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There is an ongoing debate over the transference of managerial and organizational skills, techniques, values and culture from developed countries to developing countries. We argue there is a false underlying [...]

Byline: Rick Molz, Xiaoyun Wang This paper examines the role of guanxi in the emergence of the Chinese institutional environment, institutional structure and business environment. In China, the institutional environment, institutional structure and resulting business environment are rapidly evolving and are not yet stable or predictable. Under these circumstances, guanxi is important to business executives in enacting successful business exchanges in the face of uncertainty and unpredictability. By using institutional theory and negotiated order theory, we argue that the use of guanxi will improve enterprise performance and shape the emerging institutional environment and resulting business environment.