Guest editorial

Citation

Akoorie, M.E.M. (2013), "Guest editorial", Chinese Management Studies, Vol. 7 No. 1. https://doi.org/10.1108/cms.2013.32307aaa.002

Guest editorial

Article Type: Guest editorial From: Chinese Management Studies, Volume 7, Issue 1

To guanxi or not to guanxi – that is the question. Paraphrasing William Shakespeare’s lines from Hamlet, Prince of Denmark (Act III scene I), “to be or not to be – that is the question” we, like Hamlet soliloquize on the difficulty of knowing the truth in a spiritually ambiguous universe. In this special issue of Chinese Management Studies on guanxi revisited we have to consider the following ambiguous issue. Is guanxi (now a widely known term in the canon of Western scholarship) an outmoded form of social connections and relationships, by which Chinese people (and by extension Western people who do business in China and with Chinese outside China) now being replaced by codified laws which make transparent the rules of business engagement in a manner which is customary in Western business practice?

Guanxi refers to the benefits gained from social connections and usually extends from extended family, school friends, workmates and members of common clubs or organizations. It is customary for Chinese people to cultivate an intricate web of guanxi relationships, which may expand in a huge number of directions, and includes lifelong relationships. Staying in contact with members of your network is not necessary to bind reciprocal obligations. Reciprocal favors are the key factor to maintaining one’s guanxi web; failure to reciprocate is considered an unforgivable offense. The more you ask of someone the more you owe them. Guanxi can perpetuate a never ending cycle of favors. Sociologists have linked guanxi with the concept of social (it has been described as Gemeinschaft value structure), and it has been exhaustively described in Western studies of Chinese economic and political behavior.

Yet we cannot overlook the fact that similar systems of connections exist in other cultures such as blat, term which appeared in the Soviet Union to denote the use of informal agreements, exchanges of services, connections, party contacts, or black market deals to achieve results or get ahead. The system of blat led to formation of social networks similar to Good ol’ boy networks in the USA, Old Boy Networks in the UK and the former British Empire. In the UK, at the apogee of empire, where you went to school, where you went to university and your accent as a result of this education and upbringing defined your subsequent position in life and your ability to get on. Serious social networking took place in the gentlemen’s clubs in London as members met and befriended high ranking and very powerful individuals who were also members.

Leading off this special issue our Editor-in-Chief, Check Teck Foo offers as an insight into what might become a tipping point for a future nuclear war. In his article entitled “Dioayu Islands, China-Japan guan-xi and nuclear war: is there a role for the Thomas-Kilman model”? He describes how a clutch of five uninhabited islets and three rocks, cast adrift out in the currents of the Western Pacific have recently demonstrated their power to convulse East Asia. Foo illustrates how scholars can adopt a multi-method approach to research on conflict management drawing on literature from management, political sciences, war, military studies, history, etymology and culture. Using the Thomas-Kilman (TK) model for mapping out possible solutions to resolving conflicts the author explains why the Diaoyu Islands, if not amicably resolved, may well lead to obliteration in resolving the conflict via a nuclear outbreak. Foo asserts that the Third World War might just be sparked off with Russia aligned with China against Japan and the USA.

The contribution of Foo’s article is to articulate why the issue is so complex and how deep Chinese-Japanese antagonism is a result of past cultural interactions and hostility between the two nations. “Thieving” behavior today harks back to the blatant seizure of Manchuria and Japanese puppetry of Manchukuo. It is an excellent example of the tensions between the concept of guanxi and the rule of law.

The next paper by Cao and Xiang entitled “The impact of knowledge governance on knowledge sharing: the mediating role of the guanxi effect” uses the construct of knowledge governance, which is an organizational mechanism that formally and informally defines how the firm manages activities-related knowledge. It therefore has a significant influence on knowledge sharing. Using the logical deductive approach the paper examines empirically how knowledge governance, including formal and informal knowledge governance, plays a key role in knowledge sharing. In the authors’ view the guanxi effect partially mediates between informal knowledge governance and knowledge sharing and has a significant mediating role between formal knowledge governance and knowledge sharing. This paper is the first attempt to systematically investigate the impact on knowledge sharing based on the mediation of the guanxi effect. Thus, the paper makes both theoretical and methodological contribution to studies of knowledge governance which is vitally important in an era of knowledge-based economies.

The third paper by Chong, Fu and Shang, entitled “Relational power and influence strategies: a step further in understanding power dynamics”, examines the existence of relational power derived from the Chinese construct – guanxi. These authors test the hypotheses of relational power in an empirical study utilising survey methods as well as interviews with Chinese managers in several main cities. They used two well-established constructs in the literature on power sources (position and personal power) and their relationships with influence strategies which are defined as persuasive, assertive and relationship-based strategies. Their findings showed that all three power sources predicted leaders’ choices of influence strategies. The paper thus shows how the dynamics of guanxi can help Westerners to understand work relationships in China in more depth by showing why guanxi/relational power is effective in this context. The contribution made by this paper is in integrating this new power source to the power typology which has dominated the power literature for over 50 years.

The fourth paper by Tang and Ke, “Dual order systems and SMEs’ growth: three longitudinal cases from China”, identifies the ambiguity referred to in the opening paragraph of this guest editorial. Tang and Ke identify that from an institutional perspective one proposition suggests that building guanxi networks can facilitate the growth of Chinese SMEs when institutions change in unpredictable ways. However, another proposition claims that legal institutions may become the guarantors of the growth of China’s SMEs as a result of competition in an increasingly market-oriented environment. They found that dual order mechanisms consisting of guanxi networks (information institutions) are more significant at earlier stages of the stages of growth of SMEs whereas legal systems are more influential in the later stages of growth. Supported by data from three longitudinal studies of three Chinese SMEs in Wenzhou, thus introducing a temporal element to the research, this study concludes that guanxi will always be an essential ingredient of doing business in China since firm managers have to maintain good relations with relevant government officials and managers of other firms to ensure the provision of supporting resources and the timely delivery of raw materials and intermediate goods.

The last three papers both examine guanxi outside of Mainland China, thus showing its pervasiveness of the concept in Greater China. The paper by Chao and Tian “Keeping relationships positive or doing things right: bridging women leaders’ conflict management strategies in non-profit organisations in Taiwan and the USA”, contributes to our knowledge of organisational communication and cross-cultural female leadership by examining conflict management strategies between Taiwanese female presidents and their American counterparts in Rotary clubs. This paper is a welcome addition to the lexicon of guanxi research since it examines a gender-specific situation which is located in a not-for-profit organisation – Rotary clubs. They find that female presidents in both cultures apply obliging and integrating strategies to handle management conflicts. However, they also find that Taiwanese women leaders are more likely to follow traditional norms (due to interference by past presidents) whereas women leaders in the USA tend to employ new approaches and adopt new conflict management strategies in different situations. Taiwanese leaders are more likely to use third parties to resolve conflict and keep relationships positive with their members whereas American female leaders strive to do things right and/or do the right things in their conflict strategy application.

Tsai’s paper “Towards a Guanxi-based theory of internationalization: Chinese, Taiwanese and evolving MNEs” is a conceptual paper which examines theories on kinship-based collaboration for Greater China MNEs. Tsai suggests that kinship-based alliances have been responsible for the growth in cross-border collaboration in the between Taiwan and Mainland China because partners in both countries have complementary skills. Taiwanese firms have high tech skills and are transferring the bases of their companies to Mainland China due to cost considerations. Chinese enterprises can benefit from being able to source imported technology and can shorten the time it takes to develop their high-tech industries, thus saving on research and development costs.

Finally, Ahmed, Ismail, Amin and Nawaz in their paper “A social exchange perspective of the individual guanxi network: evidence from Malaysian-Chinese employees” in the hotel industry in the western part of Malaysia looks at the direct and indirect effects through perceived organizational support (POS) and leader-member exchange (LMX) of the guanxi network in job involvement and the ultimately the effect of job involvement on in-role performance. They find that the individual guanxi network does contribute significantly towards social exchange relations (POS and LMX) and employees’ job involvement. The practical implications of this study for managers are that they can utilise the guanxi network of employees to increase employee involvement in their jobs and ultimately improve performance.

In conclusion, as Guest Editor, two things stand out from this special issue. The first is the still continued ambiguity of the guanxi construct. Is it or is it not being replaced by the legal systems? Or will it, like other social network constructs, continue to co-exist alongside the rule of law? The depth of the construct is also shown by how it can be examined at the macro (country) level, the institutional (government) level and at the micro (firm) level. The papers in this issue span all of these levels which adds greatly to our knowledge and understanding of the theme of this special issue – Guanxi revisited.

The second point is the evidence of methodological variety and the willingness of scholars to engage in qualitative and mixed methodologies (never an easy task) in China and comparative studies with other countries. This is complemented by well-founded research using quantitative approaches. This special issue re-affirms this journal, Chinese Management Studies as a significant outlet for research by Chinese scholars across China, as well as the work of international researchers. In doing so, it demonstrates the range of management research capabilities within China and the interest shown in Chinese management around the globe.

Michèle E.M. AkoorieGuest Editor