Chinese Values in Business - Research Proposal Example

Literature Review: Chinese Values in Business Customer Inserts His/Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name (10, 04, 2009) TABLE OF CONTENTS 1. Introduction…………………………………………………………………………….. 2. Research Problem……………..………………………………………………………... 3. Parent Literature………….…………………………………………………………….. a) Confucius b) Guanxi c) Confucian Values d) Confucian Values in Business i. Harmony ii. Hierarchy iii. Loyalty iv. Reciprocity 4. Concept Map……………....…………………………………………………………… 5. Major Contributions................…...…………………………………………………….. 6. Theoretical Framework.…….…………………………………………………………. 7. Research Issues / Propositions....……………………………………………………… Literature Review: Chinese Values in Business Introduction Counter to the individualism that is practised and encouraged in several Western nations, Confucian philosophy concentrates on the ethical discussion on how a society can be organised that would result in a promotion of steadiness as well as shared interests. The philosophy provides with a satisfaction of plane to communal instead of personal wellbeing and it identifies the interdependence individuals; that is, the way that one treats another ascertains the worth of the society which is formed (Rojer, 2007). Research Problem In this paper the effect of Confucianism on Chinese business will be discussed along with taking into consideration the circumstances of China's economic incorporation into the world. Some research has been done previously as well, for example by Chan (2007). The reasons for this occurrence will be presented and the part of harmony that is stressed upon by Confucianism will be considered. Some findings show that silence connections (guanxi), tolerance and harmony are stressed upon by the Chinese commerce commune (Moreiro & Li, 1999). It is said that guanxi facilitates the victory for the Chinese’s businesses (Hwang & Staley, 2005; Lovett et al, 1999; Yau et al, 2006). Although it is said that Confucianism is dead, and the Chinese government has been opposing it, yet while doing business in China one definitely feels the influence of Confucian philosophy (Jacobs, Guopei & Herbig, 1995). Parent Literature Confucius Confucius was a philosopher and it is believed that he was born in 550 BC (Kim, 2003). He established a set of moral values which were based on the standards of concord and steadiness. Confucius happened to be a counsellor for a prince and through his position he embedded his idea of morals into the defective authorized organisation of his era. His ethics affected the Chinese society to a great extent, such that these are existent even today. Guanxi In the west the business culture is said to be transaction based. In the Chinese culture it is relationship based. The westerns would describe a triumphant businessman as wealthy, whilst the Chinese culture would be called well connected (Chen, 2001). It can be said that guanxi is the Chinese term for relations existing between people. It can be carelessly termed as “connections” (Richter, 2002). Gold et al. note: ‘‘To some observers and practitioners, guanxi is an essential and defining element of Chinese culture, handed down relatively unchanged through time and space. To others, [it] is little more than a Chinese word for the personal networks, social capital, and gift economies found in all societies’’ (Gold et al., 2002: 3). Guanxi is the most significant idea when tackling with China and the Chinese. It can be applied in every communal context and not only in business. The Chinese determine their own social situation partly through the degree of their “guanxiwang, or network of contacts” (Ambler, 2008). At times the Chinese make use of their contacts only for business. Although a business can be conducted without having any relations, there are no such models where the businesses have been eventually flourishing. Apart from this, the recent history of Western businesses that were conducted in China contains a lot of examples of the organisations which have turned out to neglect guanxi and thus suffered (Ambler, 2008). “Westerners often do business with people they do not know; sometimes with people they never see. This is much harder in China, and much less likely to bring success. We believe that in order to do business with a Chinese, you must first get to know him or her. You should ideally have been recommended by a reliable third party. Contacts breed contacts. It is the first stage, getting the first contacts and getting inside the magic circle, that is hardest; once in, it is possible to exploit contacts and the contacts of contacts, and thus widen one’s own guanxiwang” (Ambler, 2008: 263). It is said that guanxiwang (guanxi networks) is an important source of information relative to those matters for which the authorized pathways are not enough. In such a commune where rules are not implemented consistently, guanxi networks prove to assist the businesses in their dealings with each other. The Chinese frequently depend on such networks when abroad and in such a commune which considers them suspicious (Chen, 2001). Due to the guanxi relations there are good turns and it is supposed that these would be returned, although at no particular time. At times gratitude due to those good turns goes on for generations and the Chinese people keep in mind the way they were helped when they required it. Usually when they return the favour, they do so in a greater degree. Due to such a wavering of the balance, the guanxi relations are strengthened and so continue. Confucian Values Confucian philosophy is centred upon five main virtues: sincerity, benevolence, filial piety, wisdom and propriety. Sincerity means to be honest, to comply with your promises, to carefully exercise your responsibilities to others. Sincerity was considered a spontaneous morality; taking into account that Confucius thought sincerity to be inclusive of the ability of being honourable by yourself. That ethical consistency actually starts with one’s sincerity (Hahn, 2000). Benevolence means to trouble oneself about the wellbeing of others and to stay ready to be of assistance to others if anyone needs you at some time. Filial piety relates to the respect that you have to show to the desires of the paternal parent. This is somewhat like the Christian commandment that says: “honour thy father and thy mother”. In the Chinese society this idea is more meaningful in the mind. Filial piety means to be completely subservient to the desires of the father. This includes living with your parents after getting married and, previously, following the entitlement of the parents to plan the marriage (Wang, n.d.). Chinese feel wisdom is extremely important and they respect knowledge. Wisdom and age are associated together and the elders are highly deferred. Propriety covers every feature of human conduct and continues on to the complicated arrangement of rituals and traditions that daily Chinese activities are bound to. (Sprunger, n.d.). Rite is an important section of the virtue of propriety. Confucian Values in Business According to Schneider & Barsoux (1997), it is required that we also take into account the within-culture disparities in order to completely get to know about the commerce side of any national tradition. Confucian beliefs happen to be a vital segment of the Chinese viewpoint, and this makes it a vital segment of doing business. Due to this factor it is thought that if there is a strong understanding of the established Chinese morals, it would certainly help in the business relations with China (Graham 1983; Osland, 1990). Confucius did not attempt to forward his business debates openly due to the fact that at his time the economy was very much dissimilar to what it is now, plus during his time the merchants were regarded as lowly as it was considered their interest is just in making profits instead of rectitude. However, still Confucian ethics are relevant in commerce conditions. These consist of harmony, hierarchy, loyalty and reciprocity (Yen, 2008). Harmony Confucius emphasized a lot on the significance of the expansion and maintenance of pleasant relations. Even though the Chinese culture consists of a sundry variety of philosophies, usually Confucianism is recognised as being the main base of Chinese culture custom. Even today the Confucian knowledge guides the Chinese communiqué conducts. There are five chief Confucius ideas that combine together so as to direct the Chinese communiqué conducts. These are jen (benevolence, humanism), yi (justice, righteousness), li (propriety, rite), zhi (wisdom) and xin (trustworthiness). Jen means humanness. Jen is entrenched in the near linkage between the self and the other. It relates to fondness, faith, liking and compassion to others by means of self-control and restraint (Chen & Chung, 1994). According to Fung (1983) by practising jen a person is able to improve and sustain others while improving and sustaining himself. As a consequence of jen there is also compliance so as to make ourselves modest on behalf of lesser (Chang, 1992). Along with this, the personification of jen is very nearly linked to reciprocity. Noted collectively, jen personifies these communiqué conducts: humility, respect, loyalty, magnanimity, trust, adroitness, and benevolence (Chen, 1987). It is expected that a Chinese manager following Confucius would be having a good nature and would be kind toward his employees. It is expected that he would be focusing on relation construction and to acting cordially. Chinese managers more look for devotion, faith, and loyalty instead of the quality of work. Every worker performs as best as he can and acts such that he is of help to everyone in the group. The discrepancies in personal performance are not regarded provided that the group as a whole is functioning suitably. The manager has a part to play in the maintenance of unity and benevolence in the whole company. Yi, together with authenticity and fairness, happens to be the inner decisive factor of suitability of kindness which works so as to direct the communiqué conducts by specifying the things that one ought and ought not to do during communal exchanges (Chen & Chung, 1994). It relates to the aptitude of suppleness as well as adaptableness with regard to the circumstances. In individual contact yi permits us to observe further than just private advantage and add to the improvement of general benefit from the viewpoint of original kindness of individual temperament (Yum, 1988). Righteousness relates to the fact that the manager has to be maintaining the best possible standards of ethical behaviour. They have to be sacrificing personal interests for the company. Several cases are perceived where the Chinese managers maintain yi. However, there are some others where this is not the case and it is replaced by face saving conduct. A peculiar proposition is that the moral origins of Confucius have been taken on more by the Western mangers (Romar, 2004). Li means ritual or respect. Ritual is related to the idea of reputation. According to the Chinese if one has a face, he has a good link in his community, and this allows for things running properly; while if he loses it that means that he gets into a dilemma or has embarrassing feelings in some particular situations (Luk, Fullgrabe & Li, 1993). Silin (1976) and Pye (1982) write that along with face saving being employed a lot so as to enable the Chinese to control a modern communal organisation, it is also used in order to attain a successful business negotiation. Therefore, there can be adverse prospective relations due to bad reputation. Nevertheless, relation and connection is familiarized in China since long (Keller & Kronstedt, 2005, p.62). The behaviour of the Chinese during the time when they are conducting business dealings is affected by the traditional significance of harmony. There is a mutual connection between culture and communication (Nakanishi, 1987) and therefore, culture is unavoidably displayed in the way a person communicates and negotiates. In communication, those belonging to the high context societies, such as the Chinese, are more probable to take on a non-confrontational and oblique approach and during the discussion they tend to talk less, employ vague language, and not directly refuse so that they are able to promote or preserve a pleasant ambience (Chen, 1997). Along with this, the Chinese have a preferment to collaboration and interdependence to egoism due to the fact that collaboration leads to making possible pleasant relations. The Chinese have always regarded gaining wisdom (xhi) as respectful. The Chinese assumes the elders to be wiser as compared to the juniors and they are highly respected. This is to be seen in the various aspects in an organisation, for example that a senior employee will be given a higher position even if he is less competent as compared to a junior worker. Lastly there is xin or trustworthiness. Along with being dependable, the manager is supposed to be dedicated to his company. The Chinese manager has to be see to it that he maintains authority and insures that each of his employees work so as to contribute to the mission of the company. In China it is seen that there is a strong direction heading to the formation and maintenance of trust. Once more the quality of being trustworthy is considered more important than that of performance. Hierarchy Hierarchy is a significant component of traditional Chinese commune. It is founded on the teachings of Confucius. According to Confucius, hierarchy assists in the avoidance of confusion and maintains peace in every aspect of life (Ghauri & Usunier, 2003), and that includes business talks. Confucius put down certain directives and relative to those there are “five constant relationships” that are responsible for governing everyday interaction. They are as follows (Tian, 2007): Ruler and Subject: This is considered the most significant; in the directives that Confucius lay down and also in the Chinese realization. Although Confucius considered it in royal respect, it is possible to make it relevant in other aspects too. This relationship is warmly linked to the asset of respect; which means that the “subject” should always respect the “ruler” as it is extremely essential. The ruler would always have to see that the subject is being treated properly and whatever decision he takes is in his best interests. In the business side this can be applied in the case of the government; that one is supposed to revere the government so that it does not react in an adverse manner or be strict to one’s business. Usually, in a Chinese company, the decision making is done by the leaders with the highest rank in the organisation and it is expected that everyone else would follow the directions given and not argue about it. It is also expected that the workers would behave loyally and would be dedicated to the company. The organisation would have to return this favour by taking care of its employees. Such holistic concern for workers reveals itself in the means that are strange in Western companies. The Chinese organisations treat their employees with more of paternity and offer several benefits which are not to be found in the Western organisations, like housing, childcare and education. Elders and Youngsters: The elder person is supposed to always direct the younger one and advise him on how he can counter the day to day problems and circumstances that he might come across, while the younger has to revere the elder at all times (Ghauri & Usunier, 2003). Age respect is yet considered to be a significant feature of Chinese custom. Younger managers are not promoted to higher positions if there are senior managers in spite of the younger being more qualified and more suitable for the job, as would say the Westerners. It is expected that the junior members would obey the elders while the elders are to care for the younger ones. Parent and Child: Confucius said that no matter what, it is the parent who is correct and has the right to give the final decision on everything. This aspect is applicable in the businesses that are conducted in the family. In such businesses one has to always keep in mind that the father, and not the son, is the final authority. However, it is possible to apply this relationship in another way too; that is, in an organisation where the boss may be considered as the parent while the junior worker would be the child (Rarick, 2007). Similar to a father counselling, teaching and directing a son, the Chinese mangers are expected to be doing this as well, but with the workers. In Confucian societies, the role of the manager in his interaction with the employee is like that of the father towards his son, although in the current Chinese companies this idea exists for both the males and the females. The Chinese managers are supposed to be mentors for the employees and act so as to offer them with a role model. In this way they meet with the requirements of father-son relationship which had been proposed by Confucius. Husband and Wife: Confucian commune was patriarchal. It was always that the husband would go for work and earn money to support the family whilst the wife would have to obey her husband in everything. Out of all the relationships, it can be said that this one has been mostly modified and if one observes the different Chinese companies, he would see that women now occupy plenty of important positions, although as yet inequality exists. Friends: Confucius regarded collaboration amongst people to be vital. At the current day this Confucian teaching relates to the fact that the company members should be working together so as to have group unity. However, in the west they consider it suitable if attention is focussed on a person. They give each person a separate task and the best ones are recognised. These kinds of practices do not take place in the Chinese customs. The Chinese would not consider it fine if a particular member is singled out for recognition over the others, as they say that this kind of conduct leads to a disruption in unity. Similarly, group responsibility is also preferred over individual responsibility. According to Confucius if the people are treated as a group and are motivated for the creation and maintenance of unity they would perform better. Loyalty Confucius is also said to have taught loyalty along with his other principles. Loyalty was supposed to be extending your responsibilities to your friends and relations. It was thought that loyalty is a very great human quality. A person had to be loyal to his family as well as to his friends. For example, a child should be loyal to his parents and this was like filial piety in the sense that you have to do what your parents want and not go against them. Then there is loyalty towards the ruler (or the country). A person has to be loyal towards his homeland at all times. Similarly, loyalty is also applied to the business side. It is imagined that the employees are going to display complete loyalty to their boss and follow his orders without questioning anything. It is said that loyalty is preferable over the performance quality (Steers & Nardon, 2005). Reciprocity Lastly, there is the Confucian idea of reciprocity. It is said that this idea grew from the other Confucian ideas, which are benevolence (jen) and loyalty (zhong) (Yen, 2008). It is called bao and it is said to play a major part in Chinese business custom (Tsui, Bian & Cheng, 2006). Westerners would call this the “golden rule”, that is, “do unto others as you would want done to you” (Moore, 1967). The main beliefs of bao are rooted in the laws that govern familial relations. However, the influence that it has can clearly be seen in the business side. Bao means revering vocational relations plus behaving with revere to people, whether the higher ones or the inferiors. Therefore, according to bao anyone who gives respect should be receiving it too. That he should be treated the same way that he treats another person. There is only a narrow difference between bao and guanxi. That is because vocational interactions and relations are viewed as essential if one has to regularly get businesses done in China with the Chinese people and have to rely on assistance from the people which would be the return for any past favours. Concept Map Major Contributions Plenty of studies are available relating to the issue of Chinese values in business. One particular study was conducted by Hwang et al. (2008). The team went on to investigate into the Confucian concept of guanxi in Taiwan. The team conducted the research and acquired original information regarding the existing views of the Taiwanese regarding the way guanxi is set up and how it is developed. Also, the researchers investigated into how guanxi is practised and whether the people tend to accept it or not. Along with this Hwang et al. conducted the study to ascertain the way guanxi affected the business works, employment and promotions, and social integrity and impartiality. The research was conducted through a questionnaire survey. Various questioning pertaining to the concept of guanxi were sent to individuals. The participants were just professionals or the students who would be becoming professionals. The results that the team obtained showed that guanxi is indeed required for the success of a business and has an important role in employment but it can also lead to corruption. The results did not show anything new as these results have been founded previously. That is, that guanxi is important in a business. The researchers could also find out the relevance of guanxi in Western businesses and whether such a business adopting this concept would succeed in the original setting. Another research is by Wah (2001) whose study was performed through mail questionnaires, structured and semi-structured interviews, and also focus groups and observations. This was done for ten years and then the results were analysed. It was found that a correlation exists between Chinese cultural values and managerial practices in Singapore as well as in Malaysia. Interviews with managers from Singapore showed that they tend to be value-driven. Although the paper (Wah, 2001) tells that there is a relation between the Chinese values and business practices, it does not delve into what the relation is. There can be research done in order to find as to how far the Chinese values and business practices be related to each other and in what ways. The research can take each factor of the Chinese values at a time in order to determine its result on business. Theoretical Framework Research Issues / Propositions This research inspects into the Confucian values that are relevant to and applied in Chinese businesses. The different elements of Confucianism are guanxi, the four virtues and the ethics relevant to the business field. It can be seen from the literature reviewed that guanxi helps a Chinese businessman to succeed in his venture. Guanxi relates to people having connections with others. A question here is whether a business can exist without the input of guanxi. Since this idea has Confucian fundamentals, it is not quite followed all over the world, yet the international businesses cannot be termed as a failure. The impact of the application of guanxi to a single Western business can be found with its counterparts following their Western traditions. In this way it would be discovered as to whether guanxi can improve a business in an alien environment. Similarly there are the five virtues which Confucius explained. There is no doubt that sincerity is required by a manager in order for a business to succeed. 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