WESTERN AND EASTERN VIEWS ON SOCIAL NETWORKS

Abstract: In the current economic environment social networks have a strategic importance for organizational competitive advantage. However, the dynamics of these networks is not the same in the West and in Confucian societies. Therefore executives need to understand the rules of game in each region. The aim of this article is threefold. First, we summarize relevant literature addressing the dynamics of social networks (such as customer, relational and social capital as well as guanxi) and analyze positive and negative elements associated with them. We approach these issues from a Western and Confucian perspective respectively. Second, the article presents the results of our case study among world pioneering firms from Asia and Europe in measuring and reporting these social connections from a Western perspective. It is examined the basic indicators firms use to measure these networks and the major issues managers should consider when measuring and reporting these knowledge-based resources. Finally, it concludes with a discussion of why managers should make an effort to understand social connections and its dynamics when doing business in Western countries and Confucian societies, like China and Japan