15th September 2021

Book in Focus

Has China Devised a Superior Path to Wealth Creation? The Role of Secular Values

By Charles Hampden-Turner, Peter Peverelli and Fons Trompenaars

China is a focus topic of all major newspapers and media. Not a day goes by without at least one item on China. However, China has hardly been a recipient of praise in the past year or longer. ‘Dictatorship’, ‘violation of human rights’, and more recently even ‘genocide’, seem to be obligatory terms to get a text about China published these days. In that context, the title of this book can be seen as more than challenging; it is downright disruptive.

Still, the authors are not alone in challenging the overall negative tendency in reporting about China. According to the United Nations Conference on Trade and Development (UNCTAD), China was the largest recipient of foreign direct investment in 2020 with US$163 billion in inflows compared to US$134 billion attracted by the United States. Multinational corporations seem to have more faith in investing in China than in any other country. This is no surprise. China also was the only G20 nation with a positive GDP growth (2.3%) in the same year. The other 19 economies had shrunk due to the COVID-19 pandemic. Talking about COVID, at the time of writing this article, worldometers.org indicates that the number of Chinese corona deaths is 3 per million inhabitants. The same parameter for the USA is 1886. Both figures are a direct consequence of the way the respective governments dealt with the pandemic.

There are more signs that contradict the negative image of China in Western media reports. China is becoming the world leader in ever more technological and academic fields. The maximum space for this article is insufficient to list them all. Let’s stick to one striking example. The national railway company of the Netherlands, the home nation of two of the authors, hopes that in 2022 the local high-speed rail (Fyra) will travel at a speed of 220 km/hr. Chinese high-speed trains are already doing 330 km/hr or higher. In July 2021, the prototype of the first Chinese maglev train was presented. It is designed to run at a staggering 600 km/hr. Alternatively, take a look at the World Intellectual Property Indicators 2020 compiled by the World Intellectual Property Organization. The page with the key statistics includes patents, trademarks, industrial designs and plant varieties. China was the top applicant in all four categories in that year. As for patents, China was good for 43.4% of all patent applications in 2020; the USA for 19.3%. An alternative way of looking at China is called for.

Culture as set of values

This book employs the 7-Dimension model of measuring national cultures developed by one of the authors, Fons Trompenaars, enlarged with a dimension from the model of Geert Hofstede. This model of measurable culture allows researchers to determine the cultural profile of each nation and to compare the models of two or more cultures much more accurately than the previously used descriptive models. It is also a transnational model, not linked to a particular culture. Chinese (and many Western) researchers like to flaunt with Confucius as the first prophet of Chinese culture. We do recognise the value of Confucius’ Analects and cite this work in this book. However, describing Chinese culture as ‘Confucian’, makes it hard to compare that culture with, e.g., German culture, as we would first need to measure the ‘Confucian-ness’ of German culture.

What we can measure is the degree to which Chinese and Germans give priority to the interests of a group or to the interests of the individual members of the group. This refers to the dimension Individualist – Communitarian. German culture ends up closer to the Individualist end of this dimension, and the Chinese to the Communitarian end. This does not mean that ‘Chinese culture is Communitarian’. Japanese culture is also Communitarian, but closer to the end of the dimension, indicating that Japanese culture is more Communitarian than Chinese culture.

We can continue measuring Chinese and German culture using the other dimensions of the model. The result offers an in-depth insight in the differences and similarities between the two cultures. This is not the place to discuss all dimension. We will list them here as an indication of what you can expect when you start reading this book.

Universal rules---------------------------------------Particular exceptions

Individualism/self-interest--------------------------Community/benefit others

Specific points and parts-----------------------------Diffuse patterns & wholes

Inner-directed by convictions-----------------------Outer-directed by responsibilities

Achieved status---------------------------------------Ascribed status

Sequential time---------------------------------------Synchronous time



Cultural explanation of China’s success

While single dimensions already have a strong explanatory power, the book regularly combines dimensions to analyse complex issues. An interesting example is the very different way enterprises are socially embedded in China and in most Western countries. We already indicated that Western nations are more Individualist, while Chinese culture is rather Communitarian. In a corporate context, this is reflected in the fact that the interests of individual shareholders, as owners of a company, prevail over the interests of the company, where ‘the company’ stands for the conglomerate of other stakeholders like employees, suppliers, clients, etc.

Another dimension 'Specific – Diffuse' measures the extent to which a culture divides the world into clearly separated boxes, categories, etc., or allows those boxes to overlap. Western nations are quite Specific; Chinese culture is rather Diffuse. The number of stakeholders with which Chinese company managers have to align with is considerably larger that that of their Western counterparts. Peter Peverelli already introduced that in his paper Chinese Organizations as Groups of People - Towards a Chinese Business Administration. Companies in an Individualist Specific cultures create wealth first and foremost for the shareholders. If they are satisfied, the company is doing well. In Communitarian Diffuse China, companies are embedded in an eco-system of many engaged stakeholders. The latter are employees, suppliers, government officials, family members of employees, local residents, and so on. A well-run Western company creates value for its owners; a well-run Chinese company creates value for the entire community.

Readers can find a useful perspective on China, including praise for this book, in a post on LinkedIn by Gordon Dumoulin of the 5iZ China consultancy.

Charles Hampden-Turner graduated from Trinity College Cambridge, and received his MBA and DBA from the Graduate School of Business of Harvard University. He was a recipient of the Douglas McGregor Memorial Award, and has received fellowships from the Guggenheim Foundation, the Rockefeller Foundation, the Ford Foundation, and the Lilly Endowment, among others. He is the author of 21 books, including Riding the Waves of Culture and Maps of the Mind (1981). Dr Hampden-Turner co-founded Trompenaars Hampden-Turner Consulting in 1983.

Peter Peverelli is affiliated with the School of Business and Economics at Vrije Universiteit Amsterdam. He received a PhD from Leiden University, the Netherlands, and a PhD in Business Administration from Erasmus University Rotterdam. He was one of the first Dutch students to study for a year in China in 1975 and has been shuttling between Europe and China ever since. He combines his academic work with business consulting. His publications include: Chinese Corporate Identity (2006) and Chinese Entrepreneurship (2012).

Fons Trompenaars is an organizational theorist, management consultant and best-selling author. He is known for his seven-dimensional model of national business cultures. His publications include Riding the Waves of Culture, and he is a recipient of a Professional Practice Award from the American Society of Training and Development. In 2011, HR Magazine voted him among the world’s top 20 international thinkers. He is Director of a course on Servant Leadership at Vrije Universiteit Amsterdam.

Has China Devised a Superior Path to Wealth Creation? The Role of Secular Values is available now in Paperback at a 25% disocunt. Enter the code PROMO25 to redeem. 

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