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Guanxi and organizational dynamics in China: a link between individual and organizational levels

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Abstract

Guanxi in China is a very ancient concept embedded in the Confucian concept of life and one that is a ‚hot' topic in that it is currently attracting increasing attention from both Western and Chinese scholars. One aspect of Guanxi which has been the subject of most of the research of late is the influence of Guanxi on firm performance. However, relatively few studies have examined how Guanxi at the individual level is transferred into a firm to influence its financial performance. This study first reclassifies Guanxi into obligatory, reciprocal, and utilitarian types at the individual level as a means to clarifying the confusion brought above from previous studies. It then provides a conceptual framework in which to systematically characterize the link between Guanxi at the individual level and organizational dynamics: that is, how is Guanxi at the individual level shifted to a firm and how does it affect organizational dynamics of that firm at the organizational level. Finally, it provides a deeper understanding of the financial implications of Guanxi to business firms in China.

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Acknowledgements

The authors thank two anonymous reviewers for their insightful constructive comments.

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Authors and Affiliations

  1. School of Public Administration, Huazhong University of Science and Technology, Room 306, 6th, Dormitory, Western 3rd District, 430074, Wuhan, Hubei, P.R. China

    Yi Zhang

  2. College of Management, Huazhong University of Science and Technology, 430074, Wuhan, Hubei, P.R. China

    Zigang Zhang

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  1. Yi Zhang
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Correspondence to Yi Zhang.

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Dr. Yi Zhang is Associate Professor of School of Public Administration and a former postdoctor of Scholl of Management at Huazhong University of Science and Technology. His research lie in international business and FDI, strategic management in China, and organizational learning. His work has been and will be published in the Journal of Business Ethic and Singapore Management Review.

Zigang Zhang is Professor of College of Management at Huazhong University of Science and Technology. His research interests include strategic management, knowledge management, and cooperation management.

An earlier version of this paper was presented at the Fourth Asia Academy of Management Conference, December 2004, in Shanghai, P.R. China.

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Zhang, Y., Zhang, Z. Guanxi and organizational dynamics in China: a link between individual and organizational levels. J Bus Ethics 67, 375–392 (2006). https://doi.org/10.1007/s10551-006-9031-7

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  • DOI: https://doi.org/10.1007/s10551-006-9031-7

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