From Collectivism to Individualism: The Changing Culture in Chinese Family Firms with The Fade of Confucianism

Introduction

Accompanying the strong economic growth over the past three decades, China has been an economic giant among nations of the world. The economic boom has caught a profusion of scholars' attention to find out the impetuses of China's rapid development. Among different dynamics of China's economic growth, Chinese family businesses are crucial to China's success. By 1999, there 1,508,857 private firms employing 20,220,000 workers in China (Lan, 2002, cf. Wu, 2006). According to Backman (1995), over 70% of corporate wealth in Southeast Asia is controlled by the Chinese families. There have been many articles on Chinese family enterprises. Inter alia, many researchers put their focus on the cultural impact on the firms as Chinese culture, which has been mainly influenced by Confucianism, significantly differs from that of the West which has been generally affected by Christianity. For instance, Hofstede (1980) did his cross-cultural study and concluded that the Chinese score higher on power distance but lower on individualism than most Westerners. The research of Hofstede has demonstrated that Confucianism shed new light on contemporary studies on business culture which was mainly dominated by the Western-oriented business culture theories.

Although it has been realized that Confucianism is the basis of both the society and businesses not only in China but in other countries nearby, most of the researchers have focused on how Confucianism has influenced the Chinese culture and Chinese businesses with reference to Hofstede's study. However, researchers have rarely realized that the Hofstede's conclusion on Chinese culture might be outdated due to the dramatic social, economic and cultural changes in China over the last three decades. In addition, few articles have put their major concern on the change of Chinese culture and hence the change of the culture within Chinese family businesses, and the possible future issues resulted from such changes. The aim of this essay is to manifest the change of Chinese culture, especially the view that Chinese family business owners are more collective-focused than Western counterparts with reference to Confucianism, and the impact of Hofstede's study on Chinese family businesses. Then some unique challenges these enterprises may encounter will be discussed and finally a possible solution with reference to the experience of Japan will be given to. The next section will provide a literature review on Hofstede's (1980) work and previous researches on the role of Confucianism in Chinese family business.

Literature Review

According to Schein (cf. Brewis, 2007), organizational culture refers to the shared beliefs, norms and values about priorities and appropriate methods of undertaking specific tasks among members of a particular organization. There is no doubt that organizational