Title: Guanxi: the evolutionary process of management in China

Authors: Ron Berger; Ram Herstein; Yoram Mitki

Addresses: Department of Business Management, The Lander Institute - Jerusalem Academic Centre, 3 Am Violamo St., Givaat Shaul, Jerusalem, Israel ' Department of Business Management, The Lander Institute - Jerusalem Academic Centre, 3 Am Violamo St., Givaat Shaul, Jerusalem, Israel ' Department of Business Management, The Lander Institute - Jerusalem Academic Centre, 3 Am Violamo St., Givaat Shaul, Jerusalem, Israel

Abstract: As China becomes increasingly important to the global economy, it becomes increasingly prudent to understand the mindset of the Chinese manager. Recognising the significant impact of guanxi and its influence on management in China is important for Western firms. The paper illustrates the evolutionary process of the Chinese managerial infrastructure and builds a basic framework for understanding it better. This study found that China is in the midst of an institutional managerial evolution from a communist based managerial system to a capitalistic socialist system managed by the communist party. An attempt to replace the old discretion based system of revenue sharing with a new rule based system of revenue-sharing demanded an evolution of managerial practices. The managerial aspects of how to transform the present Chinese managerial approach to an Anglo Saxon, transparent one based on clear rules of trade backed by a strong business ethics backbone and models is crucial.

Keywords: guanxi; Chinese management; social capital; transactional exchange; social exchange; institutional evolution; managerial evolution; China; revenue sharing; business ethics; trade rules.

DOI: 10.1504/IJSCM.2013.057554

International Journal of Strategic Change Management, 2013 Vol.5 No.1, pp.30 - 40

Published online: 22 Sep 2014 *

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