How much does interpersonal guanxi matter to business performance? The mediating role of relationship learning in an emerging market context

Abstract

PurposeBy adopting learning theory and a guanxi perspective, this study aims to investigate the effects of interpersonal guanxi (interpersonal networks or connections) and relationship learning on companies’ business performance when operating in a large emerging market.Design/methodology/approachUsing a sample of 294 sales managers and salespeople in the Chinese hotel sector, the authors empirically test the authors' arguments through a structural equation modeling (SEM) approach.FindingsThe authors' findings indicate that strong interpersonal guanxi tends to generate more positive business performance. Furthermore, the authors find that relationship learning plays a mediating role in the association between interpersonal guanxi and hotel companies’ business performance in a Chinese context. Finally, the authors empirically explore the moderating effect of inter-firm dependence on the contribution of interpersonal guanxi to relationship learning. Findings demonstrate that this effect varies significantly based on inter-firm dependence, with interpersonal guanxi exhibiting a greater positive impact if such dependence is high.Originality/valueThis study enriches our understanding of interpersonal guanxi and of how companies can enhance the companies' business performance in an emerging market context.