Frontiers of Entrepreneurship Research 1995

Frontiers of Entrepreneurship Research
1995 Edition

1995 Abstracts

Order hard copy editions of Frontiers of Entrepreneurship Research by mail

Navigational Aids

  • Babson-Kauffman Entrepreneurship Research Conference (BKERC)
  • Frontiers of Entrepreneurship Research Topical Index
  • Return to Frontiers of Entrepreneurship Research 1995 Edition
  • Research (General)

  • Table Of Contents

    The tables and graphs in this document are currently unavailable online.  Please see online Order Form at if you wish to order a copy of



    Elena Ai-Yuan Yang, University of Pennsylvania


    This is an exploratory case study comparing American and immigrant Chinese business owners' networking processes. The networking perspective offers enough flexibility to capture both the individualistic oriented view (Westerners) and collective oriented portrayal (ethnic groups) of entrepreneurs. Since Chinese do not favor survey method, and since culture can be better appreciated through process, I relied on in-depth interviews and observations among 4 cases in two types of industry (Chinese and American, in restaurant and in fashion design). Using four behaviorally oriented dimensions, ends vs. means; analysis vs. holism; horizon of time; doing vs. being, I analyze and interpret both cultural and networking processes among the four cases. I will also mention a few surprises.


    Even in the increasingly globalized environment, Asian cultures, with the exception of Japanese and Korean, have not received adequate attention in the Western literature. Much of the academic treatment of Chinese culture, a vast nation with a vast ethnic population dispersed all over the world, tends to be either romanticizing (by Western scholars) or defensive (by Chinese scholars). Literature in cross-cultural management has only recently begun to pay serious attention to Chinese management (Adler, Doctor, & Redding, 1986), usually in the context of large organizations, and the struggling and learning are as much about the content as about finding appropriate methodology (Adler, Campbell, and Laurent, 1989; and Hofstede & Bond, 1988). While the portrayal of Chinese culture as collectively-oriented is factual, individual Chinese, especially overseas, still have to struggle to make themselves competitive (which has an aspect of individual competence) in their business areas. Literature about ethnic entrepreneurs by and large still tends to paint ethnic minorities as a whole entity. A more pertinent approach to understanding ethnic enterprises, owned by Asians, and Chinese specifically, is by examining how individual expressions emerge in the context of a collectively oriented system and thinking.

    Origin and the Purposes of the Study

    Granovetter's network perspective (1973 and 1982) provides the lead to exploring both the individualistic spirits and the influences of collective others on the individuals, especially in the setting of small business. In addition, although the concept of "network" is not quite the same as "connections" in Chinese (guan-xi), they are closely related. Even more important is Granovetter's articulation of the dynamics of strong ties and weak ties. A network dominated by one's strong ties may create a seemingly safe and comfortable environment, but one not conducive for striving for innovations. One important source of innovation is one's diversified network where a mixture of strong ties and weak ties can serve as bridges to connect to other networks that may not otherwise be available. Yet there are prices to be paid in both a close-knit network, such as intrusion on one's privacy, and in a diversified network, such as the amount of time required to cultivate people of different backgrounds may prohibit establishing many intimate relationships.

    What intrigues me is that by Granovetter's arguments, the typical heavy reliance of Chinese on family and/or extended family's assistance in running a business, while offering many advantages such as low labor costs with high reliability, can also hamper one's taking innovative steps. Related arguments about why Chinese enterprises cannot grow big have surfaced recently (Hamilton, et al., 1993; and Kao, 1993). While Chinese concept of family is bedrock in the culture, "family" is not as supportive and cohesive as Westerners romanticize it. Being a Chinese, I have witnessed many negative family dynamics that are not UNLIKE many American family problems. However, there might be something else in the Chinese culture that can enable families to operate a business together despite some family problems. Networking process that focuses on establishing and maintaining interpersonal relationships is the way that would incorporate both individual expressions and collective dynamics, and at the same time, the role of culture can be studied.

    Elsewhere I reported my entry process of obtaining cases for my study (Yang, 1994) of which the data is the basis for the current report. The theoretical background for the earlier report remains the same for current issues; hence, I will only briefly summarize below the key points.


    Ethnic Enterprises

    Generally speaking, Western literature treats entrepreneurs as individual loners who, often against all odds, are out to make it on their own. However, when examining ethnic enterprises, we tend to see a group picture, either that all ethnic minorities are treated as the same group (Bonacich, 1987; and Waldinger, Aldrich, Ward, & Associates, 1990), or that ethnic businesses are operated by groups, usually family or extended family (Light, 1984; and Zimmer & Aldrich, 1985). Furthermore, while on the one hand there is a strand of literature pointing out the unfavorable odds of survival for ethnic enterprises (Cooper & Gascon, 1992; Dadzie & Cho, 1989), on the other hand some sociologists (Bonacich, 1987; Light, 1984; Sanders & Nee, 1987; and Zimmer and Aldrich, 1987) have brought to our attention the readily available capital structure, the low-cost labor, and the protection of the ethnic enclave which give ethnic business owners advantages. Clearly, depending on the research questions, one gets different scenarios (Cobas, 1986).

    What has been lacking in this area of literature is a micro treatment of studying ethnic enterprises; we need to focus on separating the ethnic groups AND on how some individual ethnic owners operate. Furthermore, in addition to the traditional emphasis on monetary and labor concerns, there are other types of resources that can be critical for business owners' operations, such as information, ideas (Cooper, Folta, & Woo, 1990), and emotional support.

    Cultural/Cross-Culture Issues

    I take the view that a culture is best appreciated when crossing cultural boundaries and entering into another (Hall, 1973), and that many single-culture studies are based on implicit comparisons against another culture (Ragin, 1987). For ethnic enterprises, it therefore is pertinent to take into consideration the host culture in which they operate.

    While Hofstede's monumental work (1980) has helped us understand the various values residing in different cultures, it still leaves unanswered questions, such as how people from different cultures may share the same values but still behave differently (Swidler, 1986). Both Keesing (1974) and Swidler (1986) propose to view culture from a more process-oriented perspective in which culture is defined as "a system of knowledge" (Keesing, 1974) and which in turn is manifested in a person's choice of "strategic kit" (Swidler, 1986) to create his/her cultural competencies. Guided by other scholars' works (Adler & Jelinek, 1986; Hall, 1974; Hofstede and Bond, 1988; and Redding, 1982 & 1990), I chose four dimensions to explore Chinese and American business operations. These dimensions are summarized in Table 1.

    (Table 1)

    Networking Process

    Earlier I have defined networking process as the process of establishing and maintaining interpersonal relationships, which are guided by principles of expectations and obligations (Coleman, 1990). Furthermore, there are similarities between networking and Chinese concept of guan-xi, but Chinese connections "operate like a series of invisible threads tying Chinese to each other with far greater tensile strength than mere friendship in the West would do" (King, 1991). Part of the binding force is the Chinese sense of obligations, to the family, to the elderly, to the next generations... Every role has a set of responsibilities (and therefore obligations) one has to observe and follow. Americans tend to emphasize expectations in their relationships which are developed over time.

    During my data collection, I often found myself operating between the principles of obligations with Chinese and expectations with Americans. Below, I will introduce how I approach data collection process.


    Doing an exploratory field research means having to deal with numerous unknown factors at the beginning of the study and also with its design. For the current study, there have been multiple attempted entries (too many), failed entries (4 cases), and conversations with Chinese of all backgrounds; as a result of constant monitoring and modifications, the design was not really finalized until I obtained my 5th and last case.

    Originally, I intended to capture both established industry and emergent industry for the following reasons: (1) Generally, immigrants trying to enter into business ownership tend to follow the paths their co-ethnic predecessors have established (Cobas, 1986), e.g. restaurants for Chinese. Taking advice from others who know more than oneself and who may be older, is an important feature of Chinese concept of guan-xi, connections. If one rejects others' advice, especially if that advice comes from family friends of elder status, several relationships in the chain of connections may be hurt, i.e. losing face (Redding, 1982). Therefore, an immigrant's network composition would affect the kind of advice a potential business owner, immigrant or not, obtains. Using Granovetter's work (1972 & 1982), my working assumption is that a likely network for the first time restaurant owner may be composed of mostly strong ties with family, relatives, family friends, and owner's close friends. This is probably true for both American and immigrant Chinese. (2) A corollary of the first point is that to venture into a non-traditional, emergent, industry, among several necessary conditions a potential owner has to meet is a network of not just strong ties but some bridging weak ties (Granovetter, 1982), which would provide a wider range/variety of information, ideas, and other needed resources. It is likely that such a diversified network is harder for immigrants to establish than their native counterparts. There are not many significant studies (although there are a few popular articles) on Chinese guan-xi and its influence, and comparing it with the Western concept of network. I proposed to capture two cases, one American and one immigrant Chinese, per industry.

    However, what eventually emerged in the design was that the resulting five cases (2 pairs of Chinese and American and 1 American in the pilot phase) were all chosen in established industries, with three in food/restaurant and two in fashion design. Upon reflection, I was pleased to have the cases in fashion design. Even though the industry is well established, with high corresponding competition and low entry barriers, it is still not an industry that most immigrant Chinese would consider. Hence, my working assumptions about Chinese entering into emergent industry should apply in this industry as well. Of the total five valid cases, all but one resulted from my personal connections, indirect and direct. The one cold call1 resulted in the case of an American cafe owner.

    Abandoning attempts to obtain a case in a truly emergent industry became necessary owing to the following: (1) Chinese participation in emergent industry is small; (2) Chinese are reticent by nature, such as, "but I don't have much to show you." I found, through the reluctant Chinese business owners, that their discomfort about talking about themselves was especially acute when they attempted getting into something new; and (3) they felt uncertain or uneasy about talking about their businesses at start-up level. In contrast, the three Americans cases all regarded their start-up status as an achievement to be proud of. Without external legitimization and recognition of what they had done, Chinese should not "brag" about themselves. Consequently, I had to fall back to established industries to locate willing Chinese whose business establishments would indicate some promise of innovations.

    Two additional criteria of case selection had to be relaxed. Originally, I aimed for business owners whose current businesses would be their first ventures. However, both designers had small ventures, in the same industry, prior to their current businesses. The Chinese designer started her business making scarves, and the American designer dabbled in men's wear. my primary criterion of immigrant Chinese automatically limited my choices in an industry where there were few Chinese from whom to select. Another criterion was that the length of immigrant Chinese's residency in the States should be less than 10 years. Again, with all the other binding factors, both of the Chinese cases had lived in the States between 10 and 15 years. In retrospect, I found them to be more experienced in cross-cultural environment, which has helped me immensely.

    I do have to admit that after securing the cases of designers, the search for a Chinese restaurant owner was a difficult one. This being the last case, there were more restrictions if I wanted to match as many owner characteristics as possible. I was almost ready to relax all criteria, and simply tried to find any willing Chinese restaurant owner. Needless to say I was in a euphoric state when the current Chinese cafe owner consented, especially since her case was almost the perfect synthesis of all the other cases. And the owner was, right from the start, willing, open, and very thoughtful. On my entry, she actually invited me to be "part of her life" in order to truly understand her and her operations. At that moment, I felt very "Chinese," immersed in the spirit of yuan-fen, a fateful encounter but purposefully extending it, of whose importance in guan-xi I had forgotten; I will delve into this concept more later.

    One of the few conclusions I make about exploratory methodology, at this point, is that participants' willingness to cooperate is extremely important, especially when their involvement in the study is a lengthy one. Self-selection is inevitable. While there is bias in such a selection process, what I have learned from these Chinese will serve as the bridge I need to cross over to understand the "core" Chinese, those who would not consider being involved in such type of study. I do admit that I was lucky (or had a good yuan? -- also to be explained later) to have all these cases possessing similar characteristics. All owners were in their early to mid 30's, with at least B.A. or B.S. degrees, and with little or no prior experience in start-up. Table 2 summarizes the characteristics of the businesses.

    (Table 2)

    Paradoxical Lesson #1: The design features that I tried to control did not all come through, but through no conscious design on my part, the resulting cases presented some remarkable matching quality, e.g. both Chinese cafe owner and American designer had B.A. in history.


    There is a tendency in cross-cultural comparisons to treat uncovered differences as culturally bound and similarities as cultural free. I will steer clearly away from adopting such a stance else I venture into generalizations, which is totally unwarranted at this stage and with my methods. I will confine myself to describing the similarities and differences, and pointing out the unique aspects that were emphasized and practiced by Chinese.

    Similarities: (Among all four cases)

    None of the four owners set up their businesses with the sole purpose of making a profit. The Chinese restaurant owner did start with needing a means of earning a living, which in her mind was not fully equated with profit making. All agreed that profit making was basic for moving the business forward, but that they were in the business for passion, or for belief. Both of these industries are seasonal/cyclic in nature. All owners were good at: recognizing their own strengths and weaknesses, finding people with complementary styles to work closely with them, and analyzing their business operations; and all were prone to engage in philosophical discussions. Finally, all started with capital from personal savings, and/or with financial assistance from immediate families.


    I describe the differences using the four cross-cultural dimensions, identified earlier, for guidance. I rarely find the differences straightforward along the divide between the cultures, or between the different industries. Often the differences are combinations and/or matters of degree.

    Ends vs. Means. American owners took the business as a way of defining (as opposed to expressing their ideas using business as a vehicle) themselves; their businesses were about themselves. For example, James, the American designer, always knew, from high school on, that he wanted to be a fashion designer (although he went on to get a liberal arts degree from an Ivy League school). Liz, the American cafe owner, also said similarly, "I have always wanted my [own] business my whole life." The same held partially for the Chinese designer, at least for the time being; she speculated getting involved in other ventures, though had little clues as to what they might be. "I don't know [if I want to continue in this line of business]. I have so many interests to explore." While the design aspect was very closer to her, she was constantly exploring other avenues of expressing herself, whether cooking for a magazine story, participating in an art exhibit, acquiring new interests such as interior decoration or gaining new skills, e.g. singing and horseback riding. Design seemed to be both an end as well as a means for furthering herself. The Chinese cafe owner did start the business as a means of acquiring an independent living. However, she incorporated many of her beliefs and artistic skills, and turned the cafe and its operations into an expression (as opposed to definition) of herself.

    "They [the customers] are not just paying for the coffees, but the atmosphere, service, music...everything. There are many such places in Taiwan. I wanted to make this idea popular, to provide a place for people to relax, to think and talk. I wanted to create a place where people can understand how to enjoy life."

    But she made it clear that the cafe was only part of her life.

    Being vs. Doing. Related to the above dimension, both Americans' doings were toward defining themselves, while Chinese incorporated both the doings and their being into their businesses. For instance, Su's being an artist, in addition to being a designer, brought her into several circles of artists in town. Her latest consultant who had been very instrumental in putting the last two fashion shows together was an artist. Yien's incorporating her Buddhist practice, i.e. vegetarian diet, into her menu was another example.

    IF an entrepreneur's activities are part of self-actualization process of defining oneself, s/he may find it difficult to relinquish some of these activities, perceived as part of oneself, to others. The difficulty in delegation may be a matter of wanting to control everything, or it may be a matter of not wanting to let go oneself. Given that Chinese culture is characterized as a "being" culture, a Chinese may find it relatively easier to delegate because many activities are not part of what defines oneself. However, the picture I got was mixed. The American designers, the American restaurant owner, and the Chinese cafe owner had not been able to totally delegate tasks to others. Both Chinese designer and American cafe owner did delegate so that they could either do what they like to do best, i.e. going to design museum to "study," or move on to the next stage of development, such as researching locations for next cafe. The American designer's passion for sewing and his abilities to sew excellently could have been his Achilles hill because he had troubles relinquishing the sewing to his seamstresses. In fact, symbolically, he always had to sew a dress the night before a runway show. Similarly, the American restaurant owner was so proud of his cooking and his boot-strapping abilities that he would only let his sister cook one day out of a week, and has never attempted to hire another cook. The Chinese cafe owner rather knew and aimed for eventual delegation but hadn't been able to find the "right" person(s).

    The first two dimensions are closely related.

    Paradoxical Lesson #2: At times, Chinese rule-and-role governed culture seems constraining, yet under certain circumstances (perhaps in a foreign land?), Chinese are actually freer to act. American culture, though is generally recognized for its individualism and freer expressions, at the same time, compels its people to constantly search and define themselves and the boundaries around them.

    Analysis vs. Holism. As mentioned before, all four owners were good at analysis, but the Americans were stronger at exercising this and more ready to engage in analysis in conversations. With Chinese, I usually had to lead by breaking my questions into several parts and occasionally had to offer examples to get them going. While all four owners understood their own situations, in terms of strengths and weaknesses, and market positions, only two Americans, fashion designer and cafe owner, actually wrote business plans, with more specific goals in mind. Chinese were less specific, and had broader/vaguer goals. Su's almost unarticulatable goals is a good example: "knowing my dreams...whether I can reach them or not doesn't really matter that much. Just doing the best toward the dream is the most important. It's less critical to reach these dreams than having them." And at this writing, she couldn't predict what she would do in a few years' time. While Yien did aim for independence (so as to have the full custody of her three children after the divorce), she also wanted to provide a "relaxed place for people to take refuge from their hectic life."

    Time Horizon. Based on their business plans, both Americans were more willing to engage in projections about the future. They did not necessarily talk about 5-year plan or any plan with time limitations; they did talk about stages of development, assuming a linear progression. While Chinese also had to face the cyclic nature of their business, they were less concerned about where they should progress toward; their focus was more about immediate future. It was almost as if Chinese were more short-term oriented than Americans. The Chinese designer, though she was not too happy about the $300 - $700/hour model fees for the runway show, would pay it anyway, because her goal was to make sure that the models fitted in the theme, a holistic composition that she wanted to create. The American designer had to let the financial reality/constraints dictate and aim for models with the lowest prices (his clothes would be considered a good replacement for cash) that he could get. The Chinese did not have specific long-term oriented goals, such as reaching certain stages by certain times that both Americans aimed for. With regard to time, it might be more meaningful to consider broader time span to appreciate Chinese ways and a linear (narrower?)2 view for Americans. Paradoxical Lesson #3: Chinese focus on short-term, relax about long-term, give impression of being "timeless" or "very-long-term oriented." American focus on long-term can make them uptight all the time, give impression of being short-term focused. This dimension is more related to the "analysis vs. holism" dimension, which seems to be the overall dimension capturing all three other dimensions.


    The ethnic enterprise literature tends to stress the importance of family labor in immigrants' business, implying such a role is less important for American business owners. For all five cases, immediate family (either marital, significant other, or biological) played an important role, providing financial, informational, and emotional support. The Chinese cafe owner initially relied on her biological family as most Chinese would, but later they all left for their own various pursuits. The American designer's heavy reliance on his parents for financial and emotional support and his uncle's involvement as an advisor providing vital information leads, actually fit the usual portrayal of a Chinese business.

    Both Chinese tended to view most people around them as potential resources of information, ideas, and other kinds of help, and they would want to know the person as a whole person first, the holistic approach. Su expressed, "All people I have known have influenced me, in all aspects; I can't identify anything specific." Once at a dinner table, after some discussions with one of the guests with whom she was somewhat acquainted, Su found out that he had his own computer consulting business. Su promptly asked, "would you like to work for me?" A few seconds later, Su's husband, who only met this guest for the first time at the dinner and had been discussing computer with the guest, said, "I was wondering how to ask that question?!"

    The Chinese concept of guan-xi has more to do with making general connection first, a connection couched in social context and made into interpersonal relationship; everyone is potentially useful but the "usefulness" can be best discovered in a more personal and socializable situation. Chinese people would frown upon overtly utilitarian approach in any settings; therefore, the starting point is to get to know the person, then some time in the future (and no one can guess when that may occur), the person's specific skills, certain connections, or ideas come to be useful. In Su's case, perhaps in her mind, she felt that even with only few encounters with the guest she knew him as a "person" already. In contrast, Americans tend to associate connections, especially made in business setting or about doing business, with institutionalized environment. For instance, my Wharton association would indicate to them the credentialling process that I went through, with which they could identify and on which they could rely to make judgement. Similarly, they would initially receive a supplier or a buyer with the understanding of the person's associated institution; the buying organization's reputation sometimes supersedes the buyer's style.

    Another way to look at this is that Americans' proclivity for efficiency would lead them to notice people's specific background/skills/roles first for connections. So they tended to regard people around them by their professional associations, such as suppliers, buyers, customers... Closer relationships may develop later on, but the initial point of contact is often of more specific nature. Therefore, for Americans, once both parties are clear about the roles they serve, they try to clarify and fulfill each other's expectations concerning these roles. In contrast, for Chinese, when the initial contact starts as friendly relationship, then when one party needs/requests the other's help, the other party's sense of obligation is invoked to respond to the needs.

    Paradoxical Lesson #4 American's view of individuals in business setting, assigning roles to others, can be actually more limiting than Chinese approach of viewing a person as a whole being first.

    An interesting challenge for American entrepreneurs would be how to maintain their detachment from institutions (often the genesis of their desire to be an entrepreneurs) while having to interact/do business with those perceived to be tied to institutions? For Chinese entrepreneurs, how would they maintain their socially embedded guan-xi while recognizing and acknowledging individual's achievements (to that individual's satisfaction)?

    What is Unique to Chinese?

    Both Chinese have emphasized the importance of yuan-fen , or yuan, a concept that Chinese do not verbalize clearly but which is exactly understood by all Chinese. My dilemma is explaining this holistic concept using analytical tool to an audience more accustomed to linearly oriented thinking. The best I can offer at this point is this: It does relate to the notion of "fate" -- as defined earlier, a fateful encounter but can be purposefully extended -- but also a person can adjust or manufacture her/his own yuan by cultivation through education (not necessarily formal), family teaching, constant self reflection, learning from others.... Yuan concerns at least three elements, analytical units: TIMING, LOCATION, and PERSONAL CONNECTION. All three have to converge before a "venture" (not necessarily of business nature) can work out advantageously.

    My Chinese cafe owner gave me this example: For a salesperson to make a successful entry to her shop, s/he would be foolish to come in at the peak hour, or at the low time. If the salesperson does some homework, observing as a customer for a few days, and comes in when the owner is counting the cash, after a good show, then the owner is likely to want to buy from him/her. What this example suggests to me is that one has to observe a person over a period of time, before attempting to make the move. After practicing such tactics, then one eventually accumulates enough knowledge and intuition to target a person without laboring over a long haul. However, to Chinese, even after all the elements specified and principles practiced, there is still "something out there" that cannot be controlled. One can do everything right and still may not feel right to make the move. Or, what does not make sense at one time may come around and provide a lesson at a much later time. The connection cannot be made until the lesson is learned.

    The Chinese designer offered a perfect personal experience of this type of learning. She was advised by a fortune teller (such a person enjoys a more reputable status than the palm reader in this country) to take up horseback riding, "it would do you good." Since the designer is hungry for all things that she did not experience in China, she enthusiastically took the lesson.

    According to a friend of the designer, she was not very proficient and she was not even allowed to ride in Central Park. During this time, she was very much into expanding her business in a much bigger way, having a special showroom, exploring European market...etc. This same friend helped her, though thinking that she tried to move and expand too fast. Eventually, the designer realized the potentially downside of such an approach, and suspended the efforts. Shortly afterwards, she went to Morocco at the invitation of the royalty (the third time), and so had free access to royal stable. She rode horses and attempted to gallop, fell, and passed out briefly. After she returned to the States she told her friend about the whole experience, and got the comment, "now do you know what the lesson here?" "What?" "Don't try to run before you can walk! Just like your business." Would an American make similar convoluted connections and take it seriously? Some would but might be laughed at.

    Where I am struggling right now is that to Chinese, detailed explanation of such a concept may actually bring out disagreement. Chinese all think they know such a popular notion, but since they never attempt to explain it, they may find the nuances in the explanation and interpretation different to different people. To an American, there is nothing new about those three elements, but how they work together may be different. In particular, that last unexplained force has become romanticized in the Western imagination with a near-mystical appeal which actually raises barriers to Western-Oriental communication. What I have understood is that Chinese willingness to rely on yuan suggests that they are less in need of taking control of their environment, and more willing to read meanings into "signs" in their environment. Americans might do the same but would rarely acknowledge the practice. To the Chinese designer, if the press did not pay much attention to a show, it just meant that her next show might be better received, e.g. incremental improvement is harder to recognize than radical ones and having a "low" might offer more room to make that radical step. And if not, it just meant that the time was not right for her to push further than where she was at the moment.

    Similarly, when I told the Chinese cafe owner that I have had nothing but the best cooperation from my cases, she said that it was likely because I had the yuan; it showed on my face. And this is how some Chinese would size up each other on the first encounter -- If it did not "feel" right, then do not push. But how does one know when the "time" is right? "You'll know."

    I invoke this holistic concept not because it is rich and beautiful nor because of the often implied superiority of anything that is holistic, but rather because it is a pervasive concept in Chinese everyday living and in forming and establishing relationships. There is a danger of overrelying on the concept: One might either not push certain decisions or relationships enough because one feels the yuan is not yet mature, and miss significant opportunities; conversely, one might forge ahead and take certain action being convinced of the mature yuan, and later find the decision unwise. The concept can also be used in a catch-all fashion where it can be applied to both cause and effect, and I hope to be more judicious in the use of the concept.


    The major surprise was that among my four cases, one American has the kind of network that is the expected usual Chinese style, and the Chinese, in some ways, have the appearance of more independence, or independent means. However, the people surrounding the Chinese, both inside and outside their organizations, have been very instrumental in their current successful positions.

    My numerous failed attempts of entering into Chinese businesses have also been a surprise, but more to Westerners than to me or to other Chinese. Westerners assumed that my being Chinese and my ability to speak perfect Chinese, and my Wharton connection would open doors easily. To Chinese, my lack of guan-xi was enough to explain failure despite my arduous efforts. But what really surprised me, in the end, was that three of my cases (and one pilot case) all came through my American connections!


    While there are core values in every culture, it is more telling when we can understand how people use those values in the conduct of their lives, including operating an enterprise. We can better appreciate a culture through the lens of process in which people incorporate their values into their thinking and behaving. This appreciation is further clarified by observing and understanding the interactions of people of different cultures.

    Much of what I have learned has, at this point, more implications on methodology than it has on conceptual/theoretical work. For an appreciation of Chinese culture, or of most Oriental cultures which are characterized by high context (Hall, 1973), survey method is of little use. In-depth interviews and participant observations offer much richer and more useful knowledge. There may be other methods that have yet to be conceived. However, most Chinese are not familiar with the nature and principles of field study. Thus, in combination with their pragmatic nature, e.g. concerns for setting up an enterprise in a foreign land, makes Argyis and Schon's (1978) action research methodology, in which researchers can take more active role (such as consultant) while collecting data, very appealing.

    Timing is a critical issue. It is difficult to convince Chinese at the start-up level to participate in such a study. Either one has to engage in a lengthy search and persuasion process, or one must relax the limits of start-up and aim for a business that has been operating longer than commonly observed. If one can find ways to collect background information, one can better grasp a good time to approach the owner.

    Lastly, being a relatively young-looking female carry certain set of advantages and disadvantages. A research program that would include researchers of diversified backgrounds would offer opportunities for comparison on the match of researchers and the researched.


    Adler, N.J., Campbell, N. & Laurent, N. (1989). In Search of Appropriate Methodology: From Outside the People's Republic of China Looking In. Journal of International Business Studies, Spring, 61-74.

    Adler, N.J., Doktor, R., & Redding, S.G. (1986). From the Atlantic to the Pacific Century: Cross-Cultural Management Reviewed. Journal of Management, 1986 Yearly Review of Management, Vol. 12, No. 2: 295-318.

    Adler, N.J. & Jelinek, M. (1986). Is "Organization Culture" Culture Bound? Human Resource Management, Spring, Vol. 25. No. 1: 73-90.

    Argyris, C. & Schon, D.A. (1978). Organizational Learning: A Theory of Action Perspective, Reading, MA: Addison-Wesley Publishing Company.

    Berg, D.N. & Smith, K.K. (1985). The Clinical Demands of Research Methods. In D.Berg & K. Smith (eds.). Exploring Clinical Methods for Social Research, Beverly Hills, CA: Sage Publications.

    Bonacich, E. (1987). "Making it" in America: A Social Evaluation of the Ethics of Immigrant Entrepreneurship. Sociological Perspectives, Vol.30, No.4: 446-466.

    Cobas, J.A. (1986). Paths to Self-Employment among Immigrants. Sociological Perspectives, Vol. 29, No. 1: 101-120.

    Coleman, J.S. (1990). Foundations of Social Theory, Chapter 12: Social Capital. Cambridge, MA:Harvard University Press.

    Copper, A.C., Folta, T., & Woo, C. (1990). Information Acquisition and Performance by Start-up Firms. Paper presented at 1990 Babson Conference.

    Cooper, A, C. & Gascon, F.J.G. (1992). Entrepreneurs, Processes of Founding, and New-Firm Performance. In Sexton & Kasarda (eds.). The State of the Art of Entrepreneurship, Boston, MA: PWS-Kent Publishing Company.

    Dazie, K.Q. & Cho, Y. (1989). Determinants of Minority Business Formation and Survival: An Empirical Assessment. Journal of Small Business Management, July: 56-61.

    Granovetter, Mark S. (1973). The strength of Weak Ties. American Journal of Sociology, 78: 1360-1380.

    Granovetter, Mark S. (1982). The Strength of Weak Ties: A Network Theory Revisited. In P. V. Marsden & N. Lin (eds.). Social Structure and Network Analysis. Beverly Hills, CA: Sage.

    Hall, Edward T. (1973). The Silent Language. New York, NY: An Anchor Book.

    Hamilton, G.H., Feenstra, R.C., Chung, W-K., Lim, E.M. & Yang, T-H. (1993). Embeddedness and Economic Organization: A Comparison of Business Groups in Taiwan and South Korea. Paper prepared for presentation at the Vancouver Network Conference, Whisler, British Columbia.

    Hofstede, Geert. (1980). Culture's Consequences: International Differences In Work-Related Values. Beverly Hills, CA: Sage.

    Hofstede, Geert & Bond, Michael H. (1988). The Confucius Connection: From Cultural Roots to Economic Growth. Organizational Dynamics, 5-21.

    Kao, John. (1993). The Worldwide Web of Chinese Business. Harvard Business Review, March-April, 24-35.

    Keesing, R.M. (1974). Theories of Culture. Annual Review of Anthropology, Vol. 3: 73-97.

    King, A. Y-C. (1991). Kuan-shi and Network Building: A Sociological Interpretation. Daedalus, Vol. 120, No. 2: 63-84.

    Light, Ivan. (1984). Immigrant and Ethnic Enterprise in North America. Ethnic and Racial Studies, Vol. 7, No. 2: 195-216.

    Raigin, Charles. (1987). The Comparative Method: Moving Beyond Qualitative and Quantitative Strategies, Berkeley, CA: University of California Press.

    Redding, S.G. (1982). Cultural Effects on the Marketing Process in Southeast Asia. Journal of the Market Research Society, Vol. 24, No. 2: 98-114.

    Redding, S.G. (1990). The Spirit of Chinese Capitalism. New York, N.Y.: Walter de Gruyter.

    Sanders, J.M. & Nee, V. (1987). Limits of Ethnic Solidarity in the Enclave Economy. American Sociological Review, Vol.5, December: 745-773.

    Swidler, Ann. (1986). Culture in Action: Symbols and Strategies. American Sociological Review, Vol. 51: 273-286.

    Waldinger, R., Aldrich, H. Ward, R. & Associates. (1990). Ethnic Entrepreneurs, Newbury Park, CA: Sage Publications.

    Yang, Elena A. (1994). The Entry Process into American's Network vs. Chinese Guan-Xi: A Cross-Cultural Understanding of Comparative Method and Business Owner's Networks. Paper presented at Babson Entrepreneurial Research Conference, 1994, at Babson College, MA.

    Zimmer, Catherine and Aldrich, Howard. 1987. Resource Mobilization through Ethnic Networks: Kinship and Friendship Ties of Shopkeepers in England. Sociological Perspectives, Vol. 30: 422-445.

    1. Chinese would be the first to admonish me against gaining entry via cold calls. Introduction based on guan-xi is almost a must. The few cold calls that I made to approach Chinese, while I was able to converse with the owners, never resulted in their participation.

    2. The choice of words is a dilemma. If we have to impose a continuum for comparison, we usually have dichotomous words for the two ends of the continuum, which sometimes connotes better or worse, less or more, or as in "broader" and "narrower." It is possible that sometimes we set out to define a continuum, and arrive at parallel concepts.

    Return to Babson College
    Main Home Page
    Table of
    (c)1996 Babson College. All rights reserved.
    Last updated November 25, 1996 by Frank Lafleur