Business ethics: look to the East

Victoria University

Tuesday 18th October 2011 5 Comments

The world’s second largest economy has its own business ethics and doesn’t need western values forced on it, according to a leading international business academic.

Victoria University Business and Law Executive Dean Professor David Lamond has presented research on the 2,500-year-old Confucian philosophy underlying Chinese business ethics.

Speaking at Beijing’s Central University of Finance and Economics last week, Professor Lamond explained the global financial crisis had shown western business ethics were more honoured in the breach and questioned how we could expect China to follow our example.

“In the West we act like we have the best ideas on business ethics and they should be adopted by China, and then events like the global financial crisis happen,” Professor Lamond said. “Our ideas have not even been adopted in the West so why would we think that China could or should adopt them?”

He said Confucian thinking had been informing ethical business practice in China for several millennia, providing a "home grown" solution that could work not only for China but in the West too.

“We in the West should look to learn from China rather than just think we are the teachers,” he said.

He said a follower of Confucian moral philosophy aimed to become a junzi, or a ‘person of virtue’ – an ideal that was still spoken of as the standard of personal integrity in China today. When applied to a business person, this ideal is termed rushang.

“The modern Confucian business person applies the Confucian principles of benevolence (ren), rightness (yi), propriety (li), wisdom (zhi), and trustworthiness (xin) to their business practice,” he said.

“At the same time, the rushang respects the rule of law and avoids the limitations of administration by personal power alone (renzhi) and should welcome both feedback and criticism without enacting or supporting retribution on those who provide it.”

He said there was growing political and popular support in China for management based on Confucian moral philosophy.

“Far from needing to impose a western framework as solution, China has its own framework to derive solutions to the issues in business ethics it is confronted with, core ideas equally germane to the western context,” he said.

Comments from our readers

On 18 October 2011 at 11:49 am bc said:

The east faces the same problem as the west. Any system is good if all follow it, but many don't. The solution is finding a way to get people to follow the rules/philosophy rather than what it is.

On 18 October 2011 at 12:36 pm merlin said:

Rules are all very well but they must be based on integrity and rightness, secondly nothing replaces real values or conciense - these principals apply to all mankind although some have strayed further from them than others. Western business is based on bigger is better and more profit no matter the "real" cost, all that matters to them is the $ cost. In the name of "acceptable business" we have companies like monsanto posioning the world, food manufacturers turning out chemical laden - dare i call it food - stuff to line the supermarket shelves and all this not only condoned but activley encouraged by governments - bottom line is it comes down to the individual and our own conscience/ethics/morals call it what you will.So until the average Joe Bloggs starts demanding change by simply not supporting unethical business then all we look forward to is more of the same.

On 18 October 2011 at 4:05 pm Siena said:

I can adopt and live with the essential thoughts of Confucius being love (I might fail on this one), kindness, wisdom and generosity. Peace and prosperity are what people all strive for. I have read that Confucius laid down a code of ethics that was adopted as a quasi-religious national philosophy of governance and personal behavior. His teachings emphasized duty to family, respect for learning, virtuous behavior and [obedience of individuals to the state], this ethic I would not find acceptable, however. A proposal to amend the law on protecting the rights of the elderly would make clearer that children have the duty to visit and care for their aged parents, well we Māori have been taking care of our Tipuna (elderly) way before the European arrived in Aotearoa. I doubt you would find one Māori elder in a resthome...They raised us and we reply in kind and take care of them.

On 19 October 2011 at 8:48 am Martin said:

People who are pincipalled will do the right thing. Those in China the US or elsewhere who want to make quick buck regardless of rules will also do so. You find what you look for.

On 19 October 2011 at 10:34 pm Teng Ooi said:

During Confucius' time (the Warring States, about 500 BC), there was a system of ranking people according to their occupation and business people were ranked last, after the scholars, the farmers and the laborers. Business people were accorded the lowest rank in society because they did nothing but skimmed profit off people. This perception remains today in Chinese society, even among overseas Chinese. Business people tended to be profiteers. They were not seen as active contributors to the welfare of others. This of course is an erroneous concept. Business people have a very responsible role to play in society. There was a very successful business person in China before the time of Confucius. His name was Fan Li. He is credited as the business sage of China. He made what must have been millions in today's money but gave them all away to the poor, not once but three times. This is the model business people should follow. That is money made in business should be given back to society (at least a huge portion of it), like Warren Buffet, Bill Gates and other philanthropists. I read that Steve Jobs did not practice that and it was a pity as he could not do so now even if he wanted to. But his beneficiaries can do it on his behalf. Set up a fund for the poor, for education, indeed any charity is fine. This is the only way to show gratitude to the world that has given us so much. And, the more we give, the more we shall receive. This is the unseen but irrefutable rule of richness.