Stability and Change in Managerial Work Values: A Longitudinal Study of China, Hong Kong, and the U.S.A

This study presents a 12-year (1989-2001) longitudinal comparison of managerial values systems in China, Hong Kong, and the U.S. Using hierarchical cluster analysis, we test the validity of the three competing perspectives–convergence, divergence and crossvergence–on values system evolution in these three societies. We use the socio-cultural influence and business ideology influence typology as the foundation for developing our hypotheses. Additionally, we assess the contribution of the specific values within the values system to the overall system values findings. Our data most strongly supports the multi-cultural crossvergence perspective. During a time period of stability in the U.S. and substantial change in both Hong Kong and China, the values of Hong Kong and China became more similar, while the values of these two Greater China societies became more different from those of the U.S. Changing Values—China, Hong Kong, and the U.S. 3 Do changes in societal values require years, decades or centuries? This question has been debated for decades (Webber, 1969). The debate focuses around the convergence, divergence or crossvergence perspectives, as well as the reasons or influences that lead to each of these three perspectives (Dunphy, 1987; Ralston, Holt, Terpstra, and Yu, 1997). The purpose of the current study is to shed some additional insight on this debate using longitudinal data from three societies. Ralston, Gustafson, Cheung, and Terpstra (1993) observed differences in values among mainland China, Hong Kong, and the U.S. in 1989. The goal of this cross-sectional study was to assess the level of values convergence–divergence–crossvergence among these societies. Hong Kong was the focus of the Ralston et al. (1993) study because of the intermixed influences that the Chinese culture and British rule have had on Hong Kong over the past century. However, this study had one substantial limitation: cross-sectional investigations are not able to provide definitive conclusions regarding the nature and processes of values change (Inglehart, 1997; Inglehart and Baker, 2000; Ralston et al., 1997; Tan, 2002). Building on the Ralston et al. (1993) study, the purpose of the current study was to assess longitudinal changes that might have occurred across these three societies during a period of substantial change in both China and Hong Kong while relative stability in the U.S. during the same time period. If there is short-term change (convergence) in global values, we would expect there to be greater similarity of values across these three societies in our 2001 study than there were in the Ralston et al. (1993) study. Thus, our data, in conjunction with the data of the Ralston et al. (1993) study, allows us to examine longitudinal values evolution that is not possible in a cross-sectional analysis. Since 1989, a variety of changes in the global business environment has taken place. In the U.S., change has been the most subtle. For example, Inglehart (1997) found there has been a Changing Values—China, Hong Kong, and the U.S. 4 relatively minor shift in intergenerational values in the U.S. Conversely, changes in mainland China and Hong Kong over this period have been much more dramatic. According to Inglehart, these changes appear to be linked to the dynamic nature of the economic and political shifts that have occurred in mainland China and Hong Kong. Further, the Internet has evolved into a major source of information and communication, and satellites have begun to broadcast global television into formerly closed mainland China (Hong, 1998). The Chinese economy has taken major steps in its transition to a market economy, resulting in gaining WTO membership in 2001 (Chen, 2002). One of the most significant political changes that occurred between 1989 and 2001 was the reunification of Hong Kong with mainland China, which resulted in the one-country, two-system plan with Hong Kong being a Special Administrative Region (SAR) of the People’s Republic of China (Holliday and Wong, 2003). Because of these changes, ranging from the subtle to the dramatic, these three locations provide a very interesting context for a longitudinal comparison. Thus, our primary research question is: What has been the impact of the socio-cultural and business ideology influences on the managerial work values in these three societies? To answer this question, we considered the alternative predictions of the convergence, divergence, and crossvergence perspectives on change in societal values systems (Dunphy, 1987; Ralston et al., 1997; Webber, 1969). We also investigated changes in the specific values used to constitute a values system, because understanding why changes in specific values took place—or did not—should provide greater insight into how and why values systems evolve. We identified eight values that are meaningful and relevant for assessing managerial work values. This approach allows us to assess the level of stability and change in values systems across these three societies over this 12-year period (1989 and 2001). This approach also allows us to assess which values are most (and least) susceptible Changing Values—China, Hong Kong, and the U.S. 5 to change, as well as examine the patterns of changes in these values. We begin our discussion of these issues by reviewing the literature on the convergence, divergence, and crossvergence perspectives of values change. Following that, we discuss two types of influences on managerial work value systems, namely socio-cultural influence and business ideology influence. We discuss which of the eight specific values are most likely to be influenced by socio-cultural or business ideology forces. The result is two sub-systems of values. Next, we integrate our discussions of the three values change perspectives with the two types of influences on managerial work values to develop three competing hypotheses. We test these hypotheses at the values system level and at the values sub-system level, as determined by the influence typology. To provide greater in-depth understanding of the reasons underlying the values evolution, we conduct an analysis for each of the eight specific values. We conclude the paper with a discussion of our findings that, in part, challenge current theory. Finally, we discuss the theoretical and practical implications of these findings. CONCEPTUAL BACKGROUND AND HYPOTHESES Three Perspectives on Values Change The convergence, divergence, and crossvergence perspectives on change offer three alternative predictions regarding the cross-cultural development of managerial values (Dunphy, 1987; Ralston et al., 1997). The convergence-divergence debate in the international business arena goes back at least four decades (Webber, 1969), while the crossvergence concept emerged in this debate about a decade ago (Ralston et al., 1993). An important aspect of the convergencedivergence debate focuses on the time needed for change to occur, as we shall discuss. Convergence. Convergence theorists argue that industrialization and technology are the primary driving forces for the global merging of work values. These same theorists believe that Changing Values—China, Hong Kong, and the U.S. 6 such historic shifts reflect in significant ways the development of Western capitalism as it is influenced primarily by technology (Dunphy, 1987). Their point should be well taken, especially across well-established, stable societies. However, in the context of developing and transitioning economies, one could question whether technology is a sufficient explanation. In these developing and/or transitioning societies, we see that changes in economic (e.g., mainland China) and political (e.g., Russia) systems appear to be having substantial impact on the work values of these societies (Yip, 1992) and that these systems can change more rapidly, relative to the change in the socio-cultural system of a society. Furthermore, technology tends to flourish in capitalistic systems where entrepreneurs and venture capitalists can exploit new ideas quickly (Suarez-Villa, 2000). Capitalistic systems, while not creating democracies, tend to result in a lessening of political constraints so that market economies can function (Peng and Shekshnia, 2001). In turn, maturing economic systems tend to invest more in technological development (Suarez-Villa, 2000). Recent research shows that highly developed societies with political democracies and high levels of technological sophistication tend to cluster together, and all correlate positively with the level of economic development (Keefer and Knack, 1997). Therefore, given this interrelatedness of technological, political, and economic development, these three forces form an integrated set of stimuli. We refer to this as the “business ideology” paradigm. The synergistic effect of these three aspects of the business ideology paradigm serves as the force for values convergence across societies. For example, as capitalism flourishes, communism declines; and levels of technological sophistication become more universal. Divergence. In contrast, proponents of the divergence perspective argue that the values system of a society is deeply embedded in its cultural roots. Divergence theorists, thus, posit a Changing Values—China, Hong Kong, and the U.S. 7 values system as the product of socio-cultural influences (Inkeles, 1997). From this perspective, national culture differences reflect enduring cultural heritages that are deeply embedded in individuals (Ricks, Toyne, and Martinez 1990). The divergence approach argues that the values and beliefs learned during childhood socialization endure throughout one’s lifetime irrespective of business ideology changes in the society, and that these values are passed from one generation to the next generation. As such, values change due to the socio-cultural influence is a very slow process that should be measured in terms of generations and centuries (Inglehart and Baker, 2000; Ralston, Egri, Stewart, Terpstra, and Yu, 1999 ). Crossvergence. Crossvergence is a more recently developed concept. Ralston et al. (1997) define crossvergence as the synergistic interaction of socio-cultural and economic ideology influences within a society that result in a unique value system. This perspective sees that values system as different from the values supported solely by either socio-cultural or economic ideology influences. In this definition, economic ideology reflects the economic system that individuals within a society experience, with technology being an implicit part of it. However, in today’s multi-faceted global environment, it appears that the Ralston et al. (1997) definition may be too narrow. Consequently, we propose to expand the economic ideology concept to that of the business ideology paradigm. This approach incorporates the political and technological influences as well as the economic influences upon the values system of a society. Thus, we expand the definition of crossvergence to propose that the business ideology forces leading to convergence and the socio-cultural forces leading to divergence will synergistically interact with one another. The result is a unique values system that differs from both the convergence and divergence positions. Changing Values—China, Hong Kong, and the U.S. 8 Looking at crossvergence at the values system level, one or more of the eight values that constitute the values system for this study could change; yet others could remain unchanged. The result of the integration of certain values that have remained constant and other values that have changed would be a newly evolved and unique values system. To more fully understand the overall change in a values system, it is important to ascertain which specific, subsystem-level values are changing and the directions in which they are changing. This expanded level of analysis would seem particularly relevant to understanding the evolution of developing and/or transitioning societies where we find business ideology subjected to greater and more rapid change than in stable, well-developed societies. Thus, the convergence–divergence– crossvergence (C-D-C) debate focuses on two key points of disagreement that are inextricably intertwined. One debate concerns the primary influence on values systems formation: Is business ideology or socio-cultural the primary influence? A second debate regards the time-lapse: Do values systems change over the span of years or over the span of centuries? In summary, the convergence perspective argues that the primary influence is business ideology and that change can occur within years. The divergence perspective argues that the primary influence is the socio-cultural impact and that change evolves slowly over centuries (Webber, 1969). The crossvergence perspective attempts to bridge this divide by accepting that the socio-cultural and business ideology explanations are both viable, and that they are inherently interactive (Ralston et al., 1997). This approach further acknowledges that some aspects of a values system may change over a period of years while other aspects of a values system may take generations or centuries to change. This view argues that for a fuller appreciation of the dynamics of values change, one must simultaneously consider the longitudinal aspects of sociocultural and business ideology influences. Thus, from the crossvergence perspective, the Changing Values—China, Hong Kong, and the U.S. 9 essential question is: To what degree and at what speed do various aspects of a society’s values system change? By comparing three societies that have experienced different degrees of change and sources of change, we sought to contribute to the resolution of the convergence-divergencecrossvergence debate. Two Types of Influence that Shape Our Values Systems While a culture group has one values system, we identify two potentially competing sets of influences–business ideology and socio-cultural–which shape that values system. Additionally, the malleability of the specific values identifies the potential impact that these two sets of influences might have on the overall values system. Convergence would argue that all values are malleable and thus susceptible to the influence of business ideology; divergence would argue that all values are enduring vestiges of a society’s socio-cultural heritage. The crossvergence perspective argues that some values are malleable to the influence of business ideology, while other values are rigidly enduring and more socio-cultural influenced. As such, this issue might be oversimplified as a contrast between the needs of the business world versus ingrained personal philosophy. However, given that all values originate from individual cultural and philosophical upbringing, then all values may be shaped to some extent by one’s experience in the business world. Thus, the question that now arises is: Which values tend to be fundamental and unchanging tenets of one’s philosophical upbringing, and which values tend to be more susceptible to the pressures of one’s work environment? The works of Rokeach (1973) and Schwartz (1992) identify a contrast between terminal and instrumental values that are theoretically consistent with the crossvergence perspective. Socioculturally ingrained values are deeply rooted in the core social fabric of the society. Therefore, these values are less likely to change in response to business ideology influences (i.e., economic, Changing Values—China, Hong Kong, and the U.S. 10 political, and technological changes). Values that are more peripheral, on the other hand, are more susceptible to change when there are economic, political and/or technological changes. Thus, change to any of these aspects of business ideology influence can have a substantial impact upon these instrumental values. Based upon the existing literature, Ralston et al. (1993) developed a values system that consists of eight specific values. Collectively, these eight values constitute a model of the managerial work values in terms of managers’ views and valuation of the superior-subordinate relationship (integration), managers’ orientation toward employee welfare versus task accomplishment (human-heartedness), managers’ approach to influencing others at work (Machiavellianism), and managers’ feelings of control over their work environment (locus of control). Further, these values dimensions incorporate the importance of trust in relationships (Confucian work dynamism), the emphasis on one’s self-interest versus the good of others (moral discipline), one’s orientation toward wanting security and avoiding risks (intolerance of ambiguity), and the acceptance of new ideas and change (dogmatism). Within the context of these eight values, we further refine our research question: Which of these eight values are core values that are influenced primarily by socio-cultural factors, and which are peripheral values that are influenced primarily by business ideology factors? Socio-cultural influenced values. The values of Confucian dynamism, moral discipline, intolerance of ambiguity, and dogmatism are not in the exclusive domain of socio-cultural control. Yet these tenets are more culturally imbued than determined by business ideology because they appear to be, to a significant degree, fundamental to a society’s values and less so to the influences of the business world. Changing Values—China, Hong Kong, and the U.S. 11 Confucianism is a philosophy which, in addition to professing the importance of developing a long-term orientation, identifies a hierarchical structure in which family is central. The Confucian perspective of work dynamism is based on an individual's level of search for virtue (Chinese Culture Connection, 1987). Confucian work dynamism was adopted as the “fifth” Hofstede (2001) dimension, and has been described as a measure of long-term orientation. Implicit in this value system is the importance of developing a trust-based relationship with business associates. Both Fukuyama (1995) and Inglehart (1997) have shown that a high level of societal trust appears to be related to the economic development level of a country. Moral discipline describes a long held belief about relationships with family and friends. It is positively related to the cultural value of “collectivism” and identifies an individual's level of self-control in relation to others, particularly regarding whether individuals see themselves as an integral part of a collective or not. The research of Ralston et al. (1997), Schwartz (1992) and Triandis (1995) concurs that collectivism can be a primary factor in differentiating cultural groups. Intolerance of ambiguity relates to the inability to cope with major environmental change and conflict (Timothy, Thoresen, Pucik, and Welbourne, 1999). Numerous studies have demonstrated the relevance of intolerance of ambiguity for understanding differences across cultures and use the term as a proxy for conservatism (e.g., Dollinger, 1983; Martin and Westie, 1959). A low score on intolerance of ambiguity identifies societal members’ ability to function with a feeling of relative certainty even when confronted by a dynamic and changing environment, such as the changing political environment of Hong Kong or the changing economic environment of China. Changing Values—China, Hong Kong, and the U.S. 12 Dogmatism is related to personality rigidity. It is a pervading adherence to the traditional voice of authority and a reluctance to challenge the status quo. It indicates the degree of flexibility or openness to new ideas and change (Davies, 1998; Schulze, 1962). Schwartz (1992) identified the importance of this value in his 20-country study in developing a cross-culturally validated measure of values. Schwartz’s study includes the values dimension of openness-tochange versus conservation (dogmatism). The value constructs of Schwartz have proved important in understanding values orientations among different age groups of Chinese and Americans (Egri and Ralston, 2004). Business ideology influenced values. Integration, human-heartedness, Machiavellianism, and locus of control clearly appear to be work-related and influenced by work environments. Integration is an indicator of the formal power relationship that is acceptable between a superior and a subordinate. Integration is negatively related to power distance (Hofstede, 2001), which identifies the degree of hierarchical distance between a superior and a subordinate that is considered as acceptable. High integration would mean low preference for hierarchical structures, formal rules, and authoritative leadership. Thus, integration may serve as an indicator of the degree of centralization that is regarded as appropriate within a work organization. Human-heartedness describes the management style of an individual as either peopleoriented or task-oriented. Thus, the human-heartedness value relates to the typology of an individual’s leadership style (Bass, 1990). It may also be viewed as comparable to the masculinity-femininity culture value (Hofstede, 2001) with human-heartedness positively associated with a “feminine” approach (people-oriented) rather than a “masculine” (taskoriented) management style. Additionally, this value identifies an individual's level of social consciousness and compassion toward others. Changing Values—China, Hong Kong, and the U.S. 13 Machiavellianism taps into the individual’s strategy for gaining influence. This tactic identifies a manager's willingness to use social power and to place self-interest above the interest of the work group (Jaffe, Nebenzahl, and Gotesdyner, 1989). Recognition of the importance of the ability to influence others by various informal means goes back centuries. In the West, Machiavelli (1513/1984) was one of the early writers, while Chinese General Sun’s (1963) influential discourse, The Art of War, predates Machiavelli by a century. More recently, Kotter (1985) was among the first to identify the importance of understanding the concepts of power (as informal influences) in the business world. At the same time, Kipnis, Schmidt, and Wilkinson’s (1980) seminal work on influence tactics laid the modern business foundation for the importance of understanding the work implications of influence tactics, such as Machiavellianism. Interestingly, those scoring high on Machiavellianism, while tending to be good administrators, also qualify as sociopaths who tend to possess low ideological commitment, with more concern for a personal agenda (Nelson and Gilbertson, 1991). Locus of control relates to managers’ attitude regarding the extent to which they have control over events and, therefore, over their ability to bring about change (Blau, 1987; Rotter, 1966; Spector, 1982). High internal locus of control managers tend to act on their belief that they have control over outcomes at work. High external locus of control managers are more likely to passively attribute work outcomes to factors such as influential others (e.g., government) or chance. Research has found that people with an internal locus of control are more self-motivated (Judge and Bono, 2001), are more proactive in terms of striving for achievement (Spector, 1982), and have the predisposition to be more effective leaders (Blau, 1993). Trompenaars (1996) reported that, in general, managers in North America have a higher internal locus of control than do managers in the Far East. Changing Values—China, Hong Kong, and the U.S. 14 Hypotheses The overarching goal of this study is to explore whether there is longitudinal evidence of a global convergence of values (in sole support of the business ideology perspective), a societal divergence of values (in sole support of the socio-cultural perspective), or a multi-cultural crossvergence of values (in support of the crossvergence perspective, an integrative impact of the socio-cultural and business ideology forces). As has been noted, previous discussions and tests of the convergence-divergence-crossvergence C-D-C debate have been at the cross-sectional level of analysis. For the longitudinal study of the C-D-C issue for multiple societies, we argue that it is important to conceptualize the values change in terms of the whole values system to provide a holistic investigation of the C-D-C issue. We present three competing hypotheses to represent each of these values change perspectives. While these hypotheses are presented at the values system level, we will also assess these same hypotheses at the sub-systems–business ideology and socio-cultural–level. Convergence hypothesis. The convergence perspective would predict that any differences in values in 1989 would disappear or significantly decline by the 2001 time period such that the value systems of the three societies would be more similar in 2001 than in 1989. Based on the technology-driven orientation of classical convergence thinking (Webber, 1969), this would also mean that the convergence would be in the direction of the U.S. values system, which in 1989 was the most technologically sophisticated of these three societies. Hypothesis 1: Based on the convergence perspective (business ideology influence), there will be a significant decrease in the differences across the value systems of the three societies from time period one (1989) to time period two (2001). Divergence hypothesis. In contrast, the divergence perspective would predict cultural stability across this 12-year time period; any cross-cultural differences in values systems found Changing Values—China, Hong Kong, and the U.S. 15 in 1989 would remain in 2001. Thus, there would be consistency in the uniqueness of each society’s values system regardless of the degree of inter-societal contact or changes in the business ideology of the societies during this period. Hypothesis 2: Based on the divergence perspective (socio-cultural influence), there will be continued differences in the value systems of the three societies from time period one (1989) to time period two (2001). Crossvergence hypothesis. The crossvergence perspective is more complex. In essence, it would predict an interaction between business ideology and socio-cultural influences that would result in a cross-cultural evolution of values systems between 1989 and 2001. Specifically, specific values may change in independent ways such that values systems may evolve in a multitude of plausible ways. Since crossvergence theory proposes that there will be an interaction of business ideology and socio-cultural influences to create a new values system, we developed two interrelated crossvergence hypotheses based upon convergence predictions for the business ideology values and divergence predictions for the socio-cultural values. Crossvergence theory would predict that the 2001 managerial work values systems in each society would be substantively different from those observed in 1989, with specific values changing to different degrees and in different directions to produce different across-society relationships in 2001. We use Hong Kong as the focal society, as did Ralston et al. (1993), to predict a converging of business ideology values for Hong Kong with the U.S, and a continued divergence of socioculturally influenced values for Hong Kong and the U.S. We predict less difference between Hong Kong and mainland China for business ideology values over time, and continuing differences between Hong Kong and mainland China for socio-cultural values. Hypothesis 3a: Based on the crossvergence perspective (interaction of business ideology and socio-cultural influences), Hong Kong will be more similar to the U.S. in 2001 than it was in 1989 on the values primarily impacted by business ideology influences (Integration, human-heartedness, Machiavellianism, and locus of control) Changing Values—China, Hong Kong, and the U.S. 16 Hypothesis 3b: Based on the crossvergence perspective, Hong Kong will continue to be different from either mainland China or the U.S. in 2001 as it was in 1989 on the values primarily impacted by socio-cultural influences (Confucian dynamism, moral discipline, intolerance of ambiguity, and dogmatism). To summarize, if there is a significant decrease in the differences across the values of the three societies from 1989 to 2001, then values system convergence has occurred. Conversely, if there continues to be differences in the values of the three societies over this time period, then values system divergence has occurred. Finally, if there are changes in the interrelationships of one or more of the specific values among the three societies over this time period, then values system crossvergence has occurred. In addition, knowledge of values evolution on specific values, as well as the values system as a whole, contributes to a more in-depth interpretation of the findings. Thus, we conduct analysis on the specific values to better identify the degree of change in specific aspects of a society’s values system.