Abstract. External relationships are required for running businesses. While rooting on Western management theories to run their businesses, Taiwanese business managers are also affected by Chinese culture, such as giving gift to maintain other's face during business negotiation. Hence, it is interesting to know and compare the effects of these two conducts on business partners' reciprocity likelihood(RL). A structural model was tested with data collected from 125 questionnaires. The results show that both relational investment(RI) and gifting behavior have positive impacts on RL; yet, giving gift, through the mediation of Mianzi(face), exert a stronger affection on RL than RI.
IntroductionBusiness can hardly survive without external relationships. Cultivate external relationships with suppliers or partners are required for successfully doing business. Many researches have focused on how to effectively invest in mutual relationship to increase the possibility of reciprocity likelihood(RL)in the future [4;11].In oriental society, it is not an un-common practice to improve the relationship and RL by giving gift to business partners; yet, in western society, giving gift is often considered as bribery. Hence, the effect of giving gift on RL was rarely being examined[e.g., see 18].This study intends to mitigate this gap, and compare the effects of relational investment (RI) and giving gift on RL, in a context of small and medium enterprises in Taiwan.For some decades, Taiwan's business systems are deeply influenced by and rooted on Western thoughts and knowledge. Yet, their initiatives are also impacted by Chinese cultural values at the same time. Specifically, this study will focus on the roles of Mianzi or face, the perception of one's social status, prestige, or pride [13; 18]and gifting behavior. In social interactione, it is important for Chinese people to conduct face work, like giving someone expensive gifts, to maintain one's own, or other's Mianzi.The objective of this study, hence, is to explore the answer of the question: whether or not gifting and Mianzi should be considered to extend the RI theories to fit in the specific context of Taiwan businesses.