Case Request Form

Sons and Daughters: Guanxi as a Double-Edged Sword

REF ID : UST071
HBP Product : ST71
Case Author : Prof Joon Nak CHOI and Marcella HO
PublicAction Date : 14.03.2019

Abstract

Guanxi, political connections in China, can provide unique competitive advantages, but can expose business leaders to regulatory and political risks in the region. The fictional case focuses on how U.S. banks in Hong Kong, a major financial center for the Chinese market, are pinned upon the horns of a dilemma. Banks can abide by the letter of the law and not win any business; alternatively, they can break the law, in spirit if not actually the letter, and win business at the cost of incurring legal jeopardy and possibly violating one’s own sense of morality by hiring the children of well-connected senior management of a Chinese business who can direct substantial mandates to the employers.

 

Learning Objectives

Through this case, students will be able to:

- understand grandxi (personal relationships) in Chinese businesses, which embody both opportunities and risks;

- distinguish the nuances between legally permissible and prohibited behaviors in the context of political connections; and

- navigate the difficult business environment which hidden cultural agenda

Company/Organization JT Fische - fictitious
Industry investment banking
Major Discipline International Business
Subject(s) Chinese business, grandxi, personal relationships, cultural issues, legal policy, opportunities and risks management, political connections, Foreign Corrupt Practices Act
Geography China, Hong Kong
Case Nature Fictitious
Page count of the Case 14
Teaching Notes 9
Publisher HKUST
Last Revision Date 20.02.2019