Impact of Guanxi Practices on Procedural Justice: A Multi-Level Analysis - Prof. 3786, Apuntes de Idioma Inglés

¡Descarga Impact of Guanxi Practices on Procedural Justice: A Multi-Level Analysis - Prof. 3786 y más Apuntes en PDF de Idioma Inglés solo en Docsity! Published online: 20 October 2009 # Springer Science + Business Media, LLC 2009 Abstract In this research, we compared and contrasted the effects of managers’ interpersonal level guanxi practice and group level guanxi practice on employees’ procedural justice perceptions. Results indicated that interpersonal guanxi practice was associated with increased employee fairness perceptions whereas group level guanxi practice (the sense that guanxi is used often to make human resource decisions within a management group) was negatively related to perceived fairness. Thus, while individuals may like the personal favors of managers’ interpersonal guanxi practice, their sense of justice is undermined by the broad use of guanxi. In addition, group level guanxi practice moderated the relationship between interper- sonal guanxi practice and procedural justice such that this relationship was stronger in work units with high levels of group level guanxi practice. Thus, when employees see many others affected by guanxi, their sense of justice is even more strongly influenced by interpersonal guanxi practice. Keywords Guanxi .Guanxi practice . Procedural justice Asia Pac J Manag (2011) 28:715–735 DOI 10.1007/s10490-009-9176-x Y. Chen (*) : R. Friedman Owen Graduate School of Management, Vanderbilt University, 401 21st Ave. South, Nashville, TN 37203, USA e-mail: Ying.Chen@Owen.Vanderbilt.Edu R. Friedman e-mail: Ray.Friedman@Vanderbilt.Edu E. Yu School of Management, North China Electric Power University, Being, China e-mail: yuenhai@263.net F. Sun School of Management, Xi’an Jiaotong University, Xi’an, China e-mail: fbsun@126.com Examining the positive and negative effects of guanxi practices: A multi-level analysis of guanxi practices and procedural justice perceptions Ying Chen & Ray Friedman & Enhai Yu & Fubin Sun It is commonly recognized that the practice of guanxi is prevalent and important in Chinese society (e.g., Hwang, 1987; Xin & Pearce, 1996; Yeung & Tung, 1996). Previous work on guanxi has focused on linking guanxi and organizational outcomes. This previous research indicates that guanxi practice involves a social dilemma (Chen & Chen, 2009). On the positive side, supervisor-subordinate guanxi (that is, strong social ties between a supervisor and a subordinate) can bring benefits to the parties involved. Research has found, for example, that managers tend to give more bonuses to and are more likely to promote employees with whom they have good personal relationships (Law, Wong, Wang, & Wang, 2000). This practice of allowing supervisor- subordinate guanxi to influence how substantive work rewards are allocated is called “guanxi practice.” On the negative side however, even though guanxi practices can benefit individual recipients of favors, at a broader level guanxi practices can be detrimental to the interest of groups, organizations, and society (e.g., Dunfee, Warren, & Li, 2004; Fan, 2002). Research evidence has shown that group guanxi practice, which is defined as the general pattern within a management group of making human resource (HR) decisions on the basis of personal relationships, is related negatively to employees’ in-role performance and extra-role performance (Hsu & Wang, 2007). Although the particularistic norms and favored treatment inherent in guanxi practices may be beneficial to the individuals involved, in organizational settings, such particularistic rules may conflict with universalistic norms, which stress treating people similarly regardless of one’s relationship with them (Heimer, 1992). The potential conflict between these two norms gives rise to justice concerns in organizations. This research is an attempt to integrate and extend the above two lines of thought about guanxi using a procedural justice perspective. In the present study, we distinguish between employees’ reactions to interpersonal level guanxi practices (that is, the way that individual employee feels about gaining work benefits from guanxi) and employees’ reactions to group level guanxi practices (that is, the shared perception that as a general practice work benefits are being allocated within a group based on supervisor-subordinate guanxi). By measuring both individual and group level effects at the same time, we are able to directly compare the effects of interpersonal level and group level guanxi practices on employees’ procedural justice perceptions. We also investigate the possible interaction effect between group level guanxi practice and individual level guanxi practice for procedural justice perceptions. We argue that the kind of self-interests (Leventhal, 1980; Thibaut & Walker, 1975) that drive positive reactions to personal level guanxi are increased when guanxi is more prevalent within the overall work group. This effect has implications for the evolution of Chinese firms from ones with more particularistic forms of management to ones with more universalistic forms of management. Our theoretical arguments were tested using a sample of 342 employees in 72 groups from 12 organizations. This study extends the line of research on guanxi practice and justice perceptions in two main ways. First, it deepens our understanding of guanxi practices by empirically testing the trade-off between individual and group guanxi effects that have been hypothesized to exist (Chen & Chen, 2009), and by showing that group level practices can dampen or amplify core individual level guanxi effects. Second, it demonstrates the cultural boundary conditions of justice theories such as the self-interest model (Thibaut & Walker, 1975) which deepens our understanding of organizational justice. 716 Y. Chen et al. know how he or she benefits from guanxi with a supervisor, but at the same time have some perception about whether guanxi typically influences that supervisor’s HR decisions. Empirically, as well, the two should be distinct. While a manager may generally be perceived by a group as, for example, letting guanxi influences his or her HR decisions (high group level guanxi practice) any individual employee working under that manager could nonetheless still feel that he or she has a low level of personal benefit from guanxi (individual level guanxi practice). In other words, there is likely to be variance among supervisor-subordinate dyads within a work group, even while members of a group develop a shared understanding of how much their supervisor generally tends to use guanxi to allocate rewards at work. Moreover, as we discuss in the next section, we expect employees to react quite differently to guanxi practices based on whether they are the beneficiaries of these practices (individual level guanxi practices) or if they see it used as a common practice by management (group level guanxi practices). Interpersonal level guanxi practices and procedural justice perceptions A vast body of research has found that Chinese managers engage in interpersonal level guanxi practices. Managers give favors to those with whom they have good guanxi. Empirical evidence consistently shows that Chinese managers’ decisions are influenced by their personal relationships with their subordinates. Zhang and Yang (1998) argued that Chinese decision makers’ reward-allocation decisions are influenced not only by the equity rules, but also by the recipients’ guanxi with them. They found in a scenario study that the Chinese do not distribute rewards based only on contribution; rather they adopt the reasonableness norm, which means that they consider both the recipients’ guanxi with them and their fairness in making allocation decisions. Recent research has found that guanxi between supervisor and subordinate affects the supervisor’s administrative decisions in promotion and bonus allocations. Managers give those with whom they have good guanxi more promotion opportunities and larger bonuses (Law et al., 2000). Zhou and Martocchio (2001) reported that Chinese managers would give more nonmonetary rewards to those who have good relationships with them than those who have poor relationships with them. When employees receive such favors from managers (that is, they experience interpersonal guanxi practices), self-serving biases are likely to lead them to regard the procedures as fair. The self-interest model of justice provides support for this proposition. The self-interest model suggests that outcomes generated by a procedure will have strong effects on procedural justice judgments about it (Lind & Tyler, 1988). Solid evidence has supported this prediction (e.g., Conlon & Fasolo, 1990; Folger & Konovsky, 1989; Greenberg, 1986). Greenberg (1986) found that people tend to believe that more beneficial outcomes are fair regardless of the fairness of the procedure. Studies on legal disputants found that subjects used final outcomes in dispute resolutions as reference information to understand their experiences in legal processes (Lind & Lissak, 1985), and there is a positive relationship between outcome favorability and procedural justice perceptions of court-order arbitration (Lind, Kulik, Ambrose, & de Vera Park, 1993). Hence, we propose the following hypothesis: Hypothesis 1 There is a positive relationship between interpersonal level guanxi practices and procedural justice perceptions. Examining the positive and negative effects of guanxi practices 719 Group level guanxi practices and procedural justice perceptions As discussed above, those with whom managers have good personal relationships and are given favors by managers are likely to believe that the resource allocation procedures are fair. At the group level, however, when employees perceive that managers systematically make HRM decisions based on individuals’ personal relationship with managers, their evaluations of fairness of procedures may decrease. In other words, at the group level, employees’ shared perceptions of guanxi practices may be related negatively to employees’ procedural justice perceptions. As a first step, we consider the general trend of social norms in China about how rewards should be allocated. According to Parsons and Shils (1951), when a traditional society is transformed into a modern society, universalistic rules generally replace particularistic rules. Recent studies have demonstrated that China has been experiencing shifting norms in terms of resource allocation rules. Among three allocation criteria—equity, equality, and need—equity (based on work performance) has become the dominant rule for Chinese employees and organizations. Chinese managers used to employ criteria such as equality, seniority, and need to allocate resources (Walder, 1986) but recent research has shown that they are shifting toward the use of equity criteria. Evidence shows that employees perceive performance- based HRM evaluations and reward systems to be fair (Bozionelos & Wang, 2007; Chen, 1995; He, Chen, & Zheng, 2004). Bozionelos and Wang (2007) investigated the attitudes of Chinese employees towards individually-based performance-related reward systems. They found that, although Chinese employees believe that performance evaluations can be affected by guanxi, they consider performance- based reward systems to be good in principle. If employees hold an ideal of equity as the appropriate basis for pay, then group level guanxi practices are likely to generate perceptions of pay injustice on the part of employees. This occurs because, where group level guanxi practices are prevalent, rewards are allocated based on personal relationship, not performance. Even though one might be lucky to benefit from guanxi personally, and would likely (as stated in Hypothesis 1) be happy to accept the benefits of guanxi if received, it is a precarious situation to be in: there is no common underlying principle to govern how you are rewarded, and rewards may be unpredictable if supervisors change or if the supervisor’s relations with others prove stronger than your relations with that supervisor. In addition, group level guanxi practices violate core ideas of procedural justice. Leventhal, Karuza, and Fry (1980) identified six rules of procedural justice: consistency, bias suppression, accuracy, correctability, representativeness, and ethicality. Lind, Tyler, and Huo (1997) have shown that neutrality is a main determinant of procedural justice. When managers have good personal relation- ships with some group members and their managerial decisions are impacted by these personal relationships, the rule of neutrality is violated, which, in turn, decreases employees’ evaluations on procedural fairness. When benefiting directly from guanxi, general principals of procedural justice may be overlooked, but there is no reason to believe that these core justice norms would be overlooked when it is others who benefit. This sense of unfairness may occur despite the fact that it is others whose outcomes are affected. Recent studies have shown that people care about how others are treated—unjust treatment others receive can have a 720 Y. Chen et al. significant impact on people’s own evaluations of the fairness of procedures (Van den Bos & Lind, 2001). In two experimental studies, researchers found that knowing that other research participants received an unfair procedure lowers subjects’ own fairness judgments (Van den Bos & Lind, 2001). Thus, we propose the following hypothesis: Hypothesis 2 There is a negative relationship between group level guanxi practice and employees’ procedural justice perceptions. Group level guanxi practice as an amplifier of self-interest Group level guanxi practices may not only have a direct effect on procedural justice perceptions, but also affect positively the impact that individual level guanxi practices have on procedural justice perceptions. We expect this to happen for two reasons. First, group guanxi practices are visible to all employees in a work group and thus establish what is perceived to be legitimate within a work group. If work units have high levels of group level guanxi practice, guanxi will come to be accepted and made normal. As Opp (1982) found, frequently repeated behaviors become normative. Once norms are built into the social structure of a group, those structures shape expectations and guide behaviors (Bourdieu, 1977). In Hypothesis 1 we proposed that individual self-serving biases would outweigh normal expectations that decision-making based on personal relations was inappropriate. However, to the degree that group level guanxi practices become routine and expected, there would be less of a feeling that decision-making based on personal relations was inappropriate, and thus less constraint on the full expression of the self-interest model discussed above. Where group level guanxi is higher, maneuvering for self- interest is legitimized; where group level guanxi is lower, such maneuvering is delegitimized. A second way in which group level guanxi practices may amplify or dampen the effects predicted by the self-interest model of justice is through social comparisons. As suggested by social comparison theory, individuals compare themselves with similar others to evaluate their own situations (Festinger, 1954) and studies have shown that employees care about the relative reward differences within groups (e.g., Sweeney, McFarlin, & Inderrieden, 1990). We can expect, then, that employees’ perceived relative value of rewards from personal guanxi with a manager would become more salient when they work in a work unit with high levels of group level guanxi practice since they are comparing their own outcomes to those achieved by others who may have gained those outcomes through guanxi. Based on these two arguments, we propose the following hypothesis: Hypothesis 3 Group level guanxi practice will moderate the relationship between interpersonal guanxi practice and procedural justice perceptions at the individual level; the relationship between interpersonal guanxi practice and procedural justice perceptions will be stronger in work units with higher levels of group level guanxi practice. The set of relationships included in the Hypotheses are summarized in Figure 1. Examining the positive and negative effects of guanxi practices 721 procedural justice (e.g., Bhal, 2006; Lee, 2001; Pillai, Scandura, & Williams, 1999). Because LMX and guanxi are conceptually related (Chen et al., 2009) we wanted to control for LMX to ensure that what we were measuring with our guanxi measure was not really LMX. LMX and guanxi practices are related in that both include some level of social exchange between supervisor and subordinate, but they are different in that LMX should involve rewards given to employees in response to their better work performance while guanxi practices refer to benefits allocated on the basis of personal ties, not work performance. Thus, while we expect that group level guanxi practices would violate rules of procedural justice, we would not expect that broad use of LMX would be seen as procedurally unjust since rewards are allocated based on performance. Still, to ensure that the effects of guanxi practices are not confounded with LMX, we included Liden and Maslyn’s (1998) LMX scale as a control variable. The alpha for LMX in this study is 0.95. Four subordinate demographic variables—age, sex, education, and organization tenure—were included as control variables in this study. They were included because previous research has shown that these demographics might be associated with commitment, justice perceptions, and turnover intentions (e.g., Lee & Farh, 1999). Age and organization tenure were measured in years. Male was coded as 1 and female as 0. Education was measured by five categories: below high school, high school, 3-year college, 4-year college, and Master’s degree or above. At the group level, we controlled group size. Group size was operationalized as the number of employees in a group. It has been found that group size is related negatively to fairness perceptions (Schminke, Ambrose, & Cropanzano, 2000). Analysis strategy Employees were nested within groups, which, in turn, were nested within organizations creating a hierarchical data structure with three levels of random variation: variation among employees within groups (level 1), variation among groups within organizations (level 2), and variation among organizations (level 3). Because of this nested data structure, we used hierarchical linear modeling (HLM) to test the hypotheses. Although Hypothesis 1 proposed relationships at the individual levels of analysis, we must also account for possible group level effects since the 342 respondents were supervised by 72 managers in 12 organizations. We used HLM 3 to control the potential effects of shared managers and organizations so that we could obtain accurate estimations of the relationships proposed by our hypotheses. All the variables were grand-mean centered, as suggested by Hofmann and Gavin (1998). At level 1, we controlled for employees’ LMX and four demographic variables: age, education level, sex, and the years worked together with the supervisor. At level 2, we controlled for group size. For the level 2 dependent variable, group level guanxi practices (which was produced by aggregating individually reported group guanxi practices responses to the group level), we examined whether there was significant between-group variance in group level guanxi practice. Level 3 is at the organizational level and there are no predictors at the organizational level. Since the data come from 12 different organizations, level 3 is put into the HLM model to control any organizational level effects on the dependent variables. 724 Y. Chen et al. Results Table 1 presents descriptive statistics, intercorrelations, and internal-consistency reliabilities of all variables. To assess the viability of creating a variable to represent shared perceptions of group level guanxi practices we computed three complementary measures of within- group agreement. These three measures were rwg, ICC (1), and ICC (2). We also calculated the F-statistic from a one-way ANOVA to determine the between-group variance for group level guanxi practice. We computed rwg values using the approach recommended by James, Demaree, and Wolf (1984). James and colleagues (1984) recommended 0.70 as the threshold for asserting that work unit members have developed shared perceptions on certain aspects of their experiences. The mean of rwg for 72 groups was 0.88. A one-way ANOVA indicated significant group-level variance in group level guanxi practice (F = 34.18, p < 0.001). ICC (1) provides an estimate of the reliability of a single individual rating of the unit mean. Its values can range from -1 to +1. In empirical settings, the range from 0.05 to 0.30 is typical with 0.12 as an acceptable cutoff point (Bliese, 2000). ICC (2) provides an overall estimate of the reliability of the unit means. The closer the value is to 1, the more reliable the unit means. Generally, values equal to or above 0.70 are acceptable (Klein, Conn, Smith, & Sorra, 2001). ICC (1) and ICC (2) calculated from an ANOVAwere 0.30 and 0.71 respectively in this study. On the basis of these results, we concluded that aggregation of individual level guanxi practice to work unit level shared perceptions of guanxi practice is justified. Since we used three-level HLM for testing all hypotheses, it is necessary to examine whether there are significant between-group and between-organization variances in the outcome variables. The reason is that HLM 3 assumes significant between-group and between-organization variance, therefore we have to investigate whether these assumptions are met. We examined two null models; that is, models with no predictors specified (at levels 1, 2, or 3), with procedural justice as the dependent variable. The results provide evidence of significant between-group variance in procedural justice (p < 0.001). The variance between organization was significant for procedural justice (p < 0.001). The null models also provide information for computing the intra-class correlation coefficients, which can be interpreted as the proportion of variance in the outcome variables that reside between groups. Our calculation shows that 20% of the variance in procedural justice exists between work units and 9% of the variance in procedural justice exists between organizations in this sample. These results justify further cross-level analyses. Moreover, it suggests that even though we have no level 3 predictors, we need to include level 3 in our analyses as a control for any effects that might be accounted for by organizational differences. We checked (using HLM, and the same controls as other models) the relationship between managers’ interpersonal level guanxi practice and supervisor-subordinate guanxi and found that there is a positive relationship between interpersonal level guanxi practice and supervisor-subordinate guanxi (γ = 0.49, p < 0.001). Thus, our individual level guanxi practices measure scale does identify work benefits that come from having a strong guanxi relationship between supervisor and subordinate. Examining the positive and negative effects of guanxi practices 725 T ab le 1 M ea ns , st an da rd de vi at io ns , an d in te rc or re la tio ns . M ea n S D 1 2 3 4 5 6 7 8 L ev el 1 A ge 35 .8 6 8. 05 E du ca tio n 4. 02 1. 09 −0 .0 6 S ex 0. 56 0. 50 −0 .0 2 −0 .0 1 Y ea rs w or ki ng fo r su pe rv is or s 5. 82 5. 26 0. 29 ** * −0 .0 1 −0 .0 6 L ea de r– m em be r ex ch an ge (L M X ) 4. 83 1. 02 −0 .0 4 0. 08 −0 .1 0 0. 07 S up er vi so r- su bo rd in at e gu an xi 3. 05 1. 36 0. 00 −0 .0 2 0. 15 * 0. 15 * 0. 41 ** * In te rp er so na l le ve l gu an xi pr ac tic e 3. 09 1. 24 0. 03 0. 07 0. 10 0. 15 0. 36 ** * 0. 63 ** * G ro up le ve l gu an xi pr ac tic e (i nd iv id ua l pe rc ep tio ns ) 2. 89 1. 15 0. 02 0. 03 0. 05 0. 07 −0 .3 9* ** −0 .1 0 −0 .1 1 P ro ce du ra l ju st ic e 4. 67 1. 21 0. 02 0. 03 0. 00 0. 02 0. 78 ** * 0. 31 ** * 0. 39 ** * −0 .4 9* ** L ev el 2 G ro up si ze 4. 75 1. 65 G ro up le ve l gu an xi pr ac tic e (a gg re ga te d) 2. 86 0. 79 N = 34 2. *p < 0. 05 ; ** p < 0. 01 ; ** *p < 0. 00 1. 726 Y. Chen et al. practices, at 1 standard deviation above the mean and at 1 standard deviation below the mean. Figure 2 shows this interaction effect.1 Discussion To summarize the results, we found, as predicted, that interpersonal level guanxi practice is positively related to procedural justice perceptions whereas group level guanxi practice is negatively related to procedural justice perceptions (after interpersonal level guanxi practice is controlled). Consistent with our prediction, results show that the effect of interpersonal guanxi practice on procedural justice was stronger in work units with high levels of group level guanxi practice. Theoretical contributions The current research makes four major theoretical contributions. First, in this study, we directly compared the effects of interpersonal guanxi practice and group level guanxi practice on procedural justice perceptions while previous studies focused on just the effects of either one of the two levels of guanxi practice. On the one hand, we found that interpersonal guanxi practice can increase employees’ procedural justice perceptions. Employees may engage in social activities with managers in order to get various favors from them, which, in turn, increase their sense of procedural justice perceptions. On the other hand, group level guanxi practice— having managerial decisions be systematically based on guanxi—can have a negative impact on employees’ procedural justice perceptions. In order to compare the positive effect of interpersonal guanxi practice with the negative effect of group level guanxi practice on procedural justice perceptions, we standardized the coefficients of the two variables to obtain the effect sizes. For interpersonal level guanxi practice, the standardized effect size was 0.13, while for group level guanxi practices, the standardized effect size was -.09 (note that Tables 2 and 3 report unstandardized coefficients). Looking at the effect sizes of the two variables, it appears that the negative effects of group level guanxi practices are slightly weaker than the positive effects of interpersonal level guanxi practices from guanxi, indicating that for those employees who are beneficiaries of guanxi practices, their overall response to guanxi practices may be net positive, while the opposite may be true for those who are not beneficiaries. We should note that in making this comparison we had to improve the way group level guanxi has typically been measured. Previously, researchers have focused 1 For the cross-level interaction—the effect of group level guanxi practice on the slope of interpersonal guanxi practice on procedural justice—we did some extra analysis as recommended by Hofmann and Gavin (1998). Hofmann and Gavin (1998) demonstrated that grand-mean centering in the presence of cross-level interactions can sometimes produce misleading results. In order to verify that the grand-mean centered estimation of the cross-level interaction in the present study was not misleading, we examined an additional model using grand-mean centering for “interpersonal level guanxi practice” at level 1. At level 2, we included the work unit level “interpersonal level guanxi practice” × group level guanxi practice to control for the between-group interaction. The between-group interaction was not significant. The result for the cross-level interaction in the group-mean centered model was similar to the one in Model 2, Table 3 (γ = .11, p<05). Examining the positive and negative effects of guanxi practices 729 mainly on the individual level of analysis when examining the role of group level guanxi practice. That is, they took as valid each individual’s own perception of group level guanxi practices, rather than measuring the actual group’s collective assessment of the level to which a work unit’s rewards are allocated based on guanxi ties. The present study, by contrast, assessed intra-group agreement about group level guanxi practices. We were able to determine that there are in fact shared perceptions of group level guanxi practice at the work unit level. In the present study, the average rwg for group level guanxi practice was 0.88, suggesting that there are collective perceptions of group level guanxi practices at the work unit level. This approach to measuring group level guanxi practices allows for a true cross-level analysis of the relative effects of individual and group level guanxi practices. Second, we found that the relationship between interpersonal guanxi practice and procedural justice perceptions is stronger in work units with higher levels of guanxi practice. This finding has an important implication. When group level guanxi practices exist, they not only lower the degree of employees’ procedural justice perceptions in general, but also enhance their self-focus—they judge the procedural justice of the supervisor even more on engaging in interpersonal level guanxi practices. Thus, the risk of broad use of guanxi in the workplace is that it puts managers in a bind. In order to help employees feel that allocations are made in a way that is just, they have to provide more individual guanxi-based benefits to employees, which then further increases perceptions of group level guanxi practices being used. It can become a never-ending cycle of guanxi amplification. On the positive side, the interaction between group level guanxi practices and self-interest dynamics show that if managers control the level of guanxi practices used generally, they can indirectly control the relative influence of employee self-interest, and thus the strength of their likely guanxi-based demands and expectations. Third, this study enriches procedural justice literature by showing the boundary conditions of the justice models in a Chinese context. Although, as Figure 2 Interaction of interpersonal level guanxi practice and group level guanxi practice on procedural justice perceptions 730 Y. Chen et al. predicted by the self-interest model, interpersonal guanxi practice has a positive effect on procedural justice, this pattern is more pronounced in the context of high levels of group level guanxi practice. Thus, the core dynamics predicted by justice scholars needs to take into account the cultural context. If the cultural environment is one that legitimizes guanxi-based practices, that cultural context can amplify the effects of self-interest. Oddly, this implies that China, which is generally thought of as a place where the group has greater weight than the individual, may have employees who judge the justice of allocation decisions based more on self-interest than employees from countries that are generally thought of as placing a greater weight on the individual. Fourth, the current work also deepens our understandings on procedural justice. The self-interest model is confirmed in the current study, but it cannot explain fully the findings we obtained from this study. We found that group level guanxi practice, on average, can lower employees’ procedural justice perceptions after controlling interpersonal level guanxi practices. The finding that the relationship between interpersonal guanxi practice and procedural justice varies based on the levels of group level guanxi practice in work units indicates that individual concerns for others also have boundary conditions. When employees work in an environment in which guanxi practice is rampant, they may be less concerned about others’ or the groups’ benefits then they would be in an environment in which guanxi practice is less legitimate. Study limitations and future research There are several limitations in this study. First, the data for this study come from state-owned firms, which may have special characteristics that led to our results. Future research should consider conducting studies in other types of ownership firms such as foreign-owned companies in order to ensure the generalizability of the research findings from this study. It is also desirable to study the cross-cultural difference on the effects of guanxi practices on work outcomes. Guanxi itself is a very general phenomenon, not limited to China. We speculate that similar effects may also exist in other societies, especially in collectivist cultures that value personal relationships. Interdependent self theory (Markus & Kitayama, 1998) indicates that in collectivist cultures relationships are valued more than autonomy, while in individualistic cultures people value autonomy more than relationships. Therefore, interpersonal guanxi practices may be more prevalent in these collectivist cultures and people may have mixed perceptions on the effects of such practices. In Western individualistic cultures, we speculate that the positive effects of interpersonal guanxi practices on procedural justice perceptions would be less whereas the negative effects of group level guanxi practices would be amplified in such cultural environments. Second, some major variables in our survey studies come from the same source that may bring concerns about common method variance. 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His research has focused on conflict management and, more recently, on Chinese–American differences in conflict management (negotiation, conflict styles, and arbitrator decision making). Recent studies have focused on online conflict management, team-based negotiation, and the study of behavioral integrity in the workplace. Enhai Yu (PhD, Renmin University) is an associate professor of management at North China Electric Power University. His research interest focuses on human resource management. Fubin Sun (PhD, Xi’an Jiaotong University) is an associate professor of management at Xi’an Jiaotong University. His research interests include human resource management, organizational behavior, and social demography.