GLOBAL INTEGRATION, NATIONAL VALUES & LOCAL DEVELOPMENT IN CHINA FRANCIS PIRON, Ph.D., 2013.

GLOBAL INTEGRATION, NATIONAL VALUES

& LOCAL DEVELOPMENT IN CHINA

FRANCIS PIRON, Ph.D., 2013

CHAPTER OBJECTIVES

• DESCRIBE THE HISTORICAL & PHILOSOPHICAL CONTEXTS OF THE PRC

• DISCUSS THE MAJOR POLITICAL, SOCIO-CULTURAL & ECONOMIC INFLUENCES ON PRC MANAGEMENT

• OUTLINE THE REGIONAL & LOCAL INFLUENCES, & GLOBAL FORCES THAT IMPACT PRC MGMT

• EXPLORE THE LINKAGES BETWEEN MACRO-, MESO- & MICROLEVEL FACORS IN PRC MGMT

• EXPLAIN MAJOR FEATURES OF PRC MANAGERIAL VALUES, SYSTEMS & PRACTICES

PRELIMINARY THOUGHTS

• TRANSITION FROM A PLANNED SOCIALIST ECONOMY TO A MORE MARKET-BASED ECONOMY

=> SIGNIFICANT ADMINISTRATIVE, REGULATORY & INSTITUTIONAL REFORMS.

• CONTEMPORARY MANAGEMENT IN THE PRC IS BASED ON:– TRADITIONAL CONFUCIAN VALUES, – COLLECTIVIST & INSTITUTIONAL BUREAUCRATIC PRACTICES,– PRAGMATIC INTERNATIONAL MANAGEMENT.

• PRC IS BECOMING A MORE TECHNOLOGICALLY-GEARED, MARKET-ORIENTED, QUALITY-DRIVEN GLOBAL COMPETITOR (AS OPPOSED TO CHEAP LABOR + “Reserve Army of Underemployed,” The Economist Sept. 6, 2008).

• THE FORCES OF HERITAGE – EXTENSIVELY LONG-TERM

ORIENTATION TOWARD CHANGE– DEEPLY EMBEDDED SOCIO-

CULTURAL LEGACY

– SINIFICATION (中国化 ) OF CONQUERORS

– LONGEVITY AND SUCCESS OF CONFUCIANISM* … IMPLY ITS WORTH

* Read “Confucianism.”

LOCAL ISSUES & EXTERNAL FORCES INFLUENCING THE MGMT CONTEXT OF PRC

• MODUS OPERANDI OF PRC MGMT PRACTICES

– CONFUCIANISM – TRADITIONAL THOUGHTS – THE ANALECT - ETIQUETTE

– MAO ZE DONG’S ECONOMIC THOUGHTS – “GREAT LEAP FORWARD” & “CULTURAL REVOLUTION”

– DEND XIAO PING’S ECONOMIC THOUGHTS “SOCIALISM WITH CHINESE CHARATCTERISTICS”

– JIANG ZE MIN’S “THREE REPRESENTS”

– HU JIN TAO’S “SCIENTIFIC DEVELOPMENT”& “SOCIALIST HARMONIOUS SOCIETY”

– XI JIN PING & LI KE QIANG


• KONG ZI (CONFUCIUS)

• KONG ZI (CONFUCIUS)*

• THE ANALECTS OR “CLASSIFIED TEACHINGS”

• REFERS TO A SET OF RITUALS (LI 禮 )

• BY PROPERLY AND SINCERELY OBSERVING A SET OF SACRED

PRACTICES ONE CAN ESTABLISH & MAINTAIN A SPECIAL

RELATIONSHIP WITH HEAVEN

RITUALS COVER EVERYTHING FROM STATE CEREMONIES TO

THE PROPER WAY TO SIT

=>LEAD TO A STATE OF PERFECT, SPONTANEOUS HARMONY

AMONG MEN * Read: “Confucius, China’s Comeback Kid” FEER


• MENG ZI (MENCIUS - 孟子 )* • MENG ZI (MENCIUS - 孟子 )*

• ARGUES FOR “INCIPIENT VIRTUOUS INCLINATIONS” = SPROUTS

• SPROUTS CAN BE SEEN IN GENEROSITY, COMPASSION, ALTRUISM

• A BAD ENVIRONMENT CAN ALSO DESTROY THE “SPROUTS”

• “SPROUTS” ARE INNATE BUT ONLY INCIPIENT

=> MORAL CULTIVATION (i.e., RITUALS) IS IMPORTANT

* Read Mencius ( 1 & 2)


• XUN ZI* (荀子 )

• STRONG DEFENDER OF CONFUCIANSIM & CONFUCIAN WAY OF LIFE

• DISCUSSES IMPORTANCE OF HUMAN POINT OF VIEW

• GOOD THINGS ARE ACHIEVED ONLY THROUGH “DELIBERATE EFFORT” => GOODNESS IS NOT NATURAL, INNATE

=> HUMAN NATURE IS BAD => WITHOUT THE EXTERNAL

RESTRAINTS OF CONFUCIAN RITUALS, PEOPLE WILL FALL INTO WRONGDOINGS, CHAOS AND POVERTY

* Read Xunzi


• CONFUCIUS, MENCIUS & SUNZI PROPOSED & SUPPORTED 道 Dào

=> THE WAY(a sage uses the Way ( 道 Dào) to refrain from

obsession and to keep his mind open. In order to accept the Way, one must first understand it, then approve it, then abide by it. The Way is the path away from obsession because of the nature of its interaction with the mind, which is empty, unified and still, when it is in accord with the Way.)


• TRADITIONAL VALUES TODAY?


• MAO ZE DONG (毛泽东 )*


• 1ST CHAIRMAN OF THE COMMUNIST PARTY OF CHINA (CCP)

• STRONG, CHARISMATIC LEADERSHIP IN A CENTRALLY PLANNED ECONOMY

• BROUGHT AN END TO INTERNAL FACTIONS & INTERNATIONAL INTERFERENCES

• GREAT LEAP FORWARD

• CULTURAL REVOLUTION

Read Mao Tse Tung (Biography)

• MAO ZE DONG (毛泽东 ) – THE GREAT LEAP FORWARD*

• Read The Great Leap Forward

• MAO ZE DONG (毛泽东 ) – THE GREAT LEAP FORWARD* – THE CULTURAL REVOLUTION **• Read The Great Leap Forward

** Read The Cultural Revolution



• DENG XIAO PING• 1978: REFORMS

• 3 ALTERNATIVES:• CONTINUE & EMBRACE SOCIALIST-COMMUNIST FUTURE,• IGNORE THE SOCIALIST-COMUNIST IDEOLOGY,• FINESSE & ADAPT IDEOLOGY TO SUIT POLICY DECISIONS

SOCIALISM WITH CHINESE CHARACTERISTICS

• “IT DOES NOT MATTER WHETHER THE

CAT IS BLACK OR WHITE AS LONG AS

IT CATCHES THE MOUSE”


• DENG XIAO PING• PRAGMATIC REFORMS

• ADOPTED A CONFUCIAN-BASED MANAGEMENT DOCTRINE … – LOYALTY TO ONE’S FAMILY– LOYALTY TO FRIENDS AND RULERS– GOLDEN RULE– PEOPLE ARE NOT EQUAL … THEY PLAY DIFFERENT ROLES IN SOCIETY– PEOPLE BEHAVIOR IS REGULATED BY SPECIAL RELATIONSHIPS THAT

DICTATE OBLIGATIONS TO EACH OTHER

• JIANG ZE MIN• GREATER EMPHASIS ON MARKET MECHANISMS & PRAGMATISM

• ACCELERATION OF MULTINATIONAL/GLOBAL EXPOSURE

• “THREE REPRESENTS”– THE PARTY SHOULD REPRESENT THE ADVANCED PRODUCTIVE FORCES IN

SOCIETY (I.E., ENTREPRENEURS & INTELLECTUALS)

– THE PARTY SHOULD REPRESENT ADVANCED MODERN CULTURE

– THE PARTY SHOULD REPRESENT THE INTERESTS

OF THE VAST MAJORITY OF THE PEOPLE

• SMASHED THE OLD “THREE MAJOR ELEMENTS OF SOCIALISM”– PLANNED ECONOMY … => FULL MARKETIZATION

– PUBLIC OWNERSHIP … => PRIVATE OWNERSHIP

– DISTRIBUTIONAL PRINCIPLE OF “EACH ACCORDING TO HIS WORK” … =>CIRCULATION OF ASSETS.


• HU JIN TAO• SHIFTED TO THE 3d OF THE “THREE REPRESENTS” … “THE

INTERESTS OF THE VAST MAJORITY OF THE PEOPLE.”

• => “SOCIALIST HARMONIOUS SOCIETY … FEATURING DEMOCRACY, THE RULE OF LAW, FAIRNESS, JUSTICE, SINCERITY, TRUSTWORTHINESS, AMITY, FULL VITALITY, STABILITY, ORDERLINESS, AND HARMONY BETWEEN MANKIND AND NATURE.”

• ROOTED IN CONFUCIAN (HARMONY) AND IN MORE SOCIALIST CONCEPTS

• BELIES & ILLUSTRATES SOME OF CHINA’S SOCIAL PROBLEMS, IN PARTICULAR SOCIAL STRATIFICATION AND INEQUITY.

• GINI COEFFICIENT


• HU JIN TAO• => “SCIENTIFIC DEVELOPMENT CONCEPT”… THE

CENTRAL FEATURE OF HU’S CREATING A HARMONIOUS SOCIETY

• 2 CORE ELEMENTS:

• “TAKING PEOPLE AS THE BASIS”

• “DEMOCRACY WITH CHINESE CHARACTERISTICS” (PREMIER WEN JIABAO) => INTRAPARTY DEMOCRACY.

• “COMPREHENSIVE DEVELOPMENT”

• DEVELOPMENTAL INEQUITY BTW URBAN & RUAL CHINA


• XI JINPING & LE KEQIANG– READ “VEIL LIFTED ON CHINA’S NEXT TOP DUO”


CONCLUDING THOUGHT

• “WITHOUT THE LEADERSHIP OF THE CHINESE COMMUNIST PARTY AND SOCIALIST SYTEM, IT IS IMPOSSIBLE FOR CHINA TO EXIST IN THE WORLD AS A GENUINE INDEPENDENT STATE.”

YAO YILIN (JUNE 13, 1989)

2010 NOBEL PEACE PRIZE …

LUI XIAOBO ( 劉曉波 )

READ: “HONORING LIU XIAOBO,” & “NOBEL PRIZE

TRIGGERS GLOBAL SHOWDOWN”

“The political reality, which is plain for anyone to see, is that China has many laws, but no rule of law; it has a Constitution, but no constitutional government”

READ: “RIGHTS EXPERT – WE NEED RULE OF LAW”

China’s Economic Development - past 53 years

• EVOLVING INFRASTRUCTURE: (READ “CHINA EMBARKS ON STRUCTURAL REFORMS”)

– COEXISTENCE OF COLLECTIVIST, CENTRALLY CONTROLLED STRUCTURES, SYSTEMS & STYLES WITH COMPETITIVE MARKET-BASED STRUCTURES, SYSTEMS & STYLES

– BAO BA (PROTECT the 8 %)– READ “CHINA MAKES MONETARY-POLICY SHIFT OFFICIAL” – READ “WHERE CHINA IS HEADED”

THE MANAGEMENT OF PRC INSTITUTIONAL INFRASTRUCTURE

• FLEXIBILITY IS THE KEY TO SUCCESSFUL MANAGEMENT

=> 5 COEXISTING MANAGEMENT STRATEGIES

• 5 COEXISTING MANAGEMENT STRATEGIES – MATERIALISTIC MOTIVATIONAL APPROACH:

• UNDERLYING PRINCIPLE OF DENG XIAO PING’S REFORMS• CONSIDERS THE HUMANITARIAN BENEVOLENT CHARACTERISTICS

OF CONFUCIANISM• REWARDS INCLUDE $ BONUSES, CAREER DEVELOPMENT,

RELATIONSHIPS WITH SUPERIORS, OVERSEAS TRAVELS

THE MANAGEMENT OF PRC INSTITUTIONAL INFRASTRUCTURE


– ADMINISTRATIVE APPROACH:• RELIANCE ON GUIDELINES FROM SENIOR BUREAUCRATS• STRONG INFLUENCE ON PUBLIC & PRIVATE SECTORS• COUNTER TO REFORMIST, MARKET-BASED MANAGEMENT• AUTHORITARIAN, DISCRIMINATORY, DIRECT• EX: EMPLOYERS ARE OBLIGED TO EMPLOY HANDICAPPED OR PAY A

FINE


– ADMINISTRATIVE APPROACH:

– LEGISLATIVE APPROACH:• LONG HISTORY OF LEGALISM (e.g., HAN FEI ZI)• COMPLEXITY, ILLOGICAL INTERPRETATION AND INCONSISTENT

EXECUTION OF THE LAWS • READ “CHINA’S GREEN LAWS ARE USELESS,”

“FAILURES IN ENFORCING GREEN LEGISLATION,”

“CHINA BARS US OFFICIAL FROM AMERICAN’S APPEAL,”

“CHINA’S CULTURE OF SECRECY BRANDS RESEARCH AS SPYING,” &

“EX-USTR NOT SO DIPLOMATIC ABOUT CHINA.”

• FAILURE OF OFFICIALS & MANAGERS TO ABIDE BY THE LAW• NO RESPECT FOR THE “RULE OF LAW”



– LEGISLATIVE APPROACH:

– SOCIO-PSYCHOLOGICAL APPROACH:• GUANXI: USE OF CONNECTIONS

• GUANXI MAINTENANCE THROUGH:– TENDERING FAVORS,– NURTURING LONG-TERM BENEFITS,– CULTIVATING PERSONAL RELATIONSHIPS,– BREEDING TRUST CORRELATIONS

• MIANZI: SAVING FACE– AVOID PUBLIC EMBARRASSEMENT FROM DIRECT CRITICISM,

RIDICULE, INSULTS, – FACE IS SERIOUS BUSINESS



– LEGISLATIVE APPROACH:

– SOCIO-PSYCHOLOGICAL APPROACH:

– MATHEMATICAL APPROACH:• NEWER APPROACH• TRADITIONALLY, USED A MORE QUALITATIVE APPROACH

MICRO LEVEL: CRITICAL TRADITIONAL, TRANSITIONAL &

TRANSFORMATIONAL ISSUES IN CHINESE MGMT

• CHINA IS THE WORLD’S OLDEST BUREAUCRACY• CHINA IS THE WORLD’S OLDEST BUREAUCRACY• KEY CULTURAL LOGIC THAT FRAMES CONTEMPORARY

CHINESE WORLDVIEWS:– CURRENT STRUCTURE OF MOST COMPANIES DATES BACK TO

220BC– OVER TIME CONFUCIAN VALUES WERE INFLUENCED BY

LEGALISM, BUDDHISM, OTHER RELIGIONS (e.g., “JESUS IN BEIJING”)

– SOCIO-CULTURAL NOTION OF DYADS IS FUNDAMENTAL• KING & CIVIL SERVANTS• FATHER & SON• HUSBAND & WIFE• OLDER & YOUNGER CHILDREN• FRIENDS

=> CONCEPT OF SOCIAL HARMONY IS PARAMOUNT

• CHINA IS THE WORLD’S OLDEST BUREAUCRACY• KEY CULTURAL LOGIC THAT FRAMES CONTEMPORARY

CHINESE WORLDVIEWS• ADMINISTRATIVE STRUCTURES & ROLE OF BUREAUCRACY

ARE GROUNDED IN CONFUCIAN THOUGHT:– STRICT SOCIAL ORDER => HIGHLY COMPLEX HIERARCHY– RESPECT IS DERIVED FROM RELATIONSHIPS

– GUANXI & MIANZI


CHINESE WORLDVIEWS• ADMINISTRATIVE STRUCTURE & ROLE OF BUREAUCRACY

ARE GROUNDED IN CONFUCIAN THOUGHT• CONCEPT OF THE FAMILY

– UNQUESTIONED RESPECT FOR ELDERS AND OBEDIENCE FROM YOUNGSTERS,

– FAMILY TIES ARE EXTENDED TO CLAN … NEPOTISM– ALL (CHINESE) MEN & WOMEN ARE BROTHERS & SISTERS …

CRONYISM– STATE IS A CARETAKING PARENT … PATERNALISM



ARE GROUNDED IN CONFUCIAN THOUGHT• CONCEPT OF THE FAMILY• CHINA IS THE CENTER OF THE WORLD:

– FOREIGNERS ARE INFERIOR, BARBARIANS– LOW TOLERANCE FOR FOREIGN CRITICISM OF COUNTRY,

SYSTEM, CULTURE, ETC.– READ “CHINA BUYS UP THE WORLD”



ARE GROUNDED IN CONFUCIAN THOUGHT• CONCEPT OF THE FAMILY• CHINA IS THE CENTER OF THE WORLD• ISSUES OF BUSINESS ETHICS IN A GLOBAL CONTEXT:

– SHAPED BY CONTEMPORARY CULTURAL VALUES– “BEING RICH IS GLORIOUS,” “LIU MANG,”– READ “CHINA’S STATE CAPITALISM & “CHINESE LEADER CALLED DATA ‘MAN-MADE’”



ARE GROUNDED IN CONFUCIAN THOUGHT• CONCEPT OF THE FAMILY• CHINA IS THE CENTER OF THE WORLD• ISSUES OF BUSINESS ETHICS IN A GLOBAL CONTEXT• TIGHT, CLOSE KNIT BUSINESS ASSOCIATIONS

– “WHO YOU KNOW IS MORE IMPORTANT THAN WHAT YOU KNOW”



• MANAGERIAL ATTITUDES– BLEND OF SOCIALIST-COMMUNIST, CONFUCIAN VALUES– MANAGERS HAVE LOW POWER– MANAGERS TEND TO BEHAVE IN A PATERNALISTIC WAY– ALL-IMPORTANCE OF GUANXI - SCIENCE OF GIFT-GIVING & RECEIVING

– MIX PRIVATE & BUSINESS DEALINGS– SCIENCE OF GIFT-GIVING AND -RECEIVING

• MANAGERIAL ATTITUDES• COMMUNICATION

– TRADITIONALLY CLOSED, HIERARCHICAL, TOP-DOWN– CONFLICT WITH MARKET-DRIVEN SYSTEM– ALWAYS CONTEXT-DEPENDENT (HIGH-CONTEXT CULTURE)

– INT’L COMMUNICATION TENDS TO BE LOW CONTEXT– DIFFICULT TO UNDERSTAND FOR NEWCOMERS

• MANAGERIAL ATTITUDES• COMMUNICATION• DECISION-MAKING SYSTEMS

– HISTORICAL CULTURAL INFLUENCE• PATRIARCAL, FEUDALISTIC AUTHORITY SYSTEM

MAINTAINED BY CCP => UNQUESTIONED AUTHORITY OF THE CCP

• BASED ON POSITION WITHIN SOCIETY & FAMILY, GENDER, AGE

• SUBORDINATES ARE EXPECTED TO OBEY, NOT GIVE OPINIONS

• INDIVIDUAL RESPONSIBILITIES ARE UNCLEAR, AMBIGUOUS => LOW LEVEL OF INITIATIVES

– INFLUENCE OF REFORM• DECENTRALIZATION, DEREGULATION OF RESPONSIBILITIES

• IMPLICATIONS FOR TRANSFORMING MGMT– DISTINCT HISTORICAL, SOCIAL & CULTURAL TRADITIONS

FRAME MGMT STYLES– 3 MOST IMPORTANT SOCIO-CULTURAL PRINCIPLES:

• CENTRAL IMPORTANCE OF HUMANS =>SOCIAL/NATIONAL COHESION => HARMONY >0: STRONG COLLECTIVE COMMITMENT TO ORGANIZATIONAL

OUTCOMES <0: UNQUESTIONED CONFORMITY, LACK OF CREATIVITY

• MORALITY ABOVE ALL (CONFUCIAN VALUE)=> PATERNALISTIC LEADERSHIP & EMPLOYEE WELFARE

• HUMAN NATURE CAN BE MOULDED=> SOCIAL ENGINEERING



Gen Y Characteristics

1.Self-centered2.Creative3.Materialistic4.Facing a fast-changing world5.Technology Savvy6.Information becomes handy7.Balance of life8.International9.Less Responsible10.Cannot take pressure

(Eric Chen, CEO, Fullerton Financial Holdings in his speech at Business China meeting on 6 Oct 2010.)

CHALLENGES FOR CHINA AHEAD

• CORRUPTION PERCEPTION INDEX (2010): – 3.5 (FINLAND: 9.2; FRANCE: 6.8)

• BRIBE PAYER INDEX (2008):– 6.5 (FRANCE 8.1)

• HUMAN DEVELOPMENT INDEX (2010):– .663 (#89) (FINLAND .871 #16)

• INCOME INEQUALITY – GINI COEFFICIENT (2009):– 46. 9 (FINLAND 26.9)– R/P 10%: 21.6 (FINLAND 5.6) (RATIO OF AVERAGE

RICHEST 10% TO POOREST 10%)

• GENDER EMPOWERMENT INDEX– .533 #62 (FINLAND .902 #3)

CHALLENGES FOR CHINA AHEAD

McKINSEY CHALLENGES & OPPORTUNITIES

GLOBAL INTEGRATION, NATIONAL VALUES & LOCAL DEVELOPMENT IN CHINA FRANCIS PIRON, Ph.D., 2013.

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