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Guanxi and Conflicts of Interest

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Abstract

Guanxi involves interpersonal obligations, which may conflict with other obligations people have that are based on general or abstract moral considerations. In the West, the latter have been widely accepted as the general source of obligations, which is perhaps tied to social changes associated with the rise of capitalism. Recently, Western ethicists have started to reconsider the extent to which personal relationships may form a distinct basis for obligation. In administration and management, salient bases for decision-making include deontological, consequentialist and personalist ethics. The first may be reflected in a bureaucratic approach, the second in a price system, and the third in arrangements like guanxi. Each has positive and negative aspects, but problems arise when they lead to conflicting obligations, as may occur for an office holder who has some obligations based in deontological considerations and others based in personal relationships. This is a type of conflict of interest. Such conflicts have been considered in the West, and remedies proposed. Problems arise especially in cases where it is not clear how to prioritise different obligations, and this has been noted as a difficulty in the Chinese legal system. Questions that need to be answered include not only questions about how to deal with conflicting obligations, but also questions about what institutions to accept as giving rise to obligations. Institutions themselves may be problematic not only because of their consequences for economic productivity, but because they are internally incoherent, and this may be manifested in frequent conflicts faced by office holders.

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Acknowledgements

This article has grown out of other work by the author about guanxi and collaborative work with Annette Braunack-Mayer, Garrett Cullity, Nigel Palmer and Wendy Rogers regarding conflicts of interest, a project of the Ethics Centre of South Australia. The author is grateful to them for discussions in that context, and especially to Nigel Palmer for identification of some relevant literature, as well as to Jie Shen and Peter Verhezen for advice about guanxi, to Roderick O’Brien for a series of conversations, and to him and to Kate Leeson for comments on the penultimate draft of the paper.

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  1. School of Management, University of South Australia, North Terrace, Adelaide, 5000, Australia

    Chris Provis

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Correspondence to Chris Provis.

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Chris Provis studied and taught philosophy, then worked for some years in industrial relations and now is Associate Professor in the School of Management at the University of South Australia, and Deputy Director of the Ethics Centre of South Australia. He has published articles in journals including Business Ethics Quarterly, Journal of Business Ethics, and Business Ethics: A European Review. His book Ethics and Organisational Politics was published by Edward Elgar in 2004.

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Provis, C. Guanxi and Conflicts of Interest. J Bus Ethics 79, 57–68 (2008). https://doi.org/10.1007/s10551-007-9394-4

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