Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/18115
Title: An examination of the influence of guanxi and xinyong (utilization of personal trust) on negotiation outcome in China : an old friend approach
Authors: Leung, TKP 
Chan, RYK 
Lai, KH 
Ngai, EWT 
Keywords: Ganging
Gifts
Mianzi
Renqing
Xinyong
Issue Date: 2011
Publisher: Elsevier
Source: Industrial marketing management, 2011, v. 40, no. 7, p. 1193-1205 How to cite?
Journal: Industrial marketing management 
Abstract: Managers of multi-national enterprises (MNEs) are at a disadvantage in negotiating outcomes with their Chinese counterparts when compared to local competitors. The reasons include: local competitors are more flexible in handling business terms and conditions; local Chinese managers prefer to negotiate with their old friends or insiders in the same guanxi network; and MNE managers perceive that cultural practices such as gift-giving and guanxi are problematic. This study advances our understanding of negotiation by using a model developed for the reference of MNEs to establish an "old friend" relational status with their local Chinese counterparts. This approach emphasizes cultural adaptation for MNE managers to achieve satisfying negotiation outcomes in China. The study reveals the following unique issues: 1) in addition to their problem-solving attitude, MNE managers should practice mianzi and gift-giving to build renqing with their Chinese counterparts at a new friend stage; 2) the reciprocity dynamics of renqing should enable these managers to accumulate ganqing and to become old friends of their Chinese counterparts; 3) the establishment of ganqing between MNE managers and their Chinese counterparts should enable the development of xinyong between the two exchange parties; and 4) desirable negotiation outcomes can be built on xinyong.
URI: http://hdl.handle.net/10397/18115
ISSN: 0019-8501
EISSN: 1873-2062
DOI: 10.1016/j.indmarman.2010.12.020
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