Cronyism

Abstract

Purpose The purpose of this paper is to determine a model of how a foreign businessman obtains and maintains cronyism from his Chinese counterpart that emphasizes on an insider perspective to convert him from a new friend to an old friend of his Chinese counterpart through a guanxi adaptation mechanism. Design/methodology/approach A vigorous analysis of extant literature and an investigation of insider dynamics within a new friend/old friend perspective. Findings Gift‐giving is strategic and a foreign businessman must manage its monetary value very cautiously in order to alleviate the “face” and provide renqing so as to generate ganging and to obtain cronyism from his Chinese counterpart. In saying that, relativism prevails. A foreign company must establish a zone of ethical tolerance so that its executive knows the limits when practicing gift‐giving. In China, an old friend is a supporter and therefore a foreign business should not openly criticize his Chinese counterpart. Frequent visits to China must be maintained. Practical implications A foreign businessman needs to understand the guanxi dynamics of renqing and ganging and their sequential arrangement in the adaptation mechanism. He should use gift‐giving to offer renqing so as to establish ganging with his Chinese counterparts. Originality/value Provides a depth analysis of two emotional aspects in the guanxi adaptation mechanism, i.e. renqing and ganging which is a definitive device to convert a foreign businessman from a new friend to an old friend of his counterpart in the Chinese market.

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