This is from the preparation from 2022. When I was getting ready for my thesis at CBS.
I wrote about Guanxi and how to use it in wine business.
Source: https://www.china-mike.com/
Cross-Cultural Guanxi Leadership
https://link.springer.com/chapter/10.1007/978-3-030-24001-1_5
cultural–social–political environment. It explores how Chinese leaders could effectively influence in foreign branches by reviewing paternalistic leadership, international assignments (IAs) of Chinese expatriates, and discussing the cultural intelligence (CI).
cross-cultural guanxi leadership and the model of cross-cultural guanxi practice.
Global leadership success through emotional and cultural intelligences
https://www.sciencedirect.com/science/article/pii/S0007681305000479
Page 1.
Culturally attuned and emotionally sensitive global leaders need to be
developed: leaders who can respond to the particular foreign environments of
different countries and different interpersonal work situations. Two emerging
constructs are especially relevant to the development of successful global leaders:
cultural and emotional intelligences.
Even if your
business is a medium- or small-sized firm, you
have probably experienced globalization through
interactions with global participants that belong
to at least one, or perhaps more, of these four
key categories: customers, competitors, suppliers, or employees.
Page 2.
In a comprehensive review of the global leadership literature, Vesa Suutari (2002)
came to the following conclusions:
* Leaders need to develop global competencies.
* There is a shortage of global leaders in the corporate world.
* Many companies do not know what it means to develop corporate leaders.
* Only 8% of Fortune 500 firms have comprehensive global leadership training programs.
* There is a need to better understand the link between managerial competencies and global
leadership.
Leadership is the ability to turn vision into reality.
A second marker of global leadership skills is an emerging focus on leadership at every level of the
organization, which facilitates the creation of a platform from which to launch a global leadership
development effort
Page 3.
Based on
all evidence available, we suggest at the core of global leadership (and, hence, the development
of global leaders) are these three intelligences:
(1) Rational and logic-based verbal and quantitative intelligence with which most people
are familiar and which is measured by traditional IQ tests;
(2) Emotional intelligence (EI), which has risen to prominence as a determiner of success in the
past 10 years and which can be measured by EQ tests; and
(3) The most recent addition to our list of intelligences, cultural intelligence (CI), which
can be measured by CQ tests that are only now coming into existence.
We suggest that leadership development should follow a three-part model: assessment,
education, and experience. With most if not all aspects of leadership, it is possible to assess a
leader’s skill levels, provide the education that matches that person’s needs, and then let the
person experience the foreign culture in its organizational or geographic/ethnic specificity. As we all
know, experience itself is a great teacher, and only in the trenches can a leader begin to fully under-
stand another culture and become functional in it.
Page 6.
Their analysis contained general information about culture (e.g., values, work ethic, cultural diversity, and business protocols) and industry-specific factors (e.g., growth rate, level of competition, and the relative involvement of government).
Page 8
Peterson 2004 – cultural intelligence can be gained by plotting a trainee’s cultural framework with those of other national origins, using a number of key cultural dimensions such as equality/hierarchy, direct/ indirect, individual/group, task/relationship, and risk/certainty. An awareness of self in relation to profiles of different cultures can help develop an appreciation for the differences, the potential
for conflicts, and the cultural bfitQ between one’s embedded socio-cultural type and model socio-
cultural types in the relevant nation. This approach is similar to Lewis’s yet-to-be-released
assessment method, but uses established criteria from the analytical frameworks mentioned
above.
Page 10.
Increasing globalization will make EQ and CQ skills more relevant throughout entire organizations, and virtually everyone in management and global business situations will need to focus on
possessing these two skills.
Page 11.
Understanding why a positive or a negative outcome occurred and how to repeat or avoid this
outcome in the future is part of a life-long learning process. From an organizational perspective,
developing successful global leaders is not just the task of the human resources department;
rather, the entire organization must be involved in areas such as mentoring, coaching, role model-
ing, assessment, education, and providing experience. Only then can the organization expect to
derive the maximum impact from a global business strategy
!!!!
Danish wine importers do not always know how to talk with the other partner, English is not enough!!1
See Per Bur shouted at me that you do not know how to talk with the exporter…
3) Guanix -Wikipedia
the term old boy's network in the West
"connections" or "relationships" because those terms don't capture the significance of a person's guanxi to most personal and business dealings in China. Unlike in the West, guanxi relationships are almost never established purely through formal meetings but must also include spending time to get to know each other during tea sessions, dinner banquets, or other personal meetings.
→ similarity to the Danish market, people are friends from kindergarten time, a coffee meeting is important, the regular meeting could take for hours, and still not agree on anything, these meeting could be repeated several times
guanxi requires a personal bond before any business relationship can develop. As a result, guanxi relationships are often more tightly bound than relationships in Western personal social networks
Guanxi has 3 sub-dimensions sometimes abbreviated as GRX which stands for ganqing, a measure of the emotional attachment in a relationship, renqing (人情 rénqíng/jen-ch'ing), the moral obligation to maintain a relationship with reciprocal exchange of favors, and xinren, or the amount of interpersonal trust.[7] Guanxi is also related to the idea of "face" (面子, miànzi/mien-tzu), which refers to social status, propriety, prestige, or a combination of all three. Other related concepts include wu-lune, which supports the idea of a long term, developing relationship between a business and its client, and yi-ren and ren, which respectively support reciprocity and empathy.
For relationship-based networks such as guanxi, reputation plays an important role in shaping interpersonal and political relations.
In recent years, the ethical consequences of guanxi have been brought into question. While guanxi can bring benefits to people directly within the guanxi network, it also has the potential to bring harm to individuals, societies and nations when misused or abused. For example, mutual reciprocal obligation is a major component of guanxi.
This question is especially critical in cross-cultural business partnerships, when Western firms and auditors are operating within Confucian cultures. Western-based managers must exercise caution in determining whether or not their Chinese colleagues and business partners are in fact practicing guanxi. Caution and extra guidance should be taken to ensure that conflict does not occur as a result of misunderstood cultural agreements.
Western vs. Eastern social business relations
The four dimensions for a successful business networking comprise: trust, bonding, mutual relationship, and empathy.
4) The Transformation of Danish Culture and Chinese Culture in Sino-Danish Business Settings in China
Side 3.
Danish value:
Small power distance, Individualist
Feminine, low uncertainty avoidance
Short-term Orientation
Side 6. Maybe it is true between Danish people, but not true Danish -foreigner
Small power distance:
Decentralization is popular
Subordinates expect to be consulted
The ideal boss is a resourceful democrat
Subordinate-superior relations are pragmatic
Privileges and status symbols are frowned upon
Side 9
Better at invention, worse at implementation
5) Understanding the concept of ‘guanxi’
Relationships are everything in China. While you are building and nurturing your business relationships, you may be asked to share stories and information of a surprisingly personal nature.
Guanxi refers to having personal trust and a strong relationship with someone, and can involve moral obligations and exchanging favours.
Guanxi can also be used to describe a network of contacts, which an individual can call upon when something needs to be done, and through which they can exert influence on behalf of another.
Australian businesses might understandably struggle to integrate guanxi into their business practices. The key is to remain diligent and be aware that the reciprocal nature of guanxi also dictates an informal obligation to 'return the favour'.
Building guanxi involves a long-term approach. It can be done in several ways:
General knowledge of China
- Relationships can be aided and built by some general knowledge of China and its culture. This can assist to establish an immediate connection to a new Chinese contact.
Formal introduction
- Because Chinese people prefer to do business with people they have a personal connection with, it can help if you are introduced to a prospective business associate through an intermediary. The higher the social status that your connection has, the more successful you are likely to be at being introduced to the right people and key decision-makers.
Conscious effort
- Relationships in China are more trust-oriented and personal than relationships elsewhere, therefore a conscious and continued effort is required to develop and maintain them. It will require frequent visits, almost daily communication (preferably CEO/company director to CEO) and plenty of socialising.
Gifts
Gifts
- Giving gifts is an important aspect of doing business and building relationships in China. Australians should provide at least some overly ‘Australian’ gifts, such as toy koalas. Gifts that have your company emblem will also be well received.
Dining and entertainment
Dining and entertainment
- Once you have established relationships in China, you are likely to be invited to dinners and other forms of entertainment including golf, nightclubbing or karaoke. If you are invited for dinner at a business contact’s house (which is generally a reserved honour) – arrive on time, remove shoes before entering and take a gift. Dining is commonly used to gently probe positions without any formal commitment.
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