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Ethical cronyism: an insider approach for building guanxi and leveraging business performance in China

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  • T. K. P. Leung
  • Bradley R. Barnes

Abstract

Foreign managers often perceive cultural practices, such as gift giving and guanxi, as being unethical. This can leave them at a disadvantage when negotiating in China. This study describes a concept for the benefit of MNEs so they can leverage performance through acquiring insider status. The study suggests that foreign managers should aim to build a solid reputation to facilitate reciprocal exchange when doing business in China. Such reciprocity can help to establish affective ties to cement a relationship. Establishing affection can also lead to greater interpersonal trust and, subsequently, some degree of loyalty can then emerge as a mechanism for generating ethical cronyism and performance advantages.

Suggested Citation

  • T. K. P. Leung & Bradley R. Barnes, 2020. "Ethical cronyism: an insider approach for building guanxi and leveraging business performance in China," Asia Pacific Business Review, Taylor & Francis Journals, vol. 26(2), pages 124-148, March.
    • Handle: RePEc:taf:apbizr:v:26:y:2020:i:2:p:124-148
    DOI: 10.1080/13602381.2019.1654215
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    Cited by:

    1. Wu, Jing & Zuidema, Christian & de Roo, Gert, 2022. "Collaborative efforts on energy transition in urban China: Institutional enabling and constraining conditions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 168(C).
    2. Suying Yang & Yanhui Mao & Tao Liu & Conrad Baldner & Scott Roberts & Shaokai Lu, 2023. "Achieving ambidextrous learning in construction engineering project partnerships: the roles of formal control and Chinese guanxi," Asian Business & Management, Palgrave Macmillan, vol. 22(1), pages 431-462, February.
    3. Junfan Yu & Saskia Klerk & Michael Hess, 2023. "The influence of cronyism on entrepreneurial resource acquisition," Asia Pacific Journal of Management, Springer, vol. 40(1), pages 121-150, March.
    4. Lee, Liane W.Y. & Sharma, Piyush & Barnes, Bradley R., 2022. "Adopting big data to create an “outside-in” global perspective of guanxi," Journal of Business Research, Elsevier, vol. 139(C), pages 614-628.

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