A modern economy can be described as comprising a system of institutions, organizations, and entrepreneurial activities that facilitate the dispersion of resources, thereby providing for the needs of a society and its members (Baumol and Blinder Reference Baumol and Blinder2008). Institutions serve as the ‘humanly devised constraints [and incentives] that structure human interactions’ (North Reference North1990: 33). Subject to the institutional environment they inhabit, entrepreneurs do not merely provide products and services but especially develop new ways of doing so by innovating in various manner methods of production, introducing new products, and developing markets through which they are distributed, thereby contributing to economic advancement (Webb et al. Reference Webb, Khoury and Hitt2020: 506). It is argued here that institutions may not only shape entrepreneurs’ action but also be reshaped by them. The growth of China’s economy is not only an outcome of institutional change but also a consequence of a demand from entrepreneurs for institutional redirection and indeed transformation of existing institutional approaches to private ownership and markets. In this way entrepreneurs in China satisfy the standard definition of entrepreneurship as ‘a context-dependent social process through which individuals and teams create wealth by bringing together unique packages of resources to exploit marketplace opportunities’ (Ireland et al. Reference Ireland, Hitt, Camp and Sexton2001), and, it should not be forgotten, they themselves contribute to the creation of such opportunities.
China’s transition to a market economy, beginning in the late 1970s, resulted from both top-down and bottom-up processes. Farmers in certain areas initiated a move away from collective agriculture to household-based private production and marketing, which led to successes in a newly configured rural market economy (Lin Reference Lin1988; Liu Reference Liu1992; Puffer et al. Reference Puffer, McCarthy and Boisot2010; Watson Reference Watson1988). After initial resistance, the Central government came to see the benefits of such initiatives and went on to endorse and then promote them. In 1978 Deng Xiaoping, China’s paramount leader from 1978 to 1989, launched a reform program which not only led to the transformation of China’s economy but also reshaped the mindset of administrators and the people alike (Dickson Reference Dickson2008; Garnaut and Song Reference Garnaut and Song2004; Garnaut et al. Reference Garnaut, Song, Yao and Wang2001, Reference Garnaut, Song, Tenev and Yao2005; Tsai Reference Tsai2002, Reference Tsai2007; Whyte and Parish Reference Whyte and Parish1984; Young Reference Young1995). As a result, many individuals and families tried their fortune in the newly formed market economy, significantly expanding the population of entrepreneurs (Gold Reference Gold and Baum1991). The Communist Party’s new business-friendly policies and the institutional changes that supported them, including constitutional protection for private property ownership, has led to the rise of a new social strata of business entrepreneurs. At the same time, entrepreneurs have continuously employed strategies of various kinds to advance administrative and institutional change designed to support further business-friendly policies, and to promote the privileges that come from doing business and at the same time expand the opportunities to do so (Herberer and Schubert Reference Heberer and Schubert2020).
The efforts of entrepreneurs in this regard are not alone, of course. China’s government has since 1978 implemented policies and institutional development that has incentivized private business, as noted previously. In late 2001 China joined the World Trade Organization (WTO) through which international-standard trade institutionalization has occurred. Legal reform in China from this time has been consistent with the expectations of standardized global models (Michelson Reference Michelson2007). The development of formal institutions tends to reduce the significance of informal regulation in key sectors of any given society (Baumol Reference Baumol1990; Portes and Haller Reference Portes, Haller, Smelser and Swedberg2005). In developed economies, it is through compliance with formal institutions including formal capital and labour markets that entrepreneurs access various resources, and formal property rights and legal enforcement of dispute resolution (North Reference North1990). In developing economies, on the other hand, formal institutions are typically weak or absent, a situation often referred to as an ‘institutional void’ (Mair et al. Reference Mair, Lanuza and Ventresca2012; Sdyow et al. 2022: 331; Webb et al. Reference Webb, Khoury and Hitt2020; but see also Helmke and Levitsky Reference Helmke and Levitsky2004; Tsai Reference Tsai2006). It has been shown in the chapters earlier that China’s transitional market economy follows neither of these courses, it has not taken the trajectory of developed economies characterized by a logic of over-arching formal institutions nor that of developing economies subject to insubstantial or weak institutions, institutional voids.
The simple fact is that China is different, in many ways. The saying attributed to Deng Xiaoping summarizing China’s post-1978 development model, ‘crossing the river by feeling the stones’, indicates an exploratory, experimental, and pragmatic orientation, which captures key aspects of the transition to marketization, including initiatives of farmers and early entrepreneurs in producing and selling on their own behalf against the dominant requirements of collective enterprise. Such improvisation could only continue, though, if it were endorsed by the Communist Party. So, while there is exploratory pragmatism there is also a party-state which inevitably plays a commanding role. Indeed, in China, much regulation is initiated by the apparatus of the Party rather than the administrative bureaucracy or the courts, as in Western economies. In addition, Central government policy and regulation are invariably subject to the interpretation of local government which must implement such directives, often ‘creatively’ (Ang Reference Ang2016; Bian and Zhang Reference Bian and Zhang2014; Luo et al. Reference Luo, Yang and He2020). Under such situations, in which complexity and uncertainty are endemic, business transactions in China tend to be negotiated and settled through guanxi, a system of networked relations based on interpersonal reciprocal obligations. Such transactional arrangements, ‘weak’ in Western terms, have considerable latent strengths (Boisot and Child Reference Boisot and Child1996: 612; see also Barbalet Reference Barbalet2023). Guanxi networks provide benefit through access to privileged information and resources, and participants in guanxi obtain certainty when legal rules are weakly enforced or capriciously interpreted (Bian Reference Bian2019: 191–200). For this and associated reasons, then, entrepreneurs build, maintain, and develop guanxi networks from and through which they obtain access to resources of various types as well as bureaucratic facilitation and protection in exchange for investment in the economic development of local jurisdictions and to the benefit of officials who manage them.
In considering the situation of entrepreneurs in China, then, their conscientious engagement with guanxi networks has been discussed in many of the earlier chapters. In doing so a number of things have been achieved. One thing in particular has been a demonstration of the need to rethink the standard characterization of networks in terms of their structural attributes, through which they are regarded as entities that are in a sense prior to and even independent of the persons who inhabit them. It has been shown in Chapter 2, though, that the behaviour of network participants cannot be adequately understood simply as an effect of network embeddedness. It was shown in the chapter that entrepreneurs’ network-making is an intentional and purposive engagement undertaken by individuals through which they derive benefits. A second thing to notice, in addition to the agentic formation of business networks, also treated in the chapter, is that properly operating networks not only provide advantages to those who participate in them, but also that such network participation incurs certain costs for participants. This Janus-faced aspect of network membership is inadequately appreciated in standard treatments of networks, but clearly demonstrated in Chapter 2.
While social networks are widely held to be pervasive and encompassing, they are often thought to be redundant in the conduct of e-commerce. There is a tendency in the literature to assume that online exchanges operate through automated processes in which the social actor has little direct involvement and no control (see Couldry et al. Reference Couldry, Fotopoulou and Dickens2016: 132). Studies of online markets and e-commerce, which are historically recent phenomena, have predominantly focused on the interplay between technology and human agents. Research reported in Chapter 1, on the other hand, departs from the widely held assumption that transaction systems in internet markets do not encourage social ties between buyers and sellers in the manner of face-to-face markets (White Reference White2008: 68) and therefore that a social network basis of internet commerce is redundant. The chapter shows that entrepreneurs’ networking engagement with customers is significant and cannot be adequately dealt with through system-focused notions of the singular efficacy of an ‘apparatus’ (Couldry et al. Reference Couldry, Fotopoulou and Dickens2016; Scott and Orlikowski Reference Scott and Orlikowski2013: 78). Online business, it is shown, is not driven by abstract and standardized monetary exchange operations but by social actors who are shaped by and who reshape social and economic structures, including networks. Contrary to the residually accepted notions – democratic and utopian – of an even playing field created by the digital world (see Arora Reference Arora2012), online e-commerce systems in fact depend on and reproduce old inequalities, albeit in new forms and possibly less overtly.
The existing literature on e-commerce includes discussion focused on how reputational systems are used to mitigate the risks to consumers inherent in anonymous transactions, providing platforms for collecting data from buyers, and then aggregating and displaying numerical ratings and reviews of products and services (Adamopoulou and Symeonidis, Reference Adamopoulou and Symeonidis2014; Dikeman et al. 2014; Kuwabara, Reference Kuwabara2015). Little research has been reported, though, on how e-commerce entrepreneurs employ tailored strategies through which they themselves build their reputations online. The concept of ‘personalized anchoring reputation’, developed in Chapter 1, fills a gap in research on web-based markets by showing how companies anchor their reputations onto a prominent representative figure in framing their company’s image and its market presence. It is shown in the chapter how entrepreneurs construct their online presence in representing their companies and build a reputation based on a successfully personalized self-portrayal. Through such a personalized anchoring reputation entrepreneurs send signals to their customers, signals which are shaped in terms of a self-constructed online presence. In this way, e-commerce entrepreneurs frame their identities in order to create and expand their markets. To borrow Erving Goffman’s (Reference Goffman1963: 18) words, a ‘full spatial environment’ is created in order to convey specific information about an enterprise or entrepreneur for the purpose of building and presenting online a commercial reputation.
Another contribution of Chapter 1 is the identification and examination of the practices of an emergent category of small-scale business operatives known as m-commerce entrepreneurs. In particular, their deployment of aspects of face-to-face network interactions in the development of online markets is through what they call liebian, or fission. Their approach is in a ‘split and expand’ strategy in which chains of familial and friendship networks are generated, which draw on trust assumptions inherent in these networks and at the same time provide assurance against defection and malfeasance through face-based affirmation and sanction, in which obligation and reciprocity are maintained in this online environment. In this way, social embeddedness in online markets operate through networks of micro-level interactions. The liebian approach thus provides customers with a reliable platform, a situation which plays a constitutive role in disseminating information. The information which customers send is not abstract, rather it is ‘embodied’, to use Goffman’s (Reference Goffman1963: 14) term, which is to say that it is information carrying the opinions and emotions of the senders. Products, therefore, become imbued with meanings and feelings associated with the sender’s status, tastes, and at the same time, the meanings and value of products are reproduced through senders’ identities and their affiliations with recipients. In providing information about products to each other, participants simultaneously are involved in interactional and affective dynamics. The promotional power of consumers here lies in its symbolic and emotional nature. In Chapter 1 neglected but important aspects of the agency of not only entrepreneurs but also their customers, and the extensive reach of both in the digital age, are identified and understood.
The findings reported previously regarding liebian in particular have implications for approaches in economic sociology that see economic relations as reliant on face-to-face contacts and the relationships that come out of them (Baker Reference Baker1984; Burt Reference Burt1980, Reference Burt1992, Reference Burt2004, Reference Burt2007; Granovetter Reference Granovetter1985; Podolny Reference Podolny2001; Preda Reference Preda2013; Rauch and Casella Reference Rauch and Casella2001; Smith-Doerr and Powell Reference Smith-Doerr, Powell, Smelser and Swedberg2005; Uzzi Reference Uzzi1996, Reference Uzzi1997; Uzzi and Lancaster Reference Uzzi and Lancaster2004; White Reference White2002). It is difficult to get away from the fact that economic actors are oriented not only to commodities and profits but also to personal connections and social relationships. These distinct spheres, the economic and social, cannot be regarded as disconnected, though, because the economic actor who has established himself or herself in social relationships thereby has access to information and resources which they are able to deploy, with advantage, in face-to-face business exchanges (Uzzi Reference Uzzi1996, Reference Uzzi1997). The particular benefit of liebian for entrepreneurs is that it is their customers who perform the tasks of networking which benefit the entrepreneurs. This form of online interaction facilitates building and maintaining large numbers of both strong and weak ties. The mobilization of strong ties in liebian require little comment, but it is of interest that the liebian strategy intentionally also links persons, through the provision of information regarding everyday commodities, who would be otherwise disconnected. In this sense, then, liebian networks embed not only persons sharing strong ties but also persons connected by weak ties, thus bridging what have been called structural holes (Burt Reference Burt1992).
E-commerce is an expanding arena of activity and engagement not only in China, of course, but globally. Its success and growth as a business model relates to intrinsic qualities of e-commerce but also to its enormous advantages over shop-based sales during the COVID-19 pandemic, through which social distancing and lockdowns have interfered with face-to-face purchasing. Mention of COVID-19 reminds us that not all businesses are likely to prosper and grow; some do poorly and may even close. The general point is that entrepreneurship is arguably an uncertain process associated with risks and vulnerabilities (Townsend et al. Reference Townsend, Hunt, McMullen and Sarasvathy2018). Nevertheless, no matter how precarious business exchanges may be there are always persons attracted to it for a variety of reasons, including an absence of alternative prospects, as among the displaced farmers and politically marginal persons who during the first decade of China’s reform ‘turned to private commerce due to a lack of respectable employment options’ (Tsai Reference Tsai2007: 74). Others who engage in entrepreneurship may choose it from a range of alternative options because they harbour strong positive expectations regarding it (Tillmar and Lindkvist Reference Tillmar and Lindkvist2007: 346), in spite of the risks. The risks of doing business may not only be located in a crisis resulting from economic cycles, war, poor management of financial markets, or pandemics. Markets being inherently competitive, the risks entrepreneurs face may come from other entrepreneurs.
Business requires that those who participate in it act in their own interests. At the same time, it is expected that while a pursuit of self-interest may involve the contravention of the interests of others, honest disclosure and conduct are nevertheless required. Be that as it may, in the business world it is ever likely that some behaviour will be opportunistic through which self-interest is pursued with ‘guile’ (Williamson Reference Williamson1985). One mechanism for controlling opportunistic behaviour is contractual governance which specifies each party’s roles, entitlements, and responsibilities. It is assumed, especially in the mainstream economics literature, that under unconstrained market conditions agents will costlessly negotiate comprehensive contracts regulating future contingencies relevant to the terms of their exchange (Lorenz Reference Lorenz1999: 301). Should malfeasance occur in these circumstances formal institutions will provide third party enforcement of agreements and legal sanction against breaches. A supplement to contract is the less formal sanction against opportunistic behaviour which operates through trust relations in which it is held that the reputational costs of broken trust serve to impede the occurrence of maleficence (Granovetter Reference Granovetter1985).
While it is widely held that breaches of trust lead to exposure of the trust-breaker, resulting in the perpetrator’s loss of reputation and subsequent exclusion from future exchanges, complex social pressures are nested within embedded networks that make exit from a relationship in which trust has been broken or retaliation against a trust-breaker non-viable options. Various social obligations brought to a relationship or generated within it may constitute powerful counterincentives to disclose or punish deception. Perceived costs of relationship termination may exceed the perceived benefits of dissociating from or exposing a trust breacher. When an embedded partner has a perceived monopoly on providing particularly valuable benefits to the betrayed person, then departing the relationship may be simply impossible. Indeed, in circumstances of betrayed trust the best option may simply require the betrayed partner to adjust their own orientation in the relationship, thus permitting them to continue accessing benefits that would be lost if they were to retaliate by either exposing a breach of trust or departing the relationship in which the trust-breaker was established. The conventional view, that trust is secure because of the possible sanction that broken trust and the trust breaker will be exposed, assumes among other things that trust relations entail a commitment through which trust can be only honoured or broken. It is shown in Chapter 3 that this understanding of trust fails to appreciate that trust is in fact a commitment that may be negotiated and re-negotiated in the process of developing relationships.
Research findings reported in Chapter 3 depart from the standard understandings of trust relations in the identification of a distinction between the alter-focused strategies located in both formal and trust-based responses to malfeasance as understood in the standard literature, and ego-focused responses utilized by guanxi participants, although by no means exclusive to them. Experience of opportunism or deception invariably provokes re-evaluations of not only the competence, reliability, and honesty of violators, but also of ego’s judgement regarding them. This corresponds with research on trust as ‘situational’, which suggests that trust is necessary only under conditions of interdependence and uncertainty that are premised on the choices made by others (Khodyakov Reference Khodyakov2007). Interdependence is essential in this context because an expectation regarding another’s trustworthiness only becomes relevant when the completion of one’s own consequential activities depend on the prior actions or ongoing cooperation of another person (Barbalet Reference Barbalet2019). It is shown in Chapter 3 that rather than disclosing or punishing breaches of trust, betrayed persons may direct their attention to what they can do to preserve their advantage in the relationship, including modifying their own behaviour and expectations. In this way trust is effectively renegotiated, even redefined, in relations with exchange partners. Ego-focused adjustment may thus change the dynamic of interdependence and the degree of uncertainty in the relationship, and compel us to rethink the nature of trust. An intention here is to provoke development in research agendas which seek to better understand the complexities and fluidity of trust.
Trust as a practice or a disposition can be located in any social relation irrespective of its organizational or institutional setting. But one institution in particular in which trust is held to be centrally relevant is the family (Misztal Reference Misztal1996: Chapter 5). As the American sociologist Bernard Barber (Reference Barber1983: 26) puts it: ‘It is an everyday and valued conception in our society that the family is the primordial source and location of trust’. Families operate through enduring lifetime relationships governed by commitments of various kinds and expectations of trust, so it is not surprising that it is widely assumed that trust is inherent in the pervasiveness of family businesses and a key factor in their success. The mainstream literature on family business typically takes as its point of reference the family firm in North America and Western Europe, so theoretical approaches to family businesses represent simultaneously presuppositions drawn from values and practices conventional in Western societies (Caspary and Herrmann-Pillath Reference Caspary and Herrmann-Pillath2021; Khavul et al. Reference Khavul, Bruton and Wood2009: 1220). A study of family business in present-day China encourages revision of dominant models of family business including the role of trust in their operations. Chapter 4 of the present book challenges taken-for-granted assumptions of the Western-centric literature in its demonstration that family business does not necessarily rely on trust but more importantly on role obligation, assurance implicit in kinship structures, and through interests that are socially interrelated if not conflated.
The challenge of taken-for-granted assumptions of a Western-centric literature, mentioned in the preceding paragraph, is not a polemical exercise of juxtaposing accounts in terms of the location of their source and declaring one erroneous because of its pedigree. The issue must always be the explanatory capacity of a theoretical framework relevant to the data or subject to be explained (Qi Reference Qi2014). In this light Chapter 4 challenges also the disposition of Chinese analysts which assume that trust derived from family relations is invoked or encouraged when kin terms of address are used by staff members in an enterprise and between staff and customers, as frequently reported. A significant literature treats such practices in China in terms of the formation of pseudo-kinship or a quasi-family through which trust between non-kin individuals is not only cultivated but formalized (Guo and Miller Reference Guo and Miller2010; Jordan Reference Jordan, Hsieh and Chuang1985; Santos Reference Santos2008). Chapter 4 shows that neither pseudo-kinship nor quasi-familial relationships in fact generate familial-trust relations in any meaningful sense. It is shown, rather, that invocation of kin terms in a business context between non-kin persons is principally a strategic engagement in the development of emotional and instrumental guanxi relations which employers cultivate with their employees in order to meet needs generated in a new socioeconomic context, namely the market transitional economy current in present-day China.
It was mentioned previously that China’s development as a market economy from the 1980s replicated neither the developed Western nor the developing non-Western models. It is often assumed, though, no doubt because of the size of China’s market economy and the numbers of private entrepreneurs operating within it, and the global significance of that economy and those entrepreneurs, that if China is not currently institutionally similar to developed Western economies it is trending in that direction (see Puffer et al. Reference Puffer, McCarthy and Boisot2010). But the institutions, both formal and informal, characteristic of China’s present-day economy operate on principles rooted in China’s history and cultural development. The most important formal institution, of course, responsible for the move to marketization and the way in which it operates, is the Communist Party of China. No other global economy has a similar political pillar. The dominant informal institutions which underpin China’s economy are the family on the one hand and guanxi on the other. In market exchange relationships, as they operate in Western economies, persons provide service with the expectation of receiving comparable benefits in return (Clark and Waddell Reference Clark and Waddell1985; see Ingram and Zou Reference Ingram and Zou2008). In this way, equity is not only experienced but known to be experienced because market exchanges involve monetary transfers which are readily quantified. Guanxi relationships, by way of contrast, typically include emotional support and kindred benefits that are difficult to quantify and thereby supported through social exchanges carrying an additional bonding which may include kin forms of address. Chapter 4 thus contributes to the literature on family business by going beyond the conventional understandings of both Western and Chinese accounts by demonstrating that the apparent trust-inducing use of familial terms of address masks a complex set of interactions and exchanges providing surety through specialized guanxi practices.
Familial forms of address are of course endemic in family businesses. Family businesses have been an important component of the Chinese economy in the last four decades, and female entrepreneurs play a significant role in them. Sociological research on female entrepreneurs in China remains largely underdeveloped, however. Accounts of research regarding female entrepreneurship has predominantly drawn on North American and West European cases, implicitly informed by cultural dispositions of individualism and neo-liberal presuppositions (Jimenez Reference Jimenez2009; see also Connell Reference Connell2000: 5). Entrepreneurship is conventionally viewed as a profession requiring masculine qualities, with men alone typically regarded as ‘agentic’ (Bowman Reference Bowman2007). It is not surprising, therefore, that ‘notions of masculinity are coterminous with the normative entrepreneur’ (Marlow and Martinez Dy Reference Marlow and Martinez Dy2018: 8). When hegemonic gender beliefs are effective in defining entrepreneurship, hierarchical presumptions about men’s greater competence become salient, along with assumptions regarding men’s and women’s different traits, dispositions, and skills (Gilding Reference Gilding and Hughes1994; Ridgeway Reference Ridgeway2014). The supposed characteristics of successful entrepreneurship – agency, pragmatism, and risk-taking – are stereotypically masculine features (Calás et al. Reference Calás, Smircich and Bourne2009). Women, on the other hand, are held to conform to nurturing values and communal rather than self-directed behaviours (Heilman and Okimoto Reference Heilman and Okimoto2007). Gender roles, related to caring and motherhood, have been assumed to limit the possibilities for entrepreneurial agency (Calás et al. Reference Calás, Smircich and Bourne2009). Hegemonic gender beliefs lead to a dichotomic gendered understanding of entrepreneurship. Against familiar gender assumptions regarding women in business, discussion in Chapter 5 is premised on the idea that gender is a perceptual and relational quality, the consequences of which can best be understood by distinguishing how gender may be utilized, performed, and created. Through an examination of female entrepreneurs’ active responses to the challenges they face in business, Chapter 5 provides a basis for better understanding of what is entailed in ‘doing’ gender, ‘performing’ gender, and ‘displaying’ gender.
Family businesses are known in general to have relatively brief life cycles. Female business owners in particular tend to be regarded as more likely than male owners to fail in the face of crisis (Li et al. Reference Li, Wang, Jin, Huang and Xia2019; see Marshall et al. Reference Marshall, Niehm, Sydnor Sandra and Schrank2015). Indeed, it is reported that women and men react differently to external shocks, reflecting differences in how they manage their respective businesses (Bradshaw Reference Bradshaw2014; Young et al. Reference Young, Greenbaum and Dormady2017). It is held that women are more likely to adopt a risk aversion and defensive crisis response, while men engage a risk-taking and offensive approaches (Cesaroni et al. Reference Cesaroni, Sentuti and Buratti2015; Cowling et al. Reference Cowling, Marlow and Liu2020). Contrary to assumptions that female entrepreneurs adjust their business models to reduce risk, the Diana International Research Institute Surveys and case studies indicate that women entrepreneurs promptly captured new business opportunities that resulted from the COVID-19 crisis and related changes in their circumstances (Manolova et al. Reference Manolova, Brush, Edelman and Elam2020). And yet, women are perceived to be less likely to adopt information technology (Orser and Riding Reference Orser and Riding2018), for instance, and it has been held that social media may be a barrier to the success of women entrepreneurs (Mack et al. Reference Mack, Marie-Pierre and Redican2017). The constraints faced by businesses during COVID-19 have encouraged innovation of various kinds, including a significant growth in e-commerce and a dramatic fall in the use of cash in commercial and business transactions, developments that are likely to persist after the passing of the COVID crisis (Brammer et al. Reference Brammer, Branicki and Linnenluecke2020: 501). While the research reported in the chapters earlier pre-date this particular crisis, the concern with crisis and how business operatives in China, both women and men, conceptualized crisis and managed their enterprises through crisis is reported in Chapter 6.
The connection between business and crisis is well established in the literature, including Schumpeter’s (Reference Schumpeter1954: 81–86) idea of ‘creative destruction’ as a process in which both established enterprise is forced out of business and new enterprises arise through the opportunities creative destruction provides. Indeed, entrepreneurship can be conceptualized as a process through which entrepreneurs pursue commercial goals in the face of uncertainty (McMullen and Shepherd Reference McMullen and Shepherd2006; Townsend et al. Reference Townsend, Hunt, McMullen and Sarasvathy2018). The conceptual relationship between uncertainty, risk, and crisis is broadly acknowledged (Beck Reference Beck1992, Reference Beck2009; Fligstein and Goldstein Reference Fligstein, Goldstein, Lounsbury and Paul2010; Giddens Reference Giddens1990; Stiglitz Reference Stiglitz2010; Walby Reference Walby2015). In its wide-ranging treatment of crisis Chapter 6 challenges taken-for-granted approaches which understand crisis as a singularly present outcome or a consequence of discord or disruption with a focus on the largely detrimental consequences that typify crisis and how it is presented. A quite different understanding of crisis, in terms of a paradoxical integration of adversity and opportunity that are inextricably linked in a dynamic relationship, perceives crisis more comprehensively as an aspect or phase of an unfolding process. Through an examination of experiences of business crisis in China reported by entrepreneur respondents in the study undertaken for this book, Chapter 6 contributes not only to our understanding of business crisis, but to how crisis, in general, can be characterized and conceptualized. Chapter 6 operates through a framework which considers both how risks may be managed and, at the same time, how opportunities which emerge in crisis are identified and acted upon. By introducing the idea that crisis entails not only exposing and dealing with weakness and susceptibility but also emergent opportunities Chapter 6 contributes to an apprehension of crisis that highlights its creative and therefore positive properties encouraging business development.
In reflecting on China’s economy and especially its so-called market transition, many questions arise. This book has focused on an obvious one, namely the role of private business in this development which has not only brought irretrievable change to China but to the global economy and the geo-political balance that for past centuries has been dominated by Western powers, first European powers and from the middle of the twentieth century the United States. While the role of private business is an obvious one in consideration of China’s economy at the present time, the approach taken by this book is in a number of ways not so obvious. Given the gravity of the topic, it is not surprising that much research and scholarship has been devoted to it and many important publications have addressed the initiation of a private business economy out of a collectivist and socialist economy that was the hallmark of China’s revolution during the so-called Mao era, from the 1950s to the 1970s, and the shape it has taken since that time (Guthrie Reference Guthrie1999; Herberer and Schubert Reference Heberer and Schubert2020; Huang Reference Huang2008; Kraus Reference Kraus1991; Naughton and Tsai Reference Naughton and Tsai2015; Nee and Opper Reference Nee and Opper2012; Tsai Reference Tsai2007).
The present book is distinguished from these and similar works in a number of ways. First, it is based on 65 in-depth semi-structured interviews with and observations of entrepreneurs who own small and medium businesses in a number of cities in China. In many ways, these businesspersons are representative of the population of employers and innovators in China’s economy in the early twenty-first century. Second, the book begins with a new and dynamic sector of China’s economy with which the vast majority of ordinary Chinese have daily contact, which supplies many of the necessities of their lives, namely e-commerce. This is an under-explored domain of entrepreneurship and marketing in China that has global implications given that e-commerce is the fastest growing marketing form world wide. Third, a topic that is unavoidable in any discussion of business in China and about which a great deal has been written, namely guanxi, is treated in the present book in an entirely novel manner. Several chapters touch on guanxi and various aspects of its nature and operations. What is new in the present book is the account of agentic primacy in guanxi networks, the way in which businesses manage their workforces through the development of intra-firm guanxi, and the finessing of trust relations through guanxi. This last point is a fourth contribution to the literature on enterprise uniquely provided in the present book, namely a new account of trust relations between businesses which turns on its head the conventional approach to trust which assumes that broken trust necessarily leads to disruptions in the relationship between the trust giver and the trust breacher. Here trust is shown to be a process involving redefinition and reaffirmation subject to different personal strategies of engagement, either alter-focused or ego-focused.
In addition to the themes just mentioned which mark the novelty of the present book two other important issues are treated in chapters earlier which are largely ignored in accounts of business and entrepreneurship not only in China but generally. The first is the broad question of gender and family. Certainly, the literature on family business is well established and voluminous. One of its features, challenged in the present book, is the typical characterization of the subordinate position of female partners in family businesses. A fascinating element of the persons interviewed for the study drawn on in the present book is the high proportion of women in business, both in family firms and on their own account, and how the gender forms and dynamics they participate in have outcomes quite unlike those that might be expected on the basis of standard accounts. The Chinese case provides patterns and structures of experience for women and especially women in business that are significantly dissimilar to the experiences of Western women. Whereas it is frequently shown that family relations are an impediment on the independence of female entrepreneurs in Western economies, female entrepreneurs experience their intergenerational family more as a resource that facilitates their business endeavours rather than an incumbency detracting from their efforts in business.
A final theme treated in the present book is the nature of crisis in business and the role of crisis in entrepreneurial development. The last chapter, after a broad discussion of the conceptualization of crisis in the standard literatures as well as in the distinctively Chinese approach to crisis, goes on to show how the experience of business crisis, on the basis of interviews with entrepreneurs in China, provides opportunities for renewal and not necessarily forces business closure. This is a pertinent theme on which to end this book because the present COVID pandemic, which began after the field work for the book was completed, shows us how crisis is not only multi-faceted but also generative of new possibilities and opportunities. This is the elemental understanding of crisis in Chinese cultural areas, as weiji, danger combined with opportunity.
It was noted previously that China’s marketization path departs significantly from the Western model of economy and entrepreneurship. Many of the differences between China and the West are reflected in how each has managed the COVID pandemic. But in these differences is the fact that the pandemic has been unavoidable for all economies, and entrepreneurs everywhere have experienced similar crises through it with which they have to deal. What is attempted in the chapters earlier is to both acknowledge the commonalities of enterprise and doing business where they exist and at the same time to point to the differences between the characteristics of entrepreneurs and entrepreneurship in China against the measure of conventions about these things in the standard literature, largely Western in origin, that informs scholarship and guides research. In doing so it is hoped that the Chinese characteristics of business discovered in my field work interviews and observations will fill out and enhance the value of the accounts of business in general that research draws upon and contributes to.
