2013Cambridge Business & Economics ConferenceISBN : 9780974211428
Leadership and Ethics within the Chinese and American Corporate Culture
Adam Sharrard, Shawn Carraher
(260) 519-3432
Abstract
Purpose – The purpose of this research paper is to examine Chinese and the United States of America’s leadership styles and ethics with a focus on Confucianism. It will explore leadership styles and ethical standards of Chinese and Western entrepreneurs and business leaders. There is much to be said about the differences that play in this type of field.
Design/Methodology/Approach – Forsyth’s Ethics Position Questionnaire was used for the measurement of ethics, and Fiedler’s Least Preferred Coworker Scale was used to measure leadership. The information has been collected and compiled from scholarly sources. The sources include data collection through surveys, history, and scholarly articles. Each method/approach is unique to the study being done on leadership and ethics, specifically to some relation to Confucianism.
Findings – The findings show that Confucianism does play a role in cultural differences between business leaders from China and the United States. Chinese business leaders stress relationship development, and encourages and helps foster the growth of his/her subordinates. Guanxi is a term that is prevalent in many of Chinese business leaders’ ethical decisions. There are many actions that the Chinese see as necessary, while some Westerners believe it to be unethical. These practices stem from Confucian teachings.
Originality/Value/Contribution – The paper is original in a sense that it is combining various studies on cultural differences on leadership and ethics into one. It helps to centralize all the different things that have been researched and discussed in regards to this topic. It is valuable to learn about the cultural differences and use what has been found to better understand how Chinese business leaders see react to certain situations and ethical decisions.
Research
Leadership
Still to this day, Confucius ideals are seen in leadership positions all throughout the Chinese corporate culture. There are many characteristics that have been taught for thousands of years within the historical country of China, and it is evident that it still holds true to modern day business leaders.
Relational
One of these characteristics is someone who values relationships and puts others first. They practice ren, which is translated into love without discrimination (Sheh 2010). A leader who practices ren does not take advantage of the weak, and does not exploit others with profit in mind. Mencius, who was the most recognizable Confucian other than Confucius himself, believed that a “Confucian leader is one who emphasizes benevolence and righteousness instead of thinking of ways of profiting” (Lau, 1970).
Stemming off of ren, Confucian leaders also look to emphasize ren quin in their leadership style. Ren quin is translated into “human feelings or relationships” (Sheh 2010). Even when a subordinate makes a mistake, a leader with Confucian influence will more than likely give that individual a chance to redeem him/herself. In the book “Riding the Waves of Culture”, authors Trompenaars and Hampden-Turner write of a scenario of an assembly line worker in East Asia who inserted a component upside down, rendering the entire batch defective. When the floor director was asked who the culprit was, they refused to answer, and said that the matter was handled (Trompenaars & Hampden-Turner, 2012). This is somewhat uncommon in Western corporations. Many times, that person is singled out and punished. But the floor director knew that it was a mistake, and was willing to give that individual another chance. Leaders with Confucian aspects often see firing as a last resort, and believe in fostering the relationships with his/her subordinates (Trompenaars & Hampden-Turner, 2012).
Ren quin is often sought after more than intelligence when looking for individuals to appoint as business leaders. Sheh states, “A person who is high in intelligence (IQ) but grossly lacks human skill (EQ) will not be a preferred choice” (Sheh 2010). But if an individual has average intelligence, but has great human skills, then that person stands a good chance of being selected. Being able to interact with and having a high regard for others is paramount for Confucian leaders.
When it comes to relationships, traditional Confusions teachings have put emphasis on different social roles, which helps ensure order (Chau-kiu 2008). Traditionally, Confucians put social roles in pairs. In descending order, they are: ruler and subject (also viewed as leader and subordinate), father and son, husband and wife, elder and youngest brother, and friend and friend (Woods, 2012). Definitionism also plays an important role in leadership. Definitionism maintains that “every person must have a proper name, title, or role that prescribes behavior” (Liu, 1997).
Lifelong Learning
Confucianism also stresses constantly pushing one’s mind further, and to never become complacent. This is seen in Chinese business leaders as well. Sheh writes, “Not only do (leaders) have a strong commitment to learning from self and others, they are also not selfish in sharing knowledge and experience with their followers” (Sheh 2010). This stems from their constant search for creating and fostering relationships. Confucian leaders also fully expect their subordinates to do the same, and to stretch their minds. In fact, formal training for new hires is not as common as it is in Western cultures. Many times, all training is done on the job, and they are expected to learn and ask questions as they go along (Sheh, 2010).
Confucianism also teaches that making mistakes is a natural part of life, but those who refuse to learn from their mistakes are fools. Confucius states that “even a sage makes mistakes. The difference between a wise and unwise person is that a wise person will make amends while the unwise person persists in his mistakes and even covers them up” (Khu 1991).
Moderation
A central theme in Confucianism is zhongyong, which is translated into ”the doctrine of mean”. The doctrine of mean states that “one must adhere unswervingly to the mean, or centre course, at all times and in every situation” (Zhongyong. 2012). A Confucius leader practices this theme by balancing the “hard” leadership styles, such as discipline, charisma, and courage, with the “soft” leadership style, such as wisdom, patience, endurance, and perseverance. Sheh writes that a Confucius business leader “is firm in his principles but flexible in his approach” (Sheh, 2010). Traditional Western leadership tends to focus on one of these styles, and does not try to implement different techniques depending on the situation. The Transformational leadership style tends to offer charisma and motivational inspiration, while Servant leadership tends to be patient, and offerswisdom as to offer growth for the subordinate (Chau-kiu, 2008). Confucian leaders look to incorporate both of these leadership styles as they see fit.
Business Ethics
Confucian teachings also helps shape ethical decisions and lifestyles among business leaders. Confucian business leaders strive to be virtuous and moral. “In all, virtuous practice is the foremost component in Confucian leadership” (Chau-kiu, 2008). A leader knows that if he does not set this standard for himself, then his organization will not be virtuous either. This ethical standard must be evident throughout the whole organization, and it starts with the leaders. If the leader isn’t virtuous, then trust will not be built (Sheh, 2010). The best way to teach ethical standards is to provide an example.
Confucian views virtue as a reflection of nature (Chau-kiu 2008). Confucianists see nature as organized hierarchically and harmonious (Chau-kiu, 2008). Therefore, they strive to be virtuous, and to “be honest to people’s nature and to keep human and physical natures functioning” (Chau-kiu, 2008). Much like nature, Confucian leaders views the business culture as different levels of leaders. They put individuals in “particularistic relationships” (Brown, 2006). When negotiating, often the leaders of the group are the only individuals that speak, and they are sat down in order according to rank. They are being treated differently, but this is custom within Eastern cultures. It is not considered disrespectful (Penzer, 2006).
Guanxi
Guanxi is a term that is used frequently in the Chinese corporate culture. Guanxi can be described as an “informal, unofficial relationships utilized to get things done, from simply tasks to major life choices” (Ruan, 1993). Although it may seem like a selfish intent, it is designed to be a mutually beneficial relationship. Some believe that guanxi was developed during political unrest during the Cultural Revolution in China. It was during this time that resources were scarce, and many times it came down to who you knew when trying to obtain anything.But many others feel that the concept of guanxi has developed from Confucian teachings of the importance of relationships (Redfern 2009).
Chinese business leaders have many traditions to help ensure a mutually beneficial relationship and to not insult the other business group. One example is the handling of business cards. It is considered to be rude to write on a card you are given, or put it in your pocket or wallet (Penzer, 2006). These little miscues will insult your business counterpart and hurt the delicate relationship that is being formed. Eastern businesses are also known for taking a long time in negotiating a deal. While this may seem insulting to Western corporate culture, it is expected in Chinese business cultures. They are building guanxi before business is negotiated, but the extended period of time can be viewed as insulting and unethical to Western cultures. But the Chinese prefer to build a mutually beneficial relationship before deciding on business decisions (Ping, 2006).
One tradition that is generally viewed as unethical in Western culture is gift giving. Gift giving is another way of ensuring a strong guanxi. Many times, the gifts have a cultural significance, and are directed towards the business as a whole and not a specific business leader (Ping, 2006). The act of gift giving can be seen as bribery in the United States, but it is merely viewed as a necessary business practice in China. Any relationship takes time and consideration, and the Chinese have taken that concept from Confucian teachings and have implemented it into their business practices. Westerners may see it as dealing under the table, which is frowned upon (Ping, 2006).
Western networking is seen as more task oriented compared to Chinese practices. The United States is seen as more individualistic, while the Chinese put more emphasis on developing a relationship. “Business cooperation in the Western culture is driven by the desire to exchange benefits rather than exchange favour” (Redfern, 2009).
Method
Sample
For this paper, we used two samples of entrepreneurs from the USA and China. They included a sample size of 339 from the United States of America and 218 from China. In China, the average age was 42 and consisted of 64.7% female and 35.3% male. In the United States, the average age was 42 and consisted of 66.4% female and 32.8% male with 1.2% not disclosing gender.
Instruments
Ethics – Forsyth’s Ethics Position Questionnaire was used to measure ethics. The resource has been deemed credible. According to Harzing’s Publish or Perish, Forsyth (1980) has been cited 742 times. Davis et al. (2001) researched the reliability of the Ethics Position Questionnaire in his study called “Measuring Ethical Ideology in Business Ethics: A Critical Analysis of the Ethics Position Questionnaire.”
Leadership – In order to measure leadership, Fiedler’s Least Preferred Coworker Scale was used. The resource has been deemed credible. According to Harzing’s Publish or Perish, Fiedler (1967) has been cited 4528 times. (Citation needed on reliability)
Results
Looking at Table 1, it should be clear that we received statistically significant results from all ethical standpoints except from “Ethics are Absolute” in China. Looking at Table 2, we can see that the United States produced no statistically significant results.
As can be seen in the China-Table 1 and USA-Table 2, we are comparing correlations between the measures of ethics and personality in both the United States and China. The numbers highlighted in yellow in China-Table 1 show significant correlations. The numbers highlighted in red in USA-Table 2 are comparisons for which the China-Table 1 shows correlation but USA-Table 2 does not.
Correlations for which are strong in China are Relativism: Individual and Cultural, Consideration of Others, and Situationalism. Relativism: Individual and Cultural significance equals .003, and r = -.197. Consideration of Others significance equals .000 and r = .268. Situationalism significance equals .004 and r = .193. In China, Ethics are Absolute was not significant only being .905 and r = -.008.
In the USA, there is no significant correlations. Relativism: Individual and Cultural significance equals .486 with r = -.038. Consideration of Others significance equals .097 with r = .091. Situationalism significance equals .126 with r = .084. Ethics are Absolute significance equals .393 with r = -.047.
Discussion and Conclusion
The results look to be interesting. The concept of guanxi comes to mind when looking at the results. Because of the nature of guanxi, Fiedler’s model may not be the best way to measure leadership with the Chinese. Fielder’s model two sides is a friendship orientated leader, and a task oriented leader. The Chinese integrate both of these into one. When looking at getting tasks done, it seems that Chinese business leaders look to develop relationships first with the intention of forming a mutually beneficial relationship. Therefore, a task completion might be the end result, but a friendship is sought after first.
When looking at Relativism: Individual and Cultural, the correlation is negative, meaning they are more task oriented than relational. So when looking at the individual or culture, the leader is more task oriented.
When looking at Consideration, the higher the considerate someone is, the more likely they will be friendship oriented. This makes sense, and needs no further explanation.
Situationalism means dealing with anything other than the individual or culture. This shows the opposite of Relativism: Individual and Cultural. This shows a positive correlation, meaning they are more relational over task orientation.
The different results between Situationalism and Relativism: Individual and Cultural is the most intriguing turnout of the research performed. I would suggest a closer look into the questions asked, and look to differentiate them even more to look for different answers pertaining to specific questions. I would also survey others from other countries to see if there is a correlation between them since there was none with the United States. This would give a greater perspective on how China or the USA are different among the rest of the world.
The study evaluated both ethics and leadership of entrepreneurs with the aid of The Ethics Position Questionnaire and the Least Preferred Coworker Scale. 218 surveys were conducted in China and 339 in the United States. China – Table 1 had three significant correlations, while USA – Table 2 had no significant correlations.
References
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SeniorEntChina2
Q110
Frequency / Percent / Valid Percent / Cumulative Percent
Valid / 1 / 77 / 35.3 / 35.3 / 35.3
2 / 141 / 64.7 / 64.7 / 100.0
Total / 218 / 100.0 / 100.0
Descriptive Statistics
N / Minimum / Maximum / Mean / Std. Deviation
Q111 / 218 / 20 / 71 / 44.89 / 12.308
Q112 / 218 / 12 / 75 / 39.85 / 12.193
Valid N (listwise) / 218
1Correlations
LPC1 / RelativismIndividualandCultural / ConsiderationOfOthers / Situationalism / EthicsAreAbsolute
LPC1 / Pearson Correlation / 1 / -.197** / .268** / .193** / -.008
Sig. (2-tailed) / .003 / .000 / .004 / .905
N / 218 / 218 / 218 / 218 / 218
RelativismIndividualandCultural / Pearson Correlation / -.197** / 1 / .000 / .000 / .000
Sig. (2-tailed) / .003 / 1.000 / 1.000 / 1.000
N / 218 / 218 / 218 / 218 / 218
ConsiderationOfOthers / Pearson Correlation / .268** / .000 / 1 / .000 / .000
Sig. (2-tailed) / .000 / 1.000 / 1.000 / 1.000
N / 218 / 218 / 218 / 218 / 218
Situationalism / Pearson Correlation / .193** / .000 / .000 / 1 / .000
Sig. (2-tailed) / .004 / 1.000 / 1.000 / 1.000
N / 218 / 218 / 218 / 218 / 218
EthicsAreAbsolute / Pearson Correlation / -.008 / .000 / .000 / .000 / 1
Sig. (2-tailed) / .905 / 1.000 / 1.000 / 1.000
N / 218 / 218 / 218 / 218 / 218
**. Correlation is significant at the 0.01 level (2-tailed).
USA – Table 2