Leadership and Chinese CEO’s

Posted on November 11, 2008. Filed under: Academic Publishings, Corporate |

Tsui, Anne S., Hui Wang, Katherine Xin, Lihua Zhang, P.P. Fu. Variation of Leadership Styles Among Chinese CEO’s. Organizational Dynamics, Vol. 33, No. 1, pgs. 5-20, 2004.

The goal of this study was to identify key Chinese CEO leadership styles, variations between firms and styles, and the level of effectiveness of styles and its impact on their organizations. Research methods included; newspapers, company websites, and interviews. Using systematic statistical analyses, the study found six behavioral dimensions and four types of styles, in which the styles reflect a subtle blend of eastern values and western ideals.

After China’s economic reform 25 years ago, China has grown to be one of the world’s largest economies, and its corporate executive management has been rapidly adapting in order to handle the new economic developments. However, traditional forms of Chinese management are confronted with Western management philosophies. There are three forces affecting Chinese leadership behaviors; “traditional (Confucian) values, Communist ideologies, economic reform, and infiltration of foreign, especially Western, management philosophies and practices… (5).” As is expected, the government still plays a significant role in corporate strategies, maintaining their communist and Confucian beliefs.

There are four major Confucian virtues; the class system, obedience, the doctrine of the mean, and renqing (kindness/reciprocity). “These four virtues have historically formed the foundation of ethics and morality in the mind of the Chinese people (6).” The class system defines the social order, which is ruled by obedience to superiors. This superior-subordinate relationship maintains the cardinal relationship of social order. This Confucian tradition contributes to the authoritative leadership style of Chinese business leaders, whereas the leaders demonstrate benevolence to subordinates

These traditional Confucian values are also intertwined with communist ideologies of communal dedication and service. “These ideologies, including whole-hearted service to the people, loyalty to the Party, hard work and self-sacrifice are prescribed in the Party Constitution for members to follow (6).” This ideology is strongly correlated to corporate dedication that Chinese employees have with their companies and to their leaders (CEO’s).

Prior to China’s economic reform, the government ruled all strategies, supplies, and financial allocations. “Leaders, under the contemporary definition, did not exist, because all organizations had to do was to make sure that the allocated quotas were fulfilled, and that the people assigned to them were cared for (6).” The notion of leaders was fulfilled entirely by Confucian values, aligning allegiance to CEO’s with allegiance to the government. However, in 1978, managers of state-owned companies were now responsible for corporate operations and profit-making. Prior to 1978, privately-owned enterprises (POE’s) were deemed illegal, as they did not comply with government regulations and oversight. After the reform, POE’s were free from government regulations and were able to adopt Western managerial philosophies, allowing them to be less-risk adverse as their SOE competitors. POE’s are more likely to engage in more-risky behaviors in the pursuit of profit because they are not constrained by governmental regulations, which strongly influences Chinese leadership styles and behaviors.

They found six behavioral dimension and four styles of leadership. These styles are; Articulating Vision, Monitoring Operations, Being Creative and Risk-Taking, Relating and Communicating, Showing Benevolence, and Being Authoritative. CEO’s exhibiting Articulating Vision refers to CEOs’ ability to clearly communicate vision to his or her followers. Monitoring Operations sets the strategic decisions of the organization. Showing Benevolence refers to CEO’s executing generosity to their employees and families. Being Authoritative exudes the leader-follower relationship.

Task-behaviors, as are traditionally assigned to U.S. male leaders, are distinct in Articulating Vision, Monitoring Operations, and Being Creative and Risk-Taking. These leadership styles establish benevolence, operation oversight, and dictatorial behaviors. “The other three dimensions relate to the people management aspect of the executive position: Relating and Communicating, Showing Benevolence, and Being Authoritative (9).” Being benevolent and dedicated to social relationships is imbedded in Chinese culture, in which Confucian virtues teaches of superiors treating subordinates with kindness and righteousness.

The four leadership styles of Chinese executives are; Advanced Leadership style, Authoritative Leadership style, Progressive Leadership style, and Invisible Leadership. Advanced Leadership style is ready to work in a field full of risk and embodies the spirit of creativity which influences the corporate fabric. This leader understands the importance of his or her human capital and does his or her best to respect and understand its employees. Authoritative Leadership styled is viewed as a difficult management style to work with. Employees are obedient and abide by high moral standards in which the CEO enforces.

Progressive Leadership style establishes a strict performance system to improve efficiency and product quality. This leader unites groups to work as a whole, to create value and to please the stockholders and local communities. This leader is dynamic and is employee-oriented. Invisible Leadership style is self-explanatory. This leader prefers to pass decisions to subordinates and avoid the spotlight.

CEO’s in SOE’s are inhibited by governmental regulations, thus inhibiting leader development. In POE’s, leaders have the opportunity to develop and grow within an organization. The authors “expect that the CEO’s of these firms will have tighter control over their organizations and will introduce modern management skills (15).” Research found that Advanced Leaders are more likely to be found in POE’s than SOE’s because they have a reason to motivate and cultivate effective leaders in order to increase profits and experience internal growth.

In conclusion, the Chinese external environment has a significant impact on developing executive leaders. All six behavioral dimensions work well depending on the industry and type of company. Although China is experiencing high levels of Western influence, Chinese people are still willing to follow the Authoritative Leadership style as it is imbedded in their culture and values. Although Western philosophies would disagree, China must consider that; “Not all Chinese leaders are alike. Second, there is no one stereotypic Chinese leadership style in contemporary China. Third, leadership in China is a moving target (18),” allowing for further research and cultural development to occur. In not trying to apply my Western bias, China is moving in the right direction and will experience decades of executive leadership development.


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