Abstract
Understanding and adapting to local cultures has long been considered as an important part of successful localization, yet extant literature has not discussed how the adoption of cultural-specific construct as tools of localization facilitates successful b2b relationships with local counterparts. Whilst international companies are increasingly concerned with their business performance in China, this study believes b2b firms should engage the cultural-specific concept of guanxi (interpersonal ties) as a tool of localization when interacting with Chinese counterparts for better financial performance and long-term orientation. Using data collected from 299 Chinese buyers regarding their Sino–US business relationships, the results reveal that the relations between trust and financial performance and between uncertainty and long-term orientation are moderated by guanxi. The findings shed further light on localization literature with evidence highlighting the impact of guanxi in localizing b2b relationship activities in China.
Highlights
Globalization has attracted considerable interest over the last couple of decades (Levitt, 1983; Ramarapu, Timmerman, & Ramarapu, 1999; Mak, Lumbers, &Eves, 2012); existing studies tend to agree that such standardization offers limited explanation for the behavior of international firms in different markets (e.g., Humbert, 1993; Ruigrok & van Tulder, 1995; Czinkota & Ronkainen, 1998; Ritzer, 2004)
Whilst guanxi is specific to the Chinese culture context; this paper argues that it is of particular importance to engage the notion of guanxi as a tool of localization in international firms‟ b2b dealings with Chinese buyers
Extending previous debate on how localization requires international businesses to better understand and adapt to the local cultural values and norms (Roth, 1995; Czinkota & Ronkainen, 1998; Ferle, Edwards, & Lee, 2008), this study makes the first attempt to argue that cultural-specific relational notions should be considered as tools of localization that facilitate international firms‟ b2b relationship success in foreign markets
Summary
Globalization has attracted considerable interest over the last couple of decades (Levitt, 1983; Ramarapu, Timmerman, & Ramarapu, 1999; Mak, Lumbers, &Eves, 2012); existing studies tend to agree that such standardization offers limited explanation for the behavior of international firms in different markets (e.g., Humbert, 1993; Ruigrok & van Tulder, 1995; Czinkota & Ronkainen, 1998; Ritzer, 2004). Studies have discussed how international firms could better adapt and localize their business approaches and practices in China, adjusting to the Chinese culture in areas such as advertising (Tai & Pae, 2002; Cui & Yang, 2009), strategy (Fock & Woo, 1998), communication (Hung, 2004), services (Pheng, 1997), direct selling (Luk, Fullgrabe, & Li, 1999), retailing (Yip, 1995), and b2b activities (Yan & Gray, 1996)
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