MODERNIZATION OF THE CHINESE FAMILY BUSINESS

Abstract

In order to study the modernization of the Chinese family business, the contrast between formal rationality and substantive rationality was used to characterize significant features of Western culture and Chinese culture respectively. A theoretical model of Chinese social behaviors as influenced by the substantive ethics of Confucianism was adopted to describe the organizational behaviors which were frequently observed in Chinese family business. Several empirical studies comparing organizational climates as perceived by employees working in foreign‐invested business, private business with formal regulations, and family business were cited to support the argument that such Confucian virtues as loyalty to the organization, working hard, maintaining interpersonal harmony, etc., are most likely to be manifested in organizations where formal regulations of Western‐style management were enforced.