Ethical business cultures in China

Chinese business ethics emerged as a field of research after the begin- ning of economic reforms in late 1970s to early 1980s. In the 1990s, China grew to become a manufacturing powerhouse, and Chinese prod- ucts have been widely exported around the world. Issues associated with defective products, such as toothpaste tainted with antifreeze and pet food containing melamine, also arose and generated negative pub- licity (Lu, 2009). After China entered the World Trade Organization (WTO) in 2001, concerns were raised about the inappropriate conduct of Chinese businesses (Brand & Slater, 2003). This triggered an interest in examining the ethical conduct of Chinese business organizations. The first part of this chapter covers the development of Chinese ethical business culture and the impact of historical, cultural, eco- nomic, and political factors. It discusses the profound influence on ethical business environment and ethics of Confucian philosophy, Communist ideology, and the government regulatory agencies. Special attention is paid to the role of informal networks and the unique practice of guanxi. Next, the chapter discusses the ethics pol- icies and practices at the firm level to investigate the roles of lead- ership, managerial culture, and ethics training in ethical business practices in China. Implications are discussed from the viewpoints of both foreign and Chinese firms to provide a global perspective.