Leadership Insights from Published Studies on Chinese Top Executives
In Chap. 1, we suggested that the growth of the economy in China as a whole is a story of both top-down centrally managed capitalism (Lin 2011) and bottom-up grass-roots capitalism (Nee and Opper 2012). The former focused on the reform of state-owned enterprises and the attraction of foreign investment, while the latter allowed for the creation of a private economy without much policy guidance or support. Private individuals overcame extremely disadvantageous initial conditions and developed robust enterprises that became the major engine of growth for China. Nee and Opper (2012), through their five-year study of over 700 entrepreneurs in the Yangzi River Delta region, provided convincing evidence and a persuasive argument that this economic miracle is the result of the actions and ambitions of entrepreneurs. Since they could not rely on formal institutions, private entrepreneurs had to develop their own informal lending systems and networks of suppliers and distributors. They contributed a large proportion of the national GDP and provided employment as the state sector’s contributions to both declined steadily over the years. Formal institutional changes that legitimised the private © The Author(s) 2017
A.S. Tsui et al., Leadership of Chinese Private Enterprises, Palgrave Studies in Chinese Management, DOI 10.1057/978-1-137-40235-6_2
firms’ existence and supported their further development came after their initial success. Private entrepreneurs, the ‘capitalists’ who were despised, scorned and viewed with suspicion in the early years of the reforms, are now legitimate members of Chinese society. Even though the sea is still turbulent and the entrepreneurs are still complaining about the difficult business environment and continued unfair treatment by the government relative to state-sector firms, their economic success is undeniable, earning social acceptance as well as raising expectations by both government and citizens of their role in contributing to a balanced economic and social development of China. Even though the future is uncertain, we can conclude from the solid results that this resounding success can be credited to the ‘leadership’ or agency of the entrepreneurs and founders of these private enterprises. This conclusion is consistent with the ‘visible hand’ theory of the growth and development of industrial enterprises (Chandler 1978) in the West as well as the strategic choice theory of business and organisation management (Child 1972).
Who are these ‘visible hands’? How do they lead? This chapter is devoted to a discussion of this question by reviewing and analysing studies of executive leaders, especially chief executive officers (CEOs) from China. Even though there are many books that provide accounts of the success of private entrepreneurs, the focus of these works is often on the institutional environment and the role of social capital (e.g. Krug 2004; Nee and Opper 2012). They rarely focus on leaders’ behaviours and management approaches (including their philosophical foundations), and do not offer a conceptual analysis of the leadership practices of these leaders. Using the published studies of top leaders in Chinese firms, in this chapter we aim to develop a preliminary understanding of the key behaviours and characteristics of the top leaders of Chinese firms, with a keen eye on those who founded and managed the private enterprises.