ANSWERS FOR CASES DMG-SHANGHAI
1) Why do you think that it is so important to cultivate guanxi and guanxiwang in China?
Guanxi and guanxiwang are essential to business in China. It is an important mechanism for forming long-term business relationships and getting business done in China successfully. Guanxi refers to the connections of business that are so important to companies when foreign or domestic investors doing business in China. While guanxiwang refers to the relationship network that company cultivate. Therefore, by implementing both of these relationships it would help people do a job properly and mechanism in doing a business in China. There are so many laws stated that nothing would get done and a business would run out freely without guanxi and guanxiwang. The relationship that a businessman builds can either make or break a deal. A deal gone well will give that businessman prestige and allow for him easy access to other resources in the future. Many businessmen use guanxi and guanxiwang as a way to establish grounds and create reputations. Without these no business would get done and it is almost like a loop out around the law. What could be wrong by law can actually be look in a different light when persuading officials so it is a huge advantage. The case study illustrates the benefits returned by investing in the development of a guanxiwang. Understanding the cultural importance of guanxi and guanxiwang in China is a crucial factor, for two primary reasons: * Understanding the cultural norms implicit within dynamic reciprocity and the long-term equity principal will open doors for a business looking to operate in China * Due to the lack of a strong rule-based legal tradition, guanxi and guanxiwang can facilitate business activities, as illustrated in the case study examples of accessibility to previously restricted areas.
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