The interaction of the personnel boundary in inter-firm relationship management is viewed as particularistic in China instead of universalistic as in many Western cultures. Specifically, guanxi networks, the Chinese system of inter-personal relationship, have strong strategic implications for business interactions. The practices of guanxi and the social norms associated with guanxi are complicated. On the one hand, guanxi practices can be traced back to Confucianism; on the other hand, guanxi???s significance has been changing in line with China???s economic reform. In this research, we have attempted to find what presently constitutes good guanxi in inter-firm relationship management against this dynamic backdrop. Additionally, from the transaction cost economies (TCE) perspective, we provide an analysis that guanxi-based business practices offer transaction cost advantages as an alternative to market-based practices. We argue that such advantages partially result from guanxi???s effect on the reduction of opportunist behaviors. Backed up by 97 questionnaire responses from firms in Shanghai and 15 semi-structured interviews, our study confirms that, in inter-firm relationships management, trust, affection and long-term orientation are features of close guanxi. To enhance guanxi quality, familiarization by self-disclosure and the presence of mutual benefits are also necessary, providing practical implications for business practitioners in China. Our study also indicates that guanxi business partners are expected to be obligational in business and flexible in contingencies. Opportunistic behaviors can be mitigated by adopting guanxi practices, supporting the TCE logic. In an absence of a rationalized legal system, guanxi may fill the gaps in the enforcement of the written contract.N
| Identifer | oai:union.ndltd.org:ADTP/215591 |
| Date | January 2007 |
| Creators | Li, Xiaobei, Organisation & Management, Australian School of Business, UNSW |
| Publisher | Awarded by:University of New South Wales. School of Organisation and Management |
| Source Sets | Australiasian Digital Theses Program |
| Language | English |
| Detected Language | English |
| Rights | Copyright Xiaobei Li, http://unsworks.unsw.edu.au/copyright |
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