China is a unique country that places personal relationships above any other aspect of life. The guanxi is a famous relationship aspect of China, and with the recent interest from the whole world concerning China and its expansion, it is interesting to study the importance of this historical Chinese concept in this evolving context. In this study we are going to answer several important questions namely, the meaning of guanxi, and its influence on the modern Chinese society. How important is it for both Chinese and foreign businessmen to consider this concept in order to do business in China? What is the impact of guanxi on the functioning of a company? How does the concept of guanxi make the Chinese business context unique and different from Western applications? What is the future of the concept of guanxi? We will first give a complete definition of guanxi, which is both historical and can be applied to the modern Chinese society. The concept will also be compared with its Western counterpart. In the second part, the emphasis will be placed on the influence of guanxi on the functioning of a company. We will analyze its impact on company performance, managerial function and on global professional behavior in China. Finally, we will analyze the concept of guanxi applied to outside environments. The implication and relation of guanxi with the government, market economy and process of globalization as well as an application to foreigners will be studied.
[...] In fact, it is true that the United States of America has participated a lot in the globalization process and is today the most influential factor in the whole process. However, the United States have positioned themselves in the globalization wave, but it is a nonsense to affirm it is an American concept. The right affirmation is that the United States, and now the European Union are apparently the most influential waves spread by the globalization process, and both try to influence the rest of the world to make them use same methods and concepts as they are doing. [...]
[...] Lii in 2005, it is said that managers aware of the economic value of a social capital will be able to give up immediate financial and economic profits in order to “take advantage of a relationship in the future”. A lot of Chinese managers are not thinking in those economic terms but are acting this way because they are aware of the value of guanxi. However, the automation of this way of thinking can help managers improve their organization and efficiency in the decision making process. [...]
[...] “Can guanxi be a source of sustained competitive advantage for doing business in China”. Academy of Management, Vol VANHONACKER Wilfried R. “Guanxi Networks in China”. The China Business Review, May-June 2004 WONG Y.H. and TAM Jackie L.M. “Mapping relationships in China : guanxi dynamic approach”. Journal of Business & Industrial Marketing, Vol 15, n° WRIGHT Philip, SZETO W.F. and CHENG Louis T.W. [...]
[...] It is even against the law to reject an offer in order to support an offer made by a relative or a friend, if of course the rejected offer is apparently better than the one made by the member of the network. This can be punished by huge fines and even sometimes by a jail sentence if the discrimination goes too far. Furthermore, most Western industrialized countries are facing difficult immigration and integration problems, as in France where the social climate between the different cohabitating civilizations in the country is often subject to violence and visible tension. [...]
[...] In order to avoid that kind of mistake, the company which wishes to set up in China, must find a representative, who knows the particularities of Chinese culture well and who will know how to avoid the traps, and be able to limit the incomprehension between the two parties. It is also helpful to use this external contribution to learn about Chinese culture and their way of doing business. Then, when it will be time to negotiate (the Chinese cannot always see the representative, seeing the real boss will do gain of face) some basics are already learnt. [...]
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