Social relationships and business networks: The case of Western companies in China

Abstract

This article discusses the role played by social relationships when penetrating a foreign business network. In the business network literature social bonds have been identified as a dimension of buyer-seller relationships, but few studies have actually focused on this issue. The present study analyzed based on semi-structured interviews with Chinese and non-Chinese employees the role of social relationships in the marketing of projects and industrial goods by Western companies in China. In particular the Chinese and the experienced non-Chinese respondents stressed the importance of personal relationships, which were seen as a prerequisite for most information and business exchanges. Factors which may have influenced the role played by social relationships in China are discussed, and different ways to develop such relationships are suggested. The choice of different operational modes is discussed in terms of the access that they may give to social networks. The results suggest a trend towards using own units in China, and towards transferring the responsibility for 'networking' to local employees.