G Model WORBUS-623; No. of Pages 9 Journal of World Business xxx (2013) xxx–xxx Contents lists available at SciVerse ScienceDirect Journal of World Business journal homepage: www.elsevier.com/locate/jwb Toward a gatekeeping perspective of insider–outsider relationship development in China Hongzhi Gao a,*, John G. Knight b, Zhilin Yang c, David Ballantyne b a Victoria University of Wellington, School of Marketing and International Business, P.O. Box 600, Wellington 6140, New Zealand Otago University, Department of Marketing, P.O. Box 56, Dunedin, New Zealand c City University of Hong Kong, Department of Marketing, Academic Building 1, City University of Hong Kong, 83 Tat Chee Avenue, Kowloon, Hong Kong b A R T I C L E I N F O A B S T R A C T Keywords: Business networks Chinese–Western relationships Guanxi Reciprocal gatekeeping Adaptive gatekeeping Symbolic gatekeeping The aim of this study is to explore how relational gatekeepers facilitate the development of relationships between out-group members and in-group members in an intercultural business environment, and to bring to the surface the inter-cultural and inter-networked nuances of guanxi. Based on interviews with managers from China and New Zealand, the workings of Chinese–Western business relationships and the roles of relational gatekeepers are explored. Empirical findings reveal three key gatekeeping roles, namely reciprocal, adaptive and symbolic, used for enabling the development of intercultural business relationships. We offer a structural hole explanation of intercultural gatekeeping in a seemingly contradictory and irreconcilable inter-networked environment. Our study also provides strategic implications of intercultural gatekeeping for foreign outsiders and recommends practical approaches for reaching the decision makers and resource integrators in jealously protected local business networks. ß 2013 Elsevier Inc. All rights reserved. 1. Introduction China has long been known as a ‘relationship oriented society’ where complex overlapping social networks play a significant role in the conducting of business life (Farh, Tsui, Xin, & Cheng, 1998; Gu, Hung, & Tse, 2008; Park & Luo, 2001; Parnell, 2005; Styles & Ambler, 2003). The term used in describing these Chinese relationships and networks is guanxi. A guanxi network is ‘an exclusive circle of members’ (Wang, 2007, p. 83). Guanxi networks are usually immediate or extended family, or connected by neighborhood or locality (e.g., same town), education (e.g., classmates and alumni or teachers and students), co-workers (e.g., colleague or superior-subordinate), or other connections developed over years that provide protection, care and nurturing to individuals (Fan, 2002; Luo, 1997a; Parnell, 2005). While these guanxi connections may provide social safety nets for people wellconnected within pre-existing Chinese networks, they act as a natural barrier for all newcomers, Chinese or not (Gao, Ballantyne, & Knight, 2010). Research on guanxi in the setting of international business has flourished in recent years (Buckley, Clegg, & Tan, 2006; Chua, * Corresponding author. Tel.: +64 4 463 6914; fax: +64 4 463 5231. E-mail addresses: Hongzhi.gao@vuw.ac.nz (H. Gao), john.knight@otago.ac.nz (J.G. Knight), mkzyang@cityu.edu.hk (Z. Yang), david.ballantyne@otago.ac.nz (D. Ballantyne). Morris, & Ingram, 2009; Su, Yang, Zhuang, Zhou, & Dou, 2009; Yang & Wang, 2011; Zhou, Wu, & Luo, 2007), particularly after the rise of China as an economic power in the global market. Researchers have recognized general behavioral norms of guanxi relations such as ren qing (favor), gan qing (emotions or affect), mian zi (face work), bao (reciprocity) and xin ren (trust) (Jansson, Johanson, & Ramström, 2007; Lee & Dawes, 2005; Leung, Lai, Chan, & Wong, 2005; Wong, 1998). Understanding of intercultural guanxi interactions (i.e., how foreign managers go about developing guanxi with Chinese counterparts) is still largely missing. As Western trade with China continues to expand, intercultural guanxi poses a critical dilemma when developing Chinese–Western business relations (Gao et al., 2010). The key to this intercultural guanxi process is to reduce quandaries for foreign outsiders (regarding stepping into the closely-knit guanxi networks), and also the risks for guanxi insiders (regarding stepping out of the safety of guanxi networks to build trusting relationships with outsiders) in an intercultural and inter-networked zone. The current study aims to explore the workings of a uniquely positioned middle force, namely guanxi gatekeepers, in order to reveal critical aspects of intercultural guanxi dynamics. The structure of this paper is as follows. First, the guanxi, international business and organizational boundary spanning/ gatekeeping literature streams are reviewed to establish key knowledge gaps relating to intercultural guanxi, and to provide a basis for developing research questions. The workings of guanxi networks and the role of gatekeepers in opening up business 1090-9516/$ – see front matter ß 2013 Elsevier Inc. All rights reserved. http://dx.doi.org/10.1016/j.jwb.2013.06.002 Please cite this article in press as: Gao, H., et al. Toward a gatekeeping perspective of insider–outsider relationship development in China. Journal of World Business (2013), http://dx.doi.org/10.1016/j.jwb.2013.06.002 G Model WORBUS-623; No. of Pages 9 2 H. Gao et al. / Journal of World Business xxx (2013) xxx–xxx relations between guanxi insiders and foreign outsiders are established as the central problem of the research. Then the research methodology is reported in a specific research context – Chinese–Western business relationships and interactions. Next, the research findings reveal three key roles that guanxi ‘gatekeepers’ play in intercultural business relationships. Finally, the study offers a structural hole explanation of ‘passing through the guanxi gate’ in what is a conflicting inter-cultural and ambiguously inter-networked environment. 2. Guanxi and international business Literally, guan (‘ ’) in Chinese means ‘gate’, and xi (‘ ’)means ‘connections’. Guanxi has recently gained its prominence as a legitimate socio-cultural construct in Western mainstream literatures of cultural anthropology, sociology, social psychology, political science, marketing, management and international business (Bian, 2001; Chen & Chen, 2004; Chua et al., 2009; Farh et al., 1998; Gu et al., 2008; Hwang, 1987; Jacobs, 1982; Lovett, Simmons, & Kali, 1999; Tsang, 1998; Xin & Pearce, 1996; Yang, 1994). Literature in these various disciplines provides diverse perspectives on guanxi, including viewing it as: ‘special personal relationships’ between individuals in social settings (Yang, 1994), the process of social exchange (Hwang, 1987), a form of social capital (Bian, 2001), or particularistic ties in power exchange in political settings (Jacobs, 1979). From an institutional point of view, guanxi can be viewed as a substitute for formal institutions (Xin & Pearce, 1996). From a resource-based theory perspective, guanxi is treated as a valued organizational resource (Luo, 1997b). From a transaction cost perspective, guanxi-based exchanges lower transactions costs (Standifird & Marshall, 2000). From a process and network point of view, guanxi represents the process of reaching network incumbents who are not directly related, facilitated by the help of others (Fan, 2002). Despite varying perspectives of guanxi in the literature, a common agreement appears to be that guanxi is social (Hwang, 1987; Yang, 1994), ‘informal’ (Parnell, 2005), ‘particularistic’ and ‘personal’ by nature, and embedded in ‘closed’ and exclusive networks (Chen & Chen, 2004; Gao et al., 2010; Wang, 2007; Yang, 1994). Despite voluminous literature on guanxi in the past, most studies have been conducted among Chinese firms (for example, Ambler, Styles, & Wang, 1999; Farh et al., 1998; Guo & Miller, 2010; Park & Luo, 2001; Xin & Pearce, 1996) or as part of a comparative study involving other country contexts (for example, Alston, 1989; Wiley, Wilkinson, & Young, 2005). A further scrutiny of the guanxi literature reveals that only 34 of the articles were found to have specifically addressed guanxi in regard to the interfacing between foreign cultural norms/networks and Chinese cultural norms/ networks in cross-border relationships. By closely examining these 34 articles, we found that most studies recognize the role of intercultural guanxi in enhancing business performance and overcoming roadblocks in the Chinese market (for example, Abramson & Ai, 1999; Chadee & Zhang, 2000; Cremer & Ramasamy, 2009; Luo, 1997a). Three articles also discuss the ethical implications for Western firms in engaging with Chinese partners in a guanxi way (for example, Fan, 2002; Lovett et al., 1999; Su & Littlefield, 2001). However, only five articles directly address the intricacy of the process of intercultural guanxi development between Western managers and their Chinese counterparts (Barnes, Yen, & Zhou, 2011; Matthyssens & Faes, 2006; Styles & Ambler, 2003; Worm & Frankenstein, 2000; Yen, Yu, & Barnes, 2007). Extant research more or less points in the direction of ‘compromise’ (Yen et al., 2007), a ‘balancing act’ (Matthyssens & Faes, 2006), or ‘reconciling the interests of the individual and the firm’, and ‘pursuing paradox and opposite’ (Styles & Ambler, 2003). The importance of a guanxi hu (relationship broker, personal or institutional) in facilitating the development of business relationships has been recognized but is largely under-explored in past business studies (Davies, Leung, Luk, & Wong, 1995; Park & Luo, 2001). 3. Organizational boundary spanning/gatekeeping and network theory As our research inquiry lies in the development of intercultural guanxi and insider–outsider relationships, this requires in-depth understanding of the middle force that brokers or bridges the relationship between guanxi insiders and guanxi outsiders, socalled guanxi-oriented boundary spanners (Su et al., 2009). Organizational boundary spanners facilitate information exchange between the organization and the environment, reconcile the conflict between organizations and play an essential role in facilitating interactions between people across departments within the organization, or across organizational boundaries (Aldrich & Herker, 1977; Au & Fukuda, 2002; Ferguson, Paulin, & Bergeron, 2005; Floyd & Wooldridge, 1997; Friedman & Podolny, 1992; Haytko, 2004). Floyd and Wooldridge (1997) found that middle managers’ strategic influence arises from their ability to mediate between internal and external environments. Another concept closely related to boundary spanning is gatekeeping (Allen, 1977; Allen, Tushman, & Lee, 1979; Gemünden & Walter, 1997; MacDonald & Williams, 1993). According to Allen (1977, p. 703), gatekeepers are ‘‘individuals who maintain consistent, ongoing contact outside their organizations, who understand the way in which outsiders differ in their perspective from their own organizational colleagues, and who are able to translate between the two systems.’’ From a network theory perspective, boundary spanners and/or gatekeepers occupy a critical position within or between organizational networks (Burt, 1992, 2000). Their positions can be understood as structural-hole positions. A structural hole is ‘a relationship of nonredundancy between two contacts. . .the hole is a buffer. . .’ (Burt, 1992, p. 18). Structural holes provide ‘‘entrepreneurial opportunities for information access, timing, referrals, and control’’ (Burt, 1992, p. 2). Structural hole actors are described as people skilled in building the interpersonal bridges that span structural holes (Burt, 1999). Following the logic of structural holes, business interactions set off an interactive process of spanning boundaries of many different networks among business actors (Xiao & Tsui, 2007). Despite these established understandings of boundary spanners and gatekeepers in the organizational network context, it seems largely unknown how relationship brokers operate in an intercultural network context. It is a misconception that a guanxi network is merely an exclusive, static, and a tradition-bound system (Yang, 1994). A guanxi network can be enlarged through interactions between insiders and outsiders in a Chinese cultural setting (Guo & Miller, 2010; Park & Luo, 2001). A question of great interest is: Can intercultural interaction in a Chinese–Western business context lead to an enlargement of traditional guanxi networks? In other words, how can interactions between the insiders’ circle (of Chinese local networks in the Chinese market) and the outsiders’ circle (of foreign business networks in the Chinese market) be enjoined or bridged, in spite of cultural barriers? 4. Research method In order to investigate workings of guanxi networks and the roles assumed by guanxi gatekeepers, we used the critical incident technique (CIT). This technique involves analyzing critical incidents reported by the informants in order to uncover emerging Please cite this article in press as: Gao, H., et al. Toward a gatekeeping perspective of insider–outsider relationship development in China. Journal of World Business (2013), http://dx.doi.org/10.1016/j.jwb.2013.06.002 G Model WORBUS-623; No. of Pages 9 3 H. Gao et al. / Journal of World Business xxx (2013) xxx–xxx themes and patterns (Bitner, Booms, & Tetreault, 1990). The goal of this research is to investigate how relational or guanxi gatekeepers facilitate the development of insider–outsider relationships in an inter-networked setting. The critical incident technique enables us to gain in-depth knowledge of the process of guanxi gatekeeping and derive new typologies of guanxi gatekeeping. Respondents for this study are relational gatekeepers who have rich experience in connecting and facilitating intercultural business exchange between Chinese local business/social networks and foreign organizational networks. Respondents were identified from a convenience sample developed from a New Zealand-based global expatriate network database. New Zealand provides a valuable country context for this study because New Zealand is the first Western developed country to sign a free trade agreement with China, and has a large cultural distance from the Chinese (Hofstede, 1991). We did not limit our sample to specific industries as we aimed to obtain emergent themes from diverse views. Our sample also offers ample variability with respect to ownership (i.e., foreign, Chinese, and joint) and size of firm (see Table 1). Thirty-three interviews were conducted: 30 in China (15 in Shanghai, 8 in Beijing, 4 in Wuhan, and 3 in Tianjin), and 3 in Auckland, New Zealand. Based on research questions and insights from previous research, an English version interview guide was designed first and then translated into Mandarin by two bilingual authors. All critical incidents were investigated with aid of an interview guide. To ensure conceptual equivalence of interview questions across cultures, we tested the cultural salience of the interview guide (Bhopal & Hunt, 2003). Specifically, we pretested our interview questions with five representatives of each of the two cultural groups (New Zealand vs. Chinese) in the sample to define issues and questions as salient and meaningful within each of the two cultures in our study. Interviews took place at the premises of the respondents or other convenient venues. Interviews ranged from 60 to 120 minutes, and in most cases were conducted in English. Mandarin was used wherever applicable to capture the indigenous meaning of what Chinese informants said. Twenty-two interviews were taperecorded after gaining permission from the informants and later transcribed. Otherwise, comprehensive field notes were taken during the interviews. The field notes allowed the researchers to record the conversations accurately and also helped discover unexpected insights or opinions (Eisenhardt, 1989). Respondents were asked to describe the critical incidents connecting guanxi outsiders with insiders during an intercultural business exchange. Probing questions were used to guide respondents to discuss the purpose of the business connection, obstacles, constraints, risks, processes, prior and new emerging relationships, and resources, skills, and relational knowledge required to facilitate the business connection. At the end of the interview, we asked the respondents to reflect upon any key relational principles, social and cultural values that helped the connection process. The number of informants was not predetermined but a result of snowballing and saturation of information and insights for addressing the research questions. The analytical process consisted of repeated, careful readings and sorting of the incidents into groups and categories according to similarities in the reported experiences before the findings were finalized and reported (Bitner et al., 1990). Topic sensitivity (Roy, Walters, & Luk, 2001) and social desirability (Adler, Campbell, & Laurent, 1989) impose constraints on research in China. To address these problems, the interviewer(s) Table 1 A brief profile of informants. Ref. no. Location Size of firma Ownershipb Sector Nationalityc Title of informant 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Auckland Auckland Auckland Shanghai Shanghai Shanghai Shanghai Shanghai Shanghai Shanghai Shanghai Shanghai Shanghai Shanghai Shanghai Shanghai Shanghai Shanghai Beijing Beijing Beijing Beijing Beijing Beijing Beijing Beijing Tianjin Tianjin Tianjin Wuhan Wuhan Wuhan Wuhan SME SME SME L L L L L L L SME SME SME SME SME SME SME SME L L L L SME SME SME SME L SME SME L SME SME SME F F F F F F F F J C F F J J J C C C F F F F F F F J J C C J F C C Meat Meat Meat Dairy Insurance Market research High-tech Manufacturer Market research Hotel Dairy Engineering Wine logistics/consulting logistics/consulting Management consulting logistics/consulting Clothes Exporting Media Law service Refinery chemicals Civil work equipment Law service Catering PR service PR service Fitness service Building technologies Export and import agent Wool Telecom manufacturing Law service Machine & Equipment Textile C NZ NZ NZ NZ NZ C HK NZ HK C NZ NZ C NZ C C NZ C C C NZ NZ NZ NZ NZ C C C C C C C Marketing Manager Senior Export Manager Managing Director Managing Director Vice President Managing Director Marketing Manager Executive Director Director of Sales & Marketing General Manager Sales Representative CEO Managing Director General Manager Consultant Marketing Manager Managing Director Business Development Executive Junior staff Marketing Manager China Market Manager Partner Owner Director General Manager Managing Director CEO General Manager General Manager Manager of Sales Department General Manager Vice General Manager General Manager a b c L, large and SME, small & medium. F, foreign; C, Chinese; and J, joint. NZ, New Zealand; C, Chinese; and HK, Hong Kong. Please cite this article in press as: Gao, H., et al. Toward a gatekeeping perspective of insider–outsider relationship development in China. Journal of World Business (2013), http://dx.doi.org/10.1016/j.jwb.2013.06.002 G Model WORBUS-623; No. of Pages 9 4 H. Gao et al. / Journal of World Business xxx (2013) xxx–xxx deliberately asked Chinese respondents to use their group as reference rather than speaking their own mind (Usunier, 1998). In addition, the bilingual background and intercultural experiences of researchers also helped overcome the above problems (Brislin, 1976). A potential limitation of the CIT analysis method is the personal bias of the researchers during the analysis. This limitation has been carefully considered and dealt with by the post-interview check by informants on the analysis and interpretation made by the researchers and the iterative discussion of the research findings between the researchers and audiences in academic and business conferences/seminars. 5. Results Our research findings show that guanxi gatekeepers are required when people from the insider guanxi circle are not relationally connected to those who are outside, or have conflicts with each other over certain issues. Guanxi gatekeepers constantly make direct referrals and connections for others as well as connecting through other gatekeepers. Connecting others and being connected by others are important parts of building one’s own guanxi networks. These gatekeepers can be Chinese expatriates working for foreign companies at their corporate headquarters, Chinese local managers working for foreign companies in China, local distributors, local brokers and business partners, Chinese clients and their ‘friends’, foreign and Chinese government officials in China, or foreign brokers. Our empirical analyses also suggest that some Chinese managers in foreign-owned companies are in charge of acquiring, crosschecking and filtering information that is only made available to guanxi insiders. These managers can be viewed as a particular kind of guanxi gatekeeper. According to a Chinese manager of a New Zealand export company (R-1), he often used personal contacts in China to investigate buyers’ sources of supply. A Chinese marketing manager of a Multinational Company (MNC) in Shanghai (R-7) related an incident revealing how her personal relationship with a Chinese manager in the client company impacted on deal making. At the time, R-7’s company’s price offer was slightly higher than that of the major competitor. This Chinese manager from the client company gave her an implicit signal – if R7’s company could decrease their price to the level of the competitor, his company would buy R-7’s products. This signal was the key to the final deal reached between R-7’s company and this client. Our study also found that Chinese middle-level managers in some foreign owned businesses (R-1, R-7, R-11, R-19, R-20) were responsible for crosschecking information gained from inside sources to get a relatively true and complete story of what is happening in their market. One reason for market ‘gossip’ is that one party may not get authentic stories from others (due to guanxi barriers). But when a manager talks to different people, he/she would get a relatively complete understanding of what happened. R-25, a New Zealand manager in Beijing, observed that many people he knows in China like to tell him that they have a lot of guanxi connections. Yet, he needs to check out how genuine these guanxi links are, and determine how valuable they might be. Guanxi gatekeepers do not always report the information they gain from guanxi insiders to outsiders – they filter the information. For example, R-11, a Chinese manager working for a New Zealand engineering firm in China was asked if his Chinese clients bribed some government officials in order to bypass bureaucratic barriers. He would fully understand this situation if there was no other way of circumventing these government barriers. However, he felt very diffident about asking New Zealand suppliers to reduce their prices to allow for ‘bribery’ expenses. He could only say that the ‘extra’ expenses for importing are getting higher in China but he would then say, ‘‘I do not really want to tell you what they are as they are not pleasant to know about’’. When he said this, some suppliers accepted his ‘explanations’ as they knew China was not yet a wellregulated market and has different ethical standards than New Zealand. Differing from the past studies of organizational boundary spanning and technical gatekeeping derived from the Western literature, our study draws insights in relationship management from the evolving rules of interactions in the emergent Chinese– Western business networks and also the etymological meaning of guanxi in Chinese culture. We apply the term guanxi gatekeeping to conceptualize the function of relationship brokers in facilitating guanxi outsiders ‘in’ and ‘out’ of guanxi dynamics through operating ‘invisible’ gates. According to Oxford Dictionaries Online (2013), gatekeeping is defined as ‘‘the activity of controlling, and usually limiting, general access to something’’. A gatekeeper is referred to as ‘‘an attendant employed to control who goes through a gate; a person or thing that controls access to something’’. Etymologically, the combination of guan (‘ ’: gate), and xi (‘ ’: connections) implies special connections associated with metaphorical gates. Therefore, guanxi gatekeeping can be understood as ‘‘the activity of controlling and/or limiting outsiders from gaining access to resources that are supposed to be shared among insiders in a close-knit circle through the guidance and control of a middle party that connects to both insiders and outsiders’’. Guided by this ‘guanxi’ perspective, three gatekeeping topologies, namely reciprocal gatekeeping, adaptive gatekeeping and symbolic gatekeeping, are constructed in order to make sense of the empirical observations. 5.1. Reciprocal gatekeeping Relationship management in both the Western and Chinese traditions places its central focus on trust, commitment and reciprocity (Blau, 1968; Gulati, 1995; Isobe, Makino, & Montgomery, 2000; McKnight, Cummings, & Chervany, 1998; Park & Luo, 2001; Xin & Pearce, 1996). Once the beliefs or feelings of trust, commitment and reciprocity about the other party are established or gained, the relational and cooperative behavior would follow (Morgan & Hunt, 1994). Our study shows that the trust, commitment and reciprocal arrangements between guanxi insiders and outsiders cannot be conveniently established without the coordination and facilitation of the guanxi gatekeepers. A Chinese manager of an intermediary in Shanghai (R-14) described his gatekeeper role this way: When it comes to the operational level, my laowai (foreign) colleague cannot do it, neither can the foreign buyer. Only Chinese can do this. For specific operations, I am in charge. . .for Chinese suppliers, my laowai colleague is the ‘boss’ because Chinese people have a general respect of foreigners. In addition, for foreign customers, it is easy for my laowai colleague to communicate with them. Trust is easy to establish between foreigners because they have similar cultural backgrounds, value systems and ways of interacting. My laowai colleague and I have different roles to play. This is how we cooperate. In this case, due to collaboration between the New Zealand partner (R-13) and the Chinese partner (R-14) in the joint venture, their team acts as a ‘trust’ bridge between Chinese and Western clients. R-4, a New Zealand-origin manager of a New Zealand export company, described the role of his Chinese employees and agents in finding who to visit and who to trust. Another example given by R-2 (a New Zealand-origin manager in a New Zealand exporting company) regarding his Chinese colleague, Shenjin (pseudonym of R-1), in rebuilding and strengthening the foreign party’s Please cite this article in press as: Gao, H., et al. Toward a gatekeeping perspective of insider–outsider relationship development in China. Journal of World Business (2013), http://dx.doi.org/10.1016/j.jwb.2013.06.002 G Model WORBUS-623; No. of Pages 9 H. Gao et al. / Journal of World Business xxx (2013) xxx–xxx relationship with a Chinese client, demonstrates the value of gatekeepers in reducing conflicts and finding reciprocal solutions in an intercultural relationship crisis. Similarly, R-24, a New Zealand-origin manager in Beijing, described the role of his Chinese local staff in networking and smoothing over difficult intercultural relationships. As she put it, ‘‘We [laowai/foreign managers] do not do the Chinese-style entertaining thing. It should be local staff who do that networking and try to smooth the water and make it [the relationship] happen.’’ R-14, a Chinese partner of a joint venture in Shanghai, described his approach in reducing mutual distrust between Chinese customers and his foreign partner this way: Some information that your partner thinks is confidential, you think you have to tell your customers to show your trust. In this case, you are taking a risk; if the deal is not done, then you will be in trouble. . . most cases I have to take the risk; both parties want to be risk free, want to be protective. . . I would like both of them to try to understand [the situation] from the other’s point of view. Summarizing these empirical findings, we see that guanxi gatekeepers assure insiders that their support of outsiders (for example, disclosing inside or ‘hidden’ information) will be reciprocated in the future. This assurance function can be called ‘reciprocal gatekeeping’. For example, a key role of marketing and purchasing managers of foreign organizations in China is to identify and look after the personal interests of their Chinese clients. Reciprocal exchange and long-term guanxi are nurtured by experienced guanxi gatekeepers. According to R-28, a Chinese manager of a Chinese State Owned Enterprise (SOE), the basic principle in dealing with Chinese clients is to target their personal interests. As a Chinese sales representative of a New Zealand engineering company (R-11) reported, ‘‘in order to indicate our ‘special care’ to people from Chinese factories, we sometimes reimburse extra ‘expenses’ to them. My CEO normally has no problem with this as he knows this is a way to establish a ‘special’ relationship with them, which will be reciprocated by them in future’’. The fundamental issue is that guanxi insiders know that gatekeepers would not make use of them without reciprocation, and therefore they are willing to work with outsiders directly or indirectly through facilitation of the gatekeepers. According to a New Zealand-origin manager in a foreign broker company in Shanghai (R-13) who identified himself as an ‘informed’ guanxi outsider or a guanxi gatekeeper as well: We respect the role of guanxi brokers (in China). We won’t necessarily try to cut them out. We would say to this person, we have to deal with his/her guanxi connections directly in the interest of business and in the interest of quality, whatever.. If they do not agree, we will just go back and not go there. We will not force it . . . If we discard them, that will damage the relationship with the target party [Chinese clients] because they are friends of the intermediary [broker]. At the end of the day, we want to have a harmonious business. This foreign guanxi gatekeeper also gave an example of how he looked after one of his Chinese guanxi gatekeepers: He never ever asked for something from us. Of course, we take him out for dinner, and we always pay the ‘bills’ related to our business incurred by him. We buy some gifts. We look after his transportation expenses. I think he is also getting something from the other side. That is fine. We don’t now need him anymore. Someone has done something for you. You respect it. Until they screw it, otherwise you keep that relationship. 5 Initial guanxi insiders and outsiders may themselves become gatekeepers after seeing the benefits that go with being a gatekeeper. For example, Chinese clients of a New Zealand-origin representative of a New Zealand company (R-12) started to introduce their ‘friends’ to informant R-12 after some successful experiences with R-12. This referral by the Chinese clients can be understood as a move toward a change of network position from guanxi insiders to gatekeepers. According to a New Zealand-origin manager (R-13), by involving local guanxi brokers on a continuing basis, the foreign party creates their own guanxi networks. Changes of network position (between outsiders and insiders) represent the key stage of market entry for a foreign firm in a local market (Gao, Ballantyne, & Knight, 2012; Johanson & Vahlne, 2009), and occur through developing new, or dropping existing, relationships or changing patterns of interaction or interdependencies in existing ones (Ford & Mouzas, 2008). 5.2. Adaptive gatekeeping In intercultural interactions, guanxi gatekeepers make adaptive responses on behalf of guanxi outsiders to appease the expectations of guanxi insiders. The adaptive responses are particularly critical when guanxi rules or norms conflict with rules or norms of foreign outsiders. Through gatekeepers’ creative ‘translations’ of conflicting business norms in the connecting process both Chinese locals and foreign parties feel less threatened by exotic ideas and influences from the other side. For example, R-1, a Chinese manager of a New Zealand company, clearly identified his intermediary role between Chinese clients and foreign managers: translating the requests of Chinese clients into a form that foreign managers could accept comfortably and without any feeling of disgrace. Through his actions, foreign managers gain more understanding of Chinese markets and the subtleties of guanxi networks. An example given by R-7 (a Chinese marketing manager of a multinational in Shanghai) related to arranging for Chinese clients to attend overseas conferences in combination with a sightseeing trip; this arrangement was to circumvent the firm’s corporate policy that Chinese clients should not be invited to New Zealand for sightseeing trips. R-24, a New Zealand-origin director of a PR company in Beijing, remarked that his former boss, an American Chinese, applied tact when negotiating with Chinese counterparts. The key is to voice the foreign party’s objective from the position of the Chinese party and to smartly package what the foreign party wants, in a way that is perceived to be more beneficial to the Chinese party. This has to be based on an in-depth understanding of each other’s position. According to R-11, a Chinese manager in a foreign-owned company, he gradually introduced some Chinese business concepts including guanxi to his foreign bosses and partners. According to R-1, a Chinese manager, the common mistakes that foreign business people have made in China are that they do not understand the importance of xian zuo ren, hou zuo shi (show a ‘correct’ personality first, before discussing business). R-11’s adaptive translation of culturally bounded concepts reduces the negative impacts of coercive power and expert power, and the confrontational approach that some foreign parties would otherwise pursue or adopt in Chinese markets. These guanxi gatekeepers create a ‘correct’ personality for foreign businesses so that Chinese counterparts are more likely to respond favorably. Care is needed however in managing such adapted relationships. R-11, a Chinese Manager, related an incident in which he was asked by his guanxi contact in a local company to secretly ‘recruit’ key technicians from a local competitor with which R-11 has guanxi. In response to this request, R-11 provided a list of names that he thought might help this guanxi contact. He stopped short of Please cite this article in press as: Gao, H., et al. Toward a gatekeeping perspective of insider–outsider relationship development in China. Journal of World Business (2013), http://dx.doi.org/10.1016/j.jwb.2013.06.002 G Model WORBUS-623; No. of Pages 9 6 H. Gao et al. / Journal of World Business xxx (2013) xxx–xxx doing more and asked this guanxi contact to find other channels to achieve his purpose. To him, an appropriate adaptive response to such a ‘difficult’ request for favor was more important than the actual delivery of the favor as the actual delivery could put him at risk of breaching corporate policy, business ethics or the law. In short, gatekeepers skillfully engage in what we term ‘adaptive gatekeeping’. In this process, gatekeepers adaptively translate the request from one side into a way that the other side can accept comfortably and without feeling that they have been forced into doing something dishonorable, illegal, or against their own cultural norms and values. 5.3. Symbolic gatekeeping An insightful gatekeeper is able to capture implicit and emotional signals from guanxi insiders and symbolically respond to these guanxi signals in a manner that guanxi outsiders are not able to comprehend and respond to. Many informants in our study observed that Chinese people do not want to lose face. It is difficult to get Chinese counterparts to openly express their true thoughts and feelings. Therefore, according to R-1, a Chinese manager, his role is to get his Chinese clients to talk about some things that they do not feel comfortable communicating to foreign managers directly. R-13, a New Zealand-origin manager living in China for more than 10 years, put it this way: Because I speak the language (Chinese), I find some human things coming out of the business (meetings). For example, I heard some Chinese say, ‘I felt a bit bad about that, but we had to get this done . . .’ The translator might just ignore this important ‘cue’ that could be very important for the business. The translation quite often does not make the other side human. There is so much lost in translation. In general terms, a symbolic response to emotional signals from guanxi clients is important in nurturing long-term guanxi relationships. According to R-1, a Chinese manager, his Chinese clients and he normally call each other ‘good friends’ and ‘good brothers’. They all know these symbolic terms are not the same as friends and brothers in purely social (non-business) contexts. Conveying a ‘father-like’ role to employees (according to R-23, a New Zealand-origin owner of a Western-style café chain in Beijing), treating employees as her own children (according to R-9, a New Zealand-origin director of a large international hotel chain in Shanghai), and referring to business associates and customers as ‘brothers’ (according to R-12, a New Zealand-origin manager, and R-1, a Chinese manager) indicate that business people, regardless of whether Chinese-origin or foreign-origin, endeavor to develop their business relationships toward the Chinese concept of jia or family, and maintain these special relationships. Through communicating this way, people feel close to each other. Other symbolic acts revealed in this study include gatekeepers establishing a symbolic guanxi image for guanxi outsiders. Gatekeepers endeavor to establish a ming bai ren (‘knowing how to play guanxi games’) reputation and demonstrate their wide ren mai (guanxi connections), in order to reduce insiders’ opportunistic behavior against outsiders and to attract support for outsiders. For example, R-11, a Chinese manager of a foreign firm in Shanghai, reported that his guanxi with the Managing Director of a Chinese client company may not necessarily gain extra benefits for his business, but at least it would prevent him from being ‘bullied’ by lower level managers in the Chinese client company. According to him, a foreign entrant or outsider in China has to have a direct channel through which they can reach Chinese top management. According to R-11, R-16 and R-25, the involvement of guanxi gatekeepers lessens the negative impact of the Chinese bureaucracy on the foreign party. The impression that the foreign party has some ‘good’ links with other powerful guanxi insiders reduces the likelihood of short-term opportunistic behavior on the part of Chinese clients. Underlying the above discussion of gatekeepers is the symbolic representation of guanxi outsiders when working with insiders, in what can be called ‘symbolic gatekeeping’. Due to the existence of gatekeepers, guanxi outsiders have less exposure to any of the ‘strong-weak ties’, ‘conflicting obligations’ and ‘dynamic network learning’ dilemmas in Chinese–Western business relationships (Gao et al., 2010). Symbolic interaction is apparent when gatekeepers identify themselves with some signs or symbols (Blumer, 1969) such as ‘comfort blanket’ (R-24), ‘open[ing] doors’ (R-15) for foreign outsiders, a trust ‘bridge’ (R-13 and R-14) between insiders and outsiders, or calls of ‘laodi [brothers]’ (R-1 and R-12), father (R-23) or treating junior team members as ‘children’ (R-9) when interacting with guanxi insiders. These symbolic terms are social objects, and only meaningful in the context of social interactions (Sharon, 2007, pp. 48–49). These symbols are intentionally used (by gatekeepers) to represent and communicate special (relational) meanings to others (Sharon, 2007, pp. 49–50). Gatekeepers also engage insiders with mianzi/face work and through other social activities such as wining-and-dining together which can be seen as rituals in Chinese business/social life. Gatekeepers create a good guanxi atmosphere for social interactions between insiders and outsiders. 6. Discussion and conclusions This study discloses that changes of actors’ positions in intercultural relationships occur when inside information is transferred from guanxi insiders to outsiders, and new actors enter into the closely guarded guanxi networks and others exit. Actors may perform as gatekeepers at one time but may act as insiders or outsiders at other times, depending on the purpose of the interactions and the interpretation of their own and others’ positions in network dynamics. In other words, the networked position of guanxi gatekeepers is relative and evolving. This notion of guanxi gatekeeping resonates with the dynamic view of business networks (Fletcher & Fang, 2006; Gao et al., 2012; Johanson & Vahlne, 2009). The present study has revealed that gatekeepers connect insiders with outsiders, even though there is little general trust (applicable to the outsiders’ circle) or particularistic trust (applicable to the insiders’ circle) between insiders and outsiders (Luo, 2005). The facilitation is largely achieved through the reciprocal, adaptive and symbolic behavior that gatekeepers exchange with insiders on behalf of outsiders. In our view, the middle cultural ground between the Chinese insiders’ circle and the foreign outsiders’ circle presents a structural hole (Burt, 1992) in the two interconnected cultural networks. Armed with their guanxi experiences, skills and connections, the gatekeepers in the intercultural network are better informed than both of the other two parties (guanxi insiders and outsiders). Therefore, they are able to broker the outflow of ‘insider’ information to outsiders and span the structural holes in intercultural and inter-networked interactions. Previous studies have noted that both over-socializing and under-socializing should be avoided in business-to-business interactions (Granovetter, 1985; Prenkert & Hallén, 2006). In our view, gatekeeping achieves a balanced positioning between insider relationships and outsider relationships. Through reciprocal gatekeeping, powerful guanxi insiders/decision makers/resource integrators are engaged and interests of their family or personal networks are looked after. Through adaptive and symbolic gatekeeping, gatekeepers enable foreign outsiders/managers to Please cite this article in press as: Gao, H., et al. Toward a gatekeeping perspective of insider–outsider relationship development in China. Journal of World Business (2013), http://dx.doi.org/10.1016/j.jwb.2013.06.002 G Model WORBUS-623; No. of Pages 9 H. Gao et al. / Journal of World Business xxx (2013) xxx–xxx engage with guanxi insiders effectively even though the outsiders lack experience of guanxi knowledge and skills (Gao et al., 2010). The main contribution of the present study is that we reconcile the boundary-spanning/gatekeeping concept in organizational management with the Chinese cultural nuance of guanxi and the structural hole theory in an intercultural and inter-networked business setting. As a consequence, we are able to reveal a new networked position in cross-cultural business relationships, which we term the ‘guanxi gatekeeper’. The processes of reciprocal, adaptive and symbolic gatekeeping ebb and flow, and complement one another for resolving conflicting rules and norms between the insiders’ circle and the outsiders’ circle. Our research provides a framework within which foreign managers, guanxi resource allocators and gatekeepers operate, and it offers the potential for understanding excluding, embracing and passing through behaviors and the consequences for relationship development, in identical fashion to how a gate in a guarded castle operates. The gate metaphor is rooted in the guanxi configuration in which outsiders are closed off from special interpersonal relationships among market insiders (Chen & Chen, 2004; Gao et al., 2012; Wang, 2007). By integrating these guanxi notion and the structural hole theory (Burt, 1992) with empirical findings of this study, we propose three conditions are required for the occurrence of guanxi gatekeeping. The first condition is the lack of relational connection (in a guanxi network sense, as opposed to contractual connections) between Chinese local network members and foreign outsider network members. In this regard, a structural hole exists. The second condition is that the market allows co-existence and clash of particularistic trust (derived from guanxi ties in the insiders’ circle) and general trust (derived from contractual ties in the outsiders’ circle) in the internetworked environment. The third condition is the co-existence and clash of contractual governance norms (derived from the outsiders’ circle) and guanxi governance norms (derived from the insiders’ circle). Gate opening happens when guanxi outsiders get ‘in’ or ‘out’ of guanxi circles with the support of gatekeepers. As the result of gatekeeping, insiders and outsiders can work together without a large shift of their initial network positions. The insider–outsider interactions facilitated by guanxi gatekeepers therefore can be understood as a process by which gatekeepers offer guidance and a buffer (Burt, 1992) to both guanxi insiders and outsiders. The ultimate outcome of guanxi gatekeeping revealed in this study is to achieve harmony and a dynamic balance between insiders and outsiders who cross ‘invisible’ cultural or network boundaries. The apparent economic benefits of the role of guanxi gatekeepers can be seen from the speeding up of the partnersearching and negotiation process and also reduction of the monitoring cost as observed in other guanxi studies (Standifird & Marshall, 2000). What differentiates these notions of guanxi gatekeepers from the roles of organizational gatekeepers such as sales and purchasing managers, independent middlemen and brokers such as commercial agents and distributors, or technological gatekeepers such as technicians and professionals is that guanxi gatekeepers literally control invisible ‘gates’ that exclude or maybe grant passage to outsiders of a closely-knit social/business intertwined network. These guanxi gates are a kind of structural hole but they are less visible than other structural holes as observed in business networks (Zaheer & Bell, 2005), social networks (Fu, Tsui, & Dess, 2006) or technician or entrepreneurial networks (Burt, 1992) in a single cultural setting. Our study reveals that there are no predetermined positions for such a guanxi gatekeeper role as this is a position embedded in intercultural/ interpersonal networks, emerging from insider–outsider social interactions. 7 The key to understanding guanxi gatekeeping is not about information control as many gatekeeping theorists assert (Allen, 1977; Leung, Chan, Lai, & Ngai, 2011; Tushman & Katz, 1980; Zaheer & Bell, 2005); instead, it is the ‘assured’ reciprocity by the gatekeepers that underlies the information control. Instead of viewing reciprocity as ‘structural arthritis’ (Burt, 1999), we see reciprocity as the entrepreneurial opportunity for guanxi gatekeepers. Reciprocity varies in weight and form, depending on the internetworked context – specifically, the pre-existing obligations and favors between the gatekeepers and the insiders, the economic benefit from engaging with the outsiders and also the expectations of future exchange between insiders and outsiders. Due to conflicts deriving from the cultural and network norms between the insider circle and the outsider circle, the adaptive and symbolic nature of guanxi gatekeeping has to be recognized and valued; this perspective has been largely ignored in previous structural hole studies. 7. Managerial implications and future research This guanxi gatekeeping understanding offers a new perspective from which to examine the practice of intercultural business management. The management of guanxi reported in the literature has put undue focus on control-oriented management represented by la guanxi (pulling relationships for special reasons or forcing direct relationships with innermost guanxi insiders) (Ambler et al., 1999; Yau & Powell, 2004). Also overstressed in our view are the tactical or technical parts of guanxi interactions such as gift-giving, entertainment and inviting people out for sight-seeing (Tung & Worm, 1997). However, such control-oriented guanxi management and superficial guanxi tactics are inefficient and may even turn against guanxi outsiders (Standifird & Marshall, 2000). Guided by the guanxi gatekeeping perspective, outsiders can avoid la guanxi (which can be frustrating to many foreign managers) by identifying and engaging with gatekeepers. A guanxi gatekeeping strategy can assist foreign companies and individual actors to find a gateway through the cumbersome Chinese bureaucracy, and so engage with dynamic and complex guanxi networks. To adopt a gatekeeping network strategy, outsiders first need to identify the right people to act as gatekeepers between them and insiders. These people need to understand guanxi cultural norms. But they also need to know the norms and rules that generally apply in the outsiders’ circle (Western cultural rules and norms). Ideally, they will have a wide range of guanxi connections (ren mai) in the Chinese market. Second, a dual identity, open-minded gatekeeper, needs to be engaged. The central requirement for such a position is to build and reinforce a ming bai ren (‘knowing how to play the guanxi game’) image and demonstrate correct personalities that have symbolic meanings for guanxi insiders. Trusting gatekeepers is the key in multi-party (insider– gatekeeper–outsider) interactions. Our study shows that it is Chinese employees who can be the apparent guanxi gatekeepers in many situations and they are expected by their foreign bosses or partners to take the initiative and responsibility for searching for local clients, setting up meetings, suggesting creative solutions and implementing contracts agreed at top management levels. As some Chinese middle-level managers in foreign firms in our study reported, it is easier to look after the personal interests of their Chinese counterparts when foreign senior managers in their companies or their foreign suppliers appreciate the Chinese guanxi culture. Our study has also shown that many foreign managers paid little attention to giving support to their guanxi gatekeepers in their interactions with local guanxi clients. As pointed out by Marchington and Vincent (2004), close interpersonal relations are unlikely to emerge in circumstances where there is little Please cite this article in press as: Gao, H., et al. Toward a gatekeeping perspective of insider–outsider relationship development in China. Journal of World Business (2013), http://dx.doi.org/10.1016/j.jwb.2013.06.002 G Model WORBUS-623; No. of Pages 9 8 H. Gao et al. / Journal of World Business xxx (2013) xxx–xxx institutional support. The lack of support can be deleterious when gatekeepers do not have sufficient resources and power to engage in reciprocal gatekeeping. Other means that can be put in place to reduce the conflict threat for gatekeepers are to set fewer requirements for transparency in complex interactions, reinforcing their positions and protecting their face. In addition, foreign managements might need to consider substantial rewards, such as commissions, bonuses and promotions for their gatekeepers’ effort. The majority of research informants (Chinese and Western) were originally from New Zealand or associated with New Zealand through education or doing business with New Zealanders. Therefore, when generalizing the findings of this research to other intercultural contexts, cultural relevance should be taken into account. This research sets out to explain guanxi gatekeeping phenomena, rather than focusing upon the number of informants (and where they come from) supporting these perspectives or categories (McCracken, 1988, p. 17). This being the case, generalization of findings has to be analytical (Eisenhardt, 1989; Yin, 1994, p. 16). In other words, the goal of this study has been to generalize or relate the analysis of empirical materials to highlevel theories such as the structural hole view of networks (Burt, 1999). In addition, future research should examine the impact of other network concepts such as network centrality (Bjorkman & Kock, 1995), embeddedness (Uzzi, 1997) and network closure (Coviello, 2006). 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