In China, guanxi is the basis on which Chinese exchange a lifetime of favors, resources, and business leverage. Guanxi is considered as a unique construct and a product of Confucian values and the contemporary political and socio-economic systems in Chinese society. Guanxi functions as the Complex Adaptive System that expands and interconnects with one another and turns into a well knitted social networks; meanwhile functions of well-fixing and self-reinforcement of the guanxi chuens are activated internally, externally and interactively with synergy which shows their extreme flexibility in adaptation. Taking an ODI (outside direct investment) Taiwanese firm in China as the case, we address and conduct a survey to examine guanxi effect on management efficacy of leadership. Results of the research suggest that guanxi is not just the interpersonal link; it is also the switch that activates the social network and reconciles the mismatches interpersonally and inter networks, so as to influence the management efficacy.
