College of Admin: International Management Case Study - MGMT 0

This case study analyzes the significance of Guanxi (relationships) in the context of international management, particularly within the Chinese business environment. It explores how cultivating Guanxiwang (relationship networks) is crucial for business success in China, often surpassing the importance of the rule of law. The case highlights the experiences of DMG, a marketing agency, to illustrate how personal connections and social status influence business operations in China, differing from Western business ethics. The study examines the ethical considerations of Guanxi, including potential conflicts with Western ethical standards and legal compliance. It also discusses the challenges faced by companies that try to adhere to regulations while navigating the complexities of Guanxi. The study emphasizes the importance of understanding and adapting to the cultural nuances of the Chinese market for achieving long-term business success.

Running Head: MANAGEMENT 0
International management

MANAGEMENT 1
Answer 1 – Guanxi actually signifies connections, however, in relation to the business
environment, it can better recognise as relations (Zhao & Timothy, 2015). The reason to
which cultivation of guanxiwang and guanxi is important in China as the relations they are
made at the time of business can either make or break the organisation. There are various
legislations where in the absence of guanxiwang and guanxi, the organisation would go out of
business and nothing would get done. If the deal goes right, it will offer businessman a
prestige and enable for him easy access to other resources in the future. Hence, it can also be
said that cultivating both is also significant so as to adopt the inner culture of the nation.
Ultimately, it is an essential mechanism to do a long term business and achieving successful
business in China and so, with setting up in relationships would benefit to do a better
mechanism and practice in doing business in China.
Answer 2 – Rather than the rule of law, associations and personal power or connections
(guanxi), has always been the main aspect to getting things done in China. In China,
companies that play by rules and laws may also face challenges to compete as in this country,
people will not do something for free. It can also be called as bribery in other nations and
while looking at the case of DMG in Shangai, the influence of guanxi can be identified more
seemingly.
The originator of DMG i.e. Dan Mintz had no past understanding in the marketing arena and
he also had no connection in China. Though, he had maintained guanxi with the two young
Chinese and these two have linked with various people at a different level. With the help of
their links as a base of the organisation guanxiwang, they were able to develop as of the
country fastest growing marketing agencies.
The familiarity of DMG tells us of the way corporate is operated and led in China and this
methodology is differing to that of Western ethos. In China, social status and personal
connections are more significant than the law (Hu et al, 2016). To work in China, DMG
implies that culture plays an important role where Guanxi signifies to the corporate
association that is essential to firms doing business in the country. In addition, Guanxiwang
states to the relation network that organisations cultivate and both of these are necessary to
the Confucianism beliefs – honesty, faithfulness and shared obligations in dealing with others
– that operate a business in China. According to Dan Mintz, guanxiwang and guanxi are both
significant as they help businesses get outside the boundaries that confine the firm’s ability to
function effectively. It is also very beneficial when one has a business that brings a well job.

MANAGEMENT 2
However, when a company is tried to obey all the regulations and laws, it is not possible for
them to get good business and therefore, will definitely fail in China.
Answer 3 – Chinese firms rely upon the relationship network known as Guanxiwang and
firms can get into suffering if they request to return a favour to an associate that practices
unethical way considering all as of the shared responsibilities that are key to the process.
Cultivating guanxiwang would be taken as practicing external of the law and go with the
fines. Though businesses are led in the way in China and relies upon the corporate Code of
Ethics, According to China, guanxi relates to big admiration and faith to the individuals in the
association. It is shared and all individuals get to be benefitted. Like in the US, ethical issues
are also a law and here the question arises that one should do business with people who
believe on favour in response to a favour? And this may create a challenging situation as a
Western business could not follow through with guanxiwang if they were dedicated to high
ethical ideals and they would have to go beside their beliefs to operate their business in
China. Considering the Western businesses, there are well administered by law, order and
distinct parity. A business that tries to draw guanxiwang can be certified under law or even
have to go with legitimate causes considering the practices and act (china-window.com,
2011).

MANAGEMENT 3
References
china-window.com. (2011). Framework for Evaluating Supply Chain Execution Systems.
Retrieved from
http://www.china-window.com/china_business/china_business_tips/business-
networks-in-chin.shtml?
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Hu, J., Blue, P. R., Yu, H., Gong, X., Xiang, Y., Jiang, C., & Zhou, X. (2016). Social status
modulates the neural response to unfairness. Social Cognitive and Affective
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Zhao, S. N., & Timothy, D. J. (2015). Governance of red tourism in China: Perspectives on
power and guanxi. Tourism Management, 46(1), 489-500.