Of course, while the Chinese economy has exploded, the way business is conditioned has changed. The close connection between family and business continues to weaken as companies adopt more performance-oriented measures of success. Corporate governance, while still respected, is less hierarchical and more democratic with a conscious effort to improve management skills. Once unclear corporate structures are giving way to more defined organizational charts. Nevertheless, centuries of tradition do not disappear overnight. Confucian values, mixed with Western capitalism, have created an entrepreneurial culture that fosters true entrepreneurship. Wall, K., Lin,H., Zhang, R., Lei, X., 2009, A study on the Chinese ethical evolutions and its effects on SMB in China today, International Journal of business management [Online]. 4 (3) The ethical principles could contain a number of rules and guidelines useful for doing business. The central doctrine of Confucianism, Ren, which means kindness, benevolence, humanity and kindness, played a leading role in balancing ethics and the pursuit of profit.
There is a misconception that is clear in many newspapers, which Cardon (2009) also noted – that the Chinese are extremely polite and indirect in their affairs because of Face. In my own experience, this is not correct. The Chinese can be very direct about what they want and their opinion on an issue, and they can be indirect when it suits them: they often lie again about when an order might be ready or at what cost they are able to produce something. This is consistent with Cardon`s (2009) findings about how some businessmen exploit the naivety of a foreigner. Paternal leadership influences Chinese companies today (Liu 2010). This stems from Confucian family values in which the son must obey his father (Liu 2010). At the heart of Confucian values are the close family unit and the implicit roles and duties of children towards their parents, especially the father (Thompson 2010; Green, 2012). A similarity can be established with executives in companies (Liu 2010). Like the father of a Chinese family, a manager in a company is expected to set a moral example and guide those below him to do the right thing (Chen and Farh 2010). Family collectivism is an integral part of Confucianism, which defines the important physiognomy of a Confucian enterprise (Ip 2011). Cardon (2009) conducted recent research and analyzed interview data.
Cardon`s (2009) research highlights that it is common not to practice face-to-face in business situations with strangers. An interview with Ms. Zhang confirms this; “Face helps you to have friendly relations, but it is not very important for companiesâ Li, Z.: 2005, `Lack of Corporate Social Responsibility Behind Recent China Accidents`, www.chinawatch.org/node/3859. Retrieved 14 December 2006. Confucian entrepreneurs can be defined as those who apply traditional Chinese cultural values in relation to maintaining the moral beliefs of Confucianism in all aspects of business practice. Although Confucianism is sometimes considered hostile to entrepreneurship, it played an important role in the study of Confucian entrepreneurs “because it originally designated intellectuals and served as a set of political ideas practiced in a hierarchy of ethical obligations to the family and community.” (2) In Confucian thought, Li, another virtue that literally means decency, also exerted great influence on commercial activities. One of the earliest meanings of virtue was “ceremonies” in the sense of rituals and structures that people went through at certain times and for certain reasons. Since then, the word has developed a more general meaning, which could mean a set of ethical principles that guide interpersonal relationships in a hierarchical society. There is evidence that relations in China have been influenced by Confucian values (Lu 2003; Liu, 2010; Hennig, 2013; Chan, 2007) and that business ethics in particular were strongly influenced by Confucian values (Chan 2007; Rarick, 2007; Jaques, 2010; Jacobs et al., 1995). Understanding Confucian values can help to see the impact on relationships within Chinese companies.
Some scholars believe that Western influence distances people from Confucian values. For example, Kadoya and Bryer (2014) found in their research that businessmen in large coastal cities tended to be cosmopolitan and decidedly selfish, individualistic, and more open to Western manners. Their research concluded that Chinese managers exposed to a Western way of life retained Western values (Kadoya and Bryer 2014). The young entrepreneur, in particular, is more Western and has often abandoned Confucian traditions to be modern and westernized (Bucknall 1999). This implies that Western values are attractive to Chinese businessmen, leading to a gradual erosion of Confucian values. Guanxi is considered important to the economy because it is rooted in the way the Chinese have done business since the time of Confucius. (Buttery & Leung, 1998) In Asian culture, this is usually not what you know, but who you know (Wang 2005). Guanxi does not have a directly recognized translation, so the Chinese term is used (Hermann-Pillath 2009). Although studies vary widely and have a different purpose, Kadoya and Bryer`s findings suggest that reciprocity, an important part of guanxi, is losing importance (unlike other business ethics). However, analysis of Hermann-Pillath (2009) data shows that China has very high confidence scores, which means that Guanxi is still very important. The study by Wall et al. (2009) illustrates this by showing that the importance of guanxi is becoming increasingly important.
The research results of Wall et al. (2009) are more concrete, as the questions are directly related to the importance of guanxi, unlike other surveys by Kadoya and Bryer, Hermann-Pillath and Li. BjoÌrksteìn, J. and HaÌgglund, A., 2010. How to run a successful business in China [online]. Singapore: World Scientific. Influenced by cultural factors, the style of negotiation differs greatly from country to country (Chmielecki 2013). While soft and hard negotiation techniques are used in the West (Buttery and Leung 1998), guanxi has a significant influence on business transactions in China: business evolves from established guanxi relationships, as opposed to the Western notion that relationships arise from business (Vanhonacker 2004).