Cronyism

PurposeThe purpose of this paper is to determine a model of how a foreign businessman obtains and maintains cronyism from his Chinese counterpart that emphasizes on an insider perspective to convert him from a new friend to an old friend of his Chinese counterpart through aguanxiadaptation mechanism.Design/methodology/approachA vigorous analysis of extant literature and an investigation of insider dynamics within a new friend/old friend perspective.FindingsGift‐giving is strategic and a foreign businessman must manage its monetary value very cautiously in order to alleviate the “face” and providerenqingso as to generategangingand to obtain cronyism from his Chinese counterpart. In saying that, relativism prevails. A foreign company must establish a zone of ethical tolerance so that its executive knows the limits when practicing gift‐giving. In China, an old friend is a supporter and therefore a foreign business should not openly criticize his Chinese counterpart. Frequent visits to China must be maintained.Practical implicationsA foreign businessman needs to understand theguanxidynamics ofrenqingandgangingand their sequential arrangement in the adaptation mechanism. He should use gift‐giving to offerrenqingso as to establishgangingwith his Chinese counterparts.Originality/valueProvides a depth analysis of two emotional aspects in theguanxiadaptation mechanism, i.e.renqingandgangingwhich is a definitive device to convert a foreign businessman from a new friend to an old friend of his counterpart in the Chinese market.