Dmg Shanghai Essay

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Chapter Three Case Analysis: DMG-Shanghai 1. Why do you think that it is so important to cultivate guanxi and guanxiwang in China? Simply put, one’s reputation is a critical component of Chinese society and the Chinese business environment. Based upon a 2,000 year-old philosophy of Confucianism, guanxi establishes the “rules of interaction” in Chinese society. Guanxi defines how one interacts in a society where social standing is not equal. Instead, the philosophy establishes guidelines where one is expected to understand the hierarchical levels–the social status-of family, superiors and inferiors. These guidelines dictate one is expected to be loyal to one’s superiors and family. It also dictates that a “good superior” recognizes the efforts and loyalty of those held to be inferior. This loyalty is demonstrated through one’s actions. Loyalty is recognized and rewarded accordingly (Hill, (2008) p. 117). Basically, guanxi establishes a “chain of command” which defines the operation of society at all levels within China. Guanxiwang is an extension of these guidelines of social interaction into a networking system. Simply put, it is “who knows whom.” These hierarchical social networks are the foundation of how businesses and individuals achieve goals, interact, etc. Failure to recognize this social setting or meeting one’s obligations to superiors and inferiors results in the “loss of face.” That is, one’s reputation is greatly diminished and can have very negative results in one’s personal life as well as business environment. Cultivating guanxi and guanxiwang are important for several reasons. First, when one recognizes and adheres to these philosophies, one is showing respect and understanding for this country’s culture. This is makes the country’s people operate. To fail to understand their adherence to loyalty, obligations and hierarchy is to
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