The role of renqing in mediating customer relationship investment and relationship commitment in China

There is a growing research interest in guanxi marketing, which has been considered the Chinese version of relationship marketing. However, very little empirical research has investigated the implicit nature of renqing, the underlying mechanism that explains the cultivation and maintenance of guanxi. This study examines the role of renqing in mediating customer relationship investment and relationship commitment in the insurance industry. The authors surveyed 245 car insurance policyholders in China. The findings confirm the mediating role of renqing in such relationships and show that renqing explains a very high proportion of the variance in levels of customer relationship commitment. This result offers valuable insights and suggestions as to how to increase levels of customer relationship commitment in China.     

An examination of the influence of guanxi and xinyong (utilization of personal trust) on negotiation outcome in China: An old friend approach

Managers of multi-national enterprises (MNEs) are at a disadvantage in negotiating outcomes with their Chinese counterparts when compared to local competitors. The reasons include: local competitors are more flexible in handling business terms and conditions; local Chinese managers prefer to negotiate with their old friends or insiders in the same guanxi network; and MNE managers perceive that cultural practices such as gift-giving and guanxi are problematic. This study advances our understanding of negotiation by using a model developed for the reference of MNEs to establish an “old friend” relational status with their local Chinese counterparts. This approach emphasizes cultural adaptation for MNE managers to achieve satisfying negotiation outcomes in China.The study reveals the following unique issues: 1) in addition to their problem-solving attitude, MNE managers should practice mianzi and gift-giving to build renqing with their Chinese counterparts at a new friend stage; 2) the reciprocity dynamics of renqing should enable these managers to accumulate ganqing and to become old friends of their Chinese counterparts; 3) the establishment of ganqing between MNE managers and their Chinese counterparts should enable the development of xinyong between the two exchange parties; and 4) desirable negotiation outcomes can be built on xinyong.     

The many faces of trust and guanxi behavior: Evidence from marketing channels in China

This study examines how a trusting relationship influences firm boundary agents' guanxi behavior which involves saving face (wei hu mianzi), and affect investment (ganqing tou zi). At the individual level, we decompose trust into its competence and goodwill forms and examine their relative and interactive effects on guanxi behavior. A study conducted among 354 Chinese purchasing managers reveals that both competence trust and goodwill trust promote guanxi behavior, and these two types of character trust are substitutive for each other in terms of motivating the use of guanxi. At the firm level, calculative trust directly affects guanxi behavior and also negatively moderates the effect of competence trust on guanxi behavior. These results imply that calculative trust may substitute for competence trust in facilitating economic transactions and thereby reduce the use of guanxi in business interactions.     

Guanxi practice and Chinese buyer-supplier relationships: The buyer's perspective

This study explores the different effects of guanxi practice on Chinese buyer-supplier relationships in the initiation and the maintenance stages during the buyer-supplier relationship lifecycle. Using survey data collected from the retail industry in China, we find that retailers perceive varying buyer-supplier relationship behaviors in these two relationship stages and, accordingly, guanxi practice exerts opposite effects on retailer satisfaction. Specifically, during the relationship initiation stage, guanxi practice is negatively related to retailer social satisfaction and commitment. However, during the relationship maintenance stage, guanxi practice is positively related to retailer economic satisfaction. The results from this study provide suppliers with managerial implications on when to and when not to practice guanxi in China.     

The measurement of guanxi: Introducing the GRX scale

This study posits and examines a measurement scale for measuring guanxi based on three Chinese relational constructs - ganqing, renqing and xinren. Focusing on Anglo-Chinese buyer-seller relationships, the research reports the findings from six qualitative in-depth interviews and survey data obtained from over 200 Taiwanese trading companies. Based on exploratory and confirmatory factor analyses the findings from the final second-order confirmatory factor analysis of the guanxi model identified 11 items for measuring ganqing, renqing, xinren and guanxi respectively. The results offer a useful starting point in order for business practitioners to assess their guanxi and at the same time provide academics with a scale for operationalizing the measurement of guanxi.     

Power, conflict, and cooperation: The impact of guanxi in Chinese marketing channels

This paper tests the impact of guanxi on behaviors among firms in a Chinese marketing channel. Guanxi is operationalized in this paper as emotional closeness and interactive state. We find that the emotional closeness between channel-boundary personnel of firms has a positive impact on their exercise of noncoercive power, a negative impact on their exercise of coercive power, and a negative impact on the perceived conflict between them. In addition, emotional closeness has an indirect but positive impact on perceived cooperation. Interactive state between the boundary personnel of two firms has a positive impact on a firm exercising noncoercive power and a negative impact on perceived conflict between them. At the same time, it is positively related to a firm exercising coercive power. This shows not only the significant influence of guanxi on a firm's channel behaviors but also the constructive effects of both emotional closeness and interactive state on marketing channel behaviors in China.     

Interpersonal guanxi and partner extra-role behavior: Mediating role of relational and transactional governance strategy

This paper identifies interpersonal guanxi between boundary spanners as an individual-level antecedent of partner firms' extra-role behavior (ERB) in interfirm relationships. Drawing on interfirm governance and the guanxi literature, we propose that guanxi between boundary spanners at the operational level may promote partner firms' ERB through two governance strategies: interfirm trust and relationship-specific investment. We analyze 268 pairs of sales managers and salespeople in a variety of industries in China, and we find that guanxi between boundary spanners positively affects partner firms' ERB and that this positive relationship is strengthened by interfirm ownership homogeneity. Moreover, the relationship is mediated by interfirm trust and relationship-specific investment, and the mediation effect of interfirm trust is stronger than that of relationship-specific investment. These findings provide new insights into the relationship marketing and guanxi literature by highlighting the effects of guanxi between operational-level boundary spanners on partner firms' ERB.     

Investigating guanxi dimensions and relationship outcomes: Insights from Sino-Anglo business relationships

This study aims to develop and test a concept for improving Anglo-Chinese business relationships. By piecing together and incorporating both Chinese and western relationship constructs into a cohesive framework and testing this on a sample of Taiwanese importers, the study conceptually and empirically advances our understanding of the discipline further. Specifically, three facets of guanxi, namely ganqing (an affective element), renqing (reciprocation and favor), and xinren (personal trust) are conceptualized to determine cooperation and coordination, which in turn lead to improved performance. Based on a sample of 208 buyers (surveying perceptions of their relationships with Anglo suppliers), we provide empirical support for our concept and reveal that ganqing, renqing and xinren are crucial for fostering the development of such Sino-Anglo relationships. By providing an international flavor in terms of the constructs outlined and the importer-exporter context, the study provides fresh insights to help broaden our horizon further and understand more about relationships in an international context. Several implications are extracted from the study which a) western marketers importantly need to practice as they grapple to enter Chinese markets and nurture business relations, b) Chinese buyers can consider when managing their supplier portfolios and c) academics can use to help measure important relational constructs and undertaking research in a Chinese context.     

Manufacturer-supplier guanxi strategy: An examination of contingent environmental factors

While guanxi is a cultural norm in China, the development and maintenance of guanxi can also be viewed as a business relationship management strategy that is leveraged by organizations in response to environmental conditions. The current research proposes that participation in guanxi is not equal to actively pursuing guanxi as a business strategy. Rather, firms respond to external environmental factors through guanxi management. Drawing on contingency theory and based on the perspectives of a China-based manufacturer respondent sample, a conceptual model of environmental factors that influence manufacturer-supplier guanxi is proposed and tested. The results indicate that supply and demand market uncertainties and legal environment complexity significantly affect levels of manufacturer-supplier guanxi, and that guanxi influences the use of non-coercive power by manufacturers. Contrary to expectations, manufacturer dependence on a major supplier did not influence levels of guanxi. The study findings and their implications extend current knowledge of inter-organizational guanxi and its influence on business-to-business relationships.     

Antecedents and Outcomes of Employees' Trust in Chinese Joint Ventures

In this study we investigate the antecedents and outcomes of employees' trust in their supervisors and organizations in Chinese joint ventures. We develop a model that links trust, job security, and subordinate-supervisor guanxi. The model considers job security as an antecedent of trust in the organization and subordinate-supervisor guanxi as an antecedent of trust in supervisors. It further suggests that the turnover intention of employees is affected by their trust in their organization, and that their organizational citizenship behavior is affected by their trust in their supervisors. We use a data set consisting of 295 employees collected in four joint ventures in Southern China to test the hypotheses. The results of our LISREL and OLS regression analyses support the proposed model. Job security and subordinate-supervisor guanxi are found to affect employees' trust. In addition, trust in the organization has a stronger effect on turnover intention than does trust in one's supervisor. Trust in supervisors significantly affects the organizational citizenship behavior of employees. These findings have practical implications for the management of workers in Chinese joint ventures.     

Role conflict and ambiguity confronting transnational business networkers: Contrasting social stigma and relational risks for Chinese and Western boundary spanners

Our research explores the role conflict, ambiguity and resulting social stigma and relational risks that transnational B2B networkers face when facilitating the formation of new exchange dyads between firms from distinct and distant cultures, i.e. Chinese and Western. We integrate literature from institution theory and role theory to establish the comparative framework. This allows us to explore: (1) what stigma and relational risks guanxi brokers assume when facilitating transnational business connections; (2) if Western brokers encounter similar stigma and negative consequences that threaten their professional standing and the formation process; and, (3) the lessons from both that transnational firms can learn and incorporate into best practices. We conclude our paper with managerial implications and suggestions for further research.     

The deterrence effect of Guanxi on opportunism: The moderating effects of “three institutional pillars”

Marketing channel members are subject to opportunism, and guanxi (i.e., interpersonal ties) is a useful mechanism to deter it. This article argues that the effect of guanxi on opportunism depends on the institutional environments in which firms are embedded in. Drawing on institutional theory and guanxi literature, we investigated the effects of the “Three pillars” of institutional environments. Specifically, we examined whether legal effectiveness, Confucianism, and organizational culture incongruence moderate the impact of guanxi on exchange partners' opportunism. We collected survey data from both sales managers and salespersons in 268 manufacturing firms and merged the dataset with secondary data that measure institutional factors. The results show that guanxi deters opportunism more effectively when legal effectiveness is high, where Confucianism is more prominent, and when exchange firms' organizational cultures are more incongruent. This study provides implications for marketing channel members on how to use personal ties under different institutional conditions.     

Why do Chinese employees build supervisor-subordinate <Emphasis Type="Italic">guanxi</Emphasis>? A motivational analysis

Supervisor-subordinate guanxi is an informal leader-member relationship that is of utmost importance in Chinese organizations. This paper explores Chinese employees’ motives for building supervisor-subordinate guanxi through two studies. Study 1 develops an indigenous scale of motives for supervisor-subordinate guanxi. Four motive types (i.e., career advancement, team concern, personal life, and impression management) are identified, and the scale’s convergent and discriminant validity is established. Study 2 examines the predictive power of these motive types. The results indicate that they, as a whole, account for unique variances in supervisor-subordinate guanxi. Furthermore, as single motive types, they have unequal impacts on this relationship and its dimensions. This research enhances understanding of what underlies supervisor-subordinate guanxi from a motivational perspective and has implications for Chinese indigenous research of guanxi.     

The succession process in Chinese family firms: A guanxi perspective

Intergenerational succession is a principal cause of the high failure rate among first- and second-generation family businesses. The purpose of this paper is to contribute to the understanding of the complexity and dynamics of the succession process by examining the role of guanxi. This paper uses an exploratory case study of six Chinese family firms. The results of this research indicate that (1) the succession process of entrepreneurs’ guanxi networks can be divided into four representative phases, namely, preheating, triggering, readjusting, and reconstructing; and (2) each phase requires performing some characteristic tasks. Such tasks include the cross-generational teaching and learning of guanxi philosophy, the deconstruction of the profile of guanxi networks, the introduction of the next generation to existing guanxi parties, the cross-generational role readjustment in guanxi building and management, the renewal of guanxi parties, and the rebuilding of guanxi net structures. The results of this study also provide an extended theoretical model that helps to explain the relationship between the intergenerational transfer of entrepreneurs’ guanxi networks and the transfer of leadership.     

Gift type,guanxi, and gift acceptability in Chinese business circles: The mediating effects of perceived manipulation and face threat

Although gift giving, a catalyst of guanxi, plays an important role in doing business in China, few studies have examined how to give a proper gift within business-to-business guanxi. Drawing on guanxi and gift-giving literature, this study investigates gift acceptability in the light of gift type and guanxi in two dimensions (relational closeness and relative status) in a hierarchical Chinese business circle. We classify gifts into monetary and nonmonetary gifts. The findings from two scenario-based experiments indicate that a monetary gift versus a nonmonetary gift decreases gift acceptability through the increased level of perceived manipulation (PM) and face threat (FT) and these indirect effects are contingent on different guanxi types. The mediating roles of both PM and FT turn more significant when relational closeness (gift recipient's status relative to giver) increases. These findings help Western businesspeople select the right gift form to give to the right Chinese counterparts in the right way.     

The significance of trust and renqing in the long-term orientation of Chinese business-to-business relationships

While business relationships with China are receiving increased attention in both practitioner and academic discourse, very little empirical work however, has been undertaken to isolate and examine measures that focus on business-to-business relationships, and as such, research in this area is somewhat scant. In an attempt to bridge this gap, and add to the knowledge in this emerging discipline, the research aims to develop a conceptual framework to explore the relationship between trust and the long-term orientation in Chinese business-to-business market relationships. Based on a survey with Hong Kong companies that have a buyer-seller relationship with Chinese companies, the empirical findings indicate the mediating role and significance of ‘renqing’ for enhancing trust and contributing towards the long-term stability in relational exchange. The results highlight several implications for practicing managers to consider when aiming to establish and develop relationships in a Chinese business-to-business context.     

Relationship factors and firms' willingness-to-pay: A comparison of east-west settings

The aim of this study is to examine the underlying mechanism that explains the effects of supplier firms' sustained competitive advantage (SCA) on customer firms' willingness-to-pay a price premium (WTP) across Eastern and Western settings. Drawing upon the relationship marketing (RM) paradigm, we posit that SCA influences WTP via calculative commitment and relationship quality (RQ). A survey involving executives from Australian (n = 336) and Chinese (n = 360) firms was conducted to test the theoretical model. The findings reveal that the effect of SCA on WTP is mediated by RQ and calculative commitment among Chinese firms. Among Australian firms, however, the effect of SCA on WTP is mediated only by RQ and not calculative commitment. The study contributes to the literature by distinguishing the role of ‘rational’ (i.e., calculative commitment) and ‘emotional’ (i.e., affective commitment and RQ) relationship factors in influencing WTP, and by validating a multidimensional RQ model that is applicable to culturally diverse contexts. To marketing practitioners, this research helps to identify the conditions under which RM practices can be effective for B2B firms that operate across diverse cultures.     

Guanxi GRX (ganqing,renqing, xinren) and conflict management in Sino-US business relationships

This paper challenges the existing view of guanxi as comprising one combined notion, and thus proposes to investigate guanxi's sub-dimensions individually. Developed from Confucius Relationalism, the proposed GRX conflict management framework argues that ganqing (emotional attachment), renqing (reciprocal favour exchange) and xinren (interpersonal trust) have different effects on reducing task and emotional conflict. Empirical findings based on 300 Sino-US business relationships reveal that ganqing and xinren can significantly reduce both emotional and task conflict, whilst renqing does not have a significant effect on reducing either. Nevertheless, upon moderation analysis, the effects of ganqing and renqing in reducing emotional and task conflict become more significant when dealing with the more experienced buyer (with a longer length of employment), whilst xinren's impact on reducing task conflict is lessened in more mature relationships (those with a longer business relationship duration), compared to less developed business relationships. The findings shed new light to guanxi literature, with evidence highlighting how GRX dimensions may be employed individually to effectively reduce conflict in Sino-US business relationships.     

Ambidextrous balance and channel innovation ability in Chinese business circles: The mediating effect of knowledge inertia and guanxi inertia

Drawing on organizational learning theory and literature on guanxi, this study examines how and why ambidextrous learning balance influences firm innovation capability in Chinese business circles. We propose a U-shaped relation between ambidextrous learning balance and firm innovation capability which is mediated by guanxi inertia and knowledge inertia in different ways. Specifically, ambidextrous learning balance has an inverted U-shaped impact on guanxi inertia and further influences firm innovation capability. Whereas, ambidextrous learning balance has a linear positive influence on innovation capability through a decreased level of knowledge inertia. Based on survey data collected from, The results obtained from a sample of 197 Chinese channel enterprises using SEMs analysis provide strong support for our hypotheses. In addition, the findings based on firms with unbalanced ambidextrous learning indicate that as opposed to exploratory learning, higher level of exploitative learning leads to an increase in guanxi inertia and a decrease in knowledge inertia. These conclusions reveal how ambidextrous learning balance influence innovation capability for a firm with inherent learning preference which is not discussed by the extant research. At the same time, this study fills the gap of ambidextrous learning balance by considering the influence of culture. Our work also informs foreign practitioners of the optimal ways of learning for innovation in China.