IDEAS home Printed from https://ideas.repec.org/a/eee/intman/v22y2016i1p1-16.html
   My bibliography  Save this article

Strategic guanxi orientation: How to manage distribution channels in China?

Author

Listed:
  • Murray, Janet Y.
  • Fu, Frank Q.

Abstract

This study focuses on the role of guanxi in distribution channel management in China from the perspectives of both foreign and domestic Chinese firms. Based on a literature review and in-depth interviews with suppliers and retailers, the article provides managers with a theoretical framework for acquiring, institutionalizing and utilizing guanxi in a distribution channel system as a strategic resource to achieve long-term competitive advantages. The framework explicates three stages of strategic guanxi orientation (SGO), highlights the critical role of institutional environmental uncertainties in shaping a firm's SGO, and explores both the benefits and costs associated with adopting SGO in channel management. In addition, the study provides executives of foreign firms in China with practical guidelines on how to improve channel performance in an emerging and competitive market.

Suggested Citation

  • Murray, Janet Y. & Fu, Frank Q., 2016. "Strategic guanxi orientation: How to manage distribution channels in China?," Journal of International Management, Elsevier, vol. 22(1), pages 1-16.
    • Handle: RePEc:eee:intman:v:22:y:2016:i:1:p:1-16
    DOI: 10.1016/j.intman.2015.10.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1075425315000915
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.intman.2015.10.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Knetter, Michael M, 1989. "Price Discrimination by U.S. and German Exporters," American Economic Review, American Economic Association, vol. 79(1), pages 198-210, March.
    2. Hualiang Lu & Shuyi Feng & Jacques H. Trienekens & S.W.F. (Onno) Omta, 2008. "Performance in vegetable supply chains: the role of Guanxi networks and buyer-seller relationships," Agribusiness, John Wiley & Sons, Ltd., vol. 24(2), pages 253-274.
    3. Fan, Ying, 2002. "Questioning guanxi: definition, classification and implications," International Business Review, Elsevier, vol. 11(5), pages 543-561, October.
    4. Gerald Yong Gao & Janet Y Murray & Masaaki Kotabe & Jiangyong Lu, 2010. "A “strategy tripod” perspective on export behaviors: Evidence from domestic and foreign firms based in an emerging economy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(6), pages 1090-1091, August.
    5. Seung Ho Park & Yadong Luo, 2001. "Guanxi and organizational dynamics: organizational networking in Chinese firms," Strategic Management Journal, Wiley Blackwell, vol. 22(5), pages 455-477, May.
    6. Gooris, Julien & Peeters, Carine, 2014. "Home–Host Country Distance in Offshore Governance Choices," Journal of International Management, Elsevier, vol. 20(1), pages 73-86.
    7. Xiao-Ping Chen & Chao C. Chen, 2004. "On the Intricacies of the Chinese Guanxi: A Process Model of Guanxi Development," Asia Pacific Journal of Management, Springer, vol. 21(3), pages 305-324, September.
    8. Wang, Xiaoyun & Nayir, Dilek Zamantili, 2006. "How and when is social networking important? Comparing European expatriate adjustment in China and Turkey," Journal of International Management, Elsevier, vol. 12(4), pages 449-472, December.
    9. Swan, K. Scott & Allred, Brent B., 2009. "Does 'the China Option' influence subsidiary technology sourcing strategy?," Journal of International Management, Elsevier, vol. 15(2), pages 169-180, June.
    10. Lau, Victor P. & Dimitrova, Mihaela N. & Shaffer, Margaret A. & Davidkov, Tzvetan & Yordanova, Desislava I., 2012. "Entrepreneurial Readiness and Firm Growth: An Integrated Etic and Emic Approach," Journal of International Management, Elsevier, vol. 18(2), pages 147-159.
    11. Yi, Lee Mei & Ellis, Paul, 2000. "Insider-outsider perspectives of Guanxi," Business Horizons, Elsevier, vol. 43(1), pages 25-30.
    12. Mike W Peng & Denis Y L Wang & Yi Jiang, 2008. "An institution-based view of international business strategy: a focus on emerging economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(5), pages 920-936, July.
    13. Ramsey, Jase R., 2005. "The role of other orientation on the relationship between institutional distance and expatriate adjustment," Journal of International Management, Elsevier, vol. 11(3), pages 377-396, September.
    14. Wang, Karen Yuan & Fulop, Liz, 2007. "Managerial trust and work values within the context of international joint ventures in China," Journal of International Management, Elsevier, vol. 13(2), pages 164-186, June.
    15. Naresh Khatri & Eric W K Tsang & Thomas M Begley, 2006. "Cronyism: a cross-cultural analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(1), pages 61-75, January.
    16. Wei, Tian & Clegg, Jeremy, 2014. "Successful integration of target firms in international acquisitions: A comparative study in the Medical Technology industry," Journal of International Management, Elsevier, vol. 20(2), pages 237-255.
    17. Luo, Yadong & Shenkar, Oded & Nyaw, Mee-Kau, 2002. "Mitigating liabilities of foreignness: Defensive versus offensive approaches," Journal of International Management, Elsevier, vol. 8(3), pages 283-300.
    18. Haley, Usha C. V., 2003. "Assessing and controlling business risks in China," Journal of International Management, Elsevier, vol. 9(3), pages 237-252.
    19. Lai, Christine & Singh, Barjinder & Alshwer, Abdullah A. & Shaffer, Margaret A., 2014. "Building and Leveraging Interpersonal Trust Within and Across MNE Subsidiaries: A Social Exchange Perspective," Journal of International Management, Elsevier, vol. 20(3), pages 312-326.
    20. John H. Dunning & Changsu Kim, 2007. "The Cultural Roots of Guanxi: An Exploratory Study," The World Economy, Wiley Blackwell, vol. 30(2), pages 329-341, February.
    21. Gerald Yong Gao & Janet Y Murray & Masaaki Kotabe & Jiangyong Lu, 2010. "A “strategy tripod” perspective on export behaviors: Evidence from domestic and foreign firms based in an emerging economy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(3), pages 377-396, April.
    22. Ikujiro Nonaka, 1994. "A Dynamic Theory of Organizational Knowledge Creation," Organization Science, INFORMS, vol. 5(1), pages 14-37, February.
    23. Parente, Ronaldo C. & Baack, Daniel W. & Hahn, Eugene D., 2011. "The effect of supply chain integration, modular production, and cultural distance on new product development: A dynamic capabilities approach," Journal of International Management, Elsevier, vol. 17(4), pages 278-290.
    24. Yadong Luo & Yi Liu & Jiaqi Xue, 2009. "Relationship Investment and Channel Performance: An Analysis of Mediating Forces," Journal of Management Studies, Wiley Blackwell, vol. 46(7), pages 1113-1137, November.
    25. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    26. Steve Lovett & Lee C Simmons & Raja Kali, 1999. "Guanxi Versus the Market: Ethics and Efficiency," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(2), pages 231-247, June.
    27. Chenting Su & Zhilin Yang & Guijun Zhuang & Nan Zhou & Wenyu Dou, 2009. "Interpersonal influence as an alternative channel communication behavior in emerging markets: The case of China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(4), pages 668-689, May.
    28. Maruyama, Masayoshi & Wu, Lihui, 2015. "Overcoming the Liability of Foreignness in International Retailing: A Consumer Perspective," Journal of International Management, Elsevier, vol. 21(3), pages 200-210.
    29. Yi Zhang & Zigang Zhang, 2006. "Guanxi and organizational dynamics in China: a link between individual and organizational levels," Journal of Business Ethics, Springer, vol. 67(4), pages 375-392, September.
    30. Jon M Shapiro & Julie L Ozanne & Bige Saatcioglu, 2008. "An interpretive examination of the development of cultural sensitivity in international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(1), pages 71-87, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Elsahn, Ziad & Earl, Anna, 2022. "Alternative ways of studying time in qualitative international business research: A review and future agenda," Journal of International Management, Elsevier, vol. 28(3).
    2. Lee, Voon-Hsien & Ooi, Keng-Boon & Chong, Alain Yee-Loong & Sohal, Amrik, 2018. "The effects of supply chain management on technological innovation: The mediating role of guanxi," International Journal of Production Economics, Elsevier, vol. 205(C), pages 15-29.
    3. Furusawa, Masayuki & Brewster, Chris, 2019. "The Determinants of the Boundary-spanning Functions of Japanese Self-initiated Expatriates in Japanese Subsidiaries in China: Individual Skills and Human Resource Management," Journal of International Management, Elsevier, vol. 25(4).
    4. Hugo Ernesto Martínez Ardila & Julián Eduardo Mora Moreno & Jaime Alberto Camacho Pico, 2020. "Networks of collaborative alliances: the second order interfirm technological distance and innovation performance," The Journal of Technology Transfer, Springer, vol. 45(4), pages 1255-1282, August.
    5. Wu, Jie & Wood, Geoffrey & Khan, Zaheer, 2021. "Top management team’s formal network and international expansion of Chinese firms: The moderating role of state ownership and political ties," International Business Review, Elsevier, vol. 30(3).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhong Qin & Xin Deng, 2016. "Government and family Guanxi in Chinese private firms: perceptions and preference," Review of Managerial Science, Springer, vol. 10(1), pages 35-60, January.
    2. Linqing Liu & Shiye Mei, 2015. "How can an indigenous concept enter the international academic circle: the case of guanxi," Scientometrics, Springer;Akadémiai Kiadó, vol. 105(1), pages 645-663, October.
    3. Zhang, Man & Hartley, Janet L., 2018. "Guanxi, IT systems, and innovation capability: The moderating role of proactiveness," Journal of Business Research, Elsevier, vol. 90(C), pages 75-86.
    4. Gao, Hongzhi & Knight, John G. & Yang, Zhilin & Ballantyne, David, 2014. "Toward a gatekeeping perspective of insider–outsider relationship development in China," Journal of World Business, Elsevier, vol. 49(3), pages 312-320.
    5. Conti, Claudio Ramos & Parente, Ronaldo & de Vasconcelos, Flávio C., 2016. "When distance does not matter: Implications for Latin American multinationals," Journal of Business Research, Elsevier, vol. 69(6), pages 1980-1992.
    6. Megan Min Zhang & Paul W. Beamish, 2019. "An institutional response model to economic liberalization: Japanese MNEs’ ownership choices in China," Asia Pacific Journal of Management, Springer, vol. 36(1), pages 33-59, March.
    7. Meyer Susanne, 2012. "The world’s factory and informal ties – organisation of firm networks in the electronics industry in the Greater Pearl River Delta, China," ZFW – Advances in Economic Geography, De Gruyter, vol. 56(1-2), pages 9-24, October.
    8. Ayden, Yuksel & Tatoglu, Ekrem & Glaister, Keith W. & Demirbag, Mehmet, 2021. "Exploring the internationalization strategies of Turkish multinationals: A multi-perspective analysis," Journal of International Management, Elsevier, vol. 27(3).
    9. Horak, Sven & Yang, Inju, 2016. "Affective networks, informal ties, and the limits of expatriate effectiveness," International Business Review, Elsevier, vol. 25(5), pages 1030-1042.
    10. Lee, Voon-Hsien & Ooi, Keng-Boon & Chong, Alain Yee-Loong & Sohal, Amrik, 2018. "The effects of supply chain management on technological innovation: The mediating role of guanxi," International Journal of Production Economics, Elsevier, vol. 205(C), pages 15-29.
    11. Zhang, Lin & Cui, Lin & Li, Sali & Lu, Jiangyong, 2018. "Who rides the tide of regionalization: Examining the effect of the China-ASEAN Free Trade Area on the exports of Chinese firms," International Business Review, Elsevier, vol. 27(3), pages 501-513.
    12. Pradeep Kanta Ray & Sangeeta Ray & Vikas Kumar, 2017. "Internationalization of latecomer firms from emerging economies—The role of resultant and autonomous learning," Asia Pacific Journal of Management, Springer, vol. 34(4), pages 851-873, December.
    13. Hasan Boztoprak & Mehmet Eryilmaz, 2021. "The strategy tripod perspective in explaining firms’ export performance," Upravlenets, Ural State University of Economics, vol. 12(5), pages 50-69, November.
    14. Sven Horak & Markus Taube, 2016. "Same but different? Similarities and fundamental differences of informal social networks in China (guanxi) and Korea (yongo)," Asia Pacific Journal of Management, Springer, vol. 33(3), pages 595-616, September.
    15. Ping Ping Fu & Anne S. Tsui & Gregory G. Dess, 2006. "The dynamics of guanxi in Chinese hightech firms: Implications for knowledge management and decision making," Management International Review, Springer, vol. 46(3), pages 277-305, June.
    16. Yang, Jie, 2014. "Supply chain agility: Securing performance for Chinese manufacturers," International Journal of Production Economics, Elsevier, vol. 150(C), pages 104-113.
    17. Olwen Bedford, 2011. "Guanxi-Building in the Workplace: A Dynamic Process Model of Working and Backdoor Guanxi," Journal of Business Ethics, Springer, vol. 104(1), pages 149-158, November.
    18. Yadong Luo & Huan Zhang & Juan Bu, 2019. "Developed country MNEs investing in developing economies: Progress and prospect," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 633-667, June.
    19. Boddewyn, Jean J. & Peng, Mike W., 2021. "Reciprocity and informal institutions in international market entry," Journal of World Business, Elsevier, vol. 56(1).
    20. Buitrago R., Ricardo E. & Barbosa Camargo, María Inés, 2021. "Institutions, institutional quality, and international competitiveness: Review and examination of future research directions," Journal of Business Research, Elsevier, vol. 128(C), pages 423-435.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:intman:v:22:y:2016:i:1:p:1-16. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/601266/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.