CASE STUDY: DMG-SHANGAI
Closing Case: DMG-Shanghai-International Business chapter 3
1. Why do you think that it is so important to cultivate guanxi and guanxiwang in China?
Guanxi and guanxiwang are essential to business in China. It is an important mechanism for building long-term business relationships and getting business done in China successfully.
2. What does the experience of DMG tell us about the way things work in China? What would likely happen to a business that obeyed all the rules Because China is a big country for mechanism. By establishing connections in relationships would help do a better job and mechanism; and the society of China lacks a strong rule-based legal tradition, thus guanxi and guangxiwang is becoming a necessary and regulations, rather than trying to find a way around them as Dan Mintz apparently does?
As we look through the case of DMG in Shanghai, we recognize the influence of guanxi more apparently. Dan Mintz, the founder of DMG, had no prior experience in the fields of advertisement. He had no contact in China, even no Mandarin language. However, he had guanxi with two young Chinese who have connections with people of various levels. Making their connections as bedrock of the company’s guanxiwang, they were able to emerge as one of the China’s fastest growing advertising agencies. DMG shows us that culture is an important thing in China. Guanxi refers to the business connections that are so important to companies doing business in China. Guanxiwang refers to the relationship network that companies cultivate. Both of these are important to the Confucian ethics – loyalty, reciprocal obligations, and honesty in dealing with others - that drives business in China. Dan Mintz believes that guanxi and guanxiwang are important because they help companies get around restrictions that limit the ability of companies to function. It also is very useful when you have a business that delivers a good job; they...
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