By: Prof. Enrique Soriano
Happy Chinese New Year! It’s the year of the rat!
In this column, we will focus on “Filial Piety”, one of the greatest virtues of Confucius. Who was Confucius? He was a great sage of China, and his theories are currently being reevaluated by the Chinese in their pursuit to be the world’s next economic powerhouse. Like Sun Tzu’s “Art of War,” Confucianism has become essential in laying the foundations of a successful family business. According to Wikipedia, in Confucian, Chinese Buddhist and Taoist ethics, filial pietyis a virtue of respect for one’s parents, elders, and ancestors. The Confucian Classic of Filial Piety, thought to be written around the Qin-Han period, has historically been the authoritative source on the Confucian tenet of filial piety. The book, a purported dialogue between Confucius and his student Tseng Tzu, is about how to set up a good society using the principle of filial piety.
Filial piety must be shown toward both the living and the dead (including remote ancestors). The term “filial” (meaning “of a child”) characterizes the respect that a child—originally, a son—should show to his parents. The idea of filial piety influenced the Chinese legal system: A criminal would be punished more harshly if the culprit had committed the crime against a parent, while fathers often exercised enormous power over their children. Filial piety was the basis of a law mandating grown-up children to be responsible for providing for their elderly parents. The main source of the importance of filial piety is “The Book of Filial Piety,” a work attributed to Confucius and his son.
Relationships are central to Confucianism. Particular duties arise from one’s particular situation in relation to others. The individual stands simultaneously in several different relationships with different people: as a junior, in relation to parents and elders; and as a senior, in relation to younger siblings, students, and others. While juniors, in Confucianism, owe their seniors reverence, seniors also have duties surrounding benevolence and concern toward juniors. This theme of mutuality is prevalent in East Asian cultures, even to this day.
The choice of conflict strategies is based on the following: concern for relationships, interpersonal norms, and collective interests. The Chinese in the Philippines are mostly business owners, and their lives revolve mostly around the family business. Chinese Filipinos attribute their success in business to frugality and hard work, Confucian values, and their traditional Chinese customs and traditions. They are very business-minded; entrepreneurship is highly valued and encouraged among the young.
Although family-owned businesses can generate and significantly improve the financial wealth which stems from the family’s original fortune, most Chinese family businesses are relatively short-lived, rarely extending beyond one generation. The high mortality rate in family businesses points primarily to the challenges of management succession. There is recognition that inter-generational succession is essential for both the profitability of Chinese family businesses and the welfare of the family as a whole.
However, Chinese family business leaders often neglect the issue of succession particularly if they are entrepreneurial founders, until it is too late. A more likely reason is that the first-generation founder might have a certain vision or dream of all of his children owning the business and working together to continue the joint venture in the future. It might not be acceptable within the family to question the feasibility of this vision or dream, and as such any talk about any agreement, or the possibility of family members exiting, is perceived to be too sensitive.
To be continued….
Prof Enrique Soriano is a World Bank/IFC Governance Consultant, Senior Advisor of Post and Powell Singapore and the Executive Director of Wong + Bernstein, a research and consulting firm in Asia that serves family businesses and family foundations. He was formerly Chair of the Marketing Cluster at the ATENEO Graduate School of Business in Manila, and is currently a visiting Senior Fellow of the IPMI International School, Jakarta.
He is an associate member of the Singapore Institute of Directors (SID) and an advisor to business families worldwide, a sought after governance speaker at conferences, and book author, more than 200 articles and publications, including two best-selling Family Business books (Ensuring Your Family Business Legacy 2013 and 2015). You can read Prof Soriano’s business articles for free at www.Faminbusiness.com
