Business networking in the Chinese context: Its role in the formation of guanxi, social capital and ethical foundations

Abstract

Purpose

Business ethics has become a controversial topic as China integrates more closely into the world economy and there are signs of convergence within global professions. The purpose of this paper, therefore, is to study guanxi and business ethics in China within the context of social capital development, with a view to creating a more balanced interpretation that provides insights for Westerners wishing to conduct business in China.

Design/methodology/approach

In terms of methodology, the work is based on the results of a recent survey conducted among Chinese executives in southern China.

Findings

The major findings suggest that the processes of developing social capital and the nurturing of company‐to‐company relationships need to be planned carefully. Thus, no one individual should be responsible for the China connection, although the appointment of a team leader is essential, otherwise the Chinese side would become confused. Negotiations always are to be conducted on a team basis and always approved at the highest levels in the corporate structure.

Research limitations/implications

The limitations of this paper include the difficulties of obtaining any research sample in China. Thus, we refer to the work of Weiss, (Learning From Strangers, Free Press, New York.) and use a snowball sample.

Originality/value

The practical implications of the paper are that guanxi (a type of social capital), can be managed and that corruption does not have to result from the use of guanxi‐based relationships. Thus, the originality arises out of the practical implications, in that for the first time, Western concepts of social capital and Asian concepts of guanxi have been compared, leading to practical recommendations for Western managers.

Citation

Szeto, R., Wright, P.C. and Cheng, E. (2006), "Business networking in the Chinese context: Its role in the formation of guanxi, social capital and ethical foundations", Management Research News, Vol. 29 No. 7, pp. 425-438. https://doi.org/10.1108/01409170610690880