The Darker Side of Social Networks in Transforming Economies: Corrupt Exchange in Chinese Guanxi and Russian Blat/Svyazi

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The Darker Side of Social Networks in Transforming Economies : Corrupt Exchange in Chinese Guanxi and Russian Blat/Svyazi. / Karhunen, Paivi; Kosonen, Riitta; McCarthy, Daniel J.; Puffer, Sheila M.

In: Management and Organization Review, Vol. 14, No. 2, 06.2018, p. 395-419.

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@article{b63a28aeb99043179a34ad5f232d9444,
title = "The Darker Side of Social Networks in Transforming Economies: Corrupt Exchange in Chinese Guanxi and Russian Blat/Svyazi",
abstract = "This article addresses corruption as a negative practice displaying the 'darker side' of social capital in Chinese guanxi and Russian blat/svyazi networks. It presents a conceptual framework integrating several research streams to establish a conceptual linkage between social network characteristics and three forms of corruption between business persons and public officials: cronyism, bribery, and extortion. We argue that the forms of corruption in a society are determined by the nature of social network ties and their underlying morality, with particularistic and general trust being key factors. Our framework depicts networks as three concentric circles representing three types of corruption resulting from their corresponding types of reciprocity: open, closed, and negative. We then apply the framework to the practice of guanxi in China and blat/svyazi in Russia. We propose that different network characteristics and different forms of corruption may help explain what we label the 'China-Russia paradox' of why corruption and high economic growth have co-existed in China, at least in the short term, but less so in Russia. We conclude with ethical and legal implications for doing business in those two transforming economies and offer suggestions for future research.",
keywords = "China, corruption, reciprocity, Russia, social networks, trust, BUSINESS RELATIONSHIPS, INTERNATIONAL-BUSINESS, GEOCENTRIC FRAMEWORK, ORGANIZATIONAL TRUST, BRIBERY, GOVERNANCE, EXTORTION, EXPERIENCE, EFFICIENCY, ETHICALITY",
author = "Paivi Karhunen and Riitta Kosonen and McCarthy, {Daniel J.} and Puffer, {Sheila M.}",
year = "2018",
month = "6",
doi = "10.1017/mor.2018.13",
language = "English",
volume = "14",
pages = "395--419",
journal = "Management and Organization Review",
issn = "1740-8776",
publisher = "Cambridge University Press",
number = "2",

}

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TY - JOUR

T1 - The Darker Side of Social Networks in Transforming Economies

T2 - Corrupt Exchange in Chinese Guanxi and Russian Blat/Svyazi

AU - Karhunen, Paivi

AU - Kosonen, Riitta

AU - McCarthy, Daniel J.

AU - Puffer, Sheila M.

PY - 2018/6

Y1 - 2018/6

N2 - This article addresses corruption as a negative practice displaying the 'darker side' of social capital in Chinese guanxi and Russian blat/svyazi networks. It presents a conceptual framework integrating several research streams to establish a conceptual linkage between social network characteristics and three forms of corruption between business persons and public officials: cronyism, bribery, and extortion. We argue that the forms of corruption in a society are determined by the nature of social network ties and their underlying morality, with particularistic and general trust being key factors. Our framework depicts networks as three concentric circles representing three types of corruption resulting from their corresponding types of reciprocity: open, closed, and negative. We then apply the framework to the practice of guanxi in China and blat/svyazi in Russia. We propose that different network characteristics and different forms of corruption may help explain what we label the 'China-Russia paradox' of why corruption and high economic growth have co-existed in China, at least in the short term, but less so in Russia. We conclude with ethical and legal implications for doing business in those two transforming economies and offer suggestions for future research.

AB - This article addresses corruption as a negative practice displaying the 'darker side' of social capital in Chinese guanxi and Russian blat/svyazi networks. It presents a conceptual framework integrating several research streams to establish a conceptual linkage between social network characteristics and three forms of corruption between business persons and public officials: cronyism, bribery, and extortion. We argue that the forms of corruption in a society are determined by the nature of social network ties and their underlying morality, with particularistic and general trust being key factors. Our framework depicts networks as three concentric circles representing three types of corruption resulting from their corresponding types of reciprocity: open, closed, and negative. We then apply the framework to the practice of guanxi in China and blat/svyazi in Russia. We propose that different network characteristics and different forms of corruption may help explain what we label the 'China-Russia paradox' of why corruption and high economic growth have co-existed in China, at least in the short term, but less so in Russia. We conclude with ethical and legal implications for doing business in those two transforming economies and offer suggestions for future research.

KW - China

KW - corruption

KW - reciprocity

KW - Russia

KW - social networks

KW - trust

KW - BUSINESS RELATIONSHIPS

KW - INTERNATIONAL-BUSINESS

KW - GEOCENTRIC FRAMEWORK

KW - ORGANIZATIONAL TRUST

KW - BRIBERY

KW - GOVERNANCE

KW - EXTORTION

KW - EXPERIENCE

KW - EFFICIENCY

KW - ETHICALITY

U2 - 10.1017/mor.2018.13

DO - 10.1017/mor.2018.13

M3 - Article

VL - 14

SP - 395

EP - 419

JO - Management and Organization Review

JF - Management and Organization Review

SN - 1740-8776

IS - 2

ER -

ID: 27504937