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5 things Confucius could teach us about business

by Charlie Caruso on January 24, 2013
Business

The extraordinary growth of the Chinese economy since 1980 has revolutionised what we had previously understood about industrialisation and economic growth. This has not been by chance, and I am not alone in thinking that their culture and the influence of Confucianism has played a large role in their story.

Having recently submitted a research paper on the Chinese economy, I have had the pleasure of investigating and reading extensively about the characteristics of Chinese culture and its current effects on global business culture.  As Confucius said;

“If I am walking with two other men, each of them will serve as my teacher. I will pick out the good points of the one and imitate them and the bad points of the other and correct them in myself.” Confucius

Bearing these wise words in mind, I have drawn up what I believe are 5 characteristics of Chinese business ideology that I feel would be useful for imitation:

1.     The way they perceive a ‘crisis’

Crisis in the Chinese language (pictured) literally translates to a combination of Danger and Opportunity. Every ‘crisis’ poses a potential opportunity to the Chinese, only if that ‘danger’ is managed properly. This mentality has made Chinese thinking positive and flexible, providing an appetite for change and opportunity.

The Chinese similarly believe that when everything is going well, one must plan for the worst case scenario.  This is not to say that you should be prepared to fail, far from it. What the Chinese believe is that when you find success, you have much more to lose, and that in order to prevent future failure, one must effectively evaluate worst case scenario planning to ensure a business is adequately prepared for any “crisis”.

Success depends upon previous preparation, and without such preparation there is sure to be failure. Confucius

2.     The importance of “Guanxi”

“Guanxi” literally means “relationships”, and interpersonal relationships in Chinese business is extremely valuable, as Guanxi has been stated to be their ‘second currency’.

The Chinese business mentality is very much one of “You scratch my back, I’ll scratch yours.” In essence, this translates to exchanging favours, which are expected to be done regularly and voluntarily. What underpins this ideology is the concept of respect within a business context. Respect between all with whom you conduct business with should be something we imitate from the Chinese business culture, as Confucius said;

Without feelings of respect, what is there to distinguish men from beasts? Confucius

 3.     Strategy and Preparation

The significance of strategy in Chinese business cannot be fully understood without knowledge of the pride the Chinese have in their military history. To summarise, strategy to the Chinese is like chaos is to children, it’s in their nature. While the concept and usefulness of strategy has not been lost on Western businesses, the question remains as to how much attention we truly give it.

Is ‘strategy’ just a buzz word, a New Year ideology soon lost in the madness of trying to run your business, or is every business move you make coming straight from your business strategy? It’s something worth considering.

If you think in terms of a year, plant a seed; if in terms of ten years, plant trees; if in terms of 100 years, teach the people. Confucius

If you do not change direction, you may end up where you are heading. Lao Tz

4.     Re-evaluating what success really means

The idea that a collective board of a major corporation could review their annual financial reports, see a small profit margin and say “hey, it’s not a loss, well done everyone, no need to do any more than we’re doing”; could appear lunacy from the Western business culture perspective.  But, such perspectives toward profit and success are prolific within the Chinese business context.

The Confucian discipline, Mencius, made it abundantly clear that it was immoral of rulers to concentrate on profits for their respective states, thus ethics was deeply incorporated into business activities. Consequently, as business behavior was encouraged to be governed by the ethical principles, it has held that righteousness outweighs profits. Removing the solitary goal of profit margins, and instead embracing the fact that the bottom line, so long as it’s not loss, is not the main aim of the game is a valued concept.

Better a diamond with a flaw than a pebble without.Confucius

5.     What Confucius said…

Confucianism and its role in Chinese business culture cannot be understated. Confucianism has been the most profound and significant thought system in traditional Chinese culture and for centuries has influenced China’s economy, politics, and business culture. Without going into too much more detail than simply stating Confucius was an extraordinarily wise man whose words, even to this day, can prove very valuable to businesspeople around the world, I will end this article with a collection of what I feel are very useful words that I hope you find value in, for your business.

When it is obvious that the goals cannot be reached, don’t adjust the goals, adjust the action steps. Confucius

Instead of being concerned that you have no office, be concerned to think how you may fit yourself for office. Instead of being concerned that you are not known, seek to be worthy of being known. Confucius

The superior man makes the difficulty to be overcome his first interest; success only comes later.Confucius

 

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Top image: Steve Webel

Charlie Caruso
Charlie Caruso is the Editor and Co-Author of Understanding Y, a book she produced alongside 15 leading inter-generational commentators that reveals the secrets of how to engage, attract and communicate with Gen Y. Charlie is also the Founder of PuggleFM, an award-winning online radio station and podcast portal for parents and families
 
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