AM Lecture 3

International Management > Asian Management > Converging management? > Chinese management > Weaknesses > Guanxi

Guanxi

Guanxi, is the building of a network of personal favours, bringing with it obligations (renqing) to the beneficiaries. Indeed, Guanxi is reciprocal and breaking the rules would severely affect one's social status, or "face".

Luo's Guanxi and Business (2001) cites a 1996 survey of 11 business determinants, where Guanxi was the only item consistently chosen by business managers as a key success factor. Oddly, this seems to work as a management strategy.

Guanxi in business features as an inter-organisational network, a strategic factor to overcome shortages, and a way to gain advantages.

Large firms, such as SOEs, lack competitive mindsets, so the appearance of guanxi is minimal.

Western firms do not employ guanxi, overlooking the advantages of networking to gain competitive advantage within and between firms.

Guanxi guanxi everywhere...