Guanxi: networks or nepotism?: The dark side of business networks
This paper examines the ethical dimension of using gifts to establish social networks, applying the predominantly Chinese concept of 'guanxi' - a practice which may lead to personal and/or corporate gain. Guanxi refers to a network of personal and social relations that is characterized by specific ethical and instrumental dimensions, embedded in social and moral norms and founded on a traditional Confucian philosophy. Social contextuality seems to be more relevant for its ethical acceptability than a precise moral defined threshold. To what extent can possible gain or profit from guanxi be considered as 'ethical'? The answer lies in understanding the fine line between socially appropriate and a-social networks. Social networks such as guanxi transgress in a form of nepotism when emotional and moral obligations in interpersonal relations are ignored in favour of pure instrumental [calculating] exploitation of networks for personal gain. When the cultural ritual of guanxi, based on strong Confucian moral values, degenerates into a rent-seeking guanxi, an appropriate network loses its ethical edge as it turns into inappropriate behaviour, and allows itself to be corrupted. Networks then become 'nepotistic' or corrupt.
Europe-Asia Dialogue on Business Spirituality