Enabling Guanxi Management in China: A Hierarchical Stakeholder Model of Effective Guanxi

Abstract

Guanxi (literally interpersonal connections) is in essence a network of resource coalition-based stakeholders sharing resources for survival, and it plays a key role in achieving business success in China. However, the salience of guanxi stakeholders varies: not all guanxi relationships are necessary, and among the necessary guanxi participants, not all are equally important. A hierarchical stakeholder model of guanxi is developed drawing upon Mitchell et al.’s ( 1997 ) stakeholder salience theory and Anderson’s ( 1982 ) constituency theory. As an application of instrumental stakeholder theory, the model dimensionalizes the notion of stakeholder salience, and distinguishes between and among internal and external guanxi, core, major, and peripheral guanxi, and primary and secondary guanxi stakeholders. Guanxi management principles are developed based on a hierarchy of guanxi priorities and management specializations. The goal of this application of instrumental stakeholder theory is to construct, for Western business firms in China, a means to reliably identify guanxi partners by employing the principles of effective guanxi. These principles are described in the form of testable propositions that advance social scientific research in this area of international business ethics. Copyright Springer 2007China, guanxi , guanxi management, stakeholder salience,

Overcoming the liability of smallness by recruiting through networks in China: a guanxi-based social capital perspective

“…The prior literature on the use of networks by Chinese firms has approached this from two perspectives: (1) applying social capital theory as a theoretical lens to understand interpersonal dynamics (Fukuyama, 1995;Wu & Leung, 2005), and (2) drawing insights from different concepts of guanxi to explain how an individual behaves in the network environment (Chen & Chen, 2004;Huang, 2008;Su et al, 2007). Our study reconciles these two approaches by connecting different forms of social capital and parallel guanxi concepts to develop the GBSC perspective as a new theoretical lens to analyze recruitment practice in China.…”

“…Despite its importance, we know very little about exactly how Chinese firms use guanxi in their recruitment practice or how such an approach contributes toward overcoming of the liability of smallness for Chinese firms. Guanxi is commonly conceptualised as personal connections (Su, Mitchell, & Sirgy, 2007;Yang & Wang, 2011). Furthermore, it is not a one-dimensional concept but a group of concepts that describe how individuals connect and should behave in relationships, such as mianzi (face), jia-ren (family members), renqing (a debt to an acquaintance), guanxi-hu (specially connected individuals), and so on (Chen & Chen, 2004;Lytras & de Ordóñez Pablos, 2009;Park & Luo, 2001;Yang & Wang, 2011).…”

“…Our research has documented how Chinese firms use guanxi in their recruitment practice. These findings stimulate additional research questions regarding the relationship between the use of guanxi by employers/employees and recruitment practice in large Chinese firms (with more formal procedures), given that guanxi represents the personal connections among individuals in Chinese society and its functions have strong implications for interpersonal and interorganizational dynamics (Dunfee & Warren, 2001;Gu et al, 2008;Su et al, 2007).…”

How Guanxi Influences Word of Mouth Intentions

“…Nevertheless, it is time well spent since effective guanxi relationship can reduce the transaction costs of information search, relationship monitoring and contract enforcement (Wong and Leung, 2001). Guanxi is inherent in Chinese business people's work ethic (Su, Mitchell and Sirgy, 2006). It is impossible to ignore the impact of guanxi in any serious investigation of RM in the Chinese context.…”

“…The conceptual framework was based on concepts and previous findings from customer satisfaction, RM and guanxi literature. The model, which was modified from the studies of Kim and Smith (2007), Harris and Goode (2004), Wang and Head (2007) and Su et al (2006), sought to illustrate the relationships among relationship quality variables (satisfaction, trust, guanxi), and a relational and behavioral outcome (word of mouth intentions).…”