Guanxi Circles’ Effect on Organizational Trust

Abstract

This article proposes a Chinese network structural phenomenon—the guanxi circle. Parallel to the reasoning of leader–member exchange theory, Chinese leaders categorize their staff members into in-group and out-group members and apply different rules of social exchange to them. In addition, they divide the guanxi circle into core and peripheral members. The latter forms a bridging link keeping the guanxi circle open, and thus maintains room for flexible operations. Five types of workers are identified—a supervisor’s core members, peripheral circle members, an informal leader’s core members, bridges, and outsiders. We surveyed 354 workers in a Chinese hi-tech company with our data analysis confirming the existence of the five role types. Our analyses illustrate the differences between the roles in terms of organizational trust.