[THIS BLOG POST IS PART I OF TWO POSTS]

Rudyard Kipling’s poem of 1889 coined the well-known line:  “Oh, East is East, and West is West, and never the twain shall meet.”  This is, in fact, no longer true—including in a family context. 

Family businesses are now increasingly dealing with intercultural challenges within their own family—children are bi-cultural (i.e. born in Asia, educated in the West, whether North America or Europe).  The children may be an amalgam of East and West, while parents are of one culture.  Take the normal challenges of a family business, and add this cultural dynamic, and the potential for disarray and discord is magnified.

What are the intercultural challenges within a family enterprise, specifically in the context of East and West?  In broad strokes, there are significant differences between Western influences and Asian values. 

These differences arise in the context of many issues:  philanthropy, the legacy of the business, leadership, communication and dispute resolution.  The end result is often a process of trying to balance western business practices and the preservation of Asian values, in particular, the desire for harmony.

In order to keep a family working harmoniously, a good dose of “cultural intelligence” within family enterprise planning is required.  The notion of emotional intelligence is well-known; “cultural intelligence” is similar.  It comprises cultural knowledge, cross-cultural skills and cultural mindfulness. 

Of course, an issue needs to be identified before it can be addressed—and most typically the issue of culture is not identified.  Yet, I would suggest that the cultural dimension of the family enterprise is not simply one more factor to understand, but rather the filter or framework through which decisions are made. 

Running a family business can be challenging—and that seems to be acknowledged in all cultures.  There is a Chinese saying that “wealth does not pass three generations.”  This is, of course, very similar to the restated Western version of “rags to riches to rags in three generations.” 

Some of the challenges to family business come when the business and its founders are rooted in one culture and then the next generation has been influenced by a Western mindset.  The complication is when you have members of one culture whose children then grow up in another, often Western, culture.  A common case is when the children of parents in Asia go to the West to study and then become “westernized”—the idea was that the children would learn technical skills but not pick up the culture.

At its most basic unit, the West is an individualist culture, glorifying the lone ranger, the person going against the odds, fighting convention and being vindicated in the end.  The person forsakes family and other trappings.  The culture is based on individual rights. 

The notion of going against family wishes is embedded in Western culture.  A famous example goes back to Shakespeare’s Romeo and Juliet, first published in 1597.  The star-crossed lovers defy their families—the Montagues and Capulets—to pursue the greater value of true love!  The individuals’ self-actualization trumps family obligations.

In an Asian context, the family is much more important, being part of a greater whole.  The person is part of a family unit with their set of mutual obligations.  The family supports the younger generation materially but then expects loyalty and obedience.  So, a child might be sent overseas to study, and everything is paid for, but then the child is expected to return to the family business fold when so summoned.

Due to the prevalence of family businesses in Asia they are not as often viewed with the same cynical view as in the West.  In a Western context, there is the glory of making it on one’s own—"I didn’t need no help from nobody!”  Including, my family.  We hear the expression a “self-made millionaire.”  In other words, there is no respect accorded to someone who received millions—from family or elsewhere—and is a millionaire.

In an Asian context, the notion of a family business is different.  The concept of “blood is thicker than water” could have been coined in the East.  The family prizes loyalty above many other qualities.  Societal norms do provide underlying glue.  For example, Confucian values are embedded deep within the societal infrastructure.  They are so deeply ingrained that the source code is not typically considered.  So, children listen to their parents and even siblings may listen to their older siblings. 

The bottom line is that the family enterprise cannot be properly understood, managed and assisted without understanding its cultural context.  That will be covered in the next blog.