Guanxi (literally interpersonal connections) is in essence a network of resource coalition-based stakeholders sharing resources for survival, and it plays a key role in achieving business success in China. However, the salience of guanxi stakeholders varies: not all guanxi relationships are necessary, and among the necessary guanxi participants, not all are equally important. A hierarchical stakeholder model of guanxi is developed drawing upon Mitchell et al.’s (1997) stakeholder salience theory and Anderson’s (1982) constituency theory. As an application of instrumental stakeholder (...) theory, the model dimensionalizes the notion of stakeholder salience, and distinguishes between and among internal and external guanxi, core, major, and peripheral guanxi, and primary and secondary guanxi stakeholders. Guanxi management principles are developed based on a hierarchy of guanxi priorities and management specializations. The goal of this application of instrumental stakeholder theory is to construct, for Western business firms in China, a means to reliably identify guanxi partners by employing the principles of effective guanxi. These principles are described in the form of testable propositions that advance social scientific research in this area of international business ethics. (shrink)

We examined how the cultural dimension of universalism–particularism influences managers’ attitudes toward relational favoritism. Paradoxically, we found in a survey study that Brazilian and Chinese managers perceived more negative consequences of relational favoritism than did American managers—even though the Brazilians and the Chinese perceived stronger particularistic cultural norms in their countries than Americans did in the United States. We attribute this pattern of results to “cultural reflexivity”—the ability of people from transforming economies to be culturally self-critical during a period of (...) dramatic societal change. This pattern of results also emerged in a scenario study in which we asked these same Brazilian, Chinese, and American participants to assess managerial succession decisions made by a General Manager. We varied the scenarios so that the promoted manager was either a colleague with no pre-existing relation with the GM or a colleague who was a relative, a close friend, from the same town, or from the same school. Consistent with the results of the survey study, we found that perceived cultural norms of particularism were negatively related to perceptions of fairness. In other words, Brazilians and Chinese, even while living in more particularistic cultures, were more harsh in judging relational favoritism. We conclude with a discussion on the implications of these paradoxical relationships. (shrink)

The leader–member relationship has been identified as a key determinant of successful working relationships and business outcomes in China. A high-quality leader–member relationship helps managers and employees to meet the demands they face and gives them the opportunity to develop socially, emotionally and morally. Such relationships form the basis of the overall well-being and success of the organisation. This article contributes to relationally oriented leadership theories and more specifically to the leader–member exchange theory by examining the theory in the context (...) of Western expatriate managers and Chinese employees in China. The first aim of the study is to analyse the similarities and differences between the LMX theory, which owes its origins to Western corporate experience, and the social and moral norms of guanxi, a crucial element in the Chinese value system. Since Westerners and Chinese people can give different interpretations to guanxi, the second aim of the article is to discuss the ethical challenges to the Western manager arising from guanxi. The findings of this study have implications not only for China, but also for other Chinese communities where guanxi is endorsed and practised. (shrink)

This study examined the relationship between the Protestant Work Ethic (PWE) and Confucian Dynamism in a sample of 1,757 respondents from several provinces in mainland China. Mirels and Garrett’s (J Consult Clin Psychol 36:40–44, 1971 ) PWE Scale and Robertson’s (Manag Int Rev 40:253–268, 2000 ) Confucian Dynamism Scale were used to measure the work ethics. The 16 items of the PWE Scale and eight items of the Confucian Dynamism Scale were initially subjected to a principal components analysis. Factor analysis (...) produced four factors of the PWE, which were labeled as follows: hard work, internal motive, admiration of work itself, and negative attitude to leisure; and three factors of the Confucian Dynamism, which were labeled: long-term orientation, short-term orientation, and guanxi orientation. The results of a multiple regression analysis indicated that all the dimensions of PWE were positively related to Confucian Dynamism, but negatively to guanxi orientation. The results also indicated that three PWE dimensions (“hard work,” “internal motive,” and “admiration of work itself”) were positively and significantly related to long-term orientation, but two of them were related negatively and significantly to the short-term orientation of Confucian Dynamism. In addition, the results showed that the dimension—admiration of work itself—of PWE was significantly and negatively associated with the guanxi orientation, but significantly and positively to the short-term orientation. (shrink)

ABSTRACT:A fundamental question of global business ethics is, “When moral business conduct standards conflict across borders, whose standards should prevail?” Western scholarship and practice tends to depict home country standards as “higher” or more “restrictive” or “well-ordered” than the “lower” standards of emerging market actors. As much as the question appears culturally neutral, many who ask it do so with a culturally-specific lens shaped by prevailing conditions of Western economic strength. However, the dominant economic powers of the future are not (...) likely to be the same North American and Western European markets that have reigned supreme in the recent past. As corporations increasingly re-examine their political roles in global governance, we need also to re-examine the moral authority of global ethical norms so they do not merely reflect the dominant ideologies of the most economically powerful market actors. (shrink)

This paper provides a systematic analysis of how hometown ties, the most common and distinct bases for interpersonal ties to build upon in China, could influence corporate governance in Chinese corporations by focusing on its impact on CEO dismissals and corporate social responsibility. We find that hometown ties between CEOs and board chairs reduce the likelihood of CEO dismissals and that the negative relationship between firm performance and CEO dismissals is weaker for hometown-connected CEOs in locally administered state-owned enterprises, for (...) inside CEOs, for firms located outside board chairs’ hometowns, and for firms operating in regions with low social trust. Moreover, we find consistent evidence that hometown ties affect Chinese firms’ engagement in corporate social responsibility. Our study highlights the important role of hometown ties in Chinese relationship-based corporate governance. It also advances a normative ethical assessment of hometown-based favoritism by highlighting its distinct dynamics and impacts on focal actors and the third parties in specific contexts of actions. (shrink)

Despite the growing number of studies on the topic of guanxi in a work context, there is a paucity of research on supervisor-subordinate guanxi in the field of organisation and management. This article critically reviews the extant literature on guanxi in human resource management and organisational behaviour and applies an inductive approach to explore the perception of guanxi from both superior and subordinate perspectives in the People's Republic of China. The study reports positive and ethical features of guanxi as well (...) as unethical and negative practices in the Chinese workplace. On the positive side, guanxi comprises reciprocal exchange and perceived positive attributes, whereas its darker aspects include perceived unfairness and supervisor-targeted impression management. Managerial and research implications are discussed. (shrink)

Despite the prevalent role of guanxi in conducting business in Chinese, it is unclear whether interpersonal guanxi fosters interfirm trust. Taking a contingency approach, this study examines how institutional (government–market relationship and Buddhism influence) and individual (relative role performance and the span of partner control) factors moderate the association between interpersonal guanxi and interfirm trust. Based on a paired survey between salespersons and sales managers and two secondary datasets, this study finds that interpersonal guanxi is positively associated with interfirm trust. (...) Moreover, this positive effect is stronger when firms operate in regions with strong government–market relationships and strong Buddhism influence. In addition, the positive relationship is weaker when guanxi resides in boundary spanners who have relatively high role performance, but becomes stronger when boundary spanners have a broad span of partner control. These findings highlight the situations in which guanxi at an interpersonal level is more or less likely to foster interfirm trust. (shrink)

While business ethics has generated a great deal of research internationally over the last few decades, academic reviews of the business ethics literature remain limited. Moreover, there has been little attempt to date to analyze this literature specifically in the Greater China region, which has been experiencing rapid socioeconomic growth and dynamic evolution of business ethics in recent decades. This paper addresses this research gap by undertaking a comprehensive and critical appraisal of the business ethics literature on Greater China. In (...) particular, it maps out the existing research findings, identifies limitations in methodology, and suggests future directions for business ethics research in this region. The findings indicate that the scholarly interests cover 24 research themes, including corporate social responsibility and social performance; ethical beliefs, judgment, values, decision-making, and culture; workplace ethics and behavior; marketing ethics and consumer behavior; and sustainability. This review reveals a growing imbalance between empirical and conceptual/theoretical studies on business ethics. In addition, the published works covered in this review heavily rely on survey method and convenience sampling, with a predominant focus on a single individual level of analysis. Importantly, this study identifies four directions for future research: contextualized theoretical development, addressing multilevel research, developing research design tailored to the Chinese context, and ensuring more diversified and rigorous data collection. (shrink)

Guanxi in China is a very ancient concept embedded in the Confucian concept of life and one that is a ‚hot' topic in that it is currently attracting increasing attention from both Western and Chinese scholars. One aspect of Guanxi which has been the subject of most of the research of late is the influence of Guanxi on firm performance. However, relatively few studies have examined how Guanxi at the individual level is transferred into a firm to influence its financial (...) performance. This study first reclassifies Guanxi into obligatory, reciprocal, and utilitarian types at the individual level as a means to clarifying the confusion brought above from previous studies. It then provides a conceptual framework in which to systematically characterize the link between Guanxi at the individual level and organizational dynamics: that is, how is Guanxi at the individual level shifted to a firm and how does it affect organizational dynamics of that firm at the organizational level. Finally, it provides a deeper understanding of the financial implications of Guanxi to business firms in China. (shrink)

Managers in ethnic businesses are confronted with ethical dilemmas when taking action based on ethnic ties; and often as a result, they increase the already vulnerable positions of these businesses and their stakeholders. Many of these dilemmas concern the capital that is generated through variations in the use of ethnic stakeholder social ties. The purpose of this paper is to suggest a stakeholder-based model of social capital formation, mediated by various forms of ethnic ties, to explore the duality of ethnicity: (...) it can aid and hinder an ethnic business. Drawing upon the social capital/economic development, stakeholder salience, ethnic businesses literatures, and on social identity theory, we develop a cyclical model of relationships among ethnic business stakeholder attributes and social capital, as mediated by three-way Simmelian bonding and bridging ties, which then, in turn, affects the ethnic stakeholder attributes. We argue that the development of bridging yet strong ties through this cyclical process is relevant for the improvement of the positions of ethnic businesses in terms of both economic success and social responsibility. Specifically, we suggest that, given the duality of ethnicity in business, managers can prioritize stakeholder relationships based upon how these stakeholder ties affect social capital. (shrink)

Despite the growing number of studies on supervisor–subordinate guanxi in Chinese society, there is a paucity of research on its antecedents. The purpose of this study was to determine Chinese people’s motives for building supervisor–subordinate guanxi. We interviewed 60 Chinese employees and found evidence that most of the respondents attached importance to building supervisor–subordinate guanxi. Their motives for building this guanxi spanned a wide range of issues, from personal benefits to other-oriented and organizational concerns. From the data we collected, we (...) developed a preliminary model of the decision to build supervisor–subordinate guanxi. (shrink)

This study focuses on comparison of perceptions of ethical business cultures in large business organizations from four largest emerging economies, commonly referred to as the BRICs (Brazil, Russia, India, and China), and from the US. The data were collected from more than 13,000 managers and employees of business organizations in five countries. The study found significant differences among BRIC countries, with respondents from India and Brazil providing more favorable assessments of ethical cultures of their organizations than respondents from China and (...) Russia. Overall, highest mean scores were provided by respondents from India, the US, and Brazil. There were significant similarities in ratings between the US and Brazil. (shrink)

Based on upper echelon theory, we employ machine learning to explore how CEO characteristics influence corporate violations using a large-scale dataset of listed firms in China for the period 2010–2020. Comparing ten machine learning methods, we find that eXtreme Gradient Boosting (XGBoost) outperforms the other models in predicting corporate violations. An interpretable model combining XGBoost and SHapley Additive exPlanations (SHAP) indicates that CEO characteristics play a central role in predicting corporate violations. Tenure has the strongest predictive power and is negatively (...) associated with corporate violations, followed by marketing experience, education, duality (i.e., simultaneously holding the position of chairperson), and research and development experience. In contrast, shareholdings, age, and pay are positively related to corporate violations. We also analyze violation severity and violation type, confirming the role of tenure in predicting more severe and intentional violations. Overall, our findings contribute to preventing corporate violations, improving corporate governance, and maintaining order in the financial market. (shrink)

Thomas W. Dunfee, in addition to his many other contributions to business ethics literature, has generated a stream of research that attempts to tackle the issue of corruption. Dunfee's research on corruption includes three primary contributions: the introduction of "Integrative Social Contract Theory" which provides a normative theoretical framework by which to judge the morality of global business activity including corruption; the "C2 Principles", which outline specific content and implementation measures that corporations can voluntarily adopt to combat corruption; and a (...) normative evaluation of "guanxi," a concept which can lead to questionable corruption practices in China. The article will highlight Dunfee's contribution to the literature and suggest future research directions based on his academic work. (shrink)

This paper explores expatriates’ ethical evaluations of and responses to guanxi in China through the lens of integrative social contracts theory. We conducted in-depth interviews with 14 expatriate managers who had spent, on average, 6.5 years working and living in China. Based on the content analysis of these interviews, we identified two different uses of guanxi: defensive and competitive. In general, the respondents found defensive guanxi moral in the Chinese context, while they considered competitive guanxi immoral. Based on our findings, (...) we identified fair competition as the substantive hypernorm that governed most respondents’ ethical evaluations of guanxi. The study has implications for all scholars who seek to utilize integrative social contracts theory to study the relationship between informal networks and corruption in developing countries. (shrink)

WeChat is not only a mobile application with many innovative features but is also representative of China’s electronic revolution. It is compatible with more than 90% of smart phones and has become an indispensable tool for daily use. People are captivated by various types of WeChat voting and canvassing activities, but little research has investigated whether such voting is based on guanxi or justice. Are people truly willing to vote on WeChat? Is WeChat voting an effective means of acquaintance marketing? (...) In this research, three studies were conducted. First, 656 respondents were surveyed, and the results showed that more than 90% of WeChat users have participated in WeChat voting and that their voting behaviour is based on guanxi. Second, an online questionnaire was administered to 731 subjects, and the results were statistically analysed to determine whether voting behaviour is motivated by guanxi or by justice. The results showed that people’s behaviour deviates from their intention. Third, 676 subjects were investigated, and logistic regression was used to model and analyse the characteristics of voting participants. The many interesting findings reveal that men show more ‘empathy’ than women and that men are more likely to vote on WeChat based on reciprocity and intimacy. In addition, older people emphasize emotion, whereas students are more interested in fostering connections for the future. Inappropriate WeChat voting behaviour does not facilitate promotional marketing, damages the reputation of the company and reduces customer loyalty. These findings provide theoretical, methodological, and practical contributions to strategies for effective acquaintance marketing. (shrink)

Guanxi, or social networks common in Confucian cultures, has long been recognized as one of the major factors for success when doing business in China. However, insider networks in business are certainly not confined to Asian cultures, nor is the attendant possibility for corruption. This study obtained original data to investigate current Taiwanese perceptions of (1) how guanxi is established and cultivated; (2) how guanxi actually is practiced now and people’s acceptance of it; and (3) the effects of guanxi on (...) business operations, employment/promotion, and social justice and fairness. The researchers also hope to (4) verify some arguments made by pioneering researchers. The authors speculate on how these attitudes may affect behavior in business transactions in hopes of making readers more aware of differing cultural values that may create unexpected ethical dilemmas. They suggest that professional ethical codes should provide guidance on the practice of guanxi in a Confucian society and that special emphasis or training in interpreting those codes may be required. (shrink)

This article examines how culture influences Chinese managers’ perception of some western management instruments, such as codes of ethics and performance evaluation systems. The research is based on analyzing the tacit messages in “stories told” by managers and reviewing some of the barriers that may hinder understanding. Major obstacles lie in failing to ‘read’ each other’s cultures correctly. Assumptions and biases are left alone instead of being addressed openly. Western management systems and tools do not necessarily function equally well in (...) the Chinese culture, unless they are reassessed and adapted. Some recommendations for managers and further research are given. (shrink)

Guanxi is a complex construct of Chinese social interaction. Previous studies have focused on implications of guanxi for business outcomes; few have examined guanxi development, which is the purpose of this study. Two theoretical modes of dynamic guanxi processes in the workplace are proposed: working guanxi and backdoor guanxi . The two modes differ in frequency of interaction, frequency of exchange of favors, and how clear the parties are on what each stands to gain from a particular interaction. Although face (...) is expected to play a role in the development of each, the type of face that is most important differs. For working guanxi , lian (personal character) is most important. For backdoor guanxi , mianzi (status) is most important. Backdoor guanxi is the mode most likely to be associated with corruption, bribery, and client–patron relations. The psychological and social processes underlying development of these two modes of guanxi are explored and a basic model proposed as a basis for future research on guanxi , face, and ethics. (shrink)

This study aims to explore the role of informal leader–member interactions in managing counterproductive work behavior in a non-Western context. We propose that under the Chinese background, guanxi with supervisor increases employees’ job satisfaction, which further reduces their CWB. Partial least square structural equation modeling with a sample of 272 Chinese employees confirms this mediating effect of job satisfaction. However, we also find that job satisfaction passes the effect of guanxi with supervisor on to CWB targeting people, but not to (...) CWB targeting the organization. Implications for research on CWB and guanxi with supervisor are discussed. (shrink)

Economic openness, both in terms of increased international trade exposure and enhanced inter-firm networking, has been a key element of China’s economic emergence since the implementation of market reforms and the “opening-up policy” over 30 years ago. Unfortunately, these changes have also coincided with the increased incidence of bribery and corruption. Both in general, and in the specific context of China, research on the relationship between a firm’s tendency toward openness and its propensity to engage in bribery is scarce. This (...) study seeks to fill this gap based on empirical evidence provided by a large sample of Chinese firms. The findings of the study reveal that firms’ increased networking and openness tend to occur contemporaneously with greater bribery and corruption. We suggest that this may be due to the misuse of guanxi-based networks that coincide with the presence of firms’ open network strategies, heightened by the potential loss of resource and capability heterogeneity (and hence reduced competitive advantages) in the context of openness. We further find that firms paying bribes do so as an attempt to overcome unnecessary bureaucratic processes and ineffective institutional support that might tend to hinder their development. (shrink)

Despite an increase in international business ethics research in recent years, the number of studies focused on Latin America and China has been deficient. As trade among Pacific Rim nations increases, an understanding of the ethical beliefs of the people in this region of the world will become increasingly important. In the current study 208 respondents from Peru and China are queried about their ethical ideologies, firm practices, and commitment to organizational performance. The empirical results reveal that Chinese workers are (...) more relativistic and less idealistic than their Peruvian counterparts. One explanation for the disparity between these two groups is likely the variation in collectivism that can be traced to different levels of importance across ingroups and outgroups. In addition to a summary of the results, future research directions and managerial implications are discussed. (shrink)

Gender greatly impacts access to opportunities, potential, and success in corporate leadership roles. We begin with a general presentation of why such discussion is necessary for basic considerations of justice and fairness in gender equality and how the issues we raise must impact any ethical perspective on gender in the corporate workplace. We continue with a breakdown of the central categories affecting the success of women in corporate leadership roles. The first of these includes gender-influenced behavioral factors, such as the (...) requirements and expectations of gendered verbal and nonverbal communication styles as well as appearance. We move on to address the impact of family on corporate leadership opportunities and success, discussing the asymmetrical evaluation of an individual’s potential, authority, and competence based on gender stereotypes of familial obligations and expectations. Finally, we address how gender impacts access to networking and sponsorship opportunities and the long-term effects of systematic limitations on women’s inclusion in the upper echelons of corporate leadership. We conclude with a summary of the questions and issues raised by our discussion and direct individuals to consider how different ethical systems and moral requirements might influence their interpretations of gender and leadership in the corporate workplace. (shrink)

Drawing on social information processing theory and a career development perspective, we examined the effect of transformational leadership on the perceived overqualification via career growth opportunities, and how the supervisor–subordinate guanxi moderates the relationship between transformational leadership and perceived overqualification. We tested this proposal using three waves of lagged data collected from 351 company employees in the Yangtze River Delta region in China. The results revealed that transformational leadership had an indirect effect on perceived overqualification through career growth opportunities, and (...) supervisor–subordinate guanxi moderated the positive association between transformational leadership and career growth opportunities. In addition, the mediating effect of transformational leadership on perceived overqualification through career growth opportunities was stronger when the level of supervisor–subordinate guanxi was high and weaker when it was low. The findings have theoretical and practical implications for reducing employees’ perceptions of overqualification in the organizational context. (shrink)

We examine how recruiting managers cope with communal norms and expectations of favoritism during recruitment and selection processes. Combining insights from institutional theory and network research, we develop a communal perspective on favoritism that presents favoritism as a social expectation to be managed. We subsequently hypothesize that the communal ties between job applicants and managers affect the strategies that managers employ to cope with this expectation. We test these ideas using a factorial survey of the effects of clan ties on (...) recruitment and selection processes in Kazakhstan. The results confirm communal ties as antecedents to the strategies managers use to cope with communal favoritism. Surprisingly, the results also show that these coping strategies are relatively decoupled from managers’ recruitment decisions. The findings contribute to favoritism research by drawing attention to the mitigating work of managers in societies in which favoritism is common. (shrink)