The role of gifting on the association of relationship investment and Chinese cultural values

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Global Business Program, School of Business

The role of gifting on the association of relationship investment and Chinese

cultural values

By Yu-Jen Chen

Advisor: Dr. Yu-Chen Chen

Jan, 2014

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relationship investment and Chinese cultural values

A Thesis Submitted to Soochow University

in partial Fulfillment of the Requirements for the Degree of

Master of Business Administration In

Global Business Program

By Yu-Jen Chen

Global Business program, School of business, Soochow University Jan, 2014

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Abstract

Taiwanese business managers in their daily works are affected by Western management theories and Chinese cultural values at the same time. However, most of scholars inquire about the antecedents and consequences of buyer-supplier relationship investment in Western and Chinese society separately. Therefore, this study focuses on the context of business-to-business relationships and coordination behavior, involving Taiwanese purchasing executives or enterprise employees; hoping to understand the relationships among relationship investment, the characteristics of gift, and Chinese cultural variables. A proposed structure model was tested with data collected from an online survey and paper questionnaire. A total of 152 samples were collected. Data analysis was done using structural equation modeling using SmartPLS software. Results suggest that reciprocity likelihood was affected by both Western relationship investment skill and Eastern culture and relationships. But unexpectedly, the “mainzi” impact perceived relationship investment is negative, which means that the more “mianzi” the purchasing executives obtain, they will perceive less relationship investment.

Keywords: relationship investment, Chinese cultural value, gift-giving,Guanxi, Mianzi, Renqing

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Acknowledgments

After ITI training, I was doubtful that should I go back to school for a master's degree. Until I joined GBP's warm family which supported us in many ways, I know my decision was correct.

Due to my exchange student program, I tried completing this thesis earlier, which is never an easy option. Thanks to my thesis advisor- Dr. Yu-Chen, Chen, I could not have done this without his guidance. During the writing process, he encouraged me to think in different perspectives and provided immediate feedback and solutions for me.

However, even though this year is his sabbatical he is still replying to my e-mails speedily and patiently.

Moreover, the support from my family and friends provided me with strong power.

Especially, Mr. Lu, Anita, and Vicky who helped me collect the survey. Thanks to my mother and Anita to encouraged me when I was feeling down. Also And last but not least, thanks to Serena who always help me solve Word problems.

Last but not least, thanks to many people who help me a lot on the road of completing this research, your kindness was my biggest power. Thanks to Profess Shang and Professor Hung, your advices during oral defense were valuable to me.

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List of Figures

Figure 1 Research Framework ... 28 Figure 2 Results of Hypotheses ... 56

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List of Table

Table 1 Operational Definition and Measurement ... 40

Table 2 KMO and Bartlett's Test Results ... 42

Table 3 Rotated Factors Solution^a ... 44

Table 4 Sample's Data Structure ... 47

Table 5 Cross-Loading ... 49

Table 6 Cross-Loading after Adjusted ... 50

Table 7 AVE Score, Correlation among Variables and AVE Square-root Value ... 51

Table 8 Cronbach’s Alpha ... 51

Table 9 Goodness-of-Fit Model ... 52

Table 10 Results of the Hypotheses Testing ... 54

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I. Introduction 1.1 Background and Motivation

In daily life, people frequently build relationships with each others. A relationship means a connection between people. Business can hardly survive without external relationships. To make profits, firms must sale products or services. When companies develop a service or create a product, connections and relationships with suppliers and customers are required for successfully doing business. Hence, firms must understand how to create successful relationships with their partners; and this issue has become critical for gaining success.

Buyer–supplier relationships have become a popular research issues in the past few decades. Most of the literatures on buyer-supplier relationships contributed to how relationship marketing leads to enhanced sales performance by improved buyer-supplier relationships (Humphreys & Williams, 1996; Nyaga, Whipple, & Lynch, 2010).

Moreover, many researchers are focused on how to effectively develop partnerships to enhance the possibility of reciprocity likelihood in the future (Bodur & Grohmann, 2005;

Dorsch & Kelley, 1994). Although, no research has explained the returns from Taiwanese business-to-business investments in relationship marketing programs, or has documented how to leverage these investments for Taiwanese purchasing executives.

Interestingly, most of scholars inquire the antecedents and consequences of buyer-supplier relationship investment in Western and Chinese society separately, by using Western theories such as buyer-suppler relationship and relationship marketing, and Chinese cultural values theories such as guanxi, respectively, and independently.

Taiwan's society, economic and business systems in particular, however, is not only

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deeply influenced by Western mind thoughts for a long time, but is also rooted on and influenced by the Chinese cultural system. Western management theories are widely deployed by Taiwanese business managers in their daily work; their initiatives, however, it is also impacted by Chinese cultural values at the same time. Therefore, Taiwan is a special society where its business operations are affected by both Eastern cultural values and Western management theories.

Gift-giving some also referred to it as gifting, is taking place in all societies. A gift can be tangible or intangible goods or services. People, Chinese people in particular, normally give business gifts when they visit their business partners or customers. For example, when customers or business partners has problems, they can give them a hand such as postpone lead time or change product quality to tide over the difficulties.

Gift-giving in a business-to-business (B2B) context is one of the common methods for maintaining relationship with business partners. It is a common way to cultivate relationships and reinforce trust, caring and commitment between the parties (D’Souza, 2003). Gifts are also deemed as voluntary benefits without favors in return; the recipient, however, may feel obligated to reward the giver through the gift (Bruhn, 1996).

Gift-giving in both China and Taiwan is a significant social activity. Through the act of gift-giving, people show their respects and apologies to other people, and cultivate long-term relationship. When people get paid, they will expect to pay back in the future (LaGaipa, 1977; Nye, 1979). In Business-to-business (B2B) context, therefore, gift giving by the buyers may allow the opportunity to ask a favor in business deals with their suppliers in the future; but suppliers can also, through mutual reciprocity, establish and enhance long-term relationships with their customers.

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quite different with the Western concept of relationship. Guanxi practice is claimed to be able to reduce efforts of the foreign managers while conducting business in Chinese society (Pearce & Robinson, 2000) . Recently, Western scholars are highly concerned about its effects on business relationships (Ambler, Styles, & Xiucun, 1999; Dunfee &

Warren, 2001). Guanxi is a network of relationship which is base on friendship and affection, and it can attain reciprocity obligation by gift exchange (Pearce & Robinson, 2000) . When you need a favor, you can practice guanxi to exchange for it and take the advantage from it. In the past, people in Chinese society will, through giving high value gifts such as high-end products, cash, etc., exchange for resources or opportunities.

Since Taiwan enterprises’ operations are deeply based on Western management theories, this study will use Taiwan's enterprises as research subjects to see if their operation is also impacted by the Chinese cultural values, and inquire the relationship between these two types of relationship building skills. The main stream of gift-giving researches has primarily focused on how gifts influence the relationships; but, scholars used Mainland China or Hong Kong as the research subjects (Joy, 2001; Qian, Razzaque,

& Keng, 2007). Thus, Taiwan’s businesses are rooted on a unique context which is composed and an integration of Western management practices and Chinese cultural value. Therefore, this study will combine with Chinese cultural values and Western theory to explore Taiwan's business environment.

1.2 Research Question and Objectives

Most of previous researches explored gift-giving behavior through exchange theory. For example, Belk (1977) indicated that gift giving to have four functions which are economic exchange, social exchange, communication exchange and

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socialization. Among those researches, most of scholars discussed gift giving behavior from the perspective of reciprocity theory. For example, Joy (2001) thought reciprocity are the core of gift-giving, since social exchange is concerned about long-term relationships rather than one-off exchange relationship (Molm, 1997). From the opinion of social exchange, relationships are the long-term link. Through relation link people will offer favor to others, and expect those will give feedback in the future. The act of feedback can establish trust and continue to promote the act of exchange. In buyer-supplier relationships, most people also believed a stable and long-term relationship can allow companies take advantage from it.

Based on the reciprocity theory, this study will inquire the effects of business-to-business gift-giving behavior in Taiwan, to see whether the relation among reciprocity likelihood, perceived relationship investment, and attributes of gift-giving, and Chinese cultural values. Gift- giving is a common social behavior in Taiwan. Most of suppliers will send business gift or small gifts during some holidays, special day, or business visits. Though most of scholars agree that the B2B relationship can be enhanced through giving gift such as Bruhn (1996) indicated that gifts as means of fostering business relation; Sherry (1983) also suggested giving an appropriated gift at the right time can develop or maintain a good relationship. A perception of inferior gift value may not be effective in enhancing, or may even decrease this relationship.

Affected by Chinese cultural values, however, gift recipients may judge the gift not only from the objective values of the gifts; their perceptions may still be influenced by the societal value system such as "guanxi", "renqing", and "face".

Despite an extensive amount of research examining the influences of gift-giving on buyer-supplier relationship, researchers have not fully explored this issue in the

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context of Chinese cultural values. This paper fills in the gap by proposing an integrative model for interrelating various theories that views gift-giving as a means to investing B2B relationship mediated by Chinese cultural system.

Standing on the above assumptions, this research aims at 2 major objectives. The first objective is to provide insights into the relationship between the purchasing executive perceived sale representative relationship investment and the willingness tend to cooperate with the sales representative in the future by integrating traditional reciprocity approach with the new perspectives of Chinese cultural values. More specifically, this study will try to find out if ganqing, mianzi, or renqing mediate the relation between the purchasing executive and the sale representative the relational outcomes, hoping that the findings will find. The second one is to provide business managers who want to do business with Taiwan's buyers with some practical implications.

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II. Literature Review

The concept of relationship marketing, derived from the field of industrial marketing (Perrien & Ricard, 1995), is initially proposed by Berry in 1983. Berry (1983) stated that "relationship marketing is attracting, maintaining and – in multi service organizations – enhancing customer relationships". The essence of customer orientation in relationship marketing requires suppliers doing their best to meet customers' needs to enhance their perceptions of satisfaction, and then get the maximum profit from customers. In the past, scholars viewed business transaction as the essence of marketing (Kotler, 1972); as the times changed, scholars now suggest that enterprises must be emphasized with the concept of maintaining and promoting relations with customers, because the relationship between buyers and suppliers will continue to extend after the completion of the one-time transaction of products or services; as more time passed, significance of the sale behavior will become less important (Levitt, 1983). Therefore, Humphreys and Williams (1996) found that interpersonal interaction between both parties of a business transaction will affect customer's perceived satisfaction.

2.1 Relationship Investment

The concept of relationship investment has been explored by scholars for a long time, so there are many definitions of this variable exist in the literature. Nevertheless, most of scholars defined the relationship investment in familiar way. For example, Blau (1964) defined relationship investment as "an investment of time, effort, and other irrecoverable resources in a relationship creates psychological ties that motivate parties to continue the relationship and sets an expectation of reciprocation", and Smith and Barclay (1997) also had similar description for relationship investment. Therefore,

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this study defines relationship investment as the investment of time, efforts, and other irrecoverable resources in a relationship by the sale representative to create psychological ties that motivate sales representative and customers to maintain their relationship and sets an expectation of reciprocation(De Wulf, Odekerken-Schröder, &

Iacobucci, 2001; Smith & Barclay, 1997).

In recent years, there are several studies of relationship marketing have revealed the effects of a company's investment in relationship building can have on consumers' general cognition of the company. Generally, customers may highly likely be favorably impressed, once a seller makes a relationship investment using bonding tactics of any kind (Hart & Johnson, 1999). Baker, Simpson, and Siguaw (1999) reported that consumers were more satisfied with sellers who made extra efforts toward their customers; Ganesan (1994) found a positive relationship between a manufacturer's relationship investment and their customer's trust in the manufacturer; Palmatier, Dant, Grewal, and Evans (2006) found that relationship investment has a large direct effect on seller objective performance. Moreover, Bagozzi (1995) found that customers illustrated loyalty to certain sales representatives in reciprocation of these sales representatives’ investments in the relationship. As Kang and Ridgway (1996) contend that consumers feel need to repay the marketer’s or seller’s “friendliness.”

By devoting efforts of relationship investment, sellers can have a strong relationship with their customers, which in turn can improve sellers’ performance such as increased sales growth, market share and profitability (Crosby, Evans, & Cowles, 1990; Morgan & Hunt, 1994). In line with the concept of reciprocity, the measurement items of relationship investment emphasize a purpose for reciprocation by consumers which is based on retention efforts made by a seller (Huppertz, Arenson, & Evans,

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1978). Therefore, this study will investigate the mediating role of perceived relationship investment which accounting for the connection between relationship marketing efforts and reciprocity likelihood. A positive path between relationship investment and reciprocity likelihood implies that the customer reciprocates a seller's actions.

2.2 Relationship Marketing Efforts

Few efforts have been made to define what relation that marketing tactics really are and how valuable consumers sense them to be (Dorsch, Swanson, & Kelley, 1998;

Gwinner, Gremler, & Bitner, 1998).However, the successful establishment of commercial relationships is considered to depend on modify such tactics (Christy, Oliver, & Penn, 1996; Dwyer, Schurr, & Oh, 1987). In general, the literature has differentiated among three levels of relationship marketing (Berry, 1995).

First level depends on pricing incentives to maintain customer loyalty, which is usually indicated to as level one relationship marketing. First level is the weakest level of relationship marketing, as customers are easily stimulated by price. However, level one relationship marketing is not investigated in this study. The reason for this choice is that level first relationship marketing does not suitable into this study. As this study is focus on how to help sales representatives build up relationship with purchasing to increase future reciprocity. Rely on offering imitate price to customer will narrow down company's benefit which is not business owners forward to see.

Second level is emphasis on the social field of a relationship, which by constantly communicating with consumers or referring to their names during each other's

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study is not investigated it. Since it does not involve true relationship marketing tactics or skills, as Berry (1995) stated "At level three, the solution to the customer's problem is designed into the service-delivery system rather than depending upon the relationship-building skills."

In De Wulf et al.'s (2001) model, they identified four relationship marketing efforts as determinants of perceived relationship investment which are direct mail, preferential treatment, interpersonal communication, and tangible rewards. Among those efforts, direct mail and tangible rewards are not deemed appropriate acts in the business-to-business context in which enterprise procurement is different with personal shopping. Although a few slight modifications to the conceptualization of the remaining two efforts must be done to suit the context of this study, they are considered to be appropriate as the antecedents of relationship investment in the business-to-business context.

2.2.1 Preferential Treatment

This study defined this variable as a customer's perception of the extent that a sales representative provides treatments to him better than other sales representative (De Wulf, Odekerken-Schröder, & Van Kenhove, 2003).

When a customer perceived the sales representative offer a better service than other sales representatives; for example, A company's sales representative willing to offer a better price for the customer, and B company's sales representative deny it. At this time, the customer will tend to doing business with A company's sales representative.

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Previous research found that distinctive treatment enables a sales representative to satisfy a person's basic human requirements to feel important (Peterson, 1995).

Moreover, HennigThurau and Klee (1997) also found that a company’s efforts to care for customers may result to an increase in consumer retention rate.

2.2.2 Interpersonal Communication

Interpersonal communication emphasizes the effects of the personal touch in communication between a seller and customers can have on relational investment. This study defined interpersonal communication as “a customer's perception of the extent to which a sales representative interacts with him in a warm and personal way” (De Wulf et al., 2001). Due to the fact that social interaction and personal exchanges between a customer and a sales representative have regularly been shown to influence relationship outcomes(De Wulf et al., 2003).

2.3 Reciprocity

The commonly held definition of reciprocity is "an individual evokes obligation toward others on the basis of their past behavior (Gouldner, 1960)". It is also an interpersonal construct that philosophers, psychologists, and sociologists used for investigating relational exchange behavior. Although reciprocity behavior stresses equivalent exchange of favors between the two parties of a business transaction, but the returns are not necessarily happened immediately or in kind, but over time a balance of exchange may be finally achieved (Pervan, Bove, & Johnson, 2009).

A small favor may generate a sense of obligation to a larger return favor.

Normally, people feel an ingrained psychological pressure to reciprocate after they

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received a benefits; the behavior of reciprocating can, hence, produce pressure. Once people fail to repay obligations, it can lead to a feeling of guilt (Falk & Fischbacher, 2006; Palmatier, Jarvis, Bechkoff, & Kardes, 2009). This feeling of obligation can help to develop and continue relationships with people through frequent reciprocity actions.

For example, De Wulf et al. (2001) found that when retailer made extra efforts toward their customers, customers will feel obligated to pay back the retailer's "friendliness."

Reciprocity is determined to be a main feature for investigating the duration and stability of exchange relationship(Larson, 1992); for example, people should repay good for good, in proportion to what they receive to create stable exchange relationship (Bagozzi, 1995). In line with the reciprocal behavior, actions taken by an individual in an exchange relationship will be reciprocated in kind by another, if anyone violated the norm of reciprocity, they predict the feelings of guilt it would have (Li & Dant, 1997).

The norm of reciprocity is defined as the conduct that "people reward kind actions and punish unliked ones. The theory considers that people measure the kindness of action not only by its consequences but also by the intention underlying this action(Falk &

Fischbacher, 2006)." For example, Some examples of reciprocity include customers, who often make their purchasing decision based on their prior experiences, or frequently received products for free from retailers(Fehr & Gächter, 2000).

Reciprocity is regarded as a key factor of human behavior and is deemed as an important norm in interpersonal relationship behavior, which can help strengthen and maintain relationship with people (Smith & Barclay, 1997). For the same reason, in business-to-business context, while procurement employees within an organization received a benefit from a sales representative, they may feel guilty if they don't reciprocate to the sales representative.

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2.4 Gift

Gift-giving is seen as an act of reciprocity, and often misinterpreted as bribery by Westerners; however, it appears to be an important part of the Asian culture and can be regard as a form of relationship investment, which can rouse interactions between businesses if it cultivated well (D’Souza, 2003). Thus, we consider business gift-giving as a way of relationship investment.

Webster's Third New International Dictionary defines gift as "something given to someone without expectation of a return". “Gift” means exchanges of services and products which help people to build connections with others by the concept of reciprocity(Joy, 2001). However, the exchange of goods or services which regards as a voluntary action for providing gift receiver benefits to improve relationship between people, and it is part of cultural and social behaviors (Belk, 1977; Hollenbeck, Peters,

& Zinkhan, 2006; Joy, 2001; Larsen & Watson, 2001; Sherry, 1983).

Business gifts are a form of non-verbal and symbolic communication, and exchange of gifts is part of the personal relationship which convey a variety of messages in their culture and gift-giving between companies has become usual to a large extent (Bruhn, 1996).This study, business gift refers to the gift that a sales representative sends in some holidays or festivals, during visiting to his buyers who owns the power of making business decisions. As business gifts are provided in the hopes of creating a positive first impression that might help to create an initial business relationship;

sometimes business gifts may be regard as expecting a favor in return for something or a favor (Arunthanes, Tansuhaj, & Lemak, 1994).

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2.4.1 Gift-giving

Gift-giving is a very common phenomenon in modern society, since gift-giving is common method for people to maintain or established interpersonal relationships (Komter & Vollebergh, 1997). There are many scholars explored gift-giving, and they try to figure out why people give gifts. For example, Wolfinbarger and Yale (1993) suggested there are three motivations for interpersonal gift-giving which are experiential motivation, obligated motivation and practical motivation. Experiential motivation is an attitude towards giving gifts just for enjoyment purpose; obligated motivation refers to an attitude that giving gift is for reciprocation purpose or requirements of social norms;

practical motivation is an attitude towards giving gift for supporting the receivers (Wolfinbarger and Yale, 1993). Sherry (1983) pointed out that gift-giving motivations may range from altruistic to agonistic. Sherry(1983) suggested that using gift can modulate each other's relationship such as maintain the desired degree of intimacy.

In gift-giving process, to give, to receive, and to reciprocate is an individual's obligation (Gouldner, 1960), and cultural embeddedness is why people follow those obligations (Sherry, 1983). The giving of a gift by one person to another is unlike other exchanges. The gifting process is important such as in social integration that it has four functions which are economic exchange, social exchange, communication exchange and socialization (Belk, 1977).

In Chinese culture, giving-gift is a significant social activity, people through gift-giving to express their respect and manners to recipient. When they give gifts, they will expect recipient to re-gift fairly. For example, in Asian business context, people will bring some small gift as they visit their clients to show their respect and try to strengthen mutual relationship thus exchange for preferential treatment in business dealings in the

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future such as change delivery time or modify product. D’Souza (2003) found that eighty three percent of respondents preferred to be loyal to the supplier who gave them gifts and would also get the supplier to modify products accordingly if required. It is a cultural practice that people give gifts in holidays or ceremonies such as Chinese New Year, birthday, promotion, wedding, and other festival or special occasions. Schieffelin (1980) pointed out that gift-giving to friends, family, colleagues, or even working partners in some special occasions is a rhetorical gesture in social communication and interpersonal interaction. Mick and DeMoss (1990) defined gift-giving as a behavior of an exchange of tangible or intangible goods or services between giver and recipient.

2.4.2 Gift value

In most of conditions, gift of higher monetary value are evaluated more favorably (Larsen & Watson, 2001). Here gift value is refers to the economic value of a gift, because economic value this concept is the most familiar to people which is evaluate gift value by its market value or monetary value and expected receive the equivalent feedback in the future (Belk & Coon, 1993; Bodur & Grohmann, 2005).Gift evaluation means the recipient’s perception of the gift’s significance and appeal (Bodur

& Grohmann, 2005). The difference between gift value and gift evaluation means that a gift of relatively monetary value can be evaluated advantageously if it is ideal to the recipient or if it is a symbol of a positive relationship. Gift value also affects the recipient’s reciprocation likelihood by felt gratitude to the gift giver; a gift of greater value causes greater feeling of obligation to the giver, and then improve reciprocation likelihood (Bodur & Grohmann, 2005).

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2.4.3 Gift type

The distinction of personalized versus standardized gifts in business-to-business gift giving is of the recipient's subjective judgment. Standard gift is defined here as the gift that sales representative sent to all regular customers or potential customers in holidays or festival; however, personalized gifts need to research on customer preferences and may be more costly than standard gifts which may result in more favorable gift evaluation and greater reciprocation likelihood (Bodur & Grohmann, 2005). The type of gifts might impact a purchasing executive's feelings of obligation to repay the supplier.

2.5 Chinese Cultural value

Receiving and giving gifts is an investment to establish also main social relationship; it is also a composition of the general culture customs (Hyde, 1983; Wang, 2007). Thus, it is possible to affect the behavior and decision-making with culture, customs and norms. Culture decided the best and right gift-giving timing (Wang, 2007).

For example, American gives their gift on Christmas, birthday, Thanksgiving and Valentine’s Day (Belk, 1977; Otnes, Ruth, & Milbourne, 1994); before the Chinese Lunar New Year the gift-giving reach the highest peak in Chinese culture (Qian et al., 2007; Wang, 2007), Singaporeans will give their present while visiting the newborn baby (Nah, 1998).

Due to the different cultural contexts, the conducts for the progresses and accumulations of relationship investments such as gifting between Eastern and Western society perform differently. Western enterprises are mostly following the social exchange rules, which were specifically established for building partnership to fit the

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business purposes, but infrequently pay attention on personal friendship between the two parties of a transaction. In opposition, Eastern enterprises, represented ethnic Chinese culture, are deeply concerned with and intend to develop more guanxi with their partners beyond business relationship; and this kind of guanxi can be regarded as a special form of interpersonal connections among people (Xin & Pearce, 1996), which may exert significant influences on the customers’ perceptions of relationship investment, and eventually their reactions to sales’ investment in the relationships.

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

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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

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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

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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.

2.5.2 Mianzi

When you just know a person, Leung et al. (2011) suggest that give them gifts to make them get mianzi, and create friendship (renqing) with them. Mianzi refers to "an individual's prestige in society, a reputation achieved through getting on in life, through achieving success, and through ostentation (Leung et al., 2011).”

In ethnic Chinese society, mianzi, or face, is an individual’s possession of the respect, pride, and dignity (Goffman, 1955), which is similar with the Western concept of reputation or dignity (Chan, Denton, & Tsang, 2003). Mianzi can also defined as position in the social network of person , as well as others determine whether you ample and proper implementation of appropriate behavior to get this respect status.

King (1993) pointed out that people can through a social skill named face work to maintain others or themselves’ mianzi. Maintaining the mianzi is not only the

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personal business but also the behavior with close people, and how those people treat them, which is focus on reciprocity mianzi including obligation, depend or protection of dignity; on the other hand, it is trying to keep each other feel proud. For example, the gifts which don’t correspondence the recipients’ status will make the recipient feel lose mianzi; also the givers will lose their mianzi. Another example, the amount of red envelope as a gift to attend wedding must reflect the cost of the wedding and also the relation between two sides. Later the recipients attend the other sides’ wedding, they also have to give the red envelope. Through these skills, giving one's mianzi can be accumulated and exchange for proper interest or favor in the future (Leung et al., 2011).

"Face work" is important for both Western and Eastern society, as it is commonly practiced in social interactions to emphasize interpersonal harmony (Chan et al., 2003).

Face can be described as a protection of one's image in a relational situation, and practice of face work has strong impacts on business decisions (Buckley, Clegg, & Tan, 2006; Ting-Toomey, 1988).

Face can divided into “lian” and “mianzi” (Leung et al., 2011). Mianzi, is external face which reflects a person's social status representing his/ her prestige and honor which can be accumulated by personal efforts such as by success or ostentation; on the other hand, lian is internal face which determined one’s social confidence in the integrity of his/ her moral trait (Gao, 1998; Hinze, 2002; Hwang, 2006; Joy, 2001; Leung et al., 2011; Qi, 2011; Redding & Ng, 1983; Shi, Ichiro, & Jin, 2011; Zhang, Cao, &

Grigoriou, 2011). Therefore, there is a Cantonese saying that mianzi is given by someone, and lian is losing by yourself. In other words, lian cannot be gained but can be lost, and people cannot maintain their relationship with others if they loses lian as they

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feels guilty as well as mianzi is a social asset which can be banked and exchanged for favors in the future (Leung et al.2011; Yau, 1988). As an individual's possession of mianzi needs visible social success in matching well-established expectations, and the individual will have more mianzi when he/she moves up the social hierarchy.

Chinese culture has strict norms for interpersonal hierarchical structure.

According to the definition of mianzi, social statuses reflect a person's mianzi (Leung et al., 2011). People will meet and reaction appropriate behavior base on their social status and become an interpersonal discipline and norm (Bond & Hwang, 1986).

This specification makes the ethnic Chinese are particularly sensitive about losing face (Redeling & Ng, 1982). The behavior regardless of mianzi means that someone do not care about others opinions or criticize, they were reluctant to maintain their status in the social network; vice versa. For example, in Taiwan customs, the elder visiting newborn babies must be given "gift," and the value of the gift is reflecting the elders’

relationship with parents (Yan, 1996). In previous study of Eastern and Western culture, it found that the concern of mianzi will lead to a different luxury consumer behavior (Wong & Ahuvia, 1998). For instance, many entrepreneurs in Taiwan, even SMEs, they will purchase limousine in order to show the difference between the general class and them.

In ethnic Chinese context, people would rather make sacrifices to maintain their faces than lose face (Lee & Dawes, 2005). Mianzi is important not only for Chinese people's personal life, but for their business life. For example, Hong Kong businessmen claim that mianzi is consistently a key factor during professional interactions (Redeling & Ng, 1982). Not only Hong Kong people, but most of ethnic

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agreements in ethnic Chinese business. Furthermore, Redeling and Ng (1982) found that for middle level business executives in Hong Kong, mianzi has an important influence during business negotiations. Giving mianzi to someone in a business negotiation is considered highly desirable, whereas to harm or challenge other's mianzi is perceived as highly undesirable.

Therefore, mianzi should affect the shopping decisions of Chinese, including the choose and purchase of present. Wang (2007) found that people who care about mianzi will affect people choose their present such as the amount of present, as well as the choice of brand. Therefore, the more a person pay attention to mianzi should be care more about whether the present match or over others’ social status and whether appropriate to the interpersonal relationship between them. If you send the wrong present, the other might lose their mianzi, thus affecting their relationship, causing regression of relations.

2.5.3 Renqing

Renqing and ganqing are two significant factors in managing guanxi in ethnic Chinese society (Luk et al., 1999). Renqing and ganqing are complimentary, because the ways of materializing ganqing are also used as methods of exchanging renqing; for example, gift-giving, wining and dining and practicing ritualized decorum (Yen et al., 2011).

Meaning of renqing is broadly similar to "favor" in English which can be practiced by the stable exchange of favors in many forms of conducts, including gift giving. "Renqing can be physical or non-physical social favors that are exchanged in the

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reciprocity of courteous rituals and resources (Leung et al., 2011)." In other words, renqing is the degree that, after received gifts or favors, the recipients decided how many favors they would give back to the giver.

Renqing is also an social network of relationships, get along well with others, which able to participate in various social exchange of norm or responsibility.

Maintained renqing (giving other favor) is prerequisite for development of relationship.

However, reciprocity is mutual, if anyone failed it will damage relationship between each other.

Base on social exchange theory, renqing can be understood in terms of

"reciprocity" that depends on the role as recipient and benefactor in the guanxi (Wang, 2007). As the term renqing related to exchanges of favors following certain social norms and behavioral rules. Renqing provides leverage in interpersonal exchanges of favors such as Hwang (1987) suggested that renqing is much more highly elaborated and closer with ideas of reciprocity (Hwang, 1987; Yang, 1994).

Reciprocity is related to the recipient's behavior, and it is a social norms for people to get along well with others when they receive a favor (Leung et al., 2011) . At this time, the recipient can said to owe renqing to the benefactor, and should be prepared to pay back the debt of gratitude when the benefactor needed (Wang, Siu, &

Barnes, 2008).

Understanding and treating people with customary guidelines is the patterns of behavior in Chinese culture. It will be blamed that don’t know the manners if you receive renqing but not return it. The person might lose credit, lose mianzi and even cause serious failure of interpersonal relations and will have difficulty interact with others

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( Wang, Siu, & Barnes, 2008; Leung et al., 2011). As the givers are familiar with the interpersonal customs usually have highly empathetic and able to understand the situation of the recipient and willing to help each other (Hwang, 1987). The more abundant of renqing and empathy, the fewer barriers will be in the interpersonal action (Wang et al., 2008). Because of the above features, the relationship network can only share as members of the network. Hide under the norms of reciprocity and social interest balance. Both side develop a long-term and stable relationship (Hwang, 1987).

As a result, while you creating the network of relationships, it is also construct the responsibility of renqing network. While enjoy the benefits, there was a certain return obligations in the future (Hwang, 1987). Though renqing is a reward which can be accumulated and expected in the social exchange relationship, yet this reward may not be reciprocated immediately. Theoretically, reciprocations of renqing should not be happened immediately, otherwise it will become utilitarian transactions (Leung et al., 2011). However, if reciprocity is not observed, even good friends may still turn nasty (Joy, 2001). Thus, renqing is the reason people can establish guanxi with each other.

From givers' perspective, hence, paying renqing is just like looking forward to get an equal reciprocity in the future. Nevertheless, renqing must be skillfully implanted;so that it will become a “burden” or an “indebtedness” on the receivers to be reciprocated in the future, which can facilitate further exchanges between members of a guanxi network (Marshall, 2000; Zhang & Zhang, 2006).

According to this principle, if a salesperson invests time and endeavor to help a buyer, the buyer enjoys preferential treatment or extra services, the buyer would feel owes the salesperson a renqing and is required to reciprocate a favor someday (Shi, Shi,

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or the quality of delivered goods is different with ordering, buyers may agree the suppliers to postpone deliver time or change product standard to avoid compensation.

In such situation, suppliers owe buyers renqing and suppliers might pay back in the future if buyers need a help. If favor recipient fails to follow this rule, he will regarded as not following renqing and will lose trust between each other (Wang et al., 2008).

According to above discussion, renqing represented reward in social exchange behavior, and the value that an favor recipient perceived how much need to repay; for benefactors, they are expected the recipient return a fair reciprocity in the future.

Therefore, people with abundant of renqing value might follow the rules of interpersonal relations networks to norm others and their own behavior. Wang (2007) found that people more care about renqing would have higher efforts to purchase presents, and they might have better understandings of what recipients needs, which recipients might more satisfied with the gift they receive. Thus, enhance the recipient perceived relationship investment, as well as generate the recipient has the obligation to returns in the future.

2.5.4 Ganqing

Form the above discussion we may know, the relationship is based on mianzi and renqing is generated base on trust-oriented structure. Social interaction and transaction conducted under this structure and specification. As we already discuss mainzi and renqing before.

As for ganqing is defined as "feelings" and it implies affection, sentiment and emotion in English (Yen et al., 2011). In business context, ganqing is connected to social

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bonding, which means a certain degree of mutual personal relationship and liking shared by the supplier and buyer (Barnes, Yen, & Zhou, 2011). Ganging cannot be interpreted as duty, loyalty, or obligation, it is a deep psychological commitment between guanxi members, focusing mutual empathetic understanding, affection, sharing of happiness, and emotional recognition (Yang, 1994).

In Chinese context, ganqing is often used as a structural variable to reflect the quality of a relationship (Leung et al, 2011). Through some social interactions, such as dining with customers, visiting customers, participating in activities with buyers, and continuous exchange of mutual assistance, suppliers can establish or enhance ganqing with buyers . If both parties have enjoyed those social activities, people can increase ganqing and create better cooperation in a relationship through participating in those activities together (Barnes et al., 2011).

Within Chinese business relationship context, if there is no ganqing at all, people usually will input emotional elements to establish guanxi (Wang, 2007). As ganqing can encourage entrepreneurs to improve their bonding to another; especially friendship tie such as old friend (Leung, Wong, & Tam, 1995).The better the ganqing between two people, the closer they will locate in a network space. Due to practice of cronyism, if two people have better ganqing, differences in business practices can easily be resolved; thus, favor exchange and business deals become easier (Khatri, Tsang, & Begley, 2006). For example, two old friends may be tending to handle a transaction more flexibly and reduce the opportunity to formally legalize all the terms and conditions (Batjargal & Liu, 2004).

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III. Method 3.1 Research Framework

This study focuses on the context of business-to-business relationships and coordination behavior involving Taiwanese purchasing executives or enterprise employees; hoping to understand the relationships among relationship marketing efforts, the characteristics of gift, and Chinese cultural variables. Taiwan has a significant market in its own right and is a springboard for China; traditionally, Taiwan enterprises had immersed in and deployed Western management practices to enhance their competitiveness for over many decades. It is chosen as the research context due to its economic strength, well preservation of Chinese cultural background, and its strategic position for western firms. Based on the literature reviewed above, this study infers that, under such context, relationship marketing efforts, and the characteristics of gifts will affect Chinese cultural values and relationship investment, thereby affecting reciprocity likelihood in the future. Accordingly, relationship marketing efforts and characteristics of gift are regarded as the main independent variables. Perceived relationship investment, and Chinese cultural variables, including Mainzi, renqing, and ganqing are treated as intervening variables, and reciprocity likelihood is regarded as the dependent variable. Based on the above concepts, a conceptual model was derived and is presented in figure 1.

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Figure 1 Research framework 1. Antecedents of relationship investment

Based on the literature reviewed, buyer-seller relationship investment is proposed as the criterion for evaluating the strength of relationship between buyers and sellers in the business-to-business context. The buyer-seller interaction relationship is built based on the idea of reciprocity such that, when a sale representative makes a relationship investment in his customers, those customers may gain a favorable impression of the sale representative (Chen, Chen, Chen, and Wey, 2011).Many antecedents of perceived relationship investment have been identified in previous literatures. Most of them are based on De Wulf et al. (2001). Even though, there are many researches explored others antecedents of perceived relationship investment; for example, Yoon, Choi, and Sohn (2008) identified three more factors of interactivity dimensions, including active control, synchronicity, and two-way communication. However, it is not suitable for this study which focusing on the Internet context. The Internet context emphasized building relationships quickly, which is different with traditional business-to-business context

H14 H13

H12

H11 H10 H5

H9 H8 H7

H6 H4 H3

H2 H1

Perceived gift manipulation

Gift type Interpersonal communication

Gift economic value

Perceived relationship investment

Ganqing

Renqing

Reciprocation likelihood Mianzi

Preferential treatment

Gift evaluation

Attitude toward gift

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which emphasized the development of long-term relationship.

In their model, De Wulf et al. (2001) identified four marketing tactics which are direct mail, preferential treatment, interpersonal communication, and tangible rewards as determinants of perceived relationship investment. According to De Wulf et al.

(2001), the tangible reward means benefits given by retailer salespersons such as frequent flyer miles, free gifts, customer loyalty bonuses, and personalized cents-off coupons to keep the customers. However, this concept does not fit to this study, since in business-to business context, sales representatives will be gifting for enhance strong and longer relationship with each other, and free gifts given to purchasing executives may easily be concerned as corruption. In business-to-business context, direct mail does not fit to this study too. In reality, people already used e-mail to communicate with each other which is an important and necessary tool. Thus, this study does not choose direct mail as antecedence of perceived relationship investment. Thus, this study only chose interpersonal communication and preferential treatment as determinants of perceived relationship investment.

Interpersonal communication refers to the personal contacts between a sales representative and his customers; and social interaction and personal exchanges between them, which have regularly been shown to influence relationship outcomes (De Wulf et al., 2003).As sales representative through interpersonal communication can increase opportunity to get the purchasing executive's relevant information such as their preference. Thus, the sales representative can to pleasure the purchasing executive.

De Wulf et al. (2003) indicated the significance of similarities between sellers and buyers, because if they have no common reference points, they may be difficult to adapt the exchange from a purely transactional basis to a relational basis (Palmatier et

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al., 2006). According to Styles and Ambler (2003), purely transactional behavior is emphasis on the short-term deal, and the immediate benefits; in the opposite way, relational exchange is focus on long-term deal. Within relational exchange context, interpersonal communication between each other can see as a person want to invest relationship with another person for a long-term relationship. Therefore, the following hypothesis is offered:

H1: A higher perceived level of interpersonal communication leads to a higher perceived level of relationship investment.

Gift-giving is seen as an act of reciprocity, and often misinterpreted as bribery by Westerners; however, it appears to be an important part of the Asian culture and can be regard as a form of relationship investment, which can rouse interactions between businesses partners if it cultivated well (D’Souza, 2003). Thus, we consider business gift-giving as a way of relationship investment.

However, the gift should be seen as an implicit surprise; gifting should not be interpreted as having deliberate intention specifically targeted for the gift receiver.

Beltramini (1992) pointed out business gifting should reflect this considerations to not only maximize their potential customers’ appreciations of past purchases, but also reduce customers’ perceptions of being tactfully induced, which means customers should be feeling that they are not manipulated to continue doing business with the gift giver. Moreover, Bodur and Grohmann (2005) indicated that existing customers may be easier to respond with positive reciprocation such as purchase intentions or future cooperation opportunity if they perceived a lower level of manipulative intent behind the gift,. Thus we expect that if gift receivers perceived a specific purpose behind the gift, it might make recipients think the gifting is an act asking for a favor, rather than

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improving interactions between business partners. Therefore, the following hypothesis is offered:

H2: A higher perceived gift manipulation leads to a lower perceived relationship investment.

Preferential treatment is defined as a customer's perception of the extent that a sales representative provides treatments to him better than other sales representatives did (De Wulf, Odekerken-Schröder, & Kenhove, 2003). For example, a sales representative may provide a special price or more cares of the product’s quality which other sales representatives cannot offer. Peterson (1995) found that distinctive treatment enables a sales representative to satisfy a person's basic human requirements to feel important. Therefore, we expect that purchasing executives having a stronger perception of preferential treatment will perceive a higher level of relationship investment made by the sales representative. Therefore, the following hypothesis is offered:

H3: A higher perceived level of preferential treatment leads to a higher perceived level of relationship investment.

2. The interaction of Western relationship works and Chinese cultural variable Some studies have explored how mianzi influences Chinese consumer behavior.

Mianzi is a major personality characteristic of Chinese, which representing prestige, status, and the social self (Hwang, 1987; Yang, 1994). Especially, due to mianzi, the ethnic Chinese are more concerned about how they are perceived by others; in other words, they are more likely than westerners to feel anxiety about their self-image in public (Abe, Bagozzi, & Sadarangani, 1996). Thus, the ethnic Chinese tend to own goods that publicly demonstrate their wealth, symbolically display their social status,

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and establish their social reputation (Wong & Ahuvia, 1998).

Furthermore, an individual's possession of mianzi needs visible social success in matching well-established expectations (Leung et al., 2011). Preferential treatment may be viewed as a face work that is beneficial to enhancing one’s external face. When a seller put extra efforts such as solving a problem or offering a better price other sales representatives cannot, the buyer may feel having mianzi in the company, as distinctive treatment may make people feel they are important (Peterson, 1995), and feel gaining social success among their colleagues. Therefore, the following hypothesis is offered:

H4: Preferential treatment is positively associated with mianzi.

The ethnic Chinese prefer to rely on their networks of contacts and relationship, rather than legal standards, to get the deal done (Luo, 2007). However, the investment of relationship involves regular and rational social endeavors to achieve a scheduled goal which builds an internally stable and sustained, mutually beneficial and fruitful relationship with other business partners (Luo, Liu, & Xue, 2009). Hence, preserving mianzi become a fundamental principle in ethnic Chinese society since it can enhance each other's relationship and trust (Luo et al., 2009). Furthermore, Whitley (1991) found that precedes trust and dependence can further help people enhance relationship investment. Therefore, the following hypothesis is offered:

H5: Mianzi is positively associated with perceived relationship investment.

3. The effects of gifting within ethnic

Gift-giving is a social behavior which will be affected by social environmental factors such as culture, norms, mainstream value, and other variables. Among which,

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individual behavior deeply, and invite interests of inquiry from eastern and western scholars in recent years (Bond, 1986; Leung et al., 2011; Qian et al., 2007; Redeling &

Ng, 1982; Wong & Ahuvia, 1998). Gifting may be viewed as a technique to change and adapt these cultural variables. One of the purposes of giving a gift is trying to generate a social-emotional coherence between the buyer and the sale representative to create a favorable atmosphere in which, business discussions and negotiations can be begun and, hopefully further cooperate opportunities can be reciprocated in a cyclical pattern (Beltramini, 1992).

Base on the literature reviewed, this study infers that different gift characteristics will influence how gift recipient perceived his/ her relationship with the giver. The ethnic Chinese people tend to deal with gifting for keeping other's mianzi; hence, gift-giving is frequently selected and offered according to recipient’s social status or degrees of interconnectedness. Generally, high economic value gifts will make recipients feel more honorable and stand out a higher social status. While receiving such gift, gift receivers may feel having more respect from givers. Zhou et al. (2007) also indicated that showing respect for someone causes recipients to gain mianzi. They pointed out that, while practicing gift giving, keep someone's mianzi is one of the factors needs to take into consideration; moreover, giving others mianzi is largely involved with reciprocal social relationship (Zhou et al., 2007). another research also indicated that in order to gain and maintain others’ mianzi, people are prone to pay more for buying gifts; high economic gifts would bring mianzi to the gift receiver on account of the high social recognition from high price gift, which may enhance one’s social position (Liao & Wang, 2009). Therefore, the following hypothesis is offered:

H6: A higher gift economic value leads to a higher level of mianzi

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A gift of relatively negligible economic value can be evaluated favorably if it is desirable to the recipient (Bodur & Grohmann, 2005). Generally, gifts of higher value are evaluated more favorably by recipients (Larsen & Watson, 2001). However, high economic gift may not lead to a more favorable gift evaluation once it raises suspicion of manipulative intent (Belk & Coon, 1993; Trawick, Swan, & Rink, 1989). Moreover, Mano and Oliver (1993) found that product-evoked evaluations and emotions are significant and concurrent factors in the formation of satisfaction responses. In other words, if a gift recipient subjectively perceive that the gift is valuable, even though the gift is cheap or not too expensive, the gift recipient may still feel having mianzi. Thus, we considered that, not only the economic value of gift, but the recipient subjective evaluation of the gift will impact recipient's perception of mianzi. Therefore, the following hypothesis is offered:

H7: A higher gift evaluation leads to a higher level of mianzi

The gift recipient's attitude toward gift will also impact recipient’s perception of mianzi. Ting-Toomey (1988) pointed out that face is not only related to pride, shame, embarrassment, respect, and honor, meanwhile, it also involved with both affective reactions and social cognitive judgments. When people with positive attitude toward gift received a gift, they may feel having more respect from giver, as such attitude will lead to more positive affective experiences (Mano & Oliver, 1993).

Goffman (1955) indicates that face work is a subtle style of interpersonal encounter which exists in all societies; people will try to avoid personal embarrassment, and keeping an impression of self-respect for others. Therefore, the following hypothesis is offered:

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H8: While receiving a gift, a higher attitude toward gift leads to a higher level of mianzi

According to Leung et al. (2011), gift-giving activities must be carefully handled because they constitute an important tool for giving mianzi to counterparts. Compared to standard gifts, the selection of personalized gifts may need a research on recipient's preferences and may also be more costly than standard gift; however, a higher value gift may lead to a higher level of satisfaction for the recipient (Bodur & Grohmann, 2005). The recipient will feel gaining more respect from the personalized gift, as Kleine, Kleine, and Allen (1995) pointed out gifts are considered more favorably if it fits the recipient’s self-concept to a greater extent.

Since sending personalized gifts needs to consider recipient’s preferences and needs, hence, gifting process should be handled more carefully. Therefore, the following hypothesis is offered:

H9: Gift type will impact the level of mainzi.

H9a: Standard gift leads to a higher level of mianzi

H9b: Personalized gift leads to a higher level of mianzi.

4. Relationships among different dimensions of guanxi

When an individual has contacts with others, mianzi allows this individual to simultaneously gain and save face while avoiding losing face (Huwang, 1987). Mianzi is closely related to social prestige and status expressed by wealth and one’s existing social capital (Yang, 1994). Mianzi is a social asset which can be banked and

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"in social interactions, one’s behaviour is to maintain one’s mianzi and the mianzi of others.” emphasizes on the reciprocity of obligations, and dependence, and the protection of the esteem of those participants.

Ganging cannot be interpreted as duty, loyalty, or obligation, it is a deep psychological commitment between guanxi members, focusing mutual empathetic understanding, affection, sharing of happiness, and emotional recognition (Yang, 1994).

Ganqing is usually established by a socialization process that share feelings towards common topics with each other, such as experiences, beliefs, judgments, opinions and thoughts (Chen, Chen, & Xin, 2004). The better the ganqing between two individuals, the closer they will lie in a network space. According to Leung et al. (2011), when you just know a person, you can give him/ her mianzi through gifting, which can build affection with each other. Therefore, the following hypothesis is offered:

H10: A higher level of mianzi leads to a higher level of ganqing.

According to Hwang (1987), renqing is based on an implicit set of rules, and it is a social favor which can be exchanged in the form of money, goods, information, status, and affection by interacting individuals. Hwang (1987) also found a positive influence of face work on renqing. Furthermore, both mianzi and renging are built based on the rule of reciprocity; therefore, this study expects that if a purchasing executive has received a high level of mianzi from a sales representative, he may feel owe the sales representative favor or renqing. Therefore, the following hypothesis is offered:

H11: A higher mianzi leads to a higher level of renqing.

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A seller investing time, effort, and other irrecoverable resources in a relationship is trying to create psychological bonds with buyers to encourage buyers to stay in the relationship and sets an expectation of reciprocation (Smith & Barclay, 1997).

Consumers were more satisfied with a seller who made extra efforts to their customers (Baker et al., 1999). Palmatier et al. (2006) found that relationship investment has a large direct effect on seller objective performance. Therefore, the following hypothesis is offered:

H12: A higher perceived relationship investment leads to a higher degree of reciprocation likelihood.

Ganqing means an investment of affection such as sharing inner feelings or showing personal concerns to build a good guanxi with business partners (Wang, 2007).

According to Lee, Pae, and Wong (2001) , guanxi means a particularized and personalized relationship and foundation on the reciprocal exchange of favors. Thus, when a buyer has better ganqging with a sales representative, the buyer may be more willing to reciprocate the sales representative, such as has more cooperation in the future. Therefore, the following hypothesis is offered:

H13: A higher ganqing leads to a higher degree of reciprocation likelihood.

If an exchange partner receives a favor, the other partner is obliged to pay back the favor in the future which is base on humanized obligation. Base on renqing principle, when a buyer received a favor or gift, the buyer is implicitly expected to repay the favor or gift. According to Su and Littlefield (2001), the buyer must consciously reciprocate to avoid the feeling of guilt, as well as any damage to his own social prestige. Therefore, the following hypothesis is offered: