Contrary to expectations, an economic boom occurred after WWII in Japan and Asia’s “Four Little Dragons” (Taiwan, South Korea, Hong Kong and Singapore), and then in Southeast Asia and China’s south-eastern coastal areas after Deng Xiao Peng’s “Opening Up” of China.
Confucianism and Modern Management
But how? A significant reason may lie in cultural heritage. Asians believe that, in addition to economic policy, the profound wisdom of Confucianism management, especially humanist ideology, was a significant factor in Asia’s success.
In Confucian thought, the five virtues most often discussed are:
• Ren (benevolence or humaneness toward others)
• Yi (righteousness or justice)
• Li (propriety or etiquette)
• Zhi (knowledge)
• Xin (honesty and integrity)
Zhi, the basic concept of Confucian and management strategy, stands for people’s knowledge and talents. Zhi suggests that people should constantly strive for knowledge and competence. According to this concept of Confucianism, management should, wisely, recognize those individuals who diligently practice and succeed with the idea of zhi, recognizing and rewarding knowledge and skills.
In business, these five virtues can be interpreted as follows:
Ren is a basis for management thought. Kindness toward fellow man is the highest moral standard in Confucianism. Relative to management/employee relationships, management is expected to behave in much the same deeply caring way in which a kind and capable patriarch would look after the well being of an extended family.
Yi is part of management standards. It’s an important moral rule that calls for people to conduct themselves with righteousness and with respect for justice.
Li is the basis for management guidelines. Li is codified and treated as a comprehensive system of norms, guiding the propriety or politeness that colors everyday life.
Xin is at the core of management goals. A senior manager treats subordinates as an extension of his own family and friends and is always open and honest and behaving with the highest integrity.
A Special Word About Xiáo
Underlying and in many ways integrating these five principles is the principle of Xiào that refers to filial piety and respect for elders. The principle of xiào is critically important to understand for anyone seeking to live in or manage business in a Confucian society.
The principle of xiào is based on filial environments but was strongly advocated by Confucius as widely applicable to society at large. In this application one can see deep respect for elders and, by extension, those in positions of authority. Application of xiào has led to management systems that are extremely top-down, command-oriented and hierarchical. Leaders give commands, and others follow. This approach allows for tightly organized and easy to manage teams that strictly and diligently attempt to implement plans laid out by management. Most significantly, however, independence, initiative, creativity, and freedom of expression is seen to be greatly subdued or even nonexistent.
At the core of Confucianism is the practical and humanist foundational principle that the assets on Earth are to be combined with the power of people to use those assets in a manner that is harmonious with others to the greatest possible outcome.
Mencius, one of the key interpreters of Confucianism, also proposed that, “A just cause gains great support; an unjust one gains little.” In his philosophy, harmony is a basic and supreme principle to deal with relationships between people. By the same token, internal (employee relationships) and external (customers, suppliers, shareholders, governments etc.) harmony should create a favourable corporate culture and maintain strong competitiveness.
Confucius held this opinion as well. He advocated harmony as the most precious, but the master also pointed out: “The superior man is affable, but not adulatory; the mean man is adulatory, but not affable.” With such a heavy focus on harmony it is not surprising that “good relations” is one of the most dominant characteristics of corporate culture today in Asia.
One may be forgiven at this stage for wondering the practical application of the five core principles of Ren, Yi, Li, Zhi, Xin and Xiào to the modern business environment, but we’ll bring these elements together in Part 5 – On the Ground that will describe examples that may be encountered and approaches to successfully manage one’s business in view of these forces dominating behaviour and communications in Confucian cultures.