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Article
Publication date: 9 May 2016

Steven Tam

This article reveals a managerial issue that multinational corporations (MNCs) in China are at a strategic crossroad where their employees are competing with the same…

Abstract

Purpose

This article reveals a managerial issue that multinational corporations (MNCs) in China are at a strategic crossroad where their employees are competing with the same sources of guanxi networks for different business deals simultaneously.

Design/methodology/approach

Triggered by a real company case in China and guided by a literature review on business guanxi, the author bridged them into a specific inquiry, as little was known and should be further examined.

Findings

The author identified a paradoxical/applied scenario in MNCs between the use of guanxi and overall firm performance damaged by overusing it.

Research limitations/implications

Empirical studies are deemed necessary to seek more understanding between the role of guanxi and MNCs in China.

Practical implications

Guanxi is not a straightforward guarantee of business achievements in China. Management should note the influence of its actors – own employees – who can potentially diminish the positive returns of guanxi on overall firm’s achievements because of non-obvious interplays among employees and “contacts” on the overlapping guanxi networks. The larger the organisation, the higher the risk is.

Originality/value

This article proposes a new line of thoughts for practitioners about the effect of business guanxi on overall firm performance and serves as a starting point for academics to explore empirical research. The concept of overlapping guanxi networks is institutionalised and discussed. A three-step rule is also suggested for MNCs as a basic solution.

Details

Journal of Chinese Human Resource Management, vol. 7 no. 1
Type: Research Article
ISSN: 2040-8005

Keywords

Article
Publication date: 25 January 2023

June Cao

The objective of this study is to examine how formal and informal institutional environment influences managers’ fair value opinion shopping behaviour in the largest…

Abstract

Purpose

The objective of this study is to examine how formal and informal institutional environment influences managers’ fair value opinion shopping behaviour in the largest International Financial Reporting Standards adopter, China.

Design/methodology/approach

To test the hypotheses, I conduct a 2 × 2 between-subject randomised experiment since the inferences about cause and effect are important in this study. The between-subject experimental situations are manipulated on the basis of the financial condition of companies and boards’ oversight.

Findings

I find that managers are likely to seek favourable fair value opinions from external valuation professionals when they are under the weak boards’ oversight and high stress to meet the regulation target of the China Securities Regulatory Commission. These results are more pronounced for managers with higher both rent-seeking and favour-seeking guanxi orientations are more likely to engage in fair value opinion shopping.

Originality/value

Consistent with theoretical analysis of Balfoort et al. (2017), this study provides empirical evidence that guanxi influences the neutrality and faithful representation in fair value measurement in China. In addition, the findings extend Salzsieder’s study (2015) and reflect the context-embeddedness nature of accounting.

Details

Journal of Accounting Literature, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0737-4607

Keywords

Article
Publication date: 20 December 2022

Lilei Wang, Yumei Dang, Shufeng (Simon) Xiao and Xing'an Xu

By adopting learning theory and a guanxi perspective, this study aims to investigate the effects of interpersonal guanxi (interpersonal networks or connections) and…

Abstract

Purpose

By adopting learning theory and a guanxi perspective, this study aims to investigate the effects of interpersonal guanxi (interpersonal networks or connections) and relationship learning on companies’ business performance when operating in a large emerging market.

Design/methodology/approach

Using a sample of 294 sales managers and salespeople in the Chinese hotel sector, the authors empirically test the authors' arguments through a structural equation modeling (SEM) approach.

Findings

The authors' findings indicate that strong interpersonal guanxi tends to generate more positive business performance. Furthermore, the authors find that relationship learning plays a mediating role in the association between interpersonal guanxi and hotel companies’ business performance in a Chinese context. Finally, the authors empirically explore the moderating effect of inter-firm dependence on the contribution of interpersonal guanxi to relationship learning. Findings demonstrate that this effect varies significantly based on inter-firm dependence, with interpersonal guanxi exhibiting a greater positive impact if such dependence is high.

Originality/value

This study enriches our understanding of interpersonal guanxi and of how companies can enhance the companies' business performance in an emerging market context.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 6 September 2022

Christina Ling-hsing Chang and Sheng Wu

The speedy development of information technology (IT) is indeed a significant issue to support the enterprises to spread their products and services to their customers…

Abstract

Purpose

The speedy development of information technology (IT) is indeed a significant issue to support the enterprises to spread their products and services to their customers. Although the adoption of IT in the enterprises can help employees' work, it will increase their work exhaustion and job burnout too.

Design/methodology/approach

The survey data of this study was collected from Chinese IT personnel (ITP): 543 and Chinese information systems (IS)/IT users: 525, totaling 1,068 respondents.

Findings

The result shows that the influences of the organizational factors and guanxi on the work exhaustion are different between Chinese ITP and IS/IT users in the research model. Also the implications of the study are discussed and made some contribution to the research and management practice.

Originality/value

By comparison between the Chinese ITP and IS/IT users, this study shows that guanxi can be antecedent factor to some organizational factors, and the organizational factors guanxi have had a different effect on the work exhaustion of Chinese ITP and IS/IT users. Given that the critical successes to the organizations, management should focus on what direction to reduce Chinese ITP and IS/IT users work exhaustion.

Details

Information Technology & People, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0959-3845

Keywords

Book part
Publication date: 16 August 2014

Anna Kaunonen

Three types of industrial buyer-seller relational process models are available: joining theory, stage theory, and state theory. However, historically, these models have…

Abstract

Three types of industrial buyer-seller relational process models are available: joining theory, stage theory, and state theory. However, historically, these models have developed based on the knowledge and cultural context of the Western world. Several researchers note that national culture may have an impact on international industrial buyer-seller relationships. Including culture in the models is highly important, especially as the business environment is increasingly more global and different countries have different business cultures. The goal of this paper is to define the most suitable industrial buyer-seller relational process models for describing relationships in various contexts. The paper includes a through literature review and a single case study in order to reach this objective. A new state theory model evolved during the research. It consists of two beginning states: searching and starting; four purely middles states: constant/static, decline, growth, and troubled; and a purely end state: termination. The state of dormant/inert is both a middle state and an end state, that is, when the relational actors are not in contact does not mean that the relationship has ended, but instead, for example, new legislation may have been implemented, which requires the actors to evaluate their relationship and its future. A relationship goes through the two beginning states in the order mentioned above, but after that, any state may occur.

Details

Advances in Business Marketing & Purchasing
Type: Book
ISBN: 978-1-78190-858-7

Keywords

Book part
Publication date: 1 October 2015

Yuedong Li, Anna M. Rose, Jacob M. Rose and Fengchun Tang

This study examines the effects of incentive compensation and guanxi, a type of informal personal relationship between people, on the objectivity of Chinese internal…

Abstract

Purpose

This study examines the effects of incentive compensation and guanxi, a type of informal personal relationship between people, on the objectivity of Chinese internal auditors. Given that the objectivity of internal auditors is essential for promoting financial reporting quality, it is important to investigate the effectiveness of internal audit functions, especially in emerging markets where the corporate governance mechanisms designed to promote objectivity are less mature.

Methodology/Approach

The research employs a 2 × 2 between participants experiment with 116 graduate accounting student participants.

Findings

After controlling for internal auditors’ ethicality, we find that close-guanxi between management and internal auditors and incentive compensation in the form of bonuses based upon meeting earnings targets both have the capacity to impair the objectivity of Chinese internal auditors. Participants were more tolerant of management’s attempts to manage earnings when there was close guanxi or bonus compensation. Further, compensation structure only influenced internal auditors’ support of management when guanxi was distant, but when there was close guanxi between internal auditors and management, internal auditors were unlikely to challenge management regardless of the compensation structure.

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-1-78441-635-5

Keywords

Book part
Publication date: 14 July 2014

Yanjie Bian and Lei Zhang

We conceptualize corporate social capital within the context of Chinese guanxi culture. We assert that the formation and mobilization of corporate social capital are…

Abstract

We conceptualize corporate social capital within the context of Chinese guanxi culture. We assert that the formation and mobilization of corporate social capital are culturally and institutionally contextualized. Building upon a relational approach to corporate performance, we examine culture-sensitive properties of Chinese guanxi and compare guanxi social capital with non-guanxi social capital. We then explain why guanxi-based corporate social capital is of growing significance to the Chinese transitional economy in an era of increasing market competition and institutional uncertainty. We conclude by proposing a research agenda about the roles that guanxi-based corporate social capital plays for boosting corporate performance.

Details

Contemporary Perspectives on Organizational Social Networks
Type: Book
ISBN: 978-1-78350-751-1

Keywords

Book part
Publication date: 5 August 2022

Yanjie Bian

This chapter presents systematic evidence on the persistent power of guanxi, the Chinese phrase for informal social relations and networks, in transitional China. I draw…

Abstract

This chapter presents systematic evidence on the persistent power of guanxi, the Chinese phrase for informal social relations and networks, in transitional China. I draw heavily on my previous publications reporting findings from a series of probability sample surveys of the Job-Search Network (thereafter JSNET) project in Chinese cities, and job histories of the survey respondents combined cover a span of 37 years from 1978, the beginning year of China's market-oriented reforms, to 2014, the year of last JSNET survey completed.

Details

Informal Networks in International Business
Type: Book
ISBN: 978-1-83982-878-2

Keywords

Article
Publication date: 23 September 2022

Xiayu Chen, Jiawen Wang and Shaobo Wei

The success of social commerce depends on the actual transactions of consumers, which will be prevented in the presence of high uncertainty. However, attention paid to the…

Abstract

Purpose

The success of social commerce depends on the actual transactions of consumers, which will be prevented in the presence of high uncertainty. However, attention paid to the uncertainty reduction strategies in social commerce is limited, especially from a unified theoretical framework. Based on uncertainty reduction theory (URT), this paper aims to investigate how three uncertainty reduction strategies (i.e. situational normality, perceived effectiveness of social commerce institutional mechanisms (PESIM) and swift guanxi) affect perceived uncertainty in social commerce, which in turn affects buyers' purchase intention and purchase behavior. The moderating effects of PESIM on the relationships between the other two strategies and perceived uncertainty were also tested.

Design/methodology/approach

In this study longitudinal data from 211 buyers who have usage experience of Xiaohongshu were collected to test the proposed model and hypotheses.

Findings

Results show that the three uncertainty reduction strategies significantly reduce perceived uncertainty. PESIM negatively moderates the relationships between situational normality and perceived uncertainty, swift guanxi and perceived uncertainty. Perceived uncertainty is negatively related to purchase intention. Purchase intention positively affects purchase behavior.

Originality/value

This study focuses on the role of uncertainty reduction mechanisms in promoting purchase behavior through uncertainty reduction and sheds light on the relationships among situational normality, PESIM, swift guanxi and perceived uncertainty based on URT, which have not been extensively studied from a theoretical perspective in social commerce contexts. Besides, this study investigates the moderating role of PESIM, which improves the understanding of the role of swift guanxi and situational normality in reducing perceived uncertainty under the boundary condition of PESIM.

Details

Industrial Management & Data Systems, vol. 122 no. 12
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 15 February 2022

Zhigang Shou, Yu Gong and Qiyuan Zhang

Interorganizational dependence is considered as a liability for each firm and needs to be managed properly. Rather than exploring the opportunistic outcome of dependence…

Abstract

Purpose

Interorganizational dependence is considered as a liability for each firm and needs to be managed properly. Rather than exploring the opportunistic outcome of dependence, the authors focus on the moderating role of supply chain boundary spanners' guanxi. This study tends to uncover the way and the conditions under which boundary spanners' guanxi influences dependence-opportunism relationships.

Design/methodology/approach

Using a survey of 380 buyer–supplier exchanges in China, this study first examines the relationship between dependence and opportunism, then assesses the contingent role of boundary spanners' guanxi and further tests how unfairness perception and legal inefficiency alter the role of guanxi in managing dependence.

Findings

This study finds that buyer dependence increases supplier opportunism while supplier dependence lowers supplier opportunism. Boundary spanners' guanxi weakens the opportunism-facilitating impact of buyer dependence and mitigates the opportunism-restricting effect of supplier dependence. However, unfairness perception would attenuate the value of guanxi in restricting depended sides' opportunism but strengthen the value of guanxi in motivating depending sides' opportunism; legal inefficiency would amplify the value of guanxi in facilitating depending suppliers' opportunism.

Originality/value

First, the study enriches supply chain dependence studies by incorporating interpersonal guanxi into the investigation of dependence-opportunism relationships. Second, the study adds to the supply chain management literature by uncovering a contrasting role of guanxi in influencing the dependence-opportunism relationship. Third, the study incorporates an agency view to uncover two boundary conditions under which guanxi is mobilized for personal interest seeking or for organizational purposes.

Details

International Journal of Operations & Production Management, vol. 42 no. 3
Type: Research Article
ISSN: 0144-3577

Keywords

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