Business relationships in China: Lessons about deep trust

Kriz, Anton and Keating, Byron W. (2010): Business relationships in China: Lessons about deep trust. Published in: Asia Pacific Business Review , Vol. 16, No. 3 (22 July 2010): pp. 299-318.

Abstract

Trust is acknowledged as a central tenet of business relationships. Yet for all the attention it receives, rarely has trust been investigated in the Chinese business setting. This paper uses an emic approach to unearth some within-culture ‘truths’ about Chinese notions of trust in business exchange. The findings of this research suggest that deep trust (xinren), which is driven by reciprocal help and emotional bonding, is critical for doing business in China. A conceptual framework is provided to assist Western businesspersons to better understand the Chinese concept of trust as well as the interplay between its key antecedents.

• Item Type: MPRA Paper
• Language: English
• Keywords: trust, xinren, guanxi, help, emotion, China
• Subjects: M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M3 - Marketing and Advertising > M31 - Marketing; F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business

References

Arnott, D. 2007, Research on trust: a bibliography and brief bibliometric analysis of the special issue submissions, European Journal of Marketing, 41(9/10), 1203-1240.

Berry, J. 1980, Introduction to methodology, in Triandis, H. and Berry, J. Eds., Handbook of Cross-Cultural Psychology: Methodology - Volume 2, Allyn and Bacon, Boston.

Bian, Y. 1997, Bringing strong ties back in: Indirect ties, network bridges and job searches in China, American Sociological Review, 62(3), 366-385.

Björkman, I. and Kock, S. 1995, Social relationships and business networks: the case of Western companies in China, International Business Review, 4(4), 519-35.

Blackman, C. 2000, China Business: The Rules of the Game. Allen and Unwin, Crows Nest, NSW.

Blois, K. 1999, Trust in business to business relationships: an evaluation of its status, Journal of Management Studies, 36(2), 197-215.

Buttery, E. and Leung, T. 1998, The difference between Chinese and Western negotiations, European Journal of Marketing, 32(3/4), 374-89.

Buttery, E. and Wong, Y. 1999, The development of a guanxi framework, Marketing Intelligence and Planning, 17(3), 147-54.

Chan, H. 1995, Personal relations and relationship marketing in Chinese, Proceedings of the Seventh Bi-annual World Conference, Academy of Marketing Science, Melbourne, 66-73.

Chen, M. 2001, Inside Chinese Business: A Guide for Managers Worldwide, Harvard Business School Press, Boston.

Child, J. and Möllering, G. 2003, Contextual confidence and active trust development in the Chinese business environment, Organizational Science, 14 (1), 69-80.

Chu, C. 1995, The Asian Mind Game, Stealth Productions, Australia.

Chua, R., Morris, W. and Ingram, P. 2009, Guanxi vs networking: Distinctive configurations of affect- and cognition-based trust in the networks of Chinese vs American managers, Journal of International Business Studies, 40 (3), 490-508.

Cleary, T. 1988, Translation of Sun Tzu’s The Art of War, Shambhala Publications, Boston.

Corbin, J. and Strauss, A. 1990, Grounded theory research: Procedures, canons and evaluative criteria, Qualitative Sociology, 13(1), 3-21.

Cowles, D. 1997, The role of trust in customer relationships, Asia-Australia Marketing Journal, 4(1), 31-41.

Curran, J., Rosen, D. and Surprenant, C. 1998, The development of trust: an alternative conceptualization, Proceedings of the European Marketing Association Conference, European Marketing Association, Dublin, 111-130.

Doctoroff, T. 2005, Billions: Selling to the New Chinese Consumer, Palgrave Macmillan, New York.

Dunbar, R. 1999, Culture, honesty and the free rider problem in Dunbar, R., Knight, R. and Power, C. Eds., The Evolution of Culture, Rutgers University Press, New Jersey, 194-213.

Dunfee, T. and Warren, D. 2001, Is guanxi ethical? A normative analysis of doing business in China, Journal of Business Ethics, 32(3), 191-204.

Ekman, P. 1976, Cross-cultural studies of facial expression, in Ekman, P. Ed., Darwin and Facial Expression: A Century of Research in Review, Academic Press, New York.

Fan, Y. 2002a, Guanxi’s consequences: Personal gains at social cost, Journal of Business Ethics, 38(4), 371-380.

Fan, Y. 2002b, Questioning guanxi: definition, classification and implications, International Business Review, 11(5), 543-61.

Fang T. 1999, Chinese business negotiating style, Sage, Thousand Oaks, CA.

Fang, T. 2001, Culture as a driving force for interfirm adaptation: A Chinese case, Industrial Marketing Management, 30(1), 51-63.

Fang, T. 2004, The 'co-op-comp' Chinese negotiating strategy, in Kidd, J.B. and Richter F-J. Eds., Trust and Antitrust in Asian Business Alliances: Historical Roots and Current Practices, Palgrave MacMillan, NY, 121-50.

Fang, T. 2006, From onion to ocean: Paradox and change in national cultures, International Studies of Management and Organisation, 35(4), 71-90.

Fukuyama, F. 1995, Trust: The Social Virtues and the Creation of Prosperity, Penguin Books, UK.

Gioia, D. and Pitre, E. 1990, Multiparadigm perspective on theory building, Academy of Management Review, 15(4), 584-602.

Glaser, G. and Straus. A. 1967, The discovery of grounded theory: Strategies for qualitative research, Aldine de Gruyter, New York.

Graham, J. and Lam, M 2003, The Chinese negotiation, Harvard Business Review, 81(10), 82-91.

Gummesson, E. 1991, Qualitative Methods in Management Research, Sage Publications, Newbury Park.

Gu, F., Hung, K. and Tse, D. 2008, When does guanxi matter? Issues of capitalization and its dark sides, Journal of Marketing, 72 (July), 12-28.

Herbig, P. and Martin, D. 1998, Negotiating with Chinese: A cultural perspective, Cross Cultural Management, 5(3), 40-54.

Hofstede, G. 1997, Culture and Organisations: Software of the Mind, McGraw-Hill, USA.

International Monetary Fund 2009, World economic outlook: Global economic slump challenges policies, International Monetary Fund, Washington DC.

Kipnis, A. 1997, Producing Guanxi: Sentiment, Self and Subculture in a North China Village, Duke University Press, London.

Kriz, A. and Flint, J. 2003, Layers within layers within layers of Chinese business culture – A case for using etics, emics and emics within emics. In: Rugimbana, R. and Nwankwo, S. Eds., Cross Cultural Marketing, International Thomson Business Press, London.

Leung, T. and Wong, Y. 2001, The ethics and positioning of guanxi in China, Marketing Intelligence and Planning, 19(1), 55-64.

Leung, T., Lai, K., Chan., R. and Wong, Y. 2005, The roles of xinyong and guanxi in Chinese relationship marketing, European Journal of Marketing, 39(5/6), 528-559.

Liang, S. and Whiteley, A. 2003, Australian business in China: Searching for synergy, Asia Pacific Business Review, 9(3), 41-60.

Lovett, S., Simmons, L. and Kali, R. 1999, Guanxi versus the market: ethics and efficiency, Journal of International Business Studies, 30(2), 231-248.

Luhmann, N. 1988, ‘Familiarity, confidence, trust: Problems and alternatives’, in Trust: Making and Breaking Cooperative Relations, Eds., D. Gambetta, Basil Blackwell, New York.

Lui, T. 1998, Trust and Chinese business behaviour, Competition & Change, 3 (3), pp. 335-357.

Luo, Y. 2000, Guanxi and Business, World Scientific Publishing Co., Singapore.

Luo, Y. 2002, Building trust in cross-cultural collaborations: Toward a contingency perspective, Journal of Management, 28(5), 669-94.

Malhotra, N., Agarwal, J. and Peterson, M. 1996, Methodological issues in cross-cultural marketing research – a state of the art review, International Marketing Review, 13(5), 7-43.

Minichiello, V., R. Aroni, E., Timewell, and Alexander, L. 1995, In-Depth Interviewing: Researching People, Longman Cheshire, Melbourne.

Moorman, C., Deshpande and Zaltman, G. 1993, Factors affecting trust in market research relationships, Journal of Marketing, 57(January), 81-101.

Morgan, R. and Hunt, S. 1994, The commitment-trust theory of relationship marketing, Journal of Marketing, 58(July), 20-38.

Morris, M., Leung, K., Ames, D. and Lickel, B. 1999, Views from inside and outside: Integrating emic and etic insights about culture and justice judgement, Academy of Management Review, 24(4), 781-796.

Neuman, W. 1994, Social Research Methods, Allyn and Bacon, Massachusetts.

Nicholson, C., Compeau, L. and Sethi, R. 2001, The role of interpersonal liking in building trust in long-term channel relationships, Journal of the Academy of Marketing Science, 29(1), 3-15.

Pareek, U. and Rao, T. 1980, Cross-cultural surveys and interviewing, in Triandis, H. and Berry, J. Eds., Handbook of Cross-cultural Psychology: Methodology Volume 2, Allyn and Bacon, Boston.

Patton, M. 2001, Qualitative Research and Evaluation Methods, 3rd edn, Sage Publications, Newbury Park. Pearce, J. and Robinson, R. 2000, ‘Cultivating guanxi as a foreign investor strategy’, Business Horizons, 43(1), 31-38.

Perry, C. and Gummesson, E. 2004, Action research in marketing, European Journal of Marketing, 38(3/4), 310-320.

Pye, L. 1992, Chinese Negotiating Style: Commercial Approaches and Cultural Principles, Quorum Books, New York. Redding, G. 1990, The Spirit of Chinese Capitalism, de Gruyter, Berlin.

Redding, G. and Witt, M. 2007, The Future of Chinese Capitalism: Choices and Chances, Oxford University Press, New York

Rotter, J. 1967, A new scale for the measurement of interpersonal trust, Journal of Personality, 35, 651-665.

Sako, M. 1998, The information requirements of trust in supplier relations: Evidence from Japan, Europe and the United States, in Lazaric, N. and Lorenz, E. Eds., Trust and Economic Learning, Edward Elgar Publishing, Cheltenham.

Shemwell, D., Cronin, J. and Bullard, W. 1994, Relational exchange in services: An empirical investigation of ongoing customer service–provider relationships, International Journal of Service Industry Management, 5(3), 57-68.

Stening, B. and Zhang, M. 2007, Methodological challenges confronted when conducting management research in China, International Journal of Cross Cultural Management, 7(1), 121-142.

Su, C. and Littlefield, J. 2001, Entering guanxi: A business ethical dilemma in mainland China, Journal of Business Ethics, 33(3), 199-210.

Svensson, G. 2001, Extending trust and mutual trust in business relationships towards a synchronised trust chain in marketing channels, Management Decision, 39(6), 431-40.

Tian, X. 2007, Managing International Business in China, Cambridge University Press, United Kingdom.

Tong, C. and Yong, P. 1998, Guanxi bases, xinyong and Chinese business networks, British Journal of Sociology, 49(1), 75-96.

Triandis, H. 1995, Individualism and collectivism, Westview Press, Boulder.

Tsui, A., Farh, J. and Xin, K. 2000, Guanxi in the Chinese context, in Li, J., Tsui, A. and Weldon, E. Eds., Management and Organizations in the Chinese Context, Macmillan Press, Houndmills.

Wank, D. 1996, The institutional process of market clientelism: guanxi and private business in a South China city, China Quarterly, 147, 820-37.

Williamson, O. 1993, Calculativeness, trust and economic organization, Journal of Law and Economics, 36(April), 453-86.

Wong, S. 1996, Chinese entrepreneurs and business trust, in Hamilton, G. Ed., Asian Business Networks, Walter de Gruyter and Co., Berlin, 13-26.

Wong, Y. and Tam, J. 2000, Mapping relationships in China: Guanxi dynamic approach, Journal of Business and Industrial Marketing, 15(1), 57-70.

Wong, Y., Maher, T., Evans, N. and Nicholson, J. 1998, Neo-confucianism: the bane of foreign firms in China, Management Research News, 21(1), 13-22.

Xin, K. and Pearce, J. 1996, Guanxi: connections as substitutes for formal institutional support, Academy of Management Journal, 39(6), 1641-1658.

Yang, M. 1994, Gifts, Favors and Banquets, Wilder House Series, Cornell University Press, Ithaca.

Yau, O., Lee, J., Chow, R., Leo, Y. and Tse, A. 2000, Relationship Marketing the Chinese Way, Business Horizons, 43(1), 16-23.

Yeung, H. 1995, Qualitative personal interviews in international business research: some lessons from a study of Hong Kong transnational corporations, International Business Review, 4(3), 313-39.

Yeung, I. and Tung, R. 1996, Achieving business success in Confucian societies: the importance of “guanxi” (connections), Organizational Dynamics, 25(2), 54-66.

Young, L. and Wilkinson, I. 1989, The role of trust and co-operation in marketing channels: A preliminary study, European Journal of Marketing, 23(2), 109-122.