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Chinese Cultural
Values and Their Implications in Business
Chinese business networks are sustained by Chinese cultural values
and tradition. When these values disappear, the networks will collapse.
The following values have been identified as the key Chinese cultural
values:
trust
mistrust
reciprocity
face
time
harmony
hierarchy
power distance
long-term orientation
These Chinese cultural values are the main representations of the
seven core rituals of Confucianism: Benevolence, Harmony, Midway,Forbearance,
Filial Piety, Trust and Cautious Words.
Trust/Mistrust
In China, chronic suspicion prevails. Chinese 'appear to be quite
suspicious and cold towards strangers with whom relationships have
not been established'. Nobody could be trusted except one's kinfolk
in the form of the extended family. As Chinese do not trust outsiders,
a social network consisting of family members, relatives, friends,
classmates, colleagues etc is the immediate sphere on which trust
can be established, reciprocated and developed. Such an obsession
with trust is caused by another, often neglected, phenomenon in
China, dishonesty. In business transactions, a great deal of adulteration
of goods is practised, for example, weights and measures are juggled.
To protect one's interest and ensure that opportunistic behaviours
such as cheating are kept to a minimum, trust must be established
before any serious business relationship can be cemented. Trust-based
'guanxiwang' is the alternative to the market which is often riven
by opportunistic behaviours.
Not coincidentally; for both transaction cost theory and network
theory, trust has been also regarded as a critical component of
the network (Thorelli 1986; Jarillo 1988; Williamson 1988). Williamson
advocates that exchange relationships based on personal trust will
survive greater stress and display greater adaptability. Thorelli
observes that trust in Oriental cultures may even take the place
of contractual arrangements.
Face, Hierarchy and Power Distance
Face is a concept of central importance because of its pervasive
influence in interpersonal relations among Chinese. Chinese face
can be classified into two types,'lian' and 'mian-zi'. 'Lian' represents
the confidence of society in the integrity of ego's moral character,
loss of which makes it impossible for him to function properly within
the community, while 'mian-zi' stands for the kind of prestige that
is emphasised.., a reputation achieved through getting on in life,
through success and ostentation'. When 'lian' is lost, the person
will feel that he/she can no longer live in the world.
Loss of 'lian' within a guanxiwang as a consequence of opportunistic
behaviour means that peers will no longer have confidence in the
persons or firms concerned. As a result, their membership within
a 'guanxiwang' and in society will be untenable. Therefore, face
can be another hostage which minimises the possibility of opportunistic
behaviour within a guanxiwang. This is another reason why 'guanxiwang'
cannot merely survive but can also develop in mainland China and
overseas Chinese communities.
'Mian-zi' can also be used to form new guanxiwang. One of Confucius'
virtues is to respect authority and the elderly. Someone with authority,
often elderly and with a good reputation, can ask favours of others.
The person may act as a common agent to start a new exchange relationship.
Favours can also be asked between friends. It is an accepted norm
that as 'old friends' one should give face to the other when favour
is requested. Once again, it has been shown that the Chinese cultural
values such as face, hierarchy, power distance are closely related
to the creation and development of the business network.
Reciprocity
Guanxi cannot be sustained between two parties if there is no need
of reciprocity. Like face, the principle of reciprocity is universal
but, in the Chinese case, the concept has particular salience. When
internalised in both parties, the norm obliges the one who has first
received a benefit to repay it at a later time. Consequently, there
may be less hesitancy in being the first and a greater facility
with which the exchange and the social relation can get underway.
For most Chinese, a transaction or exchange will only take place
when there is mutual benefit for both parties involved. As indicated
earlier, reciprocity is a 'hostage' which sustains a network relationship.
Without reciprocity, established guangxi will elapse.
Time/Long Term Orientation
The time dimension for Chinese has two orientations: past-time
orientation and community. This implies that for Chinese, once a
relation is established it is hard to break and once a relation
is broken, it is very difficult to reestablish.
Continuity indicates that Chinese people are long-term oriented.
Once guangxi is established, both parties will try their best to
keep this relationship by reciprocating benefits. Compromise is
found to be the preferred solution by Chinese to an unsettled conflict.
Future business opportunities also act as hostages to a business
relationship. The benefits of establishing a long-term supplier
and buyer, relationship have been regarded as one of the pillars
of Japanese management styles which is now being enthusiastically
followed by western firms. An emphasis on long-term relationships
is also essential to the development of trust which is considered
as a critical component of network.
Harmony
The Confucian 'Doctrine of the Mean' urges individuals to avoid
competition and conflict, and to maintain inner harmon. It has been
found that traditional Chinese cultural values and cognitive orientations
have influenced the Chinese people to preserve overt harmony by
avoiding confrontation and to adopt a non-assertive approach to
conflict resolution. Guanxi cannot survive without harmony between
two parties in a relationship. Without harmonious relationships,
trust cannot be established, face cannot be saved, reciprocity will
not continue and no further guanxi can be established.
It is now evident that the key factors which help sustain and develop
networks overlap with the key Chinese cultural values. This is why
the network as a form of organisational governance is so widespread
in both China and overseas Chinese communities.
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