MANAGEMENT OF FAMILY BUSINESS IN CHINESE CULTURE

Management is a prerequisite in the running a business. It is necessary to ensure that the business is being run properly, budgets are being used to the right supplies, human resources are properly trained, the freedom of the company from risk, and so on. Management is basically a strategy to make the business run effectively. It is a set of principles to manage an organization. While organization refers to the combination of the necessary human beings, materials, tools, equipment, working space and appurtenances, brought together in systematic and effective correlation, to accomplish some desired object, management is the force which leads, guides and directs an organization in the accomplishment of a pre-determined object (Sheldon and Thompson, 2003). However, many factors determine effective management and one of them is culture. Managing a business to integrate within a specific culture might be difficult since customers have a different belief system, different norms, morale and religion. For instance, there are cases of foreign companies in China that are being managed by Westerners to ensure that the company will retain its identity even in a foreign land. However, those managers usually face the problem of culture within the company. On the other hand, local management of foreign company in China may well know how to manage their fellow citizens and might be able to handle sensitive cultural issues. But on the negative side, they may face the problem of not being able to adopt and uphold the Western management style of the company. Kessapidou and Varsakelis (2002) stated that differences in national culture influence not only the entry mode but also the perceived difficulty surrounding the integration of foreign personnel into the organization. Furthermore, management styles are tempered by cultural characteristics (Kessapidou and Varsakelis, 2002). The interest of this study is to identify the management strategies of Chinese family businesses and its significance with the Chinese culture. The aim of the study is to identify how culture influences the management strategies or the strategic management practice of the family company.   AIMS AND OBJECTIVES               The main aim of the study is to identify the management styles of family businesses within the Chinese setting. This will be achieved by asking them to answer a comprehensive questionnaire that should include Chinese traits of management control. The plan is to be able to identify if Chinese family businesses take into consideration the Chinese culture and implement them in their management styles. It will also be identified later on the elements of the Chinese style of management they are using.             The general objective of the study is to be able to contribute in the field of international management research, specifically in the issue of culture. Culture has long been an issue in international management and has been the subject of many researches. This objective can be achieved by completing the study consistently and carefully. On the other hand, the specific objectives of the study are to prove the following statements:   Ø      Chinese business companies implement management practices that are in tune with the Chinese culture. Chinese businesses still use superstitious beliefs because of the belief that they will bring good luck. Ø     National culture plays an important role in shaping effective management control and approach of a firm operating. SIGNIFICANCE OF THE STUDY             The study will be a significant contribution in the study of culture in the international business management setting. One of the possible main contributions that the study can give in the subject is that it can identify the advantages of incorporating Chinese culture to the management of family business. By sampling Chinese family companies, the study may prove that the culture of the person plays a huge role in that person's management preference. This study will further strengthen the facts that support the relationship between culture and international management. Another possible contribution that the study can give is that it can enforce and emphasize the importance of shaping management practice to the culture of the country within which the company operates. Possible theories and confirmations may be discovered in the study. It may also stumble upon new problems and hypotheses that require additional research. This study may challenge other researchers to further confirm the findings for stronger support and evidence to the hypotheses.         THEORETICAL FRAMEWORK   Initially, the first theory that may support the aims of this study is Hofstede's (1980) four value dimensions, which explain differences among work-related value patterns and affect the structuring and functioning of organisations. The four dimensions are the following: Ø      Large versus small power distance. Large power distance is the extent to which the members of a society accept that power in institutions and organisations is distributed unequally; while small power distance is the extent to which members of a society or organization accept that power is distributed fairly as employees are free to participate (Adler, 1997). Ø      Strong versus weak uncertainty avoidance. Strong uncertainty avoidance means the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity, which leads them to support beliefs promising certainty and to maintain institutions protecting conformity; while weak uncertainty avoidance is the degree to which members tend to be relatively tolerant of uncertainty and ambiguity and require considerable autonomy and lower structure (Rodriguez, 1995). Ø      Individualism versus collectivism. Individualism is the preference for a loosely knit social framework in society; collectivism stands for a preference for a tightly knit social framework. Ø      Masculinity versus femininity. Masculinity is the preference for achievement, heroism, assertiveness and material success; while femininity refers to a preference for relationships, modesty, caring for the weak and the quality of life. According to Hofstede's analysis for China, the Chinese rank lower than any other Asian country in the Individualism (IDV) ranking, at 15 compared to an average of 24 (ITIM, 2003). This may be attributed, in part, to the high level of emphasis on a Collectivist society by the Communist rule, as compared to one of Individualism (ITIM, 2003). China is proven to be a collectivist society (Triandis, 1995). Chinese are generally willing to give priority to the goals of the collective over their own personal goals, and emphasize their connection to the members of these collectives. Furthermore, they focus their trust and solidarity toward the norms of the members of their collectives, also called ingroups, and are often distrustful of outgroups. The Chinese believes that individualism connotes selfishness, a lack of concern for others, and an aversion to group discipline, whereas collectivism is understood to affirm the solidarity of the group (Ho & Chiu, 1994). METHODS A hypothetico-deductive comparative study approach will be used for the current research. The research design for the study is descriptive as it aims to present current facts about the management style of Chinese family business and the roles that Chinese culture play on them. A descriptive research intends to present facts concerning the nature and status of a situation, as it exists at the time of the study (Creswell, 1994). It is also concerned with relationships and practices that exist, beliefs and processes that are ongoing, effects that are being felt, or trends that are developing. (Best, 1970) In addition, such approach tries to describe present conditions, events or systems based on the impressions or reactions of the respondents of the research (Creswell, 1994).             The hypothetico-deductive approach will be compatible with the study because it can address very well the independent and dependent variables within the problems. The independent variable in the study is the Chinese family business management, while the dependent variable is Chinese culture. Basically, it is not only the businessman's view that will be compared, but also which type of management style mostly preferred by the family. Hypothetico-deductive method allows the research problem to be conducted in a very specific and set terms (Frankfort-Nachmias & Nachmias, 1992). Besides, a quantitative research plainly and distinctively specifies both the independent and the dependent variables under investigation (Matveev, 2002). It also follows resolutely the original set of research goals, arriving at more objective conclusions, testing hypothesis, determining the issues of causality and eliminates or minimises subjectivity of judgment (Kealey & Protheroe, 1996). Further, this method allows for longitudinal measures of subsequent performance of research subjects (Matveev, 2002). Finally, it provides achieving high levels of reliability of gathered data due to i.e. controlled observations, laboratory experiments, mass surveys, or other form of research manipulations (Balsley, 1970). However, its disadvantage is that it may not be able to squeeze out enough opinions from the respondents as the statements are already limited within the questionnaire. The respondents will only be asked to tick the level of their agreement or disagreement. For this matter, it will be ensured that the questionnaire will be designed carefully and pre-tested before the actual testing.   The Questionnaire               The questionnaire will be originally constructed and developed by the researcher with reference on the Hofstede's cultural dimension values discussed in the theoretical framework segment of this paper. The paper will be divided into three sections. The first section will intend to acquire the demographic profile of the respondents. The second part of the questionnaire will intend to acquire their level of agreement on preference to management control and style. Finally, the third part will acquire their level of preference on management. It should be noted that the second and third part will not be openly described as management styles and control of Chinese family business companies; instead they will be simply labelled as section 2 and 3. This is to control the bias that might arise once they know what the sections stand for. In this way, they will fill up the questionnaire without being conscious of their values and beliefs. Thus, the link between management preference and culture will be acquired more clearly and precise without bias. Bias is hoped to be revealed later when their answers will be analyzed. The purpose of the set of attitude statements is to determine the level of agreement or disagreement using a five-point Likert scale. In the Likert technique, the degree of agreement or disagreement) is given a numerical value ranging from one to five, thus a total numerical value can be calculated from all the responses. (Underwood, 2004) The equivalent weights for the answers will be: Range                                                            Interpretation             4.50 – 5.00                                                    Strongly Agree             3.50 – 4.00                                                    Agree             2.50 – 3.49                                                    Uncertain             1.50 – 2.49                                                    Disagree                      0.00 – 1.49                                                    Strongly Disagree   Samples                 Convenience sampling will be used in the study to avoid conflicts in the schedule of the students and to save time for the study. Questionnaires will be personally given to conveniently selected immediately available respondents. The target number for the samples is 10 Chinese family businesses. The criterion for the respondents is that they should be authentic Chinese family business operating within 6 months of more.   Results                 Results will be acquired by the tabulating the data collected using SPSS software. Demographic data, Chinese management preference data, Chinese cultural data will be analyzed with the use of ANOVA. Then, data will be compared also with ANOVA.