Journal of International Business Studies

, Volume 30, Issue 2, pp 231–247 | Cite as

Guanxi Versus the Market: Ethics and Efficiency

  • Steve Lovett
  • Lee C. Simmons
  • Raja Kali
Article

Abstract

Guanxi refers to a Chinese system of doing business on the basis of personal relationships, and it is representative of the way that business is done throughout much of the non-western world. In this paper we first evaluate guanxi from an ethical perspective, and then attempt to shed light on the sources of its economic advantages and disadvantages through the use of a simple mathematical model. Finally, we point out how eastern and western business practices may already be converging toward systems based on more complete models of trust to deal with the conditions of progress coupled with uncertainty that form our new economic reality.

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Copyright information

© Academy of International Business 1999

Authors and Affiliations

  • Steve Lovett
    • 1
  • Lee C. Simmons
    • 2
  • Raja Kali
    • 3
  1. 1.San Diego State University - Imperial Valley Campus
  2. 2.The University of Texas at Arlington
  3. 3.Instituto Tecnologico Autonomo De México

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