Guanxi: Competitive Advantages

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Many studies explained and showed that guanxi is as competitive advantage for Chinese firms.
Tsang (1998) examined whether guanxi can be sustainable competitive advantage for Chinese firms by interviewed 100 managers in China, Hong Kong and Singapore, and analyzed guanxi to prove the guanxi is sustainable competitive advantages for firms in China through using a resource-based view (RBV). This study (Tang 1998) states that it is necessary to meet three elements in order resource to give a sustainable competitive advantage: valuable, rare and imperfectly imitable. The findings showed that guanxi meets the criteria of RBV and guanxi is possible to generate competitive advantage. It indicated that value relies extremely on the partner's social
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(2013) investigates that guanxi facilitates innovation, develop business performance and venture success within the environment of highly increasing competitiveness in China. Similarly, Chen, Chang & Lee (2015) also examined whether Chinese entrepreneur’s guanxi network affects business success in creativity industry. Arribas et al. (2013) interviewed 105 entrepreneurs in Shanghai. Chen, Chang & Lee (2015) survived 293 entrepreneurs of creative industry in Taiwan. Their studies found that entrepreneurs’ guanxi networks provide resource and information accessibility, especially government ties have a great impacts in availability of resources for entrepreneurs (Wang & Lestari cited in Chen, Chang & Lee 2015). Theses accessibility and availabilities leads to increase venture success (Arribas 2013; Chen,Chang & Lee 2015). Also, these would assist to develop firm’s creativity and create to social reputation (Chen, Chang & Lee…show more content…
Park and Luo (2001) examined what guanxi brings competitive advantages for buyers and suppliers through conducting survey to 400 firms from Shanghai and Jiangsu, which were selected from 22,000 business listed of P.R.C. The findings indicates that Guanxi relationship with buyer would prompt sales growth and customer loyalty through reducing transaction costs and uncertainties, in contract guanxi relationship with suppliers aid firms to obtain materials and delivery right time, additionally guanxi with rivals assists corporation for sharing resource that supports diminish competitive cost and inconstancy of operation. Similarly, Cheng, Yip & Yeung (2012) found that guanxi development between suppliers and buyers enhance effective communication as well as improve the buyer’s trust. These lead to improve supplier performance, thus suppliers are possible to reach huge success when the buyers develop guanxi connections with suppliers. Guanxi with provider/ suppliers assist firms to obtain materials and receive high quality of services, and guanxi with customers would affect customer loyalty and enhance sales with uncertainties (Chang and Tang

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