Guanxi

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Journal of Business Ethics DOI 10.1007/s10551-010-0662-3

Ó Springer 2010

Cultural and Organizational Antecedents of Guanxi: The Chinese Cases

Liang-Hung Lin

ABSTRACT. Being different from the Western concept of ‘‘relationship,’’ Chinese concept of ‘‘relationship,’’ that is, guanxi profoundly influences Chinese society in commercial activities, business ethics, and organizational behaviors. Moreover, firms can develop their networks of guanxi to gain competitive advantages. Highlighting the cultural and organizational antecedents of guanxi, namely Confucianism and organizational ethical climate, this study examines the influence of these two antecedents on guanxi and makes comparisons of guanxi, Confucianism and organizational ethical climate between Taiwan and Mainland China. The results show that Taiwan, where preserves more Confucian culture, tends to put much emphasis on guanxi than Mainland China, especially with respect to mianzi. Concerning ethical climate, Taiwan tends to have instrumental, and law and code ethical climate. KEY WORDS: guanxi, Confucianism, organizational ethical climate

Introduction Chinese guanxi has been a popular issue in the field of social science since 1980. Western managers and scholars also find that even though guanxi in Chinese society and ‘‘relationship’’ in Western society seem to have similar literary meaning, they are actually different in expression and result (Xin and Pearce, 1996). In Chinese society, guanxi is one of the disciplines in life and has profound influence on commercial activities, business ethics, and organizational behaviors. It is thus regarded as the central notion of understanding Asian society and business behaviors (Boardman and Kato, 2003; Luo, 2002). In addition, it supports two or more than two organizations dealing with resource transactions and distribution, or sustains behaviors resulting from mutual contact

and interaction. Yeung and Tung (1996) pointed out that guanxi refers to a general form of social networks and has the implication of ‘‘gate/pass’’ and ‘‘connection.’’ In other words, a network of guanxi is established in the connection between two independent bodies, the purpose of which is to promote mobility of individual or social transactions between two sides. Moreover, both sides have to be driven by benefits and confirm the continuance of guanxi when doing business with each other. Guanxi is emphasized by Chinese society, in which roles and benefits are subtly related to each other or even difficult to be separated. Analyzing the effect of guanxi on modern Chinese society, Yang (1994) regarded guanxi as a key factor in driving Chinese government to operate. Moreover, people usually use guanxi to control others and distort the laws. Yan (1996) then indicated that guanxi is established by the development and maintenance of network relationships to help one get through all kinds of difficulties in life. Kipnis (1997) even precisely pointed out that the formation of guanxi in Chinese society involves complex social and affectionate networks within peers, families, or friends and these networks consist of three elements, namely mianzi, affect and reciprocal favor. Furthermore, guanxi is one of the major dynamic characteristics in Chinese society. It not merely refers to a very special relationship between two people, but also implies an endless exchange of favors (Alston, 1989). Thus, the existence of guanxi between people usually relies on three elements: (1) sharing identities and status with others in a group or mutually having an association with the same person; (2) actual connections and frequent contact between people; and (3) getting close to someone by direct interpersonal interaction. In addition, guanxi is considered as interpersonal networks of reciprocal bonds.

Liang-Hung Lin According to the above descriptions, it can be seen that interpersonal relationships in China are very abstract and are established by cultural-rooted...
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