Guanxi: Social Connections and Personal Relationships - Essay Example

Difference between Chinese Guanxi (Connections) Australians Network and Strategies to Possible Problems between the Two Cultures (Course) (Tutor) (Date) Introduction Gianxi is special relation between two people sharing with each other. These human relations are connected through birth, marriage friends and business. One has to have known the other before they can enter into any contractual relationship, thereby summed up as a relationship between a person and another who needs something in return for another thing. To have a better understanding of how guanxi is related to business and how Gianxi distinguishes itself from western concepts, the following clarification must be made. In the literature, guanxi is frequently referred as the Chinese version of relationship marketing or business networking (Forret & Dougherty, 2004). Such a relationship is created so as to give support to partners or members practicing it. Usually they are friends, family members or entrepreneur partners who know each other. One is obligated to another or each one of the people who are practicing Gianxi must be in a position to give and to receive thus closing out anyone who does not have anything to offer (Fan, 2002). Gianxi is therefore limited to the people or relation this relation being family, friend or business relation. This has an impact in that it closes out the other of people who might wish to sell their goods or are willing to sell their goods to them and hence making it to be an exchange society where if one person gives one something then that person has an obligation to return the favor (Yang, 1994). Literature Review The subject of Gianxi and Australian Network strategies has been dealt by other authors and there are a number of issues which have to be dealt with. Though many authors have done it, I highlighting the problems arising and also the probable solutions to a better business and network strategy so as to achieve a non-autocratic society and an open market to everyone involved is one area that has not been fully explored. Australian network on the other hand is a way to connect two persons with goods and services though not known to each other, have a mutual need of goods and services to exchange in return for the stated price by the seller (Zhao, 2010). Gianxi network strategy being a social/ business network of relations has limited the outside world from entering into business with them due to the mode of business transaction and the closed up nature. This has led to increased nepotism in the business world in terms of service and sale of product. On the other hand Australian network strategy is to be emulated as the process is open to all and for all. The basis of agreement is based on one, offer to sell a good and the other pays for it. This has no limitations in terms of ‘one must have a relation to do a business or to enter into a circle of friends who are engaging in the same business (Yan, 1996). The Gianxi network strategy leaves one to be indebted to the other. For that reason, it binds one in that if there is an outsider who might come up with a better idea, the idea cannot be incorporated simply because one owes another a favor (Zhao, 2010). This has led even to corruption and use of shortcuts in terms of registration of business this denies a country the chance to get revenue to increase economic growth hence pulling the pace of economic development backwards.A country can bring about autocracy whereby the ruling, if, they are in the bracket that has to offer favors to people they know only. They end up denying the rest of the community a chance to display their expertise. This brings about nepotism which is a result of selfishness and corruption (Yang, 1994). Discussion Australian network strategy allows one to exercise freedom in terms of doing business. It boosts revenue through collection of taxes which are clear based on the fact that it operates like an open book to all who are willing to engage in business. The terms of the business in Australian network strategies is clear and well written in an agreement. Therefore anyone entering the agreement knows what terms they are entering into and is free to decide whether the terms are right or not unlike the Gianxi whereby one owes another. The terms of agreement in the Gianxi is based on ‘knowing someone’ and therefore there is no clear agreement only an obligation to one another (Fan, 2002). Given a chance to change to the Australian Network strategy, it will open up relations within the country. Expertise will be shared within and outside the country thus promoting trade internationally and opening up the circle of trade to go beyond the borders of one particular country thus going international. Although Gianxi as a mode of business relation is based on trust, which is an essential component in any business, chances of mistrust are diminished on both parties doing business in the Australian Networking. Chances of losses in the Gianxi mode of business network strategy are high and the mode of recovery might be limited to family dispute resettlement (Kohls & Buller, 1994). Gianxi denies all people who would wish to do business with them the easiness and openness to do business. It is very selfish in terms of enjoining anyone outside the circle. It is very rigid and hence, not to be emulated. Even though, this promotes family ties and continuity of a family business dynasty which secures the future of all the family members and friends. It tries to also promote peace in terms of, one cannot wrong a friend or family member as one still needs them in all spheres therefore terming it as a‘tit for tat’ type of agreement. Australian Network strategy may not work for well for anyone who is used to making informal agreements in terms of business thus it may push away potential customers who might be willing to invest and venture into the business but the nitty gritty of setting up of the business and general laws in place might also be rigid (Verhezen, 2003). Generally the two strategies used to network may be applicable but the underlying circumstances have to be sufficed. We cannot only discriminate the Gianxi as an unfair relation which has a wall built for members only. Looking at it from a broader perspective it has ensured security of family business, family’s wealth and has secured a bright future for the future generations. So, the strategy is not all that segregating although it puts off anyone who might be interested to trade with the partners or the members (those who are practicing Gianxi) (Zhao, 2010). Conclusion Social connections and personal relationships – or Gianxi as they are known within the Chinese community – are established and enhanced by gift exchanges that conform to what can be observed in the logic of the gift. Deeply rooted in the Confucian Chinese tradition, Gianxi involves relationships between or among individuals who know each other, creating obligations for continued momentum of exchange and established trust and credibility (Yeung & Tung, 1996). Such agreements as Gianxi deny the parties right to association through denying them Fundamental Human Rights. I would recommend the mix up of the two types of strategy to strengthen the ties on grounds of family and friends and opening up a new area to do business thus reducing rigidity and and creating an open society for all that is free to trade with all. This can be well enhanced through a thorough understanding of the two strategies and assessing the needs of each before settling on any of the strategies. Bibliography Fan, Y., Questioning guanxi: definition, classification and implications. International Business Review, 11, 2002: 543-561. Forret, M. L., & Dougherty, T. W., Networking behaviors and career outcomes: differences for men and women, Journal of Organizational Behavior, 25, 2004: 419-437 Kohls, J. & Buller, P., ``Resolving cross-cultural ethical conflict: exploring alternative strategies, Journal of Business Ethics, Vol. 13, 1994: pp. 31-8. Verhezen, P., “From a culture of gift exchange to a culture of exchanging gifts”, Journal Anthropology, University of Indonesia, Jakarta, 2003: pp.101-115 Yan, Y., The flow of Gifts: Reciprocity and Social Networks in a Chinese Village, California: Stanford University Press, 1996 Yang, M. M., Gifts, Favours and Banquets: the Art of Social Relationships in China, Ithaca, Cornell University Press, 1994 Yeung, I., & Tung, R., Achieving Business Success in Confucian Societies: the importance of Guanxi (connections). Organizational Dynamics, autumn, 1996: 54-65 Zhao David, Power of guanxi: grease for the wheels of China, 2010 Read More