HK-China: Cultural Aspects

HK-China: Cultural Aspects HK-China Cultural Issues, KV Patri

Induced Innovations and Schumpeterian Innovations Induced Innovations and Schumpeterian Innovations • Induced innovations are those motivated by such signals as shifts in relative prices of inputs into a production process or changes in output prices: e.g. during the second half of the 1970s, increases in energy prices provided a strong incentive for firms to produce innovations that conserved energy or substituted other inputs for energy. • Schumpeterian innovations are the result of ‘entrepreneurial behavior’  the perception that it may be possible to exploit some latent demand or to attack existing firms with radically new product or process. HK-China Cultural Issues, KV Patri

Industrial Progress Innovation Quality Productivity HK-China Cultural Issues, KV Patri

Conditions Fostering Innovation 1. Perceived need for some better thing or for something that does not yet exist. 2. Tolerance for uncertainty and ambiguity. 3. Willingness to take risk. 4. Belief in the value of new things in general. 5. Belief in the ability to obtain valued benefits from the innovation. 6. Participation in richly connected social networks. 7. Willingness to experiment. 8. Willingness and ability to invest various kinds of resources in the new thing. HK-China Cultural Issues, KV Patri

Culture involves at least three components: what people think, what they do, and the material products they produce. Thus, mental processes, beliefs, knowledge, and values are parts of culture. Some anthropologists define culture entirely as mental rules guiding behavior, although often wide divergence exists between the acknowledged rules for correct behavior and what people actually do. Consequently, some researchers pay most attention to human behavior and its material products. Culture also has several properties: it is shared, learned, symbolic, transmitted cross-generationally, adaptive, and integrated. HK-China Cultural Issues, KV Patri

The shared aspect of culture means that it is a social phenomenon; idiosyncratic behavior is not cultural. Culture is learned, not biologically inherited, and involves arbitrarily assigned, symbolic meanings. For example, Americans are not born knowing that the color white means purity, and indeed this is not a universal cultural symbol. The human ability to assign arbitrary meaning to any object, behavior or condition makes people enormously creative and readily distinguishes culture from animal behavior. People can teach animals to respond to cultural symbols, but animals do not create their own symbols. HK-China Cultural Issues, KV Patri

Furthermore, animals have the capability of limited tool manufacture and use, but human tool use is extensive enough to rank as qualitatively different and human tools often carry heavy symbolic meanings. The symbolic element of human language, especially speech, is again a vast qualitative expansion over animal communication systems. Speech is infinitely more productive and allows people to communicate about things that are remote in time and space. Note: the above excerpts are taken from John H. Bodley, From Cultural Anthropology: Tribes, States, and the Global System, 1994. HK-China Cultural Issues, KV Patri

What is culture? • Culture is made up of values, beliefs and attitudes. • Culture depends on historical experiences of the particular people. • History Values & Beliefs Attitudes • V, B and A determine the innovative spirit of the people. HK-China Cultural Issues, KV Patri

Exercise Classify each of the eight conditions fostering innovation listed earlier as a value, belief or attitude. HK-China Cultural Issues, KV Patri

Chinese Culture • What, if any, are the unique values and beliefs of Chinese people? (Confucianism, ‘the Middle Path’, Yin and Yang, …) • What role has Chinese history played in developing these values and beliefs? • What are the attitudes resulting from these values and beliefs? • How have Chinese values changed in the last 50 years? • How might the above impacting the innovation culture of contemporary China? HK-China Cultural Issues, KV Patri

Hong Kong Culture • Which, if any, of the Chinese values, beliefs and attitudes are evident in today’s HK? • List two (each) of the contemporary values, beliefs and attitudes off HK people. • What role, if any, has the British rule played in determining HK’s contemporary culture? HK-China Cultural Issues, KV Patri

Inherited and learned Specific to Individual PERSONALITY Specific `to group or category Learned CULTURE Inherited Universal HUMAN NATURE Three Levels of Uniqueness in Human Mental Programming HK-China Cultural Issues, KV Patri

Symbols Heroes Rituals Values Practices The ‘Onion’ Diagram Manifestation of Culture at Different Levels of Depth HK-China Cultural Issues, KV Patri

Cultural Relativism • It is futile to look for absolutes (good/bad, superior/inferior, etc.) while evaluating cultures. • Everything is relative and must be interpreted in a context. What is a strength in one context may turn out to be a weakness in another. • What is ‘good’ in the eras of productivity and quality may turn out to be ‘bad’ in an era of innovation. • What is ‘good’ culture in an environment of operations may turn out to be ‘bad’ in a project environment. HK-China Cultural Issues, KV Patri

Contingency Theory The appropriate culture is contingent upon the following influencing factors: • History and ownership • Size • Technology • Goals and objectives • The environment • The people HK-China Cultural Issues, KV Patri

The Typical HK or Nanyang (overseas Chinese) firm has: • Centralization of the power of decision making, usually with a single dominant owner, manager, entrepreneur, founder or father figure. • A low level of specialization, with fewer and/or less detailed specialized departments, and with more people responsible for a spread of activities across a number of fields. HK-China Cultural Issues, KV Patri

Less standardization of activities and thus fewer routine procedures. • A relative lack of ancillary departments, such as research and development, labor relations, public relations, market research. • Reliance on personal relationships for business transactions. [Redding and Wong, “The Psychology of Chinese Organizational Behaviour,” pp. 267-295, The Psychology of Chinese People, Edited by M.H. Bond, Oxford University Press (Hong Kong), 1986.] HK-China Cultural Issues, KV Patri

Patronage in Hong Kong HK cotton spinners are patriarchal business leaders. “They conferred welfare benefits on their employees as favors, took a personal interest in their subordinates’ behavior not related to work, and disapproved trade union activities…Personalized ties with subordinates are forged in an attempt to counter their centrifugal tendency to set up on their own and become rival competitors. For industries such as spinning and weaving which require a stable workforce to deal with regular business cycles, benevolent paternalism is also one means to retain workers.” [Wong Siu-Lin, 1986, Modernization and Chinese Culture in Hong Kong, China Quarterly, No. 106, p. 313.] HK-China Cultural Issues, KV Patri

Key Principles of Confucian Teaching[Geert Hofstede, Cultures and Organizations: Software of the mind, McGraw-Hill, 1997.] HK-China Cultural Issues, KV Patri

1. The stability of a society is based on unequal relationships between people. The wu lan, or five basic relationships are ruler-subject, father-son, older brother-younger brother, husband-wife, and senior friend-junior friend. These relationships are based on mutual and complementary obligations. The junior partner owes the senior respect and obedience. The senior owes the junior partner protection and consideration. Q. Stability is clearly important when economic growth is driven bythe pursuit of productivity and quality. In contrast, innovation means instability. Is stability critical in the context of innovation? HK-China Cultural Issues, KV Patri

2. The family is the prototype of all social organizations. A person is not primarily an individual; rather, he or she is a member of a family. Harmony is found in the maintenance of everybody’s face in the sense of dignity, self-respect, and prestige. Social relations should be conducted in such a way that everybody’s face is maintained. Paying respect to someone is called ‘giving face’. Q. Discuss the advantages and disadvantages of the family prototype in the context of an organization striving to be nurture innovation as a competitive weapon. HK-China Cultural Issues, KV Patri

3. Virtuous behavior towards others consists of not treating others as one would not like to be treated oneself (The Chinese Golden Rule is negatively phrased!). There is a basic human benevolence towards others, but it does not go as far as the Christian injunction to love one’s enemies. Confucius is supposed to have said that if one should love one’s enemies, what would remain for one’s friends? HK-China Cultural Issues, KV Patri

4. Virtue with regard to one’s tasks in life consists of trying to acquire skills and education, working hard, not spending more than necessary, being patient, and persevering. Conspicuous consumption is taboo, as is losing one’s temper. Moderation is enjoined in all things. Q. Discuss to what extent these ‘virtues’ might have contributed towards the spectacular economic growth of the five dragons during the 1980s and 1990s. Comment on their utility in the emerging age of innovation. HK-China Cultural Issues, KV Patri

Power Distance Index(Managing Authority) PDI indicates the extent to which the less powerful members of institutions and organizations within a country/region accept that power is distributed unequally. HK-China Cultural Issues, KV Patri

Large PDI: • Considerable dependence (or counterdependence) of subordinates on bosses. • Subordinates either accept or reject bosses totally (polarization). Small PDI: • Preference for consultation, i.e. interdependence, between subordinates and bosses. • Subordinates quite readily approach and contradict bosses. HK-China Cultural Issues, KV Patri

HK-China Cultural Issues, KV Patri

Individualism Index(Managing Harmony) Individualism:Ties between individuals are loose. Everyone is expected to look after himself or herself and his or her immediate family.They prefer • Personal time: Having a job that leaves sufficient time for one’s personal or family life. • Freedom: Having considerable freedom to adopt one’s approach to the job. • Challenge: Have challenging work to dowork from which one can achieve a personal sense of achievement. HK-China Cultural Issues, KV Patri

Collectivism (Small II): People from birth onwards are integrated into strong, cohesive in-groups, which throughout people’s lifetime continue to protect them in exchange for unquestioning loyalty. They prefer • Training: Having training opportunities to improve one’s skills or learn new skills. • Physical conditions: Having good physical working conditions (good ventilation and lighting, adequate work space, etc.) • Use of skills: Being able to fully use one’s skills and abilities on the job. HK-China Cultural Issues, KV Patri

Managing Harmony [Hofstede 1982, p.18] HK-China Cultural Issues, KV Patri

Western Societies • Workplace • Run the system impersonally • Appointments are made, • promotions given, rules applied • impersonally • Having a brother-in-law as • one’s assistant is embarassing • Nuclear Family • Private • Personal HK-China Cultural Issues, KV Patri

TENSION Asian Societies Impersonal Workplace Management Personalized Workplace Management Extended Family HK-China Cultural Issues, KV Patri

“Asian ‘Personalistic’ Ways of Life” • Friends and relatives matter, friends of relatives matter, relatives of friends matter,,, • Wisdom of age matters • How could people with whom there were personal relationships one minute outside work be treated impersonally just like any one else half an hour later? • Must a helping hand to friends, family, ethnic group or tribe become nepotism? • Is Western-style impersonalism in every aspect of management an unavoidable condition of effective modern organization? Or have the Japanese or Chinese or other societies found an alternative way? [Hickson 1995] HK-China Cultural Issues, KV Patri

“Characteristic Chinese Small Business in HK” [Hickson 1995] • Paternalistic and personalistic. • Owner, frequently the head of the family, manages by direct personal involvement. • He brings in family members and others (with ability) he can trust. Benevolence is exchanged for loyalty. • Formalization is low. Written instructions, procedures and rules are minimal. • Supply-chain links dominated by owner’s relatives and friends. Informal links. Sometimes, exchange of directorships that follow personal links rather than financial interest. HK-China Cultural Issues, KV Patri

Collectivism in Hong Kong Chinese collectivists give priority to considerations of how their behavior might affect their standing within the group. Hong Kong Chinese are more likely than Americans to pursue conflict if the stakes involved are high and if the other person is from an out-group. [Leung Kwok, 1988, Some determinants of conflict avoidance, J. Cross Cultural Psychology, Vol. 19, No. 1, pp. 125-136.] HK-China Cultural Issues, KV Patri

Individualism and Prosperity [Hofstede 1983] plotted per capita GNP in 1970 versus Individualism Index for a number of nations and found a positive correlation, i.e., wealthier nations are more individualistic. But, Is individualism the cause of prosperity? Or, is prosperity the cause of increase in individualism? HK-China Cultural Issues, KV Patri

Masculinity Index(Managing Oneself) Masculine Societies (large MI): They prefer • Earnings: Having an opportunity for high earnings. • Recognition: Getting the recognition one deserves when one does a good job. • Advancement: Having an opportunity for advancement to higher level jobs. • Challenge: Have challenging work to dowork from which one can get a personal sense of accomplishment. HK-China Cultural Issues, KV Patri

Feminine Societies (Small MI): They prefer • Manager: Having a good working relationship with one’s direct supervisor. • Cooperation: Working with people who cooperate well with one another. • Living area: Living in an area desirable to oneself or one’s family. • Employment security: Having the security that one is able to work for one’s company as long as one wants to. HK-China Cultural Issues, KV Patri

Sectorial Factors in HK Public Sector Managers value advancement opportunities, and security for employment (Feminine?). Private Sector Managers value opportunities for advancements and high earnings (Masculine?). [Chau, Irene Hau-siu, 1988, Work related values of middle managers in the private and public sectors, Proc. 1988 Academy of International Business South East Asia Regional Conf., Bangkok, June 23-5, A14-25.] HK-China Cultural Issues, KV Patri

Uncertainty Avoidance Index(Managing Uncertainty) UAI indicates the extent to which the members of a culture feel threatened by uncertain or unknown situations. • High UAI  increased anxiety, more expressiveness. Low UAI  more internalization, higher incidence of coronary diseases. • Paradoxically, people with high UA tend to reduce ambiguity. They are often prepared to take risks to reduce ambiguity. HK-China Cultural Issues, KV Patri

The Seven S Diagram [Pascale and Athos, The Art of Japanese Management] Strategy Cold Triangle Systems Structure Super-ordinate goals Warm Square Staff Skills Style HK-China Cultural Issues, KV Patri

References ++ [Chen 1995] Min Chen, Asian Management Systems, International Thomson Business Press, London. [Handy 1996] Charles Handy, Understanding Organizations, 4th edition, Penguin Books, London. [Hofstede 1980] Hofstede, G., Culture’s Consequences, Saga. [Hofstede 1997] Hofstede, G., Cultures and OrganizationsSoftware of the Mind, McGraw Hill, NY. [Mant 1983] Mant, Leaders We Deserve. [Mead 1994] Richard Mead, International Management: Cross Cultural Dimensions, Blackwell Business. [Mintzberg 1989] Mintzberg, H., Mintzberg on Management, The Free Press. HK-China Cultural Issues, KV Patri

HK-China: Cultural Aspects