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Global Leadership And Organizational Behavior

4676 words (19 pages) Essay in Sociology

10/05/17 Sociology Reference this

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Leadership has stimulated thousands of research studies for social scientists for over 60 years (Yukl, 2006). More than four hundred definitions have been proposed to explain the dimensions of leadership (Crainer, 1995; Fleishman et al., 1991), yet Crainer (1995) addressed that ‘it is a veritable minefield of misunderstanding and difference through which theorists and practitioners must tread warily’ (p. 12). Leadership is, therefore, not an easy concept to define. Whilst one definition of leadership, directly related to our discussion, is the system proposed by Stogdill (1950), whose work had a profound impact on one of stages of research to be encountered below:

Leadership may be considered as the process (act) of influencing the activities of an organized group in its efforts toward goal setting and goal achievement (p. 3).

Three elements can be addressed in this definition: influence, group and goal. First, leadership is viewed as a process of influence where the leader has an impact on others by inducing them to behave in a certain way. Second, that influence process is conceptualized as taking place in a group context. Collinson (2009) argues group members are invariably taken to be the ‘leader’s followers’, although that is by no means obligatory. He, however, emphasizes that without followers leaders do not exist and that leadership only exists in the interaction between leaders and followers. In addition, Parry and Bryman (2006) add leadership, being a process of influence, need not come from the person in charge, but can come from anyone in the group. Third, a leader influences the behavior of group members in the direction of goals with which the group is faced (Mullins, 2008). Moreover, leaders must help create cohesive and motivated teams (Knippenberg & DeCremer, 2008). They must sell, or champion, new initiatives (Howell and Boies, 2004). And leaders must help people make sense of crises (Drazin et al., 1999).

2.2 Global Leadership and Organizational Behavior Effectiveness (GLOBE) Project

2.2.1 Introduction of GLOBE Project

Global Leadership and Organizational Behavior Effectiveness (GLOBE) Project highlighted the investigation of leadership, national culture and organizational practices concentrated on further sharpening and refining the cultural knowledge for providing a systematic and integrated methodology on the interaction of cross-cultural management (Chhokar, et al., 2007; House, 2004a; Gupta and House, 2004). Based on the quantitative data of 17,000 managers in 62 societies, GLOBE as a ten-year research program is supported by 150 investigators throughout the world (House, 2004b). The major constructs investigated in the GLOBE Program are nine dimensions of cultures in the perception of global leader behaviors:

Power Distance;

Uncertainty Avoidance;

In-Group Collectivism;

Institutional Collectivism;

Gender Egalitarianism;

Performance Orientation;

Assertiveness Orientation;

Future Orientation;

Humane Orientation.

2.2.2 Intellectual Roots of GLOBE Constructs

Gupta and House (2004) emphasized that GLOBE constructs were theoretically derived, and empirically validated. They argued that Power Distance and Uncertainty Avoidance are based on Hofstede’s (1980) work; In-group Collectivism measures pride in, and loyalty to, the family, and is derived from the Triandis et al. (1988) work on in-groups; Institutional Collectivism captures (inversely) the same construct as Hofstede’s Individualism. They addressed that Hofstede’s (1980) construct of Masculinity was used as a basis to develop the two distinct dimensions: Gender Egalitarianism and Assertiveness Orientation. Gender Egalitarianism is similar to the United Nations Development Program’s (UNDP) concept of Gender Empowerment. Assertiveness Orientation is rooted in the interpersonal communication literature (Sarros & Woodman, 1993). In addition, they claimed that Performance Orientation was derived from McClelland’s (1961) work on the need for achievement. Future Orientation is derived from Kluckhohn and Strodtbeck’s (1961) Past, Present, and Future Orientation dimension, and from Hofstede’s (2001) Long Term Orientation, which focuses on the temporal mode of the society; and Humane Orientation has its roots in Kluckhohn and Strodtbeck’s (1961) work, “Human Nature is Good versus Human Nature is Bad dimension”.

2.2.3 Strategic Significance of Cultural Dimensions

2.2.3.1 Power Distance

Hofstede (2001) and Schwartz (1994) address that Power Distance refers to a culture’s preference for differentiated, hierarchical versus undifferentiated, egalitarian status within the society. Building on their work, the GLOBE Project definition of Power Distance is “the degree to which members of an organization or society expect and agree that power should be shared unequally” (House and GOLBE Program, 2004, P.517). Therefore, lower-status individuals are expected to concede to higher-status individuals who, in turn, have the responsibility to attend to the needs of the lower-status individuals. In cultures low in power distance, superior-subordinate relations are theoretically close and less formal in nature; in cultures high in power distance, their relationships are expected to be more hierarchically distant, ordered and reserved (House and GOLBE Program, 2004).

Beliefs about the appropriate Power Distance between authorities and subordinates could shape the nature of people’s relationship with authorities (Offermann and Hellmann, 1997). Power Distance, therefore, is highly relevant to the study of leadership. High Power Distance indicates a preference for autocratic and paternalistic management, while low Power Distance requires more managerial consultation and approachability (Gupta and House, 2004).

2.2.3.2 Uncertainty Avoidance

The dimension of Uncertainty Avoidance is concerned with the extent to which people seek orderliness, consistency, structure, formalized procedures, and laws to deal with naturally occurring uncertain and important events in their daily lives (Luque and Javidan, 2004).

People socialized to have a high need for security are likely to resist change because it threatens their feelings of safety. In higher uncertainty avoidance societies, more priority is given to the training of experts rather than lay people for particular tasks (Hofstede, 2001). Here, “Citizens are not only more dependent on government, but they want it that way.” (Hofstede, 2001, P. 172) Uncertainty Avoidance is also associated with ‘tight’ societies, where social solidarity and stability is emphasized (Hofstede, 2001). Thus, Uncertainty Avoidance is related to the values of personal conformity, resistance to social change, interest in national rather than international affairs, and a call for national leadership (Eckhardt, 1971). On the other hand, the ‘loose’ societies tend to be less uncertainty avoiding. Here the values of group organization, formality, permanence, durability and solidarity are undeveloped, and deviant behavior is easily tolerated (Pelto, 1968).

2.2.3.3 In-Group Collectivism

In-Group Collectivism relates to how the individuals relate to their family, as an autonomous identity or alternatively as consciousness of responsibilities towards their family (Gelfand, et al., 2004). It is associated with ‘pride in affiliation’ and a general affective identification with, and a general affective commitment towards, family, group, community, and nation (O’Reilly and Chatman, 1986). In strong in-group collective cultures, “people from birth onwards are integrated into strong, cohesive in-groups, which throughout people’s lifetime continue to protect them in exchange for unquestioning loyalty.” (Hofstede, 1980: 51) In such cultures, there is an emphasis on collaboration, cohesiveness and harmony, as well as an effort by people to apply skills for the benefit of their family or in-group.

The in-group serves three basic needs: the need for affiliation, involvement, inclusion and belongingness; the need for intimacy, affection, and a sense of identity; and the need for social security, support, control, and power (Schutz, 1958; Festinger, 1954). It represents a high degree of emotional attachment and personal involvement of people in the larger group, and thus fosters an interest of the people in the overall best interests of the group (Allen & Meyer, 1990). In-group collectivism fosters connectivity to a group primarily because people want to be a member of the group and only secondarily because they ought to or need to.

2.2.3.4 Institutional Collectivism

The dimension of Institutional Collectivism is reflected in preferences for closer work relations and higher involvement with one’s social unit (Chhokar, et al., 2007). Institutional Collectivism emphasizes shared objectives, interchangeable interests, and common social behaviors of the people based on association with others in groups (Chatman et al., 1998). In contrast, a lack of institutional collectivism tends to be associated with a preoccupation with self-esteem (Bellah et al., 1985). In less institutionally collective societies, people remember their past performance as much better than it actually was (Crary, 1966), claim more responsibility than their spouses give them credit for in household tasks (Ross and Sicoly, 1979), judge positive personality attributes to be more appropriate in describing themselves than in describing others (Alicke, 1985), and take credit for success, yet attribute failure to the situational variables (Zuckerman, 1979). Institutional Collectivism tends to be greater in the Eastern parts of the world, which typically rely on stable informal institutions for social stability and economic activity, as compared to most societies in the West, which rely on more formalized institutions (Gupta, Sully and House, 2004).

2.2.3.5 Gender Egalitarianism

Gender egalitarianism reflects an inherent understanding between men and women, which enhances their ability to work together in social and economic spheres (Gupta, Sully & House, 2004). Gender egalitarianism, therefore, influences role differences between men and women, as well as the common values of men and women. In gender egalitarian societies, gender discrimination is mitigated, enabling women to engage fully in both the public and the community domains (Coltrane, 1988). In contrast, in most societies of the world where men traditionally are engaged in jobs that do not sufficiently reward women for their labor, women often work part-time in ‘feminine’ jobs, such as family maintenance activities, nurturance, and relationships with others in a service capacity (Littrell, 2002).

Thus, gender egalitarian societies not only tolerate diversity, but also emphasize understanding, respect, and the nurturing of diversity in their communities, through sustained committed efforts (Martin, 1993).

2.2.3.6 Performance Orientation

The performance orientation dimension reflects the extent to which a society encourages and rewards improved performance, goal-oriented behavior, and innovation (Gupta, Sully and House, 2004). Performance oriented societies put a thrust on achievement motivation, or need for achievement (McClelland, et al., 1953). The achievement motive translates into behavior through two major components: the hope for success (approach) and the fear of failure (avoidance) (Gupta and House, 2004). People with high achievement motive tend to approach rather than avoid tasks related to success, because for them success is a culmination of ability and hardwork about which they are confident of (Weiner, 1980). But in the face of continuing obstacles, they respond with a ‘helplessness’ response, involving avoidance of challenge and a deterioration of performance (Diener and Dweck, 1980). They seek positive feedback and focus their efforts in areas in which they have already been successful (Dweck, 1986; Dweck and Leggett, 1988).

2.2.3.7 Assertiveness Orientation

The dimension of assertiveness orientation is associated with a strong consciousness, expression, articulation, and communication of one’s thoughts, feelings, beliefs, and rights; in public, political and social forums, and is related to physical and psychological aggressiveness and confrontation (Gupta and House, 2004; Hartog, 2004). People in assertive societies stand up for their individual or collective rights, and demonstrate strong interpersonal competence (Lange & Jakubowski, 1976). Assertiveness implies an action-oriented focus, founded on confident decision-making behavior, and characterized by strength, forcefulness, courage, initiative, conviction, and determination (Sarros & Woodman, 1993). Assertive societies emphasize social skills and communication, direct personal influence and expression, and overall inter-personal effectiveness (Crawford, 1995).

2.2.3.8 Future Orientation

The dimension of future orientation is reflected in behaviors such as planning, preparing and investing for the future (Ashkanasy, et al., 2004). It is related to the concept of short-term vs. long-term orientation (Hofstede, 2001). At a much deeper level, it is also associated with the distinction between materialistic vs. spiritual orientation (Cervantes & Ramirez, 1992). Less future oriented cultures focus on the short-term materialistic considerations of respecting traditions to avoid isolation from the society, and maintaining face to protect one’s reputation and creditworthiness in the society (Ashkanasy, et al., 2004; Hofstede, 2001). In contrast, more future oriented cultures emphasize long-term considerations of education for self-development, and the inner ability to persist in the face of obstacles for self-actualization (Gupta and House, 2004). Therefore, in the less future oriented cultures, people seek material acquisitions to make their life more meaningful; in future oriented cultures a strong concern for virtue allows a pragmatic integration of morals and practice (Hofstede, 2001).

2.2.3.9 Humane Orientation

The dimension of humane orientation is concerned with generosity, compassion, and empathy for others (Kabasakal and Bodur, 2004). The value of humane orientation is deeply rooted in the human experience, and in the moral values arising from the situational and spontaneous demands of this human experience (Kurtz, 2001). Five distinct characteristics of humane oriented societies can be identified (Kurtz, 2001):

Concern with Happiness: Humane oriented societies emphasize individual and social pursuit of happiness;

Human Equality: Humane societies recognize equality and dignity of each person, and identify people as ends, not merely as means;

Moral Freedom: Humane societies focus on the development of modem values of high intelligence, morality and aesthetics, and help individuals freely express their own needs and diverse views on life;

Respect for Diversity: Humane societies instill tolerance for diversity of values and norms in individuals and groups without forcing dogmatic similarity. They encourage responsibility and consideration for others. Thus, these societies are founded on moral and civil virtues, such as honesty, uprightness, truth, sincerity, integrity, fairness and empathy;

Experiential Reason: Humane societies recognize the need for evolving and discovering new moral principles as societal situations change.

2.2.4 GLOBE Project in China

Although the history of China has been marked by periodic political upheavals, yet China, as a united country has experienced the longest span of homogeneous cultural development of any society in the world (Child, 1994). Chinese culture and tradition is deeply rooted and omnipresent in its present society. Fairbank (1987) argues that the influence of China’s long past is ever-present in the practices of government, business and interpersonal relations. Other researchers have also emphasized the influence of China’s culture in the way that its organizations are managed (e.g. Lockett, 1988; Pye, 1985; Redding, 1980).

While there exist great differences in terms of political, social and economic dimensions among Chinese societies where Chinese culture dominates, it is still possible to identify certain core culture characteristics that are held in common by these Chinese societies. Therefore, the results from the GLOBE Project about Chinese societal culture and organizational culture will be presented as follows.

2.2.4.1 Power distance

The two Chinese scores on Power Distance ‘As Is’ (5.04) and ‘Should Be’ (3.10) showed the largest discrepancy among the nine pairs of scores. In fact, scores of all countries on ‘Should Be’ were lower than ‘As Is’, showing a common desire that people in all these countries aspire for more equality than they currently have. The relatively higher ranked Chinese ‘Should Be’ score (12th) compared to ‘As Is’ (41st) among the 61 countries may indicate that, compared to managers from other countries, the Chinese managers demonstrate a higher level of tolerance for inequality of power in society. The discrepancy between China’s two scores may be viewed as an indicator of the existing two forces: “whereas traditional values are still highly respected, and constantly pull back Chinese organizational leaders, the internal desire to become competitive, and the external pressure to do so, are all pushing Chinese organizational leaders toward modern Western ideologies” (Fu, et al., 2004, p. 891).

2.2.4.2 Uncertainty Avoidance

China’s two scores on Uncertainty Avoidance are fairly consistent between ‘As Is’ (4.94) and ‘Should Be’ (5.28), ranking 10th and 9th, respectively. The high Chinese scores are consistent with the traditional Chinese value of order. Starting with Confucius, the Chinese seek peace and security by clinging to the past. For centuries, Chinese people were comfortable and felt secure only when they ‘played-it-safe’ (Fu et al., 2004). It may sound bizarre to Westerners, actually ridiculous even to us Chinese now, but it was unfortunately true that during the 1960s and 1970s people in China were led to seek ‘unity and order’ to such a degree that they would run their businesses the same way year after year without change, maintaining the same structure, the same products, the same everything (Bachman, 1991). Therefore, if one understands the long history and the traditional values of order, one should have no problem understanding why the current Chinese society has such a high intolerance for uncertainty (Fu et al., 2004).

It is true that all Chinese people enjoy the better living they have now and welcome change in that sense, but many of them are worried about the loss of ‘order’, therefore longing for more rules and regulations to reduce uncertainties (Chu, 1988).

2.2.4.3 In-Group Collectivism

Chinese scores on family cohesiveness ‘As Is’ (5.80, ranked 9th) were slightly higher than the scores on family cohesiveness ‘Should Be’ (5.09, ranked 58th). The concept of family has always been discouraged. In China, altruism and loyalty, loyalty to parents a home and to bosses at work, are values that the society tries very hard to instill in children (Chen, 2001). A close parent-children relationship is a virtue that is widely respected and valued. “Chinese parents take great interest in their children throughout their t lives, and their children, imbued with the doctrine of filial piety, are constantly reminded of their filial duty towards their parents” (Chao, 1983, p.72).

The reforms, nevertheless, have forced the Chinese to take care of themselves. A study that compared values held by Chinese managers before and after the Tian An Men Square incident in 1989 found a growing spirit of ‘Chinese-style’ individualism, which is “tempered by cultural relationships and centralized controls, yet compatible with Western values” (Ralston et al., 1995, p.15).Young people are becoming increasingly independent. In addition, one-child-per-family policy also makes it impossible to maintain some of the traditional values of a family (Chen, 2001). That is probably a good reason explaining why the Chinese score on family collectivism ‘Should Be’ is much lower than its score on in-group collectivism ‘As Is’ (Fu et al., 2004).

2.2.4.4 Institutional collectivism

For centuries, the individual as an end in itself was de-emphasized in Chinese society. Instead, the network of obligations and responsibilities as a group member of the society was emphasized (Chew and Putti, 1995). As Michael Bond (1991) described it: “Chinese think of themselves using more group-related concepts than Americans do; and they see their ideal ‘self’ as being closer to their social (or interpersonal) self than Westerners do” (p,34). Based on these traditional values, the Chinese score on Institutional Collectivism ‘As Is’ (4.77) was among the highest, ranking 7th among the 61 countries, meaning Chinese society is very collectivistic. The Chinese score Institutional Collectivism ‘Should Be’ (4.56), however, is slightly lower compared to the ‘As Is’ score. Although it ranked in the middle (36 among the 61 countries), the absolute difference between the two scores was very minimal (0.21). The relative discrepancy to other countries may be the result of the changes taking place in China. Like many other Chinese cultural ideologies that are being threatened by the acceptance of Western views, the collectivistic orientation, too, is being challenged (Chen, 1995). Individual contributions are now being acknowledged and rewarded. However, overall, people’s values in collectivism are still quite consistent with the traditional values (Fu et al., 2004).

2.3 Confucianism and Guanxi

2.3.1 Confucianism on Relationships

The philosophy that is known as Confucianism comes mainly from the speeches of Confucius and writings of his disciples. Confucianism has been the main foundation of traditional thought that is deeply rooted in Chinese society. Confucianism is ethical teachings rather than a religion as described in Western literatures. Confucianism is widely regarded as the behavioral or moral regulations that are mainly concerned with human relationships, social structures, virtuous behavior and work ethics. In Confucianism, rules are specified for the social behavior of every individual, governing the entire range of interpersonal relations within the society. The core virtues of Confucius basic teaching can be extracted as Ren (Humanity), Yi (Righteousness), Li (Propriety), Zhi (Wisdom) and Xin (Faithfulness).

According to Confucius, each person had a specific place in society, certain rules to follow and certain duties to fulfill. Confucius hoped that if people knew what was expected of them they would behave accordingly. He, therefore, set up Five Cardinal Relations, in which most people are involved, moreover he also laid down the principles for each relation. These can be illustrated as follows:

Basic Human Relations

Principles

Sovereign and subject (master and follower)

Loyalty and duty

Father and son

Love and obedience

Elder and younger brothers

Seniority and modeling subject

Husband and wife

Obligation and submission

Friend and friend

Trust

Source: Fan, 2000

All of these five, except the last, involve the authority of one person over another. Power and the right to rule belong to superiors over subordinates. Each person has to give obedience and respect to his/her ‘superiors’; the subject to his/her ruler, the wife to her husband, the son to his parents, and the younger brother to the older brother. The ‘superior’, however, owes loving responsibility to the subordinates.

These relationships are structured to generate optimal benefits for both parties, and the principles are laid to achieve a harmonious society (Fan, 2000). Among these five basic human relations, three are family relations, which show strong family-orientation in the Chinese society. Such a characteristic when applied to organizational management, leads to the birth of a paternalistic management style in Chinese society (Hsiao, et al., 1990). As China is a high context culture (Hall, 1976) and places much emphasis on Confucianism, relationships within the Chinese society have been explained in terms of harmony, hierarchy, and development of morality and kinship (Shenkar and Ronen, 1987).

Defining Guanxi

Under the impact of Confucianism, China is a nation whose social relationships are neither individual-based nor society-based, but typically a relationship-based society (Liang, 1974), in which almost everyone tries to maintain Guanxi. Guanxi, which literally means social relationship or social connection, is a prevalent cultural phenomenon that has strong implications for interpersonal and interorganisational dynamics in Chinese society.

The concept of Guanxi is enormously rich, complex and dynamic (Yang, 2001). In English as well as Chinese, it can be defined at various levels and from different perspectives. Chen and Chen (2004) argue that rather than social networks or interpersonal relationships found in the Western literature, Guanxi should be viewed as an indigenous Chinese construct and should be defined as an informal, particularistic personal connection between two individuals who are bounded by an implicit psychological contract to follow the social norms as maintaining a long-term relationship, mutual commitment, loyalty, and obligation.

The Confucian heritage of Guanxi

The connotations of Guanxi vary greatly in different Chinese societies and may change over time even within a single Chinese society. However, some of the fundamental meanings of Guanxi are still traceable in ancient Chinese philosophical writings, particularly the analects of Confucius (Lau, 1983).

King (1991) was among the first who took a theoretical approach to explore in to Confucianism for the historical and cultural roots of Guanxi. He contended that instead of Guanxi, the word ‘Lun’ is used in the Confucian classics, which captures some of the most essential aspects of the ancient Chinese social, political and moral philosophy. Expanding the understanding of Lun may shed lights on the historical backgrounds of Guanxi.

First, Lun attaches paramount importance to human relationships.

The Five Cardinal Relationships as a whole, pictures a social system advocated by Confucius to achieve harmony, integration, and development through a hierarchical form. Inside this system Chinese people view themselves interdependent with the surrounding social context, and the “self in relation to others” becomes the focal individual experiences (Luo, 1997). Although the structural framework of relationship evolved since Confucius time, modern Chinese societies, both mainland and overseas still remain relationship-oriented (Redding and Wong, 1986) or in other words ‘Guanxi-oriented’.

Second, Lun stresses social order.

In Confucian society, everyone knows their own place and whom they must defer to. These status differences are regarded as the appropriate way of conducting relationships and are accepted and maintained at all levels of the hierarchy (Bond, 1991). Rights and obligations of the individuals also differ according to each one’s position in society.

Third, Lun refers to moral principles in regard to interactive behaviors of related parties.

Confucianism has been a main pillar of current Chinese society for forming individual morality as well as for building harmonious community. Confucian principles put emphasis on self-cultivation and sociopolitical harmony. For example, considering the Confucian sociopolitical norms for the ruler, Confucius suggests that those who want to be rulers have to be ethical leaders having virtuous characters and attitudes. However, just as the relationships are highly differentiated, so are the moral principles. In Confucianism, furthermore, there is no universal moral standard applicable to all human relationships. Instead, each relationship has its own moral principles.

The concept of Guanxi is embedded within the Confucius philosophy and it subtly defines the Chinese moral code and perpetuates its influence in Modern China (King, 1993). Lun in Confucius philosophy is actually a concise description of Guanxi. As a social hierarchical theory, Lun has prompted almost all Chinese rulers to adopt Confucianism as a strategic tool to achieve social stability in the Chinese society (Man and Cheng, 1996).

2.3.4 Characteristics of Guanxi

Chinese people attach great importance to face (Mianzi). Face in Chinese context refers to an intangible form of social currency and personal status, which is affected by one’s social position and material wealth (Park and Luo, 2001). Chinese people value the enjoyment of prestige without the loss of face and saving of others’ face (Hwang, 1987). Therefore, to cultivate Guanxi and expand the Guanxi network, it is necessary to maintain a certain level of face. Renqing, as elaborated by many scholars (e.g. Luo, 2007) is another Chinese philosophy related to Guanxi. It refers to an informal social obligation to another party as the result of a favor gained from a Guanxi relationship. On the one hand, Chinese people weave Guanxi web in their daily life; on the other hand, they are bound by Renqing obligations. Tsui and Farh (1997) contend that in essence, reciprocity, he/she not only loses his/her own face but also jeopardize his/her Guanxi. Based on its Confucian heritage and those philosophical foundations like face and Renqing, Guanxi in Chinese context is characterized by some principles.

First, Guanxi operates in concentric circles, with close family members at the core and with distant relatives, classmates, friends, and acquaintances arranged around the core according to the distance of the relationship and the degree of trust (Yang, 1994). In a preordained relationship, e.g. family, since one’s behavior and responsibilities are largely fixed, his/her behavioral expectations and individual desires are heavily suppressed. However, in an external Guanxi network beyond the preordained relationship, one has considerable freedom in deciding whether to enter into voluntarily constructed relations (King, 1991) or not.

Second, Guanxi operates in an exclusive manner. It is network-specific and does not extend to members of other social networks. Many observers have noted that in comparison to Westerners, Chinese have a stronger tendency to divide people into different levels of categories and treat them accordingly in terms of ingroup-outgroup boundary (Triandis, 1989). Guanxi binds people together and defines those who are ingroup and/or outgroup people. Ingroup members are always protected and benefited while outgroup people are walled off and may be rejected (Hui and Graen, 1997). To develop Guanxi is to form the basis for a gradual transition from an outsider to an insider so that a long-term close relationship can be built. Entering such networks ensures trust building, decision-making, and competitive advantages for network members (Haley, Tan & Haley, 1998).

Third, Guanxi is reciprocal. A person will lose his/her face and be viewed untrustworthy if he/she does not follow the rules of reciprocity and refuse to return a favor (Alston, 1989). In Western networks, reciprocity often requires exchanges of roughly equivalent value (Powell, 1990). However, the Chinese Guanxi network is often implicit, without time specifications, and not necessarily equivalent. Guanxi links people of different social ranks, and usually the weaker party can call for special favors from the str

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