Maureen Boland student number 16914292

Master by Research in Commerce Thesis proposal

The University of Western Australia

CHINESE ENTREPRENEURS IN WESTERN AUSTRALIA: THE ROLE OF NETWORKING IN THEIR BUSINESS SUCCESSIntroductionIn this thesis, I will examine the role of networking as a

factor in the business success of Chinese entrepreneurs in

Western Australia. The benefits of networking have been

correlated with business success and increased efficiency at

all stages of the business process from start up onwards and

in areas such as transaction costs, risk taking and

recruitment.

With the advent of globalisation, ethnic networks have been

frequently described as a key success factor in international

business. Chinese entrepreneurs have been described by Harvard

University’s John Kao (1993) as forming the Chinese

commonwealth. However, in contrast to the extensive overseas

research of ethnic groups, there has been little research in

this area in Australia.

1

Australia's economic and cultural links with China have grown

steadily in recent years, benefiting from China’s rapid

development. Post 9/11, South East Asia is Australia’s largest

source of entrepreneurial/investor migrants. Australian

researcher Lever-Tracy (2002) has suggested that this

combination of proximity and economic importance means that

transnational projects by Chinese immigrants are likely to be

more advanced in Australia than those in North America and

Europe.

Networking theory, as articulated by seminal thinkers such as

Burt (2000) and Granovetter (1985), will underpin this study.

Burt (2000) introduced the concept of ‘structural holes’ which

act as a buffer between different information flows; thus

allowing for brokerage opportunities for those who can bridge

these holes. Burt (2000) suggested that entrepreneurship is

an activity based on the social capital generated by these

‘structural holes’. Similarly, Granovetter (1985) introduced

the concept of ‘strong ties’ and ‘weak ties’; with ‘strong

ties’ being family and friends, and ‘weak ties’ being

acquaintances and friends of friends.

Therefore, this thesis will investigate the extent to which

diaspora1 networks are a factor in the business success of

Chinese entrepreneurs in Western Australia. Research into the

history of international business demonstrates that these

diaspora networks enhance trust, create avenues for

1 Diaspora means a “community of people living away fromtheir traditional homeland”

2

information flows and reduce barriers to trade, as well as

helping to guarantee the enforcement of contracts.

Given the exploratory nature of this study, it will rely

heavily on a focus group methodology with the discussion

questions based on an extensive literature review. The results

of this qualitative study will then be used to develop a

detailed and rigorously constructed questionnaire that could

form the basis of a subsequent quantitative study.

Ethnic Entrepreneurship Research in Australia andOverseasEthnic entrepreneurship is attracting considerable attention

from policy makers and researchers because ethnic businesses

have a high rate of self-employment and make a substantial

economic contribution (Basu, 2006). For example, foreigners

have been “over-represented in the USA business world since

1880 and probably earlier” (Light, 1984, p.4). Further,

foreigners in the U.S. were named as inventors or co-inventors

in 25.6% of international patents filed in the U.S. in 2006

(Ewing Marion Kauffman Foundation, 2010).

Although there has been extensive research done on the topic

of Australian immigration there has been scant research in the

area of ethnic entrepreneurship in Australia (Collins, 2003).

Chavan (2005) suggests that an important landmark in ethnic

entrepreneurship research in Australia is the extensive study

conducted by Strahan and Williams (1988). Strahan and

Williams (1988) found that businesses owned by ‘the overseas

3

born’ had (on average): lower failure rates; more sustained

growth; and higher success rates in areas such as net profit

and sales, than did businesses owned by ‘the native born’.

Chavan (2005) suggests, however, that there needs to be more

research of Australian ethnic entrepreneurs with respect to:

their motivations; their strengths and resources; what leads

to the creation and apparent success of their businesses; the

contributions they are making to the economy; and the problems

they face.

Networking, Entrepreneurs and Business Success

The work of early social network theorists, such as

Granovetter (1985), countered the assumptions of neo-classical

and classical economic theorists that individuals act in self-

interest with little influence from social contacts

(O'Donnell, 2001). Granovetter (1985) argued that economic

behaviour is ‘embedded’ in social relations. His work is in

the European economics tradition of Max Weber in which

“economic action is seen only as a special, if important,

category of social action” (Granovetter, 1985, p.507). As a

result of the work of these early social network theorists, it

is now widely accepted that networking is a third type of

‘organisational arrangement’; with regulatory market forces

and administrative directives to organisational members being

the other two (O'Donnell, 2001).

Social capital most commonly means the interpersonal networks

people have available to help them achieve their goals

4

(Coleman, 1988). According to Lin, Li, & Chen (2006), the

term ‘social capital’ was first used by Jane Jacobs in 1961 to

describe the networks in American cities. Use of the term

‘social capital’ highlights the non-monetary aspect of this

source of power and influence (Portes, 1998).

A classic example that is often given in the literature to

illustrate the benefits of social capital (in particular, the

risk and cost minimization it can provide the entrepreneur) is

the Jewish dominated diamond markets in New York City (for

example, see, Coleman, 1988; Flap, 2000). The members of this

group have a high degree of intermarriage, all live in the

same community in Brooklyn and go to the same synagogues. This

high level of social capital, and its concurrent trust, allows

these merchants to pass each other bags of diamonds worth

hundreds of thousands of dollars without the need for any

formal insurance policies; this represents a considerable

saving in terms of both time and money.

Existing theory (and research) links networking to business

success (Zhao and Aram, 1995). Social networks make social

capital available to entrepreneurs. Social networks are some

of the most important kinds of structures in which economic

activity is embedded. These networks provide four very useful

elements to entrepreneurs: support and motivation; examples

and role models; expert opinion and counselling; and access to

opportunities, information and resources (Gnyawali and Fogel,

1994). This “network capital” translates into relationships

with low redundancy and means that recruitment is more

5

efficient, allowing entrepreneurs to concentrate their

resources on their competition (Hsu, 2000). These networks

also lower the barriers for risk taking (Zhao et al., 1995).

The high level of trust in ethnic networks has the added

economic benefit of reducing transaction costs (Flap, 2000;

Harris, 2009), especially in very complicated situations that

have a pressing deadline (Hoang and Antoncic, 2003). This is

particularly evident in doing business with mainland China,

where the legal structure is still evolving and the

bureaucracy is unpredictable (Smart, 1993). It is argued that

Hong Kong’s very high levels of successful investment in

mainland China is due to the reduction in transaction costs

engendered by the use of entrepreneurial networks (Smart,

1993).

Therefore, it has been suggested that entrepreneurs who have,

and effectively use, social capital are more successful at all

stages of the business process from start up onwards (Lin et

al., 2006). In new enterprises, social capital forms a kind of

“entrepreneurial social infrastructure” required for the

development of the business (Lin et al., 2006, p.173).

Entrepreneurs with high levels of social capital are more

likely to make use of outside resources rather than to only

develop internal capabilities (Lin et al., 2006). Social

capital also functions as a source of social control, which

can render formal, or overt, controls unnecessary (Portes,

1998). In the area of international business, new ventures

with extensive networks are able to internationalise speedily

6

and profitably (Zahra, 2002). Ethnic entrepreneurs use their

ethnicity to generate this crucial form of capital through

ethnic social networks (Salaff, 2003). Social capital in the

context of Chinese entrepreneurs translates as ‘guanxi’; the

Chinese version of social networks and networking (Bat and

Mannie, 2004).

Guanxi

In Confucian ethics, reciprocity is a social expectation that

implies dependence or social debt. Nowadays, amongst Chinese

people in Chinese cultures, it is explained as a method of

repaying social favours through the informal process of guanxi

(Holt, 1997). Guanxi is endemic in Chinese business practice

and developed in China as “a substitute for reliable

government and established rule of law” (Xin and Pearce, 1996)

Guanxi is a highly complex Chinese cultural characteristic

which has strong implications for both interpersonal and

inter-organisational dynamics. It is an intricate and

pervasive relational web of connections for gaining favours

which has existed in all areas of Chinese society for

centuries. Chinese people and organisations cultivate guanxi

“energetically, subtly and imaginatively, which governs their

long term social and personal relationships” (Seung Ho and

Yadong, 2001, p.455). Guanxi is not unique to China; it

exists in all human social groups, differing in the type of

ties and their intensity (Seung Ho et al., 2001).

As guanxi is a social construct rather than embedded, it has

the option of allowing outside members to join, thus greatly

7

widening its scope (Hsu, 2000). Personal trust based on social

norms, rather than legal contracts, is a key aspect of these

networks (Chung, 2005) Chinese guanxi networks “are used to

avoid opportunistic behaviour by mutual trust without using

costly monitoring apparatus” (Chung, 2005, p.291). It

operates on the basis of favour exchange, not sentiment, which

leads to more dependable personal relations (Zhao et al.,

1995). As guanxi reciprocity obligations can be called upon in

the future, it represents a way to preserve and collect the

value of inherited social capital (Seung Ho et al., 2001).

Guanxi is closely linked to the concept of face or mianzi.

Guanxi builds up a form of symbolic capital which takes the

form of face in Chinese culture. You need good guanxi to

develop face which in turn allows one to make connections to

achieve goals (Smart, 1993). The practice of guanxi means

friendship leads to business, while the reverse is usually the

case in Western business (Mavondo and Rodrigo, 2001). “It is

like a circle, using business to build social networks and

using social networks to build up business” (Salaff, 2003,

p.61).

Trust is a key Confucian business and social norm in Chinese

and Asian cultures which many Western business people find

very time consuming to develop (Mavondo et al., 2001). The

Chinese term for trust is “xinyong”, however, it is used in a

broader sense incorporating an individual’s integrity,

credibility, reputation, character and (in business) a

person’s credit rating (Kiong and Kee, 1998). The emotional

8

component of trust does not seem to affect those in

individualistic cultures, such as Australia, while it does for

those in collectivist cultures such as China (Mavondo et al.,

2001). For example, Redding (1995) notes that the three

business partners who built the fourth highest bridge in the

world in Hong Kong had no signed contracts until it was almost

halfway built.

Zhao and Aram (1995, p.354) argue that “Traditional Chinese

social behavior stresses the cultivation of interpersonal

relationships and harmonious ties” and, therefore, networking

is “highly consistent with Chinese culture and commercial

traditions.” Further, Barney (2009, p.18) suggests that

research on guanxi tends to illustrate the key concepts of

social capital theory and is “one of the best ways yet

identified to study the implications of social capital

theory”.

However, it is important to note that the guanxi argument can

risk implying that social transactions determine economic

outcomes. Although an important component, it is not a

substitute for other key components, such as managerial and

technological skills (Hsu, 2000).

Chinese Networks and Globalisation

The economic reality of globalisation has meant that ethnic

networks need to be defined quite broadly because many ethnic

groups have extensive contacts abroad and, as modern

communication has become faster and cheaper, nurturing these

9

networks has become easier. This broader reach increases the

significance of networking as an economic force (Basu, 2006).

The term “transnationalism” is used to describe migrants

participating in the political, social and economic lives of

their home countries whilst, at the same time, establishing

themselves in their adopted country. This has led to new

structures and forces that influence ethnic entrepreneurship

(Min, 2004). For example, in 1990, one quarter of Silicon

Valley entrepreneurs were foreign born (Light, 2005). In one

of the few studies of Chinese entrepreneurs in Australia, it

was found that amongst Chinese entrepreneurs in Brisbane,

their transnational networks and the social capital generated

by the Chinese diaspora network was the “very foundation of

their business” (Lever-Tracy, 2002, p.286).

Diaspora literally means “scattering of seeds” (Ang, 2005,

p.412). Armenian American scholar Khachig Toloyan is quoted

by Ang (2005, p.76) as saying that “Diasporas are exemplary

communities of the transnational moment”. Research into the

history of international business demonstrates that these

diaspora networks enhance trust, create avenues for

information flows and reduce barriers to trade as well as

helping to guarantee the enforcement of contracts (Jones,

2007a).

Most Chinese outside of mainland China come from the southeast

coast of China – mainly Guangdong, Zhejiang and Fujian

provinces (Ang, 2005). Their population is estimated to be 55

million (Ryan, 2005). Today the Chinese diaspora is

10

responsible for a large proportion of the inward foreign

direct investment (FDI) and knowledge streams into the

Peoples’ Republic of China (Jones, 2007b).

‘Chinese diaspora’ has replaced ‘overseas Chinese’ as a term

of description as it signifies belonging to a “respectable

imagined community” (Ang, 2005, p.324). It concurs with

China’s desire to establish capitalism with a Chinese face

(Ang, 2005). This more self-confident face of the worldwide

Chinese entrepreneurial network is demonstrated in the

prestigious World Chinese Entrepreneurs Convention established

in 1991 (Ang, 2005).

John Kao of Harvard University in a prescient article written

in 1993 calls this transnational web of Chinese entrepreneurs

“the Chinese commonwealth, not based in any one place,

primarily a network of entrepreneurial relationships” (Kao,

1993, p.24). Kao (1993) notes that this structure, in

contrast to the closed Japanese keiretsu, is ‘open

architecture’ which allows access for those outside the

commonwealth. The flexibility and pragmatism of the overseas

Chinese entrepreneurial networks was also noted in a study of

Chinese entrepreneurs in Brisbane, Australia (Lever-Tracy,

2002).

Kao (1993) also notes that this commonwealth is a combination

of Chinese values and Western attributes (such as flexibility

and innovation). The members of this Chinese diaspora are in

the process of shifting their focus from the clan view based

on their survivor mentality (a product of economic and

11

political hardships) to one that is directed towards economic

self-interest (Kao, 1993). By taking advantage of the

financial differences in the various markets in which they

conduct their business (e.g. labour costs) they have, in

effect, become “international arbitrageurs” (Kao, 1993, p.31).

They are constructing technological and financial bridges

between regional economies, which means they are able to

obtain access to a diversity of resources (Hsu, 2000).

Chinese entrepreneurs have managed to avoid a factor which

typically affects the profitability of ethnic entrepreneurs –

being overrun by requests for help from their fellow

compatriots. They have very clear boundaries as to who is and

who isn’t family and, therefore, who is and who isn’t eligible

for help (Flap, 2000).

This Chinese commonwealth has a formidable economic impact as

it is effectively a fourth economic power after North America,

Europe and East Asia (Kao, 1993). The Chinese are estimated to

be living in 136 countries, making it the most widespread

ethnic group in the world (Ang, 2005).

As their rapid economic growth has only been realised post-war

in East Asia and the Pacific Rim, the outstanding economic

success of the Chinese diaspora is not attributable to

Confucianism, as is commonly thought. It is more likely that

it is the ‘sojourning’ experience that has led to their high

level of economic performance (Hui, 1996). ‘Sojourners’ are

overseas Chinese whose primary orientation is towards their

homeland and family roots in China. This has influenced their

12

choice of business towards those that are easily liquidated

and require low capital investment with profit quickly

realised. Hard work and frugality are the other ingredients in

‘sojourner’ businesses (Li, 1993).

There is an economic synergy between the Chinese diaspora and

‘qiaoxiang’ (the ancestral hometowns of the diaspora which

carry strong political and emotional connotations, Ang, 2005).

This synergy, together with the rise of global capitalism and

the rapid growth of the Pacific Rim Chinese economies, has

underpinned the Chinese diaspora’s drive to take advantage of

globalisation (Liu, 1998). These familial links don’t,

however, override their primary goal in decisions made on

investing in China or elsewhere – profitability and the

availability of economic opportunities (Liu, 1998).

Chung and Hamilton (2009) reiterated these themes of East West

integration and wealth creation on an international scale as

attributes of the modern Chinese entrepreneur. They disagree

with the commonly held view that the capitalism of overseas

Chinese entrepreneurs is somehow ‘ersatz’, based on cronyism

rather than genuine capitalism. They contend that the Chinese

entrepreneurs, in adapting to Western organisational

structures, have contributed innovative solutions to

capitalist problems such as: risk management; increasing

control; and wealth creation (Chung et al., 2009). They have

kept their family based business style which incorporates two

important concepts. First, is the concept of enforceable

trust where loss of reputation is a significant sanction and

13

this is evidenced by “waiving contractual guarantees for

members of the same ethnic group” (Portes, 1995b, p.15).

Second, is bounded rationality, where there is a preference

(motivated by self interest and altruism) for fellow ethnic

members in business transactions (Portes, 1995b).

Traditionally, due to the dominance of American management

theory, capital markets have been seen to be composed of many

autonomous owners. However worldwide, the dominance of a

relatively small number of family owned companies seems to be

the norm rather than the exception. For example, there is

Samsung, LG and Hanjin in Korea and Copec, Falabella and CMPC

in Chile (Barney et al., 2009).

Networking theory – the contribution of Burt and Granovetter

The success of the diaspora Chinese networks can be explained

by Burt’s (2000) wide ranging theory of ‘structural holes’.

“These are holes in the social structure which separate non

redundant sources of information, sources that are more

additive than overlapping. It is an opportunity to broker the

flow of information between people” (Burt, 2000, p.353).

Access to these holes can be borrowed by being ‘sponsored’ by

an insider. Burt (2000) illustrated this concept by relating

the following story. “The financier Baron de Rothschild is

asked by an acquaintance for a loan, to which the great man is

reputed to have replied ‘I won’t give you the loan myself; but

I will walk arm in arm with you across the floor of the Stock

Exchange, and you soon shall have willing lenders to spare’“

(Burt, 2000, p.399).

14

In responding to the demands of globalisation, the Chinese

diaspora networks have supplemented their traditional ‘strong

ties’ of family and friends with the ‘weak ties’ of

acquaintances and friends of friends. Granovetter’s (1985)

research showed that ‘weak ties’ were more effective in

generating business success as they have a larger range, are

less likely to be repetitive and are non-emotional (Portes,

1995a). Weak ties also help new ideas proliferate and

integrate diverse subgroups such as racial, ethnic or

geographic (Zhao et al., 1995).

The Impact of Networking on the Success of ChineseEntrepreneurs: An Alternative View (The Revisionists)In the area of business, economic and management development

in Asia there is a great deal of interest in better

understanding whether guanxi (networking) is the main reason

for the success of Chinese entrepreneurs in Asia, or whether

it is simply their excellent business skills (Menkhoff, 2002).

A group of scholars termed the “revisionists” (who see

themselves as “demystifying and deglamorizing” ethnic Chinese

business) maintain that cultural explanations alone are not

sufficient for explaining social phenomena (Menkhoff, 2002,

p.xii). They argue that these “culturalist” viewpoints have

as their central tenet the Confucian ethic (“how to establish

a harmonious secular order in the man-centre world”, Souchou,

2002) as an essential explanation for analysing Chinese

business (see, for example, Gomez and Hsiao, 2004). Such a

view overlooks the eclectic and heterogeneous influences on

15

Chinese culture such as: Christianity; Mahayana Buddhism; folk

religious associations; and diverse Chinese subcultures

(Menkhoff, 2002). The culturalist approach overemphasizes the

importance of ethnic solidarity across the diaspora (Gomez et

al., 2004).

Gomez and Hsiao (2004) represent an uncompromising aspect of

this view, stating that Chinese business is “driven not by

culture, but by organisational imperatives” (Gomez et al.,

2004, p.5). Their point of view has a strong political

imperative. The Chinese entrepreneurs in Asia have been seen

as a kind of ‘fifth column’2 in Pacific Rim countries and this

erroneous “groupthink” implication regarding Chinese

entrepreneurs has led to many ethnic clashes in South East

Asian countries (Gomez et al., 2004).

Yeung (2005, p.273) criticises the Gomez (2004) view as

“throwing the baby (culture) out with the bathwater (the

"culturalist" analysis).” Yeung (2005) postulates a more

moderate view - ‘hybrid capitalism’. This ‘hybrid capitalism’

Yeung (2005, p.??) defines as “the gradual transformations in

the modus operandi of Chinese capitalism towards a more open

and flexible form of capitalism, defined by its incomplete,

partial and contingent transformations towards an evolving set

2 The term ‘fifth column’ is defined as “People willing tocooperate with an aggressor against their own country. Theterm originated in a remark by Francisco Franco, theSpanish dictator, that he was marching on Madrid with fourcolumns of troops, and that there was a ‘fifth column’ ofsympathizers within the city ready to help” (Merriam-Webster's Collegiate Dictionary, 2010).

16

of capitalist norms, institutions and structures.” Maureen - I

don’t think this quote came from Yeung 2005!! Could it have

come from Yeung (2003)?? (Yeung, 2003, p.9)

Gomez and Hsiao (2004), Menkhoff (2002) and Yeung (Yeung)

reject ‘essentialist’ arguments that imply the Chinese act as

a group rather than as individuals. Essentialism is defined

by Howard Winant as “a belief in unchanging human

characteristics, impervious to social and historical contexts”

(Gomez et al., 2004, p.4).

Rutten (2002), in a comparative study between European and

Asian entrepreneurs, looks at the commonly held belief that

Chinese entrepreneurs operate along more collective lines than

individualist Western entrepreneurs. He concluded that both

individualism and cooperation were important in the advance of

industrial entrepreneurship in both environments, in the

present and the past, and suggests that we re-examine current

ideas concerning the differences between Asian and European

capitalism.

Menkhoff (2002) suggests that culturalists’ “distorted” view

(which/whose distorted view) is due to the pitfalls of

essentialism, orientalisation (the connotation of Asia as a

“land of romance, intrigue and inscrutable customs”) (, The

American Heritage® Dictionary, 2003) and the lack of

comparative studies on Chinese and non Chinese entrepreneurs

and their businesses.

17

Souchou (2002) discusses guanxi in the context of a study of

Chinese traders in Sarawak, East Malaysia. His interpretation

of guanxi is new and unique as he was dissatisfied with the

traditional approaches which emphasize harmonious political

and economic dealings built on social relationships (Menkhoff,

2002). Instead Souchou (2002) emphasises the dialectic tension

inherent in the two opposing forces of guanxi’s two goals,

social continuance and individual gain and that a profitable

outcome is not always possible.

The revisionists essentially emphasize two factors - that

Chinese capitalism has been international in its focus since

its beginning and that it is very adaptive and responsive to

changing local, regional and global circumstances, as well as

highly diversified due to historical and geographical factors

(Yeung, 2003). It is a work in progress, not a fixed,

monolithic phenomenon.

The Chinese in AustraliaAustralia's economic and cultural links with China have grown

steadily in recent years, benefiting from China’s rapid

development. The number of Chinese born Australians increased

nearly six-fold in two decades to be over 310,000 in 2008 with

around two-fifths of all Chinese born Australians arriving in

the five years before the 2006 Census (Australian Bureau of

Statistics, 2009). Trade with China has grown by an average of

22% per year in the ten years to 2009, making China

Australia's largest trading partner (ahead of Japan and the

United States) (Australian Bureau of Statistics, 2009).

18

China has almost certainly overtaken Japan as the world’s

second largest economy in the second half of 2009 as Chinese

state officials revised their annual growth figure for 2009

upwards from 9% to 9.6% recently (Conway, 2009).

As noted earlier, post 9/11 Southeast Asia has become

Australia’s largest source of investor/entrepreneurial

migrants; these migrants see Australia as an attractive

destination (Jones, 2003). This marks a distinct shift from

the ‘sojourner’ mentality (where the Chinese see themselves as

temporary residents, Li, 1993) to deliberate emigration; based

on a preference for countries like Australia with strong

democratic and human rights traditions as opposed to the

pressure to assimilate that exists in many other countries

(Ang, 2005).

This combination of proximity and economic importance suggests

that transnational projects by Chinese immigrants in Australia

are likely to more advanced than those in North America and

Europe (Lever-Tracy, 2002).

Research Methodology

Research Question

The primary research question this study will examine is the

extent to which ethnic networks are a factor in the business

success of Chinese entrepreneurs in Western Australia. In

exploring this issue, it will also be necessary to investigate

19

how Chinese entrepreneurs in Western Australia perceive

business success.

The study of Chinese ethnic networks has benefits in three key areas:

Firstly, improved communication of government policy to

Chinese ethnic communities

Secondly, more accurate measuring of social capital and

social cohesion and connections between Chinese ethnic

entrepreneurs and the wider community - known as

“bridging capital”.

Thirdly, the establishment of “transnational” Asia

Pacific business links with benefits for the Australian

business community as well as the Chinese ethnic

entrepreneurs and their business connections overseas.

These points are discussed in detail below.

The importance of knowledge of Australian ethnic networks was highlighted in a 1999 study in Sydney funded by the Federal Department of Immigration and Multicultural Affairs in conjunction with the Council of Small Business Organisations of Australia. They were investigating the how adequate existing channels of communication were and how to improve this, utilising focus groups of ethnic entrepreneurs. The results showed that identifying and utilising ethnic networks,formal and informal, was a key aspect of any communication strategy between government and ethnic entrepreneurs(Collins: 2003).

Knowledge of networks amongst ethnic entrepreneurs is also important in measuring “social capital” – how harmoniously communities operate. An important component of social capitalis the idea of “bridging capital” – the formation of connections and networks between members of different groups

20

(Markus et al: 2009a). In comparison to Europe and Canada, Australia undertakes these measures of social cohesion very infrequently and on a minor level (Markus et al: 2009a). As well, this type of research into ethnic networks can alert governments to any discrimination that may be occurring. Research such as this thesis will help to establish knowledge of these important ethnic networks for government policy initiatives.

The importance of vibrant ethnic networks has been highlightedby the groundbreaking studies done by Anna Saxenian of the significance of ethnic networks to the success of Silicon Valley in California in the USA. Ethnic entrepreneurs createwealth directly through their businesses and indirectly through their trade and investment connections to their home country. These ethnic networks were formed by primarily by Chinese and Indian skilled workers who saw themselves initially as outsiders in the Silicon Valley environment. These networks were utilised very successfully to “mobilize the information, know-how, skill, and capital needed to start technology firms” (Saxenian: 2002:p.25). They join mainstreamorganisations but are more active in their ethnic associations, which amongst the Chinese have also become a vehicle for mentoring and financing the next generation of entrepreneurs(Saxenian:2002).

There is also the benefit of “transnationalism”. Australian researcher Andrew Markus has documented how transnationalism means that the Australian immigrant experience in the last twenty years is very different to post war immigration where it entailed a break with your past (Markus et al:2009a). “Transnationalism, in the entry in the Encyclopaedia of Globalization, refers to: The activities of immigrants to forgeand sustain multi-stranded social relations that link their societies of origin and settlement as a single unified field of social action. Innovations in transportation and communications have made possible a density and intensity of links not previously possible between the country of origin

21

and the country of settlement. This, in turn, has allowed for these communities to live simultaneously in two or more worlds, or to create and live in ‘transnational spaces’ to a degree not previously known” (Robertson & Schotte: p.1199 cited in Markus: 2009a).Saxenian discusses the dynamic way this has occurred in Silicon Valley - the ties of Silicon Valley immigrant entrepreneurs have to their home countries in terms of Asian “capital, markets and manufacturing capabilities” provides thedouble benefit of access to these facilities for non immigrantentrepreneurs in Silicon Valley and increased business for industries in their home countries (Saxenian: 2002: p. 28). These transnational communities allow the local US businesses to access global markets (Saxenian: 2002). Knowledge of the transnational networks of West Australian Chinese entrepreneurs could reveal similarly beneficial effects for West Australian businesses. The phenomena of transnationalism means that “brain drain” changes to “brain circulation” Saxenian suggests, as successful immigrant entrepreneurs move between the U.S. and their home countries and effectively puts an end to the “zero sum” view of immigration(Saxenian:2002:p.20). The economic benefits of these transnational links of immigrant entrepreneurs (in this case primarily Chinese and Indian) for California have been documented. Saxenian says “Researchers at the University of California, Berkeley have documented a significant correlation between the presence of first-generation immigrants from a given country and exports from California. For every1%increase in the number of first-generation immigrants from a given country, exports from California go up nearly 0.5 %. Moreover, this effect is especially pronounced in the Asia-Pacific region where, all other things being equal, California exports nearly 4 times more than it exports to comparable countries in other parts ofthe world.”(Saxenian: 2002:p. 29). Western Australia is in a very similar position regarding immigrant entrepreneurs – we have Australia’s second largest

22

number of overseas born residents (33.7%) after Sydney (34.5%)using 2006 census figures (Markus:2009b) and even closer proximity to Asian markets than California. The exploratory investigation provided by this thesis into the networks of West Australian Chinese entrepreneurs, both local and inter country, has the potential to yield new and beneficial information for both business and government.

Research Method

Structured one to one interviews will form the basis of the

exploratory research in this qualitative study. This research

approach is likely to be preferable to a survey, as Chinese

entrepreneurs are reluctant to have their businesses

researched by outsiders. Interviews with individuals are more

likely to yield useful data (Busenitz and Lau 1996).

Structured InterviewsThe questions will be face to face structured interviews – the

interviewer follows a fixed set of interview questions

(Wilson: 2010). This leaves little room for error (Denzin and

Lincoln: 2005).

Open questions will be used where no answer categories are

given. We have taken into account avoiding known problems

with this type of question i.e. two questions presented as

one; too many words; using qualifying phrases; using several

ideas in one question; unfamiliar words; questions with

instructions(Thomas:2004).

23

To ensure that the answers given by the respondents are real

and do not differ because of differences in the questions or

the conditions, certain procedures are recommended in the

interview situation. These procedures are that questions will

always be asked exactly as written, in the same order and

under the same conditions. This follows the “Principle of

Invariance of Stimuli” – that what differentiates the

respondents are only their answers and not other variables

(Thomas: 2004:p.251). This format will be followed in our

interviews.

The principle of research relevance has been followed as all

the questions are derived from the literature review or in one

instance as a result of a suggestion from our Delphi panel

(the importance of which language in type of networks)(Thomas:

2004).

The questions have all been piloted (given to small group to

make sure they are understood as intended) (Thomas: 2004). In

this case the pilot group was our Delphi panel.

If necessary, on the advice of the Delphi panel, it may be

necessary to conduct the interviews in Chinese in order to

gather data from genuine Chinese entrepreneurs. If that is

the case, then all translations will be done by National

Accreditation Authority of Translators and Interpreters

http://www.naati.com.au/index.asp for accuracy.

Regarding ethics and interviews we are following the advice

that the most important ethical imperative is simply to “tell

24

the truth” whatever criteria we adopt for the interviews

(Johnson cited in Denzin and Lincoln: 2005: p.716).

The Qualitative MethodThere is one definition of qualitative research which is

considered to be an authoritative statement on qualitative

research methodologies and that is the one that will form the

basis for the research in this thesis. It states that

“qualitative research is multi method in focus, involving an

interpretive, naturalistic approach to its subject matter.

This means that qualitative researchers study things in their

natural settings, attempting to make sense of or interpret

phenomena in terms

of the meanings people bring to them. Qualitative research

involves the studied

use and collection of a variety of empirical materials – case

study, personal

experience, introspective, life story, interview,

observational, historical, interactional,

and visual texts – that describe routine and problematic

moments and

meaning in individuals’ lives. (Denzin and Lincoln cited in

Neergaard and Ulhoi: 2007:p.5)

Qualitative research is useful for the study of Chinese

entrepreneurs as they are “outliers” – a term from statistics

that means “unusual observations that are far removed from the

mass of data” (NIST: 2002) not a study of central tendencies

in mainstream entrepreneurship (Neergaard and Ulhoi: 2007).

25

These “outliers” capture the essence of the entrepreneur’s

economist Joseph Schumpeter’s definition of the modern

entrepreneur as the agent of “creative destruction” i.e. “the

person who destroys the economic order by introducing new

products, new methods of production, new ways of organizing,

and new raw materials”(Neergaard and Ulhoi:2007:p.22). This

thesis will be examining the role of networking in this

process for West Australian Chinese entrepreneurs.

Quality criteria in qualitative researchThis research will use criteria that respond to the

traditional scientific research criteria, utilising the

rigorous method of systematically analysing high quality data.

Lincoln and Gubba have proposed four criteria for qualitative

research: credibility, transferability, dependability and

confirmability which correspond to traditional scientific

research criteria (cited in Neergaard and Ulhoi: 2007).

Credibility is ensuring that the respondent’s views match

the researcher’s representation.

Transferability means giving the reader sufficient

information to make generalisations.

Dependability involves making sure the research is

“logical, traceable and documented” (Neergaard and Ulhoi:

2007: p.387).

26

Confirmability refers to the matter that “data and

interpretation are not figments of the inquirer’s

imagination” (Neergaard and Ulhoi: 2007: p.387).

When proceeding with the analysis of the data gathered for

this thesis, all the above criteria will be adhered to

strictly in order to ensure the integrity, accuracy and

usefulness of this research.

The Delphi MethodBricolage is a French term coined by the French anthropologist

and ethnologist, Claude Levi Strauss, meaning ‘‘to use

whatever resources and repertoire one has to perform whatever

task one faces’’ (Okoli and Pawlowski: 2004:p.15). It is well

suited to areas of social complexity which are on the border

of several disciplines such as ethnic studies (Denzin and

Lincoln: 2005). Thus when confronted with the unfolding

complexities and challenges of cross cultural qualitative

research of Australian Chinese entrepreneurs combined with a

desire for research rigour, it was decided to utilise the

“Delphi panel” technique. Lack of rigour in qualitative

entrepreneurship research is a common criticism - more high

calibre qualitative research is needed for methodological

variety (Neergaard and Ulhoi: 2007).

The Delphi panel is a type of consensus research developed by

the Rand Corporation in the 1960’s. The name is derived from

the ancient Greek Delphic oracle which gathered information

from a variety of sources to arrive at the “truth” of a

27

situation (Baker et al: 2006). With a fifty year history, it

is a widely accepted means of obtaining general agreement from

a panel of experts with a view to establishing best

practice(Baker et al: 2006).

The Delphi methodology as it is commonly described “operates

on the principle that several heads are better than one in

making subjective conjectures …and that experts will make

conjectures based upon rational judgement rather than merely

guessing”(Weaver cited in Evans:2007:p.4).

A Delphi panel is particularly useful in areas where astute

and discerning experience is required as there is not any

traditional research or limited previous work on the subject

matter being researched(Baker et al: 2006).

It is useful as an exploratory tool which “reveals (not

creates) patterns of thought, areas of consensus or

disagreement, or questions to pursue” (Evans: 2007:p.1).

This “structured communication” has a degree of anonymity for

those involved (Okoli and Pawlowski: 2004:p.16). Anonymity

means that the biases of peer pressure and domineering

individuals are not a factor (Evans: 2007).

Communication is by separate emails to individuals which gives

the correspondent time for a considered response and allows us

to use participants from outside our locale. The ability to

utilise international experts gives the Delphi panel an

advantage over other group decision analysis methods (such as

nominal group technique and social judgment analysis (Okoli

and Pawlowski: 2004).

28

The Delphi panel is flexible in its design and allows for

follow up interviews which gives a richer data which in turn

means a deeper understanding of the fundamental research

questions. It is particularly useful in the early stages of a

research project in a new area to identify and prioritise

issues. It enhances the likelihood of being able to

generalise across different situations, as the panel gives a

wider empirical basis allowing for a stronger grounding of the

theories proposed (Okoli and Pawlowski: 2004).

The Delphi panel has been very useful so far in the design,

implementation and rigour of this research.

The decisions that have been largely influenced by the Delphi

panel response include:

The change from focus groups to individual interviews.

The panel was unanimous that this would produce more

honest and richer results.

The decision to use a Chinese interviewer fluent in

Mandarin and Cantonese (ideally an older male, it

depends on availability) as this will make the

interviewees feel more relaxed. The interviews will be

mainly in English but our interviewer will give us the

option to interview those who are not fluent in English.

The panel indicated this would be a very useful source of

entrepreneurs.

The identification of many sources from which we can

collect our Chinese entrepreneur subjects, both

institutional and individuals giving us enthusiastic

29

access to their communities e.g. Taiwanese entrepreneurs

in Perth

All panel members were sent a list of proposed questions

drawn from the literature and the final list of questions

was composed as a result of their comments.

Helpful suggestions like making all written requests on

UWA letterhead and stating clearly the benefit to the

entrepreneurs (see attached sample letter).

The importance of language – fluent English or fluent

Chinese – in determining the type of networking most

likely chosen – traditional guanxi or modern business

networking

Any future matters that require clarification will be sent to

the panel via email. Where relevant, other members’ comments

may be included.

There is no general agreement in the literature on the best

way to select a panel and there are many definitions of

“expert”. Therefore each researcher has to clarify and

defend their choices for their panels (Baker et al: 2006).

Baker et al offer a useful set of questions to help

researchers clarify the concept of expert (Baker et al:

2006:p.68). The relevant questions and answers are listed

below:

1. What is your definition of an 'expert'?

For this study the definition of expert is taken from The

Oxford English Dictionary ‘a person who is very knowledgeable

about or skilful in a particular area' (Soanes and Stevenson:

2004:p.501). Our criteria were those with a university

30

qualification, as well as Chinese ethnicity or research

expertise in the area of Chinese commerce. An exception was

Professor Debowski, her role is give feedback on academic

rigour and research methods.

2. What type of Delphi is being utilised and what effect has this exerted on choice of

expert?

There are three types of Delphi panels, Policy, Decision and

Classical. This is a Classical Delphi panel – facts are

gathered from an unbiased panel of experts to achieve a

consensus about future events (Crisp et al: 1997). In this

case it is used to discover the most fruitful procedures for

obtaining quality information from WA Chinese entrepreneurs to

ensure maximum truthfulness and relevance in relation to the

research topic, with emphasis on minimising the cross cultural

communication barriers. Experts in the area of cross cultural

communication between Chinese and Australians were sought.

3. What sample are you aiming for (homogenous or heterogeneous)?

Our sample is heterogeneous in line with the commonly held

belief in the literature that this is best to ensure validity

of the findings (Baker et al: 2006).

4. What sampling method was used to choose the panel members?

The method used so far is from those known to the writer or

her supervisor. However it has been decided that future

members of the panel, should this be required would be chosen

by the “snowballing” method – asking our current panel to

suggest other suitable members (Marshall and Rossman: 2011).

This will help to achieve maximum heterogeneity.

31

The members of the panel include: Cherry Chang, Taiwanese born, Australian citizen, currently

resident in Japan. Graduated from University of Western

Australia with a Bachelor of Commerce with first class

honours, ethnic Chinese entrepreneur

Patti Chong, originally from Malaysia, a law graduate of

the University of Western Australia, n private practice

since September 2006 she is currently Vice President of

the W.A. Chinese Chamber of Commerce and a member of the

Chung Wah Association. In 2005, Patti was named as one of

Lottery West’s 21 Most Inspirational West Australians.

Professor Shelda Debowski, Director of Organisational and

Staff Development Services at the University of Western

Australia where she guides the leadership, academic and

organisational development of the university. She has

also recently published a book on Knowledge Management.

Shelda has been President of the Higher Education

Research and Development Society of Australasia (Inc)

(HERDSA) since 2005. She is also the President-elect of

the International Consortium for Educational Development

– an international group of academic development national

presidents.

Dr. Stephen Grainger, a graduate of Asian Studies/Commerce at

the University of Western Australia, currently a senior

lecturer in International Management at Edith Cowan

University Joondalup. Stephen specialises in Business in

Asia and Conducting Business in China. His PhD thesis

was on guanxi in China. His current research interests

are organisational guanxi in China and the affect the

32

evolving Chinese market economy is having on the decay of

guanxi importance.

Philip Kirchlechner, Philip has 20 years experience in

marketing and business development in the iron ore and

steel industry gained through positions with Voest-Alpine

(VAI), J.P. Morgan, Hamersley Iron, and Rio Tinto Iron

Ore. 

Most recently Mr. Kirchlechner had been marketing iron

ore for Aurox Resources, securing off take for all of the

company's production.  Prior to his engagement with Aurox

Mr. Kirchlechner was Head of Marketing at Fortescue

Metals Group (FMG) and instrumental in building

relationships with key decision makers in the Asian steel

industry, including iron ore endusers in Japan, Korea,

Korea, Taiwan and mainland China.

While at Rio Tinto, Mr. Kirchlechner was based in

Shanghai and in charge of iron sales and marketing

activities to Chinese steel producers.

Mr. Kirchlechner has lived in China for 16 years and is

fluent in Mandarin Chinese, German, and Dutch.  Mr.

Kirchlechner earned a Master’s of Science from the

Massachusetts Institute of Technology, a Bachelor of Arts

from Reed College, and a diploma in Chinese language from

the Beijing Languages Institute.

Shirlyn Riemer – director and proprietor Austral Pacific

exports – Australian exporter of quality Australian food

products – Bachelor of Science in Business Administration

Ateneo de Manila University, Philippines and Small

33

Business Development Unit Curtin University- ethnic

Chinese entrepreneur – Australian resident from the

Philippines

Keith Seed, Director Trade Services, Chamber of Commerce &

Industry of Western Australia- speciality – international

trade

Dr. Gary Sigley , Professor of Chinese Studies, University of

Western Australia and Director of the Confucius

Institute, University of Western Australia, cross

cultural communications expert, fluent Mandarin Chinese

speaker

Research Sample

From the Western Australian Chinese Chamber of Commerce

membership a random sample of Chinese entrepreneurs will

be selected to participate in three focus groups of ten

members each (maximum).3 To help overcome the difficulty

with very low participation rates in entrepreneurship

research {Morkel, 2009 #83}, a visiting American professor,

Kevin Lowe, suggested using the Chinese Chamber of Commerce

of Western Australia (CCCWA) as a source of Chinese

entrepreneurs for focus groups and surveys and including a

question in the quantitative survey of the efficacy of

membership of the CCCWA for business success {Lowe, 2004

#84}. Research by Davidsson and Honig {, 2003 #62} has

confirmed that this is likely to be a very useful strategy.

3 Four to twelve members is the recommended size for a focusgroup (Krueger, 2000b).

34

In a study of nascent entrepreneurs Davidsson and Honig {,

2003 #62`, p.323} found that being a member of a business

networking organisation (such as a Chamber of Commerce,

Rotary or Lions) was a “significant and strong” factor in a

firm’s successful emergence.

Although a longitudinal study is not possible, the focus group

participants will be asked about their experiences with

networking at various stages in their business careers. The

questions will be open ended, arranged in a logical sequence

and progress from the general to the specific (Krueger,

2000a).

Data Analysis Method(s)

The data analysis used will follow the principles of being

“systematic, sequential, verifiable and continuous” (Krueger,

2000b, p.128). The data will be analysed by thematic coding

which is a bridge between the language of qualitative research

and the language of quantitative research (Boyatzis, 1998).

Thematic analysis is the search for important themes emerging

in the description of the phenomena studied – a form of

pattern recognition. These themes then become the categories

for analysis (Fereday and Muir-Cochrane, 2006). A theme is “a

pattern in the information that at minimum describes and

organises the possible observations and at maximum interprets

aspects of the phenomenon” (Boyatzis, 1998, p.161).

A “good code” is one that captures the qualitative richness of

the phenomenon (Boyatzis, 1998, p.1). Reliable coding means

capturing the codable moment and consistently encoding it

35

(Boyatzis, 1998). Thematic analysis allows for the

transformation of qualitative information into quantitative

data (Boyatzis, 1998).

Summary

In summary, this study will use a qualitative (structured one

to one interview method) methodology to explore the role of

networking as a factor in the business success of Chinese

entrepreneurs in Western Australia.

References

Ang, I. (2005). "Undoing Diaspora: questioning globalChineseness in the era of globalization." in H. Liu (eds),The Chinese Overseas. Routledge, London and New York.

Australian Bureau of Statistics. (2009). EXPANDING LINKS WITHCHINA AND INDIA. Australian Bureau of Statistics,

Barney, J. B. and S. Zhang. (2009). "The Future ofChinese Management Research: A Theory of ChineseManagement versus A Chinese Theory of Management."Management and Organization Review. 5(1): 15-28.

Basu, A. (2006). "Ethnic minority entrepreneurship." in M.Casson, Yeung, B., Basu, A., and Wadeson, N. (eds), TheOxford handbook of Entrepreneurship. OUP, Oxford England.

Bat, B. and L. Mannie. (2004). "Entrepreneurs' Access toPrivate Equity in China: The Role of Social Capital."Organization Science. 15(2): 159.

Boyatzis, R. E. (1998). Transforming qualitative information: thematicanalysis and code development. SAGE Publications, Inc., ThousandOaks USA.

36

Burt, R. S. (2000). "The network structure of social capital."Research in Organizational Behavior. 22(345-423.

Busenitz, L. W. and C.-M. Lau. (1996). "A Cross-CulturalCognitive Model of New Venture Creation." Entrepreneurship:Theory & Practice. 20(4): 25-39.

Chavan, M. (2005). "Diversity Makes Good Business." EqualOpportunities International. 24(Iss. 7/8): 21 pgs.

Chung, W.-K. (2005). "Western Corporate Forms and the SocialOrigins of Chinese Diaspora Entrepreneurial Networks." inI. B. McCabe, Harlaftis, G., and Minoglou, I.P. (eds),Diaspora Entrepreneurial Networks - four centuries of history. Berg, OxfordEngland and New York City.

Chung, W.-K. and G. G. Hamilton. (2009). "Getting Rich andStaying Connected: the organizational medium of Chinesecapitalists." Journal of Contemporary China. 18(58): 47 - 67.

Coleman, J. S. (1988). "Social Capital in the Creation ofHuman Capital." The American Journal of Sociology. 94(S95-S120.

Collins, J. (2003). "Australia: Cosmopolitan CapitalistsDownunder." in J. a. K. Rath, R. (eds), ImmigrantEntrepreneurs Venturing Abroad in the Age of Globalization. Berg, Oxford.

Conway, E. (2009). Chinese economy overtakes Japan. Telegraph MediaGroup Limited London.

Davidsson, P. and B. Honig. (2003). "The role of social andhuman capital among nascent entrepreneurs." Journal of BusinessVenturing. 18(3): 301-331.

Ewing Marion Kauffman Foundation. (2010). Kauffman ResearchRoundup.

Fereday, J. and E. Muir-Cochrane. (2006). "Demonstrating RigorUsing Thematic Analysis: A Hybrid Approach of Inductiveand Deductive Coding and Theme Development." InternationalJournal of Qualitative Methods. 5(1): 1-11.

Flap, H., .Kumcu, A. & Bulder,B. (2000). "The Social Capitalof Ethnic Entrepreneurs and Their Business Success." in J.Rath (eds), Immigrant Businesses

37

The Economic, Political and Social Environment. Palgrave, Warwick England.

Gnyawali, D. R. and D. S. Fogel. (1994). "Environments forEntrepreneurship Development: Key Dimensions and ResearchImplications." Entrepreneurship: Theory & Practice. 18(4): 43-62.

Gomez, E. T. and H. M. Hsiao. (2004). Chinese Enterprise,Transnationalism, and Identity. Routledgecurzon, London.

Granovetter, M. (1985). "Economic Action and Social Structure:The Problem of Embeddedness." The American Journal of Sociology.91(3): 481-510.

Harris, I. C. (2009). "Ethnicity Effects on the FamilyBusiness Entrepreneurial Process." Family Business Review.22(3): 293-296.

Hoang, H. and B. Antoncic. (2003). "Network-based research inentrepreneurship: A critical review." Journal of BusinessVenturing. 18(2): 165-187.

Holt, D. H. (1997). "A comparative study of values amongChinese and U.S. entrepreneurs: Pragmatic convergencebetween contrasting cultures." Journal of Business Venturing.12(6): 483-505.

Hsu, J. Y., Saxenian, A. (2000). "The limits of guanxicapitalism: transnational collaboration between Taiwan andthe USA." Environment and Planning A. 32(11): 1991-2005.

Hui, P.-K. (1996). Overseas Chinese business networks: East Asian economicdevelopment in historical perspective. State University of New Yorkat Binghamton,

Jones, G., and R. Daniel Wadhwani. (2007a). Entrepreneurial Theoryand the History of Globalization.

Jones, G., and Rohit Daniel Wadhwani,. (2007b). EntrepreneurshipAnd Global Capitalism. Edward Elgar, Cheltenham UK andNorthhampton MA USA.

Jones, S. L. (2003). The economic trend in immigration policy: Acomparative analysis of the entrepreneur/investor program in Canada, UnitedStates and Australia. Syracuse University, United States -- NewYork.

38

Kao, J. (1993). "The worldwide web of Chinese business."Harvard Business Review. 71(2): 24-36.

Kiong, T. C. and Y. P. Kee. (1998). "Guanxi Bases, Xinyong andChinese Business Networks." The British Journal of Sociology. 49(1):75-96.

Krueger, N. F. R., M.D. and Carsrudc, A. (2000a). "Competingmodels of entrepreneurial intentions." Journal of BusinessVenturing. 15(5-6): 411-432.

Krueger, R. A. (2000b). Focus groups: a practical guide for appliedresearch. (3rd). Sage Publications, Thousand Oaks USA.

Lever-Tracy, C., Ip, D., and Tracy, N. (2002). "From a nicheto a world city: barriers, opportunities and resources ofethnic Chinese businesses in Australia." in T. a. G.Menkhoff, S. (eds), Chinese Entrepreneurship and Asian BusinessNetworks. RoutledgeCurzon, London and New York.

Li, P. S. (1993). "Chinese Investment and Business in Canada:Ethnic Entrepreneurship Reconsidered." Pacific Affairs. 66(2):219-243.

Licht, A. N. a. S., J.I. (2006). "Social Dimensions ofEntrepreneurship." in M. Y. Casson, B. Basu, A. andWadeson, N. (eds), The Oxford Handbook of Entrepreneurship OUP,Oxford.

Light, I. (1984). "Immigrant and ethic enterprise in NorthAmerica." Ethnic & Racial Studies. 7(2): 22.

Light, I. (2005). "The ethnic economy." in N. J. a. S.Smelser, R. (eds), The handbook of economic sociology. RussellSage, New York.

Lin, B.-W., P.-C. Li and J.-S. Chen. (2006). "Social capital,capabilities, and entrepreneurial strategies: a study ofTaiwanese high-tech new ventures." Technological Forecasting andSocial Change. 73(2): 168-181.

Liu, H. (1998). "Old Linkages, New Networks: The Globalizationof Overseas Chinese Voluntary Associations and ItsImplications." The China Quarterly. 155): 582-609.

39

Lowe, K. P. (2004). Selection of thesis subject and method of data collection.Crawley, Western Australia.

Mavondo, F. T. and E. M. Rodrigo. (2001). "The effect ofrelationship dimensions on interpersonal andinterorganizational commitment in organizations conductingbusiness between Australia and China." Journal of BusinessResearch. 52(2): 111-121.

Menkhoff, T. a. G., S. (2002). Chinese Entrepreneurship and AsianBusiness Networks. RoutledgeCurzon, London, England.

Merriam-Webster's Collegiate Dictionary. (2010). Merriam-Webster's Collegiate Dictionary, Eleventh Edition online. Merriam-Webster,

Min, Z. (2004). "Revisiting Ethnic Entrepreneurship:Convergencies, Controversies, and ConceptualAdvancements¹." International Migration Review. 38(3):1040-1074.

Morkel, A. (2009). Personal communication re research methods inentrepreneurship Claremont, Perth Western Australia.

O'Donnell, A. G., A., Cummins, D., Carson, D. . (2001)."The network construct in entrepreneurship research: Areview and critique " Management Decision. 39(9): 749-760.

Portes, A. (1995a). "Children of Immigrants: SegmentedAssimiliation and its Determinants." in A. Portes (eds),The economic sociology of immigration: essays on networks, ethnicity andentrepreneurship. Russell Sage, New York.

Portes, A. (1995b). "Economic Sociology and the Sociology ofImmigration." in A. Portes (eds), The Economic Sociology ofImmigration: Essays on networks, ethnicity and entrepreneurship. RussellSage, New York.

Portes, A. (1998). "Social capital: Its origins andapplications in modern sociology." Annual Review of Sociology.24(0-12.

Redding, G. (1995). "Overseas Chinese networks: Understandingthe enigma." Long Range Planning. 28(1): 61-69.

40

Rutten, M. (2002). "Individualism and collective forms ofbusiness organisation: rural capitalists in India,Malaysia and Indonesia." in T. a. G. Menkhoff, S. (eds),Chinese Entrepreneurship and Asian Business Networks.RoultledgeCurzon, London.

Ryan, J. (2005). "Chinese women as transnational migrants." inH. Liu (eds), The Chinese Overseas. Routledge, London and NewYork.

Salaff, J. W. a. G., A., Wong, S. and Ping, L. (2003). "EthnicEntrepreneurship, social networks and the enclave

." in B. Yeoh, Kiong, T.C. and Charney, M.W. (eds), ApproachingTransnationalisms:

Studies on Transnational Societies, Multicultural Contacts, and Imaginings of Home

. Kluwer Academic Publishers, Boston, Dordrecht, London.

Seung Ho, P. and L. Yadong. (2001). "Guanxi and organizationaldynamics: organizational networking in Chinese firms."Strategic Management Journal. 22(5): 455-477.

Smart, A. (1993). "Gifts, Bribes, and Guanxi: AReconsideration of Bourdieu's Social Capital." CulturalAnthropology. 8(3): 388-408.

Souchou, Y. (2002). "Guanxi - Sentiment, performance and thetrading of words." in T. a. G. Menkhoff, S. (eds), ChineseEntrepreneurship and Asian Business Networks. RoutledgeCurzon,London.

Strahan, K. W. a. W., A. J. (1988). Immigrant Entrepreneurs inAustralia - A report to the Office of Multicultural Affairs. Department ofthe Prime Minister and Cabinet, Australia.

The American Heritage® Dictionary. (2003). The American Heritage®Dictionary of the English Language, Fourth Edition. Houghton MifflinCompany, Boston.

Xin, K. R. and J. L. Pearce. (1996). "Guanxi: Connections assubstitutes for formal institutional support." Academy ofManagement Journal. 39(6): 1641.

41

Yeung, H. (2005). "Book Review: Chinese Enterprise,Transnationalism, and Identity by Gomez, E. T. and H. M.Hsiao." Journal of Contemporary Asia. 35(2): 272-274.

Zahra, S. A. a. G. G. (2002). " InternationalEntrepreneurship: The Current Status of the Field andFuture Research Agenda." in M. A. Hitt, Ireland, R.D. lCamp, M.S. and . Sexton, D.L. (eds), Strategic Entrepreneurship.Blackwell reference online,

Zhao, L. and J. D. Aram. (1995). "Networking and growth ofyoung technology-intensive ventures in China." Journal ofBusiness Venturing. 10(5): 349-370.

Material not used

From a review of the literature it seems there are a number of

issues and suggestions that future research should consider.

For example:

- Multimethod studies, combining qualitative and

quantitative methods, should be used in the research of

entrepreneurial networks, as “they can support strong

causal claims about the role of networks in

entrepreneurship” (Hoang et al., 2003, p.12).

- Western measures of social capital need to take into

account the Chinese cultural phenomenon of guanxi (Bat et

al., 2004).

42

These suggestions will be met, as far as possible, within the

constraints of this study as follows:

- To help overcome the difficulty with very low

participation rates in entrepreneurship research (Morkel,

2009), a visiting American professor, Kevin Lowe,

suggested using the Chinese Chamber of Commerce of

Western Australia (CCCWA) as a source of Chinese

entrepreneurs for focus groups and surveys and including

a question in the quantitative survey of the efficacy of

membership of the CCCWA for business success (Lowe,

2004). Research by Davidsson and Honig (2003) has

confirmed that this is likely to be a very useful

strategy. In a study of nascent entrepreneurs Davidsson

and Honig (2003, p.323) found that being a member of a

business networking organisation (such as a Chamber of

Commerce, Rotary or Lions) was a “significant and strong”

factor in a firm’s successful emergence.

- Past research has been almost entirely cross sectional

and short term (Light, 2005). More longitudinal studies

are needed (Licht, 2006). Network data needs to be

gathered over “multiple points in time” to give the

research more validity (Hoang et al., 2003, p.8).

- Research on entrepreneurial networks has rarely linked

networking to economic outcomes (Zhao et al., 1995).

- Further research needs to be done in the area of what are

the resources, rare and valuable, that contribute to

43

entrepreneurial success and how do we determine which

networks are the source of those resources (Hoang et al.,

2003). Research into ‘social capital’ needs to clarify

the concept and its measurement (which needs to

incorporate its multifaceted nature) as well as to

distinguish between structure and effects (Flap, 2000).

- It may be that more nuanced questions are needed in

network research to tease out the differences in

structure, not just the standard “to whom do you turn to

for advice or information” (Hoang et al., 2003, p.9).

Maureen Boland

Mboland@iinet.net.au

LinkedIn Maureen Boland

+61 0415 500 006

44