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Research on guanxi, and in particular its influence on workplace outcomes, has greatly increased in the past 2 decades. Despite this proliferation, scholars have paid little attention to conceptual development of the construct. My review of the existing literature on guanxi highlighted the great variety of ways that guanxi has been conceptualized and operationalized, and the fact that existing theoretical models of guanxi operation remain largely untested. To address the lack of specificity in defining the construct of guanxi, I conducted 5 interrelated studies to define and test the construct. I focused on external guanxi between boundary spanners--people from different organizations who interact on behalf of their organizations for work purposes--in the context of the Taiwan workplace. The project entails two parts. In the initial qualitative part, I adopted an indigenous psychology perspective to delineate the contents, processes, and defining characteristics of guanxi. The results were useful in assessing the adequacy of existing theoretical conceptualizations for addressing actual workplace guanxi dynamics (Study 1, Part 1). They also supported the theoretical postulations, which I categorized as cultural-based workplace guanxi. A second objective of the qualitative study was to identify the best way to operationalize workplace guanxi, and to generate a set of items to measure it. My analysis indicated that a measure of guanxi should capture its dynamic and changeable quality and highlighted 3 dimensions of guanxi quality, namely, ganqing, renqing, and xinren (Study 1, Part 2). Based on these results, I generated items to represent each dimension. The second part of the research focused on scale development. I used the items generated in the initial DEVELOPING AND TESTING THE CONSTRUCT OF GUANXI xiii qualitative study to propose a measure of guanxi quality, the Guanxi Quality Scale (GQS), which I refined and tested in subsequent studies: pretesting the initial pool of scale items (Studies 2A and 2B), testing the factor structure (Studies 3 and 4), and assessing the construct validity of the new measure (Studies 4 and 5). Results of the factor analyses conducted in Studies 3 and 4 supported a higher-order factor structure of guanxi quality that was measured by the 3 latent factors of ganqing, renqing, and xinren. The final 15-item GQS showed high reliability and validity and can be used to measure workplace guanxi in future research. The 5 studies of this project represent a concerted effort to provide a comprehensive understanding of guanxi. The results of this study provide a common starting point and language for researchers who are investigating guanxi. By maintaining an emphasis on obtaining an insider perspective, this research also provides outsiders with valuable insights on the cultural emphasis on relationships in the context of the Taiwan workplace. DEVELOPING AND TESTING THE CONSTRUCT OF GUANXI 1 CHAPTER 1: INTRODUCTION A popular Chinese saying goes, “If you have guanxi (social connections), you will be fine. If you do not have guanxi, you will be in trouble” ( ). Instead of what you know, success is more dependent on who you know. Guanxi is an indigenous Chinese concept that originated in Confucius’ time around 500 B.C. (Hwang & Staley, 2005). It is the social fabric of Chinese societies and it has been analogized to lifeblood in Chinese businesses (Davies, Leung, Luk, & Wong, 1995). As a result of China’s expanding position on the global stage, as well as the rapid rate of growth of overseas Chinese economies, such as Taiwan, Hong Kong, and Singapore (Ahlstrom, Chen, & Yeh, 2010; Tong & Yong, 1998), guanxi has received tremendous attention in research. Chen, Chen, and Huang (2013) found significant growth in the number of publications on guanxi from 1990 to 2010. In an examination of the progress of indigenous research conducted in Asia, guanxi was found to be the most studied concept in management research in a ten year range from 2001 to 2011 (Mao, Peng, & Wong, 2012). 1. The Basic Structure of Social Relations in Chinese Societies The importance of guanxi in the workplace can be better appreciated through an understanding of the basic social mechanism that governs social structure in Chinese societies. Chinese societies are largely influenced by Confucian teachings (Chen & Chen, 2004; Tsui & Farh, 1997) and Confucian influence remains relevant in contemporary Chinese societies (Hofstede & Bond, 1988; Hutchings & Murray, 2002; Young & Corzine, 2004). Confucius emphasized wu lun, a differentiated system that comprises the DEVELOPING AND TESTING THE CONSTRUCT OF GUANXI 2 five fundamental relationships in Chinese societies (Mao et al., 2012). As written in The Doctrine of the Mean (Zhongyong), Confucius identified the five relations as follows: ruler and subject, father and son, husband and wife, elder brother and younger brother, and friends. There are norms attached to the roles in each relationship (Park, 2007): Justice and righteousness should mark the relations between sovereign and subject. There should be proper rapport between father and son. There should be separation of function between husband and wife. The younger should give precedence to the elder. Faith and trust should reign over relationships between friends. (Confucius, 1983, p. 60) Individuals are expected to behave according to their roles so that mutual expectations can be fulfilled (Yang, 1995). The lack of adherence to relationship norms breaks down lun, which reflects negatively on an individual’s character (Mao et al., 2012). In contrast, those who play their roles well are highly complimented (Wong, 2007). Adherence to relationship expectations maintains harmony in relationships, which facilitates the integration of communities and organizations, and in turn leads to stable social and political order (Park, 2007; Yang, 1995). Among the five relationships, three are familial relationships, specifically, relationships between father and son, husband and wife, and younger brother and elder brother. Relationships between ruler and subject belong to the national level. Relationships between friends consist of the rest of the relationships outside the family. Societal progress follows an inside out structure, moving from family to nation to world level, thus the family ethic forms the basis of Chinese human relations (Wong, 2007). Individuals are DEVELOPING AND TESTING THE CONSTRUCT OF GUANXI 3 expected to sacrifice their own interests and prioritize that of their families’ and communities’, people of who provide meaning and significance in their lives. Filial piety is demonstrated through respect for elders and parents, who hold the highest authority in the family (Kang, 2014). In practice, the rules for proper behavior are borrowed when guanxi cannot be clearly defined (Park, 2007). When doing businesses with strangers, there are no obligations, until a mutual sense of credibility and identity is fostered. Then, two parties may be able to regard each other as insiders and treat each other like brothers or friends (Park, 2007). Fei, Hamilton, and Wang (1992) explained that individuals are connected in a differentiated mode of association (chaxu geju). Every individual is surrounded by a concentric pattern of social relationships, in which the self is placed at its center. The closer an individual is to the self in the center, the stronger the relationship. The relationship determines how one should treat the other person, which Yang (1995) labeled relational determinism. These different behavioral standards have direct implications for working relationships. The relationship (guanxi) you have with others determines how others react to you as well as how you should treat others. Indeed, a study of guanxi between service providers and their clients in the insurance industry showed that the level of guanxi determined the service quality that insurance sales representatives provided their clients; the clients trusted the insurance sales representatives with whom they have guanxi and were less concerned with other factors, such as their budget limit, the capability of their sales agents, or the culture of the insurance company (Wong, 2007). To be able to get things done at work, people need special guanxi. This is DEVELOPING AND TESTING THE CONSTRUCT OF GUANXI 4 the reason guanxi is regarded as a closed system, in which insiders have more access to resources in the network than anyone else outside the guanxi network. According to Anderson and Lee (2008), guanxi provides meaning, identity, and purpose by setting the standards that indicate what types of behaviors are accepted and appropriate. 2. The Importance of Guanxi in Business Guanxi has gained significant research attention, particularly in the business literature. Scholars have recognized guanxi’s prominent role in the Chinese market and incorporated the construct into their studies, for example, in marketing (Giannakis, Doran, & Chen, 2012; Liu & Gao, 2014; Wong & Tam, 2000; Zhang & Zhang, 2013), economics (Cao, Baker, & Schniederjans, 2014; Cheng, Yip, & Yeung, 2012; Lee, 2010; Qin, 2011), knowledge sharing (Qian, 2012), entrepreneurship (Fu, Tsui, & Dess, 2006), and banking (Armstrong & Boon Seng, 2000), to name a few. Its importance to firm performance has also been widely studied. A meta-analysis conducted by Luo, Huang, and Wang (2012) supported the role of guanxi in driving firm performance and found that guanxi development is an effective organizational strategy as measured by economic performance (e.g., return on assets, profit growth) and operational performance (e.g., market share, sales growth). As identified in Chen et al’s (2013) review, guanxi has a significant impact on a wide range of outcomes, such as market entry and expansion into global markets (e.g., Luo & Liu, 2009; Tung & Worm, 2001; Zhao & Hsu, 2007), enhanced inter-firm cooperation and problem s

Construct development and testing of a measure of Guanxi quality : understanding workplace relationships from a cultural perspective