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The power behind the recent surge in Asias economy may have developed from the

tenets of one of that continents earliest philosophers.

The Confucius Connection:


From Cultural Roots
To Economic Growth
Geert Hofstede
Michael Harris Bond

n 1968,the late Nobel-prize-winning


mist Gunnar Myrdal published
Asian Drama that described
tions

into

the failure

ment policies

in South

econo-

a book entitled
his investiga-

of economic

develop-

and Southeast

Asia.

however,
countries

some South and Southeast Asian


besides Singapore,
such as India,

Malaysia,

Thailand,

scene of Myrdals

and Indonesia
drama),

(the very

also show signs of

Twenty years later, we are experiencing

a very

an economic takeoff.
World Bank data on the average an-

different

South

nual growth

Korea,

kind of Asian
Taiwan,

Hong

drama:
Kong,

Japan,

and Singapore

product

rate of per capita gross national

(see Exhibit 1) confirm

the East Asian

are now outperforming


the United States and
Western Europe economically.
Western mar-

lead. The Five Dragons, as these countries are


sometimes called, are heading the list, with

kets are flooded with high-quality,


hightechnology
products
made in Asia; the
production
of cameras, TV sets, and domestic appliances
has all but ceased in many

average annual sustained-growth


percentages
over a 20-year period of 7.6% for Singapore,
7.2% for Taiwan, 6.6% for South Korea,

Western countries,
the automobile
business
has suffered severely, and President Reagan
has had to violate his free-trade principles to
save the U.S. microchip
industry. It is true
that most of the competition
is from East,
rather than from South or Southeast Asia;

6.1% for Hong

Kong,

and 4.7% for Japan.

These compare with rates for Western Europe


of between 3.5% for Austria and 1.6% for
Britain; for Latin America of between 4.3%
for Brazil and -2.1% for Nicaragua; of 2.4%
for Canada;
and of 1.7% for the United
States.

ment was obviously

WHY EAST ASIA?

also involved,

is too easy an explanation


Few economists
nomic

predicted

the staggering

rise of the East Asian

many failed to recognize


well under
forecast
Strout

way. For example,

First, the quality

and

the qualities

begs the question


collectively

Economic

depends

ond, the quality-of-management

an economic

1966 did not even in-

of management

another

on

of the people to be managed;

and Alan M.

in the American

of September

eco-

it even when it was

by Hollis B. Chenery
published

Review

countries,

but this

for two reasons.

explanation

of how an entire nation

produce

nation.

sec-

better management

can
than

For the real explanation,

must turn to the domain

we

of culture.

clude Hong Kong and Singapore because they


were considered insignificant
in this respect.
The future

performances

of Taiwan

and Ko-

rea were heavily underrated,


and those of India and Sri Lanka were overrated.
Fifteen
years later, Singapore
2.5 million

exported

a population
Dragons

with a population

of

more than India did with

of 700 million.

THE NEO-CONFUCIAN HYPOTHESIS


Futurologist
Herman Kahn
cultures of the East Asian
Confucian-

that is, rooted in the teachings

Confucius.

Kahn saw himself as a culturist:

Not only was the success of the Five

He, like the authors

unpredicted,

belief that specific nations

economists

but even after the fact

have no explanation

of why these

of this article,

tural traits that arerather


can often be modified.

Colombia,

define culture

starting

position?

capita

income

Koreas

($150).

seemed

to be in a better

In 1965,

Colombias

($280) was about


In 1985,

South

capita income ($2,150) was about

per

twice South
Koreas per
one-and-a-

half times Colombias ($1,320). U.S. garment


buyers, however, chose South Korea -even
though Colombia is nearer-because
of better selection, better quality, lower prices, and
more reliable delivery times. Better manage-

of the mind

although

The authors

as the collective
that distinguishes

the members

of one category of people from those of another. This definition applies to national as
well as to corporate
at the national
hypothesis

cultures,

but we will stay

level. Kahns neo-Confucian

is that the countries

of East Asia

have common cultural roots going far back


into history, and that under the world-market
conditions

of the past 30 years this cultural

and nzuny fuiled to recognize if even when


was

well under way.

they
like to

programming

economic rise of fhe Eusf Asian countries,

if

held the

sticky and difficult

Few econovnisfs predicted Gze staggering

of

have specific cul-

to change in any basic fashion,

particular countries were so successful. Why,


for example, did South Korea outperform
which

has labeled the


countries neo-

in-

Exhibit

ECONOMICGROWTH FOR SELECTED


COUNTRIESAND GROSS NATIONAL PRODUCT(GNP) PERCAPITA

196585
Ave.

7 965

Annual

GNP/capita
Growth

1985

GNP/capita

Rate

GNP/capita

U.S. $ and

U.S. $ and

(Rank)

(Rank)

Singapore

7.6

550 (12)

7420 (10)

Taiwan

7.2

220 (16)

3600 (12)

South Korea

6.6

150 (17)

2150 (13)

Hong Kong

6.1

590 (11)

6230 (11)

Japan

4.7

780 (10)

11300 (5)

Brazil

4.3

240 (15)

1640 (15)

Austria

3.5

1180 (8)

9120 (8)

Colombia

2.9

280 (14)

1320 (16)

West Germany

2.7

1810 (5)

10940 (6)

Canada

2.4

2260 (3)

13680 (3)

Netherlands

2.0

1520 (7)

9290 (7)

Sweden

1.8

2160 (4)

11890 (4)

1.7

90 (18)

270 (18)

States

1.7

3420 (1)

16690 (1)

Great Britain

1.6

1580 (6)

8460 (9)

Poland

1.5

840 (9)

2050 (14)

1.4

2310 (2)

16370 (2)

330 (13)

770 (17)

India
United

Switzerland
Nicaragua

-2.1

Source: World Development Report 1987 and other statistics

heritance
vantage

has constituted
for successful
Cultural

cally transferred;

a competitive

business

inheritances

ad-

activity.
are not geneti-

they can in principle

be ac-

ming; thus from generation to generation, all


kinds of cultural traits are transferred.
With
this in mind, let us begin to look at the teachings of Confucius.

quired by any human being who is at the right


place at the right time. We begin to acquire
the mental programming
we call culture from
the day we are born, and the process continues throughout
our life in a particular society.
Cross-cultural
developmental
psychologists
who have studied the behavior of children in
different societies have shown that a child
learns patterns of cultural behavior very early
in its life. For example, Japanese male infants
of 3 to 4 months are noisier than Japanese female infants of the same age, whereas in the
United States the opposite is true. Sex roles
are only one aspect of our cultural program-

CONFUCIUS AND HIS TEACHINGS

Kong Fu Ze, whom the Jesuit missionaries renamed Confucius, was a high civil servant in
China around the time of 500 B.C. Known
for his wisdom,

he was always surrounded

by

a host of disciples who recorded what we


know of his teachings. He thus held a position
very similar to that of the Greek philosopher
Socrates, who lived just 80 years later. Confucius teachings are lessons in practical ethics
without any religious content; Confucianism

(if only on the surface);

ones thoughts,

ever, remain

free. Harmony

maintenance

of an individuals

ing ones dignity,

how-

is found

in the

face, n mean-

self-respect,

and prestige.

The use of our own word face in this sense


was actually

derived from the Chinese:

Losing

ones dignity,
in the Chinese tradition,
is
equivalent
to losing ones eyes, nose, and
mouth. Social relations should
in such a way that everybodys
tained. Paying respect
called giving face.
GEERT HOFSTEDE

anthropology

management

of Limburg at Maastricht,
He is also director

for Research on Intercultural


which recently

moved

3. Virtuous

of orgmizutiorzui

and international

the University
Netherlands.

is professor

ut

the

of the Institute

Cooperation,

He has lectured and published


and acts us an international

consultant

which,

however,

to cow-

punies and organizations.

toward

else is

others

con-

does not extend as far as the

injunction

Confucius

internationally

to someone

sists of treating others as one would like to be


treated oneself: a basic human benevolence Christian

to the xwne university.

behavior

be conducted
face is main-

to love thy enemies.

said, if one should

As
love ones ene-

mies, what would remain for ones friends?


4. Virtue with regard to ones tasks in life
consists of trying to acquire skills and education, working hard, not spending more than
necessary,

is not a religion

but a set of pragmatic

for daily life, derived

from what

rules

Confucius

saw as the lessons of Chinese history. The following

are the key principles

being

Conspicuous

patient,

consumption

ing ones temper.


all things.

and

persevering.

is taboo,

Moderation

as is los-

is enjoined

in

of Confucian

teaching:
I. The stability of society is based on unequal relationships between people. The wu
are ruler/
lun, or five basic relationships,

THE NEW SCIENCE OF CULTUREMEASUREMENT

subject,
brother,

fate of nations as Kahn and others assume it


to be, how then do we learn about culture?

father/son,
older brother/younger
husband/wife,
and older friend/

If culture

is as important

in determining

the

younger friend. These relationships


are based
on mutual, complementary
obligations:
The
junior partner owes the senior respect and
obedience; the senior owes the junior partner

Mere description
will not do; we need an
approach that allows comparisons
between
countriesthat is, an identification
of cultural variations.

protection and consideration.


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. Children should learn to restrain
themselves,
to overcome their individuality
so as to maintain the harmony in the family

Cultural
differences
can be measured indirectly; that is, they can be inferred
from data about collective behavior, such as
the way a countrys national
wealth is distributed
over its population;
the mobility
from one social class to another; or the frequency of political violence or labor con-

flicts,

traffic

accidents,

or suicides.

these can tell us something


culture,

about

but it is not always

should

All of

a countrys

clear how they

be interpreted.
We can avoid this problem

ing direct measures

of culture

by tak-

through

asking

well-designed
questions about peoples values
or beliefs. For this type of measurement,
we
should

have

respondents

access

to matched

from a number

tries (the more

samples

of different

the better,

of

coun-

but preferably

at

least 15).Matching samples means that the


respondents
should be people who are as
similar

as possible

in all aspects of their lives

except for their nationality.


year-old
dents,

schoolchildren,
or business

cific

training

matched

representative
populations
though

female medical

stu-

can

samples

such as public

opinion

spesuch

to have

chology at the Chinese University

of Hong

Kong. He also acts as R cross-cultural management trainer for multinational corporations in


Hong Kong, where he has lived since 1974. His
research and publications are devoted to a comparison of the psychological and social functioning of the Chinese people with people from
Western countries.

national
polls, al-

these, too, can be used.


ask the same set of at

countries.

of all our subjects

In comparing

we try to find the patterns


that

other.

form

from whole

least 30 or 40 questions

liefs

attending
all

It is not necessary

We usually
various

ten-

managers

courses

samples.

For example,

MICHAELHARRISBOND is senior lecturer in psy-

distinguish

We

methods

use

that

one

of values and be-

countries
of

in

the answers,
from

several

have been developed

each

statistical
for this

Corporation

made

tional employee

its databank

attitude

academic

research.

worldwide

comparative

employees

since

116,000

on interna-

surveys available

IBM had been


attitude

surveys of its

1967; by 1973, more

questionnaires

for

holding

in 20. different

than
lan-

purpose; this procedure supplies us with suggested dimensions of culture on which we can

guages from 72 countries had been collected.


Employee attitude
surveys have of course

locate our various

been held in many

has succeeded,

countries.

such

If our research

dimensions

should

be

easy to interpret: They should represent fundamental


problems
of human societies for
which there is no one solution but a range of
solutions,
of which each countrys culture
represents

one particular

choice.

A Case of Culture Measurement:


The IBM Studies

A unique opportunity
for culture measurement arose in the early 1970s when the IBM

companies,

but most of

them are not internationally


standardized
and they contain only questions about satisfaction at work (How do you like your boss,
pay, working
conditions,
and so forth),
which are not very suitable as cultural indices.
However, IBMs international
questionnaire contained about 60 questions (out
of a total of about 150) on the employees basic values and beliefs that were eminently fit
for measuring
culture. They included such
questions as How important
are each of the
following to you in an ideal job? followed by

a list of 14 job characteristics

such as earn-

ings, job security, challenge, freedom, cooperation, and so forth. In addition, questions
were included

on the preferred

ideal manager

(from very directive

faire).

Finally,

judgments

general

issues at work,

among

employees

than

good.

their

strongly

usually

does more
were

from

than

agree

represented

subsets
same

the corporation

they would

to

be a conservative

found
estimate

analysis

40 of them, ignoring

each
job,

nationality.
If
among counso the national

inside IBM should


of those existing

for the countries at large.


Out of 72 countries
tional culture

ex-

should be larger

be inside,

differences

from

company,

and education,
but different
anything,
cultural differences

culture

harm
to rate

targeted

for comparison

cultures

differed

covered,

the na-

the smaller IBM subsidi-

aries. Later on, it became

possible

to use data

mainly

that these

along

four

dimensions:
1. Power

Distance-

that is, the extent

which the less powerful

members

to

oforganiza-

(like the family)

accept

and expect that power is distributed unequally.


This

represents

inequality

that

is defined

from below, not from above;

it suggests

a societys level of inequality

is endorsed

that
by

its followers as much as by its leaders. Power


and inequality are of course very fundamental aspects of any society, and any individual
with some international
that all societies
some are mnre

at first used data from

to 53.

The IBM studies revealed

tions and institutions

population:

tries outside

cultures
53

disagree.
well-matched

countrys

asked

strongly

The IBM employees


tremely

to laissez-

while those of 14

into three regions-East

Africa, West Africa, and the Arab-speaking


countries-that
brought the total number of

were asked about

such as Competition

Employees

responses

style for ones

10 countries,

from another

more were grouped

unequal

2. Individualism
opposite
describes
integrated

experience

are basically

is aware

unequal,

but

than others.

on the one side versus its

(Collectivism)
on the other. This
the degree to which individuals
are
into groups.

On the individualist

lf culfuve is as imporfunf in defemining


the fate of nations as (Hevman] Kahn and
ofhevs assume if to be, how fhen do we learn
abouf culture? Mere descvipfion will not do; we
need an approach fhaf allows comparisons
befween counfries-fhaf
10

of

culfuml variations.

is, an identification

side, we find societies


tween individuals

in which

are loose:

the ties be-

Everyone

is ex-

to these cultural
the family:

choices are obviously

Power Distance

by the degree to

pected to look after himself or herself and the

which children

immediate

of their own, Individualism/Collectivism

family. On the collectivist

find societies

in which people from birth on-

ward are integrated


groups;

often

uncles,

aunts,

protecting

into strong,

their extended
and

cohesive
families

grandparents)

them in exchange

ing loyalty.

side, we

The word

sense has no political

in-

(with

continue

the cohesion

of the family

and Masculinity/Femininity

meaning:

It refers to the

the role models

that the parents


to the younger

with

the Confucian

earlier,

it will

Confucian

be

no

countries

fundamental

ism, and mid-range

involving
uersus

all societies

its opposite,

in

Femi-

ity (except Japan,


Masculinity).

respect

to
by

and older
child.

we described

surprise

generally

high on Power Distance,

one,

by

the three dimensions

teachings

group, not to the state. Again, the issue addressed by this dimension
is an extremely
the world.
3. Masculinity

with

children

If we compare

in this

to have a will

other people,

for unquestion-

collectivism

are encouraged

present

bred in

that
score

neofairly

low on Individual-

on Masculinity/Femininwhich scores quite high on

The distribution
of roles between the
sexes is another fundamental
issue for any

4. A fourth dimension found in the IBM


studies refers not to social behavior but to

society

mans search for Truth. We called it Uncer-

ninity.

that

may

tions. Analysis
womens

involve
differ

less among
Further,

to mens values

from one country


they contain

of solu-

of the IBM data revealed

values

than do mens values.


ourselves

a range

a dimension

if we restrict

(which

to another),

that

societies
vary more

we find that

from very assertive,

competitive,
and maximally
different from
womens values on the one side, to modest
and nurturing
and similar to womens values
on the other. We have called the assertive
masculine
nine.

and

the nurturing

The women

in the feminine

have the same nurturing


the masculine
more

assertive

countries

pole

pole
femi-

countries

values as the men; in


they are somewhat

and competitive,

but not as

much so as the men, so that these countries


show a gap between mens values and womens
values.
The three dimensions
described so
far all refer to three types of expected social
behavior: behavior toward people higher or
lower in rank (Power Distance), behavior toward the group (Individualism/Collectivism),
and behavior according to ones sex (Masculinity/Femininity).
The values corresponding

tainty Avoidance;

it indicates

a culture

its members

programs

uncomfortable
situations.

or comfortable

Unstructured

fined as novel,

unknown,

to what extent
to feel either

in unstructured

situations

are de-

surprising,

or dif-

ferent from usual. Uncertainty-avoiding


cultures try to minimize the possibility
of such
situations

by adhering

to strict laws and rules,

safety and security measures,


and (on the
philosophical
and religious level) a belief in
absolute

Truth: There can be only one Truth,

and we have it. People in uncertainty-avoiding countries


motivated

are also more emotional


by inner

nervous

energy.

and are
Uncer-

tainty-accepting
cultures are more tolerant of
behavior and opinions that differ from their
own; they try to have as few rules as possible,
and on the philosophical
and religious level
they are relativist, allowing many currents to
flow side by side. People within these cultures
are more phlegmatic and contemplative;
their
environment
does not expect them to express
emotions.
Exhibit 2 lists scores for the 53 cultures in the IBM research, thereby permitting

11

(F.R

35

8-9

52
34

13
50
45
54

Israel
Italy
Jamaica

Japan

33

37

49

19-20

10-11
58

77

India

28

78

Indonesia

15-16

Ireland

68

Hong Kong

2-3

Iran

60
95

Greece
Guatemala

27-28

42-44

15-16

46

8-9

51

42-44

17

24-25

39

14

20

53

41

42-44

3.5

Rank

35-36

35

Germany

Britain

68

France

Great

78
33

Equador
Finland

18

Denmark

Rica

67

Colombia
Costa

39
63

Canada
Chile

65
69

11

Austria

Brazil

36

Australia

Belgium

49

Index

Power Distance

Argentina

Country

46

39

76

54

70

41

48

14

25

35

89

67

71

63

74

15

13

23

80

38

75

55

90

46

Index

22-23

25

19

12

24

21

47-48

37

53

30

15

10-11

17

52

46

49

38

4-5

26-27

18

22-23

Rank

Individualism

95

68

70

47

68

43

56

46

57

37

57

66

66

43

26

63

16

21

64

28

52

49

54

79

61

56

Index

7-8

4-5

29

7-8

35-36

20-21

30-31

18-19

43

18-19

9-10

9-10

35-36

47

13-14

50

48-49

11-12

46

24

27

22

16

20-22

Rank

Masculinity

92

13

75

81

35

59

40

48

29

101

112

35

65

86

59

67

23

86

80

86

48

76

94

70

51

86

Index

Uncertainty

52

23

19

47-4

31-3

45

41-4

49-5

47-4

29

10-1

31-3

28

51

10-1

20

10-1

41-4

21-2

5-6

24-2

37

10-1

Rank

Avoidance

FIVEDIMENSIONSFOR FIFTYCOUNTRIESAND THREE REGIONS


INTERNATIONAL
EMPLOYEEATTITUDESURVFY
IN IBMs

SCORESON

Exhibit

31
47-48
45
29-30

31
34
58

Sweden
Switzerland
Taiwan

12

76
Yugoslavia

10-11
7

77
80
Arab Ctrs.

38

20

27

27

12

91

36

37

20

17

68

71

51

20

19

65

27

32

16

11

14

79

69

80

30

26

18

26-27

39-41

33-35

33-35

50

29

28

39-41

44

14

10-11

20

39-41

42

16

33-3.5

31

45

51

47-48

13

4-5

32

36

43

53

46

41

21

73

62

38

45

34

45

70

42

48

40

63

31

64

42

44

50

58

23

30-31

39

48-49

15

42

31-33

44

32-33

4-5

52

68

54

52

88

76

46

100

85

64

69

58

29

8
86

28

94

49

104

44

87

86

37-38

40

13-14

45

11-12

37-38

34

70

49

17
25-26

50

53
52

51
8

14

82

36
6

85

41
25-26
69

50

39

RankNumbers:
1 = Highest;
53 = Lowest(ForConfucian
Dynamism:20 = Lowest)

21-23

64
East Africa
West Africa

Regions:

38
5-6

United

81

26

Uruguay

40

18-19
61

Turkey

Venezuela

21-23

64
66

Thailand

States

13

74
57

18-19

66

Salvador

Spain

36-37

49

South Africa

Singapore

24-25

63

95

Panama

Portugal

55

Pakistan

32
2-3

22

New Zealand

21-23

50

31

Norway

64

40
47-48

38

Netherlands

94

5-6

81

Mexico

Philippines

104

Malaysia

Peru

27-28

60

Korea (S)

27

34

36

21-

43

16-

30

26

33

49-

10-

53

5-

39-

44

10-

24-

39-

38

35

18

46

16-

each country

to be positioned

four dimensions

(plus a fifth that we will de-

scribe in the next section).


relative:

on each of the

way that the distance between the lowest- and


the highest-scoring country is about 100 points.
among cultures
many

tices. For example,


Individualism

level,

differences

in these four dimensions

consequences

have

for management

prac-

both Power Distance

and

affect

the type

most likely to be effective


ideal leader in a culture

of leadership

in a country.

tances are small would be a resourceful


a culture

The

in which Power Dis-

ocrat; on the other hand,

greater

dem-

the ideal leader in

in which Power Distances

are large

Avoidance

is associated

At the national
dividualism

wealth

product

in dollars)

gross national
strongly

economic

and national

level, In(per capita


are quite

related. We have tested whether caus-

ality went from wealth to Individualism


ple in wealthier
countries
becoming

(peomore

individualist)

(indi-

vidualist

or the other way round

cultures

becoming

wealthier).

We

were able to test this because most of the IBM


population

was surveyed

year interval,
changes

twice, with a four-

so over this period we knew the

in both

wealth

and Individualism.

The data show convincingly


causality goes from wealth

that the arrow of


to Individualism

and not vice versa. If the resources

in a coun-

is a benevolent autocrat (or good father). In


Collectivist
cultures,
leadership
should re-

try allow people to do their own thing, they

spect and encourage

will start doing just that.

ties; incentives

employees group

should

and their distribution


group.

around

tives should
affect

cultures,

as individuals,

people

can

and incen-

peoples

tion is more effective

and Uncertainty
motivations:

AvoidCompeti-

in a masculine

However, none of the four dimensions is related to national economic growth.


Only

for the wealthy

culture,

countries

tend to be individualist)
ism associated

be given to individuals.

Masculinity
ance

loyal-

be given collectively,
should be left up to the

In Individualist

be moved

is more Individual-

with slower economic

and vice versa. If everybody


own thing,
than

the economy

it would

(all of which

if at least

growth

does his or her

grows less quickly


some

individuals

and personal risk is more acceptable if Uncertainty Avoidance is low. Power Distance and

worked for collective purposes. But this study


revealed no relationship
between culture and

Uncertainty
Avoidance
together affect the
image people form of what an organization
should be: larger Power Distances are associ-

economic

ated with greater centralization,

growth that holds true for all coun-

tries, including the poor ones that need such


growth the most.

while strongA Second Case of Culture


The Chinese Value Survey

14

with

formalization.

These scores are

We have chosen our scales in such a

At the company

er Uncertainty

Measurement:

The Rokeach Value Survey is a well-known


questionnaire
developed by psychologist Milton Rokeach for measuring values in American society. In 1979, a group of academic
researchers from nine Asian and Pacific countries administered
a modified version of this
survey to 100 psychology students (50 males
and 50 females) in each of ten different countries. The results of the survey were published

about the same time as those of the IBM stud-

Chinese Value Survey was administered

ies. When the two were compared,


that all four dimensions identified

students

material,

in addition

to a fifth that we have

not been able to interpret,


in the student
projects

between

was

in both samples.

demonstrated

This overlap

in different
two projects
versality

on different

was strong

dif-

populations

The agreement
support

other concern:

by U.S.,

on the results.

Scandinavian
Western

British,

countries.

Our

data

evolved from
French,

and

of them from

The Rokeach

the local

from

pos-

language

the Chinese.

To

dience

as honoring
to, respect

of parents).

of ancestors

and obe-

for, and financial

Of course,

support

to the Chinese

mind,

some of the items on the Rokeach Value Surmay have seemed

unusual.
A statistical

analysis

of the 22-coun-

try Chinese Value Survey results based on the


by an-

countries had
this conclu-

Dutch,

researchers-all

plained

for the uni-

search. The IBM questionnaires

directly

se-

Wherever

a Western mind, some of the items seemed


strange, such as filial piety (which was ex-

vey or IBM questionnaire

sion obviously also applies to the people who


conceive the questionnaires
and do the rework

made

into

equally

the

of the research-

showed that people in different


different mental programming;

translations

overlapping

however,

the influence

culture

sible,

to 100

in a vari-

in each of 22 countries

lected from all five continents.

between

of the four IBM dimensions.


We were troubled,

ers own

the

is remarkable

used completely

years in only partly

sets of countries.

on

that were represented

the two projects

ferent questionnaires

the two re-

(50 males and 50 females)

ety of disciplines

were

overlap

scores of six countries


because

were also present

data.

The
search

it appeared
in the IBM

Value Sur-

vey was a purely


U.S. instrument;
respondents
in non-Western
settings
asked to answer questions
that had

thus
were
been

relative importance

each value

attached

as opposed

in a country

to the other

to

values

again yielded four dimensions. Twenty out of


22 countries were covered earlier in the IBM
studies;

thus we could compare

the countries

the scores of

on each CVS dimension

those for the IBM dimensions.

with

Our findings

were striking: One CVS dimension was very


similar to Power Distance, another to Individualism/Collectivism,
culinity/Femininitycompletely

different

ulations, different
mix of countries.

and a third to Masthis again in spite of the


questions,

time periods,

different

pop-

and different

made up by Western researchers. Can we assume that the respondents


answers accu-

The three dimensions


common to
the Chinese Value Survey and the IBM stud-

rately

ies are the ones that refer to three types of

reflect

the essence

of their

tures? Some of the questions

own

cul-

may have been

irrelevant to them; others that were relevant


may not have been included. These concerns
led to the development
Survey (CVS).

of the Chinese

Value

Michael Bond, based in Hong Kong,


asked a number of Chinese social scientists to
prepare a list of basic values for Chinese people. This led to the creation
of a JO-item
Chinese questionnaire
that was subsequently
translated into English. Through an international network of interested colleagues, this

15

expected
seniors

social

behavior:

or juniors,

a function

behavior

toward

toward

more

and as

perseverance
and thrift), whereas those on
the right select Confucian
values oriented

the group,

of ones sex. These represent

tural choices

so fundamental

cul-

to any human

oriented

toward

toward

the future

the past and

the present.

society that they are found regardless


of
whether the values surveyed were designed

called this dimension

by a Western

fucius ideas and that its positive

or an Eastern

truly universal
all societies
different

human
share

societies

mind.

They are

traits in the sense that

the same

problems,

but

have chosen (historically

rather than consciously)

different

solutions

ies, however,

is missing

from the IBM studin the CVS data: We

did not find a CVS dimension


certainty

Avoidance.

this dimension

a dynamic,

future-oriented

related

We earlier

to Un-

associated

with mans search for Truth; it

We have
Dynamism

pole reflects

tradition-oriented

mentality.

Scores

for

pole reflects

mentality,

as its negative

for the countries

One dimension

Confucian

to show that it deals with a choice from Con-

to

these problems.

(especially

a more

Confucian

surveyed

listed in the last column

wherestatic,

Dynamism

with the CVS are


of Exhibit

2. In dis-

cussing the IBM studies, we showed that none


of the four IBM dimensions
was associated
with economic growth across all countries;
however,

we were stunned

to discover

our new dimension,

another

over the period between

1965 and 1985 across

all 22 countries,

or poor,

quite clearly marked dimension

up of the values

indicated

For countries
dimension,
exhibit
countries

in Exhibit

scoring

made
3.

high on this

strongly

Confucian

that

seems that the Chinese do not believe this to


be an essential issue. However, we did find

associated

with
rich

Dynamism,

economic

is

growth
that

were

covered.

the values on the left side of the

are relatively
scoring

more

important;

for

low, those on the right are

CONFUCIUS AND ECONOMIC GROWTH

more important.
In fact, both the values on
the right and those on the left are in line with
the teachings of Confucius as we described

A glance at Exhibit 2 shows that four of the

them earlier.

and South Korea-hold

However,

select those teachings

The

the values on the left


of Confucius

that are

Five Dragons - Hong


the Confucian

Kong,

Taiwan,

Japan,

the top positions

Dynamism

scale.

on

The next

overlap between the IBM studies and the

Chinese Value Sumey is uemavkable because the


two projects used conzpletely different questionnaires on different populations during different
16

year.

ifi

only

p&y

ove&pping

sets

of counhies,

Exhibit

VALUES ASSOCIATED WITH CONFUCIAN DYNAMISM

The relative importance


Persistence
Ordering

But the relative unimportance

of:

Personal

(perseverance)
relationships

and observing

by status

Protecting

Sweden,

Reciprocation
of greetings,
favors, and gifts

a sense of shame

scores

position.

are found

for Brazil,

and Singapore.
On

the

English-speaking
the

lower

Dynamism

we find

Australia,

the African

countries

Nigeria;

and the Philippines

New

Chinese

values

questionnaire

and perseverance
before the present boom
started; their belief in tradition
and face

composed

We learned
values

tries,

while

from

their

were preferred
other

and this was adminis-

values

in 22 counanswers

in some

were

others. We could form dimensions,

that
coun-

preferred

in

clusters of

values that appeared to be associated;


these dimensions we called Confucian

one of
Dyna-

were known

and

Japanese

tered to male and female students


tries.

by it). The Chinese

and

and Pakistan.

peoples

developthey may

and

social scientists

some

have been reinforced

(although

Britain,

Lets do a quick recap of what happened:

by the fast economic

ment of certain countries

Zimbabwe

States,

Canada;

the

of Confucian

do not seem to be recent develop-

ments caused

take a middle

side

countries
United

ues that compose the dimension

India,

The Netherlands,

and West Germany

Zealand,

your face

Respect for tradition

Having

Thailand,

of:

and stability

this order

Thrift

highest

steadiness

(negative on the Confucian

to value thrift

Dynamism

scale)

was heavily shaken by the events of the 1940s


and 1950s; therefore, we assume the values to
be at least part of the cause,
growth

and economic

to be the effect.
The logical link between

East Asian entrepreneurship.

the two is

We do not mean

that the values we found are held only by entrepreneurs;

rather,

the way

in which

we

mism. Thus far, this was a completely psychological


exercise; it was concerned,
not
with business or with economics,
but with

found them (by surveying student samples)


suggests that they are held broadly within entire societies, among entrepreneurs
and future entrepreneurs,
among their employees

culture.
It then appeared
that the country
scores on Confucian Dynamism derived from

and their families, and among members


society as a whole.

this

Let us look again at the values that


compose our Confucian Dynamism dimension (see Exhibit 3). If this dimension is somewhat puzzling to the Western readers, they
should not be surprised.
The dimension
is
composed precisely of those elements that
our Western instruments
had not registered;

exercise

are

strongly

associated

with

those countries economic growth. Thus we


have found a cultural link to an economic
phenomenon.
As in the case of the association between wealth and individualism,
the causality
could have gone either way. However, the val-

of the

17

a Westerner
important.
further.

would

not normally

find them

Thus we will try to explain

them

label

Confucian

could

be somewhat

countries

addition,

in the pursuit

suggests a general te-

of whatever

such

a number

economic

Low endorsement

mis-

of the values

in non-Confu-

dimension

as India

or Brazil.

In

values

including

goals.

the right side of our Confucian

of core Confucian

goals a per-

or herself,

with the posi-

The values associated

tive (left) side are also found


cian

nacity

son selects for himself


At the outset, we must note that the

leading.

tence or perseverance

facilitates

economic

tecting ones face, if widely


cern, would detract

growth.

shared

Pro-

as a con-

from getting on with the

such as filial piety are not associated with


this factor at all; and finally, the values on the

business.

negative (right) side, as we argued earlier, are


as Confucian as those on the positive side.

cerned with good manners

than with perfor-

mance.

for tradition

Having
should

issued

acknowledge

ordering

this disclaimer,

we

that the shared value of

relationship

by status

and observ-

The

on

Dynamism

reciprocation

of greetings,

favors, and gifts is a social activity

pedes

Too much respect


innovation:

part

of the secret

Five Dragons economic


with

which

they

technological

success

is the ease

accepted

Western

innovations.

Finally,

personal

steadiness

dualities

would discourage

the initiative,

and changeability

required

(the wu lun). This sense of hierarchy and


complementarity
of relations
undoubtedly

trying
trade.

the vicissitudes

makes the entrepreneurial


role easier to play.
The value of having a sense of

nant values is a necessary

and interrelatedness
conception

supports

shame
sensitivity

interrelatedness

to social

contacts.

thrift leads to savings,


ability

of capital

ous asset

lie at the heart


of being

which

through

The value
means

for reinvestment,

to economic

growth;

human

of

avail-

an obvieconomists

had been struck by the high savings quotas in


the Five Dragon countries.
Finally, persis-

and

stability,

to exploit
Culture

nomic growth;
sufficient
necessary

im-

of the

have

ing this order is quintessential


Confucianism
in action. As we showed earlier, hierarchical
of the Chinese

more con-

if overstressed,
risk seeking,

of entrepreneurs
of world

in the form of certain


however,

condition
culture

domifor eco-

alone is not

for such growth to occur. Two other


conditions

market and a political

are the existence

of a

context that allows de-

velopment.

The first condition

the growth

of the Five Dragons

explains

why

started

only

after 1955, when for the first time in history


the conditions for a truly global market were
fulfilled. The supportive political context was
fulfilled in all Five Dragons, although in quite
different ways, with the role of government
varying from active support to laissez-faire.
Labor unions were weak and company-oriented in all five countries,
and a relatively
egalitarian
income distribution
meant that
support for revolutionary
social changes was
weak. The Confucian sense of moderation
affected political life as well, in spite of occasional outbreaks
of unrest and violence.
The influence of the political con-

18

text is evident in the country that was the cradle of Confucianism,


the Peoples Republic of

China.

So far, data on the Chinese

What

Value Sur-

vey for the Peoples Repubiic are missing. We


can only infer that in spite of Maoism, many

the difference

Confucian

tioned

values

ples Republic,

remain

strong

in the Peo-

and that those on the left side

of our Confucian

Dynamism

currently

at the expense

boosted

dimension

are

of those on

The economic
Republic

The Cultural

1976 was a period


nomic

growth of the Peoples

was obviously

nevertheless,
growth

hampered

by politi-

Revolution

of 1966-

of economic

the average

the 20-year

and

Besides

East

(Power

Collectivism,
we found

annual

shrinkage;
rate of eco-

that included

West

Individualism/

Masculinity/Femininity)
Western

Avoidance.

dimension:

As we argued,

deals with

a societys

uncertainty-avoiding

this

search

cultures

for

believe

in an absolute Truth, and uncertainty-accepting cultures take a more relativist stance. We


also found

one uniquely

over

Confucian

Dynamism;

the Revolu-

dimension

deals with

in the Peoples Republic

period

Truth;

men-

to both

Distance,

one uniquely

dimension

and Eastern

previously

common

and

tell us about

Western

the three

dimensions

Uncertainty

the right side.

cal factors.

minds?

did our studies


between

Eastern

dimension,

we believe
a societys

for

than that of Ja-

Virtue.

pan. It also seems that under the leadership of


Deng Xiaoping, the Peoples Republic has let

relates

economic

practical ethics without any religious content.


He dealt with Virtue, but left the question of

tion was still 4.8% or higher

purity.

expediency

It is obviously

prevail

over political

more difficult

to turn

It is no accident

that this
search

to the teachings

described

that this dimension


of Confucius;

them earlier,

as we

he was a teacher

of

around a nation of 1,000 million people than


it is to turn around a nation such as Singa-

Truth

pore, which has a population


of 2.5 million.
So it is not unlikely that the Peoples Republic

line in our world that separates

will follow the success of the Five Dragonsalbeit at some distance-and


eventually
be-

cludes the countries


that are traditionally
Judaean,
Christian,
or Muslim - three reli-

come the sixth-and

gions

most powerful-dragon

There
Eastern

Truth.

of them all.

open.
is a philosophical

thinking.

that

The West, in this case, in-

are very

Throughout

much
history,

have been split between


tolerant
WESTERN MINDS AND EASTERNMINDS

currents

dividing

Western from

concerned
these

religions

fundamentalist,

that believe

with
in-

they have the

one Truth and all others are wrong,

and lib-

It is remarkable
that the values dimension aswith the economic success of East

sociated

Asiatic cultures

over the past 20 years was not

found with questionnaires


developed by Western researchers.
It took the Chinese Value
Survey- an Eastern instrument - to identify
this dimension.

This is a powerful

of how fundamental

illustration

a phenomenon

culture

really is. It not only affects our daily practices


(the way we live, the way we are brought up,
the way we manage, and the way we are managed); it also affects the theories we are able
to develop to explain our practices. Cultures
grip on us is complete.

19

eral, tolerant
humanity,

currents

that put a concern

also present

with

in all three religions,

these technologies

into

cording

to their superior

synthetic

practice

ac-

abilities.

What is true or who is right is less important

above doctrine.
These two trends

in thinking

corre-

spond to the two poles (strong or weak) of the

than what works, and how the efforts of individuals with different thinking patterns can

Uncertainty-Avoidance

be coordinated

represented

dimension.

by Confucianism

Hinduism,

Buddhism,

The East,

but

Taoism,

also

ing can have the Truth.


as partial,

Human

by

and Shinto-

ism, does not assume that any one human


truth

be-

is seen

so that one truth does not exclude

its opposite.

This is why people

in the East

can easily adhere

to more than one religion

or philosophical

school

at the same

time;

and Buddhism,

for example,

coex-

Shintoism

toward a common

nese management,
employees,

especially

is famous

for this pragmatic

thesis. The strategic advantage,


of Eastern

cultures

goal. Japa-

with Japanese
syn-

in this period

that practice

virtue

with-

out a concern for truth, is part of what our research has illustrated.

THE QUEST FOR GLOBAL MANAGEMENT

ist in many Japanese households.


Along this
line of thinking,
a practical,
nonreligious

SYNERGY

ethical system like Confucianism

The IBM values study, in which national


cultural
differences
were measured
across

can become

a cornerstone

of society - more so than in the

West,

we tend to derive

where

ethics

from

religion.
During
that

the

has shaken

Industrial

mankind

years, the Western

concern

Revolution

company.

laws of nature,

which could then be exploited

of the

tons laws; they were simply not looking for


them. The Chinese script also betrays this
in general laws: It needs 5,000

characters,

culture does not stop at the gate of the foreign


headquarters

It led to the discovery

different

subsidiaries
within the same mulcorporation,
shows that national

for Truth was at

first an asset.

lack of interest

different
tinational

for the past 200

for the sake of human progress. It is surprising that Chinese scholars, despite their high
level of civilization,
never discovered New-

one for each

syllable,

while by splitting the syllables into separate


letters Western languages need only about 30
signs. We could say that Western thinking is
analytical, while Eastern thinking is synthetic.
By the middle of the 20th century,
the Western concern for truth gradually ceased
to be an asset and turned instead into a liability. Science may benefit from analytical think-

20

putting

ing, but management


and government
are
based on the art of synthesis. With the results
of Western, analytically
derived technologies
freely available, Eastern cultures could start

business

Whether

of multicultural
Cultural

subsidiaries

like it or not,
are

differences

among

Such conflicts

headquarters

the subsidiaries,

the

in the

management.

easily lead to conflicts

porate policies.
between

they

of multinationals

national
over cor-

arise not only

and local managers

but also between

in

headquar-

ters and expatriates from the home country


nationality.
In one U.S. corporation we know,
the head of a headquarters
staff department
complained
bitterly to the president
about
the noncompliance

with certain

rules by the

East Asian regional manager, who was an expatriate American.


I fully agree, said the
president. His behavior is stupid and against
company policy. I have only one question.
From the time he worked in headquarters,
I
have known Mr. X to be an intelligent man.
How can a man be so intelligent in Los Angeles and so stupid in Hong Kong?
Policy conflicts are less likely to occur in technology and finance, which are rel-

atively

culture-independent,

in marketing
diversity

and more likely

and personnel,

is largest.

where

Multinational

cultural
corporate

be complementary.

Our experiences

with the

Chinese Value Survey are in themselves


ample of cultural

synergy,

because

an ex-

the survey

cultures handle cultural diversity among subsidiaries according to the level of Uncertainty

used a Western research approach with a Chinese questionnaire.


We can also consider the

Avoidance

economic

treme

in their headquarters.

is the position

At one ex-

that there is only one

success of the five Dragons

of cultural

synergy,

corporate truth, and we have it; at the opposite extreme the subsidiaries
are run at arms

exploitation

length,

ples. Although

without

much attempt

The president

man who steered a middle


cultural

differences

at integration.

we quoted

whom

was a wise

way. He saw that

can easily

nized by overzealous

go unrecog-

headquarters

staff and

can be interpreted
as personality
defects of
the people in the subsidiaries,
whether they
are locals or expatriates.
National cultures

can undoubtedly

to recognize
portunity

Kahn

hypothesis

has formulated

in his book

the neo-Confucian

World Economic Deuelop-

ment: 7979 and Beyond (Croom


the failure

of economics

development
an article

Helm,

to predict

managers

local cultural

of the Five Dragons,

by George

we recommend

L. Hicks and S. Gordon

ding, The Story of the East AsianEconomic


cle (Euro-Asian
1983). Michael
book entitled
p/e (Oxford

University

Press,

that the cultural


are necessarily

were first described

Hofstedes

of a relevant

description

of Organizational

(journal

1984).

article,

The

which

four

dimensions

Do American

(Organizational

Theories

Rokeach
Culture

the
Value

IBM

Dimensions:

in their

Harris Bond
the

modified

article

Hofstedes

An Independent

Validation

Value Survey

Cultural Psychology,

December

of The Chinese

con-

nese Value Survey


Search

with

Abroad?

1980).

and Michael

studies

Study

Using Rokeachs
also a member

Summer

Dynamics,

Geert Hofstede
compared

and Organi-

Apply

entitled

for Culture-Free

(Journal of Cross1984).

Bond was

Culture

Connec-

of an article on the ChiChinese Values and the


Dimensions

Psychology,

of Culture
June 1987).

of the IBM

Cultures ConseHofstede

The Cultural

Practices

of International

zation:

in the same au-

Leadership,

tion, the group of authors

to the psycho-

the idea

countries.
Such an attitude is a luxury that
the management
of a multinational
corporation can no longer afford.

(~oumal of Cross-Cultural

can be found in his book

the author

1983).

1986),

This op-

choices of their own country


superior
to those of other

Peo-

of Confucianism.

quences (Sage Publications,


tivity

of the Chinese

of and references

Geert
studies

Issues 3 and 4,

Business Review),

The Psychology

aspects

RedMira-

Harris Bond is the editor of a recent

tains discussions
logical

the

can be helped

patterns.

may help them overcome

1979). On

or explain

devel-

to Eastern princi-

there is no patent for develop-

synergy,

thors article Motivation,


Herman

originally

oped in the West according

IBM studies

SEI.ECTEDBIBLIOGRAPHY

since it was based on the

of technology

ing cultural

a case

is also
Rela-

and Theories

Busirzess Studies,
associated

with

Fall
the

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