The Chinese Triangle of Mainland China, Taiwan, and Hong Kong: Comparative Institutional Analyses

By Alvin Y. So; Nan Lin et al. | Go to book overview

10

BETWEEN PERSONAL TIES AND ORGANIZATIONAL IMPERATIVE: THE FORMATION OF EXCHANGE NETWORKS AMONG HOSPITALS

Ly-Yun Chang


SOCIAL EMBEDDEDNESS AND ORGANIZATIONAL IMPERATIVES

The purpose of this chapter is to address a contradiction in conventional wisdom: the importance of personal connections in doing business in a Chinese society. A cultural perspective that considers organization as an expression of patterned values is proposed to explain industrial arrangements and practices in general and the success of the newly industrialized economies (NIEs) in particular (Hamilton and Biggart 1988). The competitive advantages of NIEs such as Japan, Taiwan, Hong Kong, and South Korea are rooted not only in economic factors but also in social arrangements that have their origins in the preindustrial period (Biggart, Orru, and Hamilton 1995). For instance, both big and small firms in Taiwan are structured by the same framework of rules and relationships based on family-firm structures (Hamilton and Kao 1990). The traditional Chinese business model, which emphasizes family ties and obligations, remains vital for doing business in Taiwan (Ka 1994; Chen 1994, 1995; Chen 1997; Luo 1997).

Nonetheless, several case studies of high-tech industries in Taiwan reveal a different story (Lu 1996; Kao 1996). The chief executive officers (CEOs) of high-tech companies do invest time and energy in managing their social networks for problem sharing and the exchange of information. However, problem sharing and information exchange do not necessarily imply actual cooperation. Personal ties are downplayed when it comes to doing business. Transactions between organizations are often considered as a temporal and one-shot activities, and are done at arm's length. When teamwork is necessary, firms always maintain more than one business partner (usually between three and five) in order to secure autonomous power in the marketplace. Organizational considerations dominate decisions on partnership selection.

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