International Business Strategy in China and Taiwan - Dissertation Example

There follows in Chapter three a consideration of the ethical issues surrounding guanxi, including its role in fostering Corporate Social Responsibility in China and Taiwan. Chapter four concentrates on recent events, presenting a case study from Taiwan with the aim of illustrating some of the issues that arise when guanxi goes wrong.

Both theoretical and practical dimensions of guanxi in the context of international business are explored, along with some of the complex social and political factors that are currently influencing business practices in China and the surrounding region. It is suggested that guanxi is changing in the new global context. The study concludes that establishing guanxi is an essential business strategy for western MNEs to be successful in China and Taiwan and that it will remain a very important part of Chinese business culture.

A number of implications for both Eastern and Western partners are listed, showing how they will each have to adapt to the way that guanxi is evolving. Keywords: China, Taiwan, guanxi, culture, business ethics, corporate social responsibility, international business, reputation management. . Despite the amount of material available on the subject, there is very little clarity in terms of what it means in the globalized world, and how Western investors and partners can best deal with guanxi. Another important factor is the very fast pace of change in China which tends to make even some very recent scholarship obsolete within a short space of time.

It is important to understand what guanxi really is, where it comes from, and how it has developed and changed throughout China’s long history. The present study explores in particular the new global context for guanxi and looks for any implications for East/West Partnerships going into the future. The previous literature on the subject is analyzed thoroughly, but the study argues also for a fresh appreciation of how guanxi is changing. This has implications both for Chinese businesses and for Western companies entering the Chinese markets and so the emphasis is on ways in which both parties can benefit from this old tradition in a globalized context.

Internationalization has become a global trend. Many second-world countries such as China, Brazil, Malaysia, and Taiwan have opened up their economic door to stimulate their own economies and play a more active role in world affairs. As the Asian market has been growing rapidly, investing in these emerging economies has become extremely attractive to Western multinational enterprises (MNEs). Over the last decade, China has achieved the highest GDP growth rate among all the nations in the world. Besides its huge internal market, the single largest export market for China is the United States, which takes roughly a quarter of all Chinese exports. (Hwang et al., 2009, p. 236).  This trend means that Chinese and Western managers are increasingly having to find ways to communicate and do business with each other, crossing the cultural divide in order to maximize their investment in international trade.