Confucianism as one of the Chinese major philosophical mainstreams can be applied not only in a private but also in a public or business context.
In business Confucian values can especially be of importance when it comes to management and leadership. In this context it is of minor relevance whether a European or a Chinese company plans to adopt a Confucian leadership strategy. Europeans could in principle also integrate Confucian values into their strategy, because it simply appears to make sense. However the point may be that Confucianism originates from China. Since it is an indigenous philosophical stream people there are traditionally used to this kind of values. Therefore in case of a Chinese company an identification of the employees with Confucian values in the field of management and leadership is much more likely. Especially in management and leadership it is essential to not impose strategies on employees where an identification with these values is in question due to their foreign provenance. This includes Western strategies unmindfully applied in China as well as the other way round.
In this article three different perspectives on Confucian leadership strategies are discussed. A Confucian leadership strategy whether applied in Europe or China is strongly supported by Werner Schwanfelder (2006) in his book “Konfuzianismus im Management – Werte und Weisheit im 21. Jahrhundert”[i]. Werner Schwanfelder is sales director at Siemens AG and responsible for divisions in Shanghai, Beijing and others.
The second contribution comes from Alexander Gruchmann (2008). In his publication “Mitarbeiterführung in China. Eine kulturbezogene Betrachtung”[ii] he tries to shed some light on the applicability of various western-originated leadership strategies in a Chinese context.
The last perspective on this topic is presented by Po Keung Ip (2009), who generally holds a critical view regarding Confucian teachings implemented in fields of business and management. In his article “Is Confucianism Good for Business Ethics in China?” he argues that in practice Confucius’ moral person Junzi cannot serve as an appropriate role model in a leadership context.
Confucianism as leadership strategy
In his book Schwanfelder (2006) focuses on the manager as leader. He describes how Confucius’ teachings can help to improve the manager’s ability in a leadership position. This also yields positive effects on his personnel regarding identification with the working group and tasks at hand. The scope offered in his book ranges from the manager’s personality, attitude and tasks to his leadership behaviour and the objectives to be achieved. This part of the article covers the essential aspects of his book, namely the manager’s leadership behaviour and personality.
Generally Schwanfelder (2006) distinguishes between manager and leader. In his opinion qualifications for leadership exceed those required for a management position, which becomes obvious in particular when managing the workforce (p.77). The manager is a well trained professional and represents the practitioner whose job is described by making decisions and monitoring his personnel. By contrast a leader additionally needs a convincing personality. Therefore leadership is bound to personality and not simply a matter of training compared to managing as such (Schwanfelder 2006, p.70).
Leadership responsibility calls for certain character traits, such as empathy and communicative abilities. Furthermore classical virtues, such as respect, wisdom and virtuousness play a major role. In addition the leader also needs to have managerial know-how, because in the end he will be judged on grounds of his results. However there does not exist an ultimate strategy that could ensure leadership success, but generally frankness, the capability to differentiate, focussing on individual employee’s positive qualities and encouraging talents are major criteria to be taken into account.
When leading a team leadership behaviour comes into focus. A leader shall be able to motivate his team, otherwise success is unlikely to be achieved. Here Schwanfelder (2006) alludes to Confucian virtues: Leadership behaviour should be based accordingly on humaneness, decency and lenience. Humaneness is expressed by respect, while decency implicates righteousness, modesty and sincerity. Lenience on the other hand includes persistence, patience and consideration towards employees. If all these traits are finally embraced by authenticity and true identification with the leadership task, it yields a high level of trustworthiness. Additional essential criteria for exemplary leadership behaviour and motivated employees are enthusiasm and dedication. Leading by example is quite vital to the employee’s motivation (Schwanfelder p.70). If the leader himself does not show enthusiasm and trust in what he and his team are accomplishing, there cannot be any dedication expected by the employees in turn.
As mentioned earlier successful leadership requires certain character traits, because appropriate behaviour is considered a core competence. Here Schwanfelder (2006) views Confucian character traits as an appropriate base for successful leadership.
Since a leader is also a role model he or she should be aware of how his or her behaviour impacts the team. This awareness needs to be cultivated by constant reflection. Therefore a leader should be able to cultivate his or her own personality and emotions. This in turn implies life-long learning and cultivation regarding the self, which includes being frank about one’s own shortcomings. These attitudes present important Confucian character traits which are required for exemplary leadership (Schwanfelder 2006, p.85).
Professionalism is a trait which even goes beyond appropriate behaviour as such. It can be described as giving something without expecting a return, hence it becomes visible in situations where reciprocity is not expected (Schwanfelder 2006, p.150). Professionalism is further associated with decency, conscientiousness and a sense of honour, which together implies fulfilment of duties even under difficult circumstances.
The virtues of professionalism are corresponding with Confucian virtues like modesty and sincerity. These two are both associated with further virtues like decency, courage and consistency. The latter in turn can be partly associated with righteousness and humaneness which again present Confucian virtues. Professionalism furthermore implies practical qualities such as communication skills and psychological qualities like empathy (Schwanfelder 2006, p.151). Modesty as a feature of professionalism applied to a business context means to commit oneself to value creation and the company. Also modesty is appropriate regarding one’s own impeccability and self-evaluation. Sincerity as another feature of professionalism is equally important. However omnipresent sincerity is neither desirable nor feasible. Rather an attitude towards sincerity is essential based on the fact that it builds authenticity and reliability (Schwanfelder 2006, p.160). Additionally sincerity creates a base for both courage and consistency. To truly realise one’s faults requires courage. After realising both courage and consistency are needed for self-improvement, due to the fact that facing change needs courage to start and consistency to continue with self-improvement. Empathy on the other hand is an important quality, because it helps comprehending other people and accordingly their behaviour. The more the leader understands the behaviour of his or her team members, the more can he or she can adjust his or her own actions.
To summarise briefly, Schwanfelder (2006) addresses in his book “Konfuzianismus im Management – Werte und Weisheit im 21. Jahrhundert” the by him interpreted Confucian virtues authenticity[iii], humaneness or benevolence[iv] and decency. In total sum they imply further Confucian virtues such as righteousness, trustworthiness[v], sincerity[vi] and leniency[vii]. Accordingly he integrates these virtues in his vision of a Confucianism-driven leader with exemplary behaviour and personality.
A western-originated approach to an appropriate leadership strategy for China
In his book “Mitarbeiterführung in China. Eine kulturbezogene Betrachtung” Alexander Gruchmann (2008) examines various western leadership strategies regarding their applicability in a Chinese context. Thereby he mainly focuses on transactional and transformational leadership, as well as on the leader-member-exchange theory (LMX).
For Gruchmann (2008) western management strategies or leadership theories are generally very limited with regard to their applicability in China (p.62). Accordingly he argues why approaches such as transactional leadership, Management by Objectives and Management by Exception are rather not applicable in China.
Transactional leadership presents an individual-centred approach and describes a rational and reciprocal exchange relationship between employee and supervisor. While the employee’s performance shall be in line with the objectives of the organisation, the grade of fulfilment of these objectives is determined by his or her individual motivation and performance. Therefore the amount of recompense is also defined by individual performance. However this approach only works within an environment where employees discern themselves as independent and autonomous from others (Gruchmann 2008, p.59). Within a Chinese context this theory needs to be adjusted, because of the prevalent collectivist structure. Furthermore the reciprocal exchange modus yields difficulties in terms of losing face, when an employee is unable meet the stipulated objectives.
Management by Objectives (MbO) is contra-productive within a Chinese context as it includes public performance evaluation. However conflicts arising from praise or criticism need to be avoided, based on the fact that it disturbs harmony as a prevailing value.
The Chinese perception of harmony is also negatively affected when using Management by Exception (MbE) requiring the supervisor’s intervention in case delegated tasks are not fulfilled properly. Yet Gruchmann states that it is possible to partially adjust MbE to Chinese conditions and presents a passive MbE model. A passive MbE means that in case of difficulties employees seek supervisor’s help autonomously. This autonomy is described by realising failures and difficulties independently and therefore demonstrates the employee’s capability to take a holistic point of view which is linked to Chinese Confucian tradition (Gruchmann 2008, p.62).
In the end Gruchmann (2008) argues that only transformational leadership and LMX are more or less compatible with Confucianism.
Transformational leadership is not based on a reciprocal exchange relationship. Instead it moves to a higher level of interaction by the leader who convinces his team of sharing a collective vision. Besides this, the leader is considered as motivating his team and emphasising certain values. He therefore needs to have qualities like charisma, a sense of inspiration and stimulation as well as the ability to consider individual employee’s needs. If transformational leadership is authentically exemplified by the leader, this approach will be consistent with Confucian virtues such as benevolence, righteousness, conscientiousness and sincerity (Gruchmann 2008, pp.65). By living up to these virtues the leader earns respect from his employees and therewith trust. On the other hand charisma in a Chinese context is considered as linked to virtuousness and integrity by the example of the Chinese emperor who presented a virtuous ideal.
The Leader-Member-Exchange Theory (LMX) is described by a process of role development between supervisor and his or her individual employees. Relationships to individual employees can differ with regard to distance. Depending on the degree of reflecting values, viewpoints and affinities of the supervisor, the employee then belongs to an “in-group” or “out-group”. LMX appears to be applicable in China, because it is based on an autocratic and ethical management style, which can create mutual trust due to the fact that this kind of style is often conducted within China (Gruchmann 2008, p.83f). Furthermore LMX takes the conditions of collectivism into account. A survey by Kim et al. (2004) confirms that LMX as management style is preferred by the majority of Chinese employees.
To summarise briefly: The usually western-based theory as such behind the leadership style is not the crucial point regarding leadership in China. An appropriate leadership style is rather described by the degree of reconcilement of Chinese traditions and the leadership style at hand. Therefore certain aspects need to be taken into consideration. First, attention towards individual employees is not compatible with Confucianism, due to its emphasise on collectivist structures. Second, public praise or criticism disturbs the Chinese perception of harmony. And third, Confucianism places great emphasis on perpetual learning, therefore knowledge-management is essential and offers room for self-cultivation in terms of special study groups or quality circles for instance. These are the major issues of management, however this list cannot be exhaustive.
Criticism regarding Confucianism-based leadership
In his article “Is Confucianism Good for Business Ethics in China?” Po Keung Ip (2009) brings up the topic of leadership in a Confucian context. There he describes his idea of a Confucian company with all its positive and negative consequences and among others the role of Junzi, the Confucian superior moral person.
When the idea of Junzi is internalised by persons of authority, speaking of leaders for instance, a base is built for exercising virtuous corporate life and leadership. Internalising the idea of Junzi means for leaders constant self-cultivation in terms of advanced moral development. The aspect of self-cultivation in turn implies strengthening the Confucian virtues ren, yi and li which can be roughly described as benevolence, a sense for moral rightness and etiquette. Since a leader is also a role-model regarding behaviour and attitudes the focus on individual development needs to be combined with exemplary conduct. A good conduct in a Confucian sense also requires to utilise the principle of zhong shu, the Golden Rule which means (depending on the respective translation) “What you do not want done to yourself, do not do to others”, Lun Yu 25.24. Furthermore an exemplary leader would encourage and support other members of the corporation to strive for the same virtues in order to share a common base (Ip 2009, p.468).
However this presents the somewhat unrealistic ideal of a Junzi-led leader in a company. In reality the practice of the idea of Junzi certainly has its shady sides based on the fact that this is a very advanced moral ideal which “does not exist in reality in full” (Ip 2009, p.470). Becoming a Junzi is considered as ultimate goal in Confucianism. On the other side this goal breeds an endless quest. Even for people who are conscientiously striving to become a Junzi, truly fulfilling this ideal is out of reach. This is a general problem of highly moralised ideals. Good intentions are not “easily put into practice, due to the complexity and difficulties involved in the practice of morality” (ibid.).
Furthermore within reality “many people in authority simply lack all the good traits of a Junzi” (Ip 2009, p.470). Since the ideal of Junzi is bound to its Confucian background, negative side-effects of Confucianism such as authoritarianism and paternalism cast their shadow and create tensions and contradictions in itself. In the end practising the Confucian ideal of a superior moral person described as Junzi yields difficulties regarding its feasibility in the real world. Especially in the world of business, the grade of living up to moral ideals is not simply a personal matter, it is also constrained by the environment.
This article presents three different perspectives on management strategies in China. While Werner Schwanfelder emphasises the possibility of leadership and management based on a Confucian ideal, Alexander Gruchmann rather suggests a combination of selected western-based management strategies like LMX and transformational leadership which he both found adjustable to a Chinese context and Chinese traditions. Po Keung Ip generally regards Confucianism as difficult to handle when it comes to corporate ethics or management and leadership. Since Confucianism still breeds ambiguities in his opinion it is not suitable in any way.
The difference between Schwanfelder’s and Ip’s view point regarding Confucianism in management lies in their basic assumptions. Schwanfelder underscores a Confucian ideal when exercising leadership. This ideal in turn is based on Confucius’ wisdom in general as presented in his books and is not necessarily bound to the Confucian moral ideal called Junzi. Ip on the other hand considers Confucianism within a company as a systemic approach which also includes the Confucian moral ideal Junzi as a role-model for leadership. As the implementation of Confucianism in a company is not free from negative consequences, the moral ideal is yet overshadowed. Moreover, meeting the requirements resulting from the ideal of Junzi in reality is practically out of reach. When striving for such a high moral ideal failure is inevitable in the end. Therefore Junzi cannot really serve as a proper ideal for leadership, because it simply overstrains human capability.
Notwithstanding certain difficulties both Schwanfelder’s (2006) and Gruchmann’s (2008) approaches could be in principle practicable. However in comparison to Gruchmann (2008), Schwanfelder’s (2006) approach is rather idealistic, whereas Gruchmann (2008) presents a more realistic approach due to the fact that it is based on already established management strategies.
Gruchmann, Alexander. Mitarbeiterführung in China Eine Kulturbezogene Betrachtung. Hamburg: Diplomica-Verl., 2008.
Ip, Po Keung. “Is Confucianism Good for Business Ethics in China?” Journal of Business Ethics 88 (2009): 463-76. Springer.
Schwanfelder, Werner. Konfuzius Im Management Werte Und Weisheiten Im 21. Jahrhundert. Frankfurt/Main: Campus-Verlag, 2006.
 For more information on ren, yi and li see Ip 2009, p.464
[i] So far there is no English translation available.
[ii] So far there is no English translation available.
[iii] Schwanfelder 2006, p.108, see as reference Confucius Lun Yu 3.26
[iv] ibid. p.87, see as reference Confucius Lun Yu 4.2
[v] ibid. p.126, see as reference Confucius Lun Yu 4.13 and 15.18
[vi] ibid. p.101, see as reference Confucius Lun Yu 15.18 and 2.19
[vii] ibid. p.126, see as reference Confucius Lun Yu 4.13