Interaction between business strategy and the use of guanxi in China Research Proposal

Interaction between business strategy and the use of guanxi in China - Research Proposal Example The guanxi business strategy will be measured according to the various aspects of business that can be influenced when it is implemented on individuals in the market. This research aims at collecting data that will be used to analyze the situation and give objective recommendations on the best business strategy to adopt in the whole issue for businesses to be sustainable. INTRODUCTION Background to Guanxi Guanxi is dated to very long in the history of the Chinese where there were many political and social upheavals in which people were killed and resources destroyed (Leung et al, 2011, p801). In those times, people were disintegrated and fought against each other as well as exploiting the weak to gain some properties from them and dominate them (Kang et al, 2007, p45). As a result guanxi was formed, which is a term that means a network through which people relate and help each other to secure favors as individual or in business and hence promote the wellbeing of each other. The Confu cius codified the individual, family and societal ties, which specified the responsibilities of different people in their environment and laid the expectation of the society on different people to ensure they fulfill them. During the times when China face social and political instabilities, the relationships established were important in preventing the spread of injustices and wars among the members who related with each other (Langenberg, 2007, p33). The Chinese society is established in units of families, in which the members have a certain kind of relationship that could be defined by blood, neighborhood, friendship or involving classmates who shared a class in school. All the members in this family are very loyal to each other but on the contrary, they have similar level of distrust on the non-members who could be around them (Tan and Chee, 2005, p204). This means that in order to extend business favor to any person in the Chinese society, the first consideration is the ties a p erson has with the one who possesses it and is ready to give out (Lee, Reiche and Song, 2010, p164). The people who are members of this same family are connected together in relation to a system of reciprocity and equity and that helps them to treat each other well so that they can also receive particular favors from them (Jin, Cheng and Yunjie, 2009, p161). On the other hand, there are different consequences that are associated with disregard to the commitment to one’s family whereby the errant loses his or her social reputation and prestige, which is a very important thing in the relationship of the people with each other (Guan, 2011, p5). Business interactions in China are established on the bases of these ties and they contribute to decisions that a person takes in a transaction or a venture that can extend a certain favor to a person or to both (Ruehle, 2010, p9). Guanxi principles have permeated to the political and other social relations to disrupt laws of justice that are enacted to curb favoritism because personal judgment is the conviction that people have to enable them to have all they need (Luo, 1995, p248 and; Luo and Chen, 1997, p7). In this respect, loyalty to the family becomes a very important thing, more than the loyalty one has on the government or other institution of the society that has similar or contrasting demands