Guanxi: Principles, philosophies, and implications

It has long been recognized that personal relationship (guanxi) is one of the major dynamics in the Chinese society where business behavior revolves around guanxi. It has been pervasive in the Chinese business world for the last few centuries. Any business in this society, including both local firms and foreign businesses, inevitably face guanxi dynamics. In light of the paucity of research on guanxi in the Chinese management literature, this paper offers the definition, principles, and philosophies of guanxi, illuminates guanxi's economic rationale and its characteristics relative to Western networking, and provides managerial implications and theoretical directions pertaining to guanxi.