CASE STUDY: DMG SHANGHAI
1.3 What are the ethical issues that might arise when drawing upon guanxiwang to get things done in China? What does this suggest about the limits of using guanxiwang for a Western business committed to high ethical standards?
When drawing upon guanxiwang to get things done in China, several ethical issues may arise.
1. Favoritism and Nepotism: Guanxiwang heavily relies on personal relationships and connections, which can lead to favoritism and nepotism. This means that opportunities and benefits may be directed towards those with personal connections, rather than being based on merit and fair competition.
2. Bribery and Corruption: Guanxiwang is often associated with the exchange of favors, gifts, and monetary incentives to secure desired outcomes. This can easily slide into bribery and corruption, as individuals may feel pressured to offer or accept inappropriate gifts or favors to maintain guanxi relationships.
3. Unfair Business Practices: Relying solely on guanxiwang can lead to unfair business practices, as it may exclude potential competitors who lack the necessary connections or relationships. This can undermine free and fair competition in the market and create disadvantages for those without guanxi connections.
Using guanxiwang for a Western business committed to high ethical standards has its limits. Firstly, it goes against the principles of fairness, meritocracy, and transparency that Western businesses often prioritize. Guanxiwang relies on personal relationships and informal networks, which may not align with the Western business ethos of impartiality and accountability.
Secondly, relying heavily on guanxiwang may violate Western ethical norms and regulations. Western businesses typically adhere to strict anti-bribery and anti-corruption laws, and engaging in guanxiwang practices, which often involve the exchange of gifts and favors, can potentially be seen as ethically compromising or even illegal.
Lastly, depending solely on guanxiwang may limit a Western business's ability to make objective and data-driven decisions. Guanxi relationships are based on personal connections and trust, which can sometimes overlook or disregard objective factors such as quality, expertise, or value for money when making business decisions.
Overall, while guanxiwang can be a useful tool for doing business in China, it presents ethical challenges for a Western business committed to high ethical standards, potentially compromising fair competition, transparency, and impartiality. Therefore, Western businesses need to find a balance between leveraging guanxiwang and maintaining their ethical integrity.