Guanxi as a Relationship Commitment and Loyalty Behaviour: A Study of Chinese Banking Customers
A guanxi network, or relationship network, is considered an essential strategic asset for organizations doing business in the People’s Republic of China. Yet outside Asia, the mechanics of this business tool are barely understood. Using Ajzen and Fishbein’s theory of reasoned action, this study examines the relationship between the independent variables of guanxi, ingroup identification and affective investment; two outcome variables, being loyalty behavior and word-of-mouth intention; and two mediators, calculative trust and affective attitude towards the bank. A mixed-method approach was used in this research. To establish the role guanxi plays in cultivating brand loyalty, a preliminary qualitative study employed grounded theory methodology. A quantitative questionnaire used the structural equation modeling method to test and validate the conceptual framework. Five hypotheses were tested against a sample of 429 bank customers who were asked to evaluate the relationship with their primary bank and banker. The findings confirm that guanxi drives customer loyalty and word-of-mouth behavior through the two mediators and that ingroup identification has a direct influence on customer’s loyalty. The effect of affective investment, such as gifting, was found to be insignificant, which may indicate that the largely superficial act of building interpersonal guanxi is less relevant in contemporary China. This study adds to relationship marketing theory of guanxi when applied to the business-to-consumer market segment in mainland China. The research offers insights for managers on how they might best do business in China and illustrates that the deeper constructs underlying guanxi are rooted not in superficial acts, but in the development of ever-deeper relationships through social and business-based transactions. Managers should understand that the subtle difference between business relationships in the Western cultural context and in the Chinese setting lies in the strength of interpersonal ties involving the buyer and seller, and that successful managers in China build those interpersonal ties. Guanxi requires building GRX – an abbreviation of ganqing (long-term affection between individuals), renqing (interpersonal give and take), and xinren (inter-personal trust). By assessments of a customer’s calculative trust and brand’s affective attitude, practitioners can assess guanxi’s impact on loyalty intentions. This research also helps refine the measurement of guanxi and ingroup biases for future research.
Emerging Trends in Asian Markets: Proceedings of the 2015 International Conference of Asian Marketing Associations
https://www.researchgate.net/publication/318899923_Guanxi_as_a_relationship_commitment_and_loyalty_behavior_a_study_of_Chinese_banking_customers International Conference of Asian Marketing Association in Japan, Tokyo, Japan (Oct 30- Nov 1)
Lee, L. W.,& Tang, Y. (2015). Guanxi as a Relationship Commitment and Loyalty Behaviour: A Study of Chinese Banking Customers. Emerging Trends in Asian Markets: Proceedings of the 2015 International Conference of Asian Marketing Associations, 8-8. Retrieved from https://repository.vtc.edu.hk/thei-fac-man-hos-sp/133