Guanxi vs networking: Distinctive configurations of affect- and cognition-based trust in the networks of Chinese vs Amer

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& 2009 Academy of International Business All rights reserved 0047-2506

Guanxi vs networking: Distinctive configurations of affect- and cognition-based trust in the networks of Chinese vs American managers Roy Y J Chua1, Michael W Morris2 and Paul Ingram2 1

Harvard Business School, Boston, USA; Columbia University, Columbia Business School, New York, USA 2

Correspondence: R Y J Chua, Morgan Hall, 312 Harvard Business School, Soldiers Field, Boston, MA 02163, USA. Tel: þ 1 617 495 6465; Fax: þ 1 617 496 6568; E-mail: [email protected]

Abstract This research investigates hypotheses about differences between Chinese and American managers in the configuration of trusting relationships within their professional networks. Consistent with hypotheses about Chinese familial collectivism, an egocentric network survey found that affect- and cognitionbased trust were more intertwined for Chinese than for American managers. In addition, the effect of economic exchange on affect-based trust was more positive for Chinese than for Americans, whereas the effect of friendship was more positive for Americans than for Chinese. Finally, the extent to which a given relationship was highly embedded in ties to third parties increased cognition-based trust for Chinese but not for Americans. Implications for cultural research and international business practices are discussed. Journal of International Business Studies (2009) 40, 490–508. doi:10.1057/palgrave.jibs.8400422 Keywords: guanxi; trust; culture; social network

Received: 20 March 2007 Revised: 8 July 2007 Accepted: 14 November 2007 Online publication date: 17 July 2008

INTRODUCTION Business everywhere involves trusting relationships. Yet do these relationships develop in the same patterns in different cultures? A prominent theme in Western research on workplace relationships is the Protestant ethic of separating socio-emotional and instrumental concerns (Sanchez-Burks, 2002; Weber, 1904/1930). By contrast, researchers in Chinese culture have emphasized that work relationships combine affective and instrumental ties (Bond & Hwang, 1986; Yang, 1994). Undeniably, Chinese business relationships have a strong socio-emotional component, typically involving personal gifts, shared meals, and introduction to family members (Pearce & Robinson, 2000; Trompenaars, 1994; Yang, 1988; Yang, 1994). This distinctive pattern of trusting relationships in Chinese business has been described by many scholars in terms of the folk concept guanxi (King, 1991; Lin, 2001). Some have proposed that the practices referred to by guanxi are unique to Chinese culture (e.g., Hung, 2004; Lin, 2001; Vanhonacker, 2004), whereas others have equated them with practices referred to as networking in the West (e.g., Wellman, Chen, & Dong, 2001). The current research takes a middle path of drawing on Western social science concepts

Trust in Chinese and American networks

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and methods to elucidate the differences between American and Chinese cultures in the configuration of trust in managers’ profess