Summary New Yorker Dan Mintz moved to China as a freelance film director with no contacts, no advertising experience. DMG had emerged as one of China’s fastest growing advertising agencies. Mintz attributes his success in part to what the Chinese call guanxi: Guanxi means relationship and through business setting it can be better understood as connection. Guanxi has its roots in the Confucian philosophy of valuing social hierarchy and reciprocal obligations. Confucian ideology has a 2,000-year-old history in China.
Confucianism stresses the importance of relationships, both within the family and between master and servant. Confucian ideology teaches that people are not created equal. Today, Chinese will often cultivate a guanxiwang, or “relationship network,” for help. Reciprocal obligations are the glue that holds such networks together. If those obligations are not met-if favors done are not paid back or reciprocated-the reputation of the transgressor is tarnished, and he or she will be less able to draw on his or her guanxiwang for help in the future.
Guanxi is an important mechanism for building long-term business relationships and getting business done in China. There is a tacit acknowledgment that if you have the right guanxi, legal rules can be broken, or at least bent. Mintz established connections with two Chinese individuals with access to high ranking government officials. Who were Bing Wu and Peter Xiao. Bing Wu, who works on the production side of the business and Peter Xiao, comes from a military family with major political connections.
Together, these three have been able to open doors that long-established Western advertising agencies have not. They have done it in large part by leveraging the contacts of Wu and Xiao, and by backing up their connections with what the Chinese call Shi li, the ability to do good work. The ads used traditional Chinese characters, which had been banned by Chairman Mao. To get permission to use the characters in film and print ads-a first in modern China-the trio had to draw on high-level government contacts in Beijing.
They won over officials by arguing that the old characters should be thought of not as “characters” but as art. Later, they shot TV spots for the ad on Shanghai’s famous Bund. DMG has also filmed inside Beijing’s Forbidden City, even though it is against the law to do so. Using his contacts, Mintz persuaded the government to lift the law for 24 hours. As Mintz has noted, “We don’t stop when we come across regulations. ” There are restrictions everywhere you go. You have to know how to get around them and get things done. ”
A) Why do you think it is so important to cultivate Guanxi and Guanxiwang in China? Answer: Guanxi means relationship and through business setting it can be better understood as connection. Guanxi and Guanxiwang are essential to business in China. Guanxi is an important mechanism for building long-term business relationships and getting business done in China. Guanxiwang refers to the relationship network that companies cultivate. Both of these are important to the Confucian ethics – loyalty, reciprocal obligations, and honesty in dealing with others – that drives business in China.
Dan Mintz believes that Guanxi and Guanxiwang are important because they help companies get around restrictions that limit the ability of companies to function. So as China gives so much emphasis on Guanxi and Guanxiwang without these nobody in China can do business properly and successfully. B) What does the experience of DMG tell us about the way things work in China? What would likely happen to a business that obeyed all of the rules and regulations rather than trying to find a way round them as Dan Mintz apparently does? Answer: China is a country filled with people who do not do anything for free.
There is always a cost. Mintz cultivated his Guanxiwang by doing business with two young Chinese who had big connection; Bing Wu and Peter Xiao were the members of a very strong connection and relationship with high level govt. They were able to use the tradition Chinese characters, they were able to do it because they have high levels government contact in Beijing. Later they were able to shut down the bund to make the shoot drawing again on government contacts. They also persuaded the government to lift the law for 24 hours to allow shooting in Forbidden City in Beijing. A common law system is used here.
So by DMG experience we can say if you have strong connection with government and with powerful people of china and if you have good relationship with them, then it is very easy to avoid any restriction very smoothly and without any difficulty. If a business in China that obeyed all the rules and regulations, rather than trying to find a way around them as Dan Mintz apparently did, then it would be very difficult for the business to run smoothly as there are lots of rules and regulation in China. If they obey then it will be very difficult for them to be successful and reach to the top position. —–O—-
