Someone's Wife Is Someone's Daughter: An Exploratory Study of Guanxi Strategy in China

ABSTRACT

Although the importance of guanxi in China has been well documented, much less emphasis has been devoted to the implications for foreign businesses and how they can compensate for the lack of a guanxi network when developing their business positions in the PRC.

This study, based on 47 interviews with CEOs and other senior executives of foreign companies, was conducted by the first author in three areas of China with the highest penetration by foreign companies: Beijing, Guangdong Province, and Shanghai. The research involved interviewing executives from a variety of industries and countries operating in China. By employing a qualitative approach that allowed issues relating to guanxi to emerge it was possible to better grasp the import of the topic. The interview method helped explore the participants' experiences of conducting business in China with respect to guanxi in particular. The research approach allowed the first author to use his knowledge and expertise while conducting the interviews, as well as to elicit different points of views from the participants. Verbatim quotations are used to emphasize key points and conclusions.

Not only were the context and meaning of guanxi to senior executives in foreign companies explored, but also evidence was amassed of the existence of carefully crafted and intended guanxi strategies. Some pointers for developing a guanxi strategy were also gleaned from these data. Later, this work may be supplemented by rigorous quantitative research in order to assert the framework and some of the conclusions about guanxi as a component of entry strategy arrived at in this paper.

KEYWORDS:

• Guanxi
• business networking
• strategy