Trust and Commitment as Alternative Responses to Social Uncertainty

Abstract

Abstract Trust has been recognized as an important variable to characterize business operations in East Asian countries. For example, Redding and Tam (1985), Redding and Wong (1986), and Redding (1989) pointed out that the inability of Chinese entrepreneurs to develop business networks beyond family and kin networks has contributed to the dominance of small family businesses in Hong Kong. Studying more than forty large businesses in Taiwan, Kao (1989) concluded that “personal trust” is one of the key mechanisms of guanxi, which Hamilton (1989) called the Chinese type of capitalism in Taiwan. Furthermore, Whitley (1990) proposed that trust mechanisms between strangers is a crucial societal context that differentiates dominant forms of business organization in Japan, Korea, Taiwan, Hong Kong, and the United States.