U S China Trading Relations the Research Proposal

Excerpt from Research Proposal :

Fueled by massive inflows of foreign direct investment, rising exports, and one of the highest personal savings rates (around 40% of GNP) in the world, this exceptional economic performance has translated into a tripling of per capita incomes. A better material existence is apparent from the provision of food, clothing, and housing for the vast majority of China's 1.3 billion people to the widespread availability of basic consumer durables such as refrigerators, washing machines, and television sets for an increasingly large number of households.: China's growing prosperity was evident by explosive construction throughout the country (Shanghai reportedly has 20% of the world's high-rise construction cranes currently in operation) and by a proliferation of services such as restaurants, fashionable boutiques, movies, and discos in the cities. For the growing and increasingly consumer-oriented middle class, shopping and dressing fashionably is definitely "in." (Ahearn, 1998)

The businesses of China are managed by people who are friendly and hardworking and it a business community characterized by "purposeful activity and vitality." (Ahearn, 1998) Ahearn states: "Viewed from the large number of individual entrepreneurs providing hair-cuts, shoe shines, and bicycle repairs on the streets of Beijing, along with the omnipresent open-air food stands, it was clear that substantial numbers of Chinese are taking advantage of new opportunities to earn money "off" a growing market economy." (1998)

Ahearn (1998) relates that businessmen and officials in Hong Kong hold that the role of Hong Kong as "the major source of finance and services for the mainland would continue to grow in the future. They pointed to the successful transition to date, which has maintained Hong Kong's vitality and confidence, and to China's own obvious self-interest in maintaining Hong Kong as its "Golden Goose." At the same time, a case for a more guarded assessment became apparent based on the challenge Asia's financial crisis was posing for Hong Kong and China, as well as on Hong Kong's own growing internal problems."


Ahearn (1998) states that the growth of China has resulted in the creation of "...complex relationships with economic neighbors both near and far. Whether out of ignorance, malice, or ambivalence, certain steps taken -- or not taken -- by the Chinese government have created an unfair playing field in the world market. This is not meant to be a condemnation, but rather a realistic observation. Many forget that the mercantilist style of the early British economy emphasized protecting vulnerable industries and even reneging on international agreements in order to get ahead -- not exactly the classic Adam Smith model we now attribute to the Empire. In many ways we see a similar pattern unfolding in China: a rising economic hegemon that protects vulnerable industries, squeezes out competition, dismisses intellectual property rights in order to break foreign dependencies, undervalues its currency, and refuses to forcefully confront corruption and mismanagement. Yet, much like all developing nations, China is slowly coming to understand how such behavior, though beneficial in the short-term, leads to instability in the long run. Although still a long way from true free-market practices, the government is taking some important first steps." (Ahearn, 1998)

V. STUDY - ACCULTURATIONOF MANAGERS in GLOBAL MARKETPLACE the work of Boon and Tan (2002) entitled: "Impact of Industrialization on Acculturation of Managers in the Global Marketplace" reports a study that examined the "...impact of national environment on managerial value systems by comparing representative samples of Chinese managers in the United States, Singapore and the People's Republic of China." (Boon and Tan, 2002) it is related that two measures were used in this study: (1) dimensions of western measures (Machiavellianism, Dogmatism, Locus of Control, and Intolerance of Ambiguity); and (3) Eastern measures (Integration, Confucian dynamism, Human-heartedness and Moral Discipline). (Boon and Tan, 2002)

Boon and Tan states that Chinese managers in Singapore in this study were found "to display more common values with their counterparts in the U.S.A., while showing more dissimilar values with their PRC counterparts." (2002) it is stated that studies in relation to the affect of industrialization on the "personal value systems of managers in international business can be broadly categorized under three schools of thought" (Boon and Tan, 1998) Those three are the following:

1) One school which has as its emphasis cultural convergence "proposes that individuals in industrialized nations, through the imperatives of industrialization and economic development, will embrace common attitudes and behaviors despite cultural differences. This homogenizing effect can be observed in areas such as rationalism, secularism, and mechanical time. At the organizational level, there is greater similarity of structures such as complexity, formalization, centralization, and adoption of universal business practices, and this brings about a similarity in managerial values.

2) in the international arena, when emerging economies take on the free enterprise system of the west, they also adopt certain ideological values that are part of the free-market capitalism in the west. In this way, the western ways of engaging in business are exposed to these developing economies during industrialization, and thus the developing countries would assimilate ideologically driven values common to those held in the industrialized western countries; and 3) a third view, that of crossvergence, asserts that neither convergence nor divergence view is adequate to explain the dynamic interaction of economic ideology and national culture. It argues that the integration of cultural and economic ideological influences will result in a unique value system that is different from any of the original cultures. The crossvergence school claims that some new crossbred forms of values result when two cultures meet. Ralston et al. (1997) considered this as a continuum between the polar extremes of convergence and divergence, where an integration of cultural and ideological influences results in unique value systems that is different from the value set supported by either national culture or economic ideology." (Boon and Tan, 2002)

Boon and Tan states that when the People's Republic of China begin transforming the economy which was centrally planned to a market oriented economy in the 1970s the economic reform became the "turning point where the introduction and transfer of management know-how form foreign countries took place. The process of industrialization has led to revolutionary changes in institutional patterns as well as in peoples' values and attitudes). Although Chinese values have formed a clear and consistent system for generations this does not imply that the values and the system have not been changed. During the Cultural Revolution in PRC in the period from 1966-76, classical Chinese value system was disrupted at its basic foundation, the orthodox doctrine of Confucianism, was severely criticized and forbidden."(Boon and Tan, 2002) it is reported that studies on Chinese managers in various countries have resulted in results which are diverse "on the value systems of Chinese managers." (Boon and Tan, 2002) it is related that in a comparative study of "142 middle managers in departmental and retail stores in Singapore and 137 middle managers in Australia that findings show that "significant differences existed in work-related behavior and interpersonal relationships between the two countries." (Boon and Tan, 2002) Specifically stated were the following:

Singaporean Chinese managers were less satisfied with their jobs;

Singaporean Chinese experienced greater stress in their work situations; and Singaporean Chinese managers had poorer relationships with their superiors and peers than their Australian counterparts. (Boon and Tan, 2002)

Boon and Tan also relate a study reported in the work of Ralston et al. (1995) which made an examination of the "...apparent evolution in work values among the young Chinese managers in Shanghai a two-and-a-half-year period that spans the June 1989 Tiananmen Square incident. Findings suggest a growing spirit of Chinese style individualism and also provide some indication that these young Chinese managers are adopting more western ways of doing things. "(2002) Boon and Tan additionally relate that another area of research utilized the Chinese Value Survey (CVS) framework that the Chinese Culture Connection in 197 developed for the purpose of studying the personal values of Chinese managers.

Lee and Wahs' (1994) study on the relationship between Chinese values and organizational practices in Singapore supported the hypothesis that the four value factors from the CVS are significant integrative with organizational practices in Singapore. Particularly, human-heartedness values were significantly correlated to the managerial functions and business orientation in organizational practices. Moral discipline was significantly correlated to managerial functions as well as the human related approach in organizational practices in Singapore." (Boon and Tan, 2002) Boon and Tan state that a study conducted by Ralston et al. (1992) made comparison of the eastern values "across the U.S.A., Hong Kong, and PRC. The study found that three CVS dimensions -- integration, Confucian work dynamism and human heartedness -- discriminated among the groups." (2002)

Further reported by Boon and Tan is that Ralston et al. (1993a) in a comparative study on the impact of managerial values on decision-making between the United States…

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