External entrepreneurs/investors and guanxi: hostels in a tourism area, Xinjiang, China

Abstract

Purpose

This research aims to explore how outsider entrepreneurs maintain harmonious guanxi with stakeholders (especially the government) in an ethnic minority area of less-developed western China.

Design/methodology/approach

This paper is derived from an ethnographic study undertaken by the first author who lived for 12 consecutive months in the case area.

Findings

This research indicates that outsider entrepreneurs need to balance between standards required by industry associations and sound “guanxi”, between bureaucratic arrangements and business practice, between economic profit and lifestyle within a guanxi-dominated society. It may be argued that the continuance of relationships represents the continuance of resources and benefits and the maintenance of social and political capital.

Practical implications

One issue in the relationship with local governments is the question to what degree politicians can influence enterprises’ business? Political guanxi is thus an important key to any understanding of the local political scene. In China, the Chinese philosophy that Harmony is the most precious is a strategy often adopted in mediation and operation.

Originality/value

Factors including guanxi, entrepreneurs’ operation motivations, government-directed political system, indigenous people and culture and Butler’s tourism area life cycle (TALC) model are considered in the discussion. This study expands the knowledge pertaining to hostels in China in relation to their interaction with local governments and locals to maintain a good guanxi. It highlights the multiple dimensions of guanxi in terms of micro-and macro-perspectives with reference to functionality and cultural requirements.

Citation

Yang, J., Ryan, C. and Zhang, L. (2014), "External entrepreneurs/investors and guanxi: hostels in a tourism area, Xinjiang, China", International Journal of Contemporary Hospitality Management, Vol. 26 No. 6, pp. 833-854. https://doi.org/10.1108/IJCHM-01-2013-0049