Paper on Chinese business world wins international prize

Published 01 August 2008


A postgraduate student at the University of New England has won an international prize with a conference paper that investigates some of the unique features of the Mainland Chinese business world.

Ke Gao, a PhD student in UNE’s School  of Business, Economics and Public Policy, wrote the paper in collaboration with his supervisor, Associate Professor Bernice Kotey. It reveals a business world in which Western-style entrepreneurship goes hand-in-hand with traditional “family” values.

It won one of five prizes awarded at the 2008 International Council for Small Business World Conference in Halifax, Canada, in June. The prize-winners were chosen from among the presenters of about 500 papers and workshops at the conference.

The paper begins by recognising that entrepreneurship – the founding, ownership and management of a business – is a recent phenomenon in Mainland China. It points out that the majority of Mainland Chinese businesses – particularly those in the small and medium enterprise sector – were either State-owned enterprises given away by the Government to their current owners, or cooperative concerns purchased from their members by the current owner-managers.

It goes on to examine the unique combination of entrepreneurial and conservative values that is necessary for successful business operation in the Chinese context, pointing out that, while Mainland Chinese entrepreneurs take calculated risks and are innovative, ambitious, creative, and confident, they also uphold values of humanism and familism – values entrenched in Chinese culture.

The humanistic values of courtesy, magnanimity, good faith, diligence, and kindness encourage a cordial, relaxed and friendly relationship among employees, with the emphasis on forming good relationships rather than self-promotion. In this environment, seniority and good behaviour rather than good performance are of prime importance in securing an employee’s promotion within the business.

In China every business is viewed as a family, with managers responsible for both managing the business and solving employees’ personal problems. The paper says that this familism, while  encouraging nepotism (with preference being given to family members, relatives and friends during recruitment), is associated with values such as loyalty, solidarity, patriotism, filial piety and trustworthiness.

As the ultimate authority in the business, the Chinese entrepreneur must maintain a high social status and must be respected. This value of respect for the hierarchy requires employees to be loyal and obedient to their superiors, who in turn should look after their employees’ welfare.

The research found that there is a strong emphasis on building and using networks within the Mainland Chinese business world. Social networks (guanxi in Chinese) feature prominently in the management approaches adopted by Mainland Chinese entrepreneurs. Guanxi can provide competitive advantage by allowing access to resources, information and technology often below market cost. Nevertheless, the paper says, care must be taken when developing and maintaining such networks, as the associated costs can exceed the benefits.

It concludes that, while exposure to Western culture through education, travel and business contacts has – to some extent – changed the values and management practices of Mainland Chinese entrepreneurs, values developed through these socialisation processes remain “skin deep” compared to the “bone deep” Chinese values developed from childhood.

A PHOTOGRAPH of Ke Gao at the conference in Canada can be seen by clicking on the image of Nanjing Road, Shanghai, displayed here.