About AMA

Executive Summary
Guanxi (pronounced as guan-shee) is a concept in Chinese culture that means interpersonal relationships or connections. In sociological terms, guanxi consists of personal ties or social bonds and is described by some management consultants as the informal connection that is essential to gain approval for or access to nearly everything in China.

A key aspect of Chinese culture is its high degree of collectivism. The norms of Chinese interpersonal behavior distinguish in-group from out-group people. For in-group relationships, in which expressive (or affectionate) ties are predominant, Chinese people pay more attention to attachment, harmony, and long-term relationships by going along with the group. For out-group relationships, in which instrumental ties are predominant, people tend to distrust one another. Therefore, in general, Chinese society is a low-trust society.

Guanxi can be classified into three categories: expressive ties for family members, instrumental ties for strangers, and mixed ties for familiar people. Lee and Dawes limit the study to guanxi of the mixed-tie type because most business situations fit this type. 

On the basis of literature reviews of Chinese culture and interpersonal relationships as well as interviews with Chinese managers, Lee and Dawes define guanxi as having two components: instrumental and affectionate. The instrumental part consists of two concepts, face preserving and reciprocal favor, and the affectionate part consists of only affect. These three concepts are universal; that is, they have similar meanings in different countries, though presentations of these concepts may differ in different cultures. In the Chinese culture, these three components mingle with one another; that is, for Chinese people, both the instrumental and the affect components go together; business mingles with affect. This culture is quite different from that of the United States in which business is business and is not mingled with affection. Lee and Dawes collected data from 128 organizations in Hong Kong, and their empirical study offers the following findings: (1) Affect, but not the other two instrumental components of guanxi, contributes to improving guanxi; (2) a buying firm’s trust in a selling firm contributes to the buyer’s long-term orientation to the seller; and (3) a buying firm’s personal trust in the selling firm’s sales manager is a major factor in the buyer’s long-term orientation toward the seller. The reason for this is that if buying personnel and the sales manager are guanxi partners, the buying personnel may be loyal to the sales manager. This personal loyalty becomes a long-term orientation to the selling firm. Therefore, guanxi is a double-edged sword because when a sales manager leaves the seller, he or she brings the guanxi partners along.

Biography
Don Y. Lee is Associate Professor of Marketing in the Department of Management and Marketing at Hong Kong Polytechnic University. He received his doctoral degree from the Wharton School at the University of Pennsylvania in 1991. His areas of marketing expertise and interest are channels, business-to-business, relationship marketing, and cross-cultural studies. In addition, Lee has worked in the areas of health care and mechanical engineering. Lee has published in such journals as Journal of Industrial and Business Marketing, Journal of Management Studies, Journal of Business Research, and European Journal of Marketing.

Philip L. Dawes is Professor of Marketing in the Wolverhampton Business School at the University of Wolverhampton, United Kingdom. He received his doctoral degree in 1990 from the Australian Graduate School of Management, University of New South Wales, and his master’s degree in Industrial Marketing in 1977 from the University of Bath. Dawes has worked in the U.K. pharmaceutical industry for ten years. His areas of interest include business-to-business marketing, services marketing, and cross-functional relationships. Dawes has published in such journals as Journal of Business and Industrial Marketing, Journal of High Technology Management Research, and Industrial Marketing Management.