Leadership Issues Faced While Operating in China

Leadership issues while operating in China

The role of a leader varies from culture to culture or even within sub-cultures. Organisational cultures are the perfect example of this and like national cultures, their current nature is reliant on history. Stereotypically big, old companies have a stronger tendency to rely on authoritarian leadership, while young small companies believe more in egalitarian management. This comparison functions also as a good example of Western style leadership vs Chinese leadership.

China is one of the oldest cultures in the world, with written history starting as early as 1700 BC. This makes China one of the oldest, if not the oldest, culture in the world. While this per se might not be of much importance to a foreign manager in China, the fact that through c. 4000 years of history, mainland China has only had 37 years of apparent democracy as the Republic of China. This period was filled with conflict and internal strife. Due to this historical reason, the concept of authoritarian leadership is very ingrained into the Chinese culture. (Ambler 2008)

While the concept of relying totally on authoritarian leadership is an anathema to contemporary Western leadership theory, in China the concept is throughly tempered by Neo-Confucian values. In Confucianism the relationship between sovereign and subject is the most important. Leaders have an obligation to care for their subjects, for which subjects in turn owe absolute loyalty (Ambler 2008: 74). Due to this concept being a core component of Chinese culture, it is a part of doing business in China also. Managers are expected to place employees before stockowners for example and even help them beyond work-related issues. This is very contrary to Finnish leadership culture for example and presents a major challenge for any manager wishing to lead Chinese employees.

Key concepts in Chinese culture, that are relevant to leadership, are Guanxi and face. The definition of guanxi is difficult, since western culture does not have anything like it on such scale. Essentially guanxi describes a system of favors. While in the West businesses attempt to make agreements binding through legal measures like contracts, in China guanxi acts as the binding force. The amount of gaunxi a person has is dependant on their social position, history and prestige (Ambler 2008: 97-99). The more guanxi a person has, the more favors they can ask. A person who has used or lost their guanxi can be considered a social pariah. This includes managers also. For example, if a manager makes an agreement with an employee, but does not follow it, the manager loses guanxi. Eventually the employees will lose their respect for the manager and not follow them anymore. The manager will also find all other doors closed to him in Chinese sociaty, since guanxi is not interpersonal, but societal. The importance of guanxi cannot be overstated to any manager wishing to operate in China.

The concept of face is probably the most well known aspect of Asian cultures, with it being especially important in China and Japan. While the statement losing face has the same definition in both Western cultures and China, it is a lot more important in the later. Any action that causes social disgrace to another person, makes them lose face, harms the guanxi of the offender. The most common tripping stone for managers in this regard is etiquette. By following etiquette the person shows respect and by failing causes extreme disrespect (Ambler 2008: 84). While the influence of face on human leadership will be more properly discussed in the appropiate section of this essay, the concept of giving face does provide an interesting issue to leadership. Giving face is not common in Western culture, as a concept. Essentially by giving face to a person, you boost their social status and guanxi. Since losing face is such a horrible prospect, gaining face is found to be extremely valuable. This can be a valuable tool for managers and it is especially important to recognize when somebody gives you face. Ignorance of the action would be a slight of highest degree.

While individually these aspects of the Chinese culture are challenging for an outsider, they are still managable through an open mind, curiosity and willingness to learn. The greatest challenge comes from all of these aspects influencing eachother. The guanxi of a leader for example tells how well the leader is managing to abide to the Confucian values in Chinese culture and care for their employees. Face in turn is a major component of guanxi. These aspects are only the tip of the icerberg that is Chinese