¹School of Business Administration, San Diego, CA, USA

Abstract

The purpose of this article is to explain how guanxi can be used as a mechanism for establishing corporate reputation in China. Guanxi can be roughly described as a type of social capital that is developed between two persons via a process of reciprocal exchange. The key to using guanxi as a way of establishing reputation is to focus on developing and maintaining a network of high-quality contacts while maintaining the focus on the discrete relationships that constitute the network. Organizations can establish themselves as reputable in China by having a multitude of organizational participants engage in guanxi-based business practices. However, guanxi remains a product of individuals and becomes an organizational asset only to the extent that individuals are willing to use their guanxi in order to achieve organizational objectives.