A study of Chinese guanxi type in family business from the perspective of power-based and leadership behaviours

Abstract

In Chinese society, a guanxi network is based on kinship or family ties of affection. This special pattern has a historical background and is one of the important factors that have enabled many Taiwanese enterprises to continue operating through the decades. The personal links between people create a kind of social network known as guanxi, which is a unique characteristic of Chinese society. The study aims to investigate the guanxi type of managers in Taiwanese family businesses, and examines how the guanxi type may moderate the correlation between the managers’ power and the influence tactics used to handle subordinates. We surveyed 178 managers who are working in Taiwanese family business. The results of the hierarchical regression modeling showed that as managers have more position power, especially those exercising the family guanxi, they are more likely to be assertive in their treatment of their subordinates. Managers possessing the friend guanxi often play a bridging role to complement the function of those managers with the family guanxi, who may use the assertive approach too strongly. Managers of this type can provide a “lubricant effect” and keep the family business running smoothly. We recommend that family business owners should pay more attention to relationship harmony and internal communication channels in their organisations.