This study presents three case studies intended to examine Chinese private firms’ reliance on guanxi-oriented governance structure under different degrees of market rationality. Our findings show that regardless of their profitability goal, employment size, and organizational complexity, the three companies under study rely rather equally on their central players’ guanxi circle as the governance structure. Furthermore, when someone is permitted to enter this guanxi circle and exercise a certain degree of managerial authority, both job competence and personal trust of this person are simultaneously evaluated. We interpret these findings not as evidence of conflict between market rationality and guanxi favouritism, but as evidence for Weberian elective affinity between the two seemingly conflicting principles.
Bibliographical noteFunding Information:
The present study was financed by grants from Youth Program Sponsored by Humanities and Social Science Fund of Ministry of Education (16YJC840019) and Postdoctoral Research Funding of Shaanxi Province (2017BSHYDZZ59) to the second author. This paper is also a product of the grant (13&ZD177) from the National Social Science Foundation of China awarded to the first author.
- guanxi circle
- guanxi favouritism
- guanxi governance structure
- market rationality