Guanxi : A Source Of Competitive Advantage And A Catalyst For China 's Future Sustainable Growth

964 Words Oct 14th, 2016 4 Pages
Chinese cultural traits have been widely seen as a source of competitive advantage and a catalyst for China’s future sustainable growth. Guanxi is a fundamental part of Chinese society and originates from Confucius 's principles of structures (Kipnis, 1997). Guanxi when used in business, plays an integral part of day to day interactions in building and maintaining interpersonal as well as business to business relationships with counterparts at different levels (Styles and Ambler, 2003 and Yen and Barnes, 2011).
The closest English synonyms to guanxi are ‘connections’ and ‘relationships’, although neither of these words captures the broader cultural implications that guanxi represents. Guanxi is formed of three fundamental elements; ganqing, renqing and xinren which refer to the concepts of affection, exchange of favours and interpersonal trust, respectively (Kipnis, 1997 and Yen et al., 2011). As a result, guanxi is a collection of social networks and relationships that help facilitate business and other transactions (Kipnis, 1997). These social networks or relationship are primarily based around four types of ties: family ties, business ties, community ties, and government ties (Guo and Miller, 2010 and Peng and Luo, 2000). These guanxi relationships are characterised by and maintained through trusting individuals, reciprocity of actions and a sense of moral obligation (Guo & Miller, 2010). Within Chinese culture and society individuals prioritise the forging of…

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