The impact of formal control and guanxi on task conflict in outsourcing relationships in China

The purpose of this study is to explore how manufacturing firms manage task conflict with their outsourcing suppliers in the context of China. Using survey data collected from manufacturing firms operating in China, we found that when implementing R&D and manufacturing outsourcing, both formal control and Chinese guanxi are useful governance mechanisms for suppressing outsourcing task conflict. We also observe that Chinese guanxi moderates the impact of formal control on task conflict, especially when implementing R&D outsourcing. By investigating the roles of formal control and Chinese guanxi in outsourcing practices in China, this study contributes to a better understanding of how to manage task conflict effectively.