Cheah Yi Chyun

Q1

1. Why do you think that it is important to cultivate guanxi and guanxiwang in China?

Guanxi or Guanxiwang is known as connections of people in the society, business, workplace, or the
idea of networking in western. As Guanxi helps to strengthen the bond and the closeness in the
function of Chinese society. Guanxi has ease a lot of difficulties and also entails the interaction of
humans (Kenton,2019).

A better to illustrate the Guanxi, say a girl named Han Meimei, who lives in the city of Hangzhou,
China, wants to receive better education services by going to the top-tier school. However, the school
only accepts students from Shanghai, she cannot get in.

Perhaps, she finds the other alternatives, such as approaching to the headmaster and since the
authorities of the school are her relatives. She fakes the paperwork with the help of the relatives and
got herself the specialist status to enrol into the school.

As looking into the example above, we could see that Han Meimei helps herself with the power of
connections (Guanxi).

Back to the question, Guanxi or Guanxiwang is known as connections of people in the society,
business, workplace, or the idea of networking in western. As Guanxi helps to strengthen the bond
and the closeness in the function of Chinese society. Guanxi has ease a lot of difficulties and also
entails the interaction of humans (Kenton,2019).

A better to illustrate the Guanxi, say a girl named Han Meimei, who lives in the city of Hangzhou,
China, wants to receive better education services by going to the top-tier school. However, the school
only accepts students from Shanghai, she cannot get in.

Perhaps, she finds the other alternatives, such as approaching to the headmaster and since the
authorities of the school are her relatives. She fakes the paperwork with the help of the relatives and
got herself the specialist status to enrol into the school.

As looking into the example above, we could see that Han Meimei helps herself with the power of
connections (Guanxi).

Back to the question, it is important to cultivate guanxi (relationship) and guanxiwang (relationships
network) because China as a country, is a country which strongly emphasizes reciprocal relationships.
Based on the case, we understand that guanxi and guanxiwang follows the teaching of Confucian
ideology that has been around for more than 2000 years.

Confucian ideology teaches that people are not created equal. Therefore, it is important for people
as a social being to cultivate good relationships between each other. As for this case, in business,
especially in China, it is clear, to be able to success, it is important to establish connections in
relationships. Because by doing so, it would help the business to do a better job, to find a better
opportunity and also overcoming some thread and obstacle along the way.

Confucian guanxi and guanxiwang becomes necessary because in this kind of relationship, it forms a
development from two partners to respect each other and help each other out in an unspecified time
Cheah Yi Chyun

in the future. It creates some kind of social investment in which people can cultivate its benefit by
knowing the right people to contact for the right cause. Moreover, China also has a weak rule of law
and legal. Things especially in business get done based on partnerships/friendships and mutual
interest, not by law or legal regulations.

Chinese people had been practicing this kind of business partnership, and always live up to their
obligations between their partners, because they fear that nobody will go into business with them if
they did not do so. In conclusion, having a good guanxi and guanxiwang is necessary if we want to be
able to maintain our business in Chinese business world, because knowing the right people and
making the right people know you in business, opens up a lot of opportunities and will help you
maintain your business.
Cheah Yi Chyun

Q2

What does the experience of DMG tell us about the way things work in China? What would likely
happen to business that obeyed all the rules and regulations, rather than trying to find a way around
them as Dan Mintz apparently does?

Dan Mintz as the founder of DMG had no experience in the advertisement sector nor contact in
China, even the language itself. However, he had guanxi with two young Chinese who have
connections with diverse levels of people, so they were able to be one of China's fastest growing
advertising agencies.

The DMG experience in China shows that culture matters as an important thing in China. Guanxiwang
refers to the relationship network that companies cultivate. Both of these are important in dealing
with others that drives business in China. Dan Mintz has a believe that guanxi and guanxiwang can
help companies get around restrictions that limit the ability of companies to function, so it is very
useful in delivering a good job.

Business in China without the relationships network threatened to fail because it is almost impossible
for us to get a triumph if we cannot work around the law and have doors opened. Culture in China
has a role as an imperative factor when conducting business (Foreign or domestic).

The guanxi and guanxiwang factors are very important pieces of China's culture. Both are essential to
someone who is trying to start a successful business in China. Overall, this is an advantage that DMG
was able to acquire due to the fact that Wu was a recognized national champion and Xiao has
political connections
Cheah Yi Chyun

Q3

What are the ethical issues that might arise when drawing upon guanxiwang to get things done in
China? What does this suggest about the limits of using guanxiwang for a Western business
committed to high ethical standards?

When talking about ethical issues, the practice of guanxiwang (network/networking) practiced by
DMG might be classified as unethical or even borderline corrupt seen from the Western perspective.
The Western culture and perspective in general (not only in the business world) highly values equal
chances. Had this case happened in the Western business world, it would not only concern ethical
values but also a number of laws.

Due to this reason Western businesses committed to a high ethical standard and high compliance to
law would refuse the practice of guanxi. However, this might become a barrier for them when trying
to expand to China, as they might come across regulations that limit them from doing certain
business practices.

Integrity index: Western countries appear the most in the list as accordance with index.org (Source
from < https://integrity-index.org/ > 2019 updated)
Cheah Yi Chyun

References

1) Kenton, W., 2019, What is Guanxi? [Online Article]. Available at <

www.bbc/guanxi/definition/hhsskfddcc/303442284dd294.com > [Accessed 12 September
2020].

2) Luo, Y, Ying H, and Stephanie L. 2011, Guanxi and Organisational Performance: A Meta-
Analysis. Available at < https://www.cambridge.org/core/journals/management-and-
organization-review/article/guanxi-and-organizational-performance-a-
metaanalysis/01809BBE18130E83F8DFEF078DF13640 > [Accessed 22 September 2020].

3) Mike, C., 2020, Chinese Guanxi: The Oil That Keeps China Running. [ChinaMike.com]
Available at < https://www.china-mike.com/chinese-culture/guanxi/ > [Accessed 22
September 2020].