Guanxi management as complex adaptive systems: A case study of Taiwanese ODI in China

Abstract

In China, guanxi is the basis on which Chinese exchange a lifetime of favors, resources, and business leverage. Guanxi is considered a unique construct and a product of Confucian values and the contemporary political and socioeconomic system in Chinese society. With its cultural embeddings guanxi, as the social norm of conduct, functions as complex adaptive systems that expand and interconnect to become well-knit social networks; meanwhile the functions of well-fixing and self-reinforcement of the guanxi networks (chuens) are synergetically activated internally, externally, and interactively, which shows their extreme flexibility of adaptation. Taking as a case study an outside direct investment (ODI) Taiwanese firm in China, we address and conduct a survey to examine the effect of guanxi on management. Results of the research suggest that guanxi is not limited to interpersonal links; it is also the switch that activates social networks and that reconciles interpersonal and internetwork mismatches to influence management efficacy. © Springer 2009.