Please use this identifier to cite or link to this item: http://hdl.handle.net/1959.13/803267
- The effect of an efficient and effective politico-legal system on the Chinese business practice of guanxi
- China is increasingly engaging in international trade and commerce and rapidly becoming one of the world's leading economic superpowers. International competition has made it imperative for Western governments and firms to better understand Chinese socio-economic institutions and how these institutions and Chinese business practices evolve over time. Historically, China did not develop rules of law and the same formal institutions that govern Western business practices such as contract law, torte law, capital markets and property rights. Instead, China developed and relied on the practice of guanxi, or networks of specially developed relationships (Buttery & Wong, 1999) as a means of managing opportunism, reducing search and transaction costs, reducing environmental uncertainty (Standifird & Marshall, 2000) and transferring knowledge. Guanxi practice involves drawing on interpersonal, mutually reciprocal relationships either through directly known parties, or indirectly known third parties, in order to minimise business risk. The objective of this research is to develop a better understanding of guanxi as a tool for undertaking business in Chinese cultures and to assess whether the practice is changing. To date, much of what we know about guanxi is based on Western perceptions and interpretations, many of which are dated. The purpose of this research is twofold, first it attempts to understand the nature of guanxi from the perspective of those who practice it and secondly, to determine if and how the practice has changed over the past thirty years. A major strength of this study is its investigation of Mainland China and a range of Chinese influenced polities.
- Innovation in Management Practices p. 194-201
- Macmillan Publishers India
- Resource Type
- book chapter