Chinese Business Culture

Qingming Riverside Scene by Zhang Zeduan of North Song Dynasty

Qingming Riverside Scene

Qingming Riverside Scene

Chinese Character for Business

商

Wen

The Qin Dynasty 221-206 B.C.

知 商

商贾 “Shang gu”何谓也？商之为言商，商其远近，

度其有亡，通四方之物，故谓之商也。贾之为言固，固其有用物，以待民来，以求其利者也。行日商，止日贾。

——班固《白虎通德论》卷三《商贾》

商贾指的是什么呢？商之所以称作商（原意即估

算），是指估量道路的远近。推测物产的余缺，以调剂、周流四面八方的各种货物，所以称之为商；贾，是固定的意思，即固定生产生活必须的物品于店铺中，招徕人们前来交易，以便从中获取利润。从事贩运业务的商人称作商，经营门市生意的商人称作贾。

Shang Qiu, Henan Province

Shang

Confucius (551-479 B.C.)

Confucius said, “Is it not pleasant to learn with a constant perseverance and application? Is it not delightful to have friends coming from distant quarters?

Confucius said, “If a man keeps cherishing his old knowledge, so as continually be acquiring new, he may be a teacher of others.”

Confucius, standing by a stream, said, “It passes on just like this, not ceasing day and night.”

The Confucian Ethics and the Traditional

Chinese Business Culture

Confucianism, the most profound and dynamic thought system in traditional Chinese culture, has for centuries exerted great influences on China's economy, politics, and culture. It is not surprising, then, that the traditional Chinese business culture was deeply associated with Confucianism.

The Confucian idea of profits was double-edged. On the one hand, Confucius' disciple, Mencius, made it abundantly clear that it was immoral of rulers to concentrate on profits for their respective states. On the other hand, merchants were socially useful because their risk-taking trading activities could supply the people's diverse needs.

The Sword of Gou Jian

Mencius

In a compromise, ethics was deeply incorporated into business activities. Consequently, it was insisted that merchants' behaviors be governed by the ethical principles, which held that righteousness outweighs profits and that collective benefits and spiritual values outweigh individual benefits and material values respectively.

The ethical principles could provide a set of useful rules and guidelines for the business activities. The central doctrine of Confucianism, “Ren”, which means goodness, benevolence, humanity, and kind-heartedness, occupied a prominent role in balancing ethics with the pursuit of profits.

Ren

Ren

德 -- Virtue志 -- Will仁 -- Benevolence义 –Friendship/Justice宏 -- Broadmindedness

礼 -- Etiquette智 -- Wisdom信 -- Faithfulness恒 -- Persistence锲 -- Perseverance

Confucius sought to eliminate excessive profits by preventing such activities as cheating, manipulating supply and demand to bring about higher prices, and corrupting public officials.

Bao Zheng of Song

In Confucian thought, “Li”, another virtue literally meaning propriety, also exerted great influences on business activities. One of the virtue's earliest meanings was "ceremonies," in the sense of rituals and structures that people went through at specific times and for specific reasons. From there, the word developed a more general meaning that could mean a set of ethical principles guiding interpersonal relationship in a hierarchical society.

Li

Li

Li was helpful in keeping the paternal feudal system alive and was also important in directing people to behave ethically and politely. It has played an indispensable role even in modern business activities where quality services and politeness to customers are priorities.

In addition to Ren and Li, Xin, another virtue literally meaning honesty and trustworthiness was also important in directing business activities. Only when ethical integrity was highlighted could justice be practiced and harmony be achieved in the business community.

,

The idea that honesty and trustworthiness could lead to a harmonious and benign society found lots of followers among overseas Chinese businesspeople.

Xin

Zeng Zi

Confucius developed a set of ethical principles that have had an influential and lasting effect on Chinese society and culture. These principles are often collectively referred to as the Confucian belief system or simply "Confucianism."

While Confucius did not create a specific set of guidelines for conducting business, the broad-based applicability and timelessness of his writings have greatly influenced how the Chinese do business. Westerners who are familiar with the teachings of Confucius (including the ideals of harmony, hierarchy, collectivism and reciprocity) will have a better understanding of both how the Chinese approach business transactions and how most effectively to engage the Chinese in the business environment.

He

He

Confucius thought that it was very important for members of society to maintain harmonious relationships with one another. The three main concepts he developed--Ren, Yi, and Li--were designed to achieve such harmony. Ren (literally meaning "benevolence") is most similar to the "Golden Rule" in Western culture to do unto others that which you would have done to you. Yi(meaning "justice in human interactions") is a principle that teaches to put the common good before the individual.

Finally, the concept of Li (meaning "etiquette") focuses on the proper manners and protocols that must be observed in any given situation. Process oriented, the Chinese are concerned with observing the correct procedures and rules as much as with obtaining results when conducting business. This is not to say that process is more important than substance, but rather that Westerners who are sensitive and responsive to process may achieve more substantive gains as well.

The legacies of Confucian harmony teachings are routinely observed in Chinese business culture. For example, the Chinese are often indirect when negotiating with others and find it difficult to say "no." This is so because they seek to avoid the embarrassment and potential awkwardness such situations may create and do not want to make others feel ashamed or rejected. The concept of "face" is closely related to the principles of ren and li.

Further, because yi requires the promotion of collective welfare to achieve social stability, the Chinese will frequently consider a proposal from the standpoint of how it would affect the whole. This is often at odds with the Western view that may focus on the benefits to particular individuals or classes.

Yi

Yi

In order to promote societal stability, Confucius stressed the importance of maintaining hierarchical relationships. While hierarchical relationships can take many forms in China, they all tend to center around deference and respect for the dominant figure in the relationship. Some examples of Chinese hierarchical relationship include the ruler-subject, husband-wife, parent-child, the elder-younger brother, and the friend-friend relationship.

Again, because the structures of such relationships are so important to Chinese culture as a whole, they can also influence how the Chinese behave in all aspects of their lives. For example, the ruler-subject relationship stresses the respect that a subject must show toward his/her ruler. In the business context, this means that Westerners must appreciate the high level of respect the government commands in Chinese culture and act accordingly. In the West, many businessmen believe that free-market economics, with little government intrusion, is best.

Wu Zetian of Tang

The parent-child relationship has also influenced Chinese business culture. As the parent has the final authority over a child, so does a boss exercise the same power over a subordinate. This is a particularly important relationship to be aware of if dealing with family-run businesses. Even if an adult child is the person who exercises control over the day-to-day operations of a business, it is likely that his/her father will be the one who ultimately has final say over all business decisions (no matter what his level of involvement is with the business).

The elder-younger brother relationship has also provided a model for Chinese business relationships. Elders will generally be given more respect and deference than younger individuals regardless of the younger person's ability or rank. Westerns should also be aware of what person in their host delegation is most senior and afford the greatest respect to him. Finally, Chinese businessmen may be uncomfortable dealing with a junior Western businessmen and only want to deal with senior officials from your company. They may even see it as a sign of disrespect if they are scheduled to meet with a low- or mid-level associate.

Lu Xun and His Brother

Therefore, some Westerners think that the government is generally inept when it comes to regulating business and should not get too intimately involved in the economy. However, one cannot have such an attitude when dealing with the Chinese government as it will expect foreigners to obey the ruler-subject relationship hierarchy. Westerners should also be aware of the strict hierarchy observed within the government itself. Decisions are usually top-down and one cannot expect to get much accomplished if the higher levels of government do not approve.

The Confucian principle of collectivism states that social stability, in part, depends upon the co-dependence of--and focus on--the family unit. This principle has also been adapted to the business environment.

The Chinese will place great importance on the group, and issues tend to be decided in a deliberative manner. While the opinions of elders have great influence, decisions are often made collectively and reached through a consensus. Therefore, Westerners should not be surprised if their Chinese counterparts seek time to discuss a particular proposal among themselves before offering a response.

Finally, the Confucian principle of reciprocity, referred to as “Bao," plays a significant role in Chinese business culture. Bao is what most Westerners would know as "the golden rule," do unto others as you would want done to you.

While principles of Bao have their roots in rules governing familial relationships, its influence is evident in the business context. Bao is about respecting professional relationships and treating people (both superiors and subordinates) with respect. Accordingly, Bao holds that those who give respect or are generous to others should receive the same treatment in return.

“Bao” is closely related to the concept of “Guanxi" in that professional networks and relationships are seen as vital to getting business done in China with the Chinese frequently relying on the aid of others in return for previous favors.

Bao

“A gentleman likes fortune, but he should get it in the right way”

A Confucian businessman should know that :Harmony is the quintessence of business ethics.

Justice governs business practices

Virtue comes before profits

Respect your partner and respect yourself.

Try to be modest and patient in doing business.

Be frank and broad-minded.

Have the courage to accept the worst and never give up.

Mencius , Mandarin Meng-tzu, 371?-288? BC

Mencius and the Business EthicsJustice comes first and profit second.One should be benevolent for all life.Never forget to contribute to the society with what has gained.One should do business according to the rules.One should always cultivate himself.be candid and kindhearted.be on guard against the bad situations.Never yield to difficulties.stick to the principlesconvince people by virtues

Lao Tzu (Old Master)Chinese Taoist Philosopher, c. 600 B.C.E.

Taoism

A central quest within Taoist practices is the search for immortality - literal, physical immortality. The sense of an interplay between natural law and the abstract laws prevailing in the cosmos, is held in common by shamanism and Taoism. Taoism searched for balance within these forces and enshrined the concept that change cannot be forced, only experienced and assimilated.

Lao Tzu and the Business Ethics

Display one’s talent when neededBe practical and pay attention to detailsBe charitable without showing offBe broadmindedBe easily satisfiedBe modest and humbleBe frugal and live a plain lifeBe patient and knows how to control one’s temperRespect your business partnersLearn to be happy after losses

Business Culture

Guan Xi ---- RelationshipMian Zi ----- FaceKe Qi ----- Courtesy, politenessFan Ju ----- DinnerHe Tong ----- Contract

Guan Xi 关系

Mian Zi 面子

Ke Qi 客气

Fan Ju 饭局

He Tong 和同

Harmony 和为贵

Globalization

Important Tips for Being a Successful Businessman in China

Select important places for doing business. Doing business is like fighting a battle. The right place usually determines the success of business.

Fan Li (Tao Zhugong) The Bowl for Treasure

A good businessman should know when to buy and when to sell. In other words, one needs to know the changes in the market well and capture the important business opportunities.

Fan Li A Gate in Shan Xi

A good businessman should know how to make correct predictions for the market in the future especially after some great changes in the society.

The King of Yue Gou Jian in the Spring and Autumn Period

Selling goods at low prices with huge quantities also gains. Zhang Liang of Han Dynasty (well-known for selling scissors .

It is important to create a beautiful environment for the people who come and visit your shop. Usually well decorated interior of the shop impresses the shoppers and good service will ensure that the customers will return to you in the future

In doing business, justice plays a big role. One should gain his profits in the right way.

A business street in Ping Yao of Shan Xi

One needs to know how to make full use of the capital and how to make the money circulate. Running water never gets stale.

Use the correct strategy and make the right choices.

One must be mindful of potential problems and get fully prepared for the worst.

Be generous to your employees and kind to your customers. Guan Qian Street ---- an Important Business Street

in Su Zhou

经商秘诀

生意要勤紧——切忌懒惰懒惰则百事费

货物要修整——切忌散慢散慢则查点难

用度要节俭——切忌奢侈奢侈则钱财竭

用人要方正——切忌滥用滥用则付托难

接纳要谦和——切忌躁暴躁暴则交易少

出入要谨慎——切忌潦草潦草则错误多

买卖要机警——切忌拖延拖延则机宜失

货物要面验——切忌滥入滥入则售价减

议价要订明——切忌含糊含糊则争执多

期货要约定——切忌讹延讹延则枝节生

期限要约定——切忌马虎马虎则失信用

赊借要识人——切忌滥出滥出则血本亏

钱财要明慎——切忌糊涂糊涂则弊买生

帐目要稽查——切忌懈怠懈怠则资本滞

临事要尽责——切忌放弃放弃则权力损

优劣要分明——切忌糊浑糊浑则判断繁

说话要规矩——切忌浮躁浮躁则失事多

立心要诚正——切忌粗糙粗糙则出品劣

主心要安静——切忌惊惶惊惶则忘决断

相处要诚实——切忌虚假虚假则害己终