| When My Subordinate Is My Boss’ Close Pal: The Role of Indirect Guanxi in Manager Personnel Decision Making in Chinese Organizations |
Received:October 15, 2017 Revised:October 15, 2017 |
Key Words: Indirect guanxi, Favoritism, Guanxi rule, Objective rule |
| Author Name | Affiliation | | Han Ren0 | Sichuan University | | Xiao-Ping Chen* | University of Washington | | Weizheng Chen0 | Sichuan university |
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Abstract: |
| In this paper, we focus on indirect guanxi, defined as a connection between two people through an intermediary to whom both are closed related, and study its effects on managerial decision making in Chinese organizations. Drawing on the organizational justice theory, we propose that managers will follow a multi-principle approach and pay attention to both objective criterion such as merit or performance and guanxi-related factor in making personnel decisions. Specifically, we hypothesize a main effect of the indirect guanxi’s relative performance, and two moderators—the intermediary’s hierarchical power and the managers’ personal particularism orientation, on their willingness to make favorable decisions toward the indirect guanxi. Data from a scenario based experiment in which the participants played the role of a manager provide full support for our hypotheses. On the other hand, data from a field study in which participants recalled incidents of their managers’ favoritism toward indirect guanxi reveal very different results. In the non-manager/observer’s eyes, the objective criterion (i.e., performance) was NOT important for managerial decision making at all, what mattered were the intermediary’s hierarchical power and the manager’s particularism orientation. This perception gap between the manager (actor) and the non-manager (observer) regarding what determines favoritism is intriguing and offers great insights into explaining the commonly existed indirect guanxi phenomenon in Chinese organizations, especially in state-owned enterprises. We discuss the theoretical and practical implications of our findings in Chinese organizations and beyond. |
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