Establishing ethical Guanxi (interpersonal relationships) through confucian virtues of Xinyong (trust), Lijie (empathy) and Ren (humanity)

• DOI: https://doi.org/10.1108/CG-01-2019-0015
• Pages: 1-15
• Published date: 27 August 2019
• Date: 27 August 2019
• Author: Michelle Sitong Chen,Gabriel Eweje
• Subject Matter: Strategy

Establishing ethical Guanxi (interpersonal

relationships) through confucian virtues

of Xinyong (trust), Lijie (empathy) and

Ren (humanity)

Michelle Sitong Chen and Gabriel Eweje

Abstract

Purpose –The purpose of this paper is to examine empirically how managers establish ethical guanxi

(interpersonal relationships) with their business partners to prevent potential ethical incidences in

Chineseand Western business contexts.

Design/methodology/approach –The present study is guided by a qualitative, abductive approach

and draws on in-depthinterviews with ten senior managers in five urbanNew Zealand organisations.

Findings –The results pointout that guanxi (interpersonal relationships)purely working through renqing

(reciprocity)is not sustainable, because itperpetuates a never-ending cycle of favours,once exchanging

favours stopped or disappeared, then business relationships dwindled. To establish an ethical guanxi

model, the authors found that xinyong (trust) is the foundation, and its enlargement stimulates lijie

(empathy) that transfers pure business relationships to a genuine friendship which enhances ethical

decision-making. They also posit that once managers are embodied with lijie, then they will have the

virtue of ren to behave like junzi (ideal Confucian ethical person) whose business actions tend to be

intrinsically guidedby a sense of obligation to do something right that will work for diverse stakeholders’

interests,for the prosperity of organisations and society.

Practical implications –This study suggests that managersshould take Confucian virtues of xinyong

(trust) and lijie (empathy),because they will trigger ren (humanity) as an intrinsic value.In this way, it is

more likely for them to become junzi (ideal Confucian ethical person) whose business actions are

intrinsically guided by a sense of obligation to do something right that benefits various stakeholders,

organisationsand society.

Originality/value –This study contributes to the extant literature on preventing ethical incidents of

guanxi (interpersonalrelationships) by drawing a frameworkof ethical guanxi, which is built on Confucian

virtues of xinyong (trust), lijie (empathy) and ren (humanity). Further, this paper strongly suggests that

companies should educate their staff to become more humane to make moral decisions in daily

managementpractice.

Keywords Confucianism, Ethical guanxi (interpersonal relationships), Lijie (empathy), Ren (humanity),

Renqing (reciprocity), Xinyong (trust)

Paper type Research paper

Introduction

Guanxi (interpersonal relationships) is an indigenous Chinese concept that is broadly

depicted as interpersonal relationships with people, and it deeply influences the behaviour

of Chinese business people (Nie and La

¨msa

¨, 2015). Although guanxi is not a must for all

business transactions in China, it is seen as a foundation to build business relationships,

and is often used as an efficient social tool to facilitate business operations (Huang et al.,

2013).

Michelle Sitong Chen is

based at the School of

Management, Massey

University, Auckland,

NewZealand.Gabriel Eweje

is based at the School of

Management, Massey

Business School, Massey

University, Auckland, New

Zealand.

Received 10 January 2019

Revised 24 June 2019

Accepted 9 July 2019

DOI 10.1108/CG-01-2019-0015 VOL. 20 NO. 1 2020, pp. 1-15, ©Emerald Publishing Limited, ISSN 1472-0701 jCORPORATE GOVERNANCE jPAGE 1