Rectifying guanxi favoritism: towards a theory of guanxi inclusive leadership

Abstract

Research is abundant on guanxi favoritism and its severe negative consequences in Chinese organizations and society at large, but scant on what organizations and leaders can do to curb or rectify it. This is not only a serious theoretical neglect by guanxi researchers but also a practical one as it allows the problem to perpetuate even as the Chinese economy and Chinese business organizations are striving to break through global protectionism and geopolitical polarization. Based on critical analyses of existing literatures on Chinese guanxi and Western demographic diversity, and building on inclusion and inclusive leadership theories, we develop a multidimensional concept of guanxi inclusive leadership and propose a comprehensive theoretical model. We define guanxi inclusive leadership as a leader’s discretionary actions to promote the inclusion of all employees regardless of their guanxi relations with the leader for their full participation in organizational life. We further propose that leaders’ individual justice orientation and system justification belief affect guanxi inclusive leadership. Guanxi inclusive leadership, in turn, promotes employee organizational citizenship behavior (OCB-O) and innovation through the mediation of organizational trust. Organizational growth strategy and labor market competition moderate the mediation relationships. Through this theoretical work, we seek to stimulate future theory and research on how business leaders can proactively expand workplace diversity and inclusion to enhance their competitive and innovative status domestically and globally.