The State-Owned Enterprise as an Identity: The Influence of Institutional Logics on Guanxi Behavior

Previous research has debated whether guanxi persists or declines with the development of formal institutions. This study addresses this debate by investigating how the development of formal institutions in China's state-owned organizations influences employees' guanxi behavior. Building on institutional logics theory, I propose that guanxi behavior is a reaction to the socialist institutions adopted by state-owned enterprises (SOEs) and is associated with the collective identity of SOEs. Thus, employees' identification with SOEs is the mechanism that influences their guanxi behavior. A survey of 721 employees from 12 organizations compared guanxi behavior across three types of organizations with different degrees of state ownership: SOEs, public firms, and joint ventures. The results showed that the employees of joint ventures identify less with SOEs and engage in less guanxi behaviors than do SOE employees. The employees of public firms still identify with SOEs, and their guanxi behavior did not differ from that of SOE employees. Identification with SOEs mediated the effect of organizational type on guanxi behavior, whereas formalization did not. Therefore, the development of formal institutions does not necessarily decrease guanxi behavior, and its effect depends on whether the collective identity underlying guanxi is changed. This study has important implications for guanxi research, institutional logics theory, and transition economies.