Business networks in Asia are extremely important as they have been derived from cultural backgrounds and values in the Asia Pacific region. These networks are essential in the development of business operations in Asia. The importance of business networks can be dissected into a number of different aspects including the role of guanxi, relationships and the impact on organisational values, caste and patron-client networks.
Guanxi is the first aspect and justification to why business networks are so important in Asia. Guanxi is a cultural characteristic by which Luo (2007) defines to be interpersonal linkages with the implication of continued exchange of favour. For the last few centuries, guanxi has been a permanent influence on the Chinese business world (Luo 2007). Furthermore, Luo (2007) states that the construction of business networks and relationships in Asia has become essential for the success and the survival of businesses. Luo (2007, p.1) insists that ‘no company can go far unless it has extensive guanxi networks.’ Moreover, Guanxi is known to be an inter-organisational network which affects the flow of resources and interactions of a firm. This type of network provides opportunities for shared learning, transfer of technical knowledge and recourse exchange. Business networks have the capability of connecting with various organisations to ‘acquire new technologies and expand their product or market reach’ (Luo 2007, p.106).
Lasserre and Schütte (2006) state that networking and cultivating relationships with customers, suppliers, competitors, partners and government officials is standard business practice in the world, however it needs to be stressed that in Asia, there is a larger need to network. Business networks in Asia establish relationships. By constructing relationships, it forms the basis of transactions and is mutually binding and percolated throughout the business (Lasserre & Schütte 2006).
A common theme in business...