Guanxi, government and Corporate reputation in China: Lessons for international companies

Abstract

The purpose of this paper is to explore corporate reputation in the transitional Chinese context, and to examine the impact of guanxi on reputation management. China remains a hierarchical guanxi-based society despite the rapid transition to a market-led economy. The decentralised business environment today is more complicated than that in the pre-reform era. As reputation is relationship based, guanxi is an important form of reputation capital. Corporate reputation in China is all about managing relationships with key stakeholders, the most important being the government. Government at the top level is crucial for reputation-building and deal-making. Given the idiosyncratic market conditions and differences in culture, MNCs have to adopt a localisation strategy in corporate communications, showing due respect for the local culture.