How inclusive leadership manages Guanxi in SMEs digital transformation: a perspective of Chinese family business

Abstract

Prior studies overlook inclusive leadership’s role and its management of guanxi in SMEs digital transformation. And relatively little study is made of managing guanxi in SMEs digital transformation by inclusive leadership from a perspective of family business, let alone leader-member guanxi and member-member guanxi. Therefore, this thesis builds on inclusive leadership theory to address the question of how inclusive leadership manages guanxi in the digital transformation of Chinese small-medium sized enterprises from a perspective of family business.
Firstly, inclusive leadership is theoretically inferred to be an ideal leadership for managing digital transformation and guanxi in Chinese small-medium sized enterprises for its strengths, compared with transactional leadership, servant leadership, transformational leadership and paternalistic leadership with reference to the requirements of leadership in the context of Chinese SMEs digital transformation.
Secondly, an empirical support is found by a case study. The thesis adopts a qualitative approach and grounded theory to make a detailed analysis of multiple-source data mainly from in-depth semi-structured interviews of 25 leaders and 51 employees in a Chinese manufacturing SME. The thesis finds four mechanisms and works out its process model with their underlying logics: Inclusion of guanxi fosters error management and builds high-quality leader-member exchange, and the latter two mechanisms enhance psychological empowerment. The four mechanisms jointly minimize the possible negative outcomes of guanxi and create the inclusive climate friendly to digital transformation. It also discusses the underlying tenets of the four mechanisms managing guanxi in SMEs digital transformation.
The thesis contributes to inclusive leadership theory with the efficiency and process of inclusive leadership managing guanxi in SMEs digital transformation and offers experience to practitioners with detailed description of using guanxi management as a driver of digital transformation in SMEs.

Date of Award	15 Nov 2025
Original language	English
Awarding Institution	University of Nottingham
Supervisor	Martin Liu (Supervisor), Yi Wang (Supervisor) & Xuan Huang (Supervisor)