The Bamboo Network Essay Example

acquired Hutchison Whampoa, a company with the world’s biggest port and telecommunications operations, and Hong Kong Electric Holdings Limited.Li Ka-Shing’s son, Victor Li, serves as managing director and deputy chairman of Cheung Kong Holdings Limited. Y. C.

Wang is another example, with his Formosa Plastics Group. Each of his 10 children holds an executive position in the family business, and his brother is president of Formosa Chemicals and Fibre. How are businesses within the bamboo network structured? Most, if not all managerial positions within a company in the bamboo network will be filled by family members.This means that there is a significant amount of trust at the top of the company, as well as loyalty and flexibility.

It also means that the top business executives are more likely to sit and have a conversation to plan company strategy or discuss issues rather than handing each other paperwork or arranging formal meetings. Instead of meetings with expensive lawyers and accountants in formal settings, there are conversations between friends and relatives.Kinship, dialect and common origin provide the basis for mutual trust in business transactions in the network, even when conducted at great distances. A common set of values exists in the bamboo network which includes hard work, conscientiousness, loyalty to superiors and trust among family and friends, which allow many of the bamboo network businesses to get around government-imposed barriers. The fact that minimal paperwork is involved also means that there is no paper trail, should there be any government investigations of the company.The bureaucracy embedded within most businesses in Western culture is much less prevalent in Chinese businesses, as the personal relationships the management team have

with each other are very strong, and there is less of a hierarchical structure given the relationships are a lot closer.

As mentioned before, the business will generally pass from one generation to the next, typically giving the sons preference over the daughters in terms of company leadership. The head of the family will be the chief decision maker, and any sensitive information will be on a strict need-to-know basis with regards to non-familiar subordinates.Trust is one of the most important factors in the bamboo network, and only employees who have worked with the employer for a long time will hold higher positions if they are not family members. Because the leader of the company is generally the head of the family, he has the power in the business sense and in the social sense, which can be effective in maintaining control, since he will have more experience than his children and the responsibility they have to respect him in all spheres of life. What role does Confucianism play in bamboo networks? To live is to love others, to honour ones parents, to do what is right instead of doing what is advantage, to practice reciprocity, and to rule by moral example instead of by force and violence. ” This famous Confucius quote is useful in showing how Confucianism strongly affects business structure and the bamboo network.

As mentioned before, the businesses within the bamboo network are all family-managed. These businesses also strongly believe in reciprocity, the core idea behind ‘guanxi’ relationships.Finally, ruling by moral example is extremely important in the bamboo network, as one of the hallmarks of the bamboo network is trust, meaning

the business must be operated in a way in which everyone feels comfortable. What are the positives and negatives of the Chinese business model? •Positives There are many advantages to the bamboo network model of operating a business.

The owners are the controlling managers, so they do not face issues with conflicting values or ideas in upper ranks.This means that decisions can be reached a lot faster and with less time wasting, so managers can devote their attention to doing business and completing the tasks set before them. Also, the fact that there is less paperwork and more of a personal nature means there are higher levels of trust, interaction and discussion. Naturally, this means better idea formulation and consideration. •Negatives The fact that the businesses in the bamboo network were started as very small, family run operations means that they are typically very low-tech in nature, and rely on hard work rather than technology to complete a task.

They also have a very limited marketing capacity, because the bamboo network enterprises tend to only make products for other businesses to use, rather than products for consumer purchase. For example, many of the companies are involved in real estate, like hotels. They are good at making deals to sell the hotels to other businesses, but would be less efficient in running the hotel themselves simply due to the fact that they’d have to market it and put on a public face, something that is not typically required in their line of business. Possible issues with western tradingBusinesses from the West can compliment businesses in the bamboo network, as long as the two can acknowledge their different

operating styles and values. For example, trying to turn a Chinese company into a bureaucratic Western-style business is bound to fail; just the same as trying to remove the hierarchical structure in an American business will not work. Western businesses do have something to offer those in the bamboo network by way of technical expertise, consumer marketing skills and the ability to manage large-production operations.

The Chinese businesses have something to offer the West, in that typically businesses in the bamboo network have a low public profile, reducing the likelihood of becoming a target of public criticism or governmental action. Most of the companies serve as middlemen, making the product for someone else. The owners also tend to have connections in government, meaning they are privy to things that western companies are not. For example, Li Ka-shing’s son, Richard Li, started a company called PCCW. The company then won a controversial land deal, acquiring valuable waterfront real estate from the government without any public auction bids.Many in Hong Kong cried cronyism, as Hong Kong chief executive Tung Chee Hwa gave away the land to his new high-tech residential and commercial venture called Cyberport.

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