Figure 1. Schematic Diagram to illustrate the Stakeholder’s Theory
In the past few decades, we have seen global warming, terrorist attacks, financial institution collapses, business scams, the Enron case and other unethical practices in the United States and other parts of the world (Low, 2009; 2009a). Notably then, nowadays, facing with accelerating turbulence and change, business leaders and managers need or should seek fresh ways of thinking and actions to sustain their business performance and growth in a global setting. Asian countries including China, South Korea, Taiwan, Vietnam, Japan and Singapore are fast emerging or becoming dominant global business players; the recent rapid heating and rise of the Chinese economy has an impact on the overall global economy as well as the balance of power in the world.
It is interesting to note that all these said Asian countries have been influenced historically in one way or another by the practice of Confucian Ethics in their business leadership and management. In this paper prepared with wise Chinese sayings, the authors interpret and present Confucian Ethics and business lessons derived from the wisdom of Confucius. From Confucian Ethics comes the emphasis on positive business dealings and harmonious relationships as well as the value of learning; and these bring many benefits and good practices including good business management and applications of the Stakeholder theory. The understandings and practices of Confucian Ethics in a business organization coupled with the awareness, theory and applications of the stakeholder theory can indeed bring much peace, learning and growth for an organization.
These days, due to the dynamics and the ever changing business environment, it is very important for an individual whether (s)he is a business leader, a manager or an employee in an organization to be cautious and aware, more so, to embrace the business code ethics and corporate social responsibility. One has to do so or should feel compelled because firstly, the public expects corporate leaders/managers to apply ethical principles in their businesses. Secondly, people also increasingly expect business to be more socially responsible day by day. Thirdly, human beings share a single planet with finite natural resources and it is crucial to ensure the sustainability of the supplies and the resources for the present and the future generations. Lastly, new technologies bring along new ethical situations and concerns such as genetically modified, high yielding crops/food or nuclear crises that might cause safety and health problems, yet there are also other threats including scams, online frauds, invasion of privacy, internet pornography. Indeed, many tough situations and ethical concerns exist. (Low, 2008a).
Moreover, on the contrary, there is much competitive pressure to succeed, businesses must succeed. People may make their own luck by any means; worse, at times, the means may justify the ends. They would say: “attack or be attacked” so much so that even “Greed is good” [as proclaimed by the Michael Douglas character, Gordon Gekko, in the 1987 Hollywood movie, Wall Street.] ( Low, 2008a).
However, one must realize that each of us has a social responsibility. Looking at the bigger picture, one must also agree that each firm has a social responsibility which is the firm's recognition of how its business decision(s) can affect society. “Ethics, the yardstick, serves as the foundational stone of doing business and it should play a critical role in every business, profit or non-profit organization, society, and nation. Ethics pays. Being ethical imparts a sense of trust which promotes positive alliances among business partners and associates. Confucian ethics can supply the basis through which people do, conduct business or make business decisions” ( Low, 2008a: 47). In this paper, the objectives are of two folds: Firstly, to relate to or interpret Confucian ethics in the light of the stakeholder theory and secondly, a call for each of us to continue to do something beneficial for the society at large. Each of us (companies and businesses) also has stakeholders; we need to satisfy our stakeholders too. Similarly, a firm is to satisfy the needs and interests of its stakeholders.
About Confucius (Pinyin: Kǒng Fūzǐ; Wade-Giles: K'ung-futzu, lit. “Master Kung”, 551 BC – 479 BC), he was an esteemed Chinese thinker and social philosopher, whose teachings and philosophy have deeply influenced Chinese, Japanese, Korean and Vietnamese thought and life ( Wikipedia, 2007, Chew, 2000) and also elsewhere, even in the Western world ( Yang, 1993). His ideas have, in fact, been lasting.
Zi Gong, a disciple, once asked Confucius, “Is there a single word that a man can follow and practice as his principle of conduct for life?” Confucius replied, “It is, perhaps, the word, Shu (恕) or reciprocity. That is 'not to do unto others what one does not want others to do unto oneself.' ” (Analects of Confucius, XV: 24; Lin, 1994: 186). The authors are inclined to favour the Confucian's overall anchor, the Golden Rule, that is, in a positive way, “One should treat others as one would like others to treat oneself”. Incorporating the Golden Rule, the stakeholder theory ( Donaldson & Preston, 1995; Lawrence and Weber, 2008) becomes relevant. This also meant that one moves away from oneself and becomes less self-centred, more thinking of others, and in fact, more altruistic. All businesses should be aware of their responsibilities to the public at large, that is to their stakeholders and make decisions that reflect these responsibilities in clear and transparent ways. Here, the business can then engage the stakeholders moving from inactive to reactive to proactive and to interactive. The basic point is that one can argue that business cannot avoid communication but has to enter into dialogue, do something, and engage with its stakeholders – market or non-market – in an ongoing responsive relationship. (Figure 1).
Figure 1. Schematic Diagram to illustrate the Stakeholder’s Theory
Note that there is a critical need to review and reflect of oneself (also read as corporation) and one's (corporation's) actions at regular intervals.
Albert Einstein (1879 – 1955) once said, “The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing.” In this regard of being responsible to oneself and others, Zeng Zi (a disciple of Confucius) said, “Every day I examine myself once and again: Have I tried my utmost to help others? Have I been honest to my friends? Have I diligently reviewed the instructions from the Master?” (Analects of Confucius, I: 4). Thus far, it is important that an individual should be responsible for what (s)he is doing and also to what others are doing around him/her . When one looks at a bigger picture, it is axiomatic that the firm should be responsible to all its stakeholders. The stakeholder theory is very attractive in that the stakeholders can also be expanded to any party(ies) and all an individual or business (“the Confucian measure of man is man”; Lin, 1994: 183, emphasis added) needs to do is to think of the party(ies) and be responsible to act or satisfy the needs and interests of the party(ies) involved. Besides, the normative value of the stakeholder theory should be appreciated; stakeholders are seen as possessing value regardless of their instrumental use to management. The normative view is often perceived as the moral or ethical view because “it emphasizes how stakeholders should be treated” ( Buchholtz and Carroll, 2009: 93) hence, the importance of the principle of stakeholder fairness.
Confucius remarked, “Man's existence lies in his integrity. A man without integrity can exist merely through his luck.” (Analects of Confucius, VI: 19; Waley,1992). A person's integrity of being truthful and sincere to oneself and society is of great importance and it appears that many often overlooked that the essence of Confucianism is the “idea of being true to oneself in this world” (interestingly, there is an intrinsic or inside-out approach) when fulfilling obligations to family and others in society (Wang, 2004: 51). When one is truthful to oneself, one would then be able to fulfil one's obligation to look after one's family in a caring and sincere way. When an individual can achieve this, then for one to care and contribute to one's society would come in a natural way. Therefore, sincerity and integrity of an individual are the key strengths of the Confucian ethics when applied to the stakeholder theory/ others in society. Whatever, even very little that each of us, individuals and businesses can do for our respective universe that would be great. After all, it would contribute to the overall goodness, similar to what the late Indian nationalist leader Mohandas Gandhi (1869 –1948) said, that is, “be the change you want to see in the world.” And individuals do make a difference in ethical actions.
Albert Schweitzer (1875 – 4 September 1965), a Franco- German theologian said, “Ethics is the activity of man directed to secure the inner perfection of his own personality.” This is very similar to what Mencius had said, men are inherently good ( Lin, 1994; Chan, 1973). Individuals have ethical attributes that can be cultivated and extends outwards. Currently, to these researchers, there is a need for ethical renewal by applying an insideout approach. Mother Earth is sick; there should be ethical concerns, not to say, the many environmental concerns, by all. China and India are growing but “the vast majority of Asia's poor are rural”, “millions more are barely getting by (surviving)” ( Wehrffritz; 2008; italics, mine), there are problems of income gaps and other issues. As earlier said, technologies are also changing and with it, come various ethical issues. Take, for example, just recently, a ferocious tsunami spawned by one of the largest earthquakes ever recorded slammed Japan's eastern coast on Friday, 11 March 2011, killing hundreds of people as it swept away boats, cars and homes while widespread fires burned out of control. Following these events, a nuclear power plant at Fukushima, after stricken and damaged by the tsunami, produced an accumulation of hydrogen near the nuclear reactors and caused large explosions that heavily damaged the outer buildings housing them. The disasters also knocked out the reactor cooling systems, triggering more explosions and fires and releasing radiation. The crippled plant suffered an extensive radioactive materials leakage polluting the air, water (marine life) and land (vegetation) surrounding the area. (Singapore Straits Times, 2011). The emitted radioactive materials have also contaminated the fishing village, farm produce and drinking water. The contaminated water raised concerns about the safety of seafood in the country that gave the world sushi, prompting the government to set limits for the first time on the amount of radiation permitted in fish. (Singapore Straits Times, 2011a). Residents living nearby the nuclear plant have to be evacuated to other safer places away from the radiation hazards. In addition, several weeks had passed since the Japanese plant operator, together with the help of the world nuclear experts, were trying to contain the damage i.e. to prevent the radioactive materials leakage from spreading further. (Singapore Straits Times, 2011b).
Although natural disasters such as earthquake and tsunami cannot be foreseen and be prevented, however, the authors felt that if the Japanese can continue to learn from their past history (experiences), the disaster may have been avoided or minimize. In Confucianism, one should learn not only from the past, but also, from mistakes. Confucius said, “I was not born with knowledge, but, being fond of ancient culture, I was eager to seek it through diligence.” (Analects of Confucius, VII: 20). What are then the learning points from this recent Japan's disaster?
On the one hand, using all these experiences and information passed down by their ancestors, Japan may have effectively utilized all these information and crafted a better policy to protect the homes and livelihood of its people against natural disasters. Through history, one may map out the frequent tsunamis occurrence coastline, and this would provide a basis for further resettlement in order to protect the future descendants. On the other hand, Japan nuclear crises might have been avoided if a careful and intensive feasibility study has been carried out beforehand, especially on the decision making of building a nuclear plant near to the epi-centre of the volcanic area and that this feasibility study should also include proactive crises management if unforeseen accidents do happen. Referring to this event, one can see that the Japanese response to the nuclear crises was too slow and was based on trial and error basis; more proactive crisis management could be applied.
A well balanced, inclusive approach, according to certain standards and ideals, is often essential for the proper governance of any organization. And in the stakeholder theory, to its stakeholders/investors, the firm and/or its managers should closely monitor employees' decisions to ensure that they are made in the best interests of the owners and stakeholders and that corruption is avoidable. Employees' compensations may be awarded directly tied to the firm's performance. The firm's financial reporting should also be accurate and transparent; it should give complete financial statements, those that are more understandable and more readily interpreted. Firms need to fulfill their responsibility to their creditors by providing good financial reporting. As in the case of Enron by conspiring with the auditors and concealing some debts that the company had incurred, Enron was able to more easily borrow funds and ultimately, it went bankrupt because it could not cover the payments on all of its debts. Specifically, Enron did not disclose some of its debt and indeed, its creditors would have been concerned about extending more credit if they had fully understood how much debts Enron already had.
A large factor in determining the likelihood of success and profits in an organization is customers' satisfaction. When there is customer loyalty, the customer retention rate will be high and business results tend to follow. Other than profit orientated, an organization should also adopt responsible production practices and dutiful sales practices to its customers. Customers should receive fair exchange: value and quality for money spent ( Lawrence and Weber, 2008). In this regard, one has to be a good listener and be able to communicate well with the customers. The firm, in establishing a code of responsibilities, can monitor customer complaints and make full use of customer feedback to better serve the customer ( Madura, 2007).
Confucius cared most about people. When the stables burned down, Confucius enquired if any person had been hurt but did not ask about the horses. He recognized the free will of every individual, believing that the commander of three armies could be removed, but the will of even a common person could not be taken away. ( Low, 2010). In this respect, the business also needs to take care of its employees, providing stable employment, fair pay, and safety as well as the fact that employees are treated properly by other employees. Here, satisfying employees, the key issues in modern businesses include diversity, equal opportunity and the prevention of sexual harassment. ( Madura, 2007).
This point has been first highlighted by Low (2008a).
As defined by the WBCSD (World Business Council for Sustainable Development), “Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.” ( WBCSD, 2000).
In 2002, the definition was further simplified to, “Corporate social responsibility is the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life.” (WBCSD, 2002). The concept of CSR has given rise to various business practices that are more stakeholders and societal orientated ( Fairbrass, 2005). Stakeholders' opinions and evaluation become important and have a great impact on the businesses today. The stakeholder theory suggested that investing time and other resources in addressing stakeholders' interests and concerns is an important corporate activity. Stakeholders are groups and individuals who can affect or are affected by, the achievement of an organization's mission. ( Freeman, 1984). Nowadays, big organizations such as oil and gas companies have an obligation to society and are responsible to numerous stakeholders including owners, employees, customers, suppliers, competitors, government regulators and communities. By integrating CSR into core business processes and stakeholder management, businesses can achieve their ultimate goal of creating both corporate and social value. Therefore, business corporations should be searching for ways to integrate CSR into their long-term business strategies in a way that is beneficial to both business and society.
Again, Mohandas Ghandi (1869 –1948) once said, “There is a sufficiency in the world for man's need but not for man's greed.” In this regard, the firm needs to ensure its responsibility to the community. It should be socially responsible. It needs to take care of and protect the environment. Firms need to prevent air, water and land pollution. Automobile and steel firms have reduced air pollution by changing their production processes so that less carbon dioxide escapes into the air ( Madura, 2007). China, for example, has admitted that it has failed badly; the country has not made much headway in improving the environment, says its Government Report ( Tschang, 2007). In this aspect, present day China needs to apply the Confucian Ethics in conjunction with the stakeholder theory – particularly in terms of the firm's responsibility to the environment – to make Mother Earth a healthier and a more pleasant place for all to live. The Chinese needs to realize that in traditional Chinese/ Confucian mind, men exist in harmony with nature (One with Nature), and unlike in the Western mind, traditionally, nature is to be conquered; there is a dominance orientation ( Adler, 2008). In this regard, the Chinese have to do something for the environment and Mother Earth.
One of the chief challenges faced is that of giving back or returning to the community and attaining the goal of greater common good by subscribing to and upholding Confucian ethics and the stakeholder theory. To be a responsible individual, one should not condone something which is not right or against human rights. Therefore, child prostitution, like child slavery, should not be simply accepted or tolerated. It is a gross abuse of the human rights of those who are least able to do anything. Whoever one is and whatever one does, one should and must do something about it. Just imagine if it happened to one when one were young, or to one's own child. Individuals and companies alike need to raise public awareness such as sponsoring children education in developing countries and/or sponsoring some awareness events including posting Internet articles and printing simple leaflets [which could include facts and figures to end sex trade/trafficking, prostitution, pornography and child sex tourism]. Street children (they are human beings who need the basic human rights too), particularly in developing countries, can also be attended to. Companies can also help to improve their welfare, and thus fulfilling their CSR while contributing to the society's well-being. The families of street-children are often too poor to feed an extra mouth; and among other things, companies can help by giving meals, books/ educational resources and old toys and improve their welfare. Besides street-children, companies can also help prisoners by sending them books so that they can educate themselves to a get a high-school diploma or a college degree. (Low and Ang, forthcoming).
Being ethical is synonymous with being a gentleman. Obviously, being a gentleman, the business owner/ firm must take care of the interests and needs of all the stakeholders.
What Confucius has impressed on us is that: To be a leader in business or in life, one needs to act and behave as a gentleman. However, one thing we have to be cautious is the character and integrity of a leader. Confucius warned his disciples, “Before praising a man who is honest in speech, one should observe: Is he a true gentleman or is his dignity just merely pretence?” (Analects of Confucius, XI: 21). Honestly speaking, a leader painting an impressive vision to his/her followers is not good enough, (s)he should also act on it and see through that his/her vision materialize in the future. If we are to achieve a state of orderliness and peace, we need to return to traditional values of virtue. These values are based entirely on one concept: Junzi. Differing from the Western Biblical traditions, the 5th century Chinese sage Confucius believed that human nature is basically good. However, he also believed that this goodness needs to be nurtured and cultivated and the best way to do so is through education. According to Confucius, “unending strength, resoluteness, simplicity and reticence are close to benevolence” which is attainable through self-cultivation, education and performance of the li or rituals/code of behaviour. ( Story, 2007).
Interestingly, in a capsule, just as Confucius has said, “It is man that makes truth great, and not truth that makes man great.” and “the measure of man is man” ( Lin, 1994: 183). Therefore, a so-called great man has to be consistently carrying out good things in a truthful manner to him and to others all the times; and even without other people noticing, not that he has done just a few visible and truthful things in the past to be recognized as a great man. In short, humanism and true manhood are stressed. “A gentleman understands what is moral; a base man understands what is advantageous or profitable” ( Chew, 2000: 9).
Needless to say, if a gentleman were to go and live among uncivilized people, then how could these people be crude? His very character as Junzi and his consistent actions will help to change them for the better.
Virtue is something to be desired highly. But why virtue is stressed? Winston Churchill (1874 –1965) said, “The only reward of virtue is virtue; the only way to have a friend is to be one.” Virtue is thinking and doing what is right and avoiding what is wrong. When virtue is practised, one enjoys a clear conscience. And a clear conscience is like a soft pillow, and one sleeps well. “A gentleman finds peace of mind in virtue and he covets it” (Confucius cited in Chew, 2000: 8). Rightly too, Confucius has highlighted that “likes and dislikes should not affect our judgment. We should be on the side of what is right and against what is wrong” ( Chew, 2000: 9). Again, on anything we do, we should have a clear conscience on what is right and what is wrong.
In this aspect, one's good example is critical. Without example, a leader becomes “a person who lacks gravity (and) does not inspire respect” (Confucius cited in Chew, 2000: 2, italics ours). A leader gains moral grounds and attracts his followers through his examples. His actions are louder than words.
As highlighted by Low (2006), role models should be assessed in the light of honesty and integrity. When comes with the time that the followers have doubt and question their leaders' honesty and integrity, leaders cannot be role models. For small and medium Chinese business leaders, it is a matter of face or honour. In the case of Singapore's national values, ( Low 2002; 2009b; 2011) speaks of the Confucian Heritage, here, it should be noted that in 2010, Singapore, together with Denmark and New Zealand, were ranked as the first most corruption free among 178 countries because all three countries scored the same CPI of 9.3. The CPI (Corruption Perception Index) scores countries on a scale of zero to 10, with zero indicating high levels of corruption and 10, low levels. (Transparency International, 2010). Singapore with a score of 2.194 was ranked among the top ten nations in the world in government effectiveness in the 2010 World Bank's “Worldwide Governance Indicator 2010” Report. ( World Bank Institute, 2010). It is noted that the governance indicators are measured in units ranging from about -2.5 to 2.5, with higher values corresponding to better governance outcomes. The Singapore's People Action Party (PAP) track record and ability to fight off critics based on honesty and integrity has enabled it to stay relevant and win all election campaigns since 1959 ( Lim and Daft, 2004: 50).
According to Confucius as well, “a wise man does not readily give utterance to words in case his actions do not live up to his words” ( Zhou, 2005: 10) “One who talks too much is prone to failure.” (Confucius cited in Zhou, 2005: 68). “A gentleman is slow to speak but prompt to act” (Confucius, cited in Chew, 2000: 10). “When the ruler (leader) does what is right, he will have influenced over the people without giving commands.” ( Lin, 1994: 199).
“A good leader may be compared to the wind and the common people to the grass. Let the wind blow over the grass and the grass, under the force of the wind, cannot but bend.” (Analects of Confucius XII: 19; Chew, 2000: 18). Pro-active, through his examples and behaviour, the business owner/ firm thus builds his/ its influence. Furthermore, when the employees fully trust and respect the leader, they would follow the leader's instructions and perform accordingly.
Here, “a gentleman is bound to attract other gentlemen. A villain is bound to attract other villains. Moreover a gentleman is naturally at ease with other gentlemen; a villain is naturally at ease with other villains” (Confucius cited in Chew, 2000: 2). Consequently, an organization runs in a gentlemanly and meritocratic way (such as with proper policy, procedure and fair treatment) would not attract and recruit any bad employees.
Interestingly, one's best way to raise one's influence is to apply the Golden Rule, the gentleman's code of conduct. To reinforce, it is worth repeating this – in essence, one does onto others what one oneself likes, and “do(es) not impose to others what (one oneself) dislike” ( Zhou, 2005: 4). When doing as such, one will not incur resentment, and win others over. The four essential virtues of an ethical leader are that in one's personal conduct, one is respectful. In one's dealings with one's staff, one is considerate; in caring for the common people's welfare, one is generously kind; and in dealing with all, one is just. In sum, an ethical leader is respectful, considerate, kind and just.
Love all and serve all is the Confucian message and when applied to the stakeholder theory, it becomes wholesome and without discrimination ( Low, 2008). Interestingly, Martin Luther King (1929-1968) also said, “Discrimination is a hellhound that gnaws at Negroes in every waking moment of their lives to remind them that the lie of their inferiority is accepted as truth in the society dominating them.” Discrimination at workplace is a haunting reality of the corporate world even in this millennium. Bias, prejudice and differentiation treatment rather than actual job-related basis constitute discrimination.
However, Confucianism indeed stresses on humanism. Love for mankind and may we add, love for nature too. According to Confucius “no man is a machine. He should not behave heartlessly like one, or as if others were machines” ( Chew, 2000: 5). “A gentleman is (also) conscious only in the knowledge of others' comfort; the mean is conscious only of his own comfort” ( Chew, 2000: 2, italics mine). To be ethical on doing things, one has to consider the impact of the action onto the environment and the public at large.
As a teacher (business owners), Confucius further believed that to elicit good results, he must love his pupils (employees) ( Yang, 1993; italics ours). He needs to know them well, understand their psychological particularities, give thought to ways and means of making easy their access to knowledge and, to that end, develop an effective methodology. Having said that, Confucius is also very insightful on assessing his disciples or dealing with people, he did judge a person not by one's word but by one's actions.
The hallmark of a teacher's virtue, in Confucius' eyes, was loving commitment through his lessons to his pupils' development. The teacher needs to look into the moral development of his pupils too, and that is an attractive way or value that a teacher may want to hold. In this respect, Confucius always cared and showed concern about his students especially when he was away from them. When he was in the State of Chen, Confucius missed his disciples at home. He said again and again to those who accompanied him, “Let's go home! Let's go home! My students at home all have great ambitions and have the qualities of literary men, but they do not know how to regulate themselves.” (Analects of Confucius, V: 22).
Confucius said, “One should choose to dwell in such a place where there are benevolent people who practice loving-kindness. Otherwise, how can one be said to be wise?" (Analects of Confucius, IV: I). Furthermore, the Master remarked, “Ill-cultivated men can neither be content in poverty nor happy in wealth. The well-cultivated man is always content in benevolence, and the wise man knows how to use benevolence.” (Analects of Confucius, IV:II). To these researchers, a very good example of one who practices loving-kindness, as well as being influential and leading the Confucian way is that of the late Matsushita Konosuke (1894 - 1989), the founder of Japan's Matsushita Electric (Low, 2008). The business owner/ marketer should be people-centred. Putting “people before products” ( PHP, 1991; PHP, 1994: 54), the business owner should also be responsible to his employees as well as customers, serving their needs. The late Matsushita Konosuke believed in respecting and developing people and consulting them on doing things. He said, “Consulting is better than ordering.” He was known for broaching the topic as if seeking advice or offering a suggestion and he would never order his employees to do what he wanted them to do. In other words instead of simply saying, “Would you do such and such?” he would say something like, “I've been thinking we could do such-and-such this way; what do you think?” or “Would you undertake this job?” Thus, he made his subordinates comfortable and at ease in presenting their own opinions and suggestions on the matter. ( PHP, 1991; PHP, 1994: 58 – 59).
Nowadays, there are many western examples of leading ethically and the Confucian way of giving back and contributing to the society and these can be seen as practiced by two American billionaires as follows:
St. Augustine (354 – 430) said, “Peace in society depends upon peace in the family.” Similar to Confucian values of family closeness and fatherly care, it is very true that when the families are unstable, and if there are break-ups and quarrels in the families, the whole country is not stable. If the families are at peace, the country is stable and at peace too. Businesses too, when run along the family line, create a congenial family or small group atmosphere.
Confucius stresses on the importance of the family; and in the family unit, the father is the key figure. He should be the role model. For the son, it is the son's duty to obey without questioning and honour his father, even after death.
Showing care and concern to his followers, the benevolent Confucian leader is like a father to his followers. Besides, the family spirit is often fostered, and to quote Confucius:
A true gentleman is in harmony, and is friendly with others though he does not agree with them… (Chew, 2000: 17).
In the small business situation, the father leader/ small business-owner collaborates with his “family members” in a purposeful team fashion, “rubbing shoulders and doing something together also gives the opportunity to share. ( Low, 2006a). There is joint purpose, sharing the same dreams and bringing the relationship to a higher plane. There is also synergy” ( Low 2001: 101; Low, 2005; Low, 2007). Employees' successes are celebrated and with effective team leadership, teamwork is fostered and higher performance attained (Zimmerer & Scarborough, 2006, cited in Low, 2007). At the core, it appears that this teamwork, or more appropriately, consensus-seeking culture may be related to loyalty, which is also considered to be a virtue by the Chinese (Bond, 1987, cited in Low, 2002; 2009b). Chinese are taught from a young age to be loyal to their family and kin. Hsu (1984) claims, loyalty to the family will continue to play a critical role among Chinese. Family is important in any culture, but it is extraordinarily so in Chinese culture. But more importantly, “relations among family members provide the human basis for the moral virtues of the Chinese” (Nakamura, 1978, cited in Low, 2002; 2009b). Hsu (1984) has identified some of the significant characteristics of the Chinese family that have a strong impact on Chinese organizations. The Chinese as a people are special in their relationships with others, and a strong emphasis on the importance of blood relations, parental authority, filial piety and loyalty exists. The late Kwek Hong Png, founder and chairman of the Hong Leong (Singapore) group of companies, for instance, pointed this out when he was expanding his business:
Mindful of the old Chinese proverb that when tackling a tiger, one needs the help of one's brothers, I invited my brothers to join my firm. (Kwek, 1987, cited in Low, 2002; 2009).
The Confucian practitioner sets the heart right (ethical goodness, awareness and reasoning); and does personal cultivation (ethical action and leadership).
One makes mistakes but learns from it. One learns to attain moral perfection. Here, Low 2006b, (citing Sie, 1997 and Cham, 1998) highlights these:
Wu, a Chinese scholar mentioned that learning, or the Confucian concept of keji (one must learn and be ready to move), was important to Singapore and its future. Keji was also reflected in the way the Government made its education, IT and technology plans about 30 years ahead, and Singaporeans must learn to move ahead in today's world. In a true Confucian fashion, the Singapore Government has invested much to better the Singapore workers' educational status. University education is also given much emphasis; the government is seeking to make local universities world-class and best in the region; and with Singapore's ambition to be the knowledge centre of the region, it is only natural to emphasise research and development.
To Confucius, “the gentleman broadens himself by scholarship or learning, and then regulates himself by li (proper conduct or moral discipline)” (Analects of Confucius, VI: 27; Scholastic,2007).
The Confucian leader, even in the modern day, stresses on learning, education and high integrity. Its investments on schools and education are high ( Low, 2002; 2009b). Having the Confucian Heritage practical thriver culture ( Low, 2002; 2009b), the Singapore Government relies on the Mandarinate or scholars to administer the City-state. Although appearing elitist, the efficient and honest civil service promptly attended to the needs of its citizens, and it is said that for Singapore everything was on the table with clear rules (Thurow, 1996 and Schein, 1996, cited in Low, 2002). High integrity is maintained with the Corrupt Practices Investigations Bureau (CPIB) under the charge of the Prime Minister's Office. Indeed, as Confucius highlighted, “We are saying (emphasizing) all the time: Li! Li!” ( Lin, 1994, 2000, italics mine).
Learning and improving never stops. To the Confucian gentleman, to be capable, one must study; to be intellectual, one must learn from others. ( Zhou, 2005: 36), profit(ing) by good examples and avoid(ing) bad examples. ( Chew, 2000: 13). Continuous improvement indeed builds and grows his or her moral fibre.
Prudence is care and good sense when making a decision or taking action. Being prudent is also a virtue, another trait of the Confucian ethics. Confucius is attributed to say these:
Tze-chang asked Confucius, “In what way should a person in authority act in order that he may conduct government properly?” The Master replied, “Let him observe the five excellent things, and banish away the four bad things, then he may conduct government properly.” And one of the five excellent things is as Confucius replied: “When the person in authority is beneficent without great expenditure ( Pay, 2000).
Being prudent means one would not be extravagant, spending beyond one's means or 'keeping up with the Jones's'. Not being prudent can eventually lead one to be corrupt, committing frauds or accepting bribes to cope to ends meet in which one would not be responsible to one's employer/ customers/ investors or even suppliers/ community.
Low's ( 2002; 2009b) and Low's ( 2005; 2011) studies support that strongly influenced by Confucianism, the Chinese mind is said to be pragmatic and devoted to seeking profit. Such a company culture, particularly in some Chinese small and medium companies such as in the “mee pok (noodle) seller corporate culture” (Low, 2005; 2007a; 2011), profits are ploughed back and being frugal is a virtue. Here, thrift involves the use of limited resources — material, capital and human resources, and these results in improving productivity and overall profitability. In fact, Low's ( 2005a) study supports that being prudent is one of the success values for the growth of Singapore companies. And Low ( 2006b) argues that being prudent also serves a crisis prevention, containment and management for the island-Republic of Singapore.
Confucian ethics enable individuals to appreciate the value of learning and to develop them towards positive business dealings and harmonious relationships; and these bring many advantages, usefulness and good practices including good business management and applications of the Stakeholder theory (This is well illustrated and summarised in Figure 2).
Figure 2. Confucian Ethics and the Stakeholder’s Theory in Business
Overall, the Confucian business owner (firm) grows or 'perfects' one's (its) virtue. Being just to humanity, the Confucian business owner (firm) would build one's (its) credibility, and has the right status so that what one (the firm) says is justifiable. When the firm/ employer's words are justifiable, then what one does can be successful – one is respected and emulated by his followers (employees, customers, suppliers, investors and community).