How to manage client entertainment in China

Client entertainment is a popular business practice that Chinese managers often use to facilitate business relationships and promote sales. Multinational enterprises (MNEs) operating in China, however, have been frequently involved in corruption allegations caused by client entertainment. This article explains client entertainment's purpose, prevalence, and persistence in China and identifies the pitfalls that foreign firms often encounter when they practice client entertainment in that country. Based on field observations and first-hand experience as well as research on public and survey data, this article also provides eight prescriptive guidelines that can potentially help firms manage client entertainment more efficiently and effectively without causing ethical and legal problems.