ABSTRACT
This chapter focuses on fostering guanxi. The success of relationship marketing in China is based on guanxi networks. Credit extension for businesses that operate in China is closely associated with guanxi. The leadership problem is exacerbated by the relatively low numbers of available Chinese who are prepared to assume new management positions. Several factors affect a firm’s ability to cultivate guanxi, including company size, organizational design, mode of entry, and experience in China. The apparent size of the firm is an important factor when its managers try to develop a guanxi network. Foreign executives must identify potential key contacts, arrange meaningful introductions, and develop trust in personal and professional relationships. Foreigners need time to become familiar with local business practices and build networks. The Chinese partner who has guanxi with powerful people in the justice department and other government agencies can escape contractual commitments without retribution.
