CHINA: Cultural Insights for Business Success – Part 2: Confucian History and Elements

Confucianism is a Chinese ethical and philosophical system developed from the teachings of the Chinese philosopher Confucius, who opened a school and cultivated many students based on the education method of “encouraging.”


Confucius lived and developed his philosophy throughout 551–478 BC. In the beginning, Confucianism was primarily a basic moral standard, but over time Confucian thought has developed into a vast and complete philosophical system and represents what has come to be thought of as the Confucian School of Thought.

Confucianism was the greatest mainstream philosophy in ancient China and is today the most important ideology in present-day China and most of East and Southeast Asia. Other parts of the world have also been deeply influenced by this philosophy as the philosophy migrated to some extent into the West via early missionaries returning from visits to China. Cultural norms similar to Confucianism can even be observed in Mexico and Central and South America.

Confucius created Confucianism at the end of the Spring and Autumn Period that roughly coincides with the end of a 1,700 year period of Chinese history – the Xia, Shang and Zhou Dynasties, which are the first historically identified dynasties of China. Confucius’ ideology absorbed some of the traditional culture from the Xia, Shang and Zhou dynasties and then formed a complete system of thought including Confucius’ own major contributions including thorough codification.

Living in the Spring and Autumn Period, a time when feudal states fought incessantly against each other, Confucius was convinced of his ability to restore some order and a better balance to the world. After much travelling around China to promote his ideas among rulers, he eventually became involved in teaching disciples. His school of thought, however, was not well integrated into society until the following Warring States Period, 475–221 BC.

Confucianism compares in impact to the many contributions made by Chinese ancient culture to worldwide civilisation, including The Four Great Inventions: papermaking, the compass, gunpowder and movable type. It has also deeply influenced modern civilisation through text in The Four Books (The Great Learning, The Doctrine of the Mean, The Analects of Confucius and Mencius) and The Five Classics (The Book of Songs, The Book of History, The Book of Changes, The Book of Rites and The Spring and Autumn Annals).

Confucianism in Europe

During the Ming and Qing Dynasties, the hardships endured by European missionaries journeying through China to build bridges with the West were rewarded with Neo-Confucianism, the mainstream thought of the time that was a response by the Confucians to the rising influence of Taoists and Buddhists. Neo-Confucian thought arose in Chinese culture during the 11th century. It had a great influence in Korea and Japan and became well-known in Europe in the 17th and 18th centuries. “Confucianism with European thought” developed during the Italian Renaissance. The combination became part of the leading ideology of European modern civilization and a significant source of The Age of Enlightenment, a cultural movement led by European intellectuals during the 18th century.

Enlightenment figures seized upon Confucian philosophy. Voltaire’s was the most powerful voice advocating Confucianism in Europe. He and his Encyclopaedia of School used Confucianism as an ideological weapon to oppose the theocratic monarchy. Neo-Confucianism, as the part of the basis of classical philosophy founded by German philosopher Leibniz, was also used as a powerful weapon – against the theology of the Roman religious court that wielded considerable influence over philosophy guiding everyday actions of society.

Francois Quesnay, known as the “European Confucius,” helped create a new era of modern political economy in which commercial productivity and efficiency were set within, guided and constrained by the rule of law, social customs and government influence, partly on the basis of Confucianism, by laying a theoretical foundation for the formation and development of British classical political economy in part set forth by Adam Smith in his 1776 book, The Wealth of Nations.

The Science of Success

Confucianism was and is seen by many as the “Science of Success.”

There is a long and steady history of successes in China, and Confucius is regarded in China as the founder of many concepts of success. His teachings rarely rely on reasoned argument, but instead emphasize self-cultivation and emulation of moral exemplars. As a Chinese thinker, he expressed his views through mottos. Compared with ancient Greek and Roman thinkers, his philosophies are conveyed more directly and practically. Indeed practicality is a consistent thread running through much of Confucianism.

One of the deepest teachings of Confucius may have been the superiority of personal moral exemplification over explicit rules of behaviour. Confucius’ concept is best expressed in his version of the Golden Rule, “Do not do to others what you would not like yourself, then there will be no resentment against you, either in the family or in the state.” Analects 12:2 (Analects is one of several books written by Confucius.)

The ideas of Confucius are considered a real treasure in China. Confucianism is a humanist system of thought that advocates harmony as fundamental to a successful life. In Confucianism, harmony is the supreme principle to deal with the relationship between nations, countries and individual human beings. For the most part (but with some very significant failings to be discussed later), Confucianism still fits well with the development of modern management in China. That’s why it plays a very significant role in Chinese and other Asian business management control systems.

Confucianism and Modern Management

Contrary to expectations, an economic boom occurred after WWII in Japan and Asia’s “Four Little Dragons” (Taiwan, South Korea, Hong Kong and Singapore), and then in Southeast Asia and China’s south-eastern coastal areas after Deng Xiao Peng’s “Opening Up” of China. But how? A significant reason may lie in cultural heritage. Asians believe that, in addition to economic policy, the profound wisdom of Confucianism management, especially humanist ideology, was a significant factor in Asia’s success.

In Confucian thought, the five virtues most often discussed are:

  • Ren (benevolence or humaneness toward others)
  • Yi (righteousness or justice)
  • Li (propriety or etiquette)
  • Zhi (knowledge)
  • Xin (honesty and integrity)

In business, these five virtues can be interpreted as follows:

  • Ren is a basis for management thought. Kindness toward fellow man is the highest moral standard in Confucianism. Relative to management/employee relationships, management is expected to behave in much the same deeply caring way in which a kind and capable patriarch would look after the well being of an extended family.
  • Yi is part of management standards. It’s an important moral rule that calls for people to conduct themselves with righteousness and with respect for justice.
  • Li is the basis for management guidelines. Li is codified and treated as a comprehensive system of norms, guiding the propriety or politeness that colours everyday life.
  • Zhi, the basic concept of Confucian and management strategy, stands for people’s knowledge and talents. Zhi suggests that people should constantly strive for knowledge and competence. According to this concept of Confucianism, management should, wisely, recognize those individuals who diligently practice and succeed with the idea of zhi, recognizing and rewarding knowledge and skills.
  • Xin is at the core of management goals. A senior manager treats subordinates as an extension of his own family and friends and is always open and honest and behaving with the highest integrity.

A Special Word About Xiào

Underlying and in many ways integrating these five principles is the principle of Xiào that refers to filial piety and respect for elders. The principle of xiào is critically important to understand for anyone seeking to live in or manage business in a Confucian society.

The principle of xiào is based on filial environments but was strongly advocated by Confucius as widely applicable to society at large. In this application one can see deep respect for elders and, by extension, those in positions of authority. Application of xiào has led to management systems that are extremely top-down, command-oriented and hierarchical. Leaders give commands, and others follow. This approach allows for tightly organized and easy to manage teams that strictly and diligently attempt to implement plans laid out by management. Most significantly, however, independence, initiative, creativity, and freedom of expression is seen to be greatly subdued or even non-existent.

At the core of Confucianism is the practical and humanist foundational principle that the assets on Earth are to be combined with the power of people to use those assets in a manner that is harmonious with others to the greatest possible outcome.

Mencius, one of the key interpreters of Confucianism, also proposed that, “A just cause gains great support; an unjust one gains little.” In his philosophy, harmony is a basic and supreme principle to deal with relationships between people. By the same token, internal (employee relationships) and external (customers, suppliers, shareholders, governments etc.) harmony should create a favourable corporate culture and maintain strong competitiveness.

Confucius held this opinion as well. He advocated harmony as the most precious, but the master also pointed out: “The superior man is affable, but not adulatory; the mean man is adulatory, but not affable.” With such a heavy focus on harmony it is not surprising that “good relations” is one of the most dominant characteristics of corporate culture today in Asia.

One may be forgiven at this stage for wondering the practical application of the five core principles of Ren, Yi, Li, Zhi, Xin and Xiào to the modern business environment, but we’ll bring these elements together in Part 5 – On the Ground that will describe examples that may be encountered and approaches to successfully manage one’s business in view of these forces dominating behaviour and communications in Confucian cultures.

Confucianism: Not Without Challengers

While, with little debate, Confucianism is the dominant guiding philosophy at play in the everyday lives of people across China and Eastern Asia, she has not been without her challengers.

Daoism (also referred to as Taoism) arose about the same time as Confucianism and may be best characterized as a form of mysticism emphasizing man’s need to align with nature. Daoism remains alive today although with a relative minority following.

Mohism, also founded around the same time of Confucius, was a philosophy remarkably similar to concepts set forth the New Testament. Mohism was, however, quite shortly absorbed into Daoism texts.

Most notably was the school of Legalism which was alive and flourishing for a period of perhaps 200 years starting around two centuries after the establishment of Confucianism. Legalism emphasized on one hand the rule of law and on the other hand was extended to encourage the use of pragmatic, and at times ruthless tactics and methods. Legalism was somewhat short-lived in ancient Chinese history but did result in a period of brutal territorial wars.

The Han dynasty ultimately rejected Legalism and adopted Confucianism as the official government philosophy as did most subsequent dynasties. Confucianism therefore held sway without significant competition until the recent times of Maoist attempts to refocus the people of China around idealism, populism and nationalism with new doctrines that made only marginal inroads.

Many view Maoism as more of a political effort than a purely philosophical one – intended to galvanize political power for the Maoists. Reformists dating to the recent times of Deng Xiao Peng have steadily attempted to cast off some of the idealism and populism of Maoism in favor of more economically practical approaches, but once again the reformist and their efforts may be seen as more related to creating increased political influence and economic success for China within a global context than as a fundamental philosophy.

The Chinese government today, with their relatively long historic focus on peace, harmonious development and efforts to avoid separatism are in many ways continuing to follow Confucianism.

Chinese companies, however, are often viewed by many as taking partial and ill-informed lessons from their Western commercial counterparts and from Western governments to be following practices that are more akin to the ancient philosophy of Legalism – at least in their external dealings.

In summary, to be clear, Confucianism is alive and well in China and represents the single most powerful force affecting everyday life, behaviour, social interaction and conduct of business within China and much of East and South-east Asia today.

The Future of Confucianism

Confucianism has remained a dominant social force in Asian society for over two thousand years, providing a useful construct for explaining modern internal business management in China as well as day-to-day private life. Fostering a work ethic consistent with Confucian values has been shown to be fruitful. Leadership under the Confucian tradition emphasizes a holistic concern for the welfare of employees, a concern for harmony in groups, teamwork and self-sacrifice.

In contrasting Western thought with Confucian thought, it was said to me by a friend that, “The Westerner strives to be a hero, while the Confucian strives to be a gentleman.” One can easily imagine the power as well as the conflicts of both (sometimes conflicting) characterizations.

Confucianism has been criticized for limiting innovation, since its heavy emphasis on respect for authority and hierarchy and what many may view as an “overly harmonious” approach may suppress healthy dissent, independent and critical thought, and individual creativity. This criticism is certainly valid, and we’ll explore ways in which to mange this limitation in Part 5 – On the Ground.

Confucianism has evolved and has been expanded by many scholars over the years and will no doubt continue to evolve. With more and more companies crossing international borders and corporate cultures, it will be interesting to see how Confucianism engages and perhaps integrates Western concepts and how Western business approaches can capture the strong forces of Confucianism. Today’s era may turn out to be one of the most rapid periods of Confucian evolution.

Read the Series: CHINA: Cultural Insights for Business Success

Part 1: Introduction

Part 2: Confucian History and Elements

Part 3: Guanxi

Part 4: Mianzi

Part 5: On the Ground

Part 6: Management Staffing

Tracy Crawford
CEO | Rain8 Group LLC
Managing Partner | CHC Couture Hospitality Concept
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