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II. Literature Review

2.5 Chinese Cultural value

2.5.1 Guanxi

In ethnic Chinese society, nothing can be done without guanxi (Qian et al., 2007).

In recent years, guanxi has become an important dimension of researches in self-construal (Chen & Chen, 2009; Gao, 1996; Li, 2002), Chinese business practices (Chung & Hamilton, 2001; Marble & Lu, 2007; Ramasamy, Goh, & Yeung, 2006), and social networks (Hammond & Glenn, 2004; Xiaodong, Weiwei, & Greeven, 2010; Zhou, Wu, & Luo, 2007). Although the social structure of East and West are both foundation on interpersonal networks, but there are great different understandings of the relationship between East and West. On the basis of rational thinking, western idea descripts the relationship into the transaction of remuneration exchange. From Semantically, guanxi literally means "pass the gate and get connected (Lee & Dawes, 2005). " The concept of guanxi means interpersonal relationships or connections among people, and can be applied not only to family and friendship relationships, but also to social connections such as dyadic relationships (Hwang, 1987) . It can be regarded as

"the personal relationship networks of informal social bonds in which individuals carry expectations and obligations to facilitate favor exchanges (T. Leung, Chan, Lai, & Ngai, 2011)". It is an important social and cultural factor in Chinese business context which

businessmen can depend upon when formal institutions and resources are unavailable (Kwang kuo Hwang, 1987; Luo, 2000; Marshall, 2000; Park & Luo, 2001; Tsang, 1998).

It also can help extending buyer-supplier relationship from normal business relationships to a close-tied relationships which make buyers and sellers doing business more enjoyable, because guanxi is a process enabling strangers to get contacted and connected with others (Leach, Liu, & Pelton, 2011).

The aim of established guanxi is ensuring that any party of a business transaction will pay for the social favor, which means people will conduct reciprocal actions to one another such as offering special interest (Qian et al., 2007). In other words, when people receive a favor from another, they are expected to reciprocate to the favor giver in the future, or the guanxi cannot be sustained. Therefore, the participants in relationship network both carry expectation and obligations of the promoting favor exchange (Leung et al., 2011).

In guanxi structure, feelings are the core concept, which, normally represents the commitment of interpersonal bonds and strength of intimacy between two parties, that determines the strength of guanxi (Yang & Wang, 2011).

Yang (1994) spread interpersonal bond into expressive, instrumental and mixed three types. The expressive bond exists in family, interpersonal bondage natural and innate. Members have responsibility and obligation to help each other. Resource exchange and lend grace is unconditional and ethical behavior. The purpose of instrumental bond is taken what they need, so it is usually use economy rules to regulate it. Generally apply on strangers. The basic purpose of mixed bond is also exchange resource and interest. It has the basic characteristics of instrumental bond but regulated

in expressive bond. Only acquaintance is applied this interpersonal connection, the Chinese often establishing such relationship with people outside of their family actively.

Ethnic Chinese people will determine the person is "insider" or not by the degree of intimacy of the feelings attachment, and determine if the person is trustworthy or has credit. Trust in the Chinese culture is established on emotional foundation (Wang, 2007; Yang & Wang, 2011), if you are insider, details of the transaction can be handled in flexibility such as conducting the transaction without following the contract terms, or contextual factors which doesn't listed in details in the contract (Batjargal & Liu, 2004). However, it is opposite to the way that Western managers did. Western managers normally regulate the rights and obligations of a transaction through terms within the contract, and they judge the degree of trustworthy regarding people by their personal characteristics or degrees of integrity (Leung et al., 2011).

In this case we can know, the relationship among Eastern is very personal, which operate based on affection. Relation is based on renqing, and then extends the feeling between people (Yen, Barnes, & Wang, 2011). Afterwards they become close friends and renqing become the norm to each other, forming a close link to each other (Leung et al., 2011). Renqing is a ticket makes other share the joy, anxiety or any emotion (Luk, Fullgrabe, & Li, 1999). For example, the red envelope we gave on the wedding of friend’s child can improve our relation. But renqing needs to return, it bring about the instrumental bond (Leung et al., 2011). With the increase of renqing, both sides become more familiar, understand and share more and more of their feelings, thoughts. It brings about expression bond; a presence in mind of emotional attachment begins to produce (Guo, 2001). They build an interpersonal relationship with the mix of instrumental and

expression bonds. How to get into the emotional-oriented interpersonal relationship?

Leung et al. (2011) suggest that can process from safeguarding others mianzi.

According to previous researches, therefore, ganqing (affect), renqing (reciprocal favor), and mianzi (face) are the necessary components of guanxi (Hwang, 1987; Kipnis, 1997; Lovett, Simmons & Kali, 1999; Park & Luo, 2001). These three dimensions are inter-related with one another, which may be mixed together as a syndrome and become significant structure variables in the Chinese community relations (Lee & Dawes, 2005) . Moreover, guanxi is derived base on mianzi; people can practice mianzi to build renqing, and practice renqing to generate ganqing Leung et al. (2011). The following sections will explore mianzi, renqing, and ganqing.

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