Presented by: Ankit Herbert Neha Robin Shraddha

Should

Howard build guanxi with new chinese official or continue guanxi with Pan?

 Red

Star- Shipping Brokerage Company Howard Zhao, Senior VP (Brokerage) Aim-To build guanxi with NCC Logistics Dept. to enhance Red Stars competitive edge in shipping brokerage industry. After spending substantial amount of time and money to build guanxi with Pan, NCCs logistics Director, Howard comes to know that Pan has been demoted and is no longer capable of giving any favours to Red Star

1. Continue building guanxi with Pan Merits: Red Star will get all possible favours once Pan gets his position back Howard will gain Pans complete trust by being with him in adversity Demerits: Pan may not be promoted in the near future. So, Red Stars ambition of capturing the market may be put in doubt.

 Merits

Hans is the new NCCs Logistics Director and the sole decision making authority. If he thinks favourably of Howard then Red Star may gain competitive advantage over others Demerits Cultural differences between Hans and Howard may cause Hans to misunderstand Howards intentions. Germans do not mix friendships with business.

 Merits

Howard- more confident of building guanxi with a chinese than with a german Best option in present case where Pan has gone and newcomer is a stranger Demerits The chinese official may not be able to influence Hans to change his decisions. Difficulty in reaching a chinese official higher than Hans.

Howard should stick to Pan and maintain his guanxi and not completely cut it out. Meanwhile he should go with decision 3 as it makes the most sense out of the three. Germans are against guanxi and view business as business. Hence its more reasonable for Howard to build gunaxi with another chinese guy and influence Hans. He also has time since the commissioning of the NCC project would take another 2-3 years.