Yuan and marketing: The perception of Chinese ownermanagers

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Yuan and marketing The perception of Chinese
owner-managers

• Wai-sum Siu
• Professor of Marketing, Hong Kong Baptist
  University
• Academic Visitor, CfEL, Judge Business School,
  Cambridge University
• Visiting Fellow, St. Edmunds College, Cambridge
• Feb. 10, 2009

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Locus of Control
being contingent on personal initiative
a person perceives success and failure
due to actions or forces beyond ones control
an external locus of control belief of events
are the result of fate, chance, luck, or destiny
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Personality models for entrepreneurs
Mainly American, Australian and British studies
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LC and Chinese Entrepreneurship
Aldrich (2000) to examine national differences
Hamid (1984) Hui (1982) internality/externality
are related to national culture
Cherry (2006) managers of collectivistic
societies are externally oriented
Locus of control of entrepreneurs in the Chinese
socio-cultural context has not been examined.
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Locus of control in a Chinese context
The individualist orientation of Western culture
entails a focus on the pursuit of personal goals
and, consequently, attention is devoted to the
development of the individual (Hui, 1982)
Researchers (e.g., Adeyemi-Bello, 2001 Furnham,
1986 Wong Sproule, 1984) questioned the
validity of Rotters (1966) Locus of Control
Scale.
The attribution of success or failure to
external causes by Asians is said to be
embodied in Yuan (?) (Lee, 1982),
Asians are more situation-centered and are more
externally oriented than their Caucasian
counterparts (Yang, 1988)
Asian culture focuses on collectivist ideals,
such as loyalty to the family and to the
community and it encourages subordination
of individual goals to the goals of the greater
group (Traindis, 1989).
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Research on Yuan
1. an etic or culture-free approach
2. an emic or culture-specific approach
3. Cultural Value Orientations (Kluckhohn and
Strodtbeck 1961), Value Survey Model (Hofstede
1980) and Chinese Culture Values Chinese Culture
Connections (1987)
No study on Yuan
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Yuan
Yuan originates from Karma (the meta-ethical
principle or law of cause-and-effect)
The existence of an object relies upon external
conditions
Should the external conditions no longer exist,
the object will also no longer exist.
Yuan denotes predetermined relations with other
things or individuals that are far beyond ones
control (Yau, 1988) .
Yuan can also be optimistic fatalism
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Yuan and Guanxi
Guanxi is the process of social interactions that
initially involve two individuals (Fan, 2002)
If there is good guanxi, people would attribute
that to Yuan.
Yuan Fen leads to good guanxi
Close relationships and casual acquaintanceships
are supposed to result from Yuan
Research on Yuan restricts itself to
interpersonal, marital and social relations and
neglects the business context
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A conceptual framework for Yuan
association
quality
matching
attitude
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The association of Yuan

• Have Yuan (You Yuan) or do not have Yuan (Wu
  Yuan).
• Yuan
• affects the association of two parties
• affects the extent or degree of the relationship
  (how much Yuan one has with another)
• The absence of Yuan
• people may not have the opportunity to associate
  with each other
• though they have the opportunity, they may not
  want to associate

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The association of Yuan

• Yuan helps maintain interpersonal harmony
• attributing the success or failure of an
  interpersonal relationship to forces beyond ones
  personal control,
• ridding oneself or others of the responsibility
• Chinese owner-managers acknowledge
• the importance of personal effort in maintaining
  a given business relationship
• they also believe that, to a certain extent at
  least, the failure or success of the relationship
  depends on Yuan

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The association of Yuan
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The quality of Yuan

• good relationship (Yuan Fen) or bad relationship
  (Nie Yuan)
• Yuan Fen - a very precious opportunity
• the fortuitous combination of secondary causes
  happens only rarely (depending not only on
  oneself but on many uncontrollable factors)
• They respect and make the best use of this
  opportunity
• Nie Yuan - a very bad relationship commonly
  referring to an immoral romantic relationship.
• Nie Yuan may not be relevant to the Chinese
  business context.

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Yuan and Fen

• Yuan literally should mean the opportunity,
  chance
• Fen literally means connection and relations and
  it has two properties
• the Eight Characters of an individual in Chinese
  mythology which determines the fate of a person
• ones value orientation which emerges from ones
  social background, that is virtue, ethical
  orientation and social responsibility of a
  person.

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Eight Characters

• This system posits that an individuals fate is
  determined by four pairs of characters. The pairs
  represent, respectively, the two-hour period, the
  day, the month, and the year of the persons
  birth one member of each pair is drawn from the
  cycle of the Ten Heavenly Stems and the other
  from the Twelve Earthly Branches. (Harrell,
  1987, p. 96)

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Eight Characters

• a kind of predetermination according to the
  harmony or disharmony of cosmic forces, something
  that is immutable.
• a post hoc rationalization
• a catchall explanation when others fail
• a way of acknowledging that even the most moral
  and diligent human beings cannot necessarily
  guarantee their success

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Eight Characters

• the time, place, date, era and also the family
  into which a person was born.
• the first contact point of a person with the
  world, the persons position in the network of a
  Chinese family, and also how one connects to the
  society.

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Fen

• ones value orientation which emerges from ones
  social background.
• means virtue and it relates to the ethical
  orientation and social responsibility of a
  person.
• a high ethical standard will help strengthen the
  relationship.
• Yuan and Fen are interrelated - Chinese also
  believe that they need
• Yuan to meet with one another, and
• Fen to become friends
• Fen helps stabilize the relationship.

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The quality of Yuan

• A failure in getting an order
• they do not have Yuan
• the presence of Yuan (association) does not
  necessary lead to a good relationship (the
  quality of Yuan)
• Chinese owner-managers understand that they need
  to have Fen with buyers.
• honour their commitments
• perform as good businessmen by delivering
  products of reasonably good quality promptly to
  their customers
• maintain good relationships with buyers
• establish credentials among the associated
  business groups

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The quality of Yuan
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Matching of Yuan

• matching of Yuan (Tou Yuan) and not matching of
  Yuan (Bu Tou Yuan)
• conditions for Tou Yuan
• Having same hobbies and similar beliefs are
• non-matching Yuan
• the environmental conditions, for example having
  same hobbies and similar beliefs, may permit a
  relationship (You Yuan)
• there is always a sense that the relationship is
  going nowhere
• human Yuan/ eye Yuan
• nice or popular NE human Yuan
• social skills NE a virtue by the Chinese

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Matching of Yuan

• Though things are predetermined, the Chinese will
  
• try positively to seek for interrelations with
  others (or things)
• to find out whether one has acquired matched Yuan
  with others or not. Those who take an active part
  in searching
• To have human Yuan and match Yuan
• establish social networks and relations
• develop good social skills
• deal with prospective buyers in a positive and
  constructive way
• Specifically, Chinese owner-managers will
• attach to different business associations to
  broaden their networks to collect and exchange
  market information, and
• also seize and share market opportunities.

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Matching of Yuan
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Attitudes toward Yuan

• follow Yuan
• a symbol of respect for nature and person
• Yuan is a metaphor that stands for the sum total
  of all conditions in the natural world
• Under the influence of Yuan, the Chinese will
• not use strategies to achieve relational outcomes
  in interpersonal communication
• place a great deal of importance on acting in
  accord with Yuan

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Attitudes toward Yuan

• cherish Yuan
• two people do their best to maintain and treasure
• they do not strategically manipulate their
  precious relationship because the felicitous
  combination of external causes and internal
  feeling does not occur very often
• Yuan also has two sides
• tragic connotations of its association with
  fatalism
• self-reliance
• people cease to complain about their circumstance
  
• try to save themselves from the natural
  consequences of their own acts before they accept
  their fate

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Attitudes toward Yuan

• Chinese owner-managers
• not to press hard to rescue a lost business or
  develop business
• try different measures
• maintaining stable product quality and prompt
  delivery
• strengthening the existing buyerseller
  relationship
• exploring new products, markets and ways of doing

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Attitude towards Yuan
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Research Question
Association
Quality
Yuan
Marketing Practices
Company Performance
Matching
Attitude
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Research design and methodology
company performance (Hi, Mod, Lo) the
embedded situations (Yuan)
a contextual stepwise approach
quantitative (survey) qualitative (narrative
analysis plot analysis content analysis)
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Sampling Frame

• 3172 Chinese small firms in
• National Census Bureau of China
• Directory of Hong Kong Industries
• Taiwan Business Directory
• SME (Brooksbank, 1991)
• employment size less than or equal to 500
  employees
• sales turnover not exceeding Hong Kong Dollars
  300 million were selected

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Sampling Frame

• Small firms in response to a large-scale survey
  on the marketing practices
• 300 Chinese (Siu Liu, 2005) National Natural
  Science Foundation of China and Research Grants
  Council of Hong Kong Joint Research Scheme
• 154 Taiwanese (Siu, Fang, Lin, 2004) Chiang
  Ching-kuo Foundation for International Scholarly
  Exchange
• 126 Hong Kong (Siu, 2000) British Council
• At the end of the questionnaire, there was a
  question asking for follow-up personal interview
• 48 Chinese, 26 Hong Kong and 28 Taiwanese
  owner-managers and/or chief executives of the
  company were successfully interviewed.

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Two-dimensional model

• The first dimension
• is correlated to one quantified variable Matching
  
• is labeled as searching and establishing Yuan
• The second dimension
• is correlated with the quantified variables
  Association, Quality and Attitude.
• Is named as accepting and maintaining Yuan.

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Typology
Anti- Yuan-ers
Yuan accepters
Dedicated Yuan believers
Stuck-in-the- middlers
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Stuck-in-the- middlers
Dedicated Yuan believers
Anti- Yuan-ers
Yuan accepters
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Typology

• Group 1 (n21) Yuan accepters
• not searching Yuan but accepting and maintaining
  Yuan
• take no action to match Yuan, but consider the
  association of Yuan and follow Yuan would be
  important in their marketing practices.
• Group 2 (n32) anti-Yuan-ers
• not searching and not maintaining Yuan.
• do not believe that Yuan would influence their
  marketing practices. Rather it is their marketing
  skills and personal contact networks that
  influence their practices.
• Group 3 (n12) Stuck-in-the-middlers
• are characterized by mix of association and
  non-association, good or bad Yuan, matching or
  not matching, cherish or follow Yuan.
• Group 4 (n26) Dedicated Yuan believers
• are characterized by their strong belief in
  matching, association, quality and cherish of
  Yuan.

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Implications

• Uncontrollable dimensions of Yuan
• Yuan is outside the control of oneself and is
  mythologically predetermined by Eight Characters,
  which is immutable and cannot be forced.
• Controllable dimensions of Yuan
• Human Yuan or Eye Yuan is not innate rather
  it can be learned, gained and developed to
  facilitate matching Yuan.
• Use personal contact networks to match and
  cherish Yuan and to enhance competitiveness

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Pragmatic Approaches

• The presence or absence of Yuan will affect the
  company performance, no matter how good the
  marketing plan is.
• They try to identify the factors that contribute
  to the matching of Yuan
• improving ones overall appearance, acquiring
  professional knowledge, and extending ones
  personal contact networks.
• placing much emphasis on personal selling,
  product performance and company/ brand reputation
• using multiform and multilateral expansion for
  diversification

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Yuan and SME Marketing

• Yuan is typically used to describe an initial
  interaction condition, but good marketing skills
  and knowledge are important as well
• Yuan is mythologically predetermined by Eight
  Characters. Chinese owner-managers may manipulate
  relating factors, improving appearance, acquiring
  professional knowledge and strengthening personal
  contact networks to facilitate the matching of
  Yuan.

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Further Research Directions
One-shot vs. Longitudinal Study
Social-economic differences
Measurement scale
A new cultural orientation?
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Last, but not least
Thank You Very Much!!!!!! Comments are most
welcome!!!!!!