The Myth of Westernization

There are many myths  about China and how things work there, mostly misleading. Some  exaggerate the negative aspects, while others do the opposite. One of the most prevalent myths, and one of the easiest ones to mistakenly believe, is that China is Westernizing. Foreigners usually go to Beijing or Shanghai and see the impressive skylines, the modern cars, luxury hotels and so on, then return home and tell our friends that China is becoming like New York or London. The truth is more complicated.

Since the "Open Door" policy was put into place in 1979 China has made great efforts at modernization, simultaneously allowing foreigners to bring their capital and expertise into the country. China has undergone enormous change in the nearly forty years since then, and it has come to look more like the West. But looking is not being. China is changing its exterior, its outward appearance, but its substance remains deeply traditional.

The myth of Westernization - and other myths about China - creates confusion among foreign businessmen and less than smooth business relationships between foreign and Chinese businessmen.  Making an effort to understand Chinese culture and its roots will enhance the probability of success considerably.

The Importance of Confucian Ethics in Business

Confucius was  a philosopher born in 551 BC He devoted his life to creating a set of ethical principles centered around the ideals of harmony and stability. He served as counsellor to a prince, and so was able to embed his system of ethics into the  inadequate legal system of the time. His ideals had such a broad, powerful affect on Chinese society that they have persisted into the modern era. .

Confucian ethics are taught to children all through their school years, from early childhood right up through University At the University level, there are often seminars devoted to a deeper understanding of ancient philosophy. Without a doubt Confucian philosophy is an integral part of the Chinese way of thinking, and this makes it an integral part of doing business.For this reason, a good understanding of the traditional Chinese ethics will ease the business relationships with China .

Confucian Ethics in Brief

Confucius did not directly address business negotiations because 2500 years ago the economy was very different from what it is today, and besides at that time merchants were considered the lowest rung of society because they were seen as being interested only in profit rather than righteousness . Nonetheless, Confucian ideals are applied in business situations.

a)    HARMONY: Confucius placed a great deal of emphasis  on the importance of the developing and maintaining harmonious relationships. According to Confucius’s instructions, three concepts are important to achieving harmony: ren, yi and li. Ren means benevolence. In practice, the concept works much like the Golden Rule - do unto others as you would have done to you.   Yi can be translated as "justice in human interactions". In practice it means looking for the common good before your own. Li means etiquette. This concept is closely related to another important concept, hierarchy, which will be explained later.

The cultural importance of harmony affects the way Chinese behave during business transactions. Chinese negotiators will tend "to adopt a non confrontational and indirect attitude in which they tend to be more silent, use ambiguous language, and avoid to say [sic] no directly to others to foster or keep a harmonious atmosphere" . Additionally, Chinese people prefer cooperation and interdependence to individualism, because cooperation facilitates harmonious relationships.

b)    HIERARCHY:  The importance of hierarchy in traditional Chinese society is based on the teachings of Confucius, who believed that hierarchy helps to avoid chaos and maintain harmony in all aspects of life, including business negotiations.    According to the guidelines set down by Confucius, there are "Five Constant Relationships" which govern day to day interactions.

- ‘Ruler and Subject’ is the most important, both in the guidelines Confucius set down and in the Chinese consciousness. Confucius conceived of it in royal terms, but  it can be applied to the government and citizens or companies. The ‘Ruler and Subject’ relationship is intimately connected with the virtue of reverence, i.e. it is important for the ‘subject’ to show reverence to the ‘ruler’. In business, it’s particularly important to show respect to the government in order to keep them from reacting negatively and overly harshly towards your company .

- Elder and Younger Siblings: the elder should guide the younger, giving suggestions on how to face situations in life, and the younger should always be respectful towards the elder.

- Parent and Child: According to Confucius, the parent is always right and he always has the final word on what to do and how. This is particularly visible today in family run businesses; when dealing with such businesses it’s important to remember that the father, not the son, is the final authority . The relationship also applies to business in a broader way if you think of the boss as the parent and the subordinate as the child.

- Husband and Wife: Confucian society was patriarchal - the husband worked earned money and the wife obeyed him in all things. Of the five relationships, this may be the one that has changed the most, and today you will often find women in important positions in Chinese companies.

- Elder and Younger friend: As with sibling relationships, so with friends - elder friends should guide younger, and younger friend should show respect to elder. In business, this type of relationship applies to colleagues in a particular way. If a younger colleague has an idea, instead of passing it to a project manager directly, he will generally pass it on to older colleagues who will then will pass it on to superiors, on up the chain to the person in charge

c) As previously mentioned, the virtue li, ettiquette, protocol or ritual, has much to do with business hierarchy. Using li means addressing those above you in the hierarchy with respect. Further, elders are generally given more consideration than juniors, even if they are technically of the same status in the company. In some cases this may even mean that promotions aredecided with regard to the age rather than merit .  It’s important for foreigners to be aware of these cultural norms. Find out beforehand who in the company you’re dealing with is in charge and address that person with respect when you meet him or her.  Also, be aware that Chinese businessmen may be uncomfortable dealing with young Western businessmen, and may even perceive being faced with too young a counterpart as a sign of disrespect. Finally, be aware of how the hierarchical mindset will affect Chinese people’s expectations of foreign companies. They may expect foreign companies to operate along the same lines as Chinese ones, which may cause confusion.
   
d)    COLLECTIVISM: Hierarchy and harmony are linked in the concept of collectivism. Confucian ethics focus on the individual, teaching him how to become a better man, but the ultimate goal is a better, more harmonious society where everyone behaves according to Confucian ethics. Confucianism stresses the importance of interdependence and the centrality of the family as a model for the whole of society. As Confucius himself said, "Progressing from the cultivation of personal lives, families are regulated, then states are governed, and then there is peace all under Heaven" .In this way personal and collective are interconnected in Chinese society.

As in traditional society, In modern Chinese companies importance is placed on the group. If there is a problem to be solved or a new strategy to be implemented, these tasks will be assigned to a group rather than to an individual, no matter how qualified a given individual might be. Decisions are then made collectively. The opinions of elders might have more weight within the group, but decisions are still made through consensus, and then a head of a delegation will be chosen to speak for the group based on seniority. 

Conclusions
There can be no doubt that Confucian thought has a profound impact on modern Chinese business practices, nor that this is just one of the many ways in which Chinese business practices differ from Western.  The principal problem that this difference creates is communication barriers. It’s neccesary to have a thorough understanding of cultural differences in order to overcome these barriers.

References
(i) Myths about doing business in China, Harold Chee " Chris West, Palgrave Mcmillan, 2004.

(ii) See "Chinese Business Values you need to know"

(iii) Kejun Xu, "The implication of Confucian and Daoist values for multinationals in intercultural business  communication" www.businesscommunication.org/conventions/Proceedings/2006/07ABC06.pdf

(iv) "The mind of the superior man is conversant with righteousness; the mind of the mean man is conversant with gain", Confucius, Analects, book 4-16.

(v) Chen, Guo-Ming, An examination of PRC Business Negotiating Behaviours. http://www.eric.ed.gov/ERICDocs/data/ericdocs2sql/content_storage_01/000...

(vi) You Nuo, "Modern China needs some old thinking", China Daily, http://www.chinadaily.com.cn/opinion/2006-07/31/content_654179.htm

(vii) Kejun Xu, in the cited article "the implication of Confucian and Taoist values for multinationals in intercultural business communication" gives a good example of the consequences of failing to adapt to this rule, describing the struggle experienced by Microsoft at the beginning of its presence in China.

(viii) An interesting example of the concept of "filial piety" is included in this article: http://3dethics.e-contentmanagement.com/inside/chapter8.html

(ix) Bob Riel, "The Cultural Context", http://www.eatonconsultinggroup.com/whats_new/cultural_context.html

(x) Kit-Chun Joanna LAM, "Confucian Business Ethics and the Economy", Hong Kong Baptist University School of Business, Business Research Centre Working Papers, http://net2.hkbu.edu.hk/~brc/WP200205.PDF

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