THE SOCIAL FOUNDATION OF CHINESE RUBBER BUSINESSES IN SINGAPORE

Abstract

Singapore is the world's premier rubber market, yet little is known about its rubber traders. This study profiles the Singapore Chinese rubber traders and delves into their organisational principles. One of the documented facts of Chinese business practice is personalism, which is the inclination to incorporate personal relationships in decision-making. My study examines the social foundations and dynamics of such personalistic business practices. The study broadly adopts the 'embeddedness' approach looking at Chinese business principles 'embedded' in the institutional environments in Singapore. The growth of the rubber commerce amidst larger political and economic developments is traced to explain how they affect personalism in the rubber trade. I argue that the feelings of general distrust engendered by socio-political instability, and paternalism, which moulds the vertical order in Chinese society. together with other institutional forces, interact dynamically to shape personal ism. Specific features of the rubber trade which contribute to particular modes of economic behaviour are also highlighted. My fieldwork identified three key aspects of personalism: personal control, personal guanxi relations, and interpersonal trust or xinyong. Personal control is effected largely through depending on people whom one personally knows and trusts as this would reduce risks and afford better business control. The study also examines the dynamics of both guanxi and xinyong. Disparities between the ideal and reality in both principles exist. The way these ideals are played out in reality is also discussed in detail. It is also my intention to show that ideals held by the Chinese rubber traders are often challenged by other institutions. Government agencies and multinational companies do impose demands on merchants which contradict their standard practices. The ways in which merchants deal with the various challenges are explored. considerations. On the contrary, economic actions are 'embedded' in the context of larger social relations. Hence, the adoption of a set of behaviours or organisational structures above another is attributed less to cost-efficient factors than to institutionalised factors. That is, 'taken-for-granted" assumptions and behaviours are resistant to change. But. when they are challenged, and when alternative myths are available, change can take place. Among other factors, the extent of transformation depends largely on the distribution of power of parties involved. Change, as and when it occurs, tends to be incremental. And despite pressures to modify certain trading methods, rubber traders still hold strongly to the myths of xinyong and guanxi. The examination of family-orientation among the rubber firms in terms of control and ownership will demonstrate the tenacity of such myths.