The power behind the recent surge in Asia’ economy may have developed from the s tenets of one of that continent’ earliest philosophers. s

The Confucius Connection: From Cultural Roots To Economic Growth
Geert Hofstede Michael Harris Bond

J

n 1968,the late Nobel-prize-winning mist Gunnar Myrdal published Asian Drama that described tions into the failure in South ment policies different Korea,

econo-

a book entitled his investigadevelopAsia. a very South

however, countries Malaysia,

some South and Southeast Asian besides Singapore, such as India, Thailand, and Indonesia drama), (the very also show signs of

of economic

scene of Myrdal’ s

and Southeast drama: Kong, Japan,

Twenty years later, we are experiencing kind of Asian Taiwan, Hong

an economic takeoff. World Bank data on the average annual growth product rate of per capita gross national the East Asian (see Exhibit 1) confirm

and Singapore

are now outperforming the United States and Western Europe economically. Western markets are flooded with high-quality, hightechnology products “made in Asia”; the production of cameras, TV sets, and domestic appliances has all but ceased in many Western countries, the automobile business has suffered severely, and President Reagan has had to violate his free-trade principles to save the U.S. microchip industry. It is true that most of the competition is from East, rather than from South or Southeast Asia;

lead. The Five Dragons, as these countries are sometimes called, are heading the list, with average annual sustained-growth percentages over a 20-year period of 7.6% for Singapore, 7.2% for Taiwan, 6.6% for South Korea, 6.1% for Hong Kong, and 4.7% for Japan. These compare with rates for Western Europe of between 3.5% for Austria and 1.6% for Britain; for Latin America of between 4.3% for Brazil and -2.1% for Nicaragua; of 2.4% for Canada; and of 1.7% for the United States.

5

WHY EAST ASIA? Few economists nomic predicted the staggering countries, ecoand

ment was obviously First, the quality the qualities

also involved,

but this on seccan than we

is too easy an explanation rise of the East Asian way. For example,

for two reasons. depends explanation

of management

of the people to be managed; of how an entire nation better management of culture. For the real explanation,

many failed to recognize well under forecast Strout
Review

it even when it was an economic and Alan M.
Economic

ond, the quality-of-management begs the question collectively another nation. produce

by Hollis B. Chenery published of September

in the American

1966 did not even in-

must turn to the domain

clude Hong Kong and Singapore because they were considered insignificant in this respect. The future performances of Taiwan and KoTHE NEO-CONFUCIAN HYPOTHESIS Futurologist Herman Kahn cultures of the East Asian Confucian”Confucius. has labeled the countries “neoof rea were heavily underrated, and those of India and Sri Lanka were overrated. Fifteen years later, Singapore 2.5 million a population exported with a population of more than India did with

that is, rooted in the teachings of this article,

of 700 million.

Kahn saw himself as a “culturist”: held the

Not only was the success of the Five but even after the fact Dragons unpredicted, economists have no explanation of why these particular countries were so successful. Why, for example, did South Korea outperform Colombia, starting which position? seemed In 1965, to be in a better Colombia’ s per

He, like the authors

belief that specific nations have specific cultural traits that are”rather sticky and difficult to change in any basic fashion, although they can often be modified.” The authors like to define culture as “the collective programming of the mind that distinguishes the members of one category of people from those of another.” This definition applies to national as well as to corporate at the national hypothesis cultures, but we will stay of East Asia level. Kahn’ neo-Confucian s

capita income ($280) was about twice South Korea’ ($150). In 1985, South Korea’ per s s capita income ($2,150) was about one-and-ahalf times Colombia’ ($1,320). U.S. garment s buyers, however, chose South Korea -even though Colombia is nearer-because of better selection, better quality, lower prices, and more reliable delivery times. Better manage-

is that the countries

have common cultural roots going far back into history, and that under the world-market conditions of the past 30 years this cultural in-

“Few econovnisfs predicted Gze staggering economic rise of fhe Eusf Asian countries, and nzuny fuiled to recognize if even when
6 if was

well under way.”

Exhibit

2

ECONOMICGROWTH FOR SELECTED COUNTRIES AND GROSS NATIONAL PRODUCT (GNP) PERCAPITA

1965’ 85
Ave. Annual Rate GNP/capita Growth %

7 965
GNP/capita U.S. $ and (Rank)

1985
GNP/capita U.S. $ and (Rank)

Singapore Taiwan South Korea Hong Kong

7.6 7.2 6.6 6.1 4.7 4.3 3.5 2.9 2.7 2.4 2.0 1.8 1.7

550 (12) 220 (16) 150 (17) 590 (11) 780 (10) 240 (15) 1180 (8) 280 (14) 1810 (5) 2260 (3) 1520 (7) 2160 (4) 90 (18) 3420 (1) 1580 (6) 840 (9) 2310 (2) 330 (13)

7420 (10) 3600 (12) 2150 (13) 6230 (11) 11300 (5) 1640 (15) 9120 (8) 1320 (16) 10940 (6) 13680 (3) 9290 (7) 11890 (4) 270 (18) 16690 (1) 8460 (9) 2050 (14) 16370 (2) 770 (17)

Japan
Brazil Austria Colombia West Germany Canada Netherlands

Sweden
India United Poland Switzerland Nicaragua States Great Britain

1.7 1.6 1.5 1.4 -2.1

Source: World Development Report 1987 and other statistics

heritance vantage

has constituted for successful Cultural

a competitive activity.

ad-

business

ming; thus from generation to generation, all kinds of cultural traits are transferred. With this in mind, let us begin to look at the teachings of Confucius.

inheritances

are not genetibe ac-

cally transferred;

they can in principle

quired by any human being who is at the right place at the right time. We begin to acquire the mental programming we call culture from the day we are born, and the process continues throughout our life in a particular society. Cross-cultural developmental psychologists who have studied the behavior of children in different societies have shown that a child learns patterns of cultural behavior very early in its life. For example, Japanese male infants of 3 to 4 months are noisier than Japanese female infants of the same age, whereas in the United States the opposite is true. Sex roles are only one aspect of our cultural programCONFUCIUS AND HIS TEACHINGS

Kong Fu Ze, whom the Jesuit missionaries renamed Confucius, was a high civil servant in China around the time of 500 B.C. Known for his wisdom, he was always surrounded by a host of disciples who recorded what we know of his teachings. He thus held a position very similar to that of the Greek philosopher Socrates, who lived just 80 years later. Confucius’ teachings are lessons in practical ethics without any religious content; Confucianism

7

(if only on the surface); ever, remain maintenance

one’ thoughts, s is found

howin the

free. Harmony of an individual’ s self-respect,

“face, n meanand prestige. Losing

ing one’ dignity, s was actually

The use of our own word “face” in this sense derived from the Chinese: one’ dignity, s in the Chinese tradition, is equivalent to losing one’ eyes, nose, and s mouth. Social relations should be conducted face is mainelse is conin such a way that everybody’ s tained. Paying respect called “giving face.”
GEERT HOFSTEDE is professor of orgmizutiorzui

to someone toward

3. Virtuous ut behavior

others

anthropology the University Netherlands. which recently

and international He is also director moved

management the

of Limburg at Maastricht, Cooperation,

sists of treating others as one would like to be treated oneself: a basic human benevolence which, however, does not extend as far as the to love thy enemies. As love one’ enes Christian Confucius injunction

of the Institute

for Research on Intercultural He has lectured and published and acts us an international punies and organizations.

to the xwne university. internationally consultant

said, if one should

to cow-

mies, what would remain for one’ friends? s 4. Virtue with regard to one’ tasks in life s consists of trying to acquire skills and education, working hard, not spending more than necessary, being patient, Moderation and persevering. as is losin is enjoined

is not a religion

but a set of pragmatic from what

rules

Conspicuous

consumption

is taboo,

for daily life, derived lowing teaching:

Confucius

saw as the lessons of Chinese history. The folare the key principles of Confucian

ing one’ temper. s all things.

I. The stability of society is based on unequal relationships between people. The “wu are ruler/ lun,” or five basic relationships, subject, brother, father/son, older brother/younger husband/wife, and older friend/

THE NEW SCIENCE OF CULTUREMEASUREMENT

If culture

is as important

in determining

the

fate of nations as Kahn and others assume it to be, how then do we learn about culture? Mere description will not do; we need an approach that allows comparisons between countriesthat is, an identification of cultural variations. differences can be meaCultural sured indirectly; that is, they can be inferred from data about collective behavior, such as the way a country’ national s wealth is distributed over its population; the mobility from one social class to another; or the frequency of political violence or labor con-

younger friend. These relationships are based on mutual, complementary obligations: The junior partner owes the senior respect and obedience; the senior owes the junior partner protection and consideration. 2. The family is the prototype of all social organizations. A person is not primarily an individual; rather, he or she is a member of a family. Children should learn to restrain themselves, to overcome their individuality so as to maintain the harmony in the family

flicts, culture, should

traffic

accidents,

or suicides. about

All of

these can tell us something but it is not always

a country’ s

clear how they by takasking

be interpreted. We can avoid this problem of culture through

ing direct measures

well-designed questions about people’ values s or beliefs. For this type of measurement, we should have access to matched samples of at
MICHAELHARRISBOND is senior lecturer in psy-

respondents

from a number the better,

of different

coun-

tries (the more

but preferably

“Matching samples” means that the least 15). respondents should be people who are as similar year-old dents, cific matched populations though as possible in all aspects of their lives For example, female medical attending all form can tenstuspesuch except for their nationality. schoolchildren, or business training samples. courses samples managers

chology at the Chinese University

of Hong

Kong. He also acts as R cross-cultural management trainer for multinational corporations in Hong Kong, where he has lived since 1974. His research and publications are devoted to a comparison of the psychological and social functioning of the Chinese people with people from Western countries.

It is not necessary from whole opinion

to have national polls, al-

representative

such as public We usually

these, too, can be used. ask the same set of at of all our subjects in Corporation academic worldwide employees 116,000 made research. since its databank on internafor holding than lanthe answers, from each tional employee attitude surveys available attitude

least 30 or 40 questions various liefs countries.

In comparing countries

we try to find the patterns that distinguish

of values and be-

IBM had been

comparative questionnaires

surveys of its

other. We use one of several statistical methods that have been developed for this purpose; this procedure supplies us with suggested dimensions of culture on which we can locate our various has succeeded, countries. If our research should be such dimensions

1967; by 1973, more in 20. different

guages from 72 countries had been collected. Employee attitude surveys have of course been held in many companies, but most of them are not internationally standardized and they contain only questions about satisfaction at work (“How do you like your boss, pay, working conditions,” and so forth), which are not very suitable as cultural indices. However, IBM’ international s questionnaire contained about 60 questions (out of a total of about 150) on the employee’ bas sic values and beliefs that were eminently fit for measuring culture. They included such questions as “How important are each of the following to you in an ideal job?” followed by

easy to interpret: They should represent fundamental problems of human societies for which there is no one solution but a range of solutions, of which each country’ s culture represents one particular choice.

A Case of Culture Measurement: The IBM Studies

A unique opportunity for culture measurement arose in the early 1970s when the IBM

9

a list of 14 job characteristics

such as earn-

from another

10 countries,

while those of 14

ings, job security, challenge, freedom, cooperation, and so forth. In addition, questions were included ideal manager faire). general among than their Finally, on the preferred judgments usually from style for one’ s to laissez(from very directive

more were grouped

into three regions-East

Africa, West Africa, and the Arab-speaking countries-that brought the total number of cultures 53 targeted for comparison mainly to 53. that these four to along The IBM studies revealed cultures 1. Power differed Distancedimensions: that is, the extent members oforganizaaccept (like the family) that which the less powerful tions and institutions

were asked about does more were asked harm to rate to exeach

issues at work, employees Employees

such as “Competition

good.”

responses

“strongly

agree”

“strongly tremely

disagree.” The IBM employees well-matched represented from subsets

and expect that power is distributed unequally. This represents inequality is defined that by from below, not from above; a society’ level of inequality s it suggests is endorsed

country’ s population: same company, job, and education, but different nationality. If anything, cultural differences among countries outside the corporation should be larger than they would be inside, so the national culture differences found estimate inside IBM should of those existing covered, the nabe a conservative

its followers as much as by its leaders. Power and inequality are of course very fundamental aspects of any society, and any individual with some international that all societies experience is aware but are basically unequal,

for the countries at large. Out of 72 countries tional culture analysis 40 of them, ignoring

some are mnre unequal than others. 2. Individualism on the one side versus its opposite describes integrated (Collectivism) on the other. This the degree to which individuals are into groups. On the individualist

at first used data from the smaller IBM subsidipossible to use data

aries. Later on, it became

“lf culfuve is as imporfunf in defemining the fate of nations as (Hevman] Kahn and ofhevs assume if to be, how fhen do we learn abouf culture? Mere descvipfion will not do; we need an approach fhaf allows comparisons befween counfries-fhaf
10

is, an identification

of

culfuml variations.”

side, we find societies tween individuals immediate

in which

the ties beis ex-

to these cultural the family: which children the cohesion other people, children with earlier, Confucian

choices are obviously are encouraged of the family

bred in

are loose:

Everyone

Power Distance

by the degree to to have a will by to by with respect

pected to look after himself or herself and the family. On the collectivist into strong, grandparents) “collectivism” side, we infind societies groups; uncles, protecting ing loyalty. often aunts, in which people from birth oncohesive families their extended and (with

of their own, Individualism/Collectivism and Masculinity/Femininity that the parents to the younger teachings no generally child.

ward are integrated

the role models present

and older

continue in this

them in exchange The word meaning:

for unquestionIt refers to the

If we compare the Confucian it will be countries

the three dimensions we described that score neofairly surprise

sense has no political

group, not to the state. Again, the issue addressed by this dimension is an extremely fundamental one, involving uersus all societies in the world. 3. Masculinity ninity.

high on Power Distance, ism, and mid-range ity (except Japan, Masculinity).

low on Individual-

on Masculinity/Femininwhich scores quite high on

its opposite,

Femi-

The distribution of roles between the sexes is another fundamental issue for any society women’ s ourselves that may involve differ a range of soluthat societies vary more we find that tions. Analysis values of the IBM data revealed less among Further, (which

4. A fourth dimension found in the IBM studies refers not to social behavior but to man’ search for Truth. We called it “Uncers tainty Avoidance”; a culture situations. ferent programs uncomfortable fined as novel, it indicates its members to what extent to feel either are deor difin unstructured

than do men’ values. s from one country they contain competitive,

if we restrict

or comfortable unknown,

to men’ values s a dimension

“Unstructured

situations” surprising,

to another),

from very assertive,

and maximally different from women’ values on the one side, to modest s and nurturing and similar to women’ values s on the other. We have called the assertive “masculine” nine.” and the nurturing in the feminine pole The women pole “femi-

from usual. Uncertainty-avoiding culof such tures try to minimize the possibility situations by adhering to strict laws and rules, safety absolute and philosophical security measures, and (on the and religious level) a belief in

Truth: “There can be only one Truth, are also more emotional by inner nervous energy. and are Uncer-

countries

and we have it.” People in uncertainty-avoiding countries motivated

have the same nurturing the masculine more assertive countries

values as the men; in they are somewhat but not as

and competitive,

much so as the men, so that these countries show a gap between men’ values and women’ s s values. described so The three dimensions far all refer to three types of expected social behavior: behavior toward people higher or lower in rank (Power Distance), behavior toward the group (Individualism/Collectivism), s and behavior according to one’ sex (Masculinity/Femininity). The values corresponding

tainty-accepting cultures are more tolerant of behavior and opinions that differ from their own; they try to have as few rules as possible, and on the philosophical and religious level they are relativist, allowing many currents to flow side by side. People within these cultures are more phlegmatic and contemplative; their environment does not expect them to express emotions. Exhibit 2 lists scores for the 53 cultures in the IBM research, thereby permitting 11

Exhibit
SCORES ON IN IBM’ s

2

FIVEDIMENSIONS FOR FIFTY COUNTRIES AND THREE REGIONS INTERNATIONAL EMPLOYEE ATTITUDE SURVFY
Masculinity Index Rank Index 86 Rank Index Uncertainty Avoidance Confucian Dynamism Rank

Country Index Rank Rank Index

Power Distance

Individualism

Argentina

49 35-36 56 61 79 54 49 52 28 64 21 16 63 26 43 66 66 57 37 57 46 56 24 12 19 76 39 46 7 25 22-23 43 68 47 70 68 95 47 35-36 9-10 9-10 18-19 43 18-19 30-31 20-21 35-36 7-8 29 4-5 7-8 1 13-14 50 48-49 86 23 67 59 86 65 35 112 101 29 48 40 59 35 81 75 13 92 49-50 41-42 45 21 31-32 47-48 19 23 52 11-12 80 46 86 24 48 27 76 22 94 5-6 21-22 41-42 10-15 20 10-15 51 28 31-32 10-15 29 47-48 2 70 24-25 16 51 37 41 2 18 8 26-27 4-5 38 49 46 9 52 17 10-11 15 3 30 53 37 47-48 53 20 14 39 24-25 17 42-44 51 8-9 46 63 71 67 89 35 6 25 14 48 41 70 54 15-16 42-44 42-44 27-28 2-3 15-16 8-9 10-11 19-20 49 52 34 37 33 8 74 15 13 23 80 38 75 55 90 22-23 10-15 36 11 65 69 39 63 67 35 18 78 33 68 3.5 35 60 95 68 78 77 58 28 13 50 45 54

46

20-22

Australia

31

11-12

Austria

Belgium

Brazil

65 23

5 17

Canada

Chile

Colombia

Costa

Rica

Denmark

Equador

Finland

France

Germany

(F.R

31 25

11-12 15-16

Great

Britain

Greece

Guatemala

Hong Kong

96

1

Indonesia

India

61

6

Iran

Ireland

Israel

Italy

Jamaica

Japan

80

Korea (S)

60 27-28 1 5-6 40 47-48 50 32 2-3 21-23 4 24-25 36-37 65 19 20 51 71 68 17 20 37 36 91 12 50 33-35 27 1 62 73 21 29 38 28 45 39-41 34 44 31-33 42 15 3 48-49 44 45 32-33 14 70 4-5 10-11 5 52 20 42 37-38 86 29 58 69 64 85 100 46 76 88 39-41 48 28 8 42 40 40 94 18-19 13 31 47-48 45 29-30 21-23 18-19 26 38 5-6 12 16 63 49 13-14 27 33-3.5 31 104 45 2 39-40 5-6 53 10-E 49-50 33 26 30 16-17 4 43 21-22 8 29 14 87 56 2 7 33 10 48 8 32 31 64 11-12 44 44 16 45 42 37-38 87 9 19 18 11 51 44 34 86 10-15 14 47-48 50 25-26 70 24-25 0 79 6 58 17 49 39-40 30 69 13 8 52 50 38 13 20 80 4-5 14 53 51 35 44 30 32 69 6 82 18 9 26 36 50 25-26 36 46 18 43 104 81 38 31 22 55 95 64 94 63 49 66 74 57 31 34 58 64 66 61 40 81 76

39

41 85

16-17

75

4

Malaysia

Mexico

Netherlands

Norway

New Zealand

Pakistan

Panama

Peru

Philippines

Portugal

South Africa

Salvador

Singapore

Spain

Sweden

Switzerland

Taiwan

Thailand

Turkey

Uruguay

United

States

Venezuela

Yugoslavia

Regions: 64 21-23 10-11 7 38 20 27 77 80 33-35 39-41 26-27 41 46 53 39 30-31 23 52 54 68 36 34 27 25 16 15-16 19

East Africa

West Africa

Arab Ctrs.

RankNumbers: = Highest; = Lowest Confucian 1 53 (For Dynamism: = Lowest) 20

each country

to be positioned

on each of the These scores are

er Uncertainty greater

Avoidance

is associated economic wealth in dollars)

with

four dimensions relative:

(plus a fifth that we will de-

formalization. At the national level, In(per capita are quite (peomore (indiWe and national product

scribe in the next section).

We have chosen our scales in such a

dividualism gross national strongly

way that the distance between the lowest- and the highest-scoring country is about 100 points. At the company among cultures many consequences affect level, differences have pracand The demin these four dimensions for management both Power Distance the type in a country.

related. We have tested whether caus-

ality went from wealth to Individualism ple in wealthier countries becoming individualist) vidualist population year interval, changes or the other way round becoming wealthier). cultures

tices. For example, Individualism

of leadership

were able to test this because most of the IBM was surveyed in both wealth twice, with a fourand Individualism. that the arrow of to Individualism in a counso over this period we knew the

most likely to be effective ideal leader in a culture ocrat; on the other hand, a culture

in which Power Disthe ideal leader in are large

tances are small would be a resourceful in which Power Distances

The data show convincingly causality goes from wealth

is a benevolent autocrat (or “good father”). In Collectivist cultures, leadership should respect and encourage employees’ group loyalties; incentives should be given collectively, and their distribution group. In Individualist should be left up to the cultures, people can

and not vice versa. If the resources

try allow people to “do their own thing,” they will start doing just that. However, none of the four dimensions is related to national economic growth. Only for the wealthy countries (all of which growth tend to be individualist) ism associated is more Individualdoes his or her

and incenbe moved around as individuals, tives should be given to individuals. Masculinity ance affect people’ s tion is more effective and Uncertainty motivations: in a masculine AvoidCompeticulture,

with slower economic

and vice versa. If everybody

own thing, the economy grows less quickly than it would if at least some individuals worked for collective purposes. But this study revealed no relationship between culture and economic growth that holds true for all countries, including the poor ones that need such growth the most.

and personal risk is more acceptable if Uncertainty Avoidance is low. Power Distance and Uncertainty Avoidance together affect the image people form of what an organization should be: larger Power Distances are associated with greater centralization, while strong-

A Second Case of Culture The Chinese Value Survey

Measurement:

14

The Rokeach Value Survey is a well-known questionnaire developed by psychologist Milton Rokeach for measuring values in American society. In 1979, a group of academic researchers from nine Asian and Pacific countries administered a modified version of this survey to 100 psychology students (50 males and 50 females) in each of ten different countries. The results of the survey were published

about the same time as those of the IBM studies. When the two were compared, that all four dimensions identified material, in addition data. overlap was between the two reon the demonstrated not been able to interpret, in the student The search projects it appeared in the IBM

Chinese Value Survey was administered students (50 males and 50 females) ety of disciplines sible, were translations made directly

to 100 seposTo

in a vari-

in each of 22 countries Wherever the Chinese. into the local

to a fifth that we have were also present

lected from all five continents. from

language

a Western mind, some of the items seemed strange, such as “filial piety” (which was explained dience as “honoring to, respect Of course, of ancestors and obesupport mind, for, and financial to the Chinese

scores of six countries in both samples. because the two projects

that were represented is remarkable difused completely

This overlap

of parents”).

ferent questionnaires on different populations in different years in only partly overlapping sets of countries. two projects versality The agreement support between the was strong for the uniby an-

some of the items on the Rokeach Value Survey or IBM questionnaire equally unusual. A statistical relative importance

may have seemed of the 22-counin a country to

analysis attached

of the four IBM dimensions. We were troubled, however,

try Chinese Value Survey results based on the each value as opposed to the other values

other concern: the influence of the researchers’ own culture on the results. Our data showed that people in different different mental programming; countries had this conclu-

again yielded four dimensions. Twenty out of 22 countries were covered earlier in the IBM studies; thus we could compare the scores of with Our findings the countries on each CVS dimension

sion obviously also applies to the people who conceive the questionnaires and do the research. The IBM questionnaires work by U.S., British, Dutch, Scandinavian Western researchers-all evolved from French, and of them from Value Surthus were been

those for the IBM dimensions.

were striking: One CVS dimension was very similar to Power Distance, another to Individualism/Collectivism, culinity/Femininitycompletely different ulations, different mix of countries. and a third to Masthis again in spite of the questions, time periods, different popand different

countries.

The Rokeach

vey was a purely U.S. instrument; respondents in non-Western settings asked to answer questions that had

made up by Western researchers. Can we assume that the respondents’ answers accurately reflect the essence of their own cultures? Some of the questions may have been

The three dimensions common to the Chinese Value Survey and the IBM studies are the ones that refer to three types of

irrelevant to them; others that were relevant may not have been included. These concerns led to the development Survey (CVS). of the Chinese Value

Michael Bond, based in Hong Kong, asked a number of Chinese social scientists to prepare a list of basic values for Chinese people. This led to the creation of a JO-item Chinese questionnaire that was subsequently translated into English. Through an international network of interested colleagues, this

15

expected seniors a function society whether

social or juniors,

behavior: toward

behavior the group,

toward and as cul-

more

oriented

toward

the future

(especially

of one’ sex. These represent s so fundamental

perseverance and thrift), whereas those on the right select Confucian values oriented toward the past and the present. “Confucian We have Dynamism” pole reflects wherestatic, called this dimension

tural choices

to any human

that they are found regardless of the values surveyed were designed or an Eastern human share the same mind. They are but to traits in the sense that problems, solutions

to show that it deals with a choice from Confucius’ ideas and that its positive a dynamic, future-oriented mentality. for Confucian of Exhibit Dynamism 2. In dissurveyed with the CVS are as its negative tradition-oriented Scores for the countries pole reflects mentality, a more

by a Western truly universal all societies different

societies

have “chosen” (historically different

rather than consciously) these problems. One dimension ies, however, is missing

from the IBM studin the CVS data: We

listed in the last column

did not find a CVS dimension related to Uncertainty Avoidance. We earlier associated this dimension with man’ search for Truth; it s seems that the Chinese do not believe this to be an essential issue. However, we did find another quite clearly marked dimension indicated in Exhibit For countries dimension, exhibit countries are relatively scoring scoring more made 3. up of the values

cussing the IBM studies, we showed that none of the four IBM dimensions was associated with economic growth across all countries; however, strongly we were stunned Confucian with rich associated to discover Dynamism, economic that is our new dimension,

growth that were

over the period between all 22 countries, covered.

1965 and 1985 across or poor,

high on this important; for

the values on the left side of the low, those on the right are
CONFUCIUS AND ECONOMIC GROWTH

more important. In fact, both the values on the right and those on the left are in line with the teachings of Confucius as we described them earlier. However, the values on the left of Confucius that are select those teachings

A glance at Exhibit 2 shows that four of the Five Dragons - Hong and South Korea-hold the “Confucian Kong, Taiwan, scale. Japan, on the top positions

Dynamism”

The next

“The

overlap between the IBM studies and the

Chinese Value Sumey is uemavkable because the two projects used conzpletely different questionnaires on different populations during different
16 year. ifi only p&y ove&pping sets

of counhies,”

Exhibit

3

VALUES ASSOCIATED WITH CONFUCIAN DYNAMISM

The relative importance Persistence Ordering (perseverance) relationships

of:

But the relative unimportance Personal Protecting steadiness your face and stability

of:

by status

and observing Thrift Having

this order Respect for tradition

a sense of shame

Reciprocation of greetings, favors, and gifts

highest Thailand, Sweden, position. Zealand, Canada; Nigeria; pened:

scores

are found

for Brazil,

India,

ues that compose the dimension Dynamism” ments caused

of “Confucian developthey may and

and Singapore. On the the lower countries United

The Netherlands, take a middle we find Britain, Zimbabwe and Pakistan. composed a the New and and Australia, side

do not seem to be recent developby the fast economic (although

and West Germany

ment of certain countries have been reinforced Japanese peoples and perseverance started; their

English-speaking

by it). The Chinese

States, countries

were known

to value thrift

the African

and the Philippines Chinese

before the present boom belief in tradition and “face” Dynamism” scale)

Let’ do a quick recap of what haps social scientists and this was adminisvalues questionnaire tered to male and female students in 22 countries. some tries, We learned values while other from values their were answers in some preferred that counin were preferred

(negative on the “Confucian

was heavily shaken by the events of the 1940s and 1950s; therefore, we assume the values to be at least part of the cause, growth to be the effect. The logical link between East Asian entrepreneurship. trepreneurs; rather, the two is We do not mean in which we and economic

others. We could form dimensions,

clusters of one of Dyna-

that the values we found are held only by enthe way found them (by surveying student samples) suggests that they are held broadly within entire societies, among entrepreneurs and future entrepreneurs, among their employees and their families, and among members society as a whole. of the

values that appeared to be associated; these dimensions we called “Confucian

mism.” Thus far, this was a completely psychological exercise; it was concerned, not with business or with economics, but with culture. It then appeared that the country scores on Confucian Dynamism derived from this exercise are strongly associated with those countries’ economic growth. Thus we have found a cultural link to an economic phenomenon. As in the case of the association between wealth and individualism, the causality could have gone either way. However, the val-

Let us look again at the values that compose our “Confucian Dynamism” dimension (see Exhibit 3). If this dimension is somewhat puzzling to the Western readers, they The dimension is should not be surprised. composed precisely of those elements that our Western instruments had not registered;

17

a Westerner important. further. label

would

not normally

find them them

tence” or “perseverance” nacity in the pursuit goals. son selects for himself

suggests a general tegoals a perincluding on or herself,

Thus we will try to explain

of whatever

At the outset, we must note that the “Confucian” could be somewhat misleading. cian The values associated such as India with the posiin non-Confuor Brazil. In values

economic

Low endorsement dimension

of the values

the right side of our “Confucian

Dynamism”

tive (left) side are also found countries addition, a number

facilitates economic growth. “Protecting one’ face, ” if widely shared as a cons from getting on with the of greetings, more conimthan with perforfor tradition” success accepted Finally, of the Western “personal The “reciprocation

of core Confucian

cern, would detract business.

such as “filial piety” are not associated with this factor at all; and finally, the values on the negative (right) side, as we argued earlier, are as “Confucian” as those on the positive side. Having should “ordering issued this disclaimer, we acknowledge relationship that the shared value of by status and observ-

favors, and gifts” is a social activity cerned with good manners mance. pedes with Too much “respect innovation: which they and part have

of the secret

Five Dragons’ economic technological steadiness innovations. stability,”

is the ease

ing this order” is quintessential Confucianism in action. As we showed earlier, hierarchical dualities and interrelatedness conception lie at the heart of being human of the Chinese

if overstressed, risk seeking,

would discourage

the initiative,

(the “wu lun”). This sense of hierarchy and complementarity of relations undoubtedly makes the entrepreneurial role easier to play. The value of having a “sense of shame” sensitivity ability supports to social interrelatedness contacts. which growth; through of means availThe value

required of entrepreneurs and changeability trying to exploit the vicissitudes of world trade. Culture in the form of certain dominant values is a necessary nomic growth; sufficient necessary velopment. the growth however, condition culture for ecoalone is not of a why only

for such growth to occur. Two other conditions are the existence explains started context that allows de-

“thrift” leads to savings, of capital ous asset to economic

for reinvestment,

an obvieconomists

market and a political

The first condition of the Five Dragons

had been struck by the high savings quotas in the Five Dragon countries. Finally, “persis-

after 1955, when for the first time in history the conditions for a truly global market were fulfilled. The supportive political context was fulfilled in all Five Dragons, although in quite different ways, with the role of government varying from active support to laissez-faire. Labor unions were weak and company-oriented in all five countries, and a relatively egalitarian income distribution meant that support for revolutionary social changes was weak. The Confucian sense of moderation affected political life as well, in spite of occasional outbreaks of unrest and violence. The influence of the political con-

18

text is evident in the country that was the cradle of Confucianism, the People’ Republic of s

China.

So far, data on the Chinese

Value Surminds? tioned and

What the difference Besides

did our studies between Western the three common Distance,

tell us about and Eastern menWest

vey for the People’ Repubiic are missing. We s can only infer that in spite of Maoism, many Confucian values remain strong in the Peoare ple’ Republic, s currently and that those on the left side Dynamism” dimension at the expense of those on

previously to both

dimensions East (Power and

Individualism/ dimension: this for search

of our “Confucian boosted the right side.

Collectivism, we found Uncertainty dimension Truth;

Masculinity/Femininity) Western a society’ s As we argued, cultures

one uniquely Avoidance. deals with

The economic Republic was obviously cal factors. The Cultural 1976 was a period nevertheless,

growth of the People’ s hampered Revolution annual by politiof 1966shrinkage; rate of eco-

uncertainty-avoiding

believe

of economic

in an absolute Truth, and uncertainty-accepting cultures take a more relativist stance. We also found Confucian dimension Virtue. one uniquely Dynamism; deals with Eastern a society’ s dimension, that this search for we believe

the average

nomic growth in the People’ Republic over s the 20-year period that included the Revolution was still 4.8% or higher than that of Japan. It also seems that under the leadership of Deng Xiaoping, the People’ Republic has let s economic expediency purity. It is obviously prevail over political to turn more difficult

It is no accident

that this dimension of Confucius; as we of he was a teacher

relates to the teachings described them earlier,

practical ethics without any religious content. He dealt with Virtue, but left the question of Truth open. dividing There is a philosophical line in our world that separates Western from Eastern thinking. The West, in this case, includes the countries that are traditionally Judaean, Christian, or Muslim - three religions Truth. tolerant that are very much history, that believe concerned these with inThroughout currents religions

around a nation of 1,000 million people than it is to turn around a nation such as Singapore, which has a population of 2.5 million. So it is not unlikely that the People’ Republic s will follow the success of the Five Dragonsalbeit at some distance-and eventually become the sixth-and of them all. most powerful-dragon

have been split between
WESTERN MINDS AND EASTERNMINDS

fundamentalist,

they have the and lib-

one Truth and all others are wrong,

sociated

It is remarkable that the values dimension aswith the economic success of East over the past 20 years was not

Asiatic cultures

found with questionnaires developed by Western researchers. It took the Chinese Value Survey- an Eastern instrument - to identify this dimension. This is a powerful illustration culture of how fundamental a phenomenon

really is. It not only affects our daily practices (the way we live, the way we are brought up, the way we manage, and the way we are managed); it also affects the theories we are able to develop to explain our practices. Culture’ s grip on us is complete.

19

eral, tolerant humanity,

currents

that put a concern

with

putting cording

these technologies to their superior

into

practice

ac-

also present

in all three religions, in thinking corre-

synthetic

abilities.

above doctrine. These two trends Uncertainty-Avoidance represented Hinduism, Buddhism, spond to the two poles (strong or weak) of the dimension. but Taoism, Human The East, also by beand Shintotruth is seen by Confucianism

What is true or who is right is less important than what works, and how the efforts of individuals with different thinking patterns can be coordinated employees, of Eastern toward a common especially goal. Japasynwithnese management, is famous cultures with Japanese in this period virtue

for this pragmatic

ism, does not assume that any one human ing can have the Truth. as partial, its opposite.

thesis. The strategic advantage, that practice

so that one truth does not exclude This is why people school in the East time; coexto more than one religion at the same for example,

out a concern for truth, is part of what our research has illustrated.

can easily adhere or philosophical Shintoism

and Buddhism,

THE QUEST FOR GLOBAL MANAGEMENT SYNERGY

ist in many Japanese households. Along this line of thinking, a practical, nonreligious ethical system like Confucianism can become a cornerstone of society - more so than in the West, where we tend to derive religion. During the Industrial that has shaken mankind concern years, the Western first an asset. laws of nature, ethics from

The IBM values study, in which national cultural differences were measured across different tinational company. headquarters business subsidiaries within the same mulcorporation, shows that national Whether they like it or not, are among management. national over corthe

Revolution

culture does not stop at the gate of the foreign of multinationals differences in the

for the past 200 for Truth was at of the

It led to the discovery

of multicultural Cultural

which could then be exploited subsidiaries

for the sake of human progress. It is surprising that Chinese scholars, despite their high level of civilization, never discovered Newton’ laws; they were simply not looking for s them. The Chinese script also betrays this lack of interest different in general laws: It needs 5,000 one for each syllable, characters,

easily lead to conflicts

porate policies. Such conflicts arise not only between headquarters and local managers in the subsidiaries, but also between headquarters and expatriates from the home country nationality. In one U.S. corporation we know, the head of a headquarters staff department complained bitterly to the president about the noncompliance with certain rules by the East Asian regional manager, who was an expatriate American. “I fully agree,” said the president. “His behavior is stupid and against company policy. I have only one question. I From the time he worked in headquarters, have known Mr. X to be an intelligent man. How can a man be so intelligent in Los Angeles and so stupid in Hong Kong?” Policy conflicts are less likely to occur in technology and finance, which are rel-

while by splitting the syllables into separate letters Western languages need only about 30 signs. We could say that Western thinking is analytical, while Eastern thinking is synthetic. By the middle of the 20th century, the Western concern for truth gradually ceased to be an asset and turned instead into a liability. Science may benefit from analytical thinking, but management and government are based on the art of synthesis. With the results of Western, analytically derived technologies freely available, Eastern cultures could start

20

atively diversity

culture-independent, and personnel, is largest.

and more likely where cultural corporate

be complementary. ample of cultural

Our experiences synergy, because

with the an exthe survey

in marketing

Chinese Value Survey are in themselves

Multinational

cultures handle cultural diversity among subsidiaries according to the level of Uncertainty Avoidance in their headquarters. At one extreme is the position that “there is only one corporate truth, and we have it”; at the opposite extreme the subsidiaries are run at arm’ s length, without much attempt whom used a Western research approach with a Chinese questionnaire. We can also consider the economic of cultural exploitation ples. Although ing cultural to recognize portunity success of the five Dragons synergy, of technology originally a case develsince it was based on the to Eastern princican be helped This opthe idea

oped in the West according synergy,

at integration. was a wise go unrecogstaff and

there is no patent for developmanagers local cultural patterns.

The president cultural

we quoted

man who steered a middle differences nized by overzealous

way. He saw that

can easily headquarters

may help them overcome

can be interpreted as personality defects of the people in the subsidiaries, whether they are locals or expatriates. National cultures can undoubtedly

that the cultural are necessarily

choices of their own country superior to those of other

countries. Such an attitude is a luxury that the management of a multinational corporation can no longer afford.

SEI.ECTEDBIBLIOGRAPHY

IBM studies zation:

were first described Theories

in the same auand OrganiAbroad?” 1980). Harris Bond the modified “Hofstede’ s Validation Bond was ConnecApply

thor’ article “Motivation, s Herman hypothesis the failure development an article Kahn has formulated the neo-Confucian Helm, Do American Geert Hofstede compared Rokeach Culture the Value IBM Study in his book of economics by George

Leadership, Summer with

World Economic Deuelop1979). On the RedMirato predict or explain

(Organizational

Dynamics, studies ment: 7979 and Beyond (Croom of the Five Dragons,

and Michael in their article

we recommend

L. Hicks and S. Gordon

Dimensions:

An Independent December 1984). Culture

Economic ding, “The Story of the East Asian’ cle’ ” (Euro-Asian 1983). Michael book entitled p/e (Oxford logical studies

s Using Rokeach’ also a member

Value Survey” of “The Chinese entitled

(Journal of Cross-

Business Review),

Issues 3 and 4, Peocon-

Cultural Psychology,

Harris Bond is the editor of a recent The Psychology of the Chinese 1986), which Press,

tion,” the group of authors nese Value Survey Search for Culture-Free

of an article on the Chi“Chinese Values and the Dimensions of Culture” June 1987).

University

tains discussions aspects Geert

of and references of Confucianism. Hofstede’ s

to the psychoof the IBM is also RelaFall the

(~oumal of Cross-Cultural

Psychology,

description 1984). Practices

can be found in his book of a relevant article,

Culture’ Conses
Hofstede If you wish

quences (Sage Publications, the author tivity 1983). of Organizational

“The Cultural

and Theories” with

to make photocopies or obtain reprints of this or other articles in ORGANIZATIONAL DYNAMICS please refer to the special reprint service

(journal

of International
The four dimensions

Busirzess Studies, associated