HK-China:
Cultural Aspects
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Induced Innovations and
Schumpeterian Innovations
• Induced innovations are those motivated by such signals as
shifts in relative prices of inputs into a production process
or changes in output prices: e.g. during the second half of
the 1970s, increases in energy prices provided a strong
incentive for firms to produce innovations that conserved
energy or substituted other inputs for energy.
• Schumpeterian innovations are the result of
‘entrepreneurial behavior’  the perception that it may be
possible to exploit some latent demand or to attack existing
firms with radically new product or process.
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Innovation
Industrial
Progress
Quality
Productivity
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Conditions Fostering Innovation
1. Perceived need for some better thing or for something that
does not yet exist.
2. Tolerance for uncertainty and ambiguity.
3. Willingness to take risk.
4. Belief in the value of new things in general.
5. Belief in the ability to obtain valued benefits from the
innovation.
6. Participation in richly connected social networks.
7. Willingness to experiment.
8. Willingness and ability to invest various kinds of resources
in the new thing.
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Culture involves at least three components: what people
think, what they do, and the material products they
produce.
Thus, mental processes, beliefs, knowledge, and values are
parts of culture.
Some anthropologists define culture entirely as mental rules
guiding behavior, although often wide divergence exists
between the acknowledged rules for correct behavior and
what people actually do. Consequently, some researchers
pay most attention to human behavior and its material
products.
Culture also has several properties: it is shared, learned,
symbolic, transmitted cross-generationally, adaptive, and
integrated.
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The shared aspect of culture means that it is a social
phenomenon; idiosyncratic behavior is not cultural.
Culture is learned, not biologically inherited, and
involves arbitrarily assigned, symbolic meanings. For
example, Americans are not born knowing that the
color white means purity, and indeed this is not a
universal cultural symbol.
The human ability to assign arbitrary meaning to any
object, behavior or condition makes people
enormously creative and readily distinguishes culture
from animal behavior. People can teach animals to
respond to cultural symbols, but animals do not create
their own symbols.
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Furthermore, animals have the capability of limited tool
manufacture and use, but human tool use is extensive
enough to rank as qualitatively different and human
tools often carry heavy symbolic meanings.
The symbolic element of human language, especially
speech, is again a vast qualitative expansion over
animal communication systems.
Speech is infinitely more productive and allows people
to communicate about things that are remote in time
and space.
Note: the above excerpts are taken from John H. Bodley,
From Cultural Anthropology: Tribes, States, and the
Global System, 1994.
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What is culture?
• Culture is made up of values, beliefs and
attitudes.
• Culture depends on historical experiences of
the particular people.
• History Values & Beliefs Attitudes
• V, B and A determine the innovative spirit
of the people.
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Exercise
Classify each of the eight conditions fostering
innovation listed earlier as a value, belief or
attitude.
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Chinese Culture
• What, if any, are the unique values and beliefs of
Chinese people? (Confucianism, ‘the Middle Path’,
Yin and Yang, …)
• What role has Chinese history played in developing
these values and beliefs?
• What are the attitudes resulting from these values and
beliefs?
• How have Chinese values changed in the last 50
years?
• How might the above impacting the innovation culture
of contemporary China?
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Hong Kong Culture
• Which, if any, of the Chinese values, beliefs
and attitudes are evident in today’s HK?
• List two (each) of the contemporary values,
beliefs and attitudes off HK people.
• What role, if any, has the British rule played
in determining HK’s contemporary culture?
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Inherited
and
learned
Specific
to
Individual
PERSONALITY
Specific `to
group
or category
Universal
CULTURE
Learned
Inherited
HUMAN NATURE
Three Levels of Uniqueness in Human Mental Programming
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Symbols
Heroes
Rituals
Values
Practices
The ‘Onion’ Diagram Manifestation
of Culture at Different Levels of Depth
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Cultural Relativism
• It is futile to look for absolutes (good/bad,
superior/inferior, etc.) while evaluating cultures.
• Everything is relative and must be interpreted in a
context. What is a strength in one context may turn
out to be a weakness in another.
• What is ‘good’ in the eras of productivity and quality
may turn out to be ‘bad’ in an era of innovation.
• What is ‘good’ culture in an environment of
operations may turn out to be ‘bad’ in a project
environment.
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Contingency Theory
The appropriate culture is contingent upon the
following influencing factors:
History and ownership
Size
Technology
Goals and objectives
The environment
The people
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The Typical HK or Nanyang
(overseas Chinese) firm has:
• Centralization of the power of decision
making, usually with a single dominant owner,
manager, entrepreneur, founder or father
figure.
• A low level of specialization, with fewer
and/or less detailed specialized departments,
and with more people responsible for a spread
of activities across a number of fields.
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• Less standardization of activities and thus
fewer routine procedures.
• A relative lack of ancillary departments, such
as research and development, labor relations,
public relations, market research.
• Reliance on personal relationships for business
transactions.
[Redding and Wong, “The Psychology of Chinese Organizational
Behaviour,” pp. 267-295, The Psychology of Chinese People,
Edited by M.H. Bond, Oxford University Press (Hong Kong),
1986.]
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Patronage in Hong Kong
HK cotton spinners are patriarchal business leaders. “They
conferred welfare benefits on their employees as favors,
took a personal interest in their subordinates’ behavior not
related to work, and disapproved trade union
activities…Personalized ties with subordinates are forged
in an attempt to counter their centrifugal tendency to set up
on their own and become rival competitors. For industries
such as spinning and weaving which require a stable
workforce to deal with regular business cycles, benevolent
paternalism is also one means to retain workers.”
[Wong Siu-Lin, 1986, Modernization and Chinese Culture in Hong Kong, China
Quarterly, No. 106, p. 313.]
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Key Principles of
Confucian Teaching
[Geert Hofstede, Cultures and Organizations: Software of the mind,
McGraw-Hill, 1997.]
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1. The stability of a society is based on unequal
relationships between people. The wu lan, or five basic
relationships are ruler-subject, father-son, older brotheryounger brother, husband-wife, and senior friend-junior
friend. These relationships are based on mutual and
complementary obligations. The junior partner owes the
senior respect and obedience. The senior owes the junior
partner protection and consideration.
Q. Stability is clearly important when economic growth is
driven bythe pursuit of productivity and quality. In
contrast, innovation means instability. Is stability critical in
the context of innovation?
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2. The family is the prototype of all social
organizations. A person is not primarily an
individual; rather, he or she is a member of a
family. Harmony is found in the maintenance of
everybody’s face in the sense of dignity, selfrespect, and prestige. Social relations should be
conducted in such a way that everybody’s face is
maintained. Paying respect to someone is called
‘giving face’.
Q. Discuss the advantages and disadvantages of the
family prototype in the context of an organization
striving to be nurture innovation as a competitive
weapon.
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3. Virtuous behavior towards others consists of not
treating others as one would not like to be treated
oneself (The Chinese Golden Rule is negatively
phrased!). There is a basic human benevolence
towards others, but it does not go as far as the
Christian injunction to love one’s enemies.
Confucius is supposed to have said that if one
should love one’s enemies, what would remain for
one’s friends?
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4. Virtue with regard to one’s tasks in life consists
of trying to acquire skills and education, working
hard, not spending more than necessary, being
patient, and persevering. Conspicuous
consumption is taboo, as is losing one’s temper.
Moderation is enjoined in all things.
Q. Discuss to what extent these ‘virtues’ might have
contributed towards the spectacular economic
growth of the five dragons during the 1980s and
1990s. Comment on their utility in the emerging
age of innovation.
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Power Distance Index
(Managing Authority)
PDI indicates the extent to which
the less powerful members of
institutions and organizations
within a country/region accept
that power is distributed
unequally.
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Large PDI:
• Considerable dependence (or counterdependence)
of subordinates on bosses.
• Subordinates either accept or reject bosses totally
(polarization).
Small PDI:
• Preference for consultation, i.e. interdependence,
between subordinates and bosses.
• Subordinates quite readily approach and contradict
bosses.
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0
HK-China Cultural Issues, KV Patri
Israel
Ireland
Sweden
UK
Gemany
Australia
Canada
USA
Italy
Japan
Pakistan
Taiwan
South Korea
Thailand
Hong Kong
France
Brazil
Singapore
India
Indonesia
Mexico
Philippines
Guatemala
Malaysia
Power Distance Index Values
120
100
80
60
40
20
26
Individualism Index
(Managing Harmony)
Individualism:Ties between individuals are loose.
Everyone is expected to look after himself or herself
and his or her immediate family. They prefer
• Personal time: Having a job that leaves sufficient time
for one’s personal or family life.
• Freedom: Having considerable freedom to adopt one’s
approach to the job.
• Challenge: Have challenging work to dowork from
which one can achieve a personal sense of
achievement.
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Collectivism (Small II): People from birth onwards
are integrated into strong, cohesive in-groups,
which throughout people’s lifetime continue to
protect them in exchange for unquestioning
loyalty. They prefer
• Training: Having training opportunities to improve
one’s skills or learn new skills.
• Physical conditions: Having good physical
working conditions (good ventilation and lighting,
adequate work space, etc.)
• Use of skills: Being able to fully use one’s skills
and abilities on the job.
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Managing Harmony
% agree or strongly agree among
Indonesians
Japanese American
1
Avoiding open
conflict is a major
task of management
64
50
24
2
Most conflicts in a
company can be
productive
21
29
64
[Hofstede 1982, p.18]
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Western Societies
Nuclear Family
• Private
• Personal
Workplace
• Run the system impersonally
• Appointments are made,
promotions given, rules applied
impersonally
• Having a brother-in-law as
one’s assistant is embarassing
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TENSION
Asian Societies
Personalized
Workplace
Management
Impersonal
Workplace
Management
Extended Family
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“Asian ‘Personalistic’ Ways of Life”
• Friends and relatives matter, friends of relatives matter,
relatives of friends matter,,,
• Wisdom of age matters
• How could people with whom there were personal
relationships one minute outside work be treated
impersonally just like any one else half an hour later?
• Must a helping hand to friends, family, ethnic group or
tribe become nepotism?
• Is Western-style impersonalism in every aspect of
management an unavoidable condition of effective modern
organization? Or have the Japanese or Chinese or other
societies found an alternative way? [Hickson 1995]
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“Characteristic Chinese Small
Business in HK” [Hickson 1995]
• Paternalistic and personalistic.
• Owner, frequently the head of the family, manages by
direct personal involvement.
• He brings in family members and others (with ability) he
can trust. Benevolence is exchanged for loyalty.
• Formalization is low. Written instructions, procedures and
rules are minimal.
• Supply-chain links dominated by owner’s relatives and
friends. Informal links. Sometimes, exchange of
directorships that follow personal links rather than
financial interest.
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100
90
80
70
60
50
40
30
20
10
0
HK-China Cultural Issues, KV Patri
Guatemala
Indonesia
Pakistan
Taiwan
South Korea
Thailand
Singapore
Hong Kong
Malaysia
Mexico
Phillipines
Brazil
Japan
India
Israel
Germany
Ireland
France
Sweden
Italy
Canada
UK
Australia
USA
Individualism Index Values
34
Collectivism in Hong Kong
Chinese collectivists give priority to
considerations of how their behavior might
affect their standing within the group.
Hong Kong Chinese are more likely than
Americans to pursue conflict if the stakes
involved are high and if the other person is
from an out-group.
[Leung Kwok, 1988, Some determinants of conflict
avoidance, J. Cross Cultural Psychology, Vol. 19, No. 1,
pp. 125-136.]
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Individualism and Prosperity
[Hofstede 1983] plotted per capita GNP in
1970 versus Individualism Index for a
number of nations and found a positive
correlation, i.e., wealthier nations are more
individualistic. But,
Is individualism the cause of prosperity?
Or, is prosperity the cause of increase in
individualism?
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Masculinity Index
(Managing Oneself)
Masculine Societies (large MI): They prefer
• Earnings: Having an opportunity for high
earnings.
• Recognition: Getting the recognition one deserves
when one does a good job.
• Advancement: Having an opportunity for
advancement to higher level jobs.
• Challenge: Have challenging work to dowork
from which one can get a personal sense of
accomplishment.
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Feminine Societies (Small MI): They prefer
• Manager: Having a good working
relationship with one’s direct supervisor.
• Cooperation: Working with people who
cooperate well with one another.
• Living area: Living in an area desirable to
oneself or one’s family.
• Employment security: Having the security
that one is able to work for one’s company
as long as one wants to.
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100
90
80
70
60
50
40
30
20
10
0
HK-China Cultural Issues, KV Patri
Sweden
Thailand
Guatemal
South Korea
France
Taiwan
Indonesia
Israel
Singapore
Brazil
Pakistan
Malaysia
Canada
India
Hong Kong
Australia
USA
Philippines
Germany
UK
Ireland
Mexico
Italy
Japan
Masculinity Index Values
39
Sectorial Factors in HK
Public Sector Managers value advancement
opportunities, and security for employment
(Feminine?).
Private Sector Managers value opportunities
for advancements and high earnings
(Masculine?).
[Chau, Irene Hau-siu, 1988, Work related values of middle managers in the private
and public sectors, Proc. 1988 Academy of International Business South East
Asia Regional Conf., Bangkok, June 23-5, A14-25.]
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Uncertainty Avoidance Index
(Managing Uncertainty)
UAI indicates the extent to which the members of a
culture feel threatened by uncertain or unknown
situations.
• High UAI  increased anxiety, more
expressiveness. Low UAI  more internalization,
higher incidence of coronary diseases.
• Paradoxically, people with high UA tend to reduce
ambiguity. They are often prepared to take risks to
reduce ambiguity.
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0
HK-China Cultural Issues, KV Patri
Singapore
Sweden
Hong Kong
Ireland
UK
Malaysia
India
Phillipines
USA
Canada
Indonesia
Australia
Thailand
Germany
Taiwan
Pakistan
Italy
Brazil
Israel
Mexico
South Korea
France
Japan
Guatemal
Uncertainty Avoidance Index Values
120
100
80
60
40
20
42
The Seven S Diagram
[Pascale and Athos, The Art of Japanese Management]
Strategy
Structure
Cold Triangle
Systems
Super-ordinate goals
Staff
Warm Square
Skills
Style
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References ++
[Chen 1995] Min Chen, Asian Management Systems, International
Thomson Business Press, London.
[Handy 1996] Charles Handy, Understanding Organizations, 4th edition,
Penguin Books, London.
[Hofstede 1980] Hofstede, G., Culture’s Consequences, Saga.
[Hofstede 1997] Hofstede, G., Cultures and OrganizationsSoftware of
the Mind, McGraw Hill, NY.
[Mant 1983] Mant, Leaders We Deserve.
[Mead 1994] Richard Mead, International Management: Cross Cultural
Dimensions, Blackwell Business.
[Mintzberg 1989] Mintzberg, H., Mintzberg on Management, The Free
Press.
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