Exploring Guanxi’s role in navigating ethical dilemmas in business environments

Purpose This study aims to explore how corporate professionals in Chinese business environments interpret the role of Guanxi in navigating ethical dilemmas, focusing on its dual nature as both a facilitator of business relationships and a source of ethical complexity. Design/methodology/approach Drawing on a qualitative research design, in-depth interviews were conducted with 28 corporate professionals in China. Thematic analysis was used to identify patterns in participants’ narratives, leading to the development of two core categories: the double-edged nature of Guanxi in decision-making and the negotiating boundaries between personal ties and professional integrity. Findings The analysis reveals that professionals interpret Guanxi as a double-edged tool that strengthens trust, facilitates opportunities and sustains relational stability, while simultaneously creating risks of favoritism, distorted decisions and weakened integrity. Participants describe how relational obligations often clash with ethical principles like transparency and fairness. In practice, this tension requires professionals to set personal “red lines,” bend rules selectively or rationalize informal practices as cultural necessities. Guanxi is therefore understood not as a static cultural relic but as a dynamic compass for navigating ethical dilemmas. It enables adaptive decision-making while exposing enduring tensions between cultural obligations and organizational standards. Originality/value This study contributes to the business ethics literature by developing a culturally grounded framework that integrates social capital theory with the ethical dimensions of Guanxi. The study offers new insights into how professionals subjectively interpret Guanxi not only as a mechanism of trust and reciprocity but also as a source of ethical dilemmas, thereby filling a gap in interpretive dimensions compared to prior research that primarily examined Guanxi as a network structure, social capital resource or organizational mechanism influencing firm performance and economic outcomes. It provides practical insights for organizations to develop tailored ethical training and governance that respect cultural norms while fostering accountability in China’s market-driven economy.