Is guanxi important in a buyer-supplier relationship? Case of Chinese logistics industry

Abstract

Purpose

The purpose of this paper is to unveil negative outcomes associated with an absence of guanxi in a buyer–supplier relationship in Chinese logistics industry.

Design/methodology/approach

This study uses a case study methodology using 16 semi-structured interviews with managers engaged in the process of buying and selling logistics services in China.

Findings

Based on the qualitative interviews, managers experience lack of trust, lack of communication flow and reduced business volume when guanxi is absent in a buyer–supplier relationship in the Chinese logistics industry.

Research limitations/implications

This study has some limitations. First, the results of this study are not generalizable to a broader population. Second, this study explores behavioral patterns with respect to Chinese business culture only.

Practical implications

Firms can use the findings from this study to understand the consequence they can face when guanxi is absent in a buyer–supplier relationship.

Originality/value

This study attempts to offer a balanced perspective on the role of guanxi in a buyer–supplier relationship, particularly in the Chinese logistics industry, by considering how an absence of guanxi generates negative outcomes for firms.

Citation

Butt, A.S., Shah, S.H.H. and Sheikh, A.Z. (2020), "Is guanxi important in a buyer-supplier relationship? Case of Chinese logistics industry", Journal of Asia Business Studies, Vol. 14 No. 1, pp. 1-14. https://doi.org/10.1108/JABS-04-2019-0127