Guanxi

by

Jane Nolan

• LAST REVIEWED: 28 July 2015
• LAST MODIFIED: 28 July 2015
• DOI: 10.1093/obo/9780199920082-0115

Introduction

The term guanxi 关系is used to describe many different facets of Chinese personal relationships. It may refer to a specific dyad, to ways in which the dyad is developed and maintained, or to the norms and expectations governing social networks more generally. It is assumed by many to be a culturally distinct form of social networking because of its roots in Confucianism. However, beyond the influence of Confucian values, guanxi can also be understood as the product of historical, political, and economic factors that encouraged the preference for particularist ties. From this standpoint, the argument runs that if societal institutions are weak, then relying on established close ties with trusted individuals becomes especially important. A number of core debates develop from this basic tension between cultural and institutional explanations. The first is whether or not the importance of guanxi will decrease as China continues its economic transition. Some argue that a shift to a rational-legal bureaucracy, based on the principle of open-market competition, will necessitate a decline in the importance of guanxi. Others suggest the reverse, noting that the turmoil associated with economic transition may create greater uncertainty and could enhance the need to rely on guanxi connections. A third position is that guanxi will endure in a modified form. What will emerge is a hybrid form of organization and capitalist economy combining both Chinese cultural preferences and certain features of modern corporations. This debate raises questions about the ethics of guanxi in a globalized economy, with both culturally relativist and normative arguments found in the literature. In terms of the link between guanxi and politics, there is much public interest in the nature of the relationships between entrepreneurs and officials and an intense focus on how they may be forged through corruption and bribery. Much of the empirical work since the mid-1980s has focused on the effects of guanxi in organizations both at the individual level (in terms of recruitment, promotion, and supervisor relationships) and at the firm level (in terms of strategy, market entry, and performance). There is also an emerging body of work on the gendered nature of power differentials in guanxi dyads. Much of the research on guanxi has been carried out in urban organizational settings by using cross-sectional surveys, but there are a number of in-depth village ethnographies that emphasize the diversity of ways in which guanxi can be experienced, conceptualized, and investigated.

General Overviews

Gold, et al. 2002 seeks to address some fundamental questions about guanxi, such as its origins, form, and purpose and whether or not it is fundamentally different from other forms of networks. It notes the conceptual burden often put on the term guanxi, which is defined in different ways in different studies, and offers a taxonomy of guanxi that is sensitive both to cultural and institutional perspectives, though it leans somewhat more toward institutionalist arguments. Yang 1994, an urban ethnography, is based on fieldwork conducted in the late 1980s and early 1990s. It shows the complex intertwining of historical, cultural, and political influences on guanxi, which, the author argues, intensified during the early transition from a socialist state economy. The basic argument is that close personal relationships served to diffuse and subvert the redistributive economy. The fieldwork shows how guanxi was defined and justified by those who actually used it. Luo 2007 focuses on the pervasiveness of guanxi in Chinese firms and the implications of this for foreign businesses. The introduction provides a clear overview of the key themes used in researching guanxi in a business context, including to what extent gift and favor exchange may be equated with bribery and corruption. Huang 2009 emphasizes the importance attached to guanxi in Confucian ethics, where the relationship itself is valued over and above any specific “cost-benefit” evaluation. Family and “family-type” relationships are used as the model for public organization and governance. From this, Huang argues, stems the blurring of public and private norms that is often associated with guanxi relationships. Huang 2009 is a key proponent of the culturalist position, arguing that guanxi can be understood only through an appreciation of how it developed from Confucianism.

• Gold, Thomas, Doug Guthrie, and David Wank, eds. Social Connections in China: Institutions, Culture, and the Changing Nature of Guanxi. Structural Analysis in the Social Sciences 21. Cambridge, UK: Cambridge University Press, 2002.

  DOI: 10.1017/CBO9780511499579

  The authors outline the historical development of the use of the concept of guanxi in scholarly and business discourse. The book has a strong focus on network analysis and sociological perspectives. There is an emphasis on how guanxi has shaped (and is being shaped by) China’s economic and institutional reforms.

• Huang Guoguang 黄光国 (Hwang Kwang-Kuo). Rujia guanxi zhuyi: Wenhua fansi yu dianfan chongjian (儒家关系主义：文化反思与典范重建). Beijing: Beijing daxue chubanshe, 2009.

  Hwang’s Chinese-language research summary emphasizes the enduring influence of Confucianism on relationships in Chinese societies. An elaboration of his general standpoint that Chinese people remain fundamentally rooted in small group relationships, which always take precedence over the interests either of individuals or large groups.

• Luo, Yadong. Guanxi and Business. 2d ed. Asia-Pacific Business 5. Singapore: World Scientific, 2007.

  Introduction to the use of guanxi in a business context. Aimed at non-Chinese managers intending to work in China. Luo is one of the key academic researchers in this area and provides a succinct overview of the major themes in guanxi and organizational studies: firm performance, strategy, and governance.

• Yang, Mayfair Mei-hui. Gifts, Favors, and Banquets: The Art of Social Relationships in China. Wilder House Series in Politics, History, and Culture. New York: Cornell University Press, 1994.

  Argues that the practice of guanxi increased during the institutional uncertainties of the reform period. Suggests “modern” guanxi is an urban, instrumental construction. It can be distinguished from the more traditional rural gift economy, which is based on feelings of warmth and reciprocity in relationships.