Chapter 3

Culture

Culture, it's been called "a riddle wrapped in a mystery wrapped in an enigma." National and organization culture set the context for effective teamwork. I take a look at what that means for China.
Culture is hard to define. It has been described as "a riddle wrapped in a mystery wrapped in an enigma" (Pettigrew, 1990). As a concept, it grew in popularity in the eighties as part of organization theory research, especially with the success of Japanese corporations attributed to specific culture features. The renowned sociologist Geert Hofstede defines culture as "the collective programming of the mind distinguishing the members of one group or category of people from others" (2001). Organizational culture, and to a larger extent, national culture directly affects teamwork.
National Culture
National Culture
National culture is defined as a set of norms, behaviors, beliefs and customs that exist within the population of a sovereign nation. According to cross-cultural research, national culture explains between 25 and 50 percent of variation in attitudes and relates to social behaviors such as aggression, conflict resolution, social distance, helping, dominance, conformity, and obedience, as well as decision-making and leadership behaviors (Gibson & Zellmer-Bruhn, 2001).

National Culture: China
When looking at the national culture in China, practitioners tend to make assumptions of a collectivist, hierarchical, and paternalistic society. But it's important to keep in mind that "there is also great ideological diversity. Traditional ideas of Confucius, Dao, and Buddhism contend directly with free market, Leftist, Communist, Socialist, and Maoist thinking" (Tjosvold & Fang, 2004).

Measuring National Culture
Geert Hofstede conducted one of the most comprehensive studies of how values in the workplace are influenced by national culture. The result of the study led to the cultural dimensions theory. While not immune to criticism, the theory is that there are six dimensions that make up what we consider "national culture." They are:

  1. Power distance - the extent to which the less powerful members of organizations within a country expect and accept that power is distributed unequally.
  2. Individualism-Collectivism - the degree of interdependence a society maintains among its members.
  3. Masculinity-Feminity - the motivations of members, wanting to achieve and be the best (Masculine) or caring for others and quality of life (Feminine).
  4. Uncertainty avoidance - the extent members feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid these.
  5. Long-term orientation - how every society has to maintain some links with its own past while dealing with the challenges of the present and future.
  6. Indulgence - the extent to which people try to control their desires and impulses.

Of the six, the first two, power distance and individualism, have received the most attention in organizational literature and are most likely to influence teamwork (Gibson & Zellmer-Bruhn, 2001). They will be looked at here. Since country scores are relative and meaningful by comparison, the USA (generally seen as more individual-driven) and Japan (generally seen as more collectivist-driven) appear alongside China's results as a benchmark.

Power Distance
National Culture
Assumptions
At 80 China sits in the higher rankings of the Power Distance Index – the belief among its citizens that inequalities amongst people are acceptable. High power distance can be seen at home (respect for elders), at school (respect for teachers), in politics and the public sector (respect for leaders), in the private sector (respect for the rich and successful), and corresponding social situations (social niceties such as seating arrangements according to status).

Challenges to Authority
Facing a freer market and increasingly open society, public spheres like school, government, and state-owned agencies are slowly transforming, but nowhere are the rumbles of conflict more apparent than the private sphere. At home, the generation and values gap have resulted in popular rent-a-girl/boyfriend apps to appease demanding parents. Hugely popular online interest groups like "Anti-Parents" on Douban — a social media site popular among twenty-and early thirty-somethings (Sun, 2013) are forums for shared, traumatic experiences. Recent subway ads by the "Singles Coalition," a non-profit collective of young people fed up with parental and societal pressure for getting married, read "Dear mom and dad, don't worry. The world is big. There are many different ways for people to live. Singles can also be happy."

Individualism
National Culture
Assumptions
At a score of 20 China is a highly collectivist culture where people act in the interests of the group and not necessarily of themselves. This is the prevailing assumption about China with its largely ethnically homogenous population, Confucian traditions that stress "harmony as most precious" (Chan, 1963), and autocratic history.

Challenges to Collectivism

Within the last 30 years, massive shifts in in China have caused much of the research on individualism-collectivism in China to become outdated. The major factors contributing to this shift from collectivism to individualism can be summarized as follows (Cao, 2009) :

1. Economic development
2. Affluence of individuals
3. Modes of production
4. Mobility
5. Traveling and education
6. Mass media

All six factors have changed drastically in the last 30 years. As Cao noted, individualism is a consequence of wealth and economic growth. The more a country's wealth and economy grows, the more choices people have, the more the country tends to be individualistic (2009, p. 45). This is reflected in the Chinese media as well. Public interest news stories about individual wealth in China are quite common. The shift toward individualism is visible from prevailing characteristics of the post-70s, 80s, and 90s generation, who make up the work force in the creative industry in China. While their parents crave stability, the younger, richer, more informed generations increasingly seek a voice and identity. Let's take a look at them:
Source: Taken in Sanlitun, Beijing, 2015
The Post-70s
Born 1970-1979. This generation was spared from the upheavals of the Cultural Revolution (1966-1976), but caught the tail end of a socialist economy. They grew up during a time when all of society was poor, when education and healthcare was free, and jobs were even assigned. Then Deng Xiaopeng's Open Door Policy in 1978 ushered an era toward private enterprise and capitalism, and many of the post-70s jumped on the bandwagon of "work hard and get rich." They tend to be practical, hardworking, conservative, responsible, and money-oriented. They tend to be less individualistic and prone to uphold social, familial or societal responsibilities.
The Post-80s
Born 1980-1989. The post-eighties generation came of age during China's modernization period. They grew up during a pre-affluent urban China knowing coal burning at home to keep warm, bicycles as mass transportation before finally witnessing the rise of cars, computers, cell phones and a China transformed. Studies conducted on this group ascribe the following traits" they are open, rebellious, aggressive, pragmatic, self-oriented, strongly independent, hoping to be noticed, eager to make money and having great interest in expensive products (Stanat, 2005). They tend to be more individualistic than previous generations.
The Post-90s
Born 1990-1999. As with many younger, upcoming generations, the post-90s are fraught with contradictions. Growing up during an urban, digital age in relative comfort, they share similarities with the post-80s both born during the period of the one-child policy. They are known to be confident, independent and have a strong sense of self-awareness. They prefer less hierarchy in the workplace and freedom in their pursuits (Sun, 2012). Conversely, these traits also result in negative stereotypes of arrogance, impulsiveness, selfishness, and being generally confused. Along with the post-80s, their increased access to wealth, mobility, education, and choices have propelled them toward individualism.
Organization Culture
Organization Culture
Organization Culture is defined as the values and behaviors that contribute to the unique social and psychological environment of an organization. Social psychologist Edgar Schein identifies three distinct levels within organization cultures. Artifacts, or tangible elements can include facilities, furniture, dress code, to the myths traded about the organization. Values, or professed beliefs, goals and philosophies regarding the organization's culture. Assumptions, or unconscious perceptions, feelings and deeply embedded behaviors that constitute the essence of culture. Schein's levels are useful to distinguish the different forces at play. An organization may espouse certain aesthetic choices and moral standard, but is driven by an opposing set of "unspoken rules" (1992).

Organization Culture: China's Creative Industries
China's creative industries, which I opt for a straightforward categorization of the arts, media and design sectors, is uniquely influenced by its shift from a world manufacturing power to a desire to become a R&D and brand power. As cost of labor rises, state-owned industrial factories face unprecedented decline. Indeed, with only 1.53% of the work force in the cultural sector in 2008, the government is aware of an increasing "cultural trade deficit." The world grew up using "Made in China" products, but Chinese youth grew up watching Korea soap operas and American iPhones. "Created in China" was nowhere to be found.

Initiatives to increase China's innovation and "soft power," or cultural influence is in the forefront of government policies. This manifests in innovation zones that cluster creative real estate, investment into traditional arts forms like the kunqu opera, to speeches from every recent social and economic development initiatives.
Because of its inherently political nature, scholars have argued that creativity has been "sinified" or harmonized in China. Sectors like art and media especially, while enjoying a boom in the recent years, continues to tread against a murky line of censorship.

It is then not surprising the word for innovation/creativity, chuangyi (literally "to make new ideas"), was introduced to Mainland China in the advertising industry through international conventions (Keane, 2013). Unlike the sectors of art and media, the design and advertising sectors are "non-sensitive media" due to their largely commercial context. The proliferation of multinational creative agencies at the turn of the millennium, followed by many independent, home-grown agencies thus give way to a diverse and dynamic industry with relative freedom to explore innovation possibilities that are apolitical.

Measuring Organizational Culture

There are numerous qualitative and quantitative measurements used to explore what makes a organization culture good. The following model is referenced for its simplicity and prevalence. Robert A. Cooke's Organizational Culture Inventory (1987) model groups organizational culture into three types:

  1. Constructive cultures - discussions and exchange of ideas encouraged; this is the most efficient culture for organizations involving complex processes and teamwork.
  2. Passive cultures - pleasing superiors first to make position safe and secure.
  3. Aggressive cultures - competition against each other so that each one performs better.

A Desire for Openness
In a transitioning economy, China's organization culture of its creative industries is affected in complex ways. Many firms have inherited the legacy of a controlled economy with top down leadership. Studies have shown firms in the private sector have a preference for simple organizational structures with everyone reporting to the top (Hout, 2014), aligning toward Cooke's passive culture. The demands of a freer market economy, however, drives cut throat competition that also foster an aggressive culture.

Within most private sector, and especially the creative industries, high power distance relationships get in the way of innovation. As an executive coach who works in Southeast Asia explains: "Senior-level people get no information, and believe that they have nothing to improve upon, and junior-level people do not bring ideas forward. It's hard to innovate under these conditions" (Sweeten, 2012).

Innovative companies are ones with high aspirations and an "openness to experimenting with radically different management techniques and practices" (Hout, 2014). Indeed, household Chinese tech brands like Alibaba, Youku, and Huawei are known simultaneously for what they do, as much as how they do it. Many companies are seeing the importance of breaking away from collectivist management in order to innovate and grow. In other words, they are making moves toward what Cooke defines as constructive cultures, or cultures that promote open discussions, idea exchange, and flatter hierarchies. Below are brief case studies demonstrating this impulse.
Case Study 1
Haidilao
Source: Sohu.com
While not technically in the creative industry, Haidilao is certainly one of the most creative businesses around found in Mainland China. As one of the country's most successful hotpot chain brands, it is known for its ebullient customer service — finding opportunity in long waits for offerings of boardgames, snacks and manicures, attentive staff who seem to go an extra mile for every small request, and servers who break into an impromptu dance while bringing your noodles. Yet when asked, founder Yong Zhang is known to say that "employees are more important than customers." Since he started the company more than 20-years-ago, personal empowerment have at the core of company success.

Employee-centric policies are visible in well-equipped housing provided for staff, guidance for career advancement, and more importantly, an openness for idea exchange. According to Zhang, "If you want creativity, you have to let your workers invent and use their creations" (Burkitt, 2013). Customer service details such as plastic bags for phones, and hairbands for women with long hair, came from employees. In a competitive environment where turnover is typically 20% for private companies, Haidilao's investment in talent retention through coaching, feedback, and training results in one of the lowest turnover rates in China (Hout, 2014).
Case Study 2
Alibaba
Source: Forbes.com
Alibaba is known for its vibrant, if not esoteric culture. There are myths like how the firm started with founder Jack Ma, an English teacher, in his apartment with 18 people that grew to over 30,000 today. Rituals that reference China's clan culture roots like a mass wedding with 102 couples officiated by Jack Ma himself (Shao, 2014). Finally, metaphors that compare the company to a gang of rebels from martial arts lore, with conference rooms and employee nicknames after kung fu heroes until they ran out (Shao, 2014). All of this might seem borderline overzealous as Jack Ma wrestles with western values and Chinese lore to create something unique.

Is it real? Beyond the gauze, elements of transparency, openness, flat hierarchy and an urge to do good emerges from real metric. Company values, which include integrity and teamwork, make up half of performance reviews (The Economist, 2013). Aliway, the company's internal communications platform, provides space for vigorous debate on everything from Alibaba products to policies regardless of employee positions (Shao, 2014). Andrew Teoh, a former Alibaba executive notes that "Alibaba is a flat structure, bureaucracy is a pet hate here" (Carsten & Aldred, 2014).
"In China however, because of the rapid economic growth in the past 30 years, and the lack of religious beliefs in this country, our management follows a less consistent pattern. We must take scraps from here and there, and nothing is our own." - Jack Ma, CEO, Alibaba, IAMCR.org (Chen, 2013)
The Third Way
Based on national, organizational trends and case studies of successful Chinese companies, I observe a few dynamics:

  1. Although there are challenges to power distance acceptance amongst young people, often times people in a position of authority are still of an older generation, more familiar working within a top down structure. Finding themselves managing young generation who have more individualistic values can lead to friction.
  2. For leaders who want to harness the power of creativity in their employees, the culture of "openness, transparency, and empowerment" is the path forward toward a dynamic and creative organization. This is seen in some of the companies noted above, but often executed in a top-down fashion by a charismatic leader.
  3. For leaders to get their employees to truly buy into such a culture, I posit that leaders need to use a simple theoretical framework to support their thinking, and in turn become coaches who use their authority for empowerment.

How do these dynamics play out specifically in the design and advertising industries? Are there any innovations or methods in teamwork that drive toward constructive cultures? In the next chapter, we talk to 20 industry leaders to find out.
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