Sunday, 29 November 2009

Does liberalism have Chinese roots?

Tim Ambler and Morgen Witzel, in their book Doing Business in China (first published in 2000, with a second edition in 2004) suggest that the liberal idea of laissez faire originates in China. Socialism, on the other hand, has its roots in Western philosophy. This is an interesting idea, because we tend to think that economic liberalism comes from the 'free' Western world, whereas socialism is the legacy of China's own recent past.
The connection between Chinese philosophy and economic liberalism, also put forward in an article by Witzel on the internet for European Business Forum ( (http://findarticles.com/p/articles/mi_hb4779/is_20/)
is formed by the inspiration some European, notably French, thinkers drew from Daoist (Taoist) writing. Witzel emphasizes the difference between Confucian and Daoist thinking:

"While the Confucians believed that virtue could best be achieved through regulation and control, the other great philosophical school of ancient China, the Daoists, argued the opposite. One of the key principles of Daoism is that true achievement comes not through action but rather through its opposite, wu-wei, or 'non-action'. The Daoist view was that the best way of achieving a desired result is through stillness, causing things to happen without intervening. In economic terms, this means letting nature take its course.

The central Daoist text, the Daodejing, spells out this concept explicitly. Those in positions of power are urged to know much, but do little. Chapter 8, for example, urges: "In governing, know how to maintain order. In transacting business, know how to be efficient. In making a move, know how to choose the right moment". Chapter 17 says that the most effective form of leadership is to motivate people rather than drive them or control them." (end of quote)

In his book with Ambler he shows how in the eighteenth century these ideas reached Europe through the translations of the Daoist texts by the Jesuits. The term wu-wei ( 無為) was translated as 'laissez-faire' by the French economist Quesnay. And this 'proves' that liberalism has Chinese roots and contradicts the dominant idea that China has been importing liberalism from the West since the the end of maoism.

I like this sort of creative reversals and it certainly helps us see another side of Chinese society: a society full of energy and improvisation, of creativity and self-organization. Some people see China as the most liberal country in the world. In spite of the many rules, the Chinese have much more freedom to decide about their own life than many Europeans, wrote Fons Tuinstra in 'Het andere Oosten' ('The other Orient') in 2003. But does this flexibility in business, this reliance on spontaneous self-organizing forces have anything to do with European and American ideas of liberalism? I don't think so. Equating wu-wei and laissez-faire does not do justice to the meaning of both terms and their embeddedness in completely different cultural contexts.

As a friend of mine suggested, wu-wei comes much closer to a concept like nirvana in the philosophy of India than to laissez-faire. The Daoist concept of wu-wei emphasizes effective action without being coercive. It is about using the potentialities of a situation to the full, by not interfering with the natural, spontaneous forces present in this situation. It has nothing to do with personal freedom, let alone with political freedom or free choice by enlightened citizens: elements that are essential in the European and American liberal views. The Chinese don't have a Statue of Liberty, inspired by Daoist philosophy. It would be unthinkable!

Daoism does imply abstinence from unnecessary interference with the 'natural' course of events. 'Spontaneous' or 'natural' action (zi-ran 自然) is an importance concept in Daoism and to some extent we can see a parallel with ideas of natural law in Western thinking. In this sense we can call Deng Xiaoping a Daoist. He wished to create the conditions for the Chinese economy to unfold and he created opportunities for learning and experimentation. These policies emphasized the 'natural forces' in society and a 'wu-wei' attitude of the Chinese leadership. This had nothing to do with political liberalism, as history has shown. When the natural forces of democratization became a threat to the political leadership, in the Tiananmen incident, Deng was prepared to use force to violently correct the situation. It shows that the room for the natural processes of self-organization and the abstinence of leadership from coercive intervention is constrained by political logic: leaders will not allow their position to be jeopardized.

So, whereas we can see some interesting parallels between Western liberalism and Chinese Daoism, they have completely different roots and are based on different values. In the Western view, economic and political freedom are believed to go hand in hand. It is the belief in 'the end of history' thesis put forward by Fukuyama. The Chinese 'Daoist' version of liberalism combines economic liberalism with an authoritarian State, which contradicts the values of the Enlightenment. The idea, first put forward by enlighted thinkers in the eighteenth century, that Daoism could inspire liberal philosohy was based on a misunderstanding. The tension between Western and Chinese ideas of a spontaneous social order will continue to exist and become more relevant as the Chinese economy gets increasingly integrated in the global economic system.

References

Ambler, Tim and Morgen Witzel, Doing Business in China. London: RoutledgeCurzon, 2004, Second Edition.

Ames, Roger T. and David L. Hall, Daodejing "Making this Life Significant" A Philosophical Translation, New York: Ballantine Books, 2003

Witzel, Morgenm What we owe to Chinese classical economics: where did modern economics originate? European Business Forum, Wntr, 2005



Saturday, 14 November 2009

Hofstede and China: Limitations



Characterizing Chinese Culture: the Poverty of Hofstede’s Dimensions

Dr. Huibert de Man

Open University of the Netherlands/Maastricht School of Management

(Originally written in 2005, adapted in 2009)


In many publications on Chinese organizations and management, some attention is given to the influence of the specific business culture in China, which significantly differs, from North American or European culture.

The most cited author in this respect is no doubt Hofstede. His analysis of work attitudes of IBM marketing professionals in 40 countries, by means of survey research in 1968 and 1972, formed the basis for a framework for the analysis of cultural differences, which was published in his book ‘ Culture’s Consequences’ in 1980 (Hofstede, 1980). This framework now belongs to the standard view of culture in management. Uncertainty avoidance, collectivism (-individualism), power distance and masculinity (-feminity) have become the standard dimensions in which cultural differences between national cultures are discussed. For our discussion, it is important to note that no observations from the People’s Republic were part of the sample. IBM had no marketing people there. Taiwan and Hong Kong were included.


Subsequent research refined the framework, without fundamentally changing it however (see Hofstede, 1991). Of special relevance for understanding Chinese business culture were the contributions by the Canadian researcher Michael Bond, which led to Hofstede’s ‘ fifth dimension’: Confucian dynamism. The conclusions on this Confucian dynamism were based on an analysis of questionnaires among students in 22 countries in 1980’s (Hofstede and Bond, 1988). Originally, the Chinese sample was restricted to Hong Kong and Taiwan. Later, data from the People’s Republic was added.

The dimension was based on a ‘Chinese values survey’ with 40 items based on Confucian values like tolerance, harmony, patience, courtesy and moderation. The dimension turned out to correlate with economic success in Asia. It was predicted that, once Mainland China would create the proper conditions, the economy would flourish there as well.

In terms of Hofstede’s original dimensions, Chinese culture is described as:

  • (rather) high power distance
  • very collectivist
  • rather uncertainty avoiding
  • not very masculine.

The fifth dimension, Confucian dynamism, has not been used by many researchers. There has been a lot of confusion over this dimension and some doubted if it was a dimension at all. The philosophical basis in Confucian thought was criticized (see also Fang, 2003).

Thus, in many publications Chinese business culture is characterized in the original four dimensions. Special emphasis is laid on the collectivism and high power distances which distinguish this culture from what North American and European managers are used to.

The value of the original work by Hofstede cannot be doubted. Neither should one deny the usefulness of the dimensions to make western managers sensitive to essential culture differences. However, the application of the Hofstede dimensions has a number of limitations of which researchers should be aware. I will mention a few of them here:

  1. In Hofstede’s work, there is an untested assumption of the homogeneity of national cultures, as well as an equally untested assumption of the homogeneity of corporate cultures and professional cultures. The differences between values and attitudes of, say, American and Taiwanese managers, are completely attributed to differences in national culture. The possibility of local variations in professional and corporate cultures is thus not accounted for. The national homogeneity assumption may be in line with nationalist ideologies which assume that there is a ‘national character’, which may be a questionable assumption in cases where regional and class variations in culture are large. Projected unto China: the problem of heterogeneity of Chinese culture(s) is neglected when one characterizes Chinese culture as many authors do. This nationalist bias is especially problematic now, where we see a revival of nationalist sentiments in China and, as a consequence, the creation of a myth of national culture based on Confucian principles.
  2. The original Hofstede research is an almost 40 years old. Even if the dimensions may still be useful, static characterizations of national cultures may lead to stereotyped images. Applied to China, this problem is especially serious. This country is in a phase a turbulent change and the assumption of a stable, unchanging Confucian base of its culture, for example, cannot be taken for granted.
  3. The original material of Hofstede equalled China with Taiwan and Hong Kong. Later, some material about the People’s Republic was added. Hofstede’s insight into China mainly occurred through the work of Bond. Application of Hofstede’s original characterizations of China to the present-day People’s Republic could be problematic, therefore.
  4. Hofstede’s framework seems to explain everything in terms of culture. In his view, institutions are the consequences of culture. The independent influence of markets and institutional arrangements on human behavior and eventually on culture is not accounted for. Applied to Chinese management, this may lead to un undervaluation of the influence of changes in markets and institutions and their shaping influence of business culture.
  5. As a framework focusing on national cultures, the characterizations of Chinese management in terms of the four (or five) dimensions may lead to a neglect of corporate, industry and professional cultures. Differences between (for example American and Chinese) organizations may wrongly be attributed to alleged national differences, at the expense of attention to more specific factors. It may also lead to a neglect of the ways in which, also in China, organizations shape their own cultures by selecting, training and indoctrinating people.

What does this criticism mean? While acknowledging the value of the original Hofstede research it points at the need for a broader, more dynamic, less deterministic and more pluriform conception of culture, especially when it comes to understanding (business) culture(s) in present-day China. My suggestions:

Use the Hofstede dimensions and original scores as hypotheses, not as descriptions of present culture; test these hypotheses if possible by fresh data gathered in China.

  • Account for pluriformity in cultures within China (regional, industries, age cohorts), do not assume one culture without further observation. Be critical of the nationalist cultural self-image projected by the Chinese leadership.
  • Account for the interplay between markets, institutions and cultures.
  • Give cultural change a central place in the analysis of present-day China, not timeless values; account for cultural ambiguity and confusion.
  • Pay attention to the way in which organizations in China actively shape their cultures.


References

Fang, Tony, ‘ A Critique of Hofstede’s Fifth National Culture Dimension’ , International Journal of Cross-Cultural Management, 3 (2003), 3, 347-368.

Hofstede, G., Culture’s Consequences: International Differences in Work-Related Values. Beverly Hills: Sage, 1980

Hofstede, G., Cultures and Organizations: Software of the Mind. London: McGraw-Hill, 1991.

Hofstede G. and M.H. Bond, ‘ The Confucius Connection: from cultural roots to economic growth,’ Organizational Dynamics, 16 (1988), 4, 4-21.


Sweeney, B., ‘Hofstede’s model of national cultural differences and their consequences: A triumph of faith – a failure of analysis’, Human Relations, 55 (2002), 89-118.