Social and Behavioral Sciences Commons^™

Social Logic As Business Logic: Guanxi, Trustworthiness And The Embeddedness Of Chinese Business Practices, Wai Keung Chung, Gary Hamilton

Research Collection School of Social Sciences

This chapter explores the nature of Chinese business practices by looking at their social foundations. We argue that the use of an inter-subjective logic based on the norms of social relationships provides an institutional foundation for economic transactions in Chinese business settings. The logic of social relationships-or what we call guanxi logic-is embedded in daily practices of the Chinese business community. Rather than making economic decisions less "economic", relational rules embedded in guanxi places interpersonal business transactions within a prescriptive framework, thereby increasing the calculability of economic outcomes. Guanxi logic is, therefore, a socially meaningful way to enhance economic rationality. …