Understanding the differences between Chinese and Western business practices: insights into Confucian philosophy

Confucian philosophy, which lies at the root of Chinese culture, has been attracting attention from both business practitioners and academia due to China’s tremendous influence on the global economy. In this paper, we review the historical development of Confucianism and its managerial implications in China. We first identify key differences between Confucian and Anglo-American culture in terms of values and beliefs, power distance, cognitive patterns, social orientation, trust, communication, expression-orientation and social environment. We then highlight managerial implications of the five constant virtues inherent in Confucian philosophy, namely, benevolence (‘ren’), righteousness (‘yi’), rites (‘li’), wisdom (‘zhi’) and trustworthiness (‘xin’). A deep understanding of differences between Confucian and Anglo-American culture forms the foundation for mutually acceptable behavioural communication codes encompassing values and norms, cognitive patterns, social orientation patterns, modes and expression-orientation models. Finally, a case study is presented to illustrate how these principles are embedded within customer relations and organisational management.