Five normative concepts guiding the Chinese ecosystem of relationships

A central theme of this book has been the importance of relationships— family, clan, regional, ethnic, and so on—which integrate with both personal and business interactions. Relationships define how much ethical, etiquette, personal, and business consideration a person deserves and expects from you, and vice-versa. The closer and more personal the relationship—which may also be a business relationship—the more one owes, but also the more one is owed in return. This was the notion of increasing ethical consideration or concern as relationships deepen. While, as we have noted, Western ethical precepts in many cases would caution against relationship-based ethics as unfair nepotism or, worse yet, corrupt cronyism, relationship-based ethics are not entirely foreign in the West. A Western parallel of the Chinese principle that relationships are an organizing ethical phenomenon can be found as far back as the Hebrew Bible (a.k.a., “Old Testament”). The ancient Hebrew relationship with the deity meant that the Ten Commandments applied to Hebrews as a group and not, as is sometimes thought nowadays, to all people universally, which is a later Christian belief. This explains why there is an apparent tension surrounding the commandment “you shall not murder” (often translated as “kill,” but that is a misleading translation of the

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Two excellent comparative works on Chinese and Western philosophy, including ethics, are Angle and Slote (2013) and Van Norden (2007). For a thoroughgoing and thoughtful attempt to reconcile Islam, Hinduism, and Christianity, see Kung, Von Stietencron, and Van Ess (1993).

Hebrew root r-ts-ch, or "IXFI, which is a legal concept, not just a biological one). The deity commands Hebrews to kill Philistines by the hundreds, which may seem like a paradox. However, the paradox dissolves when one takes the view that, because of the divine covenant, those commandments apply to and within Hebrew society, not to outsiders. One’s status as Hebrew thus makes a difference to the legal and moral status one deserves and receives. Though a subject of debate among moral philosophers, preference for one’s family or clan is a widespread fact of everyday moral life in the West. However, in China and arguably much of Asia, relationship-based ethics are more the norm than the exception they are in the West (Chinn, 2020).

Beyond understanding that relationships constitute an important ethical touchstone, it is also important to appreciate that the manner in which one behaves in various relationships is governed by a set of normative concepts. Thus far we have only looked at the connection between relationships and ethics monochromatically as a function of relative strength or closeness. We will now, however, consider five normative concepts that distinguish ethical from unethical behavior within relationships. These concepts are heavily influenced by Confucianism. Although Confucianism does not fully define Chinese ethics, culture, behavior, and mindsets, it does play an outsized role in guiding proper behavior within relationships, in part because of the Confucian emphasis on the family and the relationships it contains as the basic organizing social unit.

5.1.1 Xiào (^/Hierarchy

First, and deeply Interconnected with Chinese concepts of relationships, is the notion of xiào (^&), which is often translated as “piety” or “filial piety,” but as those terms have religious connotations in the West, xiào is better translated as “hierarchy” in the context of business. Many relationships, personal and professional, involve hierarchical differences between the people in the relationship—for example, older/younger, senior/jun-ior, superior/subordinate, higher-ranking/lower-ranking, and so on. Even among friend-friend relationships, an older or more professionally established friend might typically be treated with some additional deference by a younger or less-established friend, just on that account. Traditionally, Confucianism posits five fundamental relationships: ruler-subject, father-son, husband-wife, older brother-younger brother, friend-friend. In Chinese and other cultures influenced by Confucianism, these relationships are often thought of as a kind of blueprint for relationships generally, such that all personal-business relationships map to greater or lesser degree onto one of these five basic ones.

This principle of hierarchy in relationships is taken to extend through pretty much every aspect of Chinese culture and everyday life, extending out from family relationships to include those in business and government. Fundamentally, superiors are to behave benevolently towards subordinates, guiding them with wisdom, while subordinates are to behave respectfully and loyally towards superiors. Because hierarchy operates within relationships, and because this extends throughout daily life in Chinese culture contexts including business, the widespread Western principle to treat everyone the same does not make sense. To Chinese perspectives, acting that way is disrespectful of the relationships (especially close ones) and hierarchies that are present in every context, and people who have Awareness know this. Books on business etiquette in China often include great detail on certain clues of social hierarchy in Chinese culture contexts, especially on the mainland. These include which brand of cigarettes one should smoke, what brands and quality of alcohol one should order at banquets, what watch one should wear, and so on. We leave it to books focused more closely on those clues to lay out their subtleties. The broad practical takeaway here is to understand that equality and sameness of treatment are not guiding principles of how one interacts with others in Chinese culture contexts. Instead, one must behave respectfully—as superior, subordinate, or in some cases equals—by acting within the established system of hierarchical relationships governed by xiao.

5.1.2 Li (fjsj/Propriety

A second principle is II (fB), sometimes itself translated as “principle” or “ritual,” but also often translated as “good form, formality, etiquette” (Kroll, 2017, p. 261). For the purposes of business, II is better translated as “propriety” in the sense of commonly shared guidelines of what counts as

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For extended detailed discussions see, e.g., Hu et al. (2010), De Menthe (2013), Collinsworth (2014), and Verstappen (2015).

appropriate behavior in any given situation. LI applies to a wide range of situations, from momentary everyday events—such as greeting friends versus strangers, how to show respect to a superior or higher-ranking person, how to treat a subordinate, and so on—to more momentous events such as banquets, public speeches, or meeting a Chinese minister to negotiate a business deal. That II encompasses all of these is one reason why we introduced Interconnectedness in Chapter 2. Not only are ethics and etiquette not clearly conceptually distinguished, but moreover in II there is a background belief that the same body of guidelines and norms applies to both—to big behaviors and small, momentous and everyday. This is a further reason why foreign businesses and business executives operating in China need to recognize that the “basics” of politeness are not a “nice to have” but are integral to ethical behavior by their connection to showing respect, preserving face, and participating in guanxi networks. If you fail to exhibit rudimentary understanding of II, then you make yourself an outsider. As should be clear from our discussions of relationships as w^rell as Chapters 2 through 4, if you render yourself an outsider, as a result you become “fair game,” ethically speaking, and deserve minimal ethical consideration (Mark Zuckerberg, for example). Furthermore, instead of being a friend and thereby someone to cooperate with, you become someone with whom to strategically compete (as we elaborate in the next section).

A specific example of II guidelines at work in everyday business situations is the importance of what we will call “quietude,” especially in terms of expressing confidence in the workplace. A proverb sums it up succinctly: “confidence is quiet, insecurity is loud.” Though this line is sometimes heard in both the East and the West, in Chinese culture contexts bluster and overt confidence are considered low, base, and even “barbaric.” Except sometimes when talking to an underling, someone who is glib, bossy, or blustery is signaling that they do not have real power or influence. A persistent theme in the Confucian Analects is that people who are glib or showy, who talk too quickly, who emphasize profit over propriety, and whose actions do not measure up to their words, deserve dire criticism and mistrust (Analects 1:3, 3:1, 4:5, 4:9, 4:12, 4:16, 7:12). These are values that many Westerners

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If at any point the reader becomes concerned or even skeptical that so many terms may be used to translate a single Chinese word, we point out how many words it would take to accurately translate English "cool” into other languages—most often, “cool” itself is used, untranslated.

uphold, so they should be familiar. However, many Western—and especially American—businesspeople are taught to, and rewarded for, being assertive and outwardly confident. (This is notwithstanding the double-standard that many women face who are labeled "bossy” or worse for exactly the same behavior.) That training, and resultant behaviors, are highly counterproductive in Chinese and many other East-Asian culture contexts.

Quietude also helps explain an observation about understatement that is sometimes made by Western businesspeople working not just in China but elsewhere in East Asia. The observation is that, to Western perspectives, many East Asian businesspeople do not say what they mean. For example, as discussed in Chapter 2, to say “no” (as in, “no, we would not be able to make that deadline”) erodes the face of the person to whom you say “no.” As a result, whether or not “no” is the actual answer, to say so outright is considered very rude. Instead, as experienced China-hands know, “it would be difficult” means “no,” while “maybe” means “probably not.” Similarly, if someone is asked if they know or understand something, “I’ve studied it a bit” can mean “I am quite knowledgeable” and “I have some experience” can mean “I’m an expert.” Quietude is also operating beneath the surface in our discussion of Hank Paulson’s meeting with Zhu Rongji in Chapter 2: Paulson was not waiting to hear “yes,” he was waiting to hear “we hope to cooperate with you” (Paulson, 2015, p. 12). Once one has Awareness of this aspect of Chinese culture, it is fairly clear what the person meant.

We have tried to avoid too many predictions, in part because of how difficult China has proven to predict, but here we suspect that as the world becomes increasingly global and as the internet generation (eventually) comes to power in China, businesspeople will be able to meet on more of a middleground in terms of quietude, at least as regards assertiveness and modesty, so that such misunderstandings may become less common. Increasingly, Chinese businesspeople may become more familiar and perhaps comfortable with relatively assertive cultures to the point where assertiveness may

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This difference in how confidence is expressed is not unique to China-West divides, but sometimes also occurs within Western culture contexts, such as between Dutch and American businesspeople in interviews. To Dutch perspectives, Americans oversell themselves, while to American perspectives Dutch interviewees undersell themselves. When businesspeople are unaware of these differences, Dutch interviewees come across as under-qualified, while American hires are perceived as under-delivering (Hofstede, Hofstede, & Minkov, 2010, p. 136).

become less of an excuse to write off blustery foreigners. In the meantime, though, such foreigners have the opportunity to become increasingly global and thereby more effective in China by practicing modesty in the presence of their Chinese counterparts.

5.7.3 Zhi (^ty/Wisdom

A third normative concept governing relationships is zhi (®), which is often translated as “understanding,” “insight,” or better for our purposes, “wisdom.” Wisdom, zhi, is essentially a sense of good judgment as regards ethics and etiquette, which is acquired by cultural learning plus life experience. Having wisdom means being able to recognize not just the situations that have ethical implications and consequences, but to anticipate the implications and consequences of the particular choices and decisions one makes. Wisdom is what allowed Confucius to recognize that he needed to give different advice to students of differing temperaments in order to achieve positive outcomes for those students (Analects 11:22). The importance of wisdom was operating beneath the surface of Awareness, introduced in Chapter 2. Having Awareness, being “tuned into" subtle but important aspects of the various situations in which we find ourselves is important for identifying the etiquette and ethical cues that let us figure out how to behave correctly in Chinese culture contexts. Both the identifying and the figuring-out are encompassed by wisdom. Importantly, wisdom is neither exclusively Confucian nor exclusively Chinese—many Daoists could agree that wisdom is a virtue, and many ethical traditions, Eastern and Western, hold that a carefully-trained sense of moral judgment is important for behaving ethically (Van Norden, 2007). What is important to the ecosystem of relationships is that because the ecosystem is large and involves many subtleties, one must be able to perceive those subtleties in order to discern how to act properly. For example, a wise person accurately and quickly perceives the relationships and hierarchies operating in any particular situation and can then discern how to act in light of that understanding.

One business application of wisdom that is familiar to many people who have spent time in East-Asian culture contexts is gift-giving as it relates to maintaining relationships, including acknowledging successful negotiations and business deals. Not just brute knowledge of the situation, but insight—wisdom—is needed to navigate these situations. On the one hand, there is an expectation of gift-giving, which traditionally holds that bigger, more valuable gifts are exchanged to acknowledge bigger deals, as well as more senior people. Not participating in this practice erodes face for Chinese counterparts, can sabotage deals, and in many cases has been perceived by Westerners as reducing the competitiveness of Western firms in China. Yet, on the other hand, home-country laws, company policy, or both, restrict or can even eliminate the ability to give appropriate gifts. Wisdom is how the ethically cultivated person sees through the dilemma and acts well. A wise Western businessperson can commiserate with their Chinese partner that home-country restrictions are an unfortunate example of differing legal and moral standards, and can then give a gift consistent with those restrictions along with a carefully-written note acknowledging that the gift is inadequate w'hile extolling their respect for the Chinese partner and their ongoing cooperation (Bian, 2019).

5.1.4 YÎ (^/Uprightness

A fourth normative concept governing relationships is yi (j|), which is often translated as “righteousness” but that has religious connotations for many Westerners, so as regards business a better translation is “uprightness.” The original idea of uprightness, yi, was dutifulness with regard to the responsibilities acknowledged as appropriate within one’s “we” group and its relationships; for instance, the responsibility of a child to a father outstripping responsibilities to authorities in the sheep-story (Kroll, 2017, p. 550). In more depth, uprightness means acting in accordance with xiào, lï, and zhi—that is, actually behaving ethically, even when it may be difficult or inconvenient to do so. No matter one’s initial framework in ethics, whether it be Chinese or Western, Confucian or Aristotelian, doing the right thing sometimes requires the moral courage to uphold both ethical and etiquette ideals even when in the face of adversity or risk. This quality is uprightness. Uprightness also relates to face and guânxi: fulfilling one’s duties within one’s reciprocal relationships (guânxi) and promoting another person’s face can sometimes come at a cost, or at least risk, to you.

A familiar business example involving uprightness, yi, w'ould be when you are ordered to do something illegal (like ignore an accounting irregularity or fudge numbers in advance of a quarterly report), or you observe something problematic such as “bad” guânxi in the form of excessive nepotism or bribery. As we discussed in connection with supply-chain problems, “calling out" someone, even when justified in principle, is typically counterproductive in Chinese culture contexts. Not only can it slow down problem-solving, but it can introduce risk to you, your company, customers, and so on. One way that can happen is that, as a Chinese counterpart moves to save their own face (perhaps by breaking ties, suddenly finding a “problem” with a contract, or even flinging counter-accusations), and as they mobilize their gudnxi networks to reduce any professional damage to them, you may come under suspicion and find yourself on the defense, in addition to wasting time while the problematic behavior continues. Such problems are much more likely to be addressed, and you can maintain uprightness, yi, by not speaking out publicly about your suspicions of unethical or illegal practice, and instead privately speaking up about your concerns. In both China and the West, it is often difficult to know whom to talk to, but if you have cultivated relationships, you will have them available as a resource, both for advice on how to proceed as well as to navigate your way to having the problem addressed. By working quickly in private through close connections you and your firm have, you dramatically increase the chances of a successful resolution while minimizing the chance of blowback to you. (Sample scripts for how such difficult conversations might go are scattered throughout Chapters 2-4.)

5.7.5 Ren ({Z)/Humaneness

A fifth and final normative concept governing relationships is ren (fZ), often translated as “benevolence” or “humaneness.” In different w^rays, both are apt. On the one hand, humaneness can be understood as an all-encompassing principle, in the sense that the more ethically cultivated a person you are, the more fully you treat yourself and others humanely (Shun, 2002). This means that in interactions with others, you consistently practice the values scattered throughout this book but especially in this section—hierarchy, wisdom, propriety, and uprightness (Yu, Tao, & Ivanhoe, 2009). To be truly humane is to be all of those things. Our framework of

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The Confucian ideal of ren 0J.) governs behavior within relationships, but it is not constrained only to relationships. As we discuss, part of the concept is an all-encompassing notion of humaneness, or being a good person. However, that level of depth we leave for philosophy seminars—for discussion, see for example Hall and Ames (1987, pp. 110-130).

Context-First, Interconnectedness, Awareness, and the ability to apply those, Agility, is designed to show Western mindsets how to become fluid enough to not only understand but also behave in accordance with this comprehensive principle of humaneness (ren).

A narrower, but equally accurate, notion of ren consists in behaving benevolently towards those within one’s network of relationships, especially towards those who are your equals, juniors, and subordinates. As ever, the exact behavior that constitutes benevolence depends on hierarchy and the exact nature of the relationship (closeness, duration, rank in the firm, and so on). Concrete specifics of how to behave within relationships also depend on the preceding principles discussed in this chapter: does one understand and practice the common guidelines for proper behavior, including etiquette (11); does one show the respect and deference to one’s superiors while showing leadership towards one’s juniors (xido); does one do what is ethically required even when it is inconvenient to oneself (yi); and does one exhibit the insight needed to appropriately apply these principles to the particular situations in which one finds oneself (zhi)?

Although the foregoing list of normative concepts governing relationships is different from a comparable list of Western principles, there is nonetheless significant overlap. A standard list of Western ethical principles might start: integrity, honesty, respect, loyalty, wisdom, benevolence, compassion, justice, and so on. The Chinese list began: hierarchy, propriety, wisdom, uprightness, and humaneness. Superficially, some of these words are different, but the concepts intersect. Wisdom, the ability to have not just understanding but knowing where and how to apply it, appears on both lists. Whereas in the West we might talk about integrity to describe standing up for what is right in the face of obstacles, in Chinese contexts we talk about uprightness (yi). Whereas in Western contexts we might talk about respect and loyalty to describe how we should behave towards our superiors, our departments, our companies, and even our countries, in Chinese contexts we talk about hierarchy or “filial piety” (xido). Whereas in the West we might talk about benevolence, treating others well, or engaging in social responsibility, in Chinese contexts we would talk about humaneness (ren) both in general and specifically towards those with whom we, and our organizations, have relationships.

It is also worth stressing that even though “respect” does not appear overtly on the Chinese list, it is operating behind some of the principles, especially hierarchy (xiao) and propriety (II), and is also crucial to both face as well as guanxi. Chinese and Western perspectives alike prioritize showing respect. At its foundations, the concept is the same East to West—the difference is that one shows respect differently in differing cultural contexts. In Chinese culture contexts—and others around the globe—showing respect is not just about who speaks in what order, who leads a discussion, or who defers to whom. As one longtime traveler to East Asia put it,

whenever people acknowledge the history and culture of China (or Korea) while in these countries and show some familiarity with the customs, history, and beliefs, it makes working together easier and more effective. Some Westerners need to understand that respect is much more than a matter of not violating another’s rights; it also includes showing interest in and appreciation of their distinctive way of life ... it includes things that are about peoples and not just persons.

(Ivanhoe, Interview, 2020)