The hierarchical nature of Chinese society and the role of hierarchy in the realm of modern social structures defy explanation to Westerners who come from more egalitarian societies. It is confusing, indeed.
Nonetheless, it is necessary that Westerners working in China or seeking to do business with China understand the nature and implications of its hierarchical social structure. It is important to realize that China's highly sophisticated and intricate culture has evolved over 5,000 years. Therefore, try as you might, Chinese culture will not bend to your will. To succeed in China you will need to understand, accept and ultimately follow the exigencies of Chinese culture, of which China's hierarchical social structure is one of the most important factors.
If you fail to understand this, you will inevitably fail in the world's second largest - and soon to be largest - economy.
The Chinese concept of hierarchy is closely linked to several other concepts, including guanxi or connections, and paternalism and filial piety. Quite often Westerners misunderstand the concept of guanxi and see it in a very narrow stricture of personal friendships and backroom deals. In fact guanxi, properly defined, is about a person's relationships and responsibilities within those relationships.
Geoff Baker and Helen Zhang, authors of the book on Chinese culture Think Like Chinese, explain it best when they say "all Chinese are born connected". Guanxi makes you connected to others and brings responsibilities with those connections.
Father knows best
Those connections and their corresponding responsibilities are then defined in terms of hierarchical structures. Confucius - or Kongzi, to use his Chinese name - proclaimed the responsibilities of fathers to sons and sons to fathers, of brothers to each other, and of friends to friends, of teachers to pupils, of bosses to workers, and, of course, of government to citizens. Indeed, because of their Confucian heritage East Asian societies, from Singapore to South Korea and Japan, have a paternalistic view of government that itself is incomprehensible to Westerners. In this kind of "father knows best" society, the patriarch sitting at the top of the pyramid is not questioned and is certainly not accustomed to having his views or ideas challenged.
Everything in China's social and political structure fits into a hierarchy. The central government sits above provincial and local governments and makes macroeconomic and social decisions which it expects to be carried out to the letter. Some cities, like Beijing, Shanghai, Tianjin, and Chongqing, rank higher than others, and their mayors are on a par with central government ministers. Some universities - Peking, Tsinghua, and Fudan - not only have a higher standing than others but have leadership roles and responsibilities in tertiary education over other universities that Harvard, Stanford and Cambridge, for all their prestige, have never enjoyed.
Even in the media, a usually fiercely competitive arena, hierarchy reigns supreme. The government cascades policy decisions from The People's Daily and China Central Television to other networks. A good story in one of the leading publications will set the tone for other media. The Wall Street Journal and the Financial Times, though they may be considered among the best newspapers in the West, can only dream of such power.
And thus it is with the business world - some companies are just more equal than others. For example, the large State-owned enterprises often determine how the Chinese economy runs, with smaller companies often looking to them for leadership and tone. The largest multinationals in Western nations have no such pull because they lack the paternal responsibilities bestowed upon SOE's by the central government. A significant difference between the West's cut-throat capitalism and "socialism with Chinese characteristics" lies in the concept of paternal and filial responsibility that is common to Eastern business culture (South Korea's chaebol companies, for example, carry a similar social burden to China's SOEs).
Knowing where everyone and everything sits in this hierarchical society could prove critical to your success in China. When you enter a room you should know whose hand to shake first and with whom to exchange pleasantries about the details gleaned from their business cards before sitting down to serious business. When hosting a dinner, you have to make seating arrangements according to the rankings of your guests lest you offend someone. Get any of these details wrong and you will not make it to the next meeting, let alone make it to signing the deal.
Of course, there is a downside to China's strict hierarchical structures in business: namely, that merit may be overlooked - or expected to be overlooked - in the rise to the top of the pyramid. For example, it is possible for someone to get to a senior position in a company because of the university they went to rather than their actual abilities. Some years ago, during a performance review, I had denied a member of my team a promotion because she had failed on a number of key performance indicators. She was angry because she thought she was entitled to the promotion because she had just completed an EMBA at a top five international university. Because of the importance of hierarchy, she had put her efforts into pursuing this qualification rather than achieving our company's business targets.
This makes it all the more important for Western bosses in China to lay out their expectations of staff, to let them know the piece of paper hanging on their cubicle wall is not the measure of them in any real sense.
But Chinese hierarchy can result in other unfavorable outcomes if not fully understood. For example, Chinese are reluctant to question or challenge their superiors because they have been brought up to respect their elders and others in authority. That sometimes means that a bad idea or initiative of a boss may go unchallenged. A Western boss might interpret this as lack of loyalty or, worse, as subterfuge to undermine them. In actual fact, it is most likely neither. To Chinese, someone in a position of authority should not be challenged directly and certainly not in front of other team members. On the contrary, a Chinese staff member may see not challenging a superior as a virtue and mark of self-control.
However, that does not mean Chinese employees are prepared to hang their bosses out to dry. In fact, they may use subtleties to alert you to a potential mistake you are about to make. Unfortunately as Westerners are not used to the delicate communications, an art form in China, we often do not pick up on the signals and instead wonder why local team members speak in circumlocution.
Social change will undoubtedly come to China, just as it did in the West. The West itself is not far removed from a time when its society was locked in the depths of feudalism. It was only after the Industrial Revolution that political and social change finally broke down the West's own rigid ideas of hierarchy.
Social structures and business culture will ultimately change in China due to globalization and technological changes. Business competition will compel Chinese companies to operate in more efficient ways, particularly as they expand abroad. Technological advances and social media have already started to change the way Chinese communicate with each other. Social media platforms, like Sina Weibo (China's Twitter), mean that Chinese are now communicating ideas directly and concisely. When your friends include 700 or more people you have never met in person, the interrelated concepts of connections, face, and hierarchy will inevitably change.
But 5,000 years of culture will not change overnight. In the meantime, Westerners coming to China will need to learn the intricacies of Chinese culture to survive and thrive here.
As VP, corp and public affairs, Asia for Weber Shandwick Alistair Nicholas spent over a decade living and working in China. This article first appeared in China Daily on 3 Feb 2012