How do Guanxi and Relationship Marketing Work in Chinese Market?

Along with the perspective of relationship marketing (RM), which is a traditional view on business to business marketing in western culture, research interest in Guanxi has been growing through the study of Chinese business. Guanxi has often been viewed as unethical by westerners. However, from the Chinese perspective, Guanxi is both traditional and cultural. Foreign companies entering the Chinese market might therefore face difficulties as they attempt to transport western ethical concepts into China. Thus, we began our research with the following two questions: “Is Guanxi ethical or not?” and “In Chinese business, should firms adopt Guanxi instead of RM?”. Our review of the existing literature on Guanxi’s concept and ethical status reveals differences between Guanxi and RM. Consequently, this study examines the effects of these differences. In this study, we empirically identify the distinct effects of Guanxi and RMonmarket performance (MP) by investigating 295 firms in China. Guanxi had a more significant impact on MP than RM did. Our findings imply that Guanxi works more effectively than RMfor firms in Chinese business environment.