Guanxi, Cultural Antecedents and Trust Building in Chinese Business Research Paper

Guanxi, Cultural Antecedents and Trust Building in Chinese Business Markets - Research Paper Example The focus in this paper is on the concept of Guanxi, central to the Chinese society. The literal translations of this term could mean 'connections' and 'relationships', but both these translated terms cannot describe the deeper meaning and implications that it actually stands for.The concept of guanxi is no longer confined to China and is accepted in the West also. Guanxi has been defined in different ways depending on the various perspectives. The Chinese construct considers guanxi as a very specific personal connection between two different people. This connection is exemplified by an inherent psychological contract that needs to be followed. The social norms include being committed, maintaining loyalty and ensuring that the relationship is maintained over a long term. Guanxi also has the key characteristics of trust for the parties involved that is developed through long term interactions, reciprocity and self-disclosure.In literal sense, guanxi means connection. When it comes to relationships, this term either refers to the connection between the parties that are involved, or to the connected parties.There are different stages of guanxi - either existent or non-existent, either good or bad, distant or close, deep or superficial and so on. Guanxi can exist between two or more individuals or even between organizations or different networks.It is also necessary to know that guanxi is function in the different spheres of human life, such as the families, friends, and professional groups, political and business. The term guanxi is used along with different verbs to give it different connotations and meanings. For example, if the phrase 'pull guanxi' is used, then it means the set of actions that indicate initiating and establishing a connection. Similarly, if the phrases ‘walk guanxi' would mean using the established connections to achieve any purpose that needs to be achieved.Similarly, the term has been used in other verb forms such as building, developi ng, breaking etc. According to Gold et al, (2002), guanxi can be described as part of China's national character. Over the years, Guanxi has played a very important role in the business relationships in China. If the businesses are Guanxi based, then, there would be a higher probability to reduce uncertainty, reduce the transaction costs, and lower the search costs as trusted suppliers are already known. Guanxi based business relationships also add to strong sense of connectedness (Tung and Worm, 2001). Even while dealing with foreign investors, Guanxi helps in reducing the uncertainty associated with doing business with outsiders. This is because Guanxi helps in establishing informal relationships that can guard against any opportunistic behaviour on

Uncertainty and Risks in Entrepreneurship Essay

Uncertainty and Risks in Entrepreneurship - Essay Example When operating a small business enterprise it is imperative to reflect on the factors that influence both the internal and external environments of the business. The failure to observe the internal and external environments will render the functioning of a business system useless. This is because the small business enterprise will occasionally face obstacles in the daily operations and management. This paper discusses how the ability to cope with uncertainty and to take risks affects the operating environment of a small business enterprise. Small business enterprises nowadays are on the rise. Individuals have developed the urge of operating businesses that will bring them extra cash to cater for their ever-increasing needs. However, operation and management of any small business enterprise is not an easy task, as it requires an individual with skills, attributes, determination and disciple. It is imperative for an individual operating a business enterprise, to have the above elements since they will help when the time of facing the internal and external environment comes. In essence, taking risks and coping with uncertainty are matters that are associated with the internal and external environment of a small business enterprise. ... Managers cope with uncertainty in a reactive manner by developing adaptive strategies to counter the effect. This is so since they are beyond the immediate control of the business enterprise. As much as uncertainty is beyond the control of an individual, business enterprise, it still influences the daily operations and management of a business enterprise. Examples of uncertainties are external factors such as the economy, government policies and demographics. In most occasions, uncertainty affects a business enterprise negatively. Individuals who have taken the management role in any small business enterprise should apply a positive management attitude when coping with uncertainties. Uncertainty is unpredictable and unexpected, and that is why only the individuals with management skills and positive attitudes can have the ability to cope with uncertainty. A manager may think that he, or she has everything pertaining to a business enterprise in control, but uncertainties in the form o f government policies, competition, economical shifts and demographical changes can prove wrong a manager’s initial judgment (Gigerenzer 2008: 34). The first factor that can be a great uncertainty is government policy. It is likely that at times, the government can come up with an unexpected policy that will ultimately affect the operations of a business enterprise. A skillful manager is expected to develop coping strategies that will end up minimizing the disadvantages while maximizing the advantages, which are part the uncertainty that has been brought by the government policy. For example, government policy can entail increasing or decreasing taxes on a commodity that the business enterprise in question is selling.