Guanxi Proposal Title: \"Can Guanxi

Guanxi

Proposal Title: "Can Guanxi be a Source of Sustained Competitive Advantage for Doing Business in China?"

Statement of Problem/Proposal Introduction:

Organizational leadership in the western tradition is said to be significantly different than in eastern cultures, such as China. China employs and organizational system that does not translate to English well, but in short demonstrates the principles of an interrelation style based on previous relationships. (Kipnis, 1997, p. 17) This principle or standard for social and business interactions is termed, Guanxi. This work will propose to demonstrate a much needed study on the utilization of Guanxi, and/or its resistance in a global economy. As the economy diversifies, through global international multi-national corporate structure the need for a better understanding of how Guanxi interplays with the business traditions in other cultures, namely Western cultures.

Guanxi Defined:

According to Park and Luo, "Guanxi [pronounced guan-shee] is a cultural characteristic that has strong implications for interpersonal and interorganizational dynamics in Chinese society. It refers to the concept of drawing on a web of connections to secure favors in personal and organizational relations." (2001, p. 455) the descriptions of Guanxi, ar often difficult for the western mind to understand, but the term is best described by Kipnis in his extensive work on Guanxi in the rural tradition of China.

A every time one asked for or granted a favor, expressed sympathy, or called on a friend -- that is, every time one invoked guanxi to achieve something in the world -- one metonymically 1 re-created that guanxi. Thus, in addition to the elaborate organization of guanxi production on ritual occasions, Fengjia residents (re)produced guanxi in their daily lives. Indeed, many of the techniques of ritual guanxi production -- labor exchange, the use of kinship names, the embodiment of ganqing -- came from everyday activity. (Kipnis, 1997, p. 25)

This concept is then reflected into business utilizing similar tactics, and often the same connects, specifically in specialized production, areas and close knit small organizations. As the organizations get larger the utilization of Guanxi becomes less or simply gets very complicated, making it a mystery to the outsider.

Western View:

According to Wood, Whiteley & Zhang the concept of Guanxi, best translates in the western tradition to "who you know not what you know." In the same article the authors point out that the differences in Western vs. The Guanxi pattern of organization include, "differences in motives for utilization, the nature of reciprocation, the time orientation of the concepts, the use of power differentiation, the nature or source of power, and the nature of sanction employed as a result of different concepts." (2002, p.263) Many, spin negativity on the concept of getting somewhere based upon who you know as fierce independence and the rejection of traditional hierarchical systems, idealized in the western tradition restrict the allowance of birthright or privilege as a legitimate manner of getting ahead. Many would call it nepotism and reject it out of hand, despite the fact that it or something like it is evident in nearly every business culture in the world, not excluding the west. Who is unaware of the fact that the best way to get a job is to talk to everyone you know and get recommendations from them for where to go? People write and respond to personal recommendations, and listen to informal and formal motive driven ideas, to make a wide variety of decisions in business. The differences between the eastern tradition of Guanxi and the western traditions, with no name is just this, the western tradition has no name and is not accepted, openly. Though more and more organizations and communities have begun to accept a similar concept that they term networking. Networking can be anything from an informal grouping of people with similar goals meeting to discuss how each of their separate specialties and/or networks can aide a common goal, to personal/professional formal organizations that meet at given times throughout the year to meet new members of the business community and seek out connections to achieve personal/professional goals. As Taylor points out networking can take many forms but exists in and outside of most organizations in some form to elicit actions that met the differing needs of organizations. (Taylor, 2000, p. 251) Barabasi, discusses the nature of networking, though a concise analysis of how organizations and individuals influence one another to elicit results, in one example he states:

For example, in Silicon Valley the extensive movements of labor between companies create dense personal inter- company links. These subtle social networks are extensively utilized for hiring new employees and attracting managers." (203, p. 206)

The value of such "networks" is founded in the interconnectivity of ideas and needs in certain fields, but it can also determine the availability of employment for some individuals as well as influence the difficulty or ease an individual might have in entering a situation, as a newcomer or eliciting change in a system where they have advertently or inadvertently slighted another member of the organization or group. This to me seems very similar in context to Guanxi, though the western resistance to the eastern forms of the tradition are clearly linked to fear of the unknown.

Wood, Whiteley & Zhang also point out that in a 1993 study by Chu and Ju, 70% of 2,000 Chinese respondents to a poll, "preferred to utilize the concepts of Guanxi over normal bureaucratic channels to advance personal interests and to solve problems." (2002, p.264) the implication of this popularity is that Guanxi is a method that is trusted and predictable in a cultural context and therefore frequently relied upon to resolve conflict and create needed changes. It is also frequently pointed out that the system is best utilized in structures that are within a weak legal and regulatory system, as due to this system dealings are more likely to rely on personal relationships more than abstract legal or moral concepts. (2002, p.264)