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As mentioned above, the May Fourth Movement in 1919 had seriously destroyed Chinese old fashion and culture. Old ethics, customs, literature, social relations, and economic and political institutions came under disparaging attack to make way for the new. Yet, a new culture was slow to emerge. At that time, Confucianism was treated as a sordid knowledge harmed unaccountable generations. However, indeed, they didn’t evaluate Confucianism’s both advantages and disadvantages equally. The new culture movement fiercely condemned the thoughts of feudalism, rejected Confucianism ethics and its philosophy concerned with value which was the foundation of old education and old politics, and accordingly smashed out all the obstacles for the birth of new education. It made the period of the control of Confucianism which guided the Chinese education and thoughts of youth-student, gone and never return.
During the early period when the Chinese Communist Party controlled the Country, any old tradition was drastically erased. Especially, the madness of the Cultural Revolution attempted to destroy all traces of the old culture (e.g. works of Chinese art and literature from the period of Confucian dominance), thus clearing the path for the supposedly new ideals of the Chinese Communist Party. To this effect, massive groups of students called “Red Guards” were mobilized beginning in 1966, with instructions to destroy the “four olds”: old customs, habits, thoughts, and culture.
In short, although Confucianism still substantially influences Chinese people, its position becomes weaker. Therefore, if we want to analyze current CFFs, Confucianism is important but not enough. In general, reciprocal theory would be important to understand CFFs management.
5. Reciprocity and Stakeholder Theory
5.1 Reciprocity
Trust and reciprocity are integral elements in economic transactions between companies, consumers and retailers, between employers and employees, as well as in determining economic performance. To a manager of Chinese family-run companies, one of the essential principles to understand is guanxi, key to building successful business relationships. Guanxi refers to a particular kind of social networking grounded in trust, mutual obligations and shared experiences. This kind of relationship is mainly based the tenet of reciprocity - an exchange of favours and interactions. For instance, I take you out for dinner this time; you take me out next time. And very often it goes beyond just getting to know an individual. A business associate would get to know your family too, perhaps help them in some way, such as hosting them while they’re visiting another city.
In the Chinese context, most Chinese have been practising reciprocity or guanxi which in benign terms means the help proffered on the basis of social ties or connections. Traditional family values, such as filial piety and related obligations of mutual assistance among siblings and relatives, create a framework for economic reciprocity. Such personalised linkages are expanded to form a wider network connecting other businessmen of the same dialect or geographical origin. Such networks facilitate exchanges and reduce transaction costs. Partly because Chinese tradition doesn’t provide real check-and-balance system, close relationships based on reciprocal terms are radically important for CFFs.
In modern China, networks are still built up through, or strengthened by, reciprocity. Reciprocity and its associated networks are a way for individual to manoeuvre himself into a position which opens up the greatest opportunities for trade. Furthermore, he focuses social networks upon himself and a few key individuals and fosters dependency on the reputation and connections of one individual or a very small and selected group. Therefore, for a CFFs’ manager, it is possible to exercise considerable direct and indirect control over personal. This control is reinforced by direct reciprocal relations between the manager and persons.
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