Weekly reflection on two articles, 500-750 words
Requirements: Each reflection (or response) must be 500 to 750 words. Submit in the appropriate forum for each week for your class. Please write it in paragraph form in Microsoft Word and then paste it, so it is legible for the rest of us! Grammar is important. Each reflection should be written better than the last. You get full points if you do your best with grammar and if you attempt to integrate the readings. Youll get better each week at this. Remember, when you explain an idea that is not your own, be sure to cite the appropriate paper.
Confucian Trustworthiness and The Practice of Business in China
Author(s): Daryl Koehn
Source: Business Ethics Quarterly, Vol. 11, No. 3 (Jul., 2001), pp. 415-429
Published by: Cambridge University Press
Stable URL: https://www.jstor.org/stable/3857847
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CONFUCIAN TRUSTWORTHINESS AND THE PRACTICE OF
BUSINESS IN CHINA
Daryl Koehn
Abstract: Confucius’s teachings fail under four headings: “culture,
moral conduct, doing one’s best, and being trustworthy in what one
says” (7/25).’ Trust or, more precisely, being trustworthy, plays a
central role in the Confucian ethic. This paper begins by examining
the Confucian concept of trustworthiness. The second part of the
paper discusses how the ideal of trustworthiness makes itself felt in
business practices within China. The paper concludes by raising and
addressing several objections to the Confucian emphasis on
trustworthiness.
It is not the failure of others to appreciate your abilities that should trouble
you, but rather your own lack of them.
?Confucius
Part One: The Concept of Trustworthiness in the Confucian Ethic
Confucius contends that individuals are ethically obligated to refine themselves and to become exemplary human beings. Such refinement (jen*) requires
education. Becoming an educated and influential individual depends, in turn,
upon establishing trust: “Only after he has gained the trust ofthe common people
does the gentleman work them hard, for otherwise they would feel themselves ill-
used. Only after he has gained the trust of the lord does the gentleman advise him
against unwise action, for otherwise the lord would feel himself slandered” (19/9).
At first glance, Confucius appears to think of trust in a manner not all that
different from Western theorists. Trust is the trustor’s expectation of good will
on the part of the trustee. Trust is something we can bestow on or refuse to other
people. Trust must be gained and, if we are not careful when reposing trust, we
will feel ourselves betrayed. On closer examination, though, we find that
Confucius diverges from many Western theorists because he regards the virtue
of trustworthiness as more important than trust per se.
To be worthy of our trust a person does not have to cater to our needs. While
a good leader will try to ensure that those ruled have enough to eat and drink,
people will still honor a leader in hard times: “Death has always been with us
since the beginning of time, but when there is no trust, the common people will
?2001. Business Ethics Quarterly, Volume 11, Issue 3. ISSN 1052-150X. pp. 415-429
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416 BUSINESS ETHICS QUARTERLY
have nothing to stand on” (12/7). This saying suggests that we should trust as
long as the good will of the trustee is evident, regardless of whether the trustee
promotes our material well-being or conforms to our expectations. Virtuous per?
sons, who look beyond their own narrow self-interest and who seek the spiritual
as well as merely material welfare of all of their fellow citizens, merit our trust.
Cultivated individuals display good will by never treating the multitude with
contempt. Instead he always praises the good while taking pity on the backward (19/
3). To excessively hate those who are not refined only provokes them to unruly
behavior (8/10), and the trustworthy person seeks to avoid war and conflict (7/13).
Those who are devoted to the way of virtue take instruction from anyone who
speaks well. Anyone who truly is trying to be virtuous is eager to learn, and she
never dismisses what is said on account of who is speaking (15/23). The person
of jen* will even speak with a madman (18/5). In general, the person of jen* is
intent upon helping others realize what is good in them (12/16). He neither looks
for the evil nor denounces others as evil (17/24). He hates evil, not evil people:
“To attack evil as evil and not as evil of a particular man, is that not the way to
reform the depraved?” (12/21). If we focus upon evil persons, we will not dis?
cern opportunities for realizing the good in others. We will not merit the trust of
others because we will not be acting so as to refine people. Instead, our judg?
ments will foster hatred and discord.
Many Western ethics of trust contend that we are justified in accusing those
who fail short of our expectations of betrayal.2 Confucius asks us to consider
instead whether we have demanded more of those we have trusted than we should
have. We ought to err on the side of making allowances for people (15/15), re-
membering that individuals have different strengths. Virtue exists as a continuum.
The person of jen* has good relations with others precisely because she does not
expect complete virtue from everyone:
A man good enough as a partner in one’s studies need not be good enough
as a partner in the pursuit of the way; a man good enough as a partner in the
pursuit of the way need not be good enough as a partner in a common
stand; a man good enough as a partner in a common stand need not be good
enough as a partner in the exercise of moral discretion (9/30).
It is up to us to choose our partners and friends carefully. In some cases, our
business associates, friends, and family members may fail to keep their promises
to us or may not show us due respect. However, we should not waste our energy
accusing them of being untrustworthy. It is not the failure of others to appreciate
our abilities that should trouble us, but rather our own lack of abilities (14/29).
The Confucian ethic sees the value of trust but always directs our attention back
to our own performance and attitudes. When there is trouble, we should look
inward (4/17) and bring charges against ourselves, instead of blaming or
scapegoating others (5/26).
The Confucian ethic takes the energy out of our anger at others for slighting
us and redirects that energy back into self-examination. This redirection is ap?
propriate for several reasons. First, there is little point in getting angry with
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CONFUCIAN TRUSTWORTHINESS 417
others. If they have harmed us out of ignorance, then the correct response is to
try to educate them, not to harm them in return. If they intend us harm, we should
still try to dissuade them, rather than retaliate in kind. Second, even if others
persist in trying to wrong us, we should not let their actions distract us from the
arduous work of becoming an authoritative person. Since refinement or jen* is
within our control, we always should look to our own behavior and not worry
overly much about what others are or are not doing to us. Warned that Huan T’ui
would try to assassinate him, Confucius retorted: “Heaven is the author of the
virtue that is in me. What can Huan T’ui do to me?” (7/23). The person of jen* is
free from anxieties (7/37) because he keeps his eye on what is most important:
“If, on examining himself, a man finds nothing to reproach himself for, what
worries and fears can he have?” (12/4). Confucius was famous for maintaining
his composure in the face of insults: “To be transgressed against yet not to mind.
It was towards this end that my friend [Confucius] used to direct his efforts” (8/
5). It is our trustworthiness, not others’ machinations or venom, that should be
our primary concern.
Third, it is easy to misjudge another. We may think, for example, that some?
one is not a good leader because the community or corporation he leads is in
disarray. Yet “even with a true king, it is bound to take a generation for benevo?
lence to become a reality” (13/12). Or we may conclude we have been betrayed
when a trusted party deviates from a stated plan of action. Sometimes, though,
to change one’s mind is the right course. A “man who insists on keeping his
word and seeing his actions through to the end . . . shows a stubborn petty-
mindedness” (13/20). We cannot hope to assess accurately the “betrayals” of
other people if we are not striving simultaneously to be as mindful as possible
(15/8). Followers have a responsibility, therefore, to be thoughtful as their lead?
ers. If those who are led are not mindful, they will not be able to grasp the
wisdom in what the leader is saying and simply may dismiss her out of hand.
Finally, we humans are only too prone to self-deceit. Scrupulous self-exami-
nation is necessary if we are not to err. For example, we may be inclined to
dismiss younger workers as undisciplined and undeserving of our trust and re?
gard. Yet, we are far from infallible. How “do we know that the generations to
come will not be equal ofthe present?” (9/23). In other cases, our judgment may
be motivated by bad faith. One should never oppose a lord or ruler without first
making certain of one’s own honesty (14/22). If all of us would engage in rou-
tine self-scrutiny, we would be more worthy of trust. We then would trust one
another more fully. With more trust, we would be able to educate each other
even better, thereby increasing the level of trustworthiness and engendering
still more trust. If people are failing to live up to their potential and living
in discord, then perhaps it is because we are failing to lead by example (13/
4). When Confucius wanted to settle in the midst ofthe “barbarians,” one of
his disciples asked, “But could you put up with their uncouth ways?”
Confucius bitingly retorted, “Once a gentleman settles amongst them, what
uncouthness will there be?” (9/14).
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418 BUSINESS ETHICS QUARTERLY
For all of these reasons, Confucius warns that to love trust without loving
learning can lead an individual to do harm (17/8). Judging other people’s good
will without simultaneously turning a critical eye on our own standard and trust?
worthiness is a recipe for disaster. It does not follow that we should tolerate any
and all abuse. The person of jen* is not angered by abuse, but neither does she
stick around to be mistreated. She tries to choose her friends carefully, refusing
to accept anyone as a friend who is not as good as herself (9/25; see also 16/4).
That does not mean she chooses only completely virtuous individuals as her
friends. It does mean she looks for others who are as critically mindful as she is.
Her friends should be eager to learn. She advises them as best she can but stops
if her advice is not being heeded. She does not ask to be snubbed (12/23) and
does not waste her words on those who are incapable of improving themselves
(15/8). The superior person does not look for evil but she quickly discerns it
because she is thoughtful. So, “without anticipating attempts at deception or
presuming acts of bad faith, [she] is, nevertheless, the first to be aware of such
behavior” (14/31). Her responses to others’ acts are similarly nuanced. An in?
jury should not be taken personally but neither should it be rewarded. Confucius
rejects a student’s suggestion that one should repay an injury with a good turn.
For if you did so, then “what do you repay a good turn with? You repay an injury
with straightness, but you repay a good turn with a good turn” (14/34).
By judging and responding with a high degree of discretion, we show our?
selves to be worthy of trust. In turn, we should trust those who are consistently
thoughtful. There probably is no such thing as a perfect friend or colleague.
However, if we use good judgment and do not expect too much of our colleagues
and associates; and if our friends use good judgment as well and do not take on
too much responsibility, then we can have strong, secure, and trusting relations
with our fellow employees and friends.
Notice that for Confucius trust cannot be based on conformity to rules such
as “Always keep promises,” “Avoid conflicts of interest,” etc. A friend might
become even more trustworthy in our eyes if she were to break a promise. Sup?
pose she had promised to help her best friend paint his house. On the way over,
she comes across a child badly hurt in a bicycle accident. She takes the child to
the hospital and as a result never gets over to his house. Although she did not
keep her word, her friend might conclude she is even more deserving of his trust
because she used good judgment. To take an example from business: Oskar
Schindler lied about the health and productivity of the Jews he employed in
order to save them. This willingness to lie to the Nazis was exactly what en-
deared him to his employees.
From the Confucian perspective, there can be no algorithm for assessing other
people’s trustworthiness. We must always judge the particular action, looking at
the context in which the actor operated and at the relevant factors. There are
some general guidelines for assessing the agent’s judgment?is the person
thoughtful? Does he rush to judgment or does he stop to examine his own mo?
tives and assumptions? But these guidelines are not exhaustive and never will be
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so because the person of jen* will often act in such a way as to make us com?
pletely rethink our presuppositions. Although the ethical order has certain
changeless injunctions?e.g., “Do not let your word outstrip your deed” (14/27)
or “Be resolute” (13/27)?it is always up to the individual to decide what these
injunctions actually mean in a particular context. As Aristotle would put it, the
decision lies with perception or aisthesis. The person of jen* acquires authority
because she is able by her actions and speech to disclose new, relevant possibili?
ties to her peers. Confucius’s own discourse, for example, makes us consider
what it means for our deeds to conform to our words. He berates those who keep
to their word in a literal way as petty and stubborn-minded. So he clearly does
not favor honoring any and all of one’s past promises or claims. What does he
mean then when he urges us not to let our words outstrip our deeds?
The example given above is helpful: Although the woman failed to keep her
promise to help her friend paint his house, her words did not outstrip her deeds. In
volunteering to assist her friend, she spoke as a true friend would because friends
seek to benefit each other. In helping the child, she acted as a humane person would.
In both cases, her words and deeds reflect her commitment to jen*. Only a small
person would accuse her of betraying her friend. Those who are critically mindful
would see her behavior as exemplary (jen*) because her choices and actions serve to
disclose what it means for words and deeds to be congruent.
Part Two: Examples ofthe Confucian Ethic at Work in Business
Suspicion of Contracts
Like the Japanese, the Chinese historically have been loathe to rely upon
contracts. They often will not even read long contracts and may insist the docu-
ment be shortened. A contract is merely a commercial agreement not to be taken
as the gospel: “You might say they [the Chinese] sign long complicated con?
tracts only as a formal confirmation that they intend to do business with you, not
how they are going to conduct the business.”3 The Confucian emphasis on trust?
worthiness makes reliance on contracts less attractive for several reasons. First,
use of detailed contracts encourages parties to think of the contract as the basis
for trust. The parties then feel entitled to accuse each other of betrayal whenever
one appears to the other to have deviated from the terms of the contract. The
contract thus contributes to an atmosphere of distrust. By contrast, if people
enter into relationships and transactions with the understanding that they will
need to work hard to accommodate their partner’s interests and to keep their
own biases and self-righteousness in check, then they will have put their rela?
tionship on a sounder footing. They may still decide to use some simple written
document to lay out key terms or to serve as a talking document, but they will
not make adherence to a contract the entire basis of the relation.
Second, reliance on contracts can prevent people from focussing on the larger
picture and from being as mindful as they should be. A number of disputes
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420 BUSINESS ETHICS QUARTERLY
between the Chinese and their joint venture partners have involved transfer of
technology issues. The foreign partner typically accuses the Chinese side of failing
to meet contractual requirements to supply land or capital, while the Chinese
claim that the foreign partner has not provided the technical training the two had
agreed upon. The foreign partner has generally viewed this counter-claim as a
fabrication. It did provide training and the Chinese are simply trying to justify
their own breach of contract. While that might be true in some cases, the person
of jen* would look beyond the contractual dispute to the larger cultural and
economic issues.4
The Chinese have good reason to be sensitive about technical training. The
government has made a conscious decision to modernize the country by import-
ing technology and then adapting it to suit their needs and their level of
development. Mao Tse Tung imported “turnkey” facilities?i.e., entire facto?
ries. The current policy is to build their own facilities using imported technology.
In an effort to acquire technology as cheaply as possible, the Chinese have been
willing to acquire slightly older hardware and software in the secondhand mar?
ket. This modernization strategy obviously will not succeed if they do not also
learn to use the technology. Therefore, the Chinese place great emphasis on jishu
jiaoliu or technical presentations conveying technical information. They will
bring in successive groups. Each group asks most of the same questions their
predecessors posed. The Chinese use these sessions not only to brief all mem?
bers of their team on the status of the project but also to train their people in the
technology.5 They do not see themselves as “using” these presenters for their
own purposes. They simply see themselves as obtaining an education that any
person of genuine good will would wish to help them obtain.
Given their history of being colonized, the Chinese are understandably afraid
of being exploited. Many have noted that, as late as the beginning of World War
II, Shanghai’s British quarters still had signs proclaiming “Chinamen and dogs
are not permitted to enter.”6 They do not want to give up hard currency and to
provide land and other resources to their former masters in exchange for tech?
nology they are unable to use. Nor do they want to become a dumping ground
for obsolete or non-functioning software. If they cannot get the software to run,
they naturally suspect that they have been duped. What Westerners view as a
rather cut-and-dried contractual dispute?did the Chinese live up to their end of
the bargain or not??is a major cultural issue for the Chinese. The future of
China and Chinese pride and self-respect is at stake in each of these deals. Con?
tracting to do business with the Chinese will never build trust unless each side
consistently looks beyond the contract to discern the economic, psychological,
and cultural factors at work.7 Parties will be more inclined to take this broad and
more generous point of view if they remind themselves that they may not know
as much about the situation as they think they do. Contractual disputes will prove
more resolvable if each side shifts its attention away from the other’s alleged
betrayal and to the question of whether it has been behaving trustworthily.
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CONFUCIAN TRUSTWORTHINESS 421
The Prominence of Guanxi
The Chinese reliance on connections or guanxi is another important feature
of the Chinese business scene. Does the Confucian ethic endorse such a reli?
ance? Guanxi is typically seen as an outgrowth of the Confucian emphasis on
personal relations. And it is true that, for Confucius, good order requires that
each person fulfill his particular role-based duties. Children should be filial. The
ruler should be a ruler and a father should be a father (12/11). Persons should
acknowledge their role in the hierarchy. Historically these roles were relatively
fixed by custom. There was little public law to which people could appeal if the
authorities abused their power. In such a system, it became vitally important to
cultivate relations with powerful people in the event one needed some sort of
help from an authority. Family and local ties were especially important. To this
day Chinese businesspeople will often treat classmates, friends, and family mem?
bers preferentially when making hiring or other business decisions.8
Public authorities, especially local authorities, continue to exercise a phe-
nomenal degree of power in China. Kristoff and Wudunn argue that China still
has an imperial system. The party leader is the new emperor, but local chieftains
share in this absolute power:
Each lower official acts like a prince on his own turf, from the ministry to
the department to the section to the team, from the factory manager to the
production manager to the workshop director. The petty autocrats are often
the worst, as well as the most difficult to escape. In many villages, the
local chief rules even more absolutely than [the national leader], for he
decides who can marry, who can get good land, who can get water for
irrigation, who can be buried where. He is almost as powerful as God, but
not so remote.9
Businesspeople, therefore, are well advised to cultivate guanxi. However, it would
be a mistake to conclude, as Francis Fukuyama does, that China is a low-trust,
family-oriented society whose members have little practice or interest in
interacting with outsiders or in dealing with others on an equal basis.10 If this
were true, the Chinese would never have been able to achieve their economic
miracle: China now ranks first in the world in the production of coal, cement,
grain, fish, meat, and cotton; third in steel production; and fifth in crude oil
output; its annual growth rate has averaged more than 9 percent since 1978.11
The Chinese would never have succeeded if they had not imported their
technology and had not formed numerous joint ventures with foreign companies.
Nearly 10 percent of China’s industrial output comes from foreign-owned and
private businesses.12
It should also be noted that the fastest-growing countries during the last de?
cade?China, Japan, Hong Kong, Singapore, Taiwan, and South Korea?either
have a large Chinese population or have been heavily influenced by Chinese
culture. The ethnic Chinese may be the most economically successful ethnic
group in the world. Although they constitute only 1.5 percent ofthe Philippine
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422 BUSINESS ETHICS QUARTERLY
population, they are responsible for 35 percent of the sales of locally owned
firms. In Indonesia, they are 2 percent ofthe population but may own as much as
70 percent of private domestic capital.13 Again, these minority Chinese popula-
tions would never have done as well as they did if they had refused to deal with
non-family members.
While Confucianism certainly stresses the need for respect for family,
Confucius never says “Trust only your intimates.” On the contrary, a trustwor?
thy person willingly associates with anyone else who is eager to learn. Confucius
chides his students who presume to condemn a fellow student with an undesir-
able background (7/29). Moreover, filial piety is not desirable if it functions in
an exclusive manner. Filial piety should lead to respect for others and for true
rulers and to a general climate of trust and good will. A Confucian ethic encour?
ages open rather than exclusive relations rooted in suspicion of other people. It
supports guanxi with everyone.
The Chinese openness to new relations, their reliance on guanxi and their
emphasis on being trustworthy are evident in their response to Western market?
ing. On the one hand, the Chinese are certainly willing to buy goods from
foreigners. There is not any xenophobia when it comes to purchasing from strang-
ers. On the other hand, the most effective Western marketing focuses more on
the company and its character and less on the product.14 The consumers want to
know with whom they are dealing. This desire is a natural outgrowth of a Confu?
cian ethic emphasizing relations of mutual development and refinement instead
of desire satisfaction. Any company can sell a product, so pushing the product
does not make the company trustworthy. Advertising of the company’s charac?
ter, by contrast, may foster trustworthiness. The consumer sees that the company
is self-conscious and aware ofthe effect its behavior has on consumers and other
stakeholders. Since the advertising may turn out to be deceitful, we cannot say
that all such advertising is intrinsically ethical. Nevertheless, from the perspec?
tive of the Confucian ethic, corporate image advertising would be more ethical
than mere promotion of products because ultimately the consumer and other
stakeholders are in relation with the company, not its output.
An Emphasis on Trustworthy Leaders in Polities and in Business
The Confucian value of trustworthiness both illuminates certain Chinese busi?
ness practices and enables us to critique them. Consider the question of who is a
good business leader. In one respect, Confucian leadership resembles so-called
“servant leadership.” There are no leaders when there are no followers. One
leads best when one rules in the interest of the ruled. A ruler will be able to
accurately perceive the interests of the ruled only if he is able to live in such a
way as to remain sympathetic to other people’s concerns and problems. Since so
many people have been poor throughout China’s history, the Confucian ethic
would recommend that a business leader live frugally and unostentatiously. The
ethic does not necessarily favor absolute egalitarianism. Neither does it promote
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CONFUCIAN TRUSTWORTHINESS 423
asceticism. As the standard of living of those one is ruling or managing im-
proves, a leader can opt to live more comfortably, although virtue rather than
material comfort should always be her primary concern.
The Chinese students protesting government corruption at Tiananmen Square
were on sound Confucian ground. After Deng Xiaoping made his famous 1992
trip to the south and urged people to embrace capitalism even more quickly, the
whole country seemed to be gripped with baijinzhuyi or money worship.15 Min-
ister-level officials plus many of the leader’s children went into business for
themselves. The army ran factories making clocks and refrigerators, and the Army
General Staff Department became the part owner of a luxury Chinese hotel.
Government officials were sometimes able to enrich themselves because they
could take advantage of their contacts and their control over land to secure con?
tracts or to gain a share in joint ventures. Relatives of senior Communist officials
have become some of the richest people in China. The Confucian ethic would
condemn those who have sold state assets to enrich themselves and would ques?
tion whether such ruler-managers are true or legitimate rulers.
In addition, the Confucian ethic of trustworthiness would have us look be?
yond the material successes of leadership. Modern Chinese leaders are sometimes
praised for destroying the feudal system, reducing infant mortality, and extend?
ing adult life span. If Hitler was right and if “success is the sole earthly judge of
right and wrong,” then Mao, Zhou Enlai, and Deng Xiaoping would deserve
praise for their achievements. Confucius does not dismiss success, but he would
have us ask: Success at what? A leader should excel at leading human beings.
Guaranteeing people an “iron wage” and an “iron rice bowl” is no proof of out?
standing leadership. It is true that starving people have a hard time caring about
virtue. But feeding them does not by itself help them to realize their human
excellence. Even animals feed their young, so there is nothing especially hu-
manizing about providing material subsistence (2/7). As I noted earlier, Confucius
insists a true ruler can ask people to forego food without forfeiting their trust as
long as the ruler’s good will is evident. A trustworthy ruler never loses sight of
the distinctively human capacity to choose. People will endure all kinds of hard-
ships as long as they are not oppressed.
A famous Confucian anecdote nicely illustrates this point. According to the
Li Ji, a Confucian classic, Confucius and his students were walking through the
forest and came across a woman sitting next to an open grave. She was weeping
profusely. When one of the students asked her why she was crying, she replied
“First, my father-in-law was killed by a tiger. Later the tigers ate my husband.
Now they have eaten my son as well.” Confucius asked her why she didn’t leave
the forest. The woman replied, “At least there is no oppressive government here.”
Confucius turned to his students and said, “Remember this: Oppressive govern?
ment is more terrible than tigers.”
This story bears close analysis. The woman was dependent upon these menfolk
to provide her with a livelihood. The tigers had beggared her and were a threat to
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424 BUSINESS ETHICS QUARTERLY
her very life. Yet she would rather face material devastation than lose her free?
dom. If a true ruler serves the interests of the human beings he rules; and if, as
this story suggests, freedom is the primary interest of human beings, then the
only trustworthy ruler is the one who always takes care to respect and promote
freedom. Freedom generally “trumps” economic well-being in the Confucian
scheme of values. The ethic might sanction a forced redistribution of land but it
would never approve of the murder of the citizenry. Freedom has value because
it enables us to make the thoughtful choices th
