Principles of the CEC in Strategies of Malaysia Economy Research Paper

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Introduction

The reasons for the rising of the Chinese economic superpower interested the world community. The Chinese-owned enterprises in Malaysia appeared to be more successful against the backdrop of a crisis than businesses of other ethnic groups. It is known that the Chinese Economic Culture (CEC) is based on the moral values of Confucianism and Taoism. The question of whether the implementation of these principles played a significant role in this success arose.

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The purpose of this research is to analyze the impact of the moral values of Confucianism and Taoism on the present-day business culture of Chinese enterprises in Malaysia and discuss the opportunities of including them in competitive strategies for Malaysian business. The influence of the Chinese Economics Culture (CEC) on the culture of other ethnic groups will have positive results for the development of Malaysian Economics.

Main Body

Notwithstanding the diversities in the numerous dialects and nationalities, the Chinese people managed to develop a unique and integrated business culture practiced by the Chinese and non-Chinese worldwide. Menkhoff and Gerke (2004) noted that “The spirit of the ethnic Chinese enterprise is founded in the belief systems” (p. 159). Based on the principles of Confucianism and Taoism, this culture contains eight main elements, such as personal connection (guanxi) and intermediary (zhongjianren), face (mianzi) and endurance (chiku nailao), holistic thinking (zhengti guannian), and thrift (jiejian), social status (shehui dengji) and interpersonal harmony (renji hexie).

The element of personal connection (guanxi) means the importance of cooperation with the business partners, the emphasis is put on interpersonal relations. Chuen-Khee (2008) noted that “Personal connection (guanxi) is the mutually beneficial relationship between two or more individuals that provide an ongoing association” (p. 65). The element of an intermediary (zhongjianren) presupposes the involvement of the third parties, such as translators or advisers, which are expected to smooth the negotiation process.

The element of “face” (mianzi) means the pride and dignity of the negotiating sides, The Chinese do not like to lose their face and try to avoid the situations, decisions, or responses that could make the opposite side lose their face, it results in their extreme politeness and beating around the bush. Endurance (chiku nailao) means that The Chinese believe hard work to be the key to success; this may result in more thorough preparation for the negotiations or a prolonged negotiation process. The element of holistic thinking (zhengti guannian) means that all the separate elements are interconnected and are to be viewed as a whole, taking into consideration every slightest detail.

Thrift (jiejian) can be explained by the historical instability of the Chinese, which made the people be accustomed to economize and save every coin and is connected with the frugality of Taoism. The Chinese are famous for their reluctance to make price concessions and their love of cutting costs. The element of social status (shehui dengji) results from the Chinese respect of the hierarchy in the society, related to the propositions of Confucianism.

There is usually a Chinese spokesman in the negotiation process, while the other participants are expected to remain silent. It is preferable that several negotiators participated in the negotiations from both sides; the Chinese prefer to negotiate with the people of the same or even higher than their social status.

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The element of interpersonal harmony (renji hexie) makes the Chinese entrepreneurs look for harmony in their relations with the business partners. All the eight categories of the Chinese Economics Culture are deeply rooted in the consciousness of its representatives. This moral code helps the Chinese while making business decisions and provides the ready answers to numerous questions. On one hand, such categories as social status (shehui dengji) and thrift (jiejian) may become restrictions and narrow-mindedness in the process of communication.

But on the other hand, the elements of an intermediary (zhongjianren) and holistic thinking (zhengti guannian) make the decision-makers more flexible, consulting the specialists in different spheres and viewing the issue as a whole. The elements of personal connection (guanxi), interpersonal harmony (renji hexie), and face (mianzi) may seem to be naïve and out of date but they correspond to the psychology of the Chinese and the universal values will be always up-to-date. The reasonable implementation of such categories as endurance (chiku nailao) and thrift (jiejian) is sure to be effective. In general, all the eight categories of the Chinese Economics Culture, based on the ancient philosophical principles, used in the complex are beneficial for the negotiation process and the company policy.

The historical background and the cultural assimilation of the ethnic Chinese resulted in interference of the Chinese economics principles and Malaysian business notions. Chuen-Khee (2008) noted that regardless of the fact whether the workers are ethnic Chinese or belong to another ethnic group “may either have similar awareness or ignorance of the CEC”. Chuen-Khee (2008) researched the importance given to the elements of the Chinese Economics Culture by the representatives of the Chinese and other ethnicities.

It appeared to be that the differences in the perception of the representatives of different groups are insignificant. From one side, the ignorance of the Chinese groups may be explained by the lack of education, the principles were not cultivated to them by the older generations. On the other hand, the representatives of the other groups may be aware of the influence of the Chinese culture on the business policy of Malaysian companies. By the way, the principles of the CEC were not the only reason for creating the ethnic Chinese network of entrepreneurs. Numerous historical factors coupling with the political and economical situation in the country were significant for the organization of the ethnic networks.

Menkhoff and Gerke (2004) noted that “Ethnic networks have reputedly emerged as an avenue for co-ethnics, who are minorities in a country where the state has been hostile to the development of their economic interests, to cooperate in business for mutual benefit” (p. 159). It means that the philosophical principles were sidelined by the Malaysian realities, but did not lose their significance. Nowadays it is important to increase awareness of the principles of the CEC among the ethnic Chinese as well as the representatives of the other ethnicities.

Implementation of the principles of the Chinese Economics Culture could be beneficial for the improvement of the general level of Malaysian Economics. The most popular principles of hard work and high savings based on the elements of endurance (chiku nailao) and thrift (jiejian) correspondingly are effective for increasing the benefits of the enterprises. Chen (2004) noted that “The Chinese businessman recognizes that by being satisfied with a lower price and a smaller margin, he can sell much faster, thus reducing the slumber period” (p. 90).

This practice roots in both elements of endurance (chiku nailao) and thrift (jiejian), and is to be adopted by Malaysian enterprises to develop competitive strategies for business. As cited in Chen’s book (2004) Limlingan (1986) noted that “the Chinese businessman does not follow the Western management practice of separating marketing from financing” (p. 90). This may be explained by the element of holistic thinking (zhengti guannian), as the Chinese view the deal as a whole, not separating it into different steps and pieces, focus on the result helps to make the appropriate decisions. Implementing the principle of holistic thinking, the Chinese can choose the most prospective deals.

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The first type is a deal. Bringing profits after the investments are recovered. Chen (2004) noted that “In business jargon. It is a deal, that can yield ‘gravy profits’” (p. 91). The second deal is self-financing without cash investments. Chen (2004) noted that “It is vividly described in business jargon as ‘frying in its own fat’ or ‘cooking in its juices’” (p. 91). The practical implementation of the principles of the Chinese Economics Culture, such as lower price and a smaller margin, focus on the results of the deal and choice of the most perspective deals, coupled with the hard work and the high savings would be beneficial for the development of the competitive strategies for the Malaysian economics.

Conclusion

The eight elements of the Chinese Economics Culture root in the propositions of Taoism and Confucianism. The research of the different interpretations and practical implementations of the principles proves their effectiveness. The assimilation of the Chinese and Malaysian cultures resulted in the interference of the business cultures. It is necessary to fill the gap in the knowledge of the elements of the Chinese Economics Culture among the ethnic Chinese workers. At the same time, it is important to increase the awareness of the workers of other ethnicities. The Malaysian economy can take advantage of the implementation of the Chinese business principles developing competitive strategies for its further development.

References

Chen, M. (2004). Asian management systems: Chinese, Japanese and Korean styles of business. 2-nd edition, Thomson Learning.

Chuen-Khee, P., (2008) Insight of Chinese Economics Culture in Malaysia. International Journal of Business and Management. p. 65-73.

Menkhoff, Thomas and Gerke, Solvay (eds) (2004). Chinese entrepren and Asian business networks – sea NIP. New York, NY: RoutledgeCurzon.

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"Principles of the CEC in Strategies of Malaysia Economy." IvyPanda, 19 Dec. 2021, ivypanda.com/essays/principles-of-the-cec-in-strategies-of-malaysia-economy/.

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IvyPanda. (2021) 'Principles of the CEC in Strategies of Malaysia Economy'. 19 December.

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IvyPanda. 2021. "Principles of the CEC in Strategies of Malaysia Economy." December 19, 2021. https://ivypanda.com/essays/principles-of-the-cec-in-strategies-of-malaysia-economy/.

1. IvyPanda. "Principles of the CEC in Strategies of Malaysia Economy." December 19, 2021. https://ivypanda.com/essays/principles-of-the-cec-in-strategies-of-malaysia-economy/.


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IvyPanda. "Principles of the CEC in Strategies of Malaysia Economy." December 19, 2021. https://ivypanda.com/essays/principles-of-the-cec-in-strategies-of-malaysia-economy/.

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