Guanxi In Hospitality

Dr SV Narayanan and Bhavani Mohan discuss the concept of Guanxi and the manner in which it may be put to use in the hospitality industry

Sound hospitality business, it is said, is all about relationship management. A beginning had been made with Customer Relationship Management (CRM), which is all about relating to our customers, anticipating their needs and sustaining their interest which persuades them to retain us as first choice for fulfilling their needs.

But this is only business-customer relationship. The hospitality business has other stakeholders as well. How do we integrate these other-stakeholders into a relationship management? It is necessary, therefore, to have a Stakeholder Relationship Management (SRM) to obtain a similar synergy as in the case of CRM. This is where the Chinese concept of 'Guanxi' steps in.

What Is Guanxi?

'Guanxi' literally means 'relationships' and stands for any type of relationship. In the Chinese business world, however, it is also understood as the network of relationships among various parties that cooperate together and support one another.

Guanxi is all about positive, concerned, productive relationships. The relating individuals and organisations are expected to work towards the common good. As, Guanxi is more than stakeholder database management or getting the secretary to send greeting cards, it is enriching compared with traditional relationship management.

Yet, Guanxi is a mixed blessing with its own set of strengths and weaknesses. It seeks to initiate, build and sustain business based on simple values of decency, courtesy, trust, dependability or reliability and, through frequent contacts, build sound emotional bonds.

Hospitality And Guanxi

Hoteliers know that these are the basics of quality service. On the other hand, Guanxi could be negative too: the inability to bargain with fellow members, possible obstruction to trade outside of the Guanxi, relationships ruined by adverse trade relationships and the risk of stoking crony capitalism. Therefore a delicate balance is essential.

Starting Out

Two steps are required to make inroads into a Guanxi and to gain acceptance within it:

• Relating to the Guanxi to gain acceptance
• Benefiting from the Guanxi

To gain acceptance and support, it would be useful to follow these guidelines:

• Enlist someone else's assistance to introduce you rather than using the self-introduction method.
• Begin with informal chats before serious business
• Make friends at different structural levels ? and not merely at the top or the immediately relevant
• Maintain contacts and friendly links
• Take the trouble to remember personal issues with sensitivity
• Ask sympathetic questions
• Be reciprocally helpful beyond business matters

Benefits

Successful integration into the Guanxi would enable one to have more friends than enemies, within office as well as outside. The friendly flow of information in the Guanxi helps to :

• Know the how-where-why
• Know the nature of the relationships between the members
• Understand obstacles better, the causes and ways to deal with them
• Solve unpleasant problems
• Avoid hidden obstacles

It would be obvious that Guanxi need not be used only to deal with Chinese businesses. As a careful use of the network of personal relationships, it can be embedded into any culture, organisation and even the hospitality industry. After all, it is merely a judicious balance of formal and informal relationships within and outside an organisation that promotes the concept of a fluid exchange information.

(Dr S V Narayanan is director-general and Bhavani Mohan is faculty of National Institute of Tourism and Hospitality Management, Gachibowli, Hyderabad)