China

According to the article: Is Guanxi still working, while chinese MNCs go global? The case of Taiwanese MNCs in the UK by Chun Lisa Chen  and Mark Easter by-Smith, Guanxi is a chinese social system based on the relationships between individuals whose ultimately goal is to achieve harmony in the society, in order to get this harmony the relation should be conducted with a cooperative behavior, reciprocity and a high commitment with the others persons.

The Guanxi was inspired by some Confucianism statements that "urging individuals to adapt to the collective to control their emotions, to avoid conflict and to maintain inner harmony. Social relations should be conducted in such a way that everybody’s “face” is maintained and face is a key component in the dynamics of guanxi". The activity of Guanxi is based on a face- to face communication and the trust is the main value that sustains all the system's dynamics.

The Guanxi is applied in both fields, the social and the business one, the latter has two models of Guanxi: the horizontal Guanxi and the vertical Guanxi. The taiwanese business culture works through the construction of a contacts network, it is very common that a business manager personally knows his employees and his business contacts, in most of the cases the new employees or business contacts should be introduced by someone whom the manager trusts, this is known as Renqing and "is kind of a resource in Chinese society,
which means that an individual can introduce someone to another person in the course of social exchange".

In the horizontal Guanxi the manager works to develop and strength business relationships through the socialization with his customers, the construction of mutual trust and the constant communication. This horizontal approach let the manager get a bigger competitiveness in the market, because this model allows him to get information about business oportunities and provides him resources related to social capital, as an example of this case, the IT taiwanese MNCs, who decided to internationalize their operations afirm that they chose to locate their subsidiaries in UK, because for them is very important to work close to their most important customers.

The vertical Guanxi is related to human resource management, where it states the importance of personal relationships between the employer and the employee. The vertical Guanxi concept is highlighted in the following paragraph "Taiwanese manager gives face to the supervisor, he expects that the supervisor will obey the rules (obligation) and follow his orders (obedience)...Mianzi entails providing empathy with others and avoiding speech or actions that cause embarrassment to others. Where face is saved, emotional feelings of attachment are developed".

 This article summarizes a research made with some taiwanese MNCs , most of them from the IT sector and the financial sector, these companies develop an entry strategy to the UK market based on the Guanxi approach, but they have found some difficulties to implement this model, the Guanxi approach is not seen as a good alternative to use in an employees' recruitment, because the Guanxi could affect the company's efficiency. Also the UK employees or business contacts are not too commited with this approach.

The proposed question for this topic is:

1. Discuss in your blog the relevance of the Guanxi and the existence of chinese business networks as supporting factor to the internationalization process of chinese companies.

For me there are many valuable elements of the Guanxi approach to take into consideration when an international manager arranges to build a business relationship with his customers, I think those elements such as harmony, communication and trust could promote a higher level of cooperation and this issue could be translated in bigger and better developments of projects. In the same way I think the Guanxi approach could ease the daily activities inside a firm, because all the employees (from the top to the bottom) are caring about how they are going to interact with their partners in order to avoid emotional conflicts or disrespectful behaviors and certainly this could be a good productivity indicator because the employees could work in a comfortable labor environment.

The existence of chinese networks abroad could be very useful for companies, which are going to undertake an internationalization process, these networks could support the development of new contacts, gather market information, and give important ideas about how the beginner company should consolidate its strategic plan in this new market, however no company should depend entirely to these business networks because the international market requires a broader perspective of interaction among employees, managers and customers, many of the business contacts, whom the manager is going to know don't belong to the same business network and many of them don't even  share his culture, so he has to be ready to face this challenge.

Images taken from:

http://guanxithegame.bureauvenhuizen.com/wordpress/

http://rejon.org/wiki/IDEA_20090321_Guanxi_Magazine