The influence of social capital on risk-taking propensity. A study on Chinese immigrant entrepreneurs

This paper studies the influence of social capital on immigrant entrepreneurs’ risk-taking propensity. The paper has a particular focus on Chinese immigrants and also explores the effects of the so-called “guanxi”, a specific form of social capital for Chinese communities. The empirical research is based on a survey conducted in 2012 on Chinese immigrant entrepreneurs in Andalusia (Spain). An ordinal logistic regression specification was employed to test the hypotheses. The results show that the Chinese immigrant entrepreneurs with greater structural, relational and cognitive social capital and better “guanxi” have a higher risk-taking propensity in their business activity

Environmental Activism, Social Networks and the Internet

Social networks and the internet both have a substantial individual effect on environmental activism in China. In this article, we speculate that social linking patterns between environmental actors, which often facilitate activism on the ground, may also exist in cyberspace in the form of an online network. The article addresses the following empirical questions. Does such an online network exist? If so, who are the constituent actors? Are these the same actors observed on the ground? In addressing these questions the article aims to contribute to the growing debate on the implications of the internet for the potential emergence of social movements in China

Inter-organizational governance and trilateral trust building: a case study of crowdsourcing-based open innovation in China

In a case study of a Chinese crowdsourcing intermediary, we explore the impact of inter-organizational governance on trilateral trust-building. We show that formal control and relational governance mechanisms are essential for swift and knowledge-based trust in R&D crowdsourcing. The case also indicates that Chinese businesses continue to use guanxi (informal personal connections) as a relational and contingent mechanism to maintain affect-based trust, but guanxi is shown to inhibit the growth of Internet-based crowdsourcing for open innovation in China

A different capitalism? : Guanxi-capitalism and the importance of family in modern China

The emergence of Capitalism is said to always lead to extreme changes in the structure of a society. This view implies that Capitalism is a universal and unique concept that needs an explicit institutional framework and should not discriminate between a German or US Capitalism. In contrast, this work argues that the ‘ideal type’ of Capitalism in a Weberian sense does not exist. It will be demonstrated that Capitalism is not a concept that shapes a uniform institutional framework within every society, constructing a specific economic system. Rather, depending on the institutional environment - family structures in particular - different forms of Capitalism arise. To exemplify this, the networking (Guanxi) Capitalism of contemporary China will be presented, where social institutions known from the past were reinforced for successful development. It will be argued that especially the change, destruction and creation of family and kinship structures are key factors that determined the further development and success of the Chinese economy and the type of Capitalism arising there. In contrast to Weber, it will be argued that Capitalism not necessarily leads to a process of destruction of traditional structures and to large-scale enterprises under rational, bureaucratic management, without leaving space for socio-cultural structures like family businesses. The flexible global production increasingly favours small business production over larger corporations. Small Chinese family firms are able to respond to rapidly changing market conditions and motivate maximum efforts for modest pay. The structure of the Chinese family proved to be very persistent over time and to be able to accommodate diverse economic and political environments while maintaining its core identity. This implies that Chinese Capitalism may be an entirely new economic system, based on Guanxi and the family

Effect of supervisor-subordinate Guanxi on employees work behavior: An empirical dynamic framework

Recently, the Chinese concept of guanxi (networks or business relationships) has drawn considerable attention and inspired researchers to explore its prevalence in diverse cultures. Accordingly, we examined the direct link between supervisor-subordinate guanxi and employee work behaviors (innovative work behavior and work engagement) by investigating the moderating effect of trust in the supervisor and the mediating effect of psychological empowerment. We collected data randomly from 510 employees (383 subordinates and 127 supervisors) working in China's manufacturing industry. The PROCESS macros operationalize the study constructs to test the presence of moderated mediation. All the hypothesized relationships are supported except the mediating role of psychological empowerment in the supervisor-subordinate guanxi and innovative work behavior relationships. The findings demonstrated that trust in supervisors strengthens the supervisor-subordinate guanxi's direct effect on psychological empowerment and its indirect impact on employees’ work behaviors. To promote positive employees and work behaviors, organizations can develop supervisor-subordinate guanxi that supports organizational goals

Making sense of institutional change in China: The cultural dimension of economic growth and modernization

Building on a new model of institutions proposed by Aoki and the systemic approach to economic civilizations outlined by Kuran, this paper attempts an analysis of the cultural foundations of recent Chinese economic development. I argue that the cultural impact needs to be conceived as a creative process that involves linguistic entities and other public social items in order to provide integrative meaning to economic interactions and identities to different agents involved. I focus on three phenomena that stand at the center of economic culture in China, networks, localism and modernism. I eschew the standard dualism of individualism vs. collectivism in favour of a more detailed view on the self in social relationships. The Chinese pattern of social relations, guanxi, is also a constituent of localism, i.e. a peculiar arrangement and resulting dynamics of central-local interactions in governing the economy. Localism is balanced by culturalist controls of the center, which in contemporary China builds on the worldview of modernism. Thus, economic modernization is a cultural phenomenon on its own sake. I summarize these interactions in a process analysis based on Aoki's framework. --Aoki,culture and the economy,emics/etics,guanxi,relational collectivism,central/local government relations,culturalism,population quality,consumerism

A study of talent management in the context of Chinese private-owned enterprises

Talent Management (TM) is still a new research field in China’s context. TM like other management disciplines is often embedded in a certain institutional context and influenced by certain social norms, cultural factors and government policies. TM is therefore closely related to research context. The Chinese cultural context is influential in shaping TM concepts and practices. However, how TM practices are used to retain talents in the context of Chinese private-owned enterprises (POEs) is still a research gap. TM is a holistic strategy for an organisation. It is therefore necessary to explore Chinese POEs’ TM practices through a holistic lens, which covers the processes of defining talents, attracting talents, developing talents and retaining talents. Previous TM studies mainly focused on exploring TM concepts and there is a lack of empirical investigations on TM practices, especially in the context of Chinese POEs. Linked to the characteristics of Chinese POEs and Chinese cultural context, this study explores talent retention from a holistic perspective of TM.This research adopted an interpretivist perspective and inductive approach. Based on a case study research method, primary and secondary data were collected from three case companies, and analysed qualitatively.The theoretical framework used in this research is largely based on TM literature. Talent attraction, talent development, and talent retention are used as a lens to view the case companies and to explore what TM activities drive talent retention in the context of Chinese POEs. Organisational commitment is the main theory employed by this research to explore talented individuals’ turnover intention.Findings show that Chinese guanxi is an important perspective to define talented employees in the context of Chinese POEs. Competence, position, and guanxi are holistically considered to define a talented employee. It was found that guanxi is an important factor influencing the entire TM process, including attracting talents, developing talents and retaining talents. Career development, rewards, and guanxi were significant factors in retaining talented employees in the context of Chinese POEs. Guanxi as a new TM perspective not only makes a theoretical contribution to talent definition but also contributes to talent development and talent retention theories. The research offers practical talent retention suggestions to TM practitioners. A significant practical contribution may be adopting TM practices to develop talented employees’ guanxi ties to increase their organisational commitment and to reduce turnover intention

The form and use of social capital among foreign direct investors in their interactions with locals in Northern Laos

The research conducted for this thesis is in the area of international business; it has focused on the emerging market of Laos – and it has in particular sought to identify the form and use of social capital in the northern part of the country. This thesis will present the rationale behind the research, the planning that took place before the fieldwork commenced, and most importantly the findings of the study. Social capital is a sociological concept that since the early 1990s has gained significant recognition in the literature. While the benefits to holders of economic capital is commonly recognised – the literature argues that other forms of capital exist that, similar to economic capital, can be viewed as an asset that enables holders to reach desired outcomes. At the core of this thesis is the idea that individuals and businesses are embedded in social capital relationships and networks structures - and that these can be viewed as a resource, or strategic asset, which can be cultivated and used to improve business performance. The benefits of social capital are particularly profound in Asian contexts, where social and exchange relationships have been documented to provide the basis for most business dealings, and where the performance of businesses has been found to correlate with their ability to build and maintain durable networks. Basically, the Western idea of single firms operating autonomously has in the Asian context been proven inadequate; in Asia business success is about relations, social capital, and strategic partnerships. Consequently, it is important for Western businesses expanding into the Asian region to learn and understand how social capital can supplement economic capital in the pursuit of desired outcomes (i.e. returns in the market place). While research has been conducted into social capital in different Asian countries, in particular China, Japan and South Korea, this research has gone beyond the present understanding of social capital by focusing on the Lao context. The study has contributed to the social capital and international business literature – and it will provide investors in Laos with practical guidelines on how to access the resource social capital represents. Considering the unique circumstances of conducting research in one of the last frontiers of the world – a research design was required that could accommodate the flexibility needed in this new territory. For that reason a structured-case methodology, with an interpretive approach, was chosen for this research (as this method is particularly suited for theory that is in its early formative stages). Three case studies, conducted over four fieldtrips, were completed for the study into the phenomenon of Lao social capital. The structured case methodology is basically an improvement on traditional case study methods that ensures validity through clear links between the research questions, the data collected, and the ultimate conclusions. Furthermore, triangulation enhanced the trustworthiness of the ultimate findings by examining the phenomenon of Lao social capital from many angles; having the same story emerge from a number of cases, respondents, and data sources added to the robustness of conclusions made. Respondents were carefully selected based on the contribution to theory development they were deemed likely to make. A combination of judgment and snowball sampling was used to identify suitable respondents (given the sensitive nature of social capital this personalised sampling technique enhanced respondents comfort with the research). Respondents were selected from the expatriate community and included a broad range of nationalities (and Lao respondents were included in the study when they formed part of the business networks of the foreign respondents). During the research it became clear that the importance of social capital for business operations in Laos should not be underestimated. This was emphasised by all respondents involved in the research. In Laos it is not so much about what is in the contract; it is about what is in the relationship. When developed with reputable people, social capital can be viewed as a strategic investment that helps facilitate economic returns in the marketplace. Social capital was found to assist holders to get things done in all aspects of business; to access needed resources and information; to develop local knowhow and expertise; to navigate legal and institutional voids; to gain access to decision-makers; and to form strategic and durable exchange relationships with committed and reliable partners. Lao social capital can basically be viewed as an arrangement that enables holders to pull all the right strings. Lao social capital represents a relationship based around structures (e.g. bonding, bridging and linking) and social norms (e.g. face preservation, trust, reciprocity, and obligatory principles). While bonding social capital was found to be of strong importance among locals – bridging social capital was found to be of particular importance for foreign investors (as they have little networks or social capital upon their initial arrival in the country). Although linking social capital was found to provide substantial benefits (e.g. by speeding up bureaucratic processes) – linking social capital was found to be used less widely among foreign direct investors. Actors operating businesses in grey areas of legislation, or in industries traditionally controlled by the government, were found to have the greatest need for linking social capital. During the research a number of avenues were identified, which can make the transition from an outsider to an insider take form. The most commonly cited methods include social interactions (ideally with powerful actors), patience and relationship building, repeated business, favour exchanges (and return of these when received), trustworthy operations, humour, intermediaries, as well as modesty and a genuine interest in Lao people and culture. Face, or na, in the form of reputation and goodwill was found to positively influence all aspect of social capital development. Basically, people with abundant face found it easier to bridge the gap into new networks, to access the resource social capital represent, and to reach desired outcomes in business (and life). During the research it was documented that the distinctive version of social capital that exist in Laos, evolved the way it did to enable people to deal with a set of conditions that has influenced and transformed Lao society. Circumstances that influenced the evolution of Lao social capital include uncertainty and rapid changes, collectivism, high power distance, and limited legal infrastructure

The influence of Guanxi and knowledge of China's business environment on relationship initiation capabilities: The case of Australian SME service suppliers in China

The purpose of this research is to examine the influences guanxi resources, understanding of the Chinese business environment, environmental competition and salesperson effectiveness have on business relationship initiation capabilities with customers in the People’s Republic of China for Australian exporters. Thematic analysis is used to analyse qualitative survey data from 25 Australian small and medium enterprises (SMEs) supplying services to China. Quantitative responses from 72 firms are also examined via PLS based structural equation modelling

The use of guanxi in everyday life: The Case of School Selection in China

This research focuses on the use of guanxi (Chinese personal connections) in everyday urban life: in particular, how and why people develop their bonding, bridging and linking social capital in their guanxi networks. While much existing research focuses on the roles of bonding, bridging and linking social capital in different contexts, little is known about the process of developing and using these three types of social capitals in Chinese society. Although Kwang Kwo Hwang, Yunxiang Yan, and Xianqun Chang have distinguished different types of guanxi related to closeness, how these are related to social capital remains unknown. The study presented here aims to fill this gap in the research. Data of this research was drawn from two ethnographic studies of school place allocation in two Chinese cities during 2012-2013. The research finds that ritual is vital in guanxi practice, and it has more significant impact in moderate guanxi than close and distant guanxi. When la guanxi, people tend to apply Confucian li to show more Confucian ren in order to gain the same level of ren treatment in return from others. Thus, guanxi capital is mostly gained by ritual investment due to the influence of Confucianism. Based on this finding, the research proposes a new concept, described as “ritual capital”, which refers to a part of an individual’s cultural capital, fostered and maintained through practice of proper ritual