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

  • Chen H
  • Ellinger A
  • Tian Y
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Abstract

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. © 2010.

Author-supplied keywords

  • Demand market uncertainty
  • Legal environment complexity
  • Manufacturer dependence
  • Manufacturer-supplier guanxi
  • Non-coercive power usage
  • Supply market uncertainty

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