Guanxi and Its Role in Chinese Business
GUANXI AND ITS ROLE IN THE CHINESE BUSINESS ESTABLISHMENT AND WHAT THIS MEANS FOR NON-CHINESE BUSINESS PEOPLE IN CHINA
Guanxi
Guanxi is a Chinese term that literally means “relationships”. It stands for any type of relationship, whether it is a family relationship, or a relationship between friends. “Guanxi is the basic dynamic in personalized networks of influence, and is a central concept in Chinese society” (Wikipedia). The culture of guanxi is based on family, school, workplace, and social networks. Scholars have defined guanxi as a “special kind of personal relationship in which long-term mutual benefits are more important than short-term individual gain” (p. 191). No matter which way guanxi is defined, it is a huge part of the Chinese culture, and the way the Chinese people conduct business.
Guanxiwang
Guanxi is defined as a special personal relationship. Whereas, guanxiwang goes further than that; it refers to the network of exchange or transaction between two parties. As explained in the book, “Doing Business with China”,
“Guanxiwang obtains when one set of separate, personal and total relationships between two individuals, A and B, and another set of such relationship between B and C are interlinked through the common agent, B, acting as a witness and facilitator. As a result, the originally total and personal relationship transforms into a complex network of social exchanges with such inter-linkage extended into other sets through numerous common agents like A, B, and C” (p.191).
This figure illustrates guanxi and guanxiwang:
Guanxiwang can be divided into two main groups, social networks, and business networks. A social network is a category of social relationships built between immediate family members, extended family members, friends, classmates, fellow citizens and so on. A business network is a category of business organizations to create or develop a market that will maximize profit and minimize cost for all parties
Guanxi
Guanxi is a Chinese term that literally means “relationships”. It stands for any type of relationship, whether it is a family relationship, or a relationship between friends. “Guanxi is the basic dynamic in personalized networks of influence, and is a central concept in Chinese society” (Wikipedia). The culture of guanxi is based on family, school, workplace, and social networks. Scholars have defined guanxi as a “special kind of personal relationship in which long-term mutual benefits are more important than short-term individual gain” (p. 191). No matter which way guanxi is defined, it is a huge part of the Chinese culture, and the way the Chinese people conduct business.
Guanxiwang
Guanxi is defined as a special personal relationship. Whereas, guanxiwang goes further than that; it refers to the network of exchange or transaction between two parties. As explained in the book, “Doing Business with China”,
“Guanxiwang obtains when one set of separate, personal and total relationships between two individuals, A and B, and another set of such relationship between B and C are interlinked through the common agent, B, acting as a witness and facilitator. As a result, the originally total and personal relationship transforms into a complex network of social exchanges with such inter-linkage extended into other sets through numerous common agents like A, B, and C” (p.191).
This figure illustrates guanxi and guanxiwang:
Guanxiwang can be divided into two main groups, social networks, and business networks. A social network is a category of social relationships built between immediate family members, extended family members, friends, classmates, fellow citizens and so on. A business network is a category of business organizations to create or develop a market that will maximize profit and minimize cost for all parties
Cited: Guangsheng, Shi; Kapp, Robert A.; Lamy, Pascal. Doing Business with China. New York: Kogan Page Limited, 2003.