Translating Intervention: When Corporate Culture Meets Chinese Socialism

Introduction

China is de jure state socialist but de facto, more state capitalist; a Peoples’ Republic in which the people cannot exercise basic republican freedoms of expression and representation; the most dynamic economy in the world steered by an avowedly Marxist state apparatus (Callick, 2013; Galtung & Stenslie, 2015). Indigenous Chinese management scholars, in a recent issue of Management and Organization Review, remarked that here is a “rise of indigenous Chinese management.” The rise is seen to be occurring in response to the change in management practices attendant on “the upgrading of industry and the emergence of knowledge workers” (Zhang, 2015, p. 206). In this article, we extend ideas articulated by Chinese management scholars to look at how shifts in Chinese management practice have moved to the constitution of what Zhang (2015) characterizes as “managerial hegemony.” Gramsci (1971), in discussing the importance of building proletarian hegemony in the midst of bourgeois rule, termed the nascent and repressed Italian communist party the “New Prince” in homage to the Machiavellian tradition; in China, in homage to a far older tradition for some political scientists, the CCP continues to wield its power in a similar way as Chinese emperors in the past, hence its attribution as an “organizational emperor” (Zheng, 2010). Hegemony requires legitimacy to be effective and, in this article, we address how legitimacy is reproduced in everyday organizational life under the auspices of the CCP.

The CCP remains the dominant institutional frame in China and increasingly seeks to align its own interests with those of the nation and its key constituencies, including the intelligentsia, professionals, entrepreneurs, and more generally, the masses, to maintain legitimacy. In the past, maintaining revolutionary fervor was the mechanism for ensuring legitimacy (see Chan, Clegg, Cunha, & Rego, 2015). However, changing forms of normative control characterize the role of the CCP in the contemporary People’s Republic of China (PRC). Hence, our research question centers on the question of legitimacy:

In this article, we argue that a curious translation of ideas has occurred in the pursuit of legitimacy, in which ideas have traveled from the Korean War, through the boardrooms of corporate America and into the mundane practices of the CCP, building a corporate culture. At the core of this culture are practices that Tourish (2013), following Schein (1961), termed “coercive persuasion.” One result is that, on a national level, organizational cultures have become predicated on a pathological identification with current practices. Argyris (2000, p. 62) describes such a pathology as leading to organizational self-sealing, which in Dorst’s (2015) words is

[T]he absolute death knell to any innovation. A self-sealed culture makes it extremely difficult . . . to even think of new practices, no matter how strongly and obviously they are needed to meet changes in the external environment . . . There is no escape possible from this closed totalitarian culture, and all the deeds of resistance will ultimately be doomed. The self-sealing mechanism is very serious, indeed. (p.17, p.19)

We discuss the role of coercive persuasion and cultural self-sealing in the key organizational sites of China’s state-owned enterprises, private businesses, and social organizations, as well as considering the prefiguring of these practices in higher education practices. In the market economy, the CCP maintains the practices of penetrating, infiltrating, organizing, mobilizing, shaping, and channeling the population and enterprises, focusing on those key nodal points in the circuits of power (Clegg, 1989) that the Party controls, such as education, state-based organization, and those privately owned enterprises beholden to state sanction. To do so, it uses ideas that have traveled and been translated from afar and that have changed markedly in substance while in form and functionality they remain surprisingly similar to their points of origin.

The CCP in the PRC

The CCP has existed in both a planned economy and one that remains planned but in which the Party has developed sizable elements of a market economy in parallel. The CCP proclaims an ideological commitment to the people and the nation but the institutional mechanisms that represent these reciprocal relations of interest are weak (Pillsbury, 2015). Every aspect of the Party’s values, culture, and ideology; its policy orientations; its role in society; and its basis of legitimacy have been reshaped and eroded by market forces that the CCP has introduced. In doing so, it has sought to preserve its hegemony and organizational integrity, something well recognized in the broader social and political sciences and China Studies literature (Brødsgaard, 2012; J. Chen & Dickson, 2008; Galtung & Stenslie, 2015; Kraus, 2004).

As a Leninist vanguard party, the CCP is an organization of elites that can claim it is the vanguard of and for the nation. The CCP seeks to extend the reach of its network across all strata of society in an attempt representationally to monopolize and control organized political expressions. As a ruling Leninist party, the CCP tends to be a “party of personal interests”: individuals join the Party less because of their political conviction and commitment to the ideals of the Party but for reasons that are based on individual career considerations or other objectives leading to personal satisfaction (Gore, 2011). Being in the Party becomes a desirable passage point, if not obligatory, for occupational and social mobility in material terms. Elite political representation, detached from the mass of individuals and cadres, becomes a privileged basis for social reproduction that publicly proclaims legitimacy and sustainability while privately representing its own good as the ultimate goal (Callick, 2013). Social reproduction of the elites does not preclude the ruling elite of the Party from making adequate public policy as long as the leadership is autonomous, cohesive, and remains responsive to popular sentiments (Chen, 2015). The current highest echelon, the seven-man Politburo Standing Committee, is perceived by some observers as the source of decent and even some very good public policy (Galtung & Stenslie, 2015; Garrick & Bennett, 2016). The separation of the “organizational party,” as a political machine, from the demise of popular will in and outside of the Party, characteristic of the tumultuous Mao years, has helped to stabilize and legitimize China’s political, economic, and social development in the past three decades (Chan, 2011; Zheng & Gore, 2015). Despite the major institutional changes attendant on the introduction of market relations, the CCP remains premised on ideological memories lodged on a stubborn and persistent rhetorical resistance to capitalism (Garrick & Bennett, 2016). As an elite dominated mass party that seeks to lead and coordinate the interests of all, it strives to maintain itself as a “vanguard party striving for legitimacy by winning people’s hearts but not their votes” (Gore, 2011, p. 23; also see Kurlantzick, 2013).

Under the current phase of socialist development in China, the contemporary CCP refashions old and familiar (Leninist) methods of indoctrination but has changed the message. ¹ The Party now increasingly promotes and extols traditional Chinese cultural values through a policy and administration of deliberately designed corporate culture within its state-owned and private enterprises. ² Brady (2006, 2009, 2012), Brady and Wang (2009), and Shambaugh (2007) explore how the CCP government adjusted its notion of legitimacy by means of “mass persuasion,” “thought work,” and management of propaganda. They reached the conclusion that the vast majority of citizens now accept the existing authoritarian political system even though they may be critical of certain aspects. Nurturing and propagating traditional Chinese cultural values while infusing them with new situated meaning is designed to bolster legitimacy.

The new situated meaning derives from discourses of corporate cultural values “imported” from corporate culture discourses in academe, and the Western business world (for details of which see Hawes, 2012). Hawes (2012) traces the early application and adaptation of Western corporate culture in a growing literature on corporate culture in China. Hawes’s (2012) search of the China National Knowledge Infrastructure China Academic Journals database revealed a steady increase in the number of articles with corporate culture in their titles published by Chinese academics and management consultants: in 1986 (10), 171 for 1991, 696 for 1996, 1,144 for 2001, and 3,661 for 2008. Besides being a popular topic in Chinese management literature, corporate culture discourse has strongly influenced management practices and the vast majority of China’s top 300 corporations have, according to Hawes’s survey, set up corporate culture programs, and referenced their firms’ chosen cultural values and the ways they attempt to implement their values among employees and managers as part of their websites.

The emphasis on “culture” in Chinese corporations aligns with the Chinese government in its vigorous sponsorship of national corporate culture conferences as well as its subsidy of culture training for executives. The rationale articulated by the CCP is that “building an advanced corporate culture is a significant factor in strengthening the Party’s hold on power, in forcefully developing a progressive socialist culture, and in building a harmonious socialist society” (State-Owned Assets Supervision and Administration Commission of the State Council [SASAC], 2005, Article 1). Corporate culture building, explicitly stated by the CCP, is a “strategic move to enable corporations to improve their quality of management, strengthen their internal cohesion, and build their competitiveness” (SASAC, 2005, Article 1). Corporate culture building should be organically integrated “with Party building, ideological and political work, and spiritual civilization work.” ³ The latter sentiment finds practical expression through activities designed to present a beneficial, personal, and corporate face to the world, through building value, through mastery of traditional arts and crafts, such as calligraphy, poetry, as well as through the more material examples of funding charities, universities, and foundations in a continuation of traditional cultural philanthropic practices.

The shift to consolidating corporate culture as a basis for collective identity from a prior emphasis on root and branch national culture percolating to all levels is a recognition that vertical canalization within distributed enterprises, is more effective than that which seeks to conquer the whole of society from a single center of command. It is a shift from a form of state to organizational corporatism (Callick, 2013; Hawes, 2012). The process is carried out in phases, initially being launched in state-owned enterprises followed by private firms throughout China, as we shall discuss.

A major concern for the Chinese government is not to cede control to new sources of powers created by the market, an outcome that the Party has good reasons to fear (Zhao, 2015). At the same time, given the historic ascendancy of Party officials nationally, regionally, and locally, an ascendancy that is expressed in their ability to fix obligatory passage points for market activities within their remit, the opportunities for enterprises to prosper by currying favor from these officials through covert means, inducements, and favors are evident (G. Chen, 2015). From the Party’s interest in maintaining unity and security, however, enterprises must not be perceived as sources of scandal and corruption; thus, it is better to check and balance using any means that are legitimate and possible.

Corporate culture became an issue for the Party after the 14th National Congress in 1992, when the party began opening its ranks to business people, such that accepting private entrepreneurs into the Communist Party became seen as a way of consolidating the relationship between these people and the regime to secure enhanced regime legitimacy among this important constituency (J. Chen & Dickson, 2008). ⁴ The CCP has to cope with unintended consequences of marketization, such as the oscillation between control and decentralization, given political changes of emphasis. The situation resembles a classic cycle of control. Shifts in control patterns lead to unanticipated results. For example, one of the most conspicuous and symbolic aspects of control is the role of the CCP in directing appointments of CEOs of large state enterprises, such as Telco’s, all the banks in China, as well as all the oil companies (Callick, 2013; McGregor, 2010). It is not enough to make personnel appointments; to ensure control of those agencies it entrusts to power, the Party seeks subtly to discipline what these CEOs ostensibly direct through steering corporate culture.

A small excursion into Beijing’s streetscape demonstrates this guidance. On Beijing’s Chang’an Avenue, about 1 km west of Tiananmen Square, there is an unmarked building with no signage hanging on its façade indicating the business of the tenants inside that structure. From inside this building, in 2009, the heads of three state airlines were all rotated overnight into rival firms to keep competition in check. On another occasion in 2015, from within the building, the dictat was issued that the CEO of China Unicom should be assigned to manage rival China Mobile. These decisions flowed from the national headquarters of the Chinese Communist Party (CCP) Organization Department, which chooses who are to be the bosses of about 50 of the largest state enterprises in China (McGregor, 2010). ⁵ Contrary to some popular perceptions that China has forgone socialism and embraced capitalism, China is still much more nominally communist than many people might think, at least in terms of its elite organizational apparatuses (Galtung & Stenslie, 2015). For all the post-1989 reforms, the CCP’s constant grip on power is ensured as it maintains the status quo by controlling three major obligatory passage points: placement of personnel, propaganda, and the People’s Liberation Army. ⁶ The control is achieved both through sponsorship and through specific acculturation of those whom the Party sponsors.

Translating Corporate Culture

We know from the work of organization scholars Czarniawska and Sevón (1996, 2005) that when ideas travel they change: As ideas are picked up and developed in different contexts and within different institutional frameworks, they do not stay the same but shift subtly. That is why ideas do not so much diffuse as innovations but travel as translations. Maoism as a translation of Marxist–Leninist thought to the institutional framework of a largely peasant society wracked by warlords and war is a case in point.

By the 21st century, the corporate culture phenomenon that had characterized 1980s’ management in the Western world had reached the shores of China where it influenced the management of some of the largest Chinese business firms. Arriving in China, its destination completed a strange journey of over half a century. The concept of corporate culture evolved, in part, from early research by Edgar Schein into “brainwashing” of captured GIs by the PRC-backed North Korean army during the Korean War. In studies of the experiences of such people during the Korean War defections, Schein (1961) concluded that “brainwashing” was an inappropriate concept to account for the renunciation of U.S. citizenship by these captured GIs; in fact, the Chinese term for the practice was more appropriately translated as “thought reform.” The Chinese captors were able to elicit public anti-American statements from prisoners by placing them under harsh conditions of deprivation with the offer of more comfortable conditions for recanting. The prisoners did not actually convert to Communism but rather behaved as though they did to avoid further extreme physical coercion. Moreover, the few prisoners that were influenced by Communist indoctrination did so as a result of motives and personality characteristics that existed before imprisonment. Those who were vulnerable to a need for certainty, especially if certainty was presented to them in attractive terms, with unpalatable alternatives, were most easily disposed to profess what was offered to them.

Schein (1961) realized that indoctrination methods used were quite similar, whatever form of indoctrination was being attempted: the message might be different but the process was essentially the same. From this insight, he developed the following views. First, he deduced that group and organizational forces are stronger than individual forces and that once an individual feels psychologically safe, he or she can accept new information either through identification with others or by scanning the environment for new solutions. Change then occurs by “cognitive redefinition” through (a) semantic change in old concepts, (b) change in “adaptation level” or judgment standards as to how a given behavior or perceived object is to be judged, and (c) introduction of new concepts and meanings (Schein, 2010). These insights contributed to Schein’s famous work on corporate cultural change as a threefold process encompassing change in artifacts, behaviors, and values. Where artifacts reinforce centrally directed messages, and where behaviors model these messages, then values, the subconscious of collective culture, may change. Even if they do not, where behaviors change, the more ambiguous the situation, the more the individual will rely on the perceptions and judgments of others, especially where these are socially and personally reinforced and confirmed.

It is easy to see how policy makers, government officials, business leaders, and academics in China might vigorously embrace such views as the basic concept and practices of corporate culture, without irony. In part, their adoption in the contemporary PRC merely completes a circle of translation with a closure that more than 60 years of communism had well prepared. Yet, there is a more specific genealogical analysis to be made of how this closure through adoption was made possible. As ideas travel, as we have seen in Czarniawska and Sevón (2005), they change. We shall next investigate these changes in the context of the PRC.

Hawes (2012) argues that the explosion of interest in corporate culture that began in China in 1993 was a result of the complex interaction between various groups. First, for example, in a policy document of the CCP, it was stated for the first time that the Party must strengthen the establishment of corporate culture (qiye wenhua), nurture a high level of professional ethics, and foster a spirit of respect for the workplace (CCP, 1993, Art. II.7). Second, there was a close relationship between the political-ideological tenets ⁷ of the CCP and corporate culture “policy implementation” movements within Chinese firms. Third, the embrace of corporate culture in large Chinese companies was aided by the Chinese government’s sponsorship and fostering of many corporate culture conferences at national levels as well as the provision of subsidies to corporate culture training for thousands of Chinese corporate executives.

It has been a long-standing tradition among companies in post 1949 China to emphasize the promotion of “traditional Chinese” cultural values on which basis the Chinese regime broadens its legitimacy to promote and represent not only socialist values but also those “positive” values of traditional Chinese culture. Hawes (2012) describes how popular management theory and practices that originated in the United States as a reaction to the economic prowess of Japan, which drew on work on corporate culture by authors such as Edgar Schein, William Ouchi, Tom Peters, Robert Waterman, have been transformed by Chinese officials, scholars, and CEOs into a new entity, or what some Chinese scholars have called “socialist corporate culture with Chinese characteristics.” The irony of this complex evolution should not be lost on the reader: Originally, in Schein’s encounter with the idea that individual values could be radically changed by protracted behavioral modification, the practice emerged from the PRC.

Following Schein (1961), Tourish (2013) defines coercive persuasion as “the ways in which leaders socially construct discursive systems of constraint that are difficult for followers to challenge and resist” (p. 40). Compared with other forms of coercive control mechanisms, such as “coercive power,” which involves relying on the forced compliance of subjects to organizational norms imposed from above (“come to work on time tomorrow or you are fired”), coercive persuasion involves subjects internalizing the dominant cultural norms as their own, thereby producing individuals considered appropriate by the ruling group (Tourish, 2013, p. 41). The theory holds that if people embrace a particular belief system as if it were their own, there is a reduced need for explicit forms of surveillance because their behavior will be self-guided in the appropriate directions, therefore requiring minimal oversight from the ruling group (Tourish, 2013). The key to the success of coercive persuasion is the total prevention of reflexivity, that is, the blocking of any questioning, reflective, or reflexive attitudes, or in other words, restricting the capacity of subjects to think for themselves (Stacey, 2012). Thus, coercive persuasion can be a useful technique that powerful individuals can use to change the way people are currently thinking to the way they have decided they should be thinking and therefore the way they behave (Stacey, 2012).

While the imprisonment of U.S. citizens during the Korean War is clearly not analogous to the context of most contemporary organizations, Tourish (2013), basing his table on Schein’s (1961) theory, tabulated the power techniques into nine items that recognized that the indoctrination methods facilitating coercive persuasion were quite similar to those used within other societal institutions, even though the message might be different (see Table 1).

OPEN IN VIEWER

Table 1.

Power Techniques in Organizational Translation.

Technique	Schein’s techniques from POW experiences	Modern organizational translation of techniques
1.  Reference group affiliation	Prisoners faced an indeterminate sentence. This raised anxiety and created an impetus to affiliate with a new reference group as a means of reducing it.	Environmental changes, new entrants, and turnover create organizational anxiety. We seek alignment with reference groups to reduce the anxiety and increase conformance.
2.  Role modeling	Prisoners were placed with others who were more advanced in the learning process, who role modeled “successful” conformity and were rewarded for doing so. Prisoners were tempted to emulate their attitudes and behaviors to secure similar benefits.	Organizations develop systems of role modeling and mentoring so that members learn appropriate behavior. We learn from and come to emulate those in positions of power over us as we seek to meet their expectations, which increase conformity.
3.  Peer pressures	Rewards were given only on a group basis, and only if all members of the group embraced the new point of view. This intensified peer pressure to conform.	Focus on team working, shared rewards, and shared consequences intensifies peer pressure to conform.
4.  Alignment of identity	The new point of view was articulated repeatedly and in many forms. Repetition ensured that it eventually acquired a self-evident and eventually unchallengeable status.	Modern workers buy into the firm’s strategic vision and shape their behaviors accordingly. Conformity to the vision and values becomes part of our identity.
5.  Performance assessment	Written confession and self-criticism became a regular activity, so that prisoners assessed past actions from a new point of view. Problems with the new belief system were viewed as examples of individual rather than systemic weaknesses.	Employees are assessed based on their conformity with strategy and practice, including mechanisms such as 360° feedback. As individuals, we are expected to conform and the system is assumed to be correct.
6.  Reward systems	Conformity attracted instant rewards. Signs of insincerity or limited understanding were punished. Conformist behaviors therefore increased while dissenting attitudes withered from lack of nourishment.	Conformists are rewarded. Dissent, such as whistle blowing or resistance, is sanctioned strongly.
7.  Communication systems	Communications that in any way reinforced the old point of view or that reminded the prisoner of previous attachments were withheld or eliminated entirely. The past became ever more remote; the present acquired heightened power to shape attitudes, emotions, and behaviors.	Management and control of communication becomes central to the organization. Companies exert increased control of stakeholder information and management engagement with stakeholders.
8.  Physical pressure and work–life balance	Physical pressures were constantly applied to weaken the prisoner’s physical strength, with sleep deprivation being the most potent of these pressures; “torture” was only used as a punishment for insincerity or lack of motivation to learn.	Members are expected to work longer hours and expend greater effort as a means of demonstrating conformity and commitment. Individuals are expected to demonstrate fortitude to overcome the physical demands of labor.
9.  Psychological safety	Psychological safety was produced for prisoners by fellow prisoners who were further along in their “re-education” and could be supportive of the target prisoner’s effort.	Psychological contracts become invested in expectations of conformity. Mutual support of leaders creates both psychological safety and conformance.

Note. POW = prisoner of war.

In the past, under Mao, messages from the Party mainly involved political indoctrination. However, under China’s current phase of development, political indoctrination has become significantly less demanding. The excesses of the Mao years provoked a strong popular distaste in China for political campaigns and mass indoctrination (Brady, 2012). Yet, despite the dramatic changes that have occurred in China over the past 30 years, propaganda and “thought work” remains an essential tool used by the CCP for strengthening and reinforcing its hold on power, albeit in changed form. While political education still constitutes a part of thought work, it now also incorporates civic education (gongmin jiaoyu), patriotic education (aiguozhuyi), and education on health, psychology, morals, and the environment (Brady, 2012). We will initially consider the context of coercive persuasion in China’s higher education system, the context in which future employees’ disciplinary attitudes are formed, before considering state-owned enterprises and private businesses and social organizations.

Prefiguring: China’s Higher Education System

Before managerial cadres are employees, they are students and important ideological work and disciplinary formation occurs in the higher educational context. To consider how coercive persuasion and corporate culture play out in contemporary Chinese organizations, state-owned and private, it is useful first to consider how the Party employs “thought management” techniques in China’s higher education system and how such techniques are similar in form, albeit with a very different message, to techniques used in the education system under Mao (Brady, 2012) (see Table 2).

OPEN IN VIEWER

Table 2.

Party Thought Management of Youth and Corresponding Techniques of Power.

References	Point/example	Corresponding techniques of power
Yan (2014, p. 501)	Regularly held political education events (e.g., class meetings, Communist Youth League meetings, and reading sessions; on-campus Party school for routine ideological training)	1.  Group affiliation
Yan (2014, p. 503)	“Compulsory counselling” for students who have “radical ideas”	2.  Role modeling
Yan (2014, pp. 506-507)	Student Party members have access to a variety of privileges not available to ordinary students	6.  Reward systems

In a recent study of the student control apparatus in China’s universities, Yan (2014) examines the continuities and changes in the Party’s organizational control mechanisms compared with its Maoist past. Yan’s research found that while mass political indoctrination and mobilization have been discredited, the student control apparatus after the death of Deng Xiaoping in 1997 and up to nowadays is remarkably similar in structural terms compared with that of the pre-Cultural Revolution, combining techniques of control, surveillance, and “self-management” (Yan, 2014, pp. 498-500). Moreover, although universal political fervor has diminished dramatically in the post-Deng era, the CCP’s more traditional method of ideological indoctrination—the political education course—has been reintroduced to university classrooms, where it is compulsory for university students taking certain courses (e.g., arts and social sciences, psychical sciences, and engineering disciplines; Yan, 2014).

As we pointed out earlier, for an important condition for coercive persuasion to occur, according to Schein (1961), it involves peer pressures exerted by the group or organization over the individual. By seeking alignment with reference groups, what follows for the individual is a reduction in anxiety and an increase in conformity to organizational norms. The Party has taken advantage of these group forces in Chinese universities by, in addition to reintroducing compulsory political courses, regularly holding political education events that include class meetings (banhui 班会), Communist Youth League meetings (tuanhui 团会) and reading sessions (dushu hui 读书会), and a Party school that operates on university campuses for students to undergo routine ideological training (Yan, 2014, p. 501).

While political education events in the form of group meetings are an effective way to get university students to internalize the dominant belief systems held by the Party, Schein (1961) argues that such training should also be accompanied by a variety of other techniques. One such technique is role modeling and mentoring from team members more advanced in the learning process (Schein, 1961), a technique that the Party has recently revived in universities in the form of “compulsory counselling” (Yan, 2014, p. 503). Peking University, for example, operates a “consultation system,” which requires university political cadres to monitor the thoughts and behavior of certain categories of students, such as those who have “radical ideas” or an unsatisfactory academic performance, and conduct periodic one-to-one consultation sessions with them to provide adequate guidance on “critical points in their thought development” (sixiang guanjiedian yindao 思想关节点引导). According to one political cadre, one way to address ideas that might lead to doubts about the legitimacy of the Party is “to convince the students to connect their patriotic love of their motherland to the love of the Communist Party” (Yan, 2014, p. 503).

In addition to group-imposed peer pressures and systems of role modeling and mentoring, Schein (1961) argues that rewarding conformity is also an important technique for coercive persuasion to occur, one which the Party has also implemented in its university system. For example, student Party members have access to a variety of privileges not available to ordinary students, such as significant advantages when competing for employment at state-owned enterprises and priority in selection for the “direct admission to graduate school” scheme, whereby selected students can bypass the extremely competitive National Admission Examinations for Graduate Schools and enter graduate school directly (Yan, 2014, pp. 506-507).

These methods of thought management bear remarkable resemblance to those used in the education system under Mao, albeit with a completely different message. In a study of political education and character formation of students under Mao, Chan (1985) explains that for school-age children to be accepted into the Young Pioneers (which was portrayed as a politically elite organization), they had to receive a majority vote from all classmates who were members. Each classroom was referred to as a “Pioneer company” (zhongdui) with an assigned student “commander” and “deputy commander,” with each company broken down into classroom rows, known as Pioneer squads (xiaodui). The main purpose behind this system of early indoctrination into the hierarchical organizational structure was to create an environment in which children could learn how to behave in “small group” political discussions, which involved peer group pressure, and a system of role modeling (student commanders) and rewarding compliance (being voted in to the Young Pioneers by classmates; Chan, 1985, p. 16).

By using peer group pressures, the school system was able to ensure that conformity to the prescribed behavior was rewarded with praise, while misbehavior and unorthodox opinions were sanctioned in the form of criticism (Chan, 1985). By criticizing one another’s bad thoughts and backward performance, and praising one another for good deeds performed, the aim was that through pressure from their classmates students would be directed toward “correct” behavior (Chan, 1985, p. 53). Political discussion in “small groups” continued in junior and senior high school, where students could apply for membership in the Communist Youth League (Chan, 1985, pp. 53-56). Only those students who conformed to the prescribed behavior set out by the Party were rewarded with membership in the Communist Youth League. All these techniques would be replicated in later life in, for example, the state-owned enterprises that graduates join. Even today, a large number of Chinese students graduating from the nation’s universities will subsequently work in state-owned enterprises and/or private firms (Bo, 2015; Callick, 2013; Dickson, 2013). As we have seen in earlier discussion of corporate culture in the workplace, these graduate career trajectories are relevant. When graduates and others who have experience of thought management enter state-owned enterprises and business organizations, their consent is more easily obtained, as we shall see below.

State-Owned Enterprises

Direct political instruction is only mandatory for youth in the education system, Party members and the military. Chinese society that does not fall under one or more of these three groups is exposed to other types of propaganda and thought work (economic, cultural, and social), which the CCP refers to by the blanket term “spiritual civilization” (Brady, 2012, p. 193). Seeking to create conformity and compliance can have negative consequences for organizations (see Tourish, 2013). While it is not the purpose of this article to analyze the negative aspects of coercive persuasion in a Chinese organizational context, the CCP is employing techniques of coercive persuasion and thought work organizationally to maintain power relations in which the Party remains dominant through spreading the message of “spiritual civilization.”

Techniques of coercive persuasion have been adopted by state-owned enterprises to assist employees in internalizing corporate culture, over which the Party has much influence. The SASAC Guiding Opinion, which sets out the Chinese government’s official prescriptions for corporate culture within large state-owned corporate groups directly under the auspices of the central government, has proved to be a useful way for the Party to reinforce its subtle control over these enterprises through a more passive and persuasive approach rather than relying on direct bureaucratic intervention, much as Kunda’s (2009) research found in the engineering division of a large American high-tech corporation. Knowing what is expected from clear guidelines, the “rule of anticipated reaction” (Friedrich, 1937) frequently prevails with the sanction of intervention available where it does not.

Although corporate culture became popular in the Chinese business arena by the mid-1990s, it was formally sanctioned in 2005 by a SASAC policy. In 2005, the SASAC, a governmental body that supervises more than two hundred of the largest corporate groups under central government control in China, issued a state policy requiring all state-controlled firms to strengthen and build their corporate cultures. ⁸ The stated purpose of building corporate culture, according to SASAC, is that culture is a significant factor in strengthening the (Communist) Party’s hold on power, in developing a progressive socialist culture, and in building a harmonious socialist society. The overall tone set in the SASAC’s Articles is one of state-directed managerialism (Article 1). Article 5 of the SASAC Guiding Opinion requires firms to incorporate corporate culture building into their development strategies as a component of their operational management, which “should be organically integrated with firms’ Party building, ideological and political work, and spiritual civilization building work” (SASAC, 2005, Article 5). Spiritual civilization building places emphasis on “traditional Chinese culture” and other positive “cultural activities.”

[Firms] . . . must focus on guiding and strengthening extracurricular group activities such as photography, calligraphy, art, literature and sports, and they must organize a wide variety of healthy and distinctive cultural activities . . . in order to satisfy employees’ spiritual and cultural thirst for knowledge, beauty and pleasure. (SASAC, 2005, Article 8)

In Article 16, it is stressed that “the Party Committees, Boards of Directors, and top managers of firms should all be fully involved in the corporate culture strategic development process” along with the guiding role of “grass-roots Party organizations and mass organizations.”

In 2006, the Chinese Ministry of Labor and Social Security approved a new professional designation of corporate culture officer. The Chinese Corporate Culture Network (zhonghua qiye wenhua wang) administers since 2006 a national test for the Chinese central government-recognized qualification of corporate culture officer, a position increasingly evident in larger firms (Hawes, 2012, p. 3). These corporate culture officers work with other powerful managers created by China’s corporate reforms producing new managerial roles and identities, such as CEOs, chairman of the board, chief financial officers (CFOs) who, alongside the director of the workers union, historically have been involved in company cultural events and employee welfare programs. The new class of entrepreneurs practice institutional isomorphism in following these leads. The currently valid State Council No. 6 document stipulates that all Chinese firms will have to select staff to take training courses and exams in corporate culture transformation to obtain state-recognized professional qualification and work certification or to be permitted to carry out the tasks of corporate culture enhancement in their respective firms and organizations. Therefore, anyone who wants to take up that job needs the relevant qualification as well as certification to engage in corporate culture transformation work in firms throughout China. According to Ouyang Song, the then deputy head of the Organization Department and director of the Party’s education campaign, the setting up of a Party branch in private firms would promote healthy and sound development of the private sector and have the support of private business owners and entrepreneurs (Callick, 2013; J. Chen & Dickson, 2008).

Hawes (2012) describes how China Datang Corporation, one of the largest state-controlled electricity companies in China, set up an online forum entitled “Stories of Dedication” to praise employees publicly who exemplified such ideals as “socialism with Chinese characteristics” and strove to “build a harmonious corporation and a harmonious society.” Employees were encouraged to submit “classic examples” of colleagues who embodied these ideals, as well as a list of others to the corporation’s Propaganda Office, which reports to the CCP Ideology and Politics Department (Hawes, 2012, pp. 78-79). Those employees lucky enough to be portrayed as “classic examples” in the company’s publication may then be considered by other employees as role models to emulate, thus fulfilling the role modeling component of coercive persuasion.

Of course, a wide variety of stories with many different interpretations may be received, some of which may not be consistent with the interpretations of management. But in a state-controlled enterprise such as China Datang, editorial control is exercised by the Propaganda Office, connected to the CCP Ideology and Politics Department, meaning that contradictory interpretations or irrelevant content can simply be disregarded, while only those stories that fit best with officially determined values and ideals will be published.

While it should be expected that state-owned enterprises will closely follow the emphasis on ideological and political work, what is of particular interest is how these firms have embraced the requirement of “spiritual civilization,” especially how they have used techniques of coercive persuasion in doing so. For example, playing strongly to Schein’s (1961) coercive persuasion techniques of promoting group solidarity and shared rewards, thus increasing peer pressure to conform, Hawes (2012) describes how a group of untrained female employees at a subsidiary of China Datang Corporation won third prize for their dance routine (choreographed to accompany the corporate song) at a major cultural festival. They were rewarded by being publicly acknowledged for their achievements on the firm’s website. The resulting outcome was not only a sense of pride for participating employees, and stronger bonds forged with their colleagues, but also that the dancers performance “presented the company in an excellent light to the world outside,” such that the “assembled dignitaries” (referring to government officials) were “greatly moved” (Hawes, 2012, p. 59). Moreover, receiving praise from government officials no doubt reinforced the message that the company was complying with the “spiritual civilization” requirement outlined in the SASAC guiding opinion. It is important for Chinese business corporations to not only improve their corporate cultures but also be seen, particularly by government officials, to do so in public by improving their corporate cultures according to government policies (see Table 3).

OPEN IN VIEWER

Table 3.

State-Owned Enterprise Examples of Culture Building and Corresponding Techniques of Power.

References	Point/example	Corresponding techniques of power
China Datang Group (2007)	Ideological and political work China Datang Corporation (one of the largest state-controlled electricity companies in China) → Online forum to publicly praise employees who exemplified such ideals as “socialism with Chinese characteristics” and striving to “build a harmonious corporation and a harmonious society.”	2.  Role modeling
Hawes (2012, pp. 58-59)	Spiritual civilization work Group of untrained female employees at the Northeastern subsidiary of China Datang who won third prize for their dance routine at the Heilongjiang Power Generation Company Cultural Festival, were rewarded by being publicly acknowledged on the firm’s website and praised by government officials.	1.  Group affiliation 3.  Peer pressures 6.  Reward systems
China Datang Group (2011) Shougang Daily (2017)	Spiritual civilization work (in line with SASAC Article 8) Creative writing forum (China Datang Group) Corporate newspaper’s website—extensive gallery of painting and calligraphy (Shougang Steel Group).	4.  Alignment of identity 7.  Communication systems

Note. SASAC = State-Owned Assets Supervision and Administration Commission of the State Council.

The SASAC Guiding Opinion requires also that “[firms] must use innovative methods for building corporate culture especially through new media such as internet sites and in-house corporate publications” (SASAC, 2005, Article 8). Along with the strong emphasis placed on group and organizational forces and intensified peer pressures to conform, achieved in part by giving rewards on a group basis, coercive persuasion should also involve presenting the new values repeatedly and in many different forms so that it becomes part of individual identity (Schein, 1961). Not only are corporate magazines and online forums an excellent way for firms to ensure additional exposure to corporate culture values but they are also useful in demonstrating to the government that organizations are addressing the directives set out in the Guiding Opinion.

In line also with the requirement of “spiritual civilization,” Hawes (2012, p. 74) provides details of how China Datang Corporation, the large state-controlled electricity provider, established a creative writing forum on its website to publish lyrical prose pieces and poems written by employees. Similarly, another state-controlled corporation, Shougang Steel Group, posts on its corporate newspaper’s website an extensive gallery of paintings and calligraphy produced by its employees.

Private Businesses and Social Organizations

It is not just state-owned enterprises that diligently follow the corporate culture directives set out in the SASAC Guiding Opinion by the CCP. Privately controlled corporations have also, often even more enthusiastically, embraced the Party’s reinterpretation of corporate culture, with its emphasis on ideological and political work as well as working to build “spiritual civilization.” Only large state-owned corporate groups under central government control are required to follow the Party’s prescription of corporate culture set out in the Guiding Opinion, so a puzzle arises, “Why are these practices institutionalized elsewhere?”

One possible explanation may have to do with the increasing presence of Party Committees inside private firms, particularly large ones, in China. Since a 2002 reform to the Chinese Constitution, in any company (state-controlled and privately controlled) at which at least three Party members are employed, Communist Party branches may be established if those members apply to do so (Thornton, 2012). Given that current membership of the CCP is now well over 86 million members, it is highly likely that a large number of privately controlled organizations (at least medium- to large-sized organizations) will employ at least three Party members and will therefore be required by law to allow the CCP to establish one or more branches inside the firm if it wishes to do so. The Party thus has considerable scope to expand its presence into the private sector, allowing it to have a continuing influence in terms of thought work among this important constituency.

Many large private firms have even publicly declared their support for the Communist Party and its policies. For example, Tengen Group, a company that produces electrical instruments, includes links on its website leading to pages promoting activities held by the firm’s Communist Party Committee, such as “Party and Mass Work” and “Ideology and Morality,” while another company, Guangsha Group, a construction, tourism, media, and education services conglomerate, proudly declares on its website that it has established 170 Communist Party branches among its subsidiaries. The latter company subsequently received praise from the Zhejiang provincial government for being a “progressive grass-roots Party organization” (Guangsha Group, 2011), thus conforming to the reward requirement of coercive persuasion (Schein, 1961).

Companies use innovative methods to get their employees to learn the firm’s values in a group environment, an important condition of coercive persuasion, as we demonstrated previously. Tengen Group, for example, requires their employees to regularly recite together in unison the company “declaration” while another large privately controlled firm, Guanghui Group, achieves this through its corporate song, which is performed by employees at major corporate events and ceremonies (Guanghui Group, 2005). Interestingly, Guanghui Group has set its corporate song to the tune “March of the Chinese People’s Liberation Army,” which clearly demonstrates its support for the Party, thereby satisfying the ideological and political work requirement for corporate culture laid out in the Guiding Opinion (SASAC, 2005, Article 5).

The evidence presented by Guanghui and Guangsha Groups on the private sector is representative of the country’s largest Chinese domestic firms, over which the Party is likely to have greater influence because they are Chinese owned and there is an increased chance of larger firms employing more than three Party members. A recent study conducted in Shanghai, which draws from a more diverse sample of over 1,000 local Party committees in nonpublicly owned enterprises, both domestic and foreign owned, has demonstrated a much more focused emphasis on “spiritual civilization building” with little regard for ideological and political work (Thornton, 2012). Thornton (2012) details a number of examples demonstrating how the Party has experimented with new and innovative ways to increase its popularity and relevance in the private sector, particularly among young urban workers (see also Table 4). Some examples, which again get Party members learning in a group environment, include the Intel Shanghai Communist Party branch assisting in organizing what was reportedly the largest speed dating event in history; Party branches at the Shanghai offices of DuPont Chemical hosted a board game night and “Da Vinci Code” trivia quiz, and the Party Committee at Shanghai Investment Advisory Services Ltd. organized a “Who Moved my Cheese?” seminar bringing local business school students together with some of Shanghai’s most successful entrepreneurs (Thornton, 2012). In the latter example, it was reported that some of the students, after sharing past successes and failures in the business world, were “visibly moved” by the concern shown for them by the senior entrepreneurs. These entrepreneurs are considered “appropriate” role models or mentors for the students, particularly given that the seminar was a Party organized event, which would have likely required official approval in terms of which entrepreneurs could be considered “appropriate” according to the aims of the Party.

OPEN IN VIEWER

Table 4.

Private Business Enterprise Examples of Culture Building and Corresponding Techniques of Power.

References	Point/example	Corresponding techniques of power
Hawes (2012, pp. 51-53) Guanghui Group (2005)	Tengen Group—employees regularly recite together in unison the company “declaration” (Hawes, 2012, pp. 51-52) Guanghui Group—corporate song performed by employees at major corporate events and ceremonies; set to tune of “March of the Chinese People’s Liberation Army” → demonstrates support for the Party, and thus ideological and political work requirement in SASAC (2005)	1.  Reference group affiliation
Thornton (2012, pp. 58-59)	Intel Shanghai Communist Party branch assisting in organizing the largest speed dating event in history. Party branches at the Shanghai offices of DuPont Chemical hosting a board game night and “Da Vinci Code” trivia night.	1.  Reference group affiliation
Thornton (2012, p. 71)	Party Committee at Shanghai Investment Advisory Services Ltd. organizing “Who Moved my Cheese?” seminar bringing together school students with some of Shanghai’s most successful entrepreneurs.	1.  Group affiliation 2.  Role modeling
Hawes (2012, p. 101)	Mengniu Dairy Group → has its own in-house business institute requiring compulsory group learning sessions with colleagues (covers content aligning with “spiritual civilization” requirement).	1.  Group affiliation 2.  Role modeling
Thornton (2012, pp. 65-66)	Party branch at Shanghai Matsushita → new employees who receive poor service ratings to be mentored by a Party member until performance improves.	2.  Role modeling
Gore (2011, pp. 96-97)	Party committee of Shanxin Embroidery Market of Haimen County in Jiangsu Province → Party members to serve as role models in areas such as providing good customer service, paying taxes and fees, and openly displaying their business licenses → Communist Party membership a guarantee of the trustworthiness of products.	2.  Role modeling 6.  Reward systems
Thornton (2012, p. 74)	Rewards for white-collar workers in downtown Shanghai. Access to entertainment and leisure services → Jing’an District Party committee—white-collar workers employed in one of 400 plus enterprises can obtain VIP card allowing access to the center’s entertainment and services (most likely members of the District Party committee determine this list).	6.  Reward systems

Note. SASAC = State-Owned Assets Supervision and Administration Commission of the State Council.

The focus on group affiliation, with an emphasis on role modeling and mentoring, is also evident in the privately controlled Chinese firm Mengniu Dairy Group. Here, its founder turned the firm into a “learning organization” by establishing its own in-house Business Institute (Hawes, 2012, p. 101). In addition to requiring all of its employees to attend annual refresher courses on technical subjects, management techniques, and Mengniu’s corporate culture, employees must also, on a weekly basis for a 3-hour period, participate in group learning sessions with their colleagues, often taught by the firm’s managerial staff or invited external lecturers. While these group study sessions include practical discussions on improving the firm’s management and production processes, they also cover content that aligns well with the “spiritual civilization building” requirement in the Guiding Opinion, for example, group study of the television drama The Great Emperor Wu of Han. It is indeed highly likely that the choice of such a film intended to portray the protagonist as an exemplary model of leadership that employees might learn from and emulate in their daily work tasks (Hawes, 2012).

Role modeling and mentoring as a technique of thought work is also used by the Party branch at Shanghai Matsushita (a private company that produces microwave ovens for Panasonic), requiring new employees who receive poor service ratings to be mentored by a Party member until performance improves (Thornton, 2012). As Gore (2011) points out, Party work in private firms is supposed to evolve around promoting and facilitating business. Enterprise Party committees are to “encourage workers to work hard and love the enterprises as if their own” and Party member workers are expected “to serve as role models for non-party member workers” (Gore, 2011, p. 96). In one example, the Party committee of the Shanxin Embroidery Market of Haimen County in Jiangsu Province required Party members to serve as role models in areas such as providing good customer service, paying taxes and fees, and openly displaying their business licenses. The benefits of Party membership was also made clear to non-Party members, with the Party committee requiring all Party-member traders to display a sign outside their stalls declaring their Communist Party membership as a guarantee of the trustworthiness of their products (Gore, 2011). In this way, Party memberships may be viewed by non-Party members as “business assets,” and thus a “reward” that they may one day be entitled to if they emulate the behaviors and satisfy the conditions required to become a Party member (Gore, 2011, p. 97), which serves to sustain the reward criteria of coercive persuasion (Schein, 1961).

For white-collar workers in downtown Shanghai, such rewards may include access to entertainment and leisure services available only at government established community and activity centers. In an example of one such center, established by the Jing’an District Party committee, Thornton (2012) explains that only white-collar professionals who are employed in one of 400 plus enterprises have the benefit of receiving a VIP card allowing them to access the center’s entertainment and services, which include a fitness center, a “hotline priority booking” for concessions throughout the city, and an in-house tourist agency (Thornton, 2012, p. 74). One presumes that members of the District Party committee determine the 400 plus enterprises eligible for such benefits. Thus, it is more than likely that most of these enterprises would have established their own internal Party committees or at least have enough Party members to guarantee inclusion on such a list, demonstrating the rewards that Party involvement may bring to excluded firms.

Conclusion

In classic accounts of rational legal political legitimacy, from Weber (1978) onward, authority flows from and depends on an institutional center as well as the consent of the ruled. Contemporary China does not break with this analysis in substance but it innovates considerably within the form (Kurlantzick, 2013). Legitimacy is still highly centralized in its flows but these flows are much more dispersed than in rational legal democracies. In the latter, legitimacy is vested in a singular institutional apparatus of electing a government that then governs until, in whatever way, it loses legitimacy—that is, the support of the people. Ritualized as votes of confidence and regular periodic elections, these eventful changes in rule provide a condensation of legitimacy struggles. Once upon a time in China, legitimacy was founded in the Revolution; subsequent attempts to establish permanent revolution within the revolution, as Cultural Revolution, proved unable to reenchant legitimacy (Chan, 2011; Chan et al., 2015). The consent normally achieved through the rituals of parliamentary democracy is constituted in other ways, through other forms of governmentality, including limited elections (Bo, 2015).

In the PRC, contemporary practices of legitimation spread from the center through the key nodes of society (You, 2015). In the current Xi Jinping era, there is a singular pole and that is the Party organizational machine. As a machine, it disciplines, optimizes its capabilities, exerts forces that induce usefulness, concordance, and docility, integrating key nodal points and their incumbents into systems of efficient social and economic control. The disciplines it diffuses are those of coercive persuasion, working on routines, on concepts, on drilling the amorphous body politic of 86 million Party members into reliable and predictable members. It is through these practices that legitimacy is reproduced, rather than through the abstract rule of law or the rituals of democracy. Ironically, the techniques that are used to achieve this originated in China and were translated into the United States and then retranslated back into China. When ideas travel, they undoubtedly change, even as their functions remain the same. In this case, the function is to preserve a rational legality and legitimacy whose logic is, as Dorst (2015) suggests, “completely sealed within the ‘identity’ of the society, and everybody in it” (p. 19).