Confucianism and the art of Chinese management.

• Author: Hill, John S.

ABSTRACT

China has become a driving force in the world economy, yet East-West cultural differences remain a problem area for many managers. This paper examines the importance of Confucianism in shaping societal values in China and how these values have affected the Chinese style of management. Confucian principles are extracted from the extant literature and used to explain the cultural underpinnings of Chinese leadership patterns, interpersonal behaviors and individual values. The longevity of Confucian influences throughout Chinese culture is a major factor in China's resistance to Western management practices. There is also evidence that mainstream Confucian principles emphasizing teamwork, relationships and strong corporate cultures are gaining traction in the West. Future Western researchers should pay increased attention to East Asian philosophies and Asian-based religions in their attempts to understand non-Christian lifestyles and management methods.

Key Words: China, Management Style, Confucianism

INTRODUCTION

China has emerged as the economic behemoth of the Asian and world economies in the 21st century. It has attracted about $450 billion of foreign direct investment, 90 percent of which came after 1990 (World Investment Report 2005). Its trade surplus to the United States in 2005 was over $200 billion. In a world economically stricken with the uncertainties of terrorism and Middle Eastern political instability, China has emerged as a powerhouse in the Asian and world economies.

The increased importance of China in the world economy and its increasing interactions with the West has heightened the necessity of understanding Chinese management practices. To date, Chinese management methods have been profiled and contrasts drawn with their western counterparts. Sheh (2001) for example, has observed that Chinese management characteristics include: the strong sense of hierarchy and the cohesiveness within the hierarchical structure; the workplace de-emphasizing of self and the conscious upgrading of others; the orientation towards seniority and good conduct (reliability, obedience, trustworthiness) over performance as criteria for assessments; and the paternalistic style of management that encourages patience and face-saving in conflict situations.

But the cultural underpinnings of Chinese management practices have rarely been addressed. Many have acknowledged the underlying influence of Confucianism on Chinese behaviors and values e.g. Sheh 2001; Su, Zhang and Hulpke 1998; Graham and Lam 2003) but the connections between Confucian principles and Chinese management methods have never been subjected to in-depth scrutiny. The result has been, as Su, Zhang and Hulpke (1998) note, that few westerners understand a management culture stressing human relationships, personal connections (guanxi) and trust. Non-appreciation of cultural roots makes difficult the task of bridging East-West differences that are so important to the smooth running of commercial operations and interactions.

The objective of this paper is to explore Chinese culture, values and behaviors through the lens of arguably its primary architect--Confucius--and to further evaluate how the sage has influenced current Chinese management and business behaviors. Relevant background literatures are assembled to investigate the following topics:

* The extent of East-West cultural differences is examined to demonstrate the cultural gap to be bridged between China, East Asia, and the West. A historic perspective is added to highlight the relative geographic isolation of China and East Asia that effectively insulated their indigenous cultures from western influence until well into the 20th century.

* The evolution of Confucianism, and how its deep cultural roots acted as stabilizing influences throughout Chinese history.

* The major precepts underlying the works of Confucius and his followers, and how they affected Chinese and East Asian societies.

* The characteristics of the Chinese management style are profiled and linkages made between them and mainstream Confucian principles.

* The bridging of the East-West cultural gap: How Confucian-based East Asian principles are influencing the West; and how China's Confucian culture is accommodating the western pressures of globalization.

The interrelationships and the topic flows are illustrated in Figure 1. The starting and finishing points are the East-West cultural gap--the extent of it, how Confucianism has contributed to it through its effects on society and management, and finally how the cultural abyss is closing through East-to-West and West-to-East interactions.

[FIGURE 1 OMITTED]

THE EXTENT OF EAST-WEST CULTURAL DIFFERENCES

Increasing trade and foreign direct investment between China, East Asia and the west has highlighted significant cultural differences in the ways each does business. The cultural gap to be bridged is notable. In his seminal work, Hofstede (1980) referenced significant East-West differences in his power distance variable, with East Asian preferences towards pronounced social hierarchies. Similarly, the individualism-collectivism dimension showed the Eastern penchant towards groups rather than towards western-style individualism. Likewise, East Asian discomfort with risk-taking was a striking contrast with the West. On the fourth dimension, masculine-feminine, East Asian results were more mixed, with masculine aspects of decisiveness and chauvinism showing alongside feminine aspects such as compromise and nurturing. Later, Hofstede and Bond (1988) added a fifth dimension, Confucian Dynamism. Nations scoring highly on this dimension valued perseverance, thrift, high group orientations, and status-based relationships (Robertson and Hoffman 2000). As Fan and Zigang (2004) observed, China's scores on the Hofstede dimensions were indelibly East Asian.

HISTORIC PERSPECTIVES ON THE EAST-WEST CULTURAL GAP

History goes a long way towards explaining why China and the East have maintained their tradition-based cultures. From earliest times, East-West relations were dominated by sheer distance, with the Silk Road first exposing eastern cultures to the west, with Roman interest in Asian silks and spices prompting east-west commerce. It was not until the 13th century that Marco Polo reached China. There he found a civilization that had invented the magnetic compass, paper, block printing, gunpowder, and had used coal as an energy source in an iron smelting process that preceded Europe's by 1500 years (Roberts 1997). At that time, western influences were deemed superfluous as eastern culture and civilization were superior in almost every way.

Even as European colonization reached Asia in the 16th and 17th centuries, few inroads were made into the East Asian cultures of China and Japan until the 19th century, when the British-Chinese Opium Wars (1840-42 and 1856-60), and Commodore Perry's 1853 foray into Tokyo Bay forcibly opened up East Asian societies to western influences. Even then, western influences remained muted until well into the 20th century, and East Asian societies were able to preserve their traditional social orders and cultural beliefs (Braudel 1993). In China's case, the 1949 communist takeover isolated the country from western influences until Deng Xiou Peng's 1980s reforms. From that time, China slowly opened up and the west began to fully appreciate the depth of Chinese culture and its legacy to the Confucian way.

TOWARDS AN EXPLANATION OF THE CULTURAL GAP: THE IMPORTANCE OF CONFUCIANISM

The longevity of a 4000 year old Chinese culture and the resulting east-west cultural abyss made difficult the western task of understanding the Chinese and Eastern mindset and ways of doing things. But what factors originally molded Chinese lifestyles and mindsets? While national cultures are formed from many different influences, in the Chinese case, perhaps no-one eclipses Confucius, labeled by Smith (1998 p.158) as "probably the greatest and most influential thinker in Chinese history"; and by Jordan (1998 p.172) as "the greatest single intellectual force among one quarter of the world's population". Berthrong (1998) calls Confucius (pp.15-16) "the dominant figure of East Asia. No-one can understand China, Korea and Japan without the influence of the teacher of ten thousand generations". While it is difficult for westerners to appreciate how one man from the 6th century BC could have such an enormous influence--the fact remains that he did. As Smith (1998, p154) notes: "though Confucius did not author Chinese culture, he was its supreme editor". How this occurred is chronicled next.

THE IMPACT OF CONFUCIANISM ON CHINESE HISTORY AND CULTURE

THE HISTORIC EVOLUTION OF CONFUCIANISM

The history of Confucianism bears testament to the deep roots it established within Chinese and East Asian societies. Confucianism itself emerged during a period of ancient Chinese history when the nation was struggling between alternating periods of national unrest and unity. It was during one of the periods of internal turmoil (771-221 BC) that Confucius presented his philosophy for societal harmony and fulfillment (Cook 2003). Confucian principles took hold because they were a good fit for Chinese society at that time. China's history of Imperial dynasties and autocratic rule were excellent foundations for Confucian philosophies based on strict social class hierarchies and a respectful and obedient citizenry (De Bary 1988). But it was not until after Confucius' death that his philosophic outlook took root and became woven into the fabric of Chinese and East Asian societies. Saso (1997) noted that Confucianism was the guiding light of Chinese ethical and moral principles as early as the second century BC. In East Asia, Confucian ideas spread slowly through trade and cultural influences during the first millennium AD to Korea and Japan. The Confucian-based Chinese examination system was adopted in...