China Management Styles

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Introduction China is a bustling centre for low cost production and as a result, its potential is growing every day. It is argued that, China is moving from a centrally planned economy towards a market economy and internationalization due to increase globalization and market competiveness. Within that context China requires a change in their management styles, and because most of the foreign direct investment comes from the West. Chinese managers need to find a way to integrate tradition with Western theories of management (Zhang et al 2004). This paper aims to investigate different management styles in China. The discussion will be examined through political, cultural and historical perspectives. These factors will allow us to understand to underlying traditions that influence how Chinese organizations are managed. In fact, it can be argued that China has two managerial models now, the modern and the traditional one. Furthermore, China is becoming a global platform for diverse managerial techniques; both external (i.e. exported) and internal (i.e. home grown). The Chinese management style shall be examined through several contexts. Firstly, this study will focus on the traditions that are rooted in Chinese society and how these traditions impact on the Chinese management style. Particular attention will be paid to Guanxi, Confucianism and Daoism as these are the three main traditions that have shaped Chinese culture, values and attitudes over the last thousand years. The impact of politics on management style will then be investigated. As will be discussed, the relationship between managers and communist party officials is vital in China and can determine the success or failure of a firm. Following on from this the sweeping social reforms of the 1980s and the path towards openness shall be assessed. Market liberalisation of this time has had considerable repercussions on the traditional Chinese management style that has resulted in the adoption of a definite western style of management, particularly in Eastern China. Labour market trends and labour market participation effect on the Chinese management style shall then be assessed. Moving forward, the main types of enterprise firms in China will be distinguished. The process of opening up has resulted in the inclusion of privately owned businesses to the traditional state owned and semi state owned types of enterprises. This phenomenon has had a decided impact on the Chinese management style. The inside out perspective on Chinese management style will then be researched. In order to understand the Chinese management 1

style fully it is necessary to view it through an eastern contextual lens and understand how Eastern scholars perceive the style. In conclusion, Hofestedian theory will be analysed in order to understand the impact that the Chinese culture has had on their management style. Chinese traditions We recognized that the three most influential traditions on Chinese management styles were Guanxi, Taoism and Confucianism. In literal terms guanxi means pass the gate and get connected. Some management consultants describe it as the essential informal connections for gaining approval or access to nearly everything in China (Tsang 1998). Broadly Guanxi means interpersonal associations with the implication of constant exchange of favours (Park and Luo 2001). Guanxi in China is more about the favours and benefits people do for each other rather than living and satisfaction like they are in similar relationships in the West (Wong and Tjosveld 2010). A person who fails to return a favour under guanxi is seen as untrustworthy. Moreover, the establishment of guanxi is dependent on the availability of a guanxi base which is defined as a commonality of shared identification amongst two or more people. These include the following

• Loyalty or dialect – people from same areas • Fictive Kinship – organised clans with the same surname • Kinship – related through blood or...
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