Business networks and Chinese cultural values

Boisot and Child (1988), among others, stress that there is a potential interplay of cultural, economic, and technological influences on transaction governance. Although guanxiwang is a transaction governance rather than a key feature of Chinese culture, it is inevitably influenced by Chinese cultural values such as trust, face, reciprocity, respect for age and authority, harmony and time. Most of these cultural values are interrelated; for example, making someone lose face will negatively affect an harmonious relationship. Hence, it is Chinese cultural values that make a major difference between guanxiwang and similar governance in western countries . The ubiquitous existence of business networks in China and overseas Chinese communities is determined by the fact that network codes overlap with the key Chinese cultural values (Figure 4.3.2). Chinese business networks are sustained by Chinese cultural values and tradition. When these values disappear, the networks will collapse (Wong 1995). The following values have been identified as the key Chinese cultural values:

• trust (Redding 1990; Wong 1995);

• mistrust (Redding 1990; Low 1995; Wu 1995a);

• reciprocity (Redding 1990; Kirkbride et al 1991);

• face (Yau 1994; Lockett 1988; Kirkbride et al 1991; Redding 1990)

• time (Yau 1994; Kirkbride et al . (1991);

• harmony (Yau 1988, 1994; Kirkbride et al 1991);

• hierarchy;

• power distance (Kirkbride et al 1991; Lockett 1988; Yau 1988, 1994); and

• long- term orientation (Bond 1987).

  
  Figure 4.3.2: The research framework

These Chinese cultural values are the main representations of the seven core rituals of Confucianism: Benevolence, Harmony, Midway, Forbearance, Filial Piety, Trust and Cautious Words (Li and Wu 1993).