Leader–follower guanxi: an invisible hand of cronyism in Chinese management

Abstract

Guanxi social networks are part of the fabric of Chinese society and central to every aspect of Chinese life including work. The relationship between guanxi and cronyism has been researched and discussed by scholars in supervisor–subordinate guanxi (SSG) studies. However, SSG cannot explain the full extent of cronyism in Chinese management, which usually encompasses a network of actors including a supervisor, a subordinate, a third party (called ‘leader’) who has a higher ranking than a subordinate, and possibly an intermediary between a leader and a supervisor in the same organization. Consequently, this paper develops a new construct leader–follower guanxi (LFG) to explain cronyism in Chinese management. LFG is defined as the existence of direct particularistic (ingroup) ties associated with a particular set of differentiated behavioral obligations based on social norms between a leader and a follower in the same organization. We examine the relationship between LFG and cronyism in Chinese organizations and propose that LFG will be positively associated with cronyism. We then use Chinese ‘face’ theory (mianzi and lian) to illustrate how LFG engenders cronyism in Chinese management. We assert that LFG serves as an invisible hand of cronyism in Chinese organizations. Finally, we consider how to develop leadership and HR practices that prevent cronyism in Chinese organizations.