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AM Lecture 3International Management > Asian Management > Converging management? > Chinese management > Weaknesses > Guanxi > Guanxi guanxi everywhere... Guanxi guanxi everywhere...Chen et al studied internal management effects of guanxi on trust. They discovered that when a General Manager promoted a middle manager, the latter was either:
Trust in the GM's decision decreased higher up the scale the extent of guanxi. It brings up the issue of how much guanxi helps, as it can be useful or destructive, depending on how it is used. For example, guanxi between firms can be counter-productive, but within firms it can destroy trust. Chen et al concluded that decision-making inside the company should be guanxi neutral.
Guanxi and career progressionWong and Slater (2002) interviewed Chinese executives in private companies in Beijing and Shanhai. They discovered that many business managers had indeed got a job at some point in their careers via who they knew. Thus there was a strong effect of guanxi on career development. It can be argued that guanxi is an efficient way of promoting the right people, as it does not involve the charade of interviews and other selection processes. Parallels can be seen in Western "knowledge economy"
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