While it is emphasized in Western on “what you know”, refers to technological expertise, including the price and quality of tendered product or service, it is emphasized in Confucian societies on “who you know”, which refers to personal connections and are known in Chinese as guanxi. In this research we propose the ISOLINK theory for guanxi mechanism and conduct a survey to examine its effect on management efficacy in a Taiwanese ODI in China. Results suggest that with the cultural embeddings – ISOLINK, which activates guanxi mechanism, works as the social norm that in effect regulates people’s behavior instead of the managerial policies in Chinese organizations, and in turn stabilizes the organization in an collectively equilibrium. Furthermore, with guanxi, the organization gets to interact with the rest of the social network harmonically, which enhances the organization adaptability to the outer uncertainty. The findings of the study offer important implications for guanxi management in Chinese business.

Meiling Wong is currently a distinguished Associate Professor of Taiwan National Chinyi University of Technology. Certified with dozens of international licenses, she is positioned as the Industrial Consultant of the Certiplat Limited and the Guidance Counselor of the Professional Certification Committee. She has published research articles in SSCI journals, including Journal of American Journal of Economics and Sociology and Journal of Business Ethics as well as others, The International Journal of Diversity in Organizations, Communities and Nations and Chinese Management Studies, among others. She also serves as a regular paper reviewer for the above journals. Her recent research interests include Guanxi Management Theory, Service Quality, Cross-cultural Enterprise Operation, Human Resource Management, Organizational Culture, Leadership and Empowerment.