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Confucian Capitalism and the Paradox of Closure and Structural Holes in East Asian Firms

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  • Chai, Sun-Ki
  • Rhee, Mooweon

Abstract

A long-standing debate has taken place in the organizational sociology and social network literatures about the relative advantages of network closure versus structural holes in the generation of social capital. There is recent evidence that these advantages differ across cultures and between East Asia and the West in particular, but existing network models are unable to explain why or address cultural variation in general. This paper seeks to provide a solution by integrating a culture-embedded rational model of action into the social network model of structure, using this not only to re-examine the closure versus structural hole debate, but also to tie it to the literature on Confucian capitalism and the ‘East Asian Model’ of the firm. We argue that this integrated approach allows us to systematically analyse the relationship between culture and behaviour in networks and, more specifically, to explain why closure has been a more powerful source of productivity in East Asia than the West.

Suggested Citation

  • Chai, Sun-Ki & Rhee, Mooweon, 2010. "Confucian Capitalism and the Paradox of Closure and Structural Holes in East Asian Firms," Management and Organization Review, Cambridge University Press, vol. 6(1), pages 5-29, March.
    • Handle: RePEc:cup:maorev:v:6:y:2010:i:01:p:5-29_00
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    1. Jean–Luc Arregle & Bat Batjargal & Michael A. Hitt & Justin W. Webb & Toyah Miller & Anne S. Tsui, 2015. "Family Ties in Entrepreneurs’ Social Networks and New Venture Growth," Entrepreneurship Theory and Practice, , vol. 39(2), pages 313-344, March.
    2. Murray, Cameron K. & Frijters, Paul, 2015. "Clean Money in a Dirty System: Relationship Networks and Land Rezoning in Queensland," IZA Discussion Papers 9028, Institute of Labor Economics (IZA).
    3. Hongjuan Zhang & Liang Wang & Rong Han, 2019. "The China-West divide on social capital: A meta-analysis," Asia Pacific Journal of Management, Springer, vol. 36(3), pages 745-772, September.
    4. Ming Kong & Jie Xin & Wenxiao Xu & Haonan Li & Dandan Xu, 2022. "The moral licensing effect between work effort and unethical pro-organizational behavior: The moderating influence of Confucian value," Asia Pacific Journal of Management, Springer, vol. 39(2), pages 515-537, June.
    5. Bayari, Celal, 2020. "South Korean Economy and the Free Trade Agreement with China," MPRA Paper 102938, University Library of Munich, Germany, revised 21 Jun 2020.
    6. Min Huang & Xiaobo Li & Jun Xia & Mengyao Li, 2024. "Does Confucianism Prompt Firms to Participate in Poverty Alleviation Campaigns?," Journal of Business Ethics, Springer, vol. 189(4), pages 743-762, February.
    7. Bat Batjargal & Michael Hitt & Anne Tsui & Jean-Luc Arregle & Justin Webb & Toyah Miller, 2013. "Institutional Polycentrism, Entrepreneurs' Social Networks, and New Venture Growth," Post-Print hal-02276709, HAL.
    8. Soda, Giuseppe & Zaheer, Akbar & Sun, Xiaoming & Cui, Wentian, 2021. "Brokerage evolution in innovation contexts: Formal structure, network neighborhoods and knowledge," Research Policy, Elsevier, vol. 50(10).
    9. Getahun Fenta Kebede, 2018. "Social Capital and Entrepreneurial Outcomes: Evidence from Informal Sector Entrepreneurs in Ethiopia," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 27(2), pages 209-242, September.
    10. Alain Verbeke & Wenlong Yuan & Liena Kano, 2020. "A values-based analysis of bifurcation bias and its impact on family firm internationalization," Asia Pacific Journal of Management, Springer, vol. 37(2), pages 449-477, June.
    11. Hongjuan Zhang & Rong Han & Liang Wang & Runhui Lin, 2021. "Social capital in China: a systematic literature review," Asian Business & Management, Palgrave Macmillan, vol. 20(1), pages 32-77, February.
    12. Hom, Peter W. & Xiao, Zhixing, 2011. "Embedding social networks: How guanxi ties reinforce Chinese employees’ retention," Organizational Behavior and Human Decision Processes, Elsevier, vol. 116(2), pages 188-202.
    13. Lu, Xiao & McInerney, Paul-Brian, 2016. "Is it better to “Stand on Two Boats” or “Sit on the Chinese Lap”?: Examining the cultural contingency of network structures in the contemporary Chinese academic labor market," Research Policy, Elsevier, vol. 45(10), pages 2125-2137.
    14. Fei Song & C. Bram Cadsby & Yunyun Bi, 2012. "Trust, Reciprocity, and Guanxi in China: An Experimental Investigation," Management and Organization Review, The International Association for Chinese Management Research, vol. 8(2), pages 397-421, July.
    15. Cadsby, C. Bram & Du, Ninghua & Song, Fei & Yao, Lan, 2015. "Promise keeping, relational closeness, and identifiability: An experimental investigation in China," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 57(C), pages 120-133.
    16. Hongjuan Zhang & Rong Han & Liang Wang & Runhui Lin, 0. "Social capital in China: a systematic literature review," Asian Business & Management, Palgrave Macmillan, vol. 0, pages 1-46.
    17. Murray, Cameron K. & Frijters, Paul, 2016. "Clean money, dirty system: Connected landowners capture beneficial land rezoning," Journal of Urban Economics, Elsevier, vol. 93(C), pages 99-114.
    18. Getahun Fenta Kebede, 2020. "Network Locations or Embedded Resources? The Effects of Entrepreneurs’ Social Networks on Informal Enterprise Performance in Ethiopia," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(2), pages 630-659, June.
    19. Bat Batjargal, 2013. "Institutional Polycentrism, Entrepreneurs??? Social Networks, And New Venture Growth," William Davidson Institute Working Papers Series wp1060, William Davidson Institute at the University of Michigan.
    20. Ted Y. T. Suen & Simon K. S. Cheung & Fu Lee Wang & John Y. K. Hui, 2022. "Effects of Intrinsic and Extrinsic Motivational Factors on Employee Participation in Internal Crowdsourcing Initiatives in China," Sustainability, MDPI, vol. 14(14), pages 1-23, July.

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