Concentrical Guanxi Circles - Literature review Example

Literature Review Unit Various relationships exist among the people of the world that influences their social, economic, and political aspects. China depicts some uniqueness in the establishment of such relationships. Interpersonal relationships in China are referred to as guanxi, they emanate from the family background and extend to friends and relatives. While most of the people in the world interact and relate freely in accordance with universally acceptable principles, the case scenario in China is different. They highly regard the “Concentrical guanxi circles” (Lee and Dawes 2005, pg 29). The basis of the relationships is a social connection that traverses across other aspects hence having a great influence on the livelihoods of the people. Research has been conducted to help elucidate the basis and influence of the guanxi circles hence various conclusions have been made, some of which is contradictory. According to the developing trends in research, insurmountable attention has been given to these relationships especially in China. Due to the social nature of the guanxi relationships, it has great influence on the trust between individuals as well as their long-term orientation. The business sector is one of the influenced areas. In an attempt to find out the various factors, that comes into play in relationships relating to business markets in China Lee and Dawes (2005) hypothesized that three factors are likely to affect a firm’s trust in a supplier’s salesperson. For a firm to operate effectively, it has to develop networks and relationships with different individuals plus other organizations. In China, guanxi has been used as a business strategy to keep competitors at bay. For a thriving relationship, trust is a key ingredient; this is exactly what the guanxi provides in a relationship between a salesperson and a firm. It is apparent that trust is transferable from the firm to the supplier’s sales person resulting to the firm’s long-term orientation towards the supplier. Trust is a give and take aspect that has to emanate from both parties involved; it has the aspects of benevolence and credibility, factors that relates to reliability and a genuine interest. The interpersonal relationships that generate trust in China are based on their culture that is exemplified in three basic categories; firstly, the relationship between family members forms the core of the relationships. Secondly, the relationships between the individuals that one is familiar with and finally, that with distant individuals who are likely mere acquaintances. These relationships have a capacity to grow from one level to another despite the category. It is also apparent that these relationships are based on give and take, when a favor is given, the Chinese culture requires that one should respond back with another favor. However, this issue has generated some debate due to the need to combat corruption. The guanxi behavior in China has some identifiable elements that make it unique with trust being one of them. Different researchers have described it in various ways, these propositions include, guanxi is face preserving, attracts reciprocal favor and is characterized by emotions. In addition, trust and interactions are key factors that influence interpersonal relationships; they facilitate their growth as well as can result to its deterioration. Whether it is in the economic or political-based systems, these elements of interpersonal relationships are related one to the other. Contrary to the western way of doing things where the business is independent from personal aspects, in the Chinese setup feelings and emotions are part of the way of doing business under the unification of the guanxi. In China, emotions play a critical role in the development of trustworthy interpersonal relationships. Through a research by Lee and Dawes (2005, pg 46), that was used to test various hypotheses, it was established that the emotional part of the interpersonal relationship influenced salesperson’s trust. Their findings are complementary to previous studies that had indicates that trust can either be cognitive based or based on emotions. The latter has more weight than the former since it is based on affection rather than a mere mental perception. Just as the western research has demonstrated that, the emotion based trust’s superiority over the cognition based trust, the same translates to the business relationships in China. These findings demonstrate some level of consistency with previous research works by Chinese researchers. However, the research findings are in opposition to some findings that have shown that giving of gifts, reciprocating favors, and giving face are the key ingredients to successful interpersonal relationships. They argue that such translates to the development and sustenance of trust between the Chinese. Culture and the Chinese society value certain aspects over others hence the varied levels of trust. The Chinese society is depicted as one that has low trust compared to other societies. This results to the development of trust between individuals who share some social aspects such as the family. In the research by Lee and Dawes concerning the salespersons and the firm, there was some level of distance in the relationship between the personnel of the buying firm and the salesperson, this was mainly attributed to the fact that they were not from the same social group. Even if the salesperson has the best motive in giving a favor to the buyer, the buyer is suspicious hence mistrust. Regulations in China also play a critical role in facilitating the interpersonal relations. The Independent Commission Against Corruption in China has created an environment where favors should not be extended anyhow. It has been very stringent on corruption cases hence individuals are very cautious before receiving favors from individuals that are distant to them. However, it is part of the Chinese norms to reciprocate favors. Therefore, favors are narrowed to individuals that are familiar with each other. In the case of the buyer, they will make every attempt not to receive a favor from the salesperson so that no reciprocation will be required. Interpersonal relationships have far-reaching implications at personal as well as organizational levels. Trust results to long-term relationships, in the business sector it translates to customer loyalty, which assures the organization of its continued existence. The interactions between the buyer and the seller in the Chinese culture helps entrepreneurs understand business strategies. China is one of the rapidly growing countries in the world, therefore it is paramount that businesses understand the prevailing dynamics before engaging in business. Guanxi is an element that cannot be sidelined in Chinese business ventures since it is crosscutting across all the aspects of a business including management, marketing, consumption, and business negotiations among others. In conclusion, trust is developed among individuals and organizations but it varies with the prevailing factors such as culture. In China, guanxi plays a big role in business success. There are factors that influence the interpersonal relationships in China, which includes reciprocal favor, trust, face preserving, and affect. Among these factors, in the Chinese setup the input of emotions on interpersonal relationships is enormous. References LEE, D. Y. and DAWES, P. L., 2005, Guanxi, Trust, and Long-term Orientation in Chinese Business Markets, Journal of International Marketing, Vol. 13, No. 2, pp. 28-56. Read More