Gift Giving, Bribery and Corruption: Ethical Management of Business Relationships in China

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Gift Giving, Bribery and
Corruption: Ethical
Management of Business
Relationships in China

Gift giving is a prevalent social custom in China
in all areas of life: in family and in significant
relationships (guanxi), as well as in dealing with
political authorities, social institutions and
business people. For all that, from an ethical
perspective, it is very difficult to know when it
is proper to give or receive a gift, what sort of
gift is appropriate, or what social obligations gift
giving imposes (de Menthe, 1990).
Anyone who has lived in a foreign culture
knows how difficult it is to successfully adapt to
the local way of doing things. One can spend
many months learning how to behave, only to
find it all too easy to still commit tremendous
faux pas. For foreigners, the cultural logic and
social practices of gift giving present one of the
most difficult lessons in learning how to “do
business right” in China. Not surprisingly, many
Westerners unfamiliar with Chinese culture often
make the easy identification of gifts with bribes
and allege that the Chinese are promiscuously
corrupt in their business practices ( Economist,
1995a, 1995b). Such an easy identification is,
however, incorrect. The Chinese themselves are
well aware of the differences. There is hardly an
issue that has so preoccupied the Chinese media
and incited debate over the past years as bribery
and corruption (Levy, 1995). Within Chinese
culture itself, there are, indeed, moral parameters
to distinguish morally proper gift giving from
bribery and corruption.
In this paper I assess the cultural and moral
differences between gift giving, bribery and corruption and set forth guidelines for managing business relations in China. I begin with a
cultural framework of analysis and then proceed

Journal of Business Ethics 20: 121–132, 1999.
© 1999 Kluwer Academic Publishers. Printed in the Netherlands.

P. Steidlmeier

to analyze transactions based upon reciprocity in
terms of 1) the action itself and 2) the moral
intention of the agents. I conclude with moral
guidelines for ethical management.

Developing a cultural framework for
John Noonan (1984, p. 3) observes: “Reciprocity
is in any society a rule of life, and in some societies at least it is the rule of life.” China is one of those societies where reciprocity is a foundational pillar of social intercourse. To approach another and bring nothing is unusual, to say the

least. To accept a gift and not reciprocate is
perceived as morally wrong.
A social custom such as gift giving expresses
deeper socially embraced behavioral ideals and
norms of mutuality and “right relationships”
between people. Practices of gift giving in China
include visual behavioral patterns (organizational
artifacts), which are enshrined in r ites (li) of proper
conduct. Such rites themselves are rooted in
normative and prescriptive canons of righteousness (yi) and benevolence ( ren), which express why such actions are culturally meaningful or
logical. In general terms, cultural logic underscores
the numerous socio-cultural values and beliefs
that are embedded within organizations and
function as a sort of internal gyroscope, which
governs the social behavior of people. It is,
nonetheless, difficult to discern when it is proper
to give a gift, what its nature should be and to
whom it should be given. Such discernment is
ultimately a matter of social knowledge . Proper


P. Steidlmeier

social knowledge represents the ability to align
behavioral patterns with cultural logic.
In the area of business, a manager needs to
gather and correlate such cultural information
and its supporting ethical data in ways that make
sense and render it usable. The three principal
aspects of the cultural data base – artifacts, social
knowledge and cultural logic – are summarized
in Table I. In daily practice companies require a
concrete understanding of...
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