Networking in Asia, the West

Networking in Asia, the West

By Peter Verhezen

This is the first of two articles exploring the concept of
networking in Asian and Western communities.

JAKARTA (JP): In an Aug. 25, 1997 article in this paper, Bob
Widyahartono addressed the issue of Asian networking resulting
from the establishment of trust. He wrote "although there have
been few empirical studies on the trust and networking issue, in
reality guanxi or networking based on trust has a positive impact
on efficiency and growth."

Although Widyahartono did not define what trust exactly means
and where or how that differs from a western interpretation, the
notion that networking helps to boost an economy could be
interpreted as a normality since all businesses are based on a
certain trust, both in the East as well as in the West.

Networking is not a uniquely Asian or Chinese practice.
Networking is also important in the West.

It can be concluded from Francis Fukuyama's latest book
Trust: The Social Virtues & The Creation of Prosperity that in
some Western cultures, the extended family concept plays a
dominant role in community and business matters.

"Linkages" in Italy are a good example of such strong
bindings. Networking is as important in Italy as it is in Asia.
The famous (Mafia) kiss in business transactions is an outward
display of this.

Indonesia -- especially Java and Ambon -- possesses some
unique cultural values. However, one can easily identify general
Asian values claimed as norms in Indonesia, the West and
Southeast Asia.

Hard work, respect for learning, honesty, obedience to
parents, helping others, self-discipline, personal success,
respect for authority, social harmony and an orderly social
consensus -- all proclaimed as Asian values by Widyahartono --
are not so unique to the East as they also can be found in
Western ideals.

Stating that networking through trust is a unique
characteristic of Asia disregards empirical facts and suggests
that the West is not aware of the value of trust.

Trust is a fundamental aspect of interaction, whether
cultural, philosophical or economic. Trust and networking are the
basis of almost every financial transaction.

Warren Bennis, a famous author on leadership, notes: "Trust is
the emotional glue that binds followers and leaders together. The
accumulation of trust is a measure of the legitimacy of
leadership. It cannot be mandated or purchased; it must be
earned. Trust is the basic ingredient of all organizations, the
lubrication that maintains the organization."

According to Fukuyama, trust constitutes one of the basic
features for any social and economic community. It is the
underlying force in establishing societal and economic ties,
communication and networking. Trust is the basis on which
business communities survive.

Dramatic economic and international business changes are
making trust more important and more elusive. Trust is necessary
in any marketplace. The hypothesis is that a world completely
devoid of trust can only exist in our imagination -- people
cannot survive without trusting each other. Yet the competitive
environment that makes trust more important is also making it
more difficult to sustain.

Trust can be defined as the belief that those we depend upon
will meet our expectations of them. The word trust is derived
from the German word trost which suggests comfort. Trust is,
therefore, partly based on faith in a sense that those being
trusted are both willing and able to meet our needs.

Confidence, however, is more the result of specific knowledge
and is built on reason and fact. Trust is more than simple
confidence and less than blind faith.

The key components for building trust are achieving results,
acting with integrity and demonstrating concern.

Anthropological and sociological studies have shown that
networking is more easily established among members of the same
family, tribe or culture.

The well-known distinction between old Greeks and non-Greeks
-- or "barbarians" -- is a case in point. Richard Rorty, a
contemporary American philosopher, goes so far as to state that
compassion and trust is limited to those with close ties. Or more
broadly expressed: To trust somebody you are familiar with is
easier than with somebody unknown from another tribe or culture.

Networking is a characteristic or feature rather than the
basis of trust. Trust means that a party, whether belonging to
the same culture or same community, believes that another party
will value its commitments.

Historically, economies have grown the fastest within closely-
tied communities. Trade among the members of the Association of
Southeast Asian Nations has grown dramatically over the last
decade.

In economic terms, it is quite obvious that almost any
transaction is based on a certain amount of trust. The so-called
prisoner's dilemma has proven the trade-off between trust,
loyalty and cheating.

The utilization of trust in business is definitely more
lucrative even from a pure economic point of view. Trust indeed
leads to extensive relationships and consequently to networking.

Moreover, trust in somebody will likely benefit that person by
increased economic transactions.

Many Western and non-Asian examples could be given where
networking is a sine qua non for any business deal. The Chinese
term guanxi, networking, also plays a major and quite unique role
in obtaining business in Asia.

But it is not always as efficient as Widyahartono proclaims.
Networking which is not entirely based on business principles
could easily fall prone to nepotism which often can become
counterproductive.

Although trust in business transactions is assumed to be
essential to any business deal, economists and versed consultants
are aware of the dangers of exclusively relying on already
established networks as the sole basis for business practices.

Empirical studies would prove the opposite of what many
consider healthy practices to attain long-term growth or real
efficiency. Recognizing this, the Indonesian central bank has
limited borrowing between closely connected groups because
kinship is not always the best guide for the most efficient or
sound business decisions.

There are many examples in which corruption, resulting from
excessive deference between partners with close ties, resulted in
economic disasters -- though sometimes the individuals
responsible did indeed extraordinarily benefit from it.

These practices surely do not positively impact efficiency and
economic growth.

The writer is the managing partner of Cimad Pacific
Consultants Ltd, Jakarta.