Ethics and Diamonds : Paradoxical issues surrounding Guanxi relations in China

Ron BERGER, Bradley R. BARNES, Paul WHITLA, Ram HERSTEIN, Avi SILBERGER

Research output: Other Conference ContributionsAbstract

Abstract

While in recent years much research attention has been directed towards China and its various industries, the Chinese diamond industry has been largely neglected. China is the world’s second-largest diamond processing center after India, and the second-largest consumer market for polished diamonds following the United States. It is also predicted to surpass both countries in the near future. We identify a paradox in the Chinese diamond industry, namely, that while Chinese businesses often follow a relational governance model, China’s diamond industry tends to employ rational mechanisms of governance and exchange. We discuss the main challenges for business ethics in China, with a focus on the paradox in the Chinese diamond industry as a case study using the GRX (Ganqing, Renqing and Xinren) scale. We used interview protocols and a two stage research process to examine the influence of the GRX constructs on relationship satisfaction and performance. Due to the complexity of gathering data on a relatively secretive industry, we complemented the fieldwork by collecting further evidential artifacts from journals, books, magazines and
government officials. We ultimately identify five interrelated themes that help explain why exchange in the Chinese diamond industry is frequently more transactional than relational. Furthermore, we show how weaknesses in China’s governance systems have allowed fraud and corruption to permeate this industry and explain why business ethics appear poorly developed. The current study offers a new look at this under researched industry. Particularly, the manuscript illustrates a model of trust building based on relational exchange and explains the paradox through the business model presented. The research also helps to provide some rationale for the pervasiveness of corruption and identifies issues affecting the maturation of business ethics in the Chinese diamond industry and in some sense, China’s industries in general.
Original languageEnglish
DOIs
Publication statusPublished - Jul 2016
Event2016 Global Marketing Conference at Hong Kong - Hong Kong, Hong Kong, Hong Kong
Duration: 22 Jul 201622 Jul 2016
http://gmcproceedings.net/html/sub3_01.html

Conference

Conference2016 Global Marketing Conference at Hong Kong
CountryHong Kong
CityHong Kong
Period22/07/1622/07/16
Internet address

Fingerprint

Diamond
Industry
Guanxi
China
Paradox
Business ethics
Corruption
Governance
Renqing
Maturation
Relationship satisfaction
Relational exchange
India
Consumer markets
Process research
Fraud
Relational governance
Business model
Rationale

Keywords

  • China
  • Business ethics
  • diamond industry
  • social capital
  • governance mechanism
  • GRX scale
  • Guanxi
  • Performance
  • moral degradation

Cite this

BERGER, R., BARNES, B. R., WHITLA, P., HERSTEIN, R., & SILBERGER, A. (2016). Ethics and Diamonds : Paradoxical issues surrounding Guanxi relations in China. Abstract from 2016 Global Marketing Conference at Hong Kong, Hong Kong, Hong Kong. https://doi.org/10.15444/GMC2016.08.06.04
BERGER, Ron ; BARNES, Bradley R. ; WHITLA, Paul ; HERSTEIN, Ram ; SILBERGER, Avi. / Ethics and Diamonds : Paradoxical issues surrounding Guanxi relations in China. Abstract from 2016 Global Marketing Conference at Hong Kong, Hong Kong, Hong Kong.
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keywords = "China, Business ethics, diamond industry, social capital, governance mechanism, GRX scale, Guanxi, Performance, moral degradation",
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BERGER, R, BARNES, BR, WHITLA, P, HERSTEIN, R & SILBERGER, A 2016, 'Ethics and Diamonds : Paradoxical issues surrounding Guanxi relations in China', 2016 Global Marketing Conference at Hong Kong, Hong Kong, Hong Kong, 22/07/16 - 22/07/16. https://doi.org/10.15444/GMC2016.08.06.04

Ethics and Diamonds : Paradoxical issues surrounding Guanxi relations in China. / BERGER, Ron; BARNES, Bradley R.; WHITLA, Paul; HERSTEIN, Ram; SILBERGER, Avi.

2016. Abstract from 2016 Global Marketing Conference at Hong Kong, Hong Kong, Hong Kong.

Research output: Other Conference ContributionsAbstract

TY - CONF

T1 - Ethics and Diamonds : Paradoxical issues surrounding Guanxi relations in China

AU - BERGER, Ron

AU - BARNES, Bradley R.

AU - WHITLA, Paul

AU - HERSTEIN, Ram

AU - SILBERGER, Avi

PY - 2016/7

Y1 - 2016/7

N2 - While in recent years much research attention has been directed towards China and its various industries, the Chinese diamond industry has been largely neglected. China is the world’s second-largest diamond processing center after India, and the second-largest consumer market for polished diamonds following the United States. It is also predicted to surpass both countries in the near future. We identify a paradox in the Chinese diamond industry, namely, that while Chinese businesses often follow a relational governance model, China’s diamond industry tends to employ rational mechanisms of governance and exchange. We discuss the main challenges for business ethics in China, with a focus on the paradox in the Chinese diamond industry as a case study using the GRX (Ganqing, Renqing and Xinren) scale. We used interview protocols and a two stage research process to examine the influence of the GRX constructs on relationship satisfaction and performance. Due to the complexity of gathering data on a relatively secretive industry, we complemented the fieldwork by collecting further evidential artifacts from journals, books, magazines andgovernment officials. We ultimately identify five interrelated themes that help explain why exchange in the Chinese diamond industry is frequently more transactional than relational. Furthermore, we show how weaknesses in China’s governance systems have allowed fraud and corruption to permeate this industry and explain why business ethics appear poorly developed. The current study offers a new look at this under researched industry. Particularly, the manuscript illustrates a model of trust building based on relational exchange and explains the paradox through the business model presented. The research also helps to provide some rationale for the pervasiveness of corruption and identifies issues affecting the maturation of business ethics in the Chinese diamond industry and in some sense, China’s industries in general.

AB - While in recent years much research attention has been directed towards China and its various industries, the Chinese diamond industry has been largely neglected. China is the world’s second-largest diamond processing center after India, and the second-largest consumer market for polished diamonds following the United States. It is also predicted to surpass both countries in the near future. We identify a paradox in the Chinese diamond industry, namely, that while Chinese businesses often follow a relational governance model, China’s diamond industry tends to employ rational mechanisms of governance and exchange. We discuss the main challenges for business ethics in China, with a focus on the paradox in the Chinese diamond industry as a case study using the GRX (Ganqing, Renqing and Xinren) scale. We used interview protocols and a two stage research process to examine the influence of the GRX constructs on relationship satisfaction and performance. Due to the complexity of gathering data on a relatively secretive industry, we complemented the fieldwork by collecting further evidential artifacts from journals, books, magazines andgovernment officials. We ultimately identify five interrelated themes that help explain why exchange in the Chinese diamond industry is frequently more transactional than relational. Furthermore, we show how weaknesses in China’s governance systems have allowed fraud and corruption to permeate this industry and explain why business ethics appear poorly developed. The current study offers a new look at this under researched industry. Particularly, the manuscript illustrates a model of trust building based on relational exchange and explains the paradox through the business model presented. The research also helps to provide some rationale for the pervasiveness of corruption and identifies issues affecting the maturation of business ethics in the Chinese diamond industry and in some sense, China’s industries in general.

KW - China

KW - Business ethics

KW - diamond industry

KW - social capital

KW - governance mechanism

KW - GRX scale

KW - Guanxi

KW - Performance

KW - moral degradation

U2 - 10.15444/GMC2016.08.06.04

DO - 10.15444/GMC2016.08.06.04

M3 - Abstract

ER -

BERGER R, BARNES BR, WHITLA P, HERSTEIN R, SILBERGER A. Ethics and Diamonds : Paradoxical issues surrounding Guanxi relations in China. 2016. Abstract from 2016 Global Marketing Conference at Hong Kong, Hong Kong, Hong Kong. https://doi.org/10.15444/GMC2016.08.06.04