Wine and dine, or a fine? : A multiple case study on how Swedish companies build and manage B2B guanxi in China

Since Sweden’s home market is relatively small, companies are forced to engage in international business. Researchers have stressed that companies with a small home market should find new markets to gain benefits which companies with large home markets possess. The Chinese market has great potential, which results in numerous Swedish companies entering and establish business operations in China. Swedish companies need to address the unique aspects of conducting business in China. One of the unique aspects which has been notably concerned is the phenomena of guanxi. Guanxi is well grounded in the Chinese business culture and can be perceived as relationship building. Previous research has shown upon limited research regarding B2B guanxi in the Chinese-Western business relationships. Hence, the purpose of this thesis, is to provide a deeper understanding of how Swedish companies build and manage B2B guanxi in China and explore its potential risks and benefits. To achieve the purpose of this thesis, three main concepts have been identified- building stages of guanxi, management strategies of guanxi and risks and benefits of guanxi. These create the theoretical approach of the study. By using a qualitative research method and a deductive approach, a deeper understanding regarding guanxi in relation to Swedish companies can be acquired. The data is collected from five companies in different industries, conducting business on the Chinse market. Practical and theoretical implications have arisen from this study, contributing to the theoretical synthesis of B2B guanxi and provided valuable insights on how Swedish companies can use B2B guanxi. Based on the analysis, the outcome of this study suggest guanxi is not a prerequisite for conducting business on the Chinese market. Although, it can be seen as a tool to ease relationship building and business operations. The empirical findings indicate the relevance of B2B guanxi and have identified new factors. The key findings imply Swedish companies use intermediaries to a larger extent in the building staged and as a management strategy. While gift-giving and favour exchange are less used management strategies. Smoother business operations are perceived as an additional benefit. Whereas relationships becoming too personal and a person taking the relationships with them when leaving the company are additional risks ought to be considered new findings. The study can be valuable for Swedish companies that wish to enter or have entered the Chinese market.