Rethinking Guanxi and Performance : Understanding the Dark Side of Sino–U.S. Business Relationships

Abosag, Ibrahim and Yen, Dorothy and Barnes, Bradley and Gadalla, Eman (2020) Rethinking Guanxi and Performance : Understanding the Dark Side of Sino–U.S. Business Relationships. International Business Review. 0-0. ISSN 0969-5931

Text (Rethinking Guanxi and Performance: Managing the Dark Side of Sino–U.S. Business Relationships)
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Abstract

Previous studies on guanxi (關係) have focused on how guanxi contributes positively to business relationships, without addressing the pivotal role that guanxi plays in managing the dark side of business relationships. Such a role includes direct reduction of the dark side in business relationships but guanxi also plays a key mediating role providing further reduction of the dark side. Specifically, this study investigates guanxi’s influence on conflict, opportunism, and switching intention in Sino–U.S. business relationships. Drawing on data from over 270 Chinese firms, the findings reveal that whilst guanxi is undermined by relationship uncertainty and enhanced by performance, guanxi does indeed reduce the dark side of Sino-U.S. business relationships. Chinese buyers’ guanxi with U.S. suppliers significantly reduces their switching intention, opportunistic behavior, and the perceived levels of conflict in such relationships. Chinese buyers therefore employ guanxi as a tool to reduce the burden associated with the dark side of business relationships.