4 - Social Organisation
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4.1 Social organisation
4.3 Family matters
4.4 Role of women
4.6 Mutual respect
Us, them, you,
me and her
The final decision maker
in any form of business is the individual consumer. It is
the autonomy of the individual decision maker - whether
buying a product or service or as a business partner - is
the central notion that underpins Western business methods.
Success in China requires adapting this notion to what is
still in many respects a highly collectivised social structure.
In the first decades of its rule, the Chinese Communist
Party (CCP) sought to replace traditional Chinese social
structures with class-based categories grouping people together
as workers, peasants, intellectuals or technicians. This
form of labelling has largely been abandoned as China’s
economy has diversified. In recent years, the government
has sought to underpin its legitimacy by promoting the legacy
of Confucius, the philosopher whose ideas gave us what many
people still think of as the defining characteristics of
Briefly, Confucius sought to promote harmony by giving every
person a particular role in society, with every role having
a position within a fixed hierarchy. The male was above
the female, the old above the young, certain occupations
carried more honour and merit than others - with the merchant
or businessman at the bottom of the pile, below the farmer!
A person could rise in rank through professions by the exercise
of his talent and could accumulate seniority simply by growing
It would be wrong to say that modern Chinese society is
Confucian - Confucius' ideas were never applied fully even
in his own lifetime - but his ideas still inform the way
in which people behave within Chinese organisations and
how they relate to people outside those organisations.
uniform, not the man
In Western business the
idea of leadership is regarded as a set of qualities that
can be learned and applied by an individual. In China, a
leader is accepted as such due to his position in the hierarchy
of his or her organisation. As with the armed forces, it
is the uniform that is saluted, not the person wearing it.
However, China is not without concepts of autonomous leadership.
One such is the idea of 'Wu Wei' (literally ‘without
having to do’). This term refers to a natural authority
through which a leader is able to exert authority on those
around by means of what is best described as masterly inactivity.
A true leader's presence is felt even in his or her absence.
Big plan, big man
Understanding who is who
within the hierarchy of a Chinese organisation is an essential
task for the foreigner doing business in The People’s
Republic of China (PRC). Chinese perceptions of your place
in the hierarchy will determine how seriously you are taken,
who you will meet and whether that person will have the
authority to make a decision by him or herself or will have
to report upwards. If a company's Chinese project requires
a big commitment, this must be reflected in the status of
the person chosen to carry it forward.
In China, formal business
is done between equals, i.e. between people equal in status
in their respective organisations. This principle also carries
forward into co-operation between Sino-foreign teams, each
of whose members will have an equivalent or "shadow"
on the Chinese side.
To the Chinese, equality of status underpins mutual respect.
This in turn contributes to a trusting relationship between
individuals on each side, with personal trust regarded as
a necessary precondition for business to take place at all.
A formal contract, by contrast, is simply a legal requirement.
Trust and connections
Connections - guanxi
- are one of the best-known aspects of doing business in
China and the subject of much speculation. The importance
of guanxi partly reflects the uncertain status of businesspeople
within modern Chinese society until comparatively recently.
With their formal position liable to changes in political
outlook, personal trust became a necessary precondition
of a business relationship. And China's complex bureaucracy
meant that unofficial networks were needed to get things
done. In the context of foreign business, Chinese businesspeople
preferred to navigate unfamiliar economic waters through
making foreign contacts they felt able to invest personal
Even now when China has become the world's largest destination
for Foreign Direct Investment (FDI), relationship building
remains an important component of doing business. A successful
venture in China may establish the foreign partner as part
of the Chinese partners network of guanxi. However, although
that network may extend from China to the UK, this is no
guarantee that it will extend any further, even to a different
department of the same Chinese company. A Chinese business
group may contain several hierarchies, often organised within
departments and each under the patronage of a different
leading figure. This means that the Chinese partner in any
business may seem to have a remarkably widespread network
of influence outside his company but have little say over
what happens in the office down the corridor.
The pursuit of happiness
Business in the West is
conducted according to the theory of enlightened self-interest.
Simply by doing business honestly and competently, the businessperson
makes the best contribution possible to the wider society.
In order to do business effectively, it is preferable for
partners and suppliers to have good relationships with each
other. But it is not essential provided everyone honours
their contracts and a practical compromise can be worked
In the Chinese view, harmony is not a process that produces
better business results. It is an outcome - part of what
the two sides are doing business to create. It is an end
in itself. This notion affects every aspect of a Sino-foreign
business relationship from its strategic goals to the attitude
and demeanour of the individuals involved. Without this,
it is unlikely that any business partnership in China can
survive even though the partners might ultimately share
the same business goals.
These are some of the characteristically Chinese aspects
of business culture, which the foreigner can expect to encounter.
These aspects may be more developed in some companies than
others. Some take a "traditional" approach to
doing business. Others pride themselves on becoming more
westernised - or "internationalised", to use the
tactful term. China's rapidly evolving business environment
often creates hybrid cultures, mixing international business
methods in some areas with Chinese attitudes in others.
Foreigners cannot expect to venture into China without encountering
some or all of the business styles outlined above.
One child policy
Results of China's 2001
census gave the population as 1,260,000,000, an 11% rise
over the 1991 figure. The immense market size this represents
has been China's primary attraction for foreign business.
It has also been a matter of great concern for the Chinese
government. In the early years of Communist rule, population
growth was encouraged under Mao Zedong's slogan that "every
stomach has two hands to feed it." But as the population
approached 1 billion during the 1970's pressure on China's
resources, especially the ability to feed itself became
Since 1978, all urban and many rural couples have been restricted
to having one child per family. This has been both a radical
change to China's traditional demographic of extended families
and a source of international controversy. With population
growth slowing down, these restrictions have been eased.
For perhaps most people in China, the one child policy is
regarded as a disagreeable necessity and it remains a highly
sensitive subject, especially if raised by foreigners.
and the family
One of the paradoxes of
China's modernisation is that it allows certain traditional
practices to make a comeback. Ostentatious marriage is one
of these. Up until communist times, marriage primarily united
families, with the female partner moving into her husband's
household, in which she - at least initially - had little
or no status. Condemned as a "feudal relic" by
the Communist Party, this practice ceased. Elaborate ceremonies
were replaced by simple civil unions, with both parties
enjoined to treat each other as equals.
Cultural liberalisation has seen the return of elaborate
marriage ceremonies involving much banqueting and exchanges
of presents, with the added twist that "western-style"
marriages have become fashionable. They have also become
expensive affairs, with the consequence that the age of
marriage tends to be in the late 20's or early 30's, especially
in urban areas. It takes that long to save up for a place
of one's own and to equip it to the necessary standards.
This has not seen a return to the Confucian extended family,
however. The improving status of women and the one-child
policy has seen to it that Chinese couples now tend to live
in nuclear family units. The consequences of the one child
policy best known in the West in the widely reported phenomenon
of little emperors and empresses. The reality is more complex.
Sole children may be pampered if their parents can afford
to do so - especially if they are responding to their own
more austere upbringing - but they also carry the burden
if intense parental and family expectations, especially
in regard to education.
Role of women
Under the Confucian view
of society, women occupied a fixed position at the bottom
of the social hierarchy. Prevented from rising occupationally,
such authority that could be accrued came through age and
seniority within the household. Improving the lot of women
was an important goal of successive generations of Chinese
reformers and 20th century governments. Full formal legal
equality was established under Communist rule, under the
slogan "women hold up half the sky". According
to UN figures, earnings for women across China run at just
over 80% of men's, a roughly equivalent figure to the UK.
In practice, it is still fairly rare to meet a woman in
a leadership position in either the public or private sectors
in China (conversely, there are slightly more women in managerial
roles in traditionally male occupations, due to the Communist
Party's traditionally gender blind approach to education
and training). It should come as no surprise to meet women
working their way up through the ranks of their respective
organisations. Foreigners should adopt and stick to a gender-neutral
approach, treating the individuals concerned with the respect
that their position and seniority merits.
China is still an officially
atheist and materialist society. However, in recent years
the government has stepped back from its previous outright
hostility to imported and native religious practices. It
does take an active role in the administration of various
faiths, requiring believers to belong to officially recognised
churches and bans groups that it considers to be harmful
or a threat to its power.
Many in China still take the view that "harmful superstition"
will hold China back. But in recent years, traditional beliefs
of all kinds have enjoyed a renaissance. In general, the
Chinese have always taken an eclectic view of religion,
believing that there are many paths to enlightenment or
spirituality, rather than that one religion only promotes
the truth on these matters.
Most Chinese religious customs derive from the Buddhist
or Taoist traditions, which in turn combine with a plethora
of folk beliefs specific to different parts of the country.
Metaphysical practices like geomancy and numerology also
have a widespread following. These are mainly undertaken
in the spirit of Pascal's wager. They do no harm and may
even do some good, so why not? Foreigners should respect
such practices as part of the general fabric of Chinese
life, but they will not be expected to share them. Nor should
you be under the illusion that because Chinese partners
might wish to launch an enterprise on a lucky day, for instance,
that this will in any way effect the efficiency with which
that enterprise is run.
(For more information, see http://www.sacu.org/religion.html)
This is broadly true of many aspects
of government policy, especially where these relate to social
or economic problems within China and the measures adopted
to solve them. Whatever their private opinions on such issues
as corruption, pollution, crime or the Chinese political
system, people interpret adverse comment from foreigners
on these matters as an attack on China itself. Even raising
them in a neutral manner or in small talk may be considered
tasteless. Should these matters be raised by the Chinese
side in any meeting or discussion, the foreigner will be
expected to defer to the opinions expressed, whatever his
or her own views.
One exception to this rule is where the business at issue
may help to provide a solution to a social, economic or
environmental problem. One example would be in selling "green"
technology. While a positive environmental impact is a definite
selling point for anyone doing business in China, a tactful
approach is still necessary. Above all, it is vital to avoid
giving the impression that you have come to the rescue with
superior Western know-how and technology of a situation
caused by Chinese incompetence or mismanagement.
This sensitivity applies across many
areas of business and it can prove to be a trap for the
unwary. In the early years of China's opening up process,
many foreign companies took the opportunity to dump their
obsolescent technology on to the market, which became in
Chinese eyes another example of the willingness of Westerners
to exploit Chinese people. It also reflects a wider sense
that "only the best will do" for China.
Yet while advanced technology, and
the prestige it brings, is a positive selling point for
business, foreigners must avoid conveying the notion that
China is itself in any way "backward." Every Chinese
child is taught that his or her country gave the world the
"four great inventions" (paper making, printing,
gunpowder and compass) and historically served as a fount
of technological innovation. Consequently, internal alarm
bells will ring at anything that smacks of technological
one-upmanship from foreigners.
(For more information, please see