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The World Runs On Powwa (Guanxi)

Popularity 5Viewed 13214 times 2013-9-1 11:32 |System category:Others| different, including, posting, thankful, related

The World Runs on Powwa/Guanxi



Firstly, I am thankful to MichaelM's recent posting on a related matter that set me thinking on this subject. I had not heard of the word Guanxi before. We have so many words that mean this in India, in the different languages of India, including its own versions of Ind-glish! We call it 'Sifaarish', 'approach', 'influence', 'connection', 'pull', 'power' and my favourite one from the north-eastern part of India called "Powwa (pronounced Pow-wah)."


Thinking about it, I realise from times immemorial, Powwa is what makes the world go around. The world runs on it!


While the motive for most human enterprise (including commercial) is a certain amount of self-interest, it is more truly a measure of special favouritism to people who are close to us or those we like or love. Ultimately, when we have a choice in a capitalistic system, we most often choose to assign the benefits of our work to who we want to, whether they are really worthy of it or not, in other people's eyes. We can hire who we want, not who someone else tells us we should. It is one cornerstone of individual freedom in any society.


Historically, and even now, when people start on a potentially successful or promising business, until it gets to the point that they can afford or need to hire the best and brightest, they involve their near and dear or give them positions that they may not be the best qualified for in the long run. They just need to be capable enough to perform the job acceptably, sometimes barely. Of course, it is obvious that it is downright foolish to hire someone who cannot do the job acceptably, no matter what the situation. Such decisions can make or break a company. I think this is the context for MichaelM's recent posting.


Often the 'best' person to do the job, is determined by more than one or two criteria that are not specific to the job at hand. These criteria can be personal loyalty, chemistry and relationships. Sadly, in such instances another candidate with more educational qualifications or better score will miss out. Such is life. The fortunate family or friend who supported the company in the early days performing not just a narrow job description but anything needed and anything they can help with from accounting to cleaning the premises, will receive the benefits of the company's value in the long run.


In the next stage of growing a flourishing company, there will be hiring of people more strictly on merit of their job skills. Only after the business has become viable, and can stand on its own in some measure, will they confidently give the job to a better qualified stranger who has to work to a narrower job description and gets paid only as long as they are able to perform. Then the goal is to grow the company to such a scale that the benefits to the family/friend in the long run outweighs a near term sacrifice. Even at this stage of a company Guanxi/Powwa determine strategic decisions and hiring at the top level, while strictly merit is for operational efficiency and hiring for lower levels in the company.


Almost all famous and successful European or American companies I have known about have started and grown on the basis of Guanxi/Powwa for hundreds of years. They even now do so, even in the famous capitalistic countries or anywhere else. Even in advanced countries, there is usually an order of factors that are not specific to the job and that Powwa/Guanxi preference flows to in the following order - family (near/extended), friends, people of same region, faith, nationality, and race. In many instances, race takes preference over nationality.


Unless we live in Utopia - without borders or discrimination the world over, it does not make always make sense to hire people strictly on the basis of their merit which is based solely on the job. The best we can hope for in our imperfect world is to strike a natural balance where everyone applies Powwa/Guanxi sensibly and it achieves some measure of fairness because everyone has equal opportunity to use Powwa/Guanxi.


Remember, great empires - commercial or political are built and based on Powwa/Guanxi! If that is gone, the empires will crumble - maybe not a bad thing, but not likely or realistic. Having been at the painful receiving end of Powwa/Guanxi and seen it practised around me, I cannot believe I am writing this today. I used to be blindly against it and rant and rave when younger. Age does teach us a few things - to look at things from a different angle and in a larger context.

(Opinions of the writer in this blog don't represent those of China Daily.)




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Reply Report field_qd 2013-9-2 15:38
Guanxi or connection in China is more complicated. It differs from in India, or European, or advanced countries in the world. Maybe you can understand Guanxi better from a native angle.
Reply Report KIyer 2013-9-2 15:39
field_qd: Guanxi or connection in China is more complicated. It differs from in India, or European, or advanced countries in the world. Maybe you can understand ...
You are right, there are many flavours of Guanxi and it varies from place to place too. It would be good if you write what your thoughts are in more detail!
Reply Report zakoi 2013-9-3 21:55
Congratulations for this nice piece of blog.
“Powwa” is it a Hindi[I mean Indian official language] word?
Reply Report KIyer 2013-9-4 05:20
zakoi: Congratulations for this nice piece of blog.
“Powwa” is it a Hindi[I mean Indian official language] word?
Powwa is a regional, colloquial word from one part of India where I lived where a dialect of Hindi is spoken. It is not an official or common word around all parts of India. Thanks for your note!
Reply Report KIyer 2013-9-4 16:39
Pointing out an inconvenient truth or having an opinion that is against someone's deeply held faith or belief does not make me an ill-wisher or basher of anyone or country. One needs to focus on what is said and judge for oneself if it is true first and see its relevance to the issue at hand, before trying to work out the motives or intentions of the person. It is quite OK to disagree or differ from the opinion. Both an ill-wisher and well-wisher of the western democracy can point out the same flaws. Both have done a service when they point out a fact. How one responds to it us up to us. I am deeply convinced from my experience of life that most major decisions in the world are taken to favour someone because of their relationship with the decision taker. The most powerful nations, leaders  and the most successful businesses take the most significant decisions that impact the rest. They are not based strictly on merit of the job at hand, but loyalty, relationships and personal chemistry. It is easy for outsiders to tell/preach to the Chinese or Americans what to do or not to do, but difficult to practice it themselves. Some such issues are human and eternal.  If anything, I would say - the rest of the world has to learn how to practice Guanxi  exactly the way  it is done in the western democracies (however differently we might each understand this) which are pretty successful in becoming strong and successful. I was just making a point about this by my post. I am not saying all Guanxi is right or all wrong. I am only saying it exists and barring a miracle, will always exist.
Reply Report LawrenceD 2013-9-7 17:16
Haha. Sometime back I'd answered the same article, KIyer, and I said that  "For anyone - East or West - to suggest that it's a uniquely "Chinese concept" is nothing but pathetic propaganda, even more so when "the West" is deemed to be free of it."
However, it did not appear in that person's blog. Since then, the article appeared in another part of China Daily and I re-posted my reply (below):

Is Guanxi Bad For China?

>In the West, we value talent, education, experience, ability and creativity ... if they (relatives) get such a job and aren't the most qualified to do the job, there is little to no hesitation for them to be fired ... Americans value results. Perhaps that is why America is seen as a rich country<

I stumbled on this page and never thought I'd seen more hilarious comments. The Wall Street types who'd seen their "too big to fail" companies go belly up, only to use their guanxi with Congress and the best President money can buy to bail out their mess are known to all who've only an inkling of American life. Guanxi reaches deep into American history. It is inherent in American politics, from the robber barons during the time of Fitzgerald's Great Gatsby to Reagan's deregulation and tax breaks for the super rich, to Bush Senior's son's (Niel Bush) debacle with the nation's Savings and Loans, guanxi as well as other forms of corruption had played a constant role in the US and many other Western countries.  Niel Bush was only 30 years old when he was made a director of Silverado Savings and Loans, a son of the country's vice presidential aspirant who became the President of the United States (most fortunately for the crooks in one of the biggest heists of the people's money in American history).  A couple of sites to whet the reader's appetite:


Reply Report Ted180 2013-9-7 19:23
Of course personal preferences for family and friends will always impact on the distribution of individuals' resources. These are gifts. At the macroeconomic level, though, this tendency must be modified to ensure the peace and general well-being of collective society (humanity). This is the core of social democratic beliefs.
Reply Report KIyer 2013-9-8 02:53
Thanks for comments Lawrence and Ted. Thanks for the great examples of Guanxi still being practised in the US - the big banks bailout with public money etc. I am glad you brought it up. I was aware of it and did not put them in my article to be concise and not be too pointed citing examples from one country! But yes, the scale of the cost of Guanxi (and a few other things ) in the US dwarfs its cost in other places.
Reply Report MichaelM 2013-9-8 07:14
Great article my friend! Many different sides. I certainly didn't cover them all. Thanks for further clarifying this issue and expounding this subject! I appreciate you.
Reply Report KIyer 2013-9-8 12:31
MichaelM: Great article my friend! Many different sides. I certainly didn't cover them all. Thanks for further clarifying this issue and expounding this subject ...
Thanks Michael!

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