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    Business Networks in East Asian Capitalisms: Enduring Trends, Emerging Patterns
    Business Networks in East Asian Capitalisms: Enduring Trends, Emerging Patterns
    Business Networks in East Asian Capitalisms: Enduring Trends, Emerging Patterns
    Ebook696 pages7 hours

    Business Networks in East Asian Capitalisms: Enduring Trends, Emerging Patterns

    By Jane Nolan, Chris Rowley and Malcolm Warner

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    About this ebook

    Business Networks in East Asian Capitalisms: Enduring Trends, Emerging Patterns builds on the foundational studies conducted in the 1990s by gathering contemporary empirical and theoretical chapters which explore these themes in a comparative perspective.

    The book includes contributions from authors working on the relationship between personal and business networks in countries including China, Singapore, Malaysia, Taiwan, Japan, South Korea, Vietnam, Laos, Cambodia, and Thailand.

    Authors emphasize enduring trends in social and business networks and/or track new emerging patterns, both within East Asian nations or between East Asia and other regions such as Europe, Africa, and the Americas.

    • Provides contemporary, up-to-date empirical material and theoretical interpretation, charting the influence of more recent globalizing trends and institutional change in the region
    • Includes studies of networks within PRC, between PRC and other regions, and in Chinese communities
    • Offers studies centered on Korean, Japanese, and South East Asian Networks
    • Includes a geographical scope that will be broader than other books, aiming to include studies of newly developing economies in South East Asia that share a common cultural heritage (e.g Vietnam)
    LanguageEnglish
    PublisherElsevier Science
    Release dateSep 16, 2016
    ISBN9780081006559
    Business Networks in East Asian Capitalisms: Enduring Trends, Emerging Patterns
    Author

    Jane Nolan

    Jane Nolan was formerly a Senior Research Fellow at Magdalene College Cambridge and a lecturer at the University of Leicester. She has research interests in international human resource management, gender and diversity management, and globalization and institutional change. Her research has been funded by the ESRC and the Nuffield Foundation.

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      Book preview

      Business Networks in East Asian Capitalisms - Jane Nolan

      Canada

      Chapter 1

      Key Debates in Business Networks in East Asian Capitalisms

      An Introduction

      J. Nolan*; C. Rowley†,‡,§,¶,a; M. Warner⫽    * Newnham College, Cambridge, United Kingdom

      † Korea University, Seoul, Korea

      ‡ Griffith University, Nathan, QLD, Australia

      § Nottingham University, Nottingham, United Kingdom

      ¶ City University, London, United Kingdom

      ⫽ University of Cambridge, Cambridge, United Kingdom

      a The support of the Korea Foundation is acknowledged.

      Abstract

      In this chapter we discuss different definitions of business networks, including interpersonal networking, intercorporate networking, and political and elite networks. We also discuss the theoretical frameworks commonly used to examine the organization and development of capitalist societies in East Asia, including both the varieties of capitalism and comparative businesses systems approaches. We then provide a summary of each chapter. The collection begins with an overview of the historical development of East Asian business networks, which is followed by specific chapters on business network activity in China, Japan, Korea, and South East Asia, including the Straits region (comprising Singapore and parts of Malaysia and Indonesia), Thailand, Myanmar, and Vietnam. Contributors use a range of academic approaches, including social psychology, economics, history, politics, management, and sociology. While they all agree to some extent that culture matters, each chapter is sensitive to the historically embedded influence of institutions (local and global) and political processes.

      Keywords

      East Asia; South East Asia; Business networks; Varieties of capitalism; Comparative business systems

      1.1 Introduction

      Many scholars have argued that understanding capitalism in East Asia requires a close examination of the dynamics of business networks (see Boisot & Child, 1996; Hamilton, 1996; Hamilton & Shin, 2015; Rowley & Warner, 2006; Tung & Worm, 2001; Warner, 2013). A common view is that if Western capitalist economies are firm-based, East Asian capitalist economies are network-based and thus, networks should be recognized as the institutional foundation of economic organization in the region. However, throughout the region, different networks and organizational strategies are used in different contexts, which draw our attention to the way in which efficiency in management practices and the various rationales underpinning organizational forms may be socially constructed. While some forms of East Asian networks share a common grounding in cultural values which emphasize harmony and hierarchy in relationships, they do, nevertheless, vary in systematic ways based on historical, institutional, and political differences (Redding, 1990; Rowley & Warner, 2006; Warner, 2014; Walter & Zhang, 2012; Whitley, 1992; Witt & Redding, 2013a, 2013b).

      The aim of this edited book is to build on the foundational studies of East Asian business networks conducted in the 1990s and 2000s (Boisot & Child, 1996; Hamilton, 1996; Redding, 1990; Tung & Worm, 2001; Whitley, 1992) by gathering together empirical and theoretical work which explores these themes in a contemporary comparative perspective. We have adopted an interdisciplinary approach to this task and our international authors draw on a variety of historical, economic, political, sociological, and psychological frameworks.

      In terms of country focus, contributions to the volume concentrate on business network activity in China, Japan, and South Korea (hereafter Korea), as well as developments in South East Asia, including the Straits region (comprising Singapore and parts of Malaysia and Indonesia), Thailand, Myanmar, and Vietnam. While necessarily selective, the range of countries examined certainly provides us with sufficient scope to investigate the nature of change and continuity in business networks in East Asia. Furthermore, this allows us to also contribute to the wider and more macro-convergence and globalization debates.

      The following sections of this chapter will introduce readers to the variety of definitions of business networks used by contributors to the volume, including interpersonal networking, intercorporate networking, and political and elite networks. We will also outline the different theoretical frameworks used to examine the organization and development of capitalist societies, including the varieties of capitalism (VOC) and comparative businesses systems approaches, with a particular focus on how they might apply to developing an understanding of East Asian capitalisms. This will be followed by on overview of the structure of the book and summaries of each chapter.

      1.2 Defining Business Networks

      It is important to appreciate that there are different kinds of business networks, each of which may require investigation at a different level of analysis. In this book we consider the influence and intersection of the following kinds of networks: (i) interpersonal, reciprocity-based networks which may be based on cultural preferences, as well as historical and institutional conditions; (ii) intercorporate networking and various forms of horizontal firm coordination; and (iii) political networks which may permeate and influence both interpersonal and intercorporate networks and may be identified with rent-seeking, particularly when formal institutions are not well established. These forms of networking are, of course, mutually influential, but they are worth distinguishing here as our authors place differing emphases on the explanatory power of each kind of network.

      1.2.1 Interpersonal Networking

      Much research on East Asian business networks makes a foundational assumption that countries in the region have particularistic, collectivistic societies—where social norms towards paternalism, authority, and individualism may vary from those generally found in the West (Hofstede, 1984; House, Hanges, Javidan, Dorfman, & Gupta, 2004; Trompenaars, 1993). Some of the consequences of these norms for business networking behavior are that people may be closely bound to particular in-groups across their life course, they may demonstrate respect for age seniority and hierarchical position regardless of individual merit, and they may demonstrate a preference for group cooperation and harmony over the pursuit of individual achievement. That said, there are distinctive differences within the region in terms of how these norms may influence networks. For example, in China the emphasis is on dyadic connections with kin and close friends; in Japan, connections may focus on longstanding relationships established in the workplace; in Korea, kin-based, especially blood relationships, may dominate (Rowley, 2013; Rowley & Paik, 2009); and in the Theravada Buddhist-influenced countries of Southeast Asia an acceptance of situations, such as inequalities in power and deference to authority figures may mean less social activism and the development of networks which are resistant to change and outside influences (Alston, 1989; Nolan, 2013; Yukongdi, 2008).

      1.2.2 Intercorporate Networking and Firm Coordination

      Horizontal firm-to-firm networking may be defined as groups of firms which are coordinated by multiple ties to achieve mutually beneficial objectives. These ties may be based on ownership structure, state economic policy, and/or social networks, such as family, kinship, and friendship ties (Rowley, 2013; Warner, 2014; Zhang & Whitley, 2013). In most Western economies horizontal firm networking is considered important for the acquisition of knowledge, capital, product, and talent (Witt & Redding, 2013b). Certainly, in Japan and Korea, much has been made of the role of horizontal networking and conglomerates in establishing business success (Rowley, Bae, & Sohn, 2002; Rowley & Bae, 2004). Horizontal firm-to-firm networking in China is less common however, especially in the sensitive sectors of the economy, such as energy, communications, and finance, where the state remains heavily involved. This pattern has its roots in the industrial organization of the past and the political structure of the present. Thus, there is a tendency towards vertical networking which is partly a remnant of the planned economy. Similar patterns may be found in some of the emerging economies of South East Asia, such as Myanmar and Vietnam (Giroud, 2007; Lim, 1996; Rowley & Truong, 2009; Truong & Rowley, 2014).

      1.2.3 Political and Elite Networks

      Reciprocity-based interpersonal networking may lead to favoritism in a range of business outcomes, including recruitment and promotion within an organization through to supply chain development and licensing agreements (Gu & Nolan, 2015; Perkins, 2000; Zhang, 2016). While nepotism and favoritism are key elements of cronyism, these behaviors are not confined to East Asia and also feature in many forms of informal networking in the West (eg, the politically and economically influential old boy networks commonly associated with the British public school system) (Khatri, 2006; Watters, 2016). However, wherever they are studied, the relationship between reciprocity-based personal networks and political processes takes us beyond the micro-level social psychological study of networks into an examination of the institutional processes of elite power. The term crony capitalism was widely used in the financial press during the Asian Financial Crisis in 1997 to describe the ties which had developed between elite business families and government officials who had jointly extracted wealth from public goods for personal material advancement, a conventional definition of corruption. Marketization, in and of itself, does not eliminate clientelism and may actually reinforce the mutual dependency of officials and entrepreneurs connected through interpersonal networks (Wank, 2001; Weatherbee, 2014). Moreover, it requires explanation through an examination of global power relations in an historical and political framework.

      1.3 Defining East Asian

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