Doing business in China - the art of war?

Anti-bureaucratism is a constant feature in Maoist theory. The Maoists attempted to destroy the traditions of bureaucratization, regionalism, and localism (Tsou, 1968), with the idea of uniting Party and people, to bridge the gap between Party and the masses, and of controlling the cadres through pressures exerted by the masses. However, Chinese organizations remain excessively bureaucratic and compartmentalized. Instead of the old "class" system, there emerged a new "status" system, in which the position of an individual, not the heritage, distinguished that person from fellow comrades.

One revolutionary aim was to combat revisionism and hasten the creation of a classless society. Thus the Confucian value of self-cultivation and moulding of the personality as the basis of moral and political life, was adopted by the CCP to introduce ideals of self-education and the remodelling necessary to acquire the appropriate proletarian class attitudes (Dawson, 1978). Similarly, just as the Confucian educational system was concerned with developing Confucian virtues, the basic task of the new socialist education was to create heroic models of workers, peasants, and soldiers. A common slogan during the Cultural Revolution was "save the country by education". Schools and universities were closed down so that the educational system could be reformed. The new educational system undermined parental control by indoctrinating children throughout their schooling, separating children from parents and encouraging them to denounce their parents. Thus filial piety, a valued Confucian quality, lost its significance. Similarly friendship, another valued Confucian quality, often became strained under the pressures of the Cultural Revolution as individuals were forced to denounce each other for survival.

Strict control on thought and speech is contrary to Chinese tradition. Confucius considered it a responsibility of an individual to inform a superior when a mistake was made by the latter: stating that "If it becomes necessary to oppose him, withstand him to his face, and don't try roundabout methods". Yet this freedom was prohibited, and is reflected in the "Hundred Flowers" episode of 1957. Mao relaxed censorship, encouraging the educated classes to voice their views. A programme of "re-education" for those "rightists" who criticized the regime from "mistaken viewpoints" (Cotterell and Morgan, 1975) followed. The fear of voicing one's views and the high "uncertainty avoidance" Hofstede (1991) attaches to Chinese culture is perhaps less a product of a collectivist nature, and more that of the oppression and suppression experienced under the Communist rule.

Since the beginnings of economic reforms in 1978, the CCP seems to have relaxed its hold on the Chinese people's freedom, although it is difficult to estimate the magnitude of the difference between apparent and actual freedom. Given time and this "new found" freedom, the new-age Chinese should be able to recover the 60 years lost to political instability.

The Chinese hallmark

Despite the social changes imposed on the Chinese by the CCP, some traits of the Chinese culture have survived not only time, but also the Cultural Revolution. Summarised as the Chinese Hallmark, these include the areas of:

Harmony;

2Time and patience;

3Flexibility;

4Trust and collectivism;

5Communication;

6The unspoken rule of "Guan xi"; and

7The concept of "face".

Harmony. A key driving force underlying the Chinese culture is the concept of harmony or the maintenance of a balance of feeling. To secure harmony and happiness in the world, man must bring himself and his activities into a congenial relationship with the universe. The Chinese believe success is only achieved if one is at harmony with oneself, one's peers and the elements of the Universe (Heaven and Earth). In the face of conflict, the priority for a Chinese person would be to maintain harmony between the opposing parties. However, the Chinese believe there is a limit to everything (over or underdoing something will disrupt the balance); thus discipline is required in maintaining this balance. This discipline accompanied the long military tradition of the Chinese, who, in contrast to the opinion of many Western scholars, are capable of violence and swift retaliation, the countless wars and upheavals throughout Chinese history standing testimony to this fact. If Confucius was the "father" of the Chinese culture, then Sun Tzu, the Chinese strategist, was the "model" for strategic thinking with strong references to war. "A capacity to retain diverse viewpoints at the same time is a notable feature of Chinese thought" (Cotterell and Morgan, 1975).

Time and patience. Westerners value time, which explains the phrase "time is money", and which gives the Chinese an impression of their always being in a hurry. The Chinese, on the other hand, favour patience and calmness, which are virtues of Chinese culture, symbolizing sincerity, seriousness, competence and self-control. The possession and control of both virtues are demonstrations of strength and the Chinese people's reluctance for outright confrontation should not be mistaken for a sign of weakness:

Avoid direct confrontation when the enemy is strong. Lead the enemy into lowering its guard by giving the impression of yielding. No pride is lost until the war is lost. When the enemy lowers its guard, strike (Sun Tzu).

Sun Tzu also commanded the virtue of patience, arguing that "no matter how prepared one is, to rush into a battle is to expose oneself to the enemy". According to the Chinese strategist, time, used correctly, can be a most useful and powerful weapon, and outlasting an opponent's patience can often place oneself in a superior position.

Flexibility. The popular stereotype of the Chinese indicates that they are inflexible. This perception is perhaps caused by a lack of understanding of Chinese culture and of interaction with the Chinese. A popular Chinese proverb teaches; "to be successful in life and to achieve greatness, one must be neng qu neng shen (flexible)". The meaning of the proverb reaches beyond adaptability. In the Chinese context, flexibility also demands the ability, in a no-win situation, to yield (qu) if necessary, or simply to reason. A further Chinese saying teaches: "Nothing in life is impossible, unless one has doubts in one's own abilities". In understanding the Chinese mindset, one must consider that there is hardly anything the Chinese find impossible.

Sun Tzu advocates the principle of flexibility and shaping in war:

Just as water shapes itself according to the ground, an army should manage its victory in accordance with the situation of the enemy. Just as water has no constant shape, so in warfare there are no fixed rules and regulations...Therefore, do not repeat the tactics that won you a victory, but vary them according to the circumstances (Sun Tzu).

Trust and collectivism. The Chinese will only listen to the reason of those they trust. Trust is a valuable gift, and, for an "outsider" is the only real passport into Chinese community. Prior to acceptance, an "outsider" can expect constant suspicion, resistance, and endless probing. Trust is hard-earned and one has to prove worthy of it. Trompenaars (1993) describes the Chinese culture as diffuse, with the whole individual being involved in relationships, and where "private" space is larger but "public" space is smaller and carefully guarded. The Chinese culture "encourages complex hierarchically based interrelationships and interdependencies" (Redding, 1980) and is "collective oriented" (Hofstede, 1980). This suggests that the Chinese are a communal race, existing in groups whose social norms take precedence over individual needs. This sustains a "them and us" mentality. The crossing of the boundary between "them" and "us" can be likened to the induction into a family. An old Chinese saying: "Priority lies in the crisis at hand, and not in private concerns" holds true to this day within the Chinese culture. Crisis, in this context, is any multi-faceted situation which involves a large number of people, as opposed to the restricted domain of the individual. To ensure the survival of the majority, if necessary, the Chinese are willing to sacrifice the minority.

Hofstede (1991) further suggests a fifth dimension of Chinese culture (Confucian dynamism) characterized by long-term versus short-term orientation. The Chinese strongly support the idea of looking forward and planning ahead rather than assuming a current consumption. This dimension can be associated with the Chinese collectivist and distrusting nature, which views "outsiders", namely foreign investors and expatriates, as short-term players who do not fit into their long-term plans, and who are therefore not readily trusted or easily accepted.

Communication. Interaction and communication are fundamental components of daily life. A mastery of communication skills within the Chinese context, will enable a quicker and smoother integration into that society. The level of trust between individuals often dictates the way they communicate. From observation, two diverse forms of communication exist among the Chinese. Communication between "accepted" members of a group is free and uninhibited, whereas communication in the presence of an "outsider" restricts the freedom of expression.

Chinese communication is multi-levelled. To the "outsider's" untrained eye, the subtle movements made by Chinese to convey a message or add emphasis, are unlikely to be noticed. To the Westerner, big arm or body movements may be acceptable body language, but the Chinese consider this threatening and lacking self-control. The Chinese preach the virtues of self-restraint: "If one can control one's emotions and impulses, one has self-control. If one can control one's self, one has control over any situation".

The choice of words is important when communicating with a Chinese person, as misinterpretation may lead to misunderstanding. Likewise, given the indirectness of Chinese communication, one would be wise to "read between the lines" for double or hidden meanings. Often, a seemingly harmless statement made by a Chinese person will hide a message within the apparent message. Although the Chinese do not deliberately hide the truth, they frequently do not offer it in a straightforward Western manner. They describe their communication style as "wan zuan", which is non-confrontational, non-provoking, non-threatening, polite and graceful, but still carrying the full meaning and force of the message. The Chinese style of communication has adopted the attributes of Tai-chi, an ancient Taoist form of martial arts, still practised today. The strength behind Tai-chi is derived from the force and momentum of the opponent's moves and it is ever-changing in response to each attack. This is exactly how a Chinese person communicates. It is often difficult for a Westerner to anticipate or follow the Chinese train of thought and flow of conversation.

"Guan xi". "Guan xi' has become a familiar term among those involved with Chinese society. Ahmed and Li (1996) explain "guan xi" as fundamental in directing social and personal behaviour in China, referring to it as the relationship between people or organizations which implicitly indicates assurance, understanding and mutual obligation. Simply described, it is a co-operative relationship between individuals, as represented by the Western phrase: "You scratch my back, and I'll scratch yours". However, recent writers agree that "guan xi" should not be equated to corruption or nepotism. Ambler (1994) suggests that it is more akin to public relations practised in the West, the major difference being that its focus is on building interpersonal relations. Davies et al. (1995) highlighted a number of benefits to be derived from "guan xi":

* it can serve as an information gathering mechanism;

* it can act as a means of securing access to important resources;

* it smooths the process of gaining privileges such as government licences etc.;

* it is often used to enhance company reputation;

* it can contribute to the building and enhancement of competitive advantage; and

* it can serve to open doors where once they were firmly shut.

In China, the use of "guan xi" is the quickest and surest route to accomplishment. "Who one knows, rather than what one knows", determines success in China. However, "guan xi" is a delicate rule-governed tool. Acceptance and trust are paramount to its use. A favour granted will be met by an unspoken promise of a favour to be returned in the future, but it involves a sensitive choice of words, and is not to be abused.

The concept of "face". The Chinese written character for "face" is a symbol representing respectability, reputation and pride. When a Chinese is said to "love his/her `face'", it implies that the individual measures his/her status in society, cares how he/she is seen in public, and displays a pride in him/herself. The traditional "class" system has given way to a new "status" system, in which the position of an individual, distinguishes that person from fellow comrades. One of Trompenaars's (1993) seven cultural dimensions identified the Chinese culture as ascriptive rather than achievement-oriented. Status, in ascriptive cultures, is generally independent of a task or specific function and is attributed to an individual who is distinct and not easily compared with others. Performance is partly determined by the loyalty and affection shown by subordinates and which is, in return, displayed. For example, while the Chinese still deem it proper to address each other by their family name at work, a new protocol has emerged - the inclusion of one's title. Titles, to the Chinese, symbolize importance and achievement, and demand recognition. A Chinese has "face" when addressed by title, by superiors, peers and subordinates alike. It is a form of distinction that evolved during the communist regime and is usually linked with seniority as opposed to capability.

Many believe that the loss of "face" only occurs when a Chinese is criticized, humiliated, ridiculed or subdued in public. This is, however, not true. A manager who decides to discipline a Chinese employee by singling the person out in public may provoke and encourage vengeful reaction against him/herself, and therefore negative feedback should be shared in a one-to-one context. However, if the manager does not proceed with caution, discretion and tact, he/she could still make the employee lose "face", which according to Laserre and Probert (1996) "can have considerable disruptive effects" whether the subjugation is conducted publicly or privately.

Corporate culture - a new concept

According to Deal and Kennedy (1988), a combination of forces - changing business environments, a new workforce and advances in technology - are causing a breakdown of the large traditional, previously-dominant hierarchical organizations, resulting in highly decentralized organizations where work is done in small, autonomous units linked to the mega-corporation. For this to work, strong cultural ties are required. Corporate culture has been adopted by many corporations to provide structure, standards and a value system in which employees can operate. Many writers (Ackroyd and Crowdy, 1990; Mead,1994) consider that corporate culture provides a strong motivational force by offering its members a sense of identity and a source of commitment. Thus corporate culture becomes a framework for interpreting reality, and for moulding organizational behaviour. It is regarded as the unseen and unobservable force that is behind the tangible; a social energy that communicates with and inspires people to act. Transcending leadership style, power structures, organizational structure, decision-making processes, functional policies and management systems, it can result in one organization developing competitive advantage over another, although ostensibly both have access to similar resources.

Deal and Kennedy (1988) cite many examples of companies finding success through strong corporate cultures - Procter & Gamble, Delta Airlines, General Electric, Johnson & Johnson, 3M, Price Waterhouse & Co., Hewlett-Packard, Chubb Insurance, Leo Burnett Advertising Agency, etc. However, these companies all share one common characteristic - their corporate cultures are based essentially on the American culture and spirit.

The USA and "Americanization" have influenced the world significantly in the last century. McDonald's and Coca-Cola are prime examples of American influence on global lifestyles. Ritzer (1993) comments that McDonald's is one of the twentieth century's most influential developments, affecting a wide range of undertakings including: the restaurant business, education, work, travel, leisure activities, diet, politics, the family, and many other sectors of society. Similarly, wherever a Japanese company ventures, Japanese culture is introduced to employees, suppliers, partners and customers. Through its economic growth since the end of the Second World War, Japan has drawn the world's attention to its own unique culture and style, and has persuaded many companies to adopt the Japanese management concepts.

Introducing a corporate culture into a host environment with sufficient knowledge to understand and sustain the transference of the guest culture, could be considered as just a continuation of the home office functions in a different location. For example: in Singapore, multinational corporations are likely to find their corporate cultures accepted in entirety. On gaining independence, Singapore welcomed foreign investments and expertise. Its people had developed an international outlook, tolerance and adaptability as national traits because of its multiracial population, free access to information, and cross-cultural programmes. Singapore had also encouraged a common national language (English) to ensure homogeneity in communication.

Success may be less likely when transferring a corporate culture to a nation (per se China) that few other countries can claim to understand. China has a strong national culture, stemming from its history of a closed-door policy, which guarded the leakage of information and restricted external influence of any kind, so that its people only know one way of doing things - the Chinese way.

Consider the following allegory

An organization has its goal or destination. Its corporate culture is the guide with a map suggesting all the possible routes members can take to reach the destination, and the organization itself is the vehicle. Members of the organization have only to refer to the guide, take one of the suggested routes, and they will eventually reach the same destination. There should hardly be any ambiguity and perceptions should be uniform as all members have the same map and look out from the same viewpoint.

However, in the case of China; the vehicle (the organization) is driven by a head office (HO) representative equipped with the map (corporate culture) drawn up by HO. In the passenger seat sits a local Chinese, who is more accustomed to another mode of transport - (China) - and has his own map (Chinese culture). The HO representative is likely to encounter the following problems:

* the map does not correspond to the road system - lack of understanding of the Chinese culture, language and environment;

* the local Chinese doubts the accuracy of the map, thinks it useless as he knows the roads by heart and the only map required is that in his head - the local distrusts the foreign corporate culture and falls back on the Chinese culture; and

* the local Chinese is disoriented by the differences in perceptions, between the two vehicles, and the HO representative does not understand this confusion - the local Chinese views the world in the Chinese context while the representative introduces non-Chinese concepts and perceptions.

Hodgetts and Luthans (1994) define perception as a person's interpretation of reality. People in different cultures often have different perceptions of the same event; thus a direct transfer of corporate culture from a foreign organization into a Chinese environment without consideration for and sufficient knowledge of the national culture will result in a conflict of perception between both parties, inviting resistance from the Chinese. The traits which distinguish the Chinese from other cultures are also barriers to co-operation between the Chinese and the "Outside World".

Doing business in China

As a culture has its traits, corporate culture has its elements. Deal and Kennedy (1988) summarize these as: business environment, values, heroes, rites and rituals, and the cultural network. An understanding of the Chinese Hallmarks, as values dictating behaviour, is essential to successful transference of corporate culture, whereas a lack of understanding is a significant barrier when doing business in China. These singularly Chinese values are not easily replaced by corporate intentions, which are subject to distrust and restricted by the perception of their having a short-term application.

Western corporate values, embraced by all international hotel companies in China, define success in concrete terms and establish acceptable standards of achievement from personnel within an organization. In China, however, individual success is not a major focus, performance appraisals are abhorred and staff motivation is based on security not achievement. Individual responsibilities are not readily accepted and the empowerment which most international hotels seek to pass to their operational staff, is positively shunned by the Chinese whose hallmark incorporates the collectivist approach to problem solving, thereby stifling swift individual action to alleviate a guest complaint. Hospitality managers must also appreciate that service-oriented jobs are not highly regarded in the Chinese society. Service, in Chinese, is "fu wu". The character, "fu", also means submission. The communistic concept of "everyone being equal" has instilled a Chinese view that having to serve someone, especially a fellow Chinese, is to be reduced to servitude, which, ultimately, leads to a person in that position having no "face" - no pride and no respect from society. A common aspiration of all international hotel companies is the provision of service quality which will please guests and ensure repeat business, but against this background of perceived "loss of face", it becomes difficult to engender a culture among operational staff, which can deliver the level of service required.

As discussed previously, the use of "guan xi" is the most favoured practice in China, whether in business or social life. Understanding and accepting this fact can often ensure success, whereas not recognizing the potential of the Chinese "guan xi" and not adapting operating systems to it, may court problems. The Chinese workforce, especially in the hotel industry, presents additional hurdles for companies operating in China by virtue of its fundamentally different working ethics, styles and attitudes. At China World Hotel, one workforce value most apparent is loyalty to the local management team. Should there be a contradiction in the instructions given by a Chinese and an expatriate manager, a Chinese employee would follow those given by the former, thereby undermining the authority of the corporate appointment.

The rites and rituals of an organization are the systematic and programmed routines of organizational day-to-day life and are heavily influenced by the organization's "heroes", whose behaviour will be viewed as exemplary, and emulated. In the Chinese context, non-conformity in the behaviour of an "outsider" to Chinese behaviour is often dismissed as "peculiar", and sometimes ridiculed. Chinese employees at China World Hotel held strong opinions on the appropriate behaviour befitting individuals from each organizational level. For example, an expatriate front office manager assisting the concierge staff when manpower was short did not earn respect from the Chinese who viewed this as pretentious and a lack of authority on the manager's part. Corporate values personified by the Western (and likely HO-appointed) "Hero" were rejected. Any individual not from within the Chinese circle was classified by the Chinese as an "outsider". The Chinese "them and us" mentality restricted identification with the words, actions and values of an individual from another culture and it was usual for the Chinese to identify their own heroes, embodying Chinese values. The "local heroes" identified at China World Hotel were the Deputy General Manager, the Personnel Director and the Union Chief - all individuals of considerable power and with absolute control of the Chinese employees in the organization.

Deal and Kennedy (1988), suggest that the primary (but informal) means of communication within an organization, and the carrier of corporate values and heroic mythology, is the cultural network, or "grapevine". Since communication between Chinese and "outsiders" is guarded, non-Chinese management find it difficult to communicate with locals on the concept of corporate culture. Deal and Kennedy also indicate that "working the network effectively" is the only way to get things done or to understand what is really going on. Convincing the Chinese of the benefits of corporate culture, winning their support and, eventually gaining endorsement of the transference of a non-Chinese concept, is only achievable if both parties are communicating at the same level and in the same context.

The change process

Current literature (Hofstede, 1980, 1993; Kedia and Bhagat, 1988; Laurent, 1986; Schneider and de Meyer, 1991; Sutton, 1995) maintains that when national and organizational cultures come into conflict, the first is likely to override values in the second. It further suggests that in China cultural differences restrict the degree of transferability and the ability of management to operationalize certain management practices; and to achieve cultural change successfully it is important to understand the perceptions of the different groups within an organization.

Consequently it seems that the Chinese are disinclined to accept corporate cultures that do not reflect their own cultural norms. Therefore, it is proposed that the transference of corporate culture into Chinese society should be a change (adaptation) process. In coining the term "social navigation", Parker and Lorenzini (1993) describe the process of culture formation and change. The International Institute for Management Development (1992) suggests that cultural perception occurs at different levels: sociological, historical, evidential and psychological (SHEP) (Parker and Lorenzini, 1993). Given that perceptions differ between cultures, SHEP differences between Chinese and "outsiders" will create a distance between corporate culture and the Chinese culture.

Sociological and historical distances result from distrust and non-acceptance by the Chinese, differences in communication styles, lack of understanding of the Chinese cultural evolution, and stereotyping and misinterpretation of the Chinese culture. Economic differences, in terms of salary-scale and lifestyle, between the Chinese and the expatriates/foreign investors compound the evident social segregation. These precipitate evidential and psychological distances between parties representing the two cultures, created by perceptions of the other's behaviours and the assumptions made thereafter. The reluctance to give up a Chinese method for a more practical approach to accomplishing a task, for example, may be generalized as a Chinese characteristic of inflexibility. The different mentality and behaviour of a non-Chinese is "evidence" to the Chinese that the individual does not understand the Chinese and should be distrusted.

To realize the transference of corporate culture, these differences should first be reconciled. A balanced two-way exchange should, through time and understanding, diminish SHEP distances set by disparities in transference of corporate culture. The spiral in Figure 1 represents possible two-way communication between the two cultures. This transference can be likened to a marriage, where mutual understanding is required. This `"marriage" involves three stages - the discovery stage, the comprehension stage and the collaboration stage (see Figure 2).

As the distances are interlinked, a reduction in one distance should inevitably result in reductions in the others. Although it is impractical to suggest a critical path to reduce SHEP distances, as each combination of cultures presents a different scenario, it is reasonable to begin with the social and historical aspects of a national culture, which generally influence the cultural mindset (evidential influence and psychology).

In the discovery stage, interaction between the two cultural parties will be limited. Both parties will experience uncertainties in communication and restriction set by unfamiliarity. At this stage, questions on norms and practices should be asked with care, sensitivity and respect, and answers should be interpreted in the appropriate context, which should then be followed by better formed questions.

In the comprehension stage, each cultural party should begin to identify and understand similar and complementary areas within both cultures as awareness and the rationale behind the basic differences becomes apparent.

In the collaboration stage, both parties should be able to redefine boundaries and create new areas in which the similar, complementary and mutually-beneficial qualities of both cultures can co-exist without sacrificing either party's original goals or identity.

However, because the cultures are essentially different, a minimum distance will always exist between the two cultures, representing unique unalterable elements within a culture, or attributes of a culture that are unacceptable but tolerated by the other party.

Cross-cultural training within the international hotel groups appears to be given some credence as one strategy for enabling expatriate managers to appreciate the potential difficulties in marshalling a workforce with negative ideas about service, and the offer of staff development via language and general training is another attempt to instil corporate values into operational workers. The use of Western management trainees on sandwich placement is also increasing as international hotel managers in China look to project such proactive self-starters as role models for their reluctant Chinese operatives.

Observations from China World Hotel do suggest that the younger generation of Chinese have the potential and capacity for change. Although the Chinese cultural traits are still prevalent, younger Chinese people seem to demonstrate a higher tolerance for cultural differences and more willingness to accept alternative concepts and lifestyles. However, this does not constitute a full endorsement of the Western concept of management, as summarized in an article by Professor Huang Da, President of the People's University in Beijing:

In our eyes, studying commercial and management methods is a matter of technique. One can make his choice, it is not dangerous. To study theory contains an ideological element and that is harder to control; but it is impossible to have a full understanding of business management, what we should adopt and what we should not adopt, without a full understanding of the theory behind it (Baokan Wenzhai, 1993).

The lack of understanding of the concept of corporate culture will prevent its full acceptance by the Chinese purely because they would not trust what they do not know. When encountering an unknown entity, a Chinese person would always retreat into the safety of the collective, as suggested by the Chinese saying: "In unity there is strength".

Additionally, as corporate cultures are transgenerational, requiring long-term development and sustenance, the implementation of the Contractual Labour System in 1992/93 by the Chinese Communist Party poses the threat of discontinuity. With the new labour policy, the risk exists that (management) staff may not remain long enough with an organization to ensure continuity and consistency in its corporate culture.

Another barrier preventing younger Chinese people from learning, understanding and, subsequently accepting the Western concept of corporate culture, is the older generation currently in positions of power. The concept of importing a working culture that encourages a change in staff mentality, attitude and behaviour is generally considered a challenge to their authority, and unwelcome. The more persistently an organization is perceived to introduce and transfer its corporate culture, the tighter the control senior Chinese managers will have on their local staff.

Therefore, to successfully transfer corporate cultures, organizations need to improve their understanding of, and adaptation to, the Chinese culture, continuously evolving to avoid direct confrontation with the Chinese society and complete rejection.

It is suggested that as the younger generation of Chinese are exposed to more international influence, the Chinese culture itself will undergo a natural evolution in which it will reshape its mentality and redefine its values. This will not only allow the "Outside World" to achieve a better understanding of the Chinese mindset but will also effect a more ready acceptance of international concept.

Conclusions

The world today is witnessing a perhaps more subtle and less violent revolution in China, as tomorrow's economic giant exposes itself to the influx of international influence, from the "hamburger" lifestyle and Western popular music, to the modern management concepts of autonomy and empowerment. Although China is surrendering to change, its national culture and identity remain steadfast.

The Chinese culture is no mystery, but its unique characteristics, especially those developed in the last generation, were lost to the world during the Communist regime, and need much exploring and understanding.

Multinational organizations seeking business opportunities and intending to transfer their corporate cultures into China face the mammoth task of researching into the Chinese culture and traits, and localizing their corporate cultures on the basis of these Chinese characteristics, for only then will their corporate cultures be recognized by the Chinese.

Corporate culture should not, however, be seen as a substitute for the Chinese culture. Rather, it should be an extension of the local culture at an organizational level with organizational goals and functions. Senior Chinese managers, unfortunately, maintain the view that the introduction of corporate culture is an organizational attempt to control Chinese staff.

Therefore, while many multinational organizations recognize the need to understand the Chinese culture, and despite the efforts some have already invested in localizing their corporate cultures, a successful and effective transference of corporate culture will only occur in a future generation where the Chinese and the rest of the world have attained a level of mutual understanding. This demands a future generation of Chinese who no longer segregate themselves from the world, politically, economically, socially or culturally, and who are ready to co-operate with the "Outside World", recognising that changes are inevitable and should not be resisted.

Figure 2 The three stages of mutual understanding

Figure 1 The cultural communication spiral

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