Leadership Style in China

LEADERSHIP STYLE IN CHINA

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Abstract

This dissertation will argue that the leadership style in China combines both authority and strong discipline with fatherly moral and benevolent integrity that is supposed to be upheld without question.  As such, this study used a mixed methodological stance involving qualitative and quantitative findings to provide a wide scope of information regarding this subject matter. Moreover, the findings include primary findings that were obtained from a case study based in TCL Multimedia Technology Holdings, Ltd (a Chinese multinational company that deals in electronics) and secondary findings that were obtained from the review of literature from other previous researchers who carried out research on this subject matter. As such, in order to address this subject matter comprehensively, this study sought to identify the leadership style used in China, the impacts of this leadership style to the Chinese people (employees), the impacts of the Chinese leadership style to the Chinese economy, and the influence of the Chinese culture on the leadership style of China. In addition, this study provided recommendations on how Chinese leaders can adapt to the increased demands of the global market that they operate in so as to succeed and compete while still respecting the Chinese cultural traditions.

CHAPTER ONE: INTRODUCTION

1. Purpose of the Overall Dissertation

The present research purposes to find out the kind of leadership style that is used in China. As such, prime research activities that were carried out in this research work involve the evaluation of the leadership style of China on the basis of its implications on the people of China, its impacts on the economy of China, and the relationship that exists between the leadership style in China and the Chinese culture.

1.2.        Background Information on Company and Environment

Research indicates that company and environment is the combination of external factors and internal factors that affect the operating situation of the company (Sampson & Chambers, 2000, p. 18). A business environment includes factors such as competition, business owners, employees, clients, economic trends, government activities, and the social market of the company.  UNCTD (2003) states that China, which is a socialist-market economy with no independent judiciary because of the presence of a single political party, has a very different corporate system distinguishable from the other countries in the world. Moreover, because Guanxi (personal connections) are considered critical at all the stages of business in China, the engagement of regulations varies. In situations where some Chinese entrepreneurs feel that the laws are vague, or have irregular enforcement, these entrepreneurs tend to turn to family relationships because there is a general trust in family endurance by the Chinese (Chen & Lee, 2008, p. 14). In addition, the Chinese corporate world considers a lot of hierarchical leadership and respect. Moreover, according to Gallo (2011), competition amongst Chinese state-owned enterprises was 75%, and that between private and Chinese non-state owned companies was 86% in that same year. Therefore, there is stiff competition in the Chinese corporate sector (Rowe, 2007, p. 32).

As such, this research project based its primary findings in a case study of TCL Multimedia Technology Holdings, Ltd, which is Chinese multinational company that deals in electronics. Founded in 1981 and based in Huizhou, Guangdong, China, TCL develops designs, manufactures, distributes and sells electronic products such as refrigerators, televisions, mobile phones, and DVD players in more almost all the major continents of the world. The company, which is a sub company of TCL Corporation (its ultimate holding company), has grown over time to acquire approximately 100 million consumers all over the world. Therefore, the company has a very large number of employees globally. However, because of the centralization of the company’s operations from China, this study was conducted from the company’s headquarters back in China and all the respondents were Chinese employees, managers, and owners of TCL Multimedia Technology Holdings, Ltd.

1.3.        Background of the Study

China's emergence as a chief global economic power has put the whole universe on notice (Stuttard, 2000, p. 34). In addition, Heilamnn & Perry (2011) indicate that the Chinese rapid economic growth estimated at a rate of eight percent per year as opposed to the United States of America’s growth of about three percent per year, has come at a price. The growth of China has significantly stretched its already aging supply of labor, a factor that has fuelled intense competition for talent in China. As such, turnover rates in China have continued to rise amongst workers, increasing the demand for the skills that workers have, hence increasing the levels of bargaining power in the Chinese corporate world.Therefore, the Chinese culture that is steeped in traditions has in recent times found itself contending with the factors that shaped its past and the factors that force and rapidly shape its future (Hammond & Stapleton, 2008, p. 23).  

Derr & Bournois (2002) state that while various organizations around the world are facing considerable challenges in finding appropriate leaders to drive their agenda, in China, cultural factors are compounding that task. Moreover, the continuing transformation of the Chinese economy directly means that Chinese leaders must possess proper skills that give them the ability to blend the emerging trends of management in the corporate world with the old systems. Additionally, the leadership style in China has for a long time been founded in the mutual respect and the feeling of connectedness amongst individuals. However, Leong & Berry (2010) designate that for China to be able to compete globally; the new Chinese leaders need certain leadership qualities that are able to reach across cultures and nations because of the increased inter-cultural and multi-national trading.

Berry & Farquhar (2006) state that at a time when China is increasingly becoming more central in the global economy, scholars as well as business managers from outside China have felt the urge to understand the views and thoughts of the Chinese management and leadership. China is amongst the oldest civilizations in the whole world, and is among the countries with the largest people populations in the whole world, and has produced internationally recognized philosophers, statesmen, leaders, and thinkers of all times (Smith, 2005, p. 28). However, despite enormous literature from various scholars over time on the leadership styles found within China and outside China, there is still little explicit knowledge about the Chinese style of leadership, and by Chinese scholars (Gallo, 20011, p. 40). It is based on this that this study geared itself to finding out the leadership style of China in relevance to the Chinese economy and the impacts that this leadership style has on the economy of China, and the people of China, especially employees.