In China it's culture, not ethics or CSR

A conference this past week in Beijing was most informative on several levels. The topic was to discuss in a Chinese context business values and corporate culture. The audience was engaged – very engaged; more engaged than audiences in most of the conferences I have attended where the topic is business ethics or corporate social responsibility.

The substance of our discussions in Beijing was essentially the same concerns as inform discussions of business ethics or corporate social responsibility. But the conceptual framework, the lens, brought to bear on the subject matter was unique. The starting point was “culture”, not ethics, not the business case for taking stakeholder concerns into account when running a for-profit enterprise.

In prior workshops on business ethics in China my observation was the absence of concern for the topic on the part of Chinese business owners and managers. This recent discussion, however, was very different. It struck me as being very authentically Chinese while the previous meeting seems now in retrospect to have been the extension of a foreign framework into an unresponsive Chinese intellectual and emotional milieu.

Something like the assertion of exterritorial legal jurisdiction in China by the western powers during the glory years of Western colonial dominance. For example, Western powers had their own tribunal in Shanghai to resolve matters according to French, British, or other European legal norms and practices.

In startling contrast, in this past week’s conference and panel discussions, the Chinese asserted conceptual ownership of the subject and fully engaged their minds as well as their emotions.

It appears that, for them, the discussion of “culture” is not a trivial matter.

Which fact, I suppose, should not have come as a surprise to me. After all, Chairman Mao’s great effort to shape China in his image was undertaken as a “cultural” revolution.

In ways that were quite exciting and revealing, speakers and commentators asked basic questions as a starting point on the way to defining appropriate levels of business conduct.

They asked what is human nature? Are people basically sinful and greedy? Do people have a capacity for moral behavior? Can they acknowledge the claims of society on their freedom and autonomy? Don’t we have to choose between “profit” on one side and ethical conduct on the other as Mencius argued so many years ago?

I felt as I listened that the objective of the conversation was to find a formula for “market freedoms with Chinese characteristics.”

The need to find such a formula is palpable as the Chinese Communist Party is moving more and more beyond Deng Xiao Ping’s formula of “Socialism with Chinese Characteristics” that justified the program of reform and opening up that began some 30 years ago.

The unstated question in everyone’s mind in the conference seemed to be “what kind of company behaviors will maximize market efficiencies and so create wealth but at the same time not be destructive of social harmony and non-financial values?

“Corporate culture” seemed to be assumed to be the meeting point of profit and social responsibility. One participant described the role of culture in a market setting as the brakes to off set too much pressure on the gas pedal. Excessive acceleration – a metaphor for excessive individualism or self-seeking – is tempered by putting on the brakes and keeping the car under the speed limit or safely hugging the road as it twists and turns.

This assumption is not a bad one in my opinion. Culture is a restraint on individualism. Culture is the action of the moral sense within us; culture arises within communities and sustains communities with commonalities of values, behaviors, practices, understandings.

Our discussions in Beijing had the following logic: with the right culture in place, companies will be ethical and socially responsible.

But the approach to implementation starts with culture – the psychology of the human, the needs and motivations of people - not with debates over moral theory or a list of stakeholder interests.

At the same time, a discussion of “culture” provided a way to reclaim China’s moral heritage. We spoke of Confucianism, of Taoism, even Buddhism, as rich sources of cultural “brakes” for companies in today’s China.

I very pleasantly felt that the Caux Round Table had a constructive role to play in this conversation as we have in a number of cultures been successful in mapping global standards of ethics and corporate social responsibility to core values within national settings. I was very pleased that our colleagues Dr. Roger Conant, Hiroshi Ishida, Andy Whitford from Westpac Bank, and Brinton Scott from the Fredrickson & Byron law firm office in Shanghai could make notable and constructive contributions to the discussions.