Cultural and Organizational Antecedents of Guanxi

Cultural and Organizational Antecedents

of Guanxi: The Chinese Cases Liang-Hung Lin

ABSTRACT. Being different from the Western concept

of ‘‘relationship,’’ Chinese concept of ‘‘relationship,’’ that

is, guanxi profoundly influences Chinese society in com￾mercial activities, business ethics, and organizational

behaviors. Moreover, firms can develop their networks of

guanxi to gain competitive advantages. Highlighting the

cultural and organizational antecedents of guanxi, namely

Confucianism and organizational ethical climate, this study

examines the influence of these two antecedents on guanxi

and makes comparisons of guanxi, Confucianism and

organizational ethical climate between Taiwan and Main￾land China. The results show that Taiwan, where preserves

more Confucian culture, tends to put much emphasis on

guanxi than Mainland China, especially with respect to

mianzi. Concerning ethical climate, Taiwan tends to have

instrumental, and law and code ethical climate.

KEY WORDS: guanxi, Confucianism, organizational

ethical climate

Introduction

Chinese guanxi has been a popular issue in the field

of social science since 1980. Western managers and

scholars also find that even though guanxi in Chinese

society and ‘‘relationship’’ in Western society seem

to have similar literary meaning, they are actually

different in expression and result (Xin and Pearce,

1996). In Chinese society, guanxi is one of the dis￾ciplines in life and has profound influence on com￾mercial activities, business ethics, and organizational

behaviors. It is thus regarded as the central notion of

understanding Asian society and business behaviors

(Boardman and Kato, 2003; Luo, 2002). In addition,

it supports two or more than two organizations

dealing with resource transactions and distribution,

or sustains behaviors resulting from mutual contact

and interaction. Yeung and Tung (1996) pointed

out that guanxi refers to a general form of social

networks and has the implication of ‘‘gate/pass’’ and

‘‘connection.’’ In other words, a network of guanxi

is established in the connection between two inde￾pendent bodies, the purpose of which is to promote

mobility of individual or social transactions between

two sides. Moreover, both sides have to be driven by

benefits and confirm the continuance of guanxi

when doing business with each other.

Guanxi is emphasized by Chinese society, in

which roles and benefits are subtly related to each

other or even difficult to be separated. Analyzing the

effect of guanxi on modern Chinese society, Yang

(1994) regarded guanxi as a key factor in driving

Chinese government to operate. Moreover, people

usually use guanxi to control others and distort the

laws. Yan (1996) then indicated that guanxi is

established by the development and maintenance of

network relationships to help one get through all

kinds of difficulties in life. Kipnis (1997) even pre￾cisely pointed out that the formation of guanxi in

Chinese society involves complex social and affec￾tionate networks within peers, families, or friends

and these networks consist of three elements, namely

mianzi, affect and reciprocal favor. Furthermore,

guanxi is one of the major dynamic characteristics in

Chinese society. It not merely refers to a very special

relationship between two people, but also implies an

endless exchange of favors (Alston, 1989). Thus, the

existence of guanxi between people usually relies on

three elements: (1) sharing identities and status with

others in a group or mutually having an association

with the same person; (2) actual connections and

frequent contact between people; and (3) getting

close to someone by direct interpersonal interaction.

In addition, guanxi is considered as interpersonal

networks of reciprocal bonds.

Journal of Business Ethics (2011) 99:441–451 Springer 2010

DOI 10.1007/s10551-010-0662-3