IS GUANXI A SUCCESSFUL BUSINESS TOOL? A LITERATURE REVIEW ON GUANXI AS A RELATIONSHIP MAKING TOOL IN BUSINESS

Abstract

Building relationships or making connections and networking with people and organizations is a very successful business strategy. Relationship marketing is one of the hottest topics in business and there are many aspects associated with building relationships. Guanxi is one of the unique cultural characteristics of Chinese society, that connects the social and business networks. Guanxi shapes up the collectivism culture of this extremely large market, but it is also like a double –edged sword. This study is a literature review and discussion about Guanxi and business. The importance of Guanxi as a successful business and relationship marketing tool has been analysed by numerous scholars, by taking different business backgrounds and case studies. Guanxi may result in positive as well as negative outcomes specially when it combines with business networking. Chinese culture is different from other cultures and their differences bring diverse results or perception by interpreting Guanxi in practice. The importance of trust building that lead for personal bonding with market, long term indirect benefits in relationship building as well as direct networking are highlighted. Finally, Guanxi empowers the business by strengthening the negotiation skills in market as a way to forward the organizational performance.

Key Words: Guanxi, Relationship Marketing, Business Networking

For full paper: fmscresearch@sjp.ac.lk