Chinese Business Culture

Schulz, Andrea

Chinese Business Culture

Zusammenfassung

Inhaltsangabe:Abstract:
The aim of this Masters thesis is to explain Chinese business culture. In order to understand why Chinese business culture is different from European or American business culture, for example, it is necessary to know the roots of Chinese cultural values: what is the specific Chinese context which made it possible that China bore its unique business culture? Which specific values are valid in China today? How do they influence Chinese business conduct?
This Masters thesis explains the development and constitution of Chinese business culture.
Furthermore, with reference to the latest literature about the topic and additional field research in a private company in China, this Masters thesis reveals recent changes in Chinese business cultural values. Because business culture is influenced by variables such as globalisation or the political system, it represents a dynamic value system over the long term. Thus, this Masters thesis updates academic knowledge about this topic.
Moreover, it addresses questions that have been raised by academic authors. Whenever I found a remark in literature which raised up an interesting issue for further research, I noted the hint down and included it into my survey. Thereby, I try to add new perspectives to the topic of Chinese business culture.
In total, this Masters thesis should therefore be a useful and topical guide to Chinese business culture.

Inhaltsverzeichnis:Table of Contents:
Table of Contentsiii
List of Abbreviationsv
List of Figuresvi
Acknowledgementsvii
1.Aim of the Thesis and Leading Argument8
2.Theoretical Background of Chinese Business Culture9
2.1Definition of Business Culture9
2.2Chinese Business Environment14
2.2.1Philosophical Background: Confucianism, Taoism and Buddhism14
2.2.2Political Background: the Socialist, Authoritarian State20
2.2.3Legal Background: Law Without Lawyers, Justice Without Courts26
2.2.4Economic Background: Business Conditions in China29
2.2.5Social Background: Changing Values37
2.2.6Conclusion: Traditions Versus Rapid Modernisation40
2.3Chinese Business Culture41
3.Research Work About Chinese Business Culture52
3.1Overview over the Research Conducted52
3.1.1Research Methods52
3.1.2Research Setting: Shenzhen, Guangdong Province, China54
3.1.3Research Setting: Keze Electronics (Shenzhen) Co., Ltd.56
3.2Observations and Own Experiences57
3.3Questionnaire […]

Leseprobe

Inhaltsverzeichnis

Andrea Schulz

Chinese Business Culture

ISBN-10: 3-8324-9986-5

ISBN-13: 978-3-8324-9986-0

Druck Diplomica® GmbH, Hamburg, 2006

Zugl. Universität Passau, Passau, Deutschland, Diplomarbeit, 2006

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sì hai wéi jia

Literal Meaning: The Four Seas as Home

The World Is My Home

Xiao He, Han Dynasty

iii

Table of Contents

Table of Contents ...iii

List of Abbreviations ...v

List of Figures ...vi

Acknowledgements ...vii

1. Aim of the Thesis and Leading Argument ...8

Theoretical Background of Chinese Business Culture ...9

2.1 Definition of Business Culture ...9

2.2 Chinese Business Environment...14

2.2.1

Philosophical Background: Confucianism, Taoism and

Buddhism ...14

2.2.2

Political Background: the Socialist, Authoritarian State ...20

2.2.3

Legal Background: Law Without Lawyers, Justice Without

Courts...26

2.2.4

Economic Background: Business Conditions in China...29

2.2.5

Social Background: Changing Values ...37

2.2.6

Conclusion: Traditions Versus Rapid Modernisation ...40

2.3

Chinese Business Culture ...41

Research Work About Chinese Business Culture ...52

3.1 Overview over the Research Conducted ...52

3.1.1 Research Methods ...52

3.1.2 Research Setting: Shenzhen, Guangdong Province, China...54

3.1.3 Research Setting: Keze Electronics (Shenzhen) Co., Ltd. ...56

3.2 Observations and Own Experiences ...57

3.3

Questionnaire Results ...75

Conclusion ...91

Bibliography ...92

5.1 Internet ...92

5.2 Encyclopedias ...93

5.3 Newspaper and Magazine Articles ...93

5.4 Literature ...93

Appendix...99

6.1 Map of China ...99

6.2 The City of Shenzhen ...100

6.3

Keze Electronics (Shenzhen) Co., Ltd...106

6.4 Relevant Email Contact Between Faber-Castell and Andrea

Schulz ...109

6.5

Survey About Chinese Business Culture ...126

Affidavit...132

List of Abbreviations

CJV

Contractual Joint Venture

CCP

Communist Party of China

CEO

Chief Executive Officer

DINKs

Double Income No Kids

DNA

Desoxyribonucleic Acid

DVD

Digital Versatile Disc

etc.

et cetera, and so on

EJV

Equity Joint Venture

FCC

Faber Castell China

GDP

Gross Domestic Product

IMF

International Monetary Fund

Joint Venture

NGO

Non-Governmental Organisation

potentia hydrogenii, concentration of

hydrogen ions in liquids

p.m.

post meridiem, afternoon

PMS

Public Ministry for Security

RMB

Renminbi, Yuan, 1 = 9.44554 RMB

Chinese currency

SEZ

Special Economic Zone

SOE

State-Owned Enterprise

TVE

Township and Village Enterprise

vs.

versus, as opposed to

WFOE

Wholly Foreign-Owned Enterprise

WOS

Wholly-Owned Subsidiary

WTO

World Trade Organisation

ZGTJNJ

Zhongguo Tongji Nianjian

China Statistical Yearbook

see Xe.com, 15.11.2005

List of Figures

Important Criteria for Business Success in China

Strategies for the Creation of a Good Relationship with Business Partners

What Is Important in Business Relationships?

Do You Act According to Confucian Principles? If Yes, Which One(s)?

Has Your Company Been Influenced by Western Management Styles?

Values Important in Private Family Life

Values Important in Business Life

Does Your Company Practice Intercultural Management?

vii

Acknowledgements

This Masters thesis about Chinese business culture comprises a theoretical

and a practical part, based on research conducted in China.

To conduct this research project during my stay in Shenzhen, including

personal observations and experiences as well as a questionnaire about

Chinese business culture, was only possible with the support of my Chinese

colleagues and friends.

Thus, I would like to thank the following individuals explicitly for their warm

welcome and friendly help:

Jacky Jiang, Keze Electronics (Shenzhen) Co., Ltd., China

Joanna, A.W. Faber-Castell Guangzhou Stationery Co., Ltd., China

Besides that, I thank my parents for their continuous support during my studies,

my boyfriend who always encourages me, as well as the University of Passau

without whom this research would not have been possible.

viii

Aim of the Thesis and Leading Argument

The aim of this Masters thesis is to explain Chinese business culture. In order

to understand why Chinese business culture is different from European or

American business culture, for example, it is necessary to know the roots of

Chinese cultural values: what is the specific Chinese context which made it

possible that China bore its unique business culture? Which specific values

are valid in China today? How do they influence Chinese business conduct?

This Masters thesis explains the development and constitution of Chinese

business culture.

Furthermore, with reference to the latest literature about the topic and

additional field research in a private company in China, this Masters thesis

reveals recent changes in Chinese business cultural values. Because

business culture is influenced by variables such as globalisation or the political

system, it represents a dynamic value system over the long term. Thus, this

Masters thesis updates academic knowledge about this topic.

Moreover, it addresses questions that have been raised by academic authors.

Whenever I found a remark in literature which raised up an interesting issue for

further research, I noted the hint down and included it into my survey. Thereby,

I try to add new perspectives to the topic of Chinese business culture.

In total, this Masters thesis should therefore be a useful and topical guide to

Chinese business culture.

Theoretical Background of Chinese Business Culture

2.1 Definition of Business Culture

In order to define the term "business culture", it is useful to separate the two

words "business" and "culture", define each of them separately, and then come

to a conclusion about the meaning of the whole term.

According to the Handbook of Business Terms, business is "any activity,

enterprise, or transaction designed to provide consumers with goods or

services for a profit."

In A Dictionary of Business Terms, business is defined

as "any occupation in which people, at the risk of loss seek to make money by

producing commodities for sale, or by buying and selling commodities, or by

hiring the services of others for utilisation at a profit. Any gainful occupation for

which profit is the goal and in which there is a risk of loss."

Thus, business

means any organisation with the purpose of making profit, including small

Chinese private enterprises, but also State-Owned Enterprises (SOEs) and

especially the large national or multinational companies including their Joint

Ventures (JVs) in China.

There is no single valid definition of culture. Many authors define it in many

different ways. However, in short, one can say that culture is the subconscious,

learned, not inborn way members of one particular society think, feel, act and

communicate, including the tools they use to do so. Some authors speak of it

as a mental programme, which determines human behaviour like a complex

strand of DNA.

Symbols, for example gestures, provide the context, which

gives meaning to information. On the one hand, cultures are "extremely stable

Nisberg, 1988, p. 42

Alexander Hamilton Institute, 1987, p. 60

see Scheff, 1990, p. 27 and Geertz, 1983, p. 51

over time"

, but on the other hand, they can also change and adapt. People's

environment, for example the political system or the economic situation

influence and change their cultural values over the long term, while these

cultural values also facilitate the development of certain political or legal

systems. In addition, they influence people's short-term experiences, for

example in which situation one should be obedient, laugh, show respect etc.

Thus, culture and environment depend on each other and interact. In addition,

the border between biology, culture and personality is not strictly defined:

while man's most profound experiences, already experienced by man's

predecessors, the animals, from generation to generation, are manifest in

man's brain, for example expressed as instincts

, less profound ones - but also

very profound, handed down for many generations - are manifest in his culture,

for example the degree of hierarchical organisation of a society, as its

tolerance differs from society to society. Experiences, which are least profound,

determine man's personality.

There are cultural values determined by and

stable within the same age group, generation or the entire era.

If you

compare cultures around the world, societies differ significantly, for example

with respect to their values, practices, including rituals, heroes and symbols

like gestures or facial expressions, beliefs, action chains

, concepts of logic,

space, time, organisational structure and extension systems

. Extensions are

the tools man uses to assist his organs. For example, a microscope enhances

his eyes, a car his ability to move fast, written language extends spoken

language etc. In order to be able to compare all the cultures around the world,

a system is needed. Some authors (Hall, Hofstede, Lewis, Gesteland,

Trompenaars) have developed cultural models with up to seven dimensions or

typologies. Their purpose is to allow the exact definition of each culture around

Hofstede, 2001, p. 34

see Geertz, 1973, p. 33 ff

see Hofstede, 1997, p. 5

see Hofstede, 2001, p. 35

see Hall, 1977, p. 141 ff

see Hall, 1977, p. 25 ff

the world and as a result, their comparison. Edward T. Hall

distinguishes

between high-context and low-context cultures. In high-context cultures, the

meaning of an information is highly dependent on the situation in which it is

embedded. Low-context cultures transmit the meaning directly through the

information, for example the spoken word. He also explained two different

concepts of time: polychronic vs. monochronic time. The monochronic concept

of time defines time as linear and "emphasises schedules, segmentation and

promptness"

, while the polychronic concept of time is characterised by

several things happening at once and stresses "involvement of people and

completion of transactions rather than adherence to preset schedules."

Geert Hofstede

conducted an empirical analysis of 50 different countries

through his famous IBM-study. As a result, he was able to identify five cultural

dimensions, in which each of the 50 countries has its own position. The five

dimensions are: power-distance: this variable, reaching from low to high on the

dimensional scale, represents the degree to which the population of the

country accepts status differences. Some countries tolerate an extremely

hierarchical order of society, while others prefer equality among their fellow

countrymen. Uncertainty avoidance: this variable shows the degree, to which

members of a society fear future uncertainty. Individualism vs. collectivism: a

country can be more individualistic or more collectivistic, depending on the

importance it attaches to the individual. In collectivist societies, the individual is

always subordinate to the group and should not stand out of it. In individualistic

societies, individual rights and freedom are more important than group needs.

Masculinity vs. femininity: values associated with women are mostly social

goals, such as helping others and establishing relationships. Values

associated with men mostly comprise ego goals, such as earning money and

career. Masculinity thus describes a society, in which gender roles are clearly

see Hall, 1977

Hall, 1977, p. 17

see Hofstede, 2001

separated, whereas femininity describes a society, in which gender roles

overlap: in such a culture both women and men are expected to be sensitive

and emphasise quality of life.

Confucian dynamics, also called long-term vs.

short-term orientation: this dimension shows the extent to which a country

favours persistence, personal stability and respect for tradition. Fons

Trompenaars

even identified seven cultural dimensions: rules and

relationships, the individual and the group, indirect vs. direct communication,

how to reach status in a society, time and the role of nature. Richard D. Lewis

differentiates between linear-active, multi-active and re-active cultures. The

categories linear-active and multi-active correspond to Hall's concept of

monochronic and polychronic time: linear-active cultures tend to plan

everything and do only one thing at a time, while multi-active cultures do

several things at once. The third category, re-active cultures, includes,

according to Lewis, Southeast Asians who are described as introvert and

respect-oriented listeners. This category to some degree overlaps with the

dimension expressive vs. reserved cultures established by Gesteland,

because reserved cultures can also be described as introvert cultures. Richard

R. Gesteland

identified four dimensions: relationship-oriented vs.

task-oriented: this category is sometimes also called relationship-oriented vs.

deal-oriented and focuses on the preference of either relationships or rules.

This shows that it largely overlaps with Trompenaars' category of rules and

relationships. Formal vs. informal: Formal societies tend to be organised in a

steep hierarchy, while informal cultures stress equality. This dimension

therefore overlaps with Hofstede's dimension of power-distance. If seen in

reference to communication, formal communication corresponds to indirect

communication in high-context cultures, while informal communication means

rather direct communication and thus can primarily be encountered in

see Hofstede, 1997, p. 113

see Trompenaars, 1993

see Lewis, 2000

see Gesteland, 1999

low-context-cultures. Monochronic vs. polychronic: this dimension was already

described with respect to Hall. Reserved vs. expressive: whether a society

shows emotions freely during communication rather freely or, at the other

extreme, seems to hold back more, is the distinction described by this

dimension. Trompenaars describes a similar idea: the extent to which a society

shows feelings. One soon realises soon that all these categories overlap,

because the same variables have only different labels, with the result that they

can be summarised under one main heading. Therefore, in my opinion, the

most important categories are: uncertainty avoidance, high-context vs.

low-context, formal vs. informal, deal-focused vs. relationship-focused,

masculine vs. feminine, individualistic vs. collectivistic, expressive vs. reserved,

monochronic vs. polychronic, long-term oriented vs. short-term oriented, and

the role of nature.

As a result, business culture can be understood as the culture of business in

one country or area of the world. This includes attitudes, values and norms in

enterprises and profit-oriented organisations as well as people's behaviour

during business activities, for example in dealings and relations with

customers. It is evident that this behaviour is largely influenced by the

superordinate culture in question. Business culture itself also interacts with the

environmental conditions: it can adapt to environmental conditions over the

long term, while it also determines people's preferences for specific

environmental conditions such as the economic and political system, laws etc.

As Warner puts it, "business culture of any country grows out of its business

environment, past and present. The business environment itself is described

as taking in the relationship between business and government, business and

the economy, business and finance, business and trade unions, etc."

Warner, 1996, p. 440

However, no culture can completely be described in every detail. As Hall puts it,

"the reason one cannot get into another culture by applying the

let's-fit-the-pieces-together' process is the total complexity of any culture."

However, the most important values constituting it can be sketched, but this

will like every model which leaves out details distort reality into a sketch of

reality. This should be kept in mind, when reading further on.

2.2 Chinese Business Environment

In order to understand Chinese business culture, it is essential to know the

cultural values and economic system of China, which are substantiated in

China's history. Historical events determined the development of today's

business behaviour and thinking in China. Thus, I am going to start with an

overview of the philosophical, political, legal, economic and social background

of China.

2.2.1 Philosophical Background: Confucianism, Taoism and Buddhism

Known in China as the "Three Teachings"

, Confucianism, Taoism and

Buddhism are the main religious and philosophical ideas that had a great

influence on Chinese values, similar to the influence of Socrates' or Plato's

philosophies on Western culture. Confucius, the founder of those philosophical

ideas, which later developed into what we know as Confucianism, was born in

551 or 552 B.C. and lived until 479 B.C. He died a natural death at the age of

72. His original name was Kung Chiu, but later he was called Master Kong, in

Chinese Kong Fuzi, by his pupils. Confucius, as we know his name, is a Latin

form of Kong Fuzi. During his lifetime, which was marked by political turmoil

and unrest, his ideas were hardly known and he was not famous at all.

It was only about 300 years later during the Han Dynasty (206 B.C. 8 A.D.)

that his ideas were made the state religion and Confucianism spread. Even

Hall, 1977, p. 131

Ellwood, 1986, p. 5

more important for the influence of Confucianism on Chinese culture is the fact

that "ultimately, knowledge of the Literati Teaching, demonstrated by passing

state examinations on the classical scriptures, became the main avenue to

Chinese government posts."

Confucianism then established its stand in

Chinese society and "would dominate Chinese philosophical thinking for about

two millennia."

While during the socialist period of Cultural Revolution under

Mao in China (1966 1976) Confucianism was opposed by the

"Anti-Confucius Campaign (1973 1974)"

, its foundation in people's minds

and in Chinese culture never diminished: "Confucianism remains widely

accepted today as a core element of Chinese culture, even by official

representatives of the Communist Party of China."

Confucius' "great merit is

his discovery of the moral character of human relationships."

He set store by

benevolence in human interaction and in good government as well as the

value of modesty. One can say that his motto was: you should not do to others,

what you would not have them do to you. For Confucius, a stable society was

characterised by unequal relationships ordered hierarchically, illustrated by the

five cardinal relations (wu lun) between sovereign and subject, father and son,

elder brother and younger brother, husband and wife as well as friend and

friend. All of these relationships are unequal, except one: the relationship

between friend and friend.

Loyalty and respect towards the higher ranking

person, especially from son towards father, a concept known as filial piety, are

the most important values in those unequal relationships. Lang

concludes: "The direct consequences of this vertical order in Chinese society

are a strong respect for age and an autocratic centralisation of government

and management..."

But Confucius did not only teach respect and loyalty

towards higher ranking individuals, including older ones, but also kindness

Ellwood, 1986, p. 7

Ching, 1993, p. 53

Ching, 1993, p. 52

Lang, 1998, p. 29

Ching, 1993, p. 57

see Lang, 1998, p. 30

Lang, 1998, p. 30

towards subordinates: the ruler must care for his subjects and the parent for

the child.

In addition, the concept of equality also has a foundation in

Confucian thinking: "...the Confucian society regards itself as a large family:

within the four seas all men are brothers."

As a consequence, egalitarianism

and especially collectivism, in which group needs as well as social goals are

more important than the individual, form part of Confucianism: "Giving up

individual interests in favour of a higher social prerogative is considered one of

the character dimensions of a Confucian `perfect personality'."

Another

important point is "...Confucius' exhortation to education and hard work."

Confucius himself said: "Study as if you could never [achieve enough] [...] and

as if you had to fear [...] losing it again."

Lang reminds us that "this aspect of

Confucian philosophy has often been cited as the main reason for the

economic boom that has occurred in most of the East Asian countries over the

last few decades."

He further says: "Confucianism has had a tremendous

impact on the form and content of education in China. In particular, the elitism

of the Confucian educational system and the long tradition of theoretical

learning have shaped training methods in China."

Another aspect of

Confucianism to mention here is the family as a basic institution of

society: "The fundamental loyalty of an individual was to [his or her] family, not

to the state or the public [...] as a whole. A person certainly could be public

spirited, but not at the expense of [his or her] family."

This means that family

was perceived as the core unit of society and thus fundamental to social

organisation: "The self-sufficiency and economic well-being of the family were

for millions of Chinese the only guarantee of a decent and secure life

throughout centuries of political turmoil and sometimes arbitrary imperial

see Ching, 1993, p. 58

Ching, 1993, p. 58 and The Analects

Wang, 1998, p. 23

Lang, 1998, p. 31

Stange, 2004, p. 50

Lang, 1998, p. 31

Ogden, 1995, p. 17

rule."

The last important point of Confucianism to mention here is respect for

tradition and age. Confucius once stated: "I do not create newly, I pass down, I

believe in ancient times and love them."

Ching explains the practical

implications of this mindset: "Respect your own elders, as well as others'

elders..."

Wang further states: "In traditional China, first-order preference is

given to both the study of history and ancestor veneration. This means that the

ideas of elders and predecessors are thought of as practically imperial edicts.

The younger generation must follow regulations established by the `aged',

more often than not identified as the `older generation'."

As a conclusion, one

can say that the fundamental values of Chinese society, namely benevolence

towards other human beings, hierarchical order, egalitarianism, collectivism,

the importance of studying and learning as well as respect for tradition and age,

are all rooted in Confucian teachings.

Taoism developed as a mystical philosophy or esoteric religion on the basis of

two texts: one is called Tao-te-king, the other one Chuang-tse. The author of

Tao-te-king is believed to be Lao-tse, but historians are neither sure about his

life nor do they know whether the author of this text was really one person or

more than one. Possibly, he was even an older contemporary of Confucius. It

is certain, however, that the author of Chuang-tse is called Chuang-tse, too.

Tao means "the way" and describes an absolute and basic state, which already

existed before the universe, an "unchanging first principle"

. The Taoist's ideal

is the return to nature in order to live in balance with it. Te means "power" and

abounds in the "power of the natural, of simplicity, even of weakness"

. In

order to achieve such unity with nature and, in a broader context, even with the

universe, the virtue of non-action should be practiced. Non-action

Lang, 1998, p. 30

Stange, 2004, p. 43

Ching, 1993, p. 59

Wang, 1998, p. 24

see Ching, 1993, p. 87

Ching, 1993, p. 88

Ching, 1993, p. 89

means "without performing any acts or functions that would be characteristic of

human or a superhuman lord."

As Ching explains, "Lao-tse suggests a

measure of asceticism, of withdrawal from the world its pleasures, and even

its cherished values."

The aim is to achieve a "self-transcending liberation

from the limitations of one's own mind from one's self-interested inclinations

and prejudices."

This requires "the emptying of the senses and of the mind

itself."

By-and-by an immortality cult developed, based on Chuang-tse's

description of the perfect man, which "has led to the development of the

religious belief that there are `Immortals' who are no longer dependent on a

diet of grains, have conquered death, and are able to help others to overcome

sickness and other evils."

Chuang-tse even wrote passages in this text that

involve shamanism and ecstasy, including healing and magical powers.

The

three life-principles of breath, vital essence or semen, and spirit, are cultivated

through the practice of techniques like healing, breath circulation, meditation

and sexual hygiene.

As a by-product of those techniques, martial arts as part

of Chinese medicine came into being, for example Tai-Chi. The doctrine of

cosmic harmony, represented by a balance of the contradicting forces of yin

and yang, also originates from Taoism. To summarise, Taoism is a mystical

philosophy, which teaches people how to achieve harmony as well as to unite

with nature and the universe through non-action.

Prince Siddharta Gautama or Buddha Sakyamuni (560 480 B.C.E.) is known

as the founder of Buddhism and lived in Northern India during a time, which

was marked by political turmoil just like the lifetime of Confucius. Buddha's

philosophy, later known as Buddhism, did not enter China until around five

Ellwood, 1986, p. 8

Ching, 1993, p. 89

Ching, 1993, p. 91

Ching, 1993, p. 93

Ching, 1993, p. 91

see Ching, 1993, p. 94

see Ching, 1993, p. 105

centuries later.

Buddha's aim was to redeem humanity from their sufferings

with the aid of his philosophical ideas. Moreover, these ideas were "opposed to

distinctions of caste and class."

In China, the Mahayana Buddhism spread,

not the Hinayana type. Mahayana Buddhism stresses compassion for other

human beings. According to Buddha, every human being is bound by an

endless cycle of rebirths into our world of sufferings, explained by the Four

Noble Truths. Finding the way out of this vicious circle is the highest state one

can attain and is called nirvana: "Primitive Buddhist sutras define nirvana as

the extinction of greed, the extinction of anger, the extinction of ignorance."

To attain this state, people should live according to the Noble Eightfold Path,

eight life principles laid out in the fourth of the Four Noble Truths. The Noble

Eightfold Path encompasses "the right view, intention, speech, action,

livelihood, ambition, mindfulness and concentration."

This comprises a moral

life without murder, robbery, lying, adultery and alcohol as well as the practice

of meditation in order to detach the mind from worldly desires and evils.

Mahayana Buddhists highlight that, while mentally rising above the worldly ills

and pleasures, one should still be involved in this world in order to help other

people to attain salvation, which is called compassion.

By doing so, one

accumulates good "karma". Bad karma, collected through immoral actions, is

added to the good karma at the end of life. The sum of the two will determine

one's rebirth as a human being, an animal or other forms of life. In order to be

reincarnated as a human being rather than to be reborn as an animal, better

karma is needed: "Depending on the type of karma accumulated during a

lifetime, sentient beings are reborn in one of six realms of existence."

Because of the concept of karma, fate is regarded as just, no matter how

see Ellwood, 1986, p. 10

Ellwood, 1986, p. 10

Miszuno, 1996, S. 132

Knierim, 11.10.2005

see Ellwood, 1986, p. 11

Mizuno, 1996, S. 27

difficult it may be to suffer this fate.

In total, "karma and reincarnation added

a new dimension to the way Chinese thought about ancestors and the

afterlife."

In Mahayana Buddhism, somebody who attains nirvana can

choose rebirth as a Boddhisattva, who is able to redeem human beings from

their negative karma.

As a summary, it can be said that Buddhism adds the

valuation of ancestors and afterlife to Chinese cultural values. It was able to

find greater prevalence in China in the form of Mahayana Buddhism,

emphasising compassion for other human beings: "Buddhism could not have

survived in China the way it did, had it not adapted itself culturally to the

environment."

This is important information which allows us to draw the

conclusion that in Chinese culture, compassion for other human beings is

extremely valued.

2.2.2 Political Background: the Socialist, Authoritarian State

China has a long political history with some characteristics that still influence

today's political life. From imperialism with many dynasties which ruled China

until the revolution of 1911, through the foundation of the Republic of China,

Warlord Regimes, the war against the Japanese occupation (1937 1945)

with the victory of the Communists in 1949, the foundation of the People's

Republic of China on 1

October 1949, until today's politics of economic

reform combined with authoritarian socialism, China's population has

undergone a multitude of different political systems, each of them with its own

ideology and values. China's current political system, which was established in

1949, was once arranged as a totalitarian communist regime, especially under

Mao, the leader of the Communist Party of China (CCP), from 1949 until his

death in 1976. He also led the Cultural Revolution from 1966 until 1976, during

which people of non-conformist political opinion were executed or arrested,

see Bechert, 1966

Ellwood, 1986, p. 12

see Bechert, 1966

Ching, 1993, p. 149

even if they were party members. Nowadays, academics agree that the CCP

has lost some of its legitimacy and power and opened up towards a more

democratic style of leadership, although it is still far away from Western style

democracy. Heilmann defines it as "fragmented authoritarianism".

This

means that, while, on the one hand, during periods of relative political stability,

the power of the central state is weak and regional governments are strong, on

the other hand, during periods of crisis, the central government with its handful

of leading rulers acts quickly and has the authority to implement its decisions,

regardless of the regional governments' opinions. China's political system is

also often described as a socialist market economy. This definition

concentrates on the economic reforms that took place in recent years, which,

for example, have resulted in private business ownership now being tolerated,

while in total, the political system still maintains many elements of a communist

regime. Those elements are: the power monopoly of one sole party,

concentration of powers without any control mechanisms rather than

separation of powers, a state security organ directly subordinate to the party,

state supervision of political deviation, dominance of public ownership as well

as extensive social control.

Furthermore, extensive bureaucracy with

overlapping responsibilities, corruption, the importance of networks and

relationships as well as bargaining techniques when dealing with the state

bureaucracy, the value of political consensus, and political control of the

economy characterise the Chinese political system. I am going to describe

some of these elements in detail, because they constitute and influence

business culture in China: bureaucracy did not just recently emerge under

communism, but actually has a long Chinese tradition: "Bureaucracy has been

a feature of China for millennia. Under the Qin and Han dynasties, strong

centralised bureaucracies were developed first as a counterweight to and later

Heilmann, 2004, p. 281

see Heilmann, 2004, p. 193

as a replacement for the land-owning nobility."

Today, the bureaucratic

apparatus of the state consists of 40 million functionaries, who work on

different levels of the bureaucracy.

These functionaries are self-confident

and have a strong status in society: "Because China is a society that has a

strong historical and contemporary sense of hierarchy, Chinese government

officials have a deeply rooted understanding of the power of authority

compared to their Western counterparts. In China, officials and bureaucrats

link respect for authority with respect for their position of authority."

Moreover,

the responsibilities of each government department are not clearly defined, so

these responsibilites overlap.

In addition, government officials usually have

the power to disapprove official applications, for example for the establishment

of a JV, but not to approve them. In a socialist political system like that of China,

each official is punished for mistakes, but not rewarded for innovation.

Therefore, "every decision, no matter how trivial, is referred up the

bureaucratic structure as far as possible. In this way, lower-level officials

cannot be blamed for wrong decisions or actions that they did not develop."

Legal statements from the central government are usually kept in a general

form, so that regional governments have the freedom to interpret them. This

results in a strong regional difference of law enactment and business

regulation within China, and on top of that gives way to corrupt

practices: "However, local governments have also taken advantage of their

new freedoms to protect their immediate markets and interests."

Corruption

usually slows economic development. However, there are different types of

corruption. In China, the only kind of corruption which prevails is that which is

compatible with economic development: politicians regularly demand a share

Ambler, 2000, p. 85

see Heilmann, 2004, p. 84

Wang, 1998, p. 102

see Ambler, 2000, p. 86

Alston, 1997, p. 44

Alston, 1997, p. 40

of enterprises' profits in exchange for administrative benefits.

Blackman

describes what this means in practice: "A multinational manufacturer in South

China made an agreement under which the more material was imported, the

more money the local mayor and his bureaucracy made...In return for benefits

from the profits and the skills of private business, bureaucrats provide access

to information about policy thinking in the government and the likely

interpretation of the policy at the local level, access to licences, facilitation [of]

[...] administrative procedures and access to raw materials, public sector

markets and infrastructure."

As can already be understood, bureaucracy is

very powerful in China. In order to achieve a goal, solid personal relationships

with bureaucrats are crucial, because nearly every part of society is organised

bureaucratically, no matter if it concerns the establishment of a company, a

wedding, or the purchase of a house: "Finding the appropriate way to contact

government officials is the practical concern of anyone wanting to do business

in China."

It is common to give banquets and gifts to government officials in

order

build

such

relationships.

This

can

called

networking: "Networking, too, a practice common in American and Chinese

political contexts, is vitally important."

These network practices are not only

typically Chinese, as often stated in reference to the Chinese word guanxi

which signifies relationship, but are also typical of communist political

systems: "The social networks that developed to provide mutual assistance

under communism were often dense, but they were also narrowly focused and

highly distrustful of outsiders."

When it comes to business, bargaining about

specific conditions, for example tax rates, is allowed, as law interpretation is

flexible: "Given the scarcity of goods and an imperfectly developed market,

exchanges of goods and services as well as support are also subject to

see Heilmann, 2004, p. 185

Blackman, 2000, p. 177, 195

Wang, 1998, p. 101

Starr, 1997, p. 76

see chapter 2.3

Gries, 2004, p. 236

political bargaining. Political bargainers in China pay careful attention to their

relative rank and status, which affect both the process and the outcome."

With the Confucian heritage of collectivism, in which the group is more

important than the individual, and the Taoist value of harmony, it is

understandable that in Chinese politics, a decision is reached via consensus

rather than majority voting like in Western political systems.

The political

sphere has still got a lot of power to ensure control over businesses in China.

Before economic reforms took place under Deng Xiaoping in 1978, the

"danwei" was the Chinese unit on a local level in charge of control of workers

and factories. Every person entering the labour market was assigned to a

danwei by the state, which comprised not only a factory as a workplace, but

also social institutions, such as housing, hospitals, doctors, shops, cinemas

and entertainment programmes for the workers - all financed by the danwei,

which, in turn, was financed by the worker's unions. An enterprise was usually

led by one party politician and the manager of the SOE. This system ensured

total control over the workers' political opinions. Frequently, workers were also

obliged to attend political sessions during work time, in which the state

ideology was taught.

Today, some state enterprises have been privatised

and around 22 million private businesses have emerged. These account for

50% of total tax income from enterprises and produce 20% of all goods and

services.

But still, the government also controls private enterprises via the

acceptance or rejection of administrative approvals. As research has shown,

the government favours foreign business applications that ensure advantages

for the development of the local economy, technology transfer to Chinese

businesses, profit generation, export orientation, as well as a transfer of

management skills.

In addition, the remaining SOEs, of which there are

many, are still under tight state control: "However, the CCP branches remain

Starr, 1997, p. 75

see Starr, 1997, p. 75

see Alston, 1997, p. 87 - 93

see Brenner, 2000, p. 34

see Li, 2001, p. 261

powerful watchdogs within the companies."

The organisation of China's

security system furthermore confirms Gries' statement cited above, which says

that the state is highly distrustful of outsiders: "China's elaborate internal

security system is administered by the Public Security System (PMS), which

runs not only the uniformed police and plainclothes agents, but the security

agents in each workplace and each street committee. There are said to be

thirteen bureaus in PMS, with one of them solely responsible for monitoring the

activities of foreigners in China."

Heilmann notes that the Public Ministry for

State Security operates a growing network of covert agents. They operate for

cover organisations like companies or Non-Governmental Organisations

(NGOs) and concentrate mainly on business espionage.

However, the

state's influence of control over Chinese citizens is declining on the whole,

because with the rise of private businesses the role of the danwei in its

function of social control at the workplace is diminishing.

Freedom of

expression in private circles and the arts, domestic and overseas journeys as

well as economic involvement all have grown in recent times.

Despite this

fact, governmental control over the media, including the internet, and NGOs,

which are usually forbidden in case they become too influential, is still tight.

As a summary, one can say that China's socialist, authoritarian regime has

extensive power over the people and the economy. While doing business in

China, one has to be aware of the mechanisms of state bureaucracy with

overlapping responsibilities, corruption and state control. It is only possible to

effectively deal with the state bureaucracy through networks of personal

relationships with important officials. Political decisions, including decisions

concerning businesses, are usually reached after long bargaining periods and

Lang, 1998, p. 35

De Mente, 1989, p. 109

see Heilmann, 2004, p. 146

see Heilmann, 2004, p. 195

see Heilmann, 2004 p. 197

see Heilmann, 2004, p. 212 ff

in consensus.

2.2.3 Legal Background: Law Without Lawyers, Justice Without Courts

The Chinese legal system, in its current constitution, has a fundamentally

different approach towards dispute settlement than the Western legal system.

It has been influenced not only by Confucian values, but also by the Legalist

approach, a state ideology proclaimed mainly during the Chin Dynasty (221

206 B.C.), as well as by the communist political system still in power today.

The Confucian value of "li" stood for virtue and ethics in government and thus

"was flexible to enable a government to function harmoniously".

As a result,

morality was regarded as more important than law, and shame functioned as a

social sanction. For the Confucians, "law represented an instrument of a

tyrannical government based on compulsion."

Even in current Chinese law, it

is still possible to identify elements of Confucian philosophy: reciprocal duties

between the state and its citizens as well as the young and the old can be

found in the Constitution.

In addition, the Confucian value of the family as a

social institution is incorporated into Chinese law through family leave,

protection of reproductive health as well as childcare benefits. "One final

example of the legal codification of traditional cultural values is the requirement

that children support their parents, which appears in both the Marriage Law

and the Criminal Law (Article 183)."

The Legalists adopted a view of government solely by law, completely at odds

with Confucian thinking. They also had a negative approach towards human

nature, which they understood as distrustful. Legalism was an approach to

re-establish order in times of political chaos. The Legalists therefore

see Goh, 2002, book title

Goh, 2002, p. 34

Goh, 2002, p. 33

see Ogden, 1995, p. 191

Ogden, 1995, p. 192

"subordinate(d) all human relations to that between ruler and minister,

divest(ed) this of any moral significance, and recommend(ed) that the ruler

ascertain(ed) the loyalty of his subjects by using the `two handles' of rewards

and punishments."

Legalism was mainly an instrument for power

maintenance through harsh penal laws. Therefore, the political idea of the rule

of law until today does not arouse positive feelings among Chinese citizens,

but rather reminds them of tyrannical political leaders who tried to stay in

power. In short, litigation is "tainted with the notion of immorality, [being]

time-consuming, filled with corrupt practices, costly, humiliating, and opposed

to the Chinese world view."

This is also reflected by the following Chinese

proverb: "Let householders avoid litigation; for once go to [court] [...] and there

is nothing but trouble."

Since 1949 the socialist Chinese government has not established any

independent judiciary. Instead, the CCP Commissions for Politics and Rights

supervise police, courts and attorneys at each level of the judicial system.

Still today "the CCP continues to influence the decisions of judicial officers,

who seek to demonstrate their loyalty to the CCP by listening to its views.

Indeed, the CCP will actually intervene whenever it finds the case to be

important, difficult, or to have socially important implications."

In 1998

Chinese lawyers estimated that around 70 percent of the litigations concerning

business matters were decided in favour of the demands of local

governments.

During the Mao era, there was also a lack of qualified lawyers:

"While in 1980 there were only about 1,000 lawyers, their number has

increased to 110,000 in 2002."

Another problem was that citizens were

relatively uninformed about their rights, with the result that "this permitted

Ching, 1993, p. 81

Goh, 2002, p. 77

see Heilmann, 2004, p. 144

Ogden, 1995, p. 182

see Heilmann, 2004, p. 148

Heilmann, 2004, p. 150

Details

Seiten
Erscheinungsform: Originalausgabe
Jahr: 2006
ISBN (eBook): 9783832499860
ISBN (Paperback): 9783838699868
DOI: 10.3239/9783832499860
Dateigröße: 4.5 MB
Sprache: Englisch
Institution / Hochschule: Universität Passau – Philosophische Fakultät, Studiengang Sprachen, Wirtschafts- und Kulturraumstudien
Erscheinungsdatum: 2006 (November)
Note: 3,0
Schlagworte: china geschäftskultur kulturwissenschaften asien kulturraum

Autor

Andrea Schulz (Autor:in)

Chinese Business Culture

Zusammenfassung

Leseprobe

Inhaltsverzeichnis

Details

Autor

Andrea Schulz (Autor:in)