The Role of Confucian-Transformational Leadership in Shaping and Influencing Chinese MNEs

Abstract

The demand to comprehend leadership across the world is becoming necessary and more urgent since the inevitable trend of globalization. In today’s global arena, on the one hand, China has maintained its remarkable economic performance and Chinese culture will have a more powerful influence in the foreseeable future; on the other hand, due to the policy of reform and opening and the economy market, western management theories and practices have flowed into the Chinese market and influencing Chinese companies. Thus Chinese leadership needs to develop more compatible with western leadership, thereby Chinese MNEs become more adaptive and competitive in the current global business environment. Against this background, this paper focuses on Confucian leadership, the most important Chinese leadership shaped by traditional Confucianism for more than 3000 years, and attempts to explore the compatibility of Confucian leadership and transformational leadership. After a thorough case study of Haier Group and its CEO Zhang, Ruimin, the research found that the great success of Haier is due largely to Zhang’s Confucian-transformational leadership, which combines both the wisdom of traditional Chinese Confucianism and the essence of western transformational leadership theory. Therefore, it is demonstrated that Confucian leadership plays a vital role in shaping the management style and performance of Chinese companies, and there can be a high level of compatibility between Confucian leadership and transformational leadership.