Bernardo M. Villegas
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Asian Values in Family Enterprises

           Values prominent in the corporate culture of family enterprises all over the world have actually resulted from the institutionalization of human virtues lived by the founding entrepreneurs.  These human virtues, like prudence, justice, self-control, courage, humility, etc. are universal and, therefore, can transcend citizenships, cultures and creeds.  Justice, for example, is the habit of giving everyone his due and can be cultivated by a Chinese, a German or an American.  Humility inclines one to overcome selfishness and to serve others habitually in whatever nation or culture.  Does it make sense then to talk about Asian values that should be nurtured in family enterprises in the Asian region?

          Without getting into the debate that raged in the 1990s (see Wikipedia on Asian values) to justify authoritarian regimes in Asia such as those led by Lee Kuan Yew in Singapore or Mahathir Mohammad in Malaysia, let me limit the discussion to whether or not certain ways of living the human virtues in Asian societies can be the bases for strong corporate cultures of family businesses in East Asia, the region in which many of the most rapidly growing economies will be found in the twenty first century.  From the outset, let me say that I am inclined to agree with Indian Nobel laureate in economics, Amartya Sen, who pointed out in his article "Democracy as a Universal Value,"  that no universal "Asian" value system could possibly exist, because the diversity of Asia is far too great for there to be a single set of common values across the region.  In the design of a political system, one has to contend with such schools of Asian values as Buddhism, Confucianism, Hinduism, Integral yoga, Islam, Taoism, Shintoism, along with other philosophies and religions.  Anyway, the defenders of Asian values as a rationalization for the lack of human freedom in some authoritarian states lost a lot of their clout during the 1997 East Asian financial crisis when it became obvious that Asia as a whole lacked a regional institutional mechanism, and much less any system of cooperation to deal with the crisis. 

          If we limit the discussion about Asian values to the level of the business firm, I can see a distinct advantage of the prevalence of the Confucian ethic in East Asian societies in the fostering of strong cultures in family enterprises.  As Martin Jacques wrote in his best selling book entitled "When China Rules the World," "For two thousand years China was largely shaped by the principles of Confucius (551 to 479 B.C.) and the Analects became established as the most important book in Chinese history.  Confucianism was a syncretic mode of thinking which drew on other beliefs, mostly Taoism and Buddhism, but Confucius's own ideas remained by far the most important.  His emphasis on moral virtue, on the supreme importance of government in human affairs and on the overriding priority of stability and unity, which was shaped by his experience of a divided country, have informed the fundamental values of Chinese civilization ever since."  All of Northeast Asia (China, Korea and Japan) are fundamentally Confucian societies.  Because of the estimated 50 million overseas Chinese in Southeast Asia, the majority of whom are the leading founders of family enterprises in Indonesia, Thailand, the Philippines, Malaysia, Singapore and Vietnam, one can safely say that Confucian values have facilitated the fostering of moral virtues among a good number of entrepreneurs who established family enterprises.

          In his study of Chinese society, Martin Jacques identified the two most obvious continuities in Chinese civilization, both of which can be traced back to Confucius.  The first is the primordial role of the State and the other is the highest value to be given to education (which includes parenting).  The roots of China's (and those of other Asian societies influenced by the Chinese civilization) distinctive concept of education and parenting lie deep in its civilizational past.  Confucius's disciple, Mencius (372 to 289 B.C.), further elaborated on human nature as being essentially good and that if children are brought up in the right manner through appropriate parenting and education, they would acquire the correct attitudes, values and self-discipline.  The emphasis on moral virtues in Confucian cultures has actually been reinforced by Christian values in societies in East Asia where the high quality of education imparted in the schools established by Christian missionaries (in such key cities as Hong Kong, Singapore, Kuala Lumpur, Jakarta, Bangkok, Ho Chi Minh) motivated overseas Chinese merchants and entrepreneurs to send their children to these schools.

          The challenge to family enterprises in East Asia is how to sustain the strong family ties that are supported by both Confucian and Christian principles in the face of forces of family disintegration afflicting modernizing societies in both the West and the East.  The prevalence of divorce and frequent remarriages have obvious repercussions on the stability of family businesses.  In China, the one-child policy can complicate succession planning in family enterprises.  Although there have been recent moves to relax this policy, the experiences of other East Asian countries like Singapore and South Korea  show  that low fertility rates are very difficult to reverse in an industrialized and consumerist society.  Even the most attractive financial and other incentives to encourage larger family sizes have had very little success.  It may be wise for countries in Asia that still have young and growing populations to create conditions favoring large family sizes, at least among the entrepreneurial classes.  Family businesses will constitute a strong foundation of the economies of emerging markets for decades to come, especially in East Asia.  For comments, my email address is bernardo.villegas@uap.asia