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Proper Guanxi network: A business essential for western firms in China

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Dissertation(203.63 KB)

Date

2005

Authors

Supervisor

Littrell, Romie

Item type

Dissertation

Degree name

Master of Business

Journal Title

Journal ISSN

Volume Title

Publisher

Auckland University of Technology

Abstract

China, the largest emerging economy, has become the second largest recipient of foreign direct investment in the world. Joint ventures are dominant market entry modes used by foreign investors to adapt into the Chinese market. However, Western investors have been frustrated by China’s guanxi-based relational nature. With the differences between Chinese guanxi-based culture and Western culture, shared management, partners and employees can disagree on just about every aspect of the venture, which results in unsatisfied performances and even fatalities. Therefore, an understanding of guanxi and the construction of a proper guanxi network are essential for western investors who use Joint Venture (JV) as an entry vehicle into China. This paper aims to create an insight into guanxi by reviewing literature in the areas of guanxi definitions and classifications, and on comparisons between guanxi and western social networking patterns. A guanxi managerial model, based on Confucian wu-lun guanxi typology, is proposed to help western investors to construct and manage their ventures in China.

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Keywords

Industrial management -- China, Corporate culture -- China, Business enterprises, Foreign -- China, Joint ventures -- China, China -- Social life and customs

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DOI

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Permanent link

https://hdl.handle.net/10292/11359

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Masters Dissertations