Culture of Chinese Government Officials and Its Implications on MNC Government Affairs Practices

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• Culture of Chinese Government Officials and Its
  Implications on MNC Government Affairs Practices
• Yi-Ru Regina Chen
• Hong Kong Baptist University
• Hong Kong

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Previous Studies

• Data that suggest how MNCs government affairs
  (GA) is practiced in China
• Kennedy (2006) Business of lobbying in China
• Chen (2008) Business of Corporate Government
  Affairs in China
• US-China Business Council (2008) Conducting Govt
  Affairs in China

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Chen (2008)

• Identify management and strategies of GA used by
  MNCs in China
• Conceptualize which strategy is effective for
  certain MNCs based on corporate factors

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Model of Strategic GA
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• This study aims to explain the effectiveness of
  those GA strategies and MNCs use of the
  strategies based on the culture and behavioral
  patterns of Chinese officialdom

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RQs

• RQ1 What is the culture of Chinese officialdom,
  if any?
• RQ2 What are the types of Chinese officialdom?
• RQ3 How does that culture and official types
  affect MNC GA practices?

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Methods

• 8 Interviews (semi-structural)
• Participants reporters, officials, official
  relatives, scholars
• Second-hand data fictions and news clips on real
  cases

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Culture of Chinese Officialdom

• One should understand the following to interpret
  the culture
• Chinese (societal) culture Confucianism
• Political system feudal system and CPC
  governance
• Promotional procedure of the officialdom

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Confucianism

• 5 cardinal human relations
• The ruler and ruled (loyalty)
• The parents and children (closeness)
• The husbands and wives (role enactment)
• Siblings (ordering)
• Friends (trust)
• In-group VS. out-group, guanxi
• Long-term orientation
• Holistic thinking with harmony
• The Golden Mean

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CPC Governance

• Similar to feudalism
• Officials represent the government not
  themselves. They must prevent seeing corporations
  in private.
• Everyone tries to climb up the ladder.
  Subordinates obey and please superiors to get
  nomination for promotion. Superiors manage
  subordinates by creating conflict.

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Promotional Procedure

• By appointment
• Being nominated by ones direct superior
  nominated by the highest rank of ones bureau
  nominated by Organization Dept of CPC Central
  Committee elected by National Peoples
  Congress at all levels appointed by
  Organization Dept

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Promotional Procedure (2)

• Before 1979, ones relations with the superiors
  was the sole criterion for the nomination
• Since 1979, performance and education has become
  the two other criteria

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Culture of Chinese Officialdom (2)

• Ordering relationships by status and observing
  this order
• Following the Golden Mean
• Being prudent (cautious)
• Being low profile
• Feeling superior to others
• Emphasizing face
• Reciprocating greetings, favors and gifts

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Culture of Chinese Officialdom (3)

• 3 Donts
• Dont make a mistake
• Dont say a wrong word
• Dont follow a wrong leader
• Culture of the dining table
• Relationship cultivation
• Rules of toasting
• Rules of seating
• A platform for meeting

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Types of Govt Officials

• China is in transition
• The new-school elite
• The old-school player
• The go-byers

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GA Strategies (Chen, 2008)

• Lobbying (direct influence)
• Cooperation
• Political accommodation
• Social accommodation
• Personal relationships
• Personal services
• Organizational credibility

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Lobbying (direct influence)

• Target all types
• Why is effective interest-oriented
• How to do
• Identify interests (job opportunities, FDI, tax
  revenue, personal gain, etc)
• Follow the rules and hidden rules

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Cooperation

• Target all types
• Why is effective interest-oriented, in-group
• Identify interests (technique transfer, personal
  gain, etc)
• Follow the rules and hidden rules

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Political and Social Accommodation

• Target the new-school elite, the old-school
  player
• Why is effective long-term commitment (communal)

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Personal Relationships (1)

• Target all types
• Why is effective
• Culturally bound to observe guanxi
• Most effective with the old-school player guanxi
  is ones social capital for promotion
• How to do
• Identify the middle man
• Follow the hidden rules

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Personal Relationships (2)

• Middle men (official)
• The closer, the better
• At a higher or same rank
• Should be present all the time at the first
  meeting
• Cant be in the wrong political group

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Personal Services

• Target the new-school elite, the old-school
  player
• Why is effective interest-oriented,
  reputation-oriented (face)

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Organizational Credibility

• Target the new-school elite, the old-school
  player
• Why is effective reputation-oriented

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Implications

• Trust
• Long-term relationships (middle man)
• Interests
• Commitment
• Hidden rules (do as the officials do)
• Good reputation
• Reports from the Party (Xin Hua News Agency,
  Peoples Daily)
• Report by Information Center of local govts

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Implication (2)

• Guanxi (personal relations) provides easy access
  for communicating with officials. It is not
  sufficient for positive outcomes of GA.

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Implications (3)

• GA professionals contribute to orgl
  effectiveness by
• Understanding authority of govt offices
• Analyzing situations
• What is the situation (problem, issue, conflict)?
• Whos in charge of this?
• Communicating by the rules
• Utilizing guanxi