IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v69y2016i12p5724-5734.html
   My bibliography  Save this article

Localization in China: How guanxi moderates Sino–US business relationships

Author

Listed:
  • Yen, Dorothy Ai-wan
  • Abosag, Ibrahim

Abstract

Understanding and adapting to local cultures has long been considered as an important part of successful localization, yet extant literature has not discussed how the adoption of cultural-specific construct as tools of localization facilitates successful b2b relationships with local counterparts. Whilst international companies are increasingly concerned with their business performance in China, this study believes b2b firms should engage the cultural-specific concept of guanxi (interpersonal ties) as a tool of localization when interacting with Chinese counterparts for better financial performance and long-term orientation. Using data collected from 299 Chinese buyers regarding their Sino–US business relationships, the results reveal that the relations between trust and financial performance and between uncertainty and long-term orientation are moderated by guanxi. The findings shed further light on localization literature with evidence highlighting the impact of guanxi in localizing b2b relationship activities in China.

Suggested Citation

  • Yen, Dorothy Ai-wan & Abosag, Ibrahim, 2016. "Localization in China: How guanxi moderates Sino–US business relationships," Journal of Business Research, Elsevier, vol. 69(12), pages 5724-5734.
    • Handle: RePEc:eee:jbrese:v:69:y:2016:i:12:p:5724-5734
    DOI: 10.1016/j.jbusres.2016.05.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296316302879
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2016.05.002?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. Ron Berger, 2014. "Mastering the Art of Jugaad and Guanxi: A Western Guide to Business Practices in India and China," International Journal of Asian Business and Information Management (IJABIM), IGI Global, vol. 5(4), pages 14-22, October.
    2. Simonetta Ilari & Adrienne La Grange, 1999. "Transferring Ownership-specific Advantages to a Joint Venture in China," Asia Pacific Business Review, Taylor & Francis Journals, vol. 5(3-4), pages 119-146, March.
    3. Luk, Sherriff T. K. & Fullgrabe, Lorna & Li, Stephen C. Y., 1999. "Managing Direct Selling Activities in China: A Cultural Explanation," Journal of Business Research, Elsevier, vol. 45(3), pages 257-266, July.
    4. Samiee, Saeed & Jeong, Insik & Pae, Jae Hyeon & Tai, Susan, 2003. "Advertising standardization in multinational corporations: The subsidiary perspective," Journal of Business Research, Elsevier, vol. 56(8), pages 613-626, August.
    5. Michailova, Snejina & Worm, Verner, 2003. "Personal Networking in Russia and China:: Blat and Guanxi," European Management Journal, Elsevier, vol. 21(4), pages 509-519, August.
    6. Chung, Henry F.L. & Yang, Zhilin & Huang, Pei-How, 2015. "How does organizational learning matter in strategic business performance? The contingency role of guanxi networking," Journal of Business Research, Elsevier, vol. 68(6), pages 1216-1224.
    7. Chong Ju Choi & Carla C. J. M. Millar & Caroline Y. L. Wong, 2005. "Knowledge and Exchange," Palgrave Macmillan Books, in: Knowledge Entanglements, chapter 0, pages 65-76, Palgrave Macmillan.
    8. Yadong Luo & Ying Huang & Stephanie Lu Wang, 2012. "Guanxi and Organizational Performance: A Meta-Analysis," Management and Organization Review, The International Association for Chinese Management Research, vol. 8(1), pages 139-172, March.
    9. Douglas Dow, 2006. "Adaptation and performance in foreign markets: evidence of systematic under-adaptation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(2), pages 212-226, March.
    10. Mavondo, Felix T. & Rodrigo, Elaine M., 2001. "The effect of relationship dimensions on interpersonal and interorganizational commitment in organizations conducting business between Australia and China," Journal of Business Research, Elsevier, vol. 52(2), pages 111-121, May.
    11. Yadong Luo, 2007. "An integrated anti-opportunism system in international exchange," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(6), pages 855-877, November.
    12. Nicholson, Charles F. & Gómez, Miguel I. & Gao, Oliver H., 2011. "The costs of increased localization for a multiple-product food supply chain: Dairy in the United States," Food Policy, Elsevier, vol. 36(2), pages 300-310, April.
    13. Buckley, Peter J. & Clegg, Jeremy & Tan, Hui, 2006. "Cultural awareness in knowledge transfer to China--The role of guanxi and mianzi," Journal of World Business, Elsevier, vol. 41(3), pages 275-288, September.
    14. Shermain D. Hardesty, 2008. "The Growing Role of Local Food Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(5), pages 1289-1295.
    15. Rose, Gregory M. & Shoham, Aviv & Neill, Stern & Ruvio, Ayalla, 2007. "Manufacturer perceptions of the consequences of task and emotional conflict within domestic channels of distribution," Journal of Business Research, Elsevier, vol. 60(4), pages 296-304, April.
    16. Lianxi Zhou & Wei-ping Wu & Xueming Luo, 2007. "Internationalization and the performance of born-global SMEs: the mediating role of social networks," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 673-690, July.
    17. Calantone, Roger J. & Kim, Daekwan & Schmidt, Jeffrey B. & Cavusgil, S. Tamer, 2006. "The influence of internal and external firm factors on international product adaptation strategy and export performance: A three-country comparison," Journal of Business Research, Elsevier, vol. 59(2), pages 176-185, February.
    18. Rose, Gregory M. & Shoham, Aviv, 2004. "Interorganizational task and emotional conflict with international channels of distribution," Journal of Business Research, Elsevier, vol. 57(9), pages 942-950, September.
    19. Tjosvold, Dean & Hui, Chun & Law, Kenneth S., 2001. "Constructive conflict in China: cooperative conflict as a bridge between East and West," Journal of World Business, Elsevier, vol. 36(2), pages 166-183, July.
    20. Samiee, Saeed & Walters, Peter G. P., 2003. "Relationship marketing in an international context: a literature review," International Business Review, Elsevier, vol. 12(2), pages 193-214, April.
    21. 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.
    22. Luo, Yadong & Huang, Ying & Wang, Stephanie Lu, 2012. "Guanxi and Organizational Performance: A Meta-Analysis," Management and Organization Review, Cambridge University Press, vol. 8(1), pages 139-172, March.
    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. Rahman, Shams & Ahsan, Kamrul & Yang, Laura & Odgers, John, 2019. "An Investigation into critical challenges for multinational third-party logistics providers operating in China," Journal of Business Research, Elsevier, vol. 103(C), pages 607-619.
    2. Aykol, Bilge & Leonidou, Leonidas C., 2018. "Exporter-importer business relationships: Past empirical research and future directions," International Business Review, Elsevier, vol. 27(5), pages 1007-1021.
    3. Zhu, Qinghua & Lai, Kee-hung, 2019. "Enhancing supply chain operations with extended corporate social responsibility practices by multinational enterprises: Social capital perspective from Chinese suppliers," International Journal of Production Economics, Elsevier, vol. 213(C), pages 1-12.
    4. Yuping Deng & Yanrui Wu & Helian Xu, 2020. "Political Connections and Firm Pollution Behaviour: An Empirical Study," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(4), pages 867-898, April.
    5. Tengjian Zou & Gokhan Ertug & Ilya R. P. Cuypers & Donald L. Ferrin, 2023. "Trust across borders: a review of the research on interorganizational trust in international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(8), pages 1379-1401, October.
    6. Lee, Liane W.Y. & Tang, Yiming & Yip, Leslie S.C. & Sharma, Piyush, 2018. "Managing customer relationships in the emerging markets – guanxi as a driver of Chinese customer loyalty," Journal of Business Research, Elsevier, vol. 86(C), pages 356-365.
    7. Wang, Fangjun & Sun, Junqin & Liu, Yang Stephanie, 2019. "Institutional pressure, ultimate ownership, and corporate carbon reduction engagement: Evidence from China," Journal of Business Research, Elsevier, vol. 104(C), pages 14-26.
    8. Shaojian Chen & Hui Mao & Junqin Sun, 2022. "Low-Carbon City Construction and Corporate Carbon Reduction Performance: Evidence From a Quasi-Natural Experiment in China," Journal of Business Ethics, Springer, vol. 180(1), pages 125-143, September.
    9. Deng, Yuping & Wu, Yanrui & Xu, Helian, 2019. "Political turnover and firm pollution discharges: An empirical study," China Economic Review, Elsevier, vol. 58(C).
    10. Chen, Shaojian & Mao, Hui & Feng, Zongxian, 2020. "Political uncertainty and firm entry: Evidence from Chinese manufacturing industries," Journal of Business Research, Elsevier, vol. 120(C), pages 16-30.
    11. Leonidas C. Leonidou & Bilge Aykol & Jorma Larimo & Lida Kyrgidou & Paul Christodoulides, 2021. "Enhancing International Buyer-Seller Relationship Quality and Long-Term Orientation Using Emotional Intelligence: The Moderating Role of Foreign Culture," Management International Review, Springer, vol. 61(3), pages 365-402, June.
    12. Hemmert, Martin & Kim, Jae-Jin, 2018. "Informal social ties and relationship orientation in Korean business exchanges: A content analysis of ten inter-organizational research collaborations," Working Papers on East Asian Studies 123/2018, University of Duisburg-Essen, Institute of East Asian Studies IN-EAST.
    13. Peter S. Hofman & Constantin Blome & Martin C. Schleper & Nachiappan Subramanian, 2020. "Supply chain collaboration and eco‐innovations: An institutional perspective from China," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2734-2754, September.

    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. Abosag, Ibrahim & Yen, Dorothy Ai-wan & Barnes, Bradley R. & Gadalla, Eman, 2021. "Rethinking guanxi and performance: Understanding the dark side of Sino–U.S. business relationships," International Business Review, Elsevier, vol. 30(4).
    2. 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.
    3. Dirk Holtbrügge, 2013. "Indigenous Management Research," Management International Review, Springer, vol. 53(1), pages 1-11, February.
    4. Dejin Su & Qixia Du & Dongwon Sohn & Libo Xu, 2017. "Can High-Tech Ventures Benefit from Government Guanxi and Business Guanxi ? The Moderating Effects of Environmental Turbulence," Sustainability, MDPI, vol. 9(1), pages 1-17, January.
    5. 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.
    6. Efrat, Kalanit & Øyna, Stine, 2021. "An interaction orientation approach to SME-Intermediaries relationships," European Management Journal, Elsevier, vol. 39(4), pages 508-520.
    7. Lee, Liane W.Y. & Tang, Yiming & Yip, Leslie S.C. & Sharma, Piyush, 2018. "Managing customer relationships in the emerging markets – guanxi as a driver of Chinese customer loyalty," Journal of Business Research, Elsevier, vol. 86(C), pages 356-365.
    8. Chu, Zhaofang & Feng, Bo & Lai, Fujun, 2018. "Logistics service innovation by third party logistics providers in China: Aligning guanxi and organizational structure," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 291-307.
    9. Lu, Tingyu & Zhuang, Mengzhou & Zhuang, Guijun, 2021. "When does guanxi hurt interfirm cooperation? The moderating effects of institutional development and IT infrastructure capability," Journal of Business Research, Elsevier, vol. 125(C), pages 177-186.
    10. Luo, Jun & Chong, Alain Yee-Loong & Ngai, Eric W.T. & Liu, Martin J., 2014. "Green Supply Chain Collaboration implementation in China: The mediating role of guanxi," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 71(C), pages 98-110.
    11. Huihua Chen & Cong Chen & Hujun Li & Jianshe Zhang & Zengke Yang, 2022. "A Simulation Study on the Processes of Intra-Group Informal Interaction Affecting Workers’ Safety Behaviors," IJERPH, MDPI, vol. 19(16), pages 1-17, August.
    12. Wu, Wen-Kuei & Wang Chiu, Singa, 2016. "The impact of guanxi positioning on the quality of manufacturer–retailer channel relationships: Evidence from Taiwanese SMEs," Journal of Business Research, Elsevier, vol. 69(9), pages 3398-3405.
    13. 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.
    14. 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.
    15. Guo, Ying & Rammal, Hussain G. & Benson, John & Zhu, Ying & Dowling, Peter J., 2018. "Interpersonal relations in China: Expatriates’ perspective on the development and use of guanxi," International Business Review, Elsevier, vol. 27(2), pages 455-464.
    16. Li, Yanlin & Tian, Gary Gang & Wang, Xin, 2021. "The effect of Guanxi culture on the voting of independent directors: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 67(C).
    17. Luis Alfonso Dau & Jiatao Li & Marjorie A. Lyles & Aya S. Chacar, 2022. "Informal institutions and the international strategy of MNEs: Effects of institutional effectiveness, convergence, and distance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(6), pages 1257-1281, August.
    18. Do, Hoa & Nguyen, Bach & Shipton, Helen, 2023. "Innovation and internationalization in an emerging market context: Moderating effects of interpersonal and organizational social networks," Journal of International Management, Elsevier, vol. 29(2).
    19. Luo, Jun & Chong, Alain Yee-Loong & Ngai, Eric W.T. & Liu, Martin J., 2015. "Reprint of “Green Supply Chain Collaboration implementation in China: The mediating role of guanxi”," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 74(C), pages 37-49.
    20. Chu, Zhaofang & Wang, Qiang & Lai, Fujun & Collins, Brian J., 2019. "Managing interdependence: Using Guanxi to cope with supply chain dependency," Journal of Business Research, Elsevier, vol. 103(C), pages 620-631.

    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:jbrese:v:69:y:2016:i:12:p:5724-5734. 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/locate/jbusres .

    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.