The impact of guanxi positioning on the quality of manufacturer-retailer channel relationships: Evidence from Taiwanese SMEs

Our study aims to provide and empirically test channel relationship positions based on the Chinese guanxi perspectives. By using cluster analysis and multivariate analysis of variance, we found 4 channel relationship position clusters, namely, instrumentality-based wai-ren (outsider/stranger), reciprocity-based shou-ren (acquaintance), obligation-based zi-ji-ren (insider), and resource-based zi-ji-ren, each of which revealed different channel relationship qualities. Respondents exhibited significantly higher interfirm trust and commitment toward obligation-based and resource-based zi-ji-ren partners. However, they also revealed the highest level of relationship risk perception toward obligation-based zi-ji-ren partners, whereas the highest level of relationship satisfaction was attributed to partners in the resource-based zi-ji-ren cluster. Our findings suggest ways to construct and consolidate interfirm relationship with partners in the guanxi network. Managers should consider the relationship risk caused by guanxi investments and should ensure a mutually trustworthy and satisfactory channel relationship through reciprocal ganqing and favor exchange with the leaders of counterparties.