In China, the word guanxi is in the top ten vocabulary list of all successful businesses. Great Chinese businesses and business(wo)men just cannot survive and thrive without developing excellent guanxi with organizations of authority, such as the state-owned banks. But to a deeper extent, guanxi penetrates all manners of Chinese society. The school that you're going to has connections to high government officials, the club owner gets his loan from a friend that works at the Bank of Communication, parents has guanxi with a teacher (their intermediary) and asks her to ask the principle of a prestigiouis high school out for dinner, and so on and so forth. Nonetheless, since China began to open up in the late 1970s, understanding how to apply guanxi has been just as important, if not more, as getting accepted into college. You can do many kinds of business in China without a college degree, but having a college degree doesn't mean you'll be able to find employment.
Sometimes, however, even the Chinese have a tough time of handling the intricacies of guanxi. Like doing business, developing guanxi with others cannot be all honest and straight forward, In addition, there is the added pressure of developing a better guanxi with their target than the guy next to you, who is also trying to win your target over. My head is beginning to spin....let's put it this way...
Sample Case of Guanxi's Complexity
Mr. Chen owns a small manufacturing plant makng leather belts and he's looking to expand his business by borrowing money from Mr. Huang, the branch manager, of the only bank in town. But he knows that Mrs. Zhang, one of his biggest customer, is on bad terms with this branch manager, and Mr. Chen is afraid of losing business from Mrs. Zhang if she finds out about his relationship with Mr. Huang. If he doesn't handle this situation well, his guanxi with Mrs. Zhang or Mr. Huang can turn sour, or even worse, both of them will take their business elsewhere and Mr. Chen will be in deeper trouble. So what can Mr. Chen do to get his loan and still keep Mrs. Zhang happy?
A.) Hire Parties to Mediate the Situation
One party speaks on Mr. Chen's behalf to Mr. Huang. The second party also speaks on Mr. Chen's behalf, but to Mrs. Zhang.
B.) Personal Diplomacy
Mr. Chen asks Mr. Huang and Mrs. Zhang separately on why their relationship is so poorly (This allows both party to save "face" in case something goes wrong). He offeres his help in resolving the conflict to both sides and highlight the benefits that both side can accomplish with good relations.
or more drastically (and dangerously)
In the presence of Mr. Huang, a strategy can be employed where Mr. Chen offers criticizes Mrs. Zhang's behavior, while at the same time, he offers support to the branch manager and praise the branch manager for being so forgiving of others. This sort of forces Mr. Huang to live up to compliment that Mr. Chen so generously offered. As for Mr. Chen's case, careful diplomacy within the same line can be done by Mr. Chen. If, however, this backfires, one can imagine the consequences that await Mr. Chen.
C.) The Scapegoat
Mr. Chen can organize a situation where he makes a scapegoat of a fourth party, whose agenda is in conflict with both Mr. Huang and Mrs. Zhang. The old saying that "my enemy's enemy is my friend" applies here.
This example has only begun to break the ice of the intricacy of guanxi in China and the many ways any given situation can be influenced. Like Freud's iceberg, I like to picture guanxi as an iceberg. What we learn in school and through connections with our Chinese friends are only the top surface, the area that we can see and feel. As we dig deeper, the ice becomes colder and more dangerous to deal with, but then again, you might be able to find a flint and learn how to make a fire with it. Just be careful not to dig too far, as digging through the iceberg will reveal the frigid reality of the ocean, and who knows what other unknown that might bring.
Guanxi's Goodness
Sorry about that last part. I sort of get carried away sometimes. I got a huge course on guanxi at China's school of guanxi. An important point I also want to get across is that while guanxi is complicated and has a lot of guile to it, there are many goods that come out of guanxi. There are many goodness to it that needs to be addressed and I will address that in a later article. For example, having good guanxi solidifies trust between two parties, and in business, trust is a very important thing.
Conclusion
Anyways, if you want to learn more about guanxi-business and how Chinese business(wo)men run their businesses, Ocean University of China offers an excellent business program. I think we can rest assure that this ocean is a lot better than the ocean I described above. Anyways, You can study all the guanxi you want from their case studies and they also organize company tours at multinational corporations, where you can develop guanxi with the hiring managers. I apologize again. That was my final one. ....Good luck with your guanxi! Ok, I'll stop now.
Come visit my website to learn more.
Toan Dam |
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