In our previous publication (Hong, J., Heikkinen, J. & Blomqvist K., 2010) we examined the role of culture in university–industry R&D collaboration in China. We conducted an extensive interview round in the fields of ICT and forestry in China and found it evident that guanxi (multi-dimensional concept, roughly understood as personal relationships or connections) is the key influence of Chinese culture. In the beginning of collaboration it is essential to know the right people and have some shared history or background such as former school mate or colleague. Guanxi is a funny concept as you may also utilize your own guanxi’s guanxi for your purposes. That means you may approach easily a person that has personal relationship with your connection.
However, collaboration requires true interest in order to make new guanxi to grow. We defined the true interest in collaboration as “a matched motivation and mutual learning process in terms of producing new ideas and innovation”. The university researchers emphasized the importance of joint knowledge-creation and innovation rather than using them as cheap labor. Today, we can not avoid the fact, that China has expanding pool of skilled people that could be used for higher purposes than saving costs. However, when we are talking about knowledge-based collaboration in a relation-oriented and guanxi-based culture as China the new ideas are very difficult to adapt without personal interaction. Written papers and documents are not enough for managing the innovation process from ideas to utilization.
China is really fast changing operational environment. It is difficult to predict what the customers in the future market might want and need. Therefore, we proposed that the companies should involve local stakeholders and customers in the knowledge-based collaboration in order to track the fast changes and pulse of the future markets. Our study proved that guanxi initiates, facilitates and deepens collaboration and knowledge interaction. One should aim to create such guanxi network that enables sustainable collaboration based on mutual interest, trust and commitment.
Though our study was conducted in the context of university-industry collaboration, I can also say based on my own experience that understanding the characteristics of Chinese culture is a fundamental basis for developing guanxi and further successful business in China. It is easier, faster and more cost-effective to get into networks through a person that already is IN rather than start to develop own network. Therefore, it is advisable for companies that aim to get a foothold in China to utilize the services of professionals that already are IN.
Our article “Culture and Knowledge Co-Creation in R&D Collaboration between MNCs and Chinese Universities” was published in the journal Knowledge and Process Management, Volume 17, Number 2, pp 62-73. It can be found online in Wiley InterScience, www.interscience.wiley.com.
Dear Johanna,
I am a Chinese and I am going a sales internship now in Helsinki. I ran into your blog as I was searching the key words ” finnish company enter china” in google.
Your posts are really interesting and I would like to add few points.
As I grew up in China, I can really say that “guanxi” is important in very aspects in one’s life. I am a business student but I am interested in history and culture. I can say that in the long past when China was still ruled by monarchy, “guanxi” was the way you survive in government and business. There has been strong ties of families, so the connections between relatives are also strong. People value and trust other people that is from same place and is mentored by same teacher. As people value “guanxi” so much, people tend to give more benefit to people within their network.
“Guanxi” kind of work in the way that you give out those benefit to people within your network, and someday somehow you get some benefit back. I am not saying that people maintain “guanxi” only for their benefit, a lot of cases, friendship and partnership grow at the same time. And being friends in China basically includes giving your friend “convenience” within your power. In this way, many things are possible in China even if they are not in a written process.
About “guanxi”, there is always enough to comment.
Shanshan
Dear Shanshan,
Thank you for your insightful comment! I totally agree that friendship can be developed through co-operation, like it may do in any work place, for instance. It always amazes me what can be achieved when somebody in your network knows someone who can be at your assistance! Somehow you may jump over obstacles if you have good “guanxi” relationships. As myself, I rather consider “guanxi” as a personal relationship that is based on mutual respect, understanding and sincerety. Exploiting your “guanxi” only for selfish purposes is not a long-term solution…
I wish you’ll have educational and rewarding intern. All the best for your coming endeavoures!
Haha,
It seems that you two already communicated in a way:) Johanna, Shan Shan will also join us this Saturday coffee. She is the one mentioned about your blog yesterday.
Excited… It is so true about Guanxi. See even I met you face to face two times before, but still I don’t know about your blog. If I didn’t meet and talk with Shan Shan about my thesis plan. This Saturday coffee will never set up.
It is strange. Sometime people may share so much things in common, but we never talk or talk deep enough with each other. We just walk away without even trying. We see each other everyday, but still like a stranger….
It remains me of the book name again: Everybody communicate but few connect…
But now it’s a new chapter, I will try to find more common things with different people from different world, it is too boring sometimes to stay in our own world. Let’s go out and take some fresh air, even it may sounds so scared at first
Hey Jia,
Wow, I am happy that our little “guanxi circle” could even encourage you to start a new chapter with fresh beginning! I am happy that Shan Shan introduced you to my blog and that you even read it. I will be happy to share thoughts with both you face-to-face over a cup of coffee on Saturday. We may start a new book; “From communicating to true connections”
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