Guanxi: Perceptions and Strategic Adaptations

Abstract: Purpose: To explore perceptions of guanxi within Swedish establishments in China, and how these perceptions shape their China strategy. Design/methodology/approach: The research is based on in-depth qualitative interviews that serve as empirical evidence to investigate the relation between managers’ perception of guanxi and corresponding adaptation strategies. We have chosen a reflexive approach, assuming that guanxi is not a homogenous concept, but rather is constructed by our respondents. Findings: We argue that guanxi is a form of socio-cultural embedded social capital that is constructed by managers, depending on their position in this economic exchange system. Four different perceptions have been identified and we argue that managers’ tend to gravitate towards one or the other. Furthermore, we argue that these perceptions affect companies’ adaptation strategies in China. Research limitations/implications: We add further understanding to a complex social phenomenon. We demonstrate the need to evaluate social effects on economic transactions when establishing and operating in China. Practical implications: Enabling practitioners to deepen their understanding of the connection between perceptions of guanxi and strategy. Originality/value: The research fills an identified gap in the literature, addressing the question of perceptions of socio-cultural embedded social capital and their effect on business strategy.