Guanxi Versus the Market: Ethics and Efficiency

Steve Lovett, Lee C Simmons and Raja Kali
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Steve Lovett: San Diego State University - Imperial Valley Campus
Lee C Simmons: The University of Texas at Arlington
Raja Kali: Instituto Tecnologico Autonomo De México

Journal of International Business Studies, 1999, vol. 30, issue 2, 247 pages

Abstract: Guanxi refers to a Chinese system of doing business on the basis of personal relationships, and it is representative of the way that business is done throughout much of the non-western world. In this paper we first evaluate guanxi from an ethical perspective, and then attempt to shed light on the sources of its economic advantages and disadvantages through the use of a simple mathematical model. Finally, we point out how eastern and western business practices may already be converging toward systems based on more complete models of trust to deal with the conditions of progress coupled with uncertainty that form our new economic reality.© 1999 JIBS. Journal of International Business Studies (1999) 30, 231–247

Date: 1999
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