"Guan-xi" and the importance of contract management...
Without doubt, lately there has been a flurry of news on various contract cancellations and letters of demand sent from one party to the next. It can be said that the next 18 - 24 months will likely be the time of the 'lawyers'... With the unexpected prolonged downturn in the oil and gas market, one can expect more cancellations to come and more letters of demand for payments due on services rendered.
Interestingly this also brings to mind the following... whilst the importance of "guan-xi" (relationships) ranks high when doing business in Asia, what is equally important (and by no means any lesser), is the importance of having in place good contract management. At some point, "guan-xi" can only get you this far, and when push comes to shove (especially when dealing with large numbers...) the difference between a well-managed contract versus a mediocre one can tell you a lot about an organisation.
