THE CHINESE MANAGEMENT
Confucius on Management
History has shown that China is a significant creator and repository of great philosophies, yet we know little of Chinese philosophies on leadership. With China becoming a global economic and political force, we need to learn from and to understand Chinese leadership philosophies. We must also consider that China is now in the process of blending its tradition, customs and practices with Western concepts and ideas. In the business world, it is the blending of its wisdom and Western practices. Successful leadership behavior of today's more culturally diverse workforce is one of the most important challenges organizations face.
CHINA
The People's Republic of China today seems to be entering the modern world, coming out of the shadow of the warlords, the 20-year struggle between communism and nationalism, and the Cultural Revolution. Moves are afoot to shift the Chinese economy more toward the market-oriented end of the spectrum. China’s 1978 open door policy initiated rapid economic development, and consequently exposed china to a flood to Western management practices.
CHINA 2
China is a country of old and new and one that is in transition. With the rise of China in the global economy, it has never been more important for business leaders to understand Chinese leadership philosophies and practices. Ancient Chinese thinking and Western ideas have shaped the development of leadership styles in China. Leadership theories (paternalistic leadership as practiced by business leaders in Taiwan, Hong Kong, and mainland China), associated with Confucianism, Daoism, Legalism, the Arts of War, and the writings of Mao and Deng are analyzed by both Chinese and Western experts. To set this in a modern business context, top executives, reflect on how ancient Chinese philosophers, modern Chinese leaders, and Western management writers and thinkers have affected their business values.
China may be modernizing its economy, but it is still Communist and Eastern in outlook, so do not expect Western management practices to surface there very soon, but some even insist that the Chinese are using capitalistic practices to run private companies in this new era of freedom.

CULTURAL ENVIRONMENT OF MANAGEMENT
In all cultures, management practices must reflect a society's social, political and economic systems. Although these elements which can be separately analyzed, they all play an important role in determining management practices. Globalization is calling for the need to understand different cultures, as markets expand and new economic territories are explored, managing different people from different cultures is an important role. Each culture has its own management characteristics and/or style; our aim is to understand them and see how they fit within an organizations culture.
CHINA VS. WESTERN CULTURE: WILL THEY ADOPT IT.
As China has slowly embraced the western business world, it has also imported the tools and techniques of western managers. One reason to assume that China is becoming capitalist might be from reports concerning the opening of private enterprises. A brief analysis of ownership structure can help us understand the true impact of this phenomenon on the Chinese economy. Three aspects of the Chinese economy include the nature of ownership, the prevailing planning system, and the relative importance of production and profit. In the major cities, three ownership categories exist: state, collective, and private (individual). The total urban labor force was 117.4 million, of which 75 percent worked for state-owned enterprises, 23 percent for collectively owned enterprises, and only 2 percent for privately owned enterprises. State enterprises have played a consistently dominant role in China's economy and this dominant role of state enterprises is unquestionable. A great deal of evidence indicates that this is unlikely to change dramatically in the near future.
The term "private enterprise", is “Getihu” in China. The literal meaning of “Geti” is individual and “hu” is family. The term itself has some implications. First, it shows that it is still not comfortable to advocate the concept of strictly private ownership. "Getting rich is glorious" somehow conflicts with the ideology of "Everything belongs to the state; everybody works for the public welfare." The latter belief has been planted in people's minds for 30 years.
LACK OF WESTERN-STYLE MANAGEMENT.
The political system and ideology in China since 1949 have emphasized that a socialist country is not supposed to adopt any Western values or practices. Socialism and capitalism are viewed as two opposite ends of a continuum. Government officials have this firmly set in their minds, and they have led the people to accept this dichotomy. Elements of traditional people management practices in china have remained steadfast against the influence of foreign management principles. In the past, special Cadres Training Programs were organized, in which administrators were trained mainly in ideology. With this emphasis, it is obvious that Chinese managers were not trained by Western standards. A lack of trained managers has perpetuated in a sense by the type of education available in China since 1949. Universities and colleges have produced highly qualified personnel in science and technology. Yet there have been few business schools, and a broad business education was not given a high priority either by the government or by students in the past.

The four stages in the development of China's management system: 1949-1956; 1957-1966; 1967-1979; and 1980-1986.

CHINA’S MANAGEMENT SYSTEM
Chinese, culturally based management practices are derived primarily from Confucian principles. Confucius and his teachings remain the foundation of Chinese culture and managerial practice. It can be reasonably argued that the greatest influence on Chinese culture and managerial practices can be traced to Confucius and his value system, which emphasizes the importance of hard work, loyalty, dedication, learning, and social order.
Although Mao officially discredited Confucianism, the cultural values espoused by Confucius left a permanent mark on the psyche of the Chinese people. Recently, Confucianism has been reintroduced into the Chinese educational system (Mooney 2007; Osnos 2007) and a number of Confucian institutes have been established. Hofstede, Adler and Goldenberg all concur that Confucian principles are the dominant input into the programming of the Chinese employee’s mind.
The managerial approach of the Chinese, include the following characteristics: collectivism and harmony, centralized control, authoritarian and paternalistic leadership, family-staffed businesses, expectation of hardworking employees, and strong organizational networks and business connections. These characteristics can be traced to the value system dictated by Confucius and are influenced by the Five Relationships of Confucianism, the Five Virtues, and the Confucian Work Ethic.
Confucius
Known as the most influential man in Chinese history and often referred to as “China’s first teacher,” Confucius set the standards and values that still permeate Chinese culture.
“Born 500 years before Christ, the great philosopher and teacher, Confucius, established the cultural foundation of China. His father had nine daughters and one crippled son. At age seventy, he mated with another woman, who was 15, hoping to get a healthy son. His father died when Confucius was three and his mother raised him in poverty.”
He rose in the state government to the position of Justice Minister, but around age fifty, resigned and embarked on a twelve-year odyssey around China. When he returned home, he spent his last years teaching and writing. He died at seventy-two.
Confucius’ advice was given in oral form to his students, however, shortly after the great teacher had died his students began writing the messages he had given them, and these writings became the Analects, or the “Sayings of Confucius”
One of his deepest teachings and most difficult for Westerners to understand is the power of example instead of strict rules of behavior. Here we see again the interplay between the right brain and left-brain: high context vs. low context style of communication. This indirect way of his teaching still permeates China culture. He made his points by indirectness, through casual reference, slight mention, and innuendo, even a slight nod.

“He championed strong family loyalty, respect for elders and ancestor worship. Among the important ethical concepts are”: Short-term pleasure is bad, while trying to do the proper things at the right time is better. His moral system based on kindness, empathy and understanding others, rather than divinely ordained rules. Virtue based upon harmony with other people. This was the root of face and “Guanxi” (literally means "relationships").

China is still predominantly a relationship-based society rather than a transaction-based one.
Based on socialist ideology, and reflecting the development of China's management system, the criterion for a manager has been loyalty to the party, not knowledge or skills as seen from a Western viewpoint.

ANNEX I
The following are some features of China's unique business leadership that foreigners should learn before doing business in the world's fastest-growing economy.
(1) It is naive to think that the best Western leadership practices can just be described and applied in China. China's cultural differences with the West make some practices very difficult to work with in China.
(2) Westerners usually have their eyes on the ends while Chinese leaders focus more on the means.
(3) One reason that China has special leadership needs is demographic. An entire generation of potential business leaders languished during the Cultural Revolution. Only a small percentage of that generation became business leaders. The result was a relatively young work population compared to that in the West. Another reason for China's inability to quickly develop leaders is cultural. Many of today's senior managers in China got their positions through personal struggle. They see this as the best way to get ahead and are not keen on developing special programs to develop new leaders.
(4) The Chinese sometimes see Western independence as ``showiness.'' Some Chinese have referred to the typical Westerner as a peacock ― flashy and beautiful to look at but without much strength or substance. Standing alone is an anathema to Chinese thinking.
(5) Chinese culture is deeply founded in Confucianism, Taoism and Buddhism. They were all suppressed during the Cultural Revolution but none were eradicated.
(6) Chinese leaders are expected to be nationalistic. While their bosses require allegiance to the firm, Chinese society also expects allegiance to the country.
(7) Leaders in China are expected to express themselves much less directly than those in the West. Indirectness implies thoughtfulness and also allows room for renegotiation after the fact.
(8) Face-saving has a deeper meaning in China than in the West. Many Chinese will go to great lengths either to save face or to save someone else's face.
(9) Leaders in China need to find the right balance between truth and courtesy and encourage employees to use both in a harmonious way.
(10) Both external experts and local business leaders define China as a low trust society. Chinese people are slow to trust their leaders.
(11) The Western concept of empowerment has been introduced to China without properly recognizing the inherent conflict with Confucian hierarchy. In order to make empowerment successful in China, a leader needs to learn to integrate these disparate concepts. (12) Since China is historically both a family-run and a rural country, the theme of collectivism is strong. Unlike Western culture, which breeds individualists, Chinese culture breeds collectivists.
(13) Western legal systems are based on the rule of law. The Chinese system is primarily a rule of man.
(14) The Chinese are often accused of not being risk-takers or innovators due to the ``fear factor'' evident during the Cultural Revolution.
(15) Westerners believe in the value of making quick decisions and then taking action. Chinese want to be sure that all angles of an issue are reviewed first and all matters are thought through before coming to a conclusion. This process often involves going back to the beginning and starting the thinking and the discussion again. These two different approaches are sources of frustration for both parties.
(16) In China's short business history, using military discipline and punishment for mistakes, thus instilling a fear of humiliation, has been a typical approach to keep people motivated. The rewarding style of Western management is a bit alien to the Chinese way of thinking in business.
(17) Chinese teams are very strong. Team members are loyal to the team and committed to its success. There is a clear analogy with the Chinese family, the foundation of Chinese society.

ANNEX II
Confucianism is:
• To love others
• To honor one’s parents
• To honor elders
• To do what is right instead of what is advantageous
• To practice “reciprocity”
• To not do to others what you would not want done to you
• To rule by moral examples instead of by force and violence
The influence of these beliefs can be seen in every-day Chinese society. At work, there is a Confucian emphasis
• On interdependent relationships,
• On consensus, and
• On respect for hierarchy.