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The rise of emerging markets such as China, Brazil, Russia, and the Middle East has led to an increase in interest in understanding the nature and working mechanisms of informal networks (guanxi, yongo, wasta, blat/svyazi, etc.), which are instrumental in international business (IB) activities in these markets. Unlike Chinese informal networks, which have been researched extensively, studies on several other important informal networks remain sporadic and peripheral. From a theoretical point of view, it can be argued that the typical characteristics and behavioral ideals implied by social network theory do not fully reflect the networking ideals and practices in many non-Western countries. At the same time, international business practitioners may not have a thorough understanding of how to engage effectively in informal networking abroad or of how local managers actually network. Motivated by the wish to close this knowledge gap and work toward an inclusive and integrative theory of informal networks in international business studies, this paper suggests treating informal networks as an important type of social capital and informal institution of the respective business environment at the same time. As such, researching informal networks can be regarded a distinct research area positioned at the intersection of social capital, social network and (informal) institution theory. Finally, emerging theories are presented that indicate a path for developing informal network theory further in international business studies.

Informal networking is generally regarded as an important activity that is available to every manager, which usually results in positive outcomes. However, differences in networking behavior have been less frequently discussed and compared in a global context. We argue that different ideals of informal networking can result in situations where international managers can hardly foresee the potential consequences of their networking behavior, especially when local ideals of networking are not taken into account. Differences in networking behavior caused by differences in underlying values, norms, and ideals can lead to ethical dilemmas. At this junction, we point out the integral role favors and favor exchange play in global networking and suggest a competency framework that is helpful for international managers to navigate informal networking abroad and identify potential ethical dilemmas before they take effect.