Toward a multi-dimensional understanding of Guanxi: A study of business ethics in the Chinese banking industry

The Business Review
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Journal Article
The Business Review, Cambridge, 2009, 12 (2), pp. 38 - 43
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Guanxi, or social connections, has received increasing attention in the literature as the Western world grapples with the complexity of doing business with China. However the concept is often oversimplified in Western writings on business ethics. Networking and connections are seen as a business necessity, but on the other hand guanxi has been associated with corruption and calculative means of doing business. This study examines different dimensions of guanxi and their relationship to traditional vs modern value orientations. The study finds guanxi comprises two dimensions, one representing traditional Chinese values of reciprocity and face and the other a more modern networking style not dissimilar to that emphasised in the West. The need for a multi-dimensional approach to Guanxi is emphasised and discussed. Guanxi is a Chinese word literally translated to mean `social connections, and regarded as a key determinant to business success in modern Chinese society, particularly mainland China (Luo, 2000; Leung, Wong & Wong, 1996). Since the open-door policy was introduced in 1978, China began to change from a planned economy to a market-oriented system. In the face of increasing business contact between mainland Chinese and foreigners in the late 1970s, the word `guanxi has become popular business jargon in English (Gold ,Guthrie, & Wank, 2002). Nowadays, guanxi is used by Chinese and non-Chinese speakers to mean a mainland Chinese way of networking. Guanxi is different from the western approach of networking although they share some similarities. While they both are concerned about `knowing the right person, Chinese guanxi has a uniquely Chinese dimension of `reciprocity. Given the word `guanxi was not found in the old Chinese dictionary, some scholars argue that the concept of guanxi was a `new thing emerging in the late Cultural Revolution (1966-1976) and prospering in the economic reform period
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