Confucianism în Business

The Influence of Confucianism on Business Society

Hierarchy – Role – Harmony – Business

Five Cardinal Relationships are highly emphasized in Confucianism: monarch/subject; father/son; husband/wife; elder brother/younger brother and friend/friend. Each party has the corresponding role to play and ethical code of conduct to obey of the rectification of names, which means appropriate names with appropriate duties: “Let the ruler be a ruler, the subject a subject, the father a father, the son a son.” Under the hierarchical relation, the inferior would show respect to the superior when the latter has to take the great care to the former. Benevolence in monarch and loyalty in subject; love in father and filial piety in the son; righteous behaviors in the husband and obedience in the wife; gentility in the oldest brother and humility and respect in the younger; humane consideration in elders and deference in juniors.

Social harmony could be attained when the responsibility and duties of those parties’ role have been fulfilled under such ethical hierarchical order. Such concept of harmonization from Confucianism could contribute to business society very well and help to keep the business develop from generation to generation by emphasizing ethical behavior. The concept of ren, means as love, humanity and human heartedness would be practiced in terms of having good product knowledge and quality; producing the environmentally friendly products and taking care of the labor’s welfare and benefit; the concept of shu, means altruism could also be worked out in terms of reasonably pricing and business propriety and integrity. The more harmony the entrepreneur concerns, the more sustainable development of business could be achieved. The generations could be linked together in fulfilling duties and creating a bond between self and others in human company.

Guanxi – Face – Business

The central goal of Confucianism is to achieve social harmony, which depends not only on the maintenance of proper and correct relationship mentioned in the five cardinals relationship, but also on the protection of an individual’s “face” or one’s dignity, self-respect, and prestige when there is the guanxi established beforehand. Guanxi is typically seen as an outgrowth of the Confucian emphasis on personal relations that guanxi refers to the friendship with implications of a continual exchange of favors. Consequently, two people bind together and enjoy a guanxi connection can assume that each is consciously committed to the other by giving face or saving face when such guanxi is more in utilitarian sense than emotional that could be highly applicable in the business society. The more face the person has, the easier he could be able to develop the guanxi, the more business opportunities could be exploited.

Guanxi plays an extremely important role in the Chinese business world, especially the family business because strong bond of trust and reliability occurred between the family members.As most of the Chinese family businesses are small and managed by core family members, they are heavily dependent on business opportunities and credit lines provided by their guanxi network with cooperative relationship. No company in the Chinese family business world can go far unless it has good and extensive guanxi network. To make his guanxi work for him, a Chinese businessman honors his obligations, tries to be loyal to his family members or the friends of the family members, does favors and maintains a reputation for fairness. He would try very hard to maintain the image of a person who can be fully relied upon and will always reciprocate. Chie Nakane, a Japanese anthropologist, has made the comparison of the guanxi construction between China and Japan. She thinks that China may build up the relationship of “attribute” which is based on the individual’s common attributes, for example, being a member of a definite lineage, a clan or a social group. It may be obtained by birth. On the other hand, Japan would build up the connection based on “frame” which signifies a situational position in a given frame, that means the institution and a locality could provide a common basis to a group of individuals who are situated in it. In the attributed-guided group connection formation, the more “attributes” an individual has, the more face he enjoys and the more guanxi he is able to construct. Consequently, he will be in a more favorable position to get ahead in a competitive world, especially in the business society.