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Some Consequences of Guanxi

Abstract Multinational marketers are increasingly realizing the importance of personal relationships when dealing with Chinese enterprises, so much so that an appreciation of guanxi is now considered essential for success throughout most of Asia. By juxtapositioning elements of relationship marketing theory, buyer/seller interaction models and Chinese cultural factors, we explore the benefits of guanxi from the perspective of Singaporean firms trading with the Peoples' Republic. Specifically, we focus on the direct and indirect consequences of guanxi. Findings suggest that guanxi has a positive impact on business performance for those firms who successfully cultivate social and business networks in China. Managerial and public policy implications are outlined, limitations discussed, and directions for future research are offered.