chinese Organizational Behaviour, in MH Bond (ed) The Psychology of Chinese People, Hong Kong: Oxford University Press.
Rees J and Sullivan M (1995) Work hard, make money: Australians ponder the success of overseas Chinese, Far Eastern Economic Review 158(35): 61-63.
Richter F (ed) (1999) Business Networks in Asia: Promises, Doubts and Perspectives, Westport CT, Quorum.
Ridding J and Kynge J (1997) Empires can strike back, Financial Times 5 November, p.13.
Schak D (2000) Networks and their Uses in Taiwanese Society, in K Chan (ed) Chinese Business Networks: State, Economy and Culture, Singapore, Prentice-Hall, pp.112-128.
Scott J and Griff C (1985) Directors of Industry: The British Corporate Network, 1904-1976, Cambridge, Polity Press.
Scott J (1991) Networks of Corporate Power: A Comparative Assessment, Annual Review of Sociology 17: 181-203.
Scott J (1997) Corporate Business and Capitalist Classes, Oxford, Oxford University Press.
Seligman S (1999) Guanxi: Grease for the Wheels of China, The China Business Review September-October, pp.34-38.
Stokman F and Wasseur F (1985) National Networks a Structural Comparison, in J Scott, F Stokman and R Zeigler (eds) Networks of Corporate Power, Cambridge, Polity Press.
Tan C and Yeung H (2000) The regionalisation of Chinese business networks: a study of Singaporean companies in Hainan, China, The Professional Geographer 52(3): 437-455.
Tong CK and Yong PK (1998) Guanxi bases, Xinyong and Chinese business networks, British Journal of Sociology 49(1): 75-96.
Useem M (1984) The Inner Circle, Oxford Press, Oxford.
Useem M (1979) The Social organization of the American business elite and participation of corporate directors in the governance of American institutions, American Sociological Review 44(4): 553-572.
Van Fossen A (1993) Pacific Islands Tax Havens, Pacific Basin Studies Review 4(2): 2-3.
Whitley R (1992) Business systems in East Asia, London and Newbury Park: Sage.
Whitley R (1993) East Asian enterprise structures and the comparative analysis of forms of business organization, in Blunt and David Richards (eds) Readings in management, organization and culture in East and South-East Asia. Pater, pp.46-72, Darwin: NTU Press.
Williamson OE (1971) The vertical integration of production: market failure consideration in American Economic Review 61: 112-27.
Williamson OE (1979) Transaction-cost economics: the governance of contractual relations, Journal of Law and Economics 22: 3-61.
Williams P and Ellis S (1994) Dawkins Kisses and Tells all on the BCA, Australian Financial Review July 15, pp.1/18.
Who's Who in Australia (2002) Ralph, John Theodore, Sydney: Angus & Robertson, p.1538
Wong S-L (1990) Shanghai Industrialists in Hong Kong. Cambridge University Press.
Wong YH and Tam JL-M (2000) Mapping relationships in China: quanxi dynamic approach, Journal of Business and Industrial Marketing 15(1): 57-70.
Zang X (1999) Research Note: Personalism and Corporate Networks in Singapore, Organization Studies 20(5): 861-877.
Zeitlin M (1989) The large corporation and contemporary classes. New Brunswick: Rutgers University Press.
eContent Home
