THE COSMOPOLITAN CHINESE MANAGER : FINDINGS OF A STUDY ON MANAGERIAL VALUES ACROSS THE SIX REGIONS OF CHINA

As China emerges as a major player on the international business scene, it is becoming increasing important for Western businesses to understand the work values and behaviors of the people in this large and regionally diverse country. Thus, the focus of this study is to identify work value differences across the 6 regions of China. In the process of developing these comparisons, we identify region-clusters based on the infrastructure characteristics of the regions. Then, in order to present the findings in a manner that is meaningful to Western business, we developed our comparisons using a cosmopolitan-local orientation to illustrate the degree of compatibility of values in the various regions with Western values. One result was the identification of the emerging Cosmopolitan Chinese manager. China is a sleeping economic giant that has already begun to awaken [Linn, 1992; Nee, 1992]. Overholt [1993] observes that "the People's Republic of China is now only a few years away from becoming an economic superpower." Concurring, the Economist [War of the Worlds, 1994] predicts that China will be the number one economic power in the world within the next 25 years. Whether this comes to be or not, clearly, China is emerging as a force in today's world of business ["China's hot investment," 1994]. Thus, Tung [1994] has ardently argued that it is important for Western business people to understand the mindset and values of their Chinese counterparts. In this paper, we extend that point by arguing that it is important for Western business people to understand the diverse values held across the various regions of China, because just as societal cultures can differ, regions within a society can vary, especially if that society is large and complex [Goodman, 1992; Robertson, 1993], and China clearly meets both of these criteria [Goodman, 1989]. A reason for China's potential lies in its large, diverse population of nearly 1.2 billion—five times the population of the U.S. [James, 1989; Worden, 1988]. Even though China has a GNP that puts it in the underdeveloped country category ($498 per capita in 1994), it is presently the world's third largest consumer economy [Li, 1996; Summers, 1992; World Bank, 1990]. And, China has averaged a 9.5% real rate of GNP growth from 1979 to 1994with a 14.7% increase in 1993 being the highest [Biggs, 1993; "China Feels," 1993; Li, 1996; Tuan, 1994]. China has also experienced an explosion in foreign investment [“Foreign Investment, 1993; Golik, 1994]. From 1979 to 1989, the first eleven years after China announced its new Open Door Policy, it received over $30 billion in actual investment, with 1994 committed investments in excess of $100 billion. Thus, China is a country that is rapidly becoming a huge market for, as well as producer of world goods, as is evidenced by the increasing number of Western businesses that are trying to enter the Chinese market [Fukasaku & Wall, 1994]. However, while China's large population makes it an appealing new market, differences due to regional diversity can contribute to the confounding nature of Chinese business tactics. China's billion-plus people speak a multitude of dialects, consist of distinct ethnic groups, and follow local customs that have remained substantially intact over time [James, 1989]. This regional isolation was initially due, in large part, to China's limited infrastructure and hostile terrain [Worden, 1988]. Over the past half century, this isolation has resulted more from Communist government policy that has severely limited movement within the country [Worden, 1988]. The sustained lack of contact with others outside one’s region means that values may have evolved differently for individuals from the various regions based on their own unique environmental influences. Thus, in order to understand the values of Chinese business people, it is necessary to look at the work values held by business people in the various regions of China because these values may differ. The problems that Western businesses and their expatriates have had understanding Chinese ways of business are already documented [Domsch & Lichtenberger, 1991; Tung, 1986; Weiss & Bloom, 1990]. Thus, those who want to comprehend the issues associated with doing business in China, face the challenge of acquiring an understanding of Chinese values [Tung, 1994]. Our goal in this paper is to develop a regional analysis of values in China that will be meaningful for Western business. OBJECTIVES OF THE STUDY Over the past decade, researchers, most notably Michael Bond—from the psychological perspective—and Rosalie Tung—from the managerial perspective—have begun to explore Chinese work values [Bond 1988a, 1988b, 1991a, 1991b; Bond Hwang, 1986; Bond & King, 1985; Bond & Yang, 1982; Chinese Culture Connection, 1987; Ralston, Gustafson, Cheung & Terpstra, 1993; Redding, 1990; Tung, 1981, 1982, 1986, 1988, 1991, 1994]. However, our review of the literature identified only one study that has attempted to assess regional work values differences in China. Huo and Randall (1991) using secondary data compared Beijing (n=44) and Wuhan (n=47). Although not statistically determined, they identify differences between these two regions using the Hofstede value survey as their measure. Similarly, our review did not identify any cultural frameworks that were specifically appropriate for a cross-regional comparison of Chinese work values. Thus, before we empirically tested for regional differences in China, we wanted to identify a theoretical framework upon which to base our comparisons. Given the dearth of theory upon which to anchor this study, our preliminary objective was to develop a rationale upon which an empirical investigation of regional differences could be based. First, we needed to determine the likely sources of cross-regional differences in China. Second, after an approach for identifying the potential sources was resolved, we needed to determine what constructs would be both appropriate for measuring the differences and appropriate for providing Western businesses with useful information about Chinese work values. Along with these objectives, we kept in mind concerns that have been raised regarding the need for a stronger theoretical foundation in cross-cultural research [Negandhi, 1975; Ricks, Toyne & Martinez, 1990]. Thus, we had as a goal not only to develop an approach that could be applied to China, but also one that might be a prototype for future research to use to develop a generalizable model for assessing cross-regional differences. Once these preliminary objectives had been met, we were ready to develop hypotheses on the relationships of the regions to one another and to identified appropriate instrument measures to evaluate these relationships. Since the fundamental goal of this study is to provide information that will help Western businesses to better understand Chinese work values, the hypotheses were designed to assess the values of managers from the various regions in terms of their compatibility with Western values. Finally, based on our findings, we attempted to draw practical implications that illustrate how the effect of these differences influence the ways to view and deal with Chinese business people. REGIONAL DIFFERENCES IN CHINA In this section of the paper, we will briefly overview the groundwork for the empirical part of our study, by discussing our approach for determining the sources of cross-regional differences and our approach for comparing the regions. We begin, however, by identifying the six regions into which China is officially divided, since these are the focus of our study [James, 1989]. The regions, and the corresponding cities in which the data were collected, are: North (Beijing), East (Shanghai), Central-South (Guangzhou), Northeast (Dalian), Southwest (Chengdu), and Northwest (Lanzhou). We selected these cities for our sample —all of which have populations of more than one million—because they are economic centers of the regions. Thus, while this analysis may not capture all the withinregion nuances, it should provide an empirical foundation for understanding where there are work value differences across the regional business centers of China. Figure 1 maps these regions and the locations of the data collection