The Impact of Guanxi on Ethical Perceptions: The Case of Taiwanese Salespeople

Abstract

Purpose: Extant empirical work demonstrates that guanxi can foster favoritism or preferential treatment toward certain customers, which could lead to unethical business behavior. However, scholars have not investigated the potential effect of guanxi on ethical perceptions in a crucial extra-organizational context: the buyer–seller dyad. This article seeks to address the lacuna and examines the impact that guanxi has on Taiwanese salespeople's ethical perceptions. Methodology/approach: A survey of salespeople was used to test the proposed hypotheses. A sample consisting of Taiwanese salespeople from firms in the finance, insurance, information technology, direct selling, food and beverage, fashion, tourism, health care, and agriculture (all B2B) industries was used. Findings: Results indicate that expressive tie sales personnel tended to have lower ethical concern than their instrumental tie counterparts. Relative to instrumental tie sales personnel, mixed tie salespeople manifested less ethical concern in the scenario that was considered to be the most ethically nettlesome. Practical implications: Because guanxi affects sales personnel's ethical perceptions—thus indicating that they may compromise their organization for the good of their customer—it is important for companies to regulate guanxi building in terms of what can and cannot be done, with a range of flexibility and corresponding rewards and punishments. Ethical practices should be incorporated into salespeople's job responsibilities to encourage appropriate ethical decision making. Top management also needs to reinforce codes of ethics and demonstrate the importance of practicing ethical behavior. In addition, training programs should demonstrate how ethical conduct can be valuable for the salesperson, customer, and company even in the presence of guanxi. Clear guidance is important to both firms and salespeople. It could help salespeople become keenly alert about ethically problematic situations and make appropriate judgments about them. The end result could create an ethically healthier environment for business transactions and further avoid preference, fraud, and abuse.