Image credit: Pandora Apparel

It is always necessary to dig deep and discover the true motivations of business counterparts in China, writes Ward Chartier.  Image credit: Pandora Apparel

By Ward Chartier

The purpose of this true story is to describe how nothing is what it seems to be in many situations in China.  The story is also a caution about the need to be constantly aware of thinking and actions occurring on several levels simultaneously.

Confucian principles are an indelible part of the behavior one encounters daily in China.  Very simplistically, there is a hierarchy of loyalties that resemble a series of concentric circles.  One’s primary loyalty is to the head of the immediate family, then to immediate family members.  The next level is loyalty to one’s extended family.  In order, the next levels could be village, town, district, county, province, etc.  In parallel with loyalty, one extends respect and obedience to government officials and to scholars (teachers).  We foreigners are on the outermost fringes of the concentric circles.

In the nest of loyalties, the further one is away from another person the more it is permissible to lie, cheat, steal, and otherwise try to take advantage of them.  There is no general ethical stricture against doing this.

The company I joined several years ago originally came to Shanghai about 20 years ago and entered into a joint venture with a state-owned company.  One imperative of the state-owned company was to employ many people.  For example, several people’s job was to simply load and unload trucks.  Goods were not palletized and there was no forklift.  There was no loading dock at the height of a typical truck bed.  You can imagine the amount of labor needed to deal with shipping and receiving.  You can also correctly imagine the consternation of my company at the excess number of people on the payroll.  Some years after forming the joint venture there was a negotiated layoff to sharply reduce the headcount.  The severance payment was one month of wages for every year of service up to twelve years.  There were many employees with over 12 years of service, so my company had to decide how many people to let go and pay severance and how many to keep on the payroll until they retired or resigned.

The state-owned company had a union in place.  There was a full-time union chief and a full-time deputy.  The union then and now serves mostly as an organizer of social events, and after-hours sports tournaments and activities.  There is no collective bargaining, there has been no labor unrest, and employees bring very, very few labor grievances to the union.  One wonders how two full-time union staff members fill their days.

When I joined this company, I scheduled monthly meeting with the union chief and the HR manager.  The purpose was to encourage open communication and potentially forestall any difficult issues with the union and the workforce.  If there were issues, then we would have a forum to resolve them.

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One of the long-term employees who stayed on the payroll until retirement was a driver.  His job was to use a company car to take accountants to the bank or to the Tax Bureau, take HR staff to the Labor Bureau, on rare occasions transport employees to the doctor if they were sick or injured, fetch customers from the subway station, etc.  The cost of keeping a car, driver, and benefits for the driver far exceeded that cost of using readily available taxis.  When it came time for the driver to retire, the HR manager asked me if I wanted to replace the driver and I declined.  I should add that the HR manager was a very supportive manager who had the strong personal conviction to communicate directly with me.

A few weeks later the HR manager mentioned in our regular weekly meeting that she was getting feedback that employees were unhappy that I didn’t replace the driver.  I asked who was complaining, and the HR manager said it was a general dissatisfaction, not a specific one.  Again, I declined to hire a replacement and told the HR manager the economic reasons why.  A couple of weeks after that the HR manager reported that the complaints were getting louder.  I replied that we were facing the economic downturn of early 2009 and that I had to control costs very tightly.  She understood completely.

At the next scheduled meeting with the union chief, he raised the issue of hiring a replacement for the driver.  I asked why this was necessary.  He repeated some of the reasons that the HR manager had previously told me.  I asked some probing questions.  It was soon obvious that the “complaints” from employees about my not replacing the driver were all passing through him and then to the HR manager.  After I asked a few more questions it became very clear that the union chief had been using the driver for his own purposes to fill his work day by flitting here and there when he should have been doing his job on the company site.  The union chief disguised his dissatisfaction as originating from other employees in an attempt to fool me.  Within Confucian principles, I occupied one of the union chief’s peripheral concentric circles of loyalty, and I was fair game.

This kind of situation is ordinary in China.  Expats who have been in China for a while will recognize this situation.  It is always necessary to take time to dig deep and discover the true motivations and imperatives of people in China.  I have been lied to so many times that it is difficult to not be inured to and accept that sort of unethical behavior.  I personally find it necessary to constantly be wary and to watch for the myriad ways that people will try to take advantage.


Ward Chartier worked in high-tech manufacturing operations in 6 Ward Chartier portraitcountries for 31 years, with over 10 years as general manager.  He is presently a principal with TechZecs, a consultancy based in San Francisco.  Ward is also a frequent guest lecturer at universities, and mentors high-potential managers.