GUANXI AND BUSINESS:2ND EDITION (V5)

by Yadong Luo

Overview

Guanxi or interpersonal relationships is one of the major dynamics of Chinese society. A pervasive part of the Chinese business world for the last few centuries, it binds literally millions of Chinese firms into a social and business web. Any business in this society, including local firms and foreign investors and marketers, inevitably faces guanxi dynamics. In China's new, fast-paced business environment, guanxi has been more entrenched than ever, heavily influencing Chinese social behavior and business practice. However, as in other emerging economies, corruption in China is becoming more rampant, which makes guanxi and corruption often intermingled. As such, business executives need to place greater caution today in the practice and process of guanxi development and utilization.Due to the growing academic and practical interest in guanxi, this second edition provides a timely update to the systematic and vigorous exploration of the various social, economic, cultural, and business issues relating to the complex concept and practice of guanxi.

Product Details

ISBN-13:	9789814476911
Publisher:	World Scientific Publishing Company, Incorporated
Publication date:	02/27/2007
Series:	ASIA-PACIFIC BUSINESS SERIES , #5
Sold by:	Barnes & Noble
Format:	eBook
Pages:	412
File size:	1 MB

Table of Contents

Preface     v
Definition, Principles, and Philosophy of Guanxi     1
Concepts     1
Definition     1
Basis for Guanxi Establishment     4
Modes     7
Principles     10
Philosophy     12
Guanxi in Social Life     20
Gifts, Bribes, and Guanxi     26
Importance in the Future     31
Theoretical Directions     33
Practical Examples     36
Guanxi is His Middle Name     36
A Smuggler with Guanxi     37
Economic Perspective of Guanxi     41
Economic Rationale of Guanxi     41
Social Capital     41
Economic Necessity     43
Economic Idiom     49
Guanxi versus Western Networks     50
Guanxi as a Critical Capability     52
Business Implications     57
The Use of Guanxi by Overseas Chinese     61
Economic Perspectives     62
Cultural Perspective     66
Practical Examples     69
The New China Hong Kong Group on the Mainland     69
Guanxi: The First Step in Any China Venture     72
Business Connections byBig Six Accounting Finns     74
Guanxi and Firm Performance     79
Conceptual Background     79
Guanxi and Performance     82
Guanxi with Other Businesses     82
Guanxi with Government Officials     84
Market versus Financial Performance     85
Necessary versus Sufficient Condition     86
Empirical Evidence     88
Managerial Implications     90
Practical Examples     92
Acer in China     92
AgriGlobal in China     95
Dell Strengthens Guanxi with Its Customers     97
Chase Capital Uses Guanxi to Expand Its Asian Business     98
Valuing Connections for Hong Kong's Red Chips     100
Organizational Dynamics and Guanxi     105
Guanxi as Inter-Organizational Network     105
Organizational Dynamics and Guanxi     109
Institutional Factors     111
Ownership structure     111
Location     112
Strategic Factor     113
Strategic orientation     113
Organizational Factors     115
Organizational size     115
Resources     117
Length of operation      118
Empirical Evidence     121
Practical Examples     123
Does Guanxi Matter in KFC?     123
Operations in China     124
Guanxi relations     124
Why is Shanghai Volkswagen Successful?     126
Guanxi Used by Sony     130
Guanxi-Based Business Strategies     135
Guanxi-based Business Strategies     135
Impact of Guanxi-based Business Strategies     138
Managerial Implications     141
Practical Examples     143
Sony in China     143
AST Owes as Much to People Connections as to Electrical Ones     145
Dell in China     147
CSI in China     150
Selling in China     153
Charoen Pokphand in China     155
Foreign Businesses and Guanxi     159
Foreign Businesses in China     159
Shifting Environmental Conditions     161
New Competitive Landscape     162
Shift from scant competition to strong competition     162
Shift from niche competition to massive competition     163
Shift from single-market conception to multi-market competition     165
Shift from structural similarity to structural multiplicity      166
New Regulatory Landscape     167
Shift from entrance restriction to operational intervention     167
Shift from overt control to covert constraint     168
Shift from separation from to convergence with domestic policies     170
Shift from regulatory rigidity to regulatory elasticity     171
Shifting Dominant Strategies     173
Shift from parent integration to national integration     173
Shift from production relocation to value chain localization     177
Shift from competence transfer to competence building     179
Shift from competition to coopetition with business community     182
Shift from repetition to adaptive diversification     186
Shift from alliance building to alliance restructuring     188
Guanxi and Foreign Businesses     190
Partner Effect     190
Origin Effect     191
Length Effect     191
Size Effect     192
Empirical Evidence     193
Implications and Examples     194
Hewlett-Packard's Initiatives to Build up Guanxi     194
Toyota in China     199
NEC in China     202
Boeing in China     206
Guanxi, Corruption, and Governance     211
Nature of Corruption     211
Definition     211
Differences Between Corruption and Guanxi     215
Corruption in China     218
Current Situation     218
Types and Reasons     222
Intertwineability Between Guanxi and Corruption     227
Economics of Corruption     230
Business Implications of Corruption     237
Corruption as an Evolutionary Hazard     238
Corruption as a Strategic Impediment     240
Corruption as a Competitive Disadvantage     241
Corruption as an Organizational Deficiency     242
Governance and Guanxi     243
Corporate Governance in China     243
Guanxi and Governance     247
Governance and Corruption     250
Taxonomy of Corruption     252
Corruption and Organizational Environment     256
Corruption and Task Environments     257
Corruption and Institutional Environments     260
Corruption and Organizational Behavior     263
System Malfeasance     264
Procedural Malfeasance     265
Categorical Malfeasance     266
Structural Malfeasance      267
Corruption and Organizational Architecture     268
Corporate Culture     269
Organizational Structure     270
Compliance System     272
Conduct code     272
Compliance program     275
Practical Examples     281
Corruption in Yuxi Cigarette     281
Bribe with Care     287
Rough Justice     288
Zhu's Hatchet Man in Guangdong     291
Anti-corruption by Shell     294
Winning over hearts and minds     296
Inter-company corruption     298
A worthy fight     299
Practical Guidelines to Guanxi Cultivation     301
Constructing Your Own Guanxi Network     301
Utilizing Intermediaries     304
Searching for the Right People     305
Implanting Individual Guanxi into Organizations     307
Hiring Locals and Dispatching Ethnic Chinese     307
Monitoring Guanxi within an Organization     309
Maintaining Guanxi Relations     310
Improving Credibility     311
Practical Examples     313
GM in Shanghai     313
Xian-Jansseh     317
Motorola in China      320
Solving Staffing Problems     323
Joint-Venture Mode and Guanxi     326
"Guanxi" Man Smooths Road to China     330
Appendices
Summary of Anti-Corruption and Anti-Bribery Laws and Rules in China     331
Summary of Anti-Corruption and Anti-Bribery Laws and Rules in the United States     340
Transnational Cooperation in Combating Corruption and Bribery     349
OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions     360
Bibliography     371
Index     383
About the Author     397

Editorial Reviews

Luo (University of Hawaii, Honolulu) describes the role of personal relationships ( in the Chinese business world. He considers the social, economic, cultural, and business issues relating to this concept and the practices surrounding it. Chapters describe the principles of , the economic perspective of , its role in firm performance, organizational dynamics, business strategies, foreign businesses, corruption, and practical guidelines. Each chapter offers examples of the application of to business. Annotation c. Book News, Inc., Portland, OR (booknews.com)

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