Published January 28, 2025
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Published January 28, 2025
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Many companies in China are either family-owned or government run and therefore tend to operate within a hierarchical structure. This hierarchical approach is then underpinned by the all-pervasive influence of thousands of years of Confucian philosophy and a strongly hierarchical, bureaucratic Communist Party structure. The combination of these elements means that hierarchy in Chinese business needs to be understood and interacted with appropriately. And despite the fact that many Western business people are programmed to think of hierarchical business models as inefficient and slow, in the context of China, hierarchy simply cannot be ignored or wished away.
In Chinese business, information follows the hierarchical lines. Thus, a subordinate will give information upwards to their boss (who may pass that up to their boss) who will then pass it horizontally to a counterpart in a different function before it is sent down the chain again to the relevant party in the other function. When the information returns, it follows the same path in reverse.
This means that information flow around a local Chinese organisation can be slow – from a Western viewpoint. It also places an emphasis on getting the information to the right person first time, which in turn means you need to understand their hierarchy and who the key contact people are. A good piece of advice would be to take time in the early stages of any project to talk to senior management in your counterparty about how information flows. “If we want information about something, where do we go to find it?”
To succeed in China, it’s essential to show the necessary respect. Senior managers do not appreciate being directly disagreed with by more junior people from outside organisations. Your senior leaders should deal with their senior management – even, sometimes, regarding quite minor matters. This can put additional resource pressure on your senior leaders who may need to become involved in issues they would normally delegate to more junior people. Senior leaders also need to understand that if their junior colleagues ask them to do something which ‘back home’ should be done by somebody more junior, it is not because the junior staff are hiding from their responsibilities – in fact they are taking real responsibility by acknowledging the need to respect the hierarchy in Chinese business.
On the subject of respect, we should note the importance of ‘face’, or ‘Mianzi’ in Chinese.
Put simply, you should not do things that could make Chinese counterparts lose face. This kind of ‘losing face’ does not refer to the slight degree of embarrassment a Westerner might feel when they make a mistake. Instead, Mianzi impacts much more directly on the sense of self-esteem somebody feels about themselves and the way in which they think they might be viewed by their colleagues. The great danger of being seen to make somebody lose face (even unwittingly) is that the ‘victim’ might not want to do business with you in the future and, in addition, their peers are likely to view you as a potentially ‘dangerous’ person. If you can make one person lose face, will you do the same to others?
Potential actions that may cause your counterpart to lose face are:
Understanding this concept of ‘face’ is essential to navigating the hierarchy in Chinese business. The relative position a Chinese person occupies in relation to another (e.g. a boss to an employee, or a parent to a child) demands a certain degree of respect and demands certain behaviours. Thus, a leader of a local Chinese company will expect their lower ranking colleagues to show respect, for example, by politely greeting them in ritual fashion on arrival at work in the morning. As expected, it’s better to help your counterpart gain face because they are much happier working with someone who is known as a face-giver than somebody who is oblivious to face-related issues.
Senior Chinese managers will be friendly and respectful of senior western business people but probably not overly impressed or overawed by them. The meeting of very senior western business people and senior Chinese corporate leaders are often purely formal events in which work done before the meeting by more junior staff is celebrated and approved. These meetings are often not really used for real business discussions or decision-making.
Leaders are expected to lead in China and leadership style can therefore appear paternalistic with leaders telling people exactly what to do and subordinates doing exactly as they are told – unquestioningly (even if they think the boss might be wrong).
Strongly hierarchical cultures often produce a lack of initiative at the lower levels. Subordinates undertake the tasks they are told to by their leaders but tend not to do anything else. If the leader wants something to be done, they will give those instructions and if the instructions are not given, the boss doesn’t want that task to be undertaken. To perform a task unasked by the leader might appear as insubordination.
Age is worthy of respect in, and of, itself. Age produces wisdom and older people are to be respected because of their age. This has traditionally meant that most senior people in China were older men. Demographics in China seem to be affecting this traditional approach with younger people being promoted earlier as the older generation retires.
If this discussion of hierarchy in Chinese business has been helpful and you’d like to have a conversation about how our China cultural awareness training programmes might help your business work more effectively, please contact us.
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