After reading the answer’s to all of your questions, how much impact do you think the Chinese Culture has on its entrepreneurial spirit and success?
Do you think the ‘Bamboo Network’ applies to other cultures? Tell us about global entrepreneurial networks from your cultures… Perhaps the ‘Curry Network’ for Indians, or the ‘Vodka Network’ for the Russians…etc.
Small comment: russian love for vodka is a terrible stereotype, we mostly eat icecream in winter=).
Three Forms of Chinese Entrepreneurship:
Entrepreneurship in China used to be an oxymoron. An ideologically Marxist country since Mao Zedong took over in 1949, the Communist regime has actively suppressed and stifled capitalist activities for decades. Yet entrepreneurial activity really terminated even in a time when capitalist suspicions could easily mean public humiliation and persecution.
It is important to note that entrepreneurship in China took many different forms. Three main varieties can be identified. The first occurred before reform and through the 80’s,consisting of very small-scale activities in retail and services such as street vendors, businesses known as getihu. Perhaps more accurately referred to as ‘self-employed’rather than ‘entrepreneurs’, those involved were of low social status, often criminals and illegal migrants, and low education. They started out on their own because they were excluded from the state system. Some achieved success beyond their expectations. But for most, business was a means of subsistence.7 The second group emerged in the late 1980s, with more highly educated individuals, often engineers or SOE managers, operating on a larger scale out of choice rather than necessity. These businesses, known as siying qiye, operated in all sectors, ranging from restaurants to transportation to manufacturing, especially the production of inputs for SOEs. The third type is the foreign educated or trained Chinese returning to China to start businesses.
This type of entrepreneurship has been evident recently in the flourishing Internet sector. Each of these types of entrepreneurs operates in a somewhat different environment, under different constraints and has distinctive characteristics.
Hey guys, please check out our skit’s script about Chinese Entrepreneurship here!
Speaking about cross-cultural differences… Last semester (some of you should remember) we’ve learned a lot about Hoffstede’s Cultural Dimensions. The information about them you can find here: http://www.geert-hofstede.com/
What do you think, do this dimensions have an impact on the family business development in different countries? And if yes, how do they influence it in your opinion? Could you provide an example?
First of all I think it would be interesting to define the term bamboo network before analysing cultural differences. The example given fits our course perfectly in my eyes and underlines in short sentences the differences of a succession in a chinese sms to a western SME.
What is the ‘bamboo network’?
The bamboo network refers to the conglomerates propelling Southeast Asian economies which started as small family businesses run by overseas Chinese. The businesses are managed by the family of the founder, and are run with strong Confucian values. The combined output of the 55 million overseas Chinese is equal to a good-sized country, or close to $600 billion. Chinese expatriate workers are integral to economic success in countries such as Singapore, Thailand, Malaysia, Indonesia, Taiwan, Hong Kong, the Philippines, and Vietnam.
Most of these conglomerates are started by Chinese expatriates who move country and start out with little or no savings, work hard and earn enough to start their own businesses, and constantly reinvest to maximise their cash. Typically, a successful family will own many businesses spread over a number of countries. Control of the business is general passed from generation to generation, and since for the most part the receivers of the business have already had an active managerial role, the transitions tend to be quite smooth, as opposed to the western idea of a big takeover with sweeping changes and redundancies all round.
Li Ka-Shing is a prime example of a Chinese expat in the bamboo network. Li’s father died when he was 15 so he dropped out of school and got a job labouring at a plastics company to support his family. He worked there for 16 hours per day. Eventually, he had saved enough money to start his own business, Cheung Kong Industries, which specialised in the manufacture of plastics. He then expanded the organisation into a leading real estate investment company, and eventually acquired Hutchison Whampoa, a company with the world’s biggest port and telecommunications operations, and Hong Kong Electric Holdings Limited. Li Ka-Shing’s son, Victor Li, serves as managing director and deputy chairman of Cheung Kong Holdings Limited.
With respect to Galina’s question I think there is a huge dfference between family businesses in Europe and Asia for example. Certainly those dimensions have an impact on decision making processes within companies in their respective countries i.e. collective decision making in China and top down decision making (indivdual) in Germany for example.
Has anyone already worked in China as it would be intersting to hear about gained experiences which could either support the analysis of Hofstede or oppose it.
Thanks for your definition Max, however I think we should highlight the fact that within the ‘bamboo network’ Chinese families worked amongst one another as well thus increasing the value of the network as a whole.
In terms of the Hofstede’s dimensions of culture, China and India have different ranks on the indexes, however there are similarities in the general trend (ex. high LTO, PDI, Masculinity) perhaps this similarity is one of the reasons why existence of a ‘curry network’ similar to that of the ‘bamboo network’ can be argued. From information found on http://asiansinafrica.com/history.htm, http://www.jstor.org/pss/4410637, and, being Indo-Tanzanian, on personal knowledge of the rise in affluence of the Indian businessmen in East Africa, the idea of a ‘curry network’ is definitely supported at least in this region. Similar to the Chinese, as described in the article ‘Chinese Entrepreneurship: The development of small firms in China, when the Chinese moved into places such as Singapore, Thailand, Indonesia etc. they did business amongst themselves. Similarly when the Indian rail workers in East Africa settled in countries like Kenya, Uganda, Tanzania etc. at the end of their indenture contracts, they did business with relatives and amongst each other (as the expatriate community) and established trading networks and shops selling daily commodities, becoming known, as Mehta puts it in his article, as ‘dukhawala’s’. Mehta also describes how early settlers from India became ‘pioneers’ and helped set up the next wave of settlers. Thus the ‘bamboo network’ exists is the Indian Diaspora.
Regarding xenophobia, Indian settlers faced some dislike from the locals because of their culture and importantly the increase in affluence. An element of this dislike still exists today, as many locals have negative views of the Indo-Tanzanian culture and people. Paternalism and nepotism also exist in the Indian-Tanzanian culture as founders of family businesses are in most cases the paternal figure, and the next generation is almost predestines to takeover. Nevertheless, founders are now being more selective and taking time to educate and train the future generation and being selective in their succession plans.
Concerning Russian Diaspores in other counties (US, UK), which are mostly russian speaking (but of different ethnic origins), I can say that there is almost no “networks” in sence of business. Emigrants from Russia who conduct business in foreign land usually integrate with local businesses (even though they tend to communicate with other russian speaking people in their spare time).
Nevertheless in USA you can find completely russian blocks (just like China towns) with russian restaurants, shops, laundary etc. People from such areas tend to communicate and collaborate among each other and may even hardly speak english while their business is fine.
But all this is mostly related to previous generation of immigrants. Young ones are integrating more easily.
Kirby and Fan compare a list of sixty traditional Chinese cultural values constructed from research surveys and a list of entrepreneurial attributes as identifies by various authors to determine whether Chinese culture is conductive to entrepreneurship. They found considerable overlap between the two sets of values, including perseverance, diligence, resourcefulness, emotional stability, integrity intelligence and harmony. But some entrepreneurial attributes appeared to be in conflict with Chinese values. Moreover, the most important entrepreneurial values- creativity, innovation, and flexibility were lacking in the Chinese set of values.
This leads to the conclusion that Chinese culture would appear to be only partially conductive to entrepreneurship, while some strong barriers may exist.
I agree with Max that there is huge difference between family businesses in Asia and Europe or US. More specifically, according to David Holts analytical study a sharp contrast existed between Chinese entrepreneurs and US entrepreneurs
Kirby and Fan compare a list of sixty traditional Chinese cultural values constructed from research surveys and a list of entrepreneurial attributes as identifies by various authors to determine whether Chinese culture is conductive to entrepreneurship. They found considerable overlap between the two sets of values, including perseverance, diligence, resourcefulness, emotional stability, integrity intelligence and harmony. But some entrepreneurial attributes appeared to be in conflict with Chinese values. Moreover, the most important entrepreneurial values- creativity, innovation, and flexibility were lacking in the Chinese set of values.
This leads to the conclusion that Chinese culture would appear to be only partially conductive to entrepreneurship, while some strong barriers may exist.
I agree with Max that there is huge difference between family businesses in Asia and Europe or US. More specifically, according to David Holts analytical study a sharp contrast existed between Chinese entrepreneurs and US entrepreneurs
based on understanding of chinese culture. the bamboo network more like a part of chinese culture. because the majority chinese expatriate workers in the early stage were from Guangdong province.(their language is Cantonese). but they do not involve all culture of China.
PS: max, good comment for Bamboo network, a little mistake is Hong Kong and Taiwan are not country.
the following articles deals with management succession in chinese family business from one generation to the other. the major emphasis is to delineate the difficulties which primarily the second geenration owners encounter in managing the business and propose a tripartite model for the second generation owners of SME to adopt to enhance their abilities and competitiveness.
managemnet succession: a case for chinese family-owned business
- walter W.C. Chung, Karina P.K. Yuen
http://www.emeraldinsight.com/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0010410705.pdf
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