Free Essay Example on Guanxi Concept

The data that was collected using questionnaires will be presented with descriptive statistics. The chapter displays the information on the frequency of communication with the Hong Kong companies, mainland China companies. The third representation and analysis will inquire whether there exist cultural differences between Hong Kong and Mainland China then examine correspondent understanding of cultural differences in a business set up. The fifth question on the questionnaire inquired on the population perception of the existence of Guanxi concept in an organization concept and its importance to business operations in Mainland China. Additionally, this chapter will inquire the importance of Guanxi in an organization and the reason for its significance in an organization.

Possible effects of incorporating Guanxi into the organization setup are also examined. Will it affect business operation? Will Guanxi influence contract negotiation? What of the long term business relationship? Moreover, trust amongst organizations, will it compromised or build the existing trust even stronger?

Since the Chinese market is transforming to an open market, the sustainability of the concept is also assessed and the population view on its sustainability presented in Graphs. The same organization international presence is also examined and how they plan to build international links with other foreign organizations for the higher market presence and consumer share. The probability of the foreign organizations to incorporate the Guanxi concept into their communication is also assessed by the research since this is more culture based than management concept. Demographic factors are also assessed.

Demographics

Gender

Figure 1

The sample population had more male respondents representing 59.2 percent while the female were fifty-one which comprised of 40.8 percent of the total population.

Age

Figure 2

Figure two above shows age distribution of the study population and the demographic indicates a higher percentage of those between the ages of 46-55 years comprising of 37.6 percent followed by age range between 36-45 years. A total of 23.2 percent of the study population is representing 29 respondents. Those under the age of 25 years old covered 3.2% of the entire survey, and only 0.8% was between the ages of 56-65 years old.

Nationality

Figure 3

The survey conducted to analysis cultural differences on the business relationship in comparing Chinese and Hongkong customers and employees on the concept of Guanxi shows majority were from Hong Kong china with a percentage of 56.5 and China covering 43.5 percent.

Company location

Figure 4

There is almost an equal geographical distribution of firms in Hong Kong and mainland China. Hong Kong represents 50.8 percent of all the organizations while the mainland covers 49.2 percent of the population.

Company size

Figure 5

Figure 5 highlights the general organization size.it is evident that majority of Hong Kong and Mainland China are big organizations. Organizations with more than 30 employees represent 44.8 percent. Those with less than five (5) employees covered 9.6 percent of the total population and were the same as the organization with 6-10 employees. About 23.2 percent of the population comprised of organizations with11-20 workers. Only sixteen respondents representing (12.8 %) worked in organizations with 21-30 employees.

Employee position in their companies

Figure 6

The majority of the study population worked in senior management positions and represented 41.6 percent of the entire study population. Sales and marketing agents follow this with 25.6 percent and operation managers comprised of 19.2% of the whole job workforce in the two cities. Only 13.6 percent of the workforce worked as Administration agents.

Communication

Frequency of communication

Figure 7

About Sixty-six respondents (66) representing 53.2% of the population communicated daily with Hong Kong companies and another 8.9 percent communicated on a weekly basis. About 12.9 percent of the population ensured communication with the Hong Kong companies more than once a week while only 4.8% of the population communicated once in every fortnight. A significant 20.2 percent communicated with the Hong Kong companies once after every month.

How often is the need to converse with Mainland China Companies?

Figure 8

From the survey, the need to communicate closely correlates with the frequency to communicate as shown in figure 7. The majority needs to contact both mainland China and Hong Kong companies on a daily basis taking 54 percent then followed by those who need to communicate after a month. There is a close relationship between the two aspects of data collected.

Do you believe there are cultural differences between Hong Kong and Mainland China companies?

Figure 9

The majority of the workforce in China believe there exist a cultural difference between Hong Kong and mainland China with 99.2 percent saying yes and only one respondent gave a no, representing 0.8 percent of the entire population.

Main cultural differences that exist when doing business between Hong Kong and Mainland China

Figure 10

Since majority believe there exist cultural difference while doing business in Hong Kong and mainland China, their perspective on the cultural differences was further analyzed. About 31.2 percent of the population both believed in the value of trust and social practices as what caused the cultural values in them. About 4 percent of the respondents attributed the cultural differences to language and 4.8% on the concept of punctuality. Another 12.8 percent believed on the concept of relationship as the main cultural difference while eighteen respondents representing 14.4 percent believed the misinterpretation of contract as the cause of the gaps. Another 1.6 percent has a different opinion on the course of the cultural differences. Some said due to the difference in historical background and the divergence in mindset and mentality.

Guanxi Concept

Is the concept of Guanxi accepted in your Company?

Figure 11

About 87.2 percent of the entire population believed the concept of Guanxi in their companies while only 12.8 percent of the population could not notice the concept of Guanxi in the enterprise.

Is Guanxi important when doing business in China?

Figure 12

The majority of the employees in China believed that the incorporation of Guanxi in their management communication had a significant importance with 97.6 percent showing support for it. Those contrary to the opinion comprised of only 2.4 percent.

Do you agree it is important to establish good Guanxi when starting a business relationship?

Figure 13

A significant number of employees believed that establishing good Guanxi is important when starting a business relationship. One hundred, and twenty (120) respondents showed their support for a good Guanxi to ensure successful business relationship. There also existed those who were against the idea, and only 4 percent of the entire study sample showed a contrary opinion on the benefit of a good Guanxi.

Effect of Guanxi In Business Communications

Figure 14

About 93.5 percent believed the incorporation of Guanxi will influence how the business is conducted in an organization. However, the question did not focus on the negative or positive effect on the organization. Further, 6.5 percent noted no impact on the entire business operation.

Will Guanxi affect contract negotiation?

Figure 14

Business operations involve negotiations to reach a neutral point. However, the majority of the populace has a strong believe that Guanxi concept will influence the contract negotiation process. About one hundred and fifteen respondents representing 92 percent of the population believed that the concept will positively influence an organization process. Only 8 percent had a contrary opinion on the same.

This was also attributed to the long-term business operation within the different companies in Hong Kong and Mainland China. Figure 15 below shows that 92.8 percent the influence of Guanxi to the long-term business operation. This also closely correlates with the output of figure 14 showing nine(9) respondents representing 7.2% saying use of Guanxi will not help in the long term relationship

Figure 15

Can Guanxi build trust between Companies?

Figure 16

The issue of trust between organizations was also assessed whereby the results indicates a large population of the employees in Hong Kong and Mainland China believe Guanxi concept will enhance more trust between the companies and encourage more business deals and improve their individual profits and market presence. About 77.6 percent knew the concept leads to a stronger and reliable trust amongst the companies. Only 22.4 percent did not believe Guanxi concept can increase more trust between the businesses in Hong Kong and Mainland China.

Sustainability of the concept to the Chinese market

Figure 17

The Chinese market is changing, and it was also important to examine the sustainability of the concept with the dynamic market variables. The majority of the employees believed the concept will sustain the contemporary open market nature of the Chinese market with a percentage of 93.5. Furthermore, only eight (8) respondents representing 6.5 percent of the population believed the concept will fail with the market dynamics.

Business relationship with foreign companies

Figure 18

International presence is an important aspect towards achieving a larger market share and company product present. The survey revealed that a significant number of enterprises have a business relationship with foreign organizations. About 78.2 percent have a close business relationship outside China while only 21.8 percent did not have a business relationship in a foreign land. However, some were in the process of creating sustainable relationships with other foreign organizations either to supply their products or help them market their products.

On the issue of Guanxi concept, the majority believed that the concept can work in foreign organizations if implemented properly. Figure 19 below shows the findings of how the population sample perceived the concept if taken to the international level.

Figure 19

About 82.9 percent believe the concept will be accepted in foreign organizations while only 17.1 percent of the sample population said the idea will be rejected.

Do you think the concept of Guanxi worth existing in the global business market?

Guanxi concept can be implemented in the existing market world market, and the results showed a comparable result. The dynamic nature of markets needs the application of need concept to understand the niche requirements of the product consumers. About ninety-two (92) of the respondents believed the concept should be used in the international market while 25.8 percent believed this is a cultural concept and cannot be employed in an international market where the market involves diverse cultural views.