Motive 2 – Building Your Own Guanxi Circle

Chinese join a guanxi circle to build up relationships so as to achieve their personal goals, but they need to have their own teams to do achieve their goals. Another important motive for Chinese to work, therefore, is building their guanxi circles.

To establish their businesses, Chinese are willing to preserve quietly for one or two decades and keep carrying out favor exchanges. But they make all these efforts in exchange for the day when a lot of their circle members will follow them and many others will come to do them favors once they call for support. The very reason for their receiving support at a critical moment lies in that they have carried out a large number of favor exchanges before; those who come to do them favors are all repaying favor debts. Accordingly, Chinese do most jobs to exchange favors with each other. A great motive for Chinese to work, then, is turning acquaintance ties into friend ones and a single instance of cooperation into long-term guanxi contracts through favor exchanges. These contracts will ultimately constitute a guanxi circle around someone.

Small companies tend to be the most energetic organizations in China and they all present a network-like structure. As an example, a very capable man leads ten capable ones, each of which in turn leads five less capable ones, each of which, again, leads ten employees. In reality, a structure of small guanxi circles embedded in a big circle is very efficient in China.

Chinese has a sufficiently strong motive to work and become most efficient only when they are given opportunities for organizing their own guanxi circles. Chinese workers will, therefore, seek a sense of belonging in the ―big family‖, or their leader's guanxi circle, while seeking a sense of personal achievement in their own ―small family‖, or the team that they build for themselves. They will always search opportunities for establishing guanxi contacts, or building up relationships, in order to be able to mobilize enough resources when needed.

If a worker can never establish long-term favor-exchange relationships with his or her leader and colleagues, he or she is always regarded as an outsider, then the incentives for him or her to work are nothing related to long-term, expressive ties. With the lack of encouragement by the sense of belonging, of the accumulation of relationships, and of opportunities for personal self-realization and achievement, such employees are much more likely to resign.

Motive 3 – Enfeoffment

A Chinese person of course will have a sense of belonging if he is admitted into a guanxi circle and given chances to exchange favors. But the best incentive indeed is letting him become an independent team leader, known as being enfeoffed in Chinese history: Let him be in charge of a particular field and lead his own guanxi circle to expand outside the organization. In principle, the team leader is required to submit part of his fruits to the mother organization, on the one hand, and is allowed to retain most of them and evenly distribute them among the team members, on the other, so as for him to build his own ―family‖ and further organize a group of people to realize his personal goal. Self-organization is the very personal achievement that Chinese workers want most to make, and also is the most powerful incentive for them.

Likewise, while realizing his personal goal, the leader should establish long-term favor-exchange relationships with team members so that they will have a sense of belonging, more opportunities for building up relationships and equal access to the common pool resources of the team. And they may ultimately be given chances to organize guanxi circles for themselves and become independent leaders in particular businesses, so as to realize their personal goals. A successful leader will also effectively coordinate the goals of the ―big family‖ and the ―small family‖ and balance their interests. On the one hand, he will encourage the team members by letting them become independent team leaders. On the other, he will manage to let the ―small family‖ continue working for the goal of the ―big family.‖ The guanxi circle theory emphasizes, therefore, that in China, the most powerful incentive is enfeoffment. A Chinese are good at finding a sense of belonging within the ―big family‖ (i.e., his or her leader's circle) and a sense of achievement within the ―small family‖ (i.e., his or her own circle). A leader who understands the Chinese way of thinking should make good use of the enfeoffment system.

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