The traditional Chinese philosophies in inter-cultural leadership: The case of Chinese expatriate managers in the Dutch context

Confucianism and modern leadership models

Confucianism advocates virtuous practices, including loyalty, benevolence, humility, respect, and learning (Liu et al., 2010; Chan, 2008). These values emphasize the ideology of scholars, gentlemen, or ritual managers and are crucial for the successful management and governance of an organization. Gentlemen and scholars differentiate themselves from uncultivated people through learning (Cheung and Chan, 2005). A leader can “[g]uide them [the people] with virtue and regulate them with ritual, and they will have a sense of shame and become upright” (Watson, 2007, p. 20). Thus, power should be exercised only by people who are in the appropriate positions and have been comprehensively educated to do so (Verburg et al., 1999). To maintain authority, every person must have a proper name, title, or role that prescribes their behavior (Liu et al., 2010). These principles imply an emphasis on hierarchy: “the higher ups govern, the lower ranks obey” (Beamer, 1998, p. 54).

In addition to authority power, Confucius emphasized the importance of relationalism (guanxi). A leader influenced by Confucianism “demonstrates individualized, holistic concern for subordinates’ personal and familial well-being” in exchange for loyalty and compliance (Pellegrini and Scandura, 2008; Farh and Cheng, 2000). Underlying relationalism is the pursuit of harmony. Confucius believed that in a management situation, if leaders exhibit genuine care for their subordinates and support them in all areas, the subordinates’ feelings of gratitude will ensure a continuous give-and-take in the relationship (Pellegrini and Scandura, 2008). Such relationships offer a feeling of socioemotional exchange that encourages people to go beyond the call of duty (Chen et al., 2014).

The deep-rooted Confucian values of hierarchy and relationalism have led to the newly developed leadership model of paternalistic leadership (Cheng et al., 2003). Theoretically, paternalistic leadership is defined as “a style that combines strong discipline and authority with fatherly benevolence” (Farh and Cheng, 2000, p. 91). The concept places special emphasis on hierarchical roles and order, suggesting that subordinates must obey senior authorities; in turn, leaders must exhibit kindness and tolerance toward employees and show concern for employees’ personal and job-related activities. Empirically, a GLOBE study found that paternalism is strongly embedded in Confucian contexts (such as China, Hong Kong, and Japan). The concept of “face-saving” (an indirect manner of communicating to maintain harmony) captures the harmony principle of Confucian philosophy. Although studies in China suggest a positive relationship between paternalistic leadership and work outcomes (Cheng et al., 2003), Chen and Kao (2009) showed that paternalistic leadership contributed negatively to psychological health among non-Chinese subordinates. Additionally, the Confucian values of educating, developing, and facilitating people to achieve perfection are consistent with modern-day mainstream theories of leadership, i.e., transformational leadership. Individuals’ traditional values play an important role in how they react to transformational leadership. Kirkman et al. (2009) found that the positive relationship between transformational leadership and procedural justice is stronger among employees with a lower power distance orientation.

Taoism and modern leadership models

Taoism shares the Confucian premise that people are naturally good. However, the central tenet of Taoism is quite distinct from that of Confucianism. Chinese scholars (e.g. Cheung and Chan, 2005; Faure and Fang, 2008) argue that leaders with dominant Confucian values exhibit dramatically different leadership behavior from those with dominant Taoism values. Specifically, Taoism argues for the creation of a social equilibrium by ruling through “no action,” i.e., a light hand (Ren and Zhu, 2015). Taoism contends that leaders should lead with simplicity (Xing and Sims, 2011) and that action-free leadership is more effective (Ma and Tsui, 2015). Taoism maintains that when leaders establish numerous rules to regulate behavior, people will always find ways to violate those rules. In a complex and ambiguous inter-cultural environment, Taoist leadership focuses on being attuned to the nuances of local circumstances (Prince, 2005). Taoism uses the water metaphor to describe a seemingly invisible or soft leadership that has the strength and power to influence its surroundings. Water is altruistic, helpful, and beneficial to all things. Taoism recognizes that the ultimate goal of leaders is to serve their people and not to obtain personal benefits. Water is adaptable and flexible and can be held in a container of any shape. The best option for a leader is to maintain flexibility and adapt to the dynamics of change. Although water is soft, it is persistent and powerful. Similar to water, an effective leader should be transparent and honest. In addition, Taoism encourages leaders to be humble and modest, just as water always flows to the lowest level (Lee et al., 2013). Based on its beliefs regarding humanity and nature, Taoism anticipates and advocates people’s conformity to nature (Cheung and Chan, 2008).

Taoism opposes a hierarchical society (Xing and Sims, 2011), and a leader is not expected to interfere in society’s natural functions. The core philosophy of Taoism emphasizes a holistic perspective that includes both macro and micro approaches to the dialectical explanation of one’s surroundings (Bai and Morris, 2014). In practice, effective leaders are those who can maintain a balance between opposites, for example, by finding a balance between giving orders and not interfering with subordinates or achieving a balance between placing equal emphasis on different goals and empowering groups equally (Ma and Tsui, 2015). Despite the need for balance, a Taoist leader achieves desirable outcomes by convincing his followers to accept his vision.

Several current western leadership models echo Taoist leadership guidelines. Taoist leadership is usually understood primarily as “no action.” This basic idea fits with laissez-faire leadership (Ma and Tsui, 2015). Laissez-faire leaders are characterized by frequent absences and a lack of involvement in critical circumstances (Eagly et al., 2003). However, a lack of adequate leadership can create confusion and stress within a work group (Skogstad et al., 2007). This type of leadership has been proven ineffective in contemporary western settings (Jung and Avolio, 2000). Taoist principles of encouraging employee autonomy, promoting equality, and giving to and serving others appear to be similar to many of the latest trends in the literature: collaboration, teamwork, empowerment leadership, and servant leadership (Chan, 2008). Empowerment leadership describes leaders who provide substantial decision-making autonomy to subordinates based on their confidence that subordinates will make the right decisions (Zhang and Bartol, 2010). Similarly, Taoism suggests that leaders abandon micro-management and instead leave decisions to employees. In their case study, Han et al. (2010) justified the close relationship between Taoist ideology and servant leadership.

Legalism and modern leadership models

In contrast to the Confucian and Taoist views on human nature, Legalism asserts that not all human beings are naturally good and that some people are born bad and greedy (Watson, 1964; Ren and Zhu, 2015). The concepts of control and political manipulation are highly valued in Legalism (Cheng et al., 2003). To guard against problems caused by self-interest, leaders must be able to control themselves and monitor their employees effectively. Legalistic leadership involves the establishment and maintenance of law and order to create a self-governing system (Witzel, 2012) that functions under strict rules. Those in leadership positions must establish a regulated institution that clarifies rewards and punishments as a means to control employees. Once the self-governing institution is established, leaders cease playing active or interfering roles in organizational operations. In sharp contrast to a Confucian leader who seeks relationalism (harmony) by practicing benevolence, a Legalistic leader strives for complete adherence to rules.

According to the principle of control, prescribed rules and laws are considered essential for leaders to successfully exercise command. Under Legalism, leaders must effectively monitor their employees. Additionally, leaders must be fair in implementing laws and regulations. Legalism draws on the Confucian principle of identifying each person’s duties with a title to avoid confusion. Notably, Legalism values hierarchy differently than Confucianism. Confucianism employs hierarchy to ensure that subordinates obey a leader’s decisions. In Legalism, the natural order is not entirely sufficient. Rather, Legalism contends that a leader must exercise judgment in the choice of subordinates. The leader must evaluate employees according to their worth, place them in the appropriate positions, and provide opportunities to exploit their talents. Legalism recognizes the importance of establishing clear boundaries to delineate responsibilities and appointing the most appropriate people to available positions (Ma and Tsui, 2015). Even those who have close relationships with the leaders are rewarded or punished in the same way as others. Seeking harmony is not part of the Legalist philosophy. The relationship between leaders and subordinates is presumed to be based solely on rules, and personal feelings must be ruthlessly eradicated (Witzel, 2012). To ensure that policies are fully implemented, leaders are expected to maintain professional work relationships with their employees.

Transactional leadership appeals to subordinates’ self-interest and establishes exchange relationships between leaders and subordinates (Eagly et al., 2003). Transactional leaders promote and capitalize on people’s calculations and their dependence on the leader (Cheung and Chan, 2008). These leaders make no concerted effort to develop a deep sense of trust or to foster interpersonal relationships. Transactional leadership theory argues that rewards are contingent on employees’ performance and effort. To manage expectations, the leader and subordinates must agree on what followers must do to obtain rewards or avoid punishment (Jung and Avolio, 2000). The core idea of contingent rewards and punishments is perfectly aligned with Legalist principles (Ma and Tsui, 2015).

The Netherlands was selected as the study site for several reasons. First, because of the constraints of the research period, it was necessary to choose a country that plays a key cultural and economic role in Europe. The Netherlands is considered a model of Western European managerial values and practices (Ozorovskaja et al., 2007). From a cultural comparative perspective, the Netherlands is one of the countries that differs the most from China (House et al., 2004). The cultural distance between the Netherlands and China is expected to be greater than that between India and China (House et al., 2004), and therefore the Netherlands offers more avenues for inter-cultural research in the leadership domain.

Confucianism-based leadership behaviors

As mentioned above, the value of hierarchy is emphasized less in the Netherlands than in China. To maintain a positive image of leadership authority, the Chinese expatriates resorted to another Confucian theme – acting as role models – to maintain a positive leadership image. They demonstrated the values of self-perfection through learning, self-discipline, and self-reflection. Notably, although the Chinese leaders suggested lower expectations for hard work among the Dutch employees, they praised the ethic of hard work for themselves. They believed that leaders must work hard, be selfless, and pursue collective well-being to set a good example for team members. Leaders with intense traditional Confucian values expressed their work values in terms of disciplining their own work behaviors. The CEO of a Chinese MNC (Leader 9) stated his understanding of being a role model as follows:

Before asking employees to perform, leaders must discipline themselves. Setting a good example is a process of building trust with subordinates. For example, I have never disappeared without notifying my employees. In a cross-cultural situation, it is important to keep the working schedule transparent for employees. This provides my subordinates with a sense of security.

In addition, the interviewees described benevolent leadership behaviors that reflected the philosophy of Confucianism. These leaders demonstrated individualized and holistic concern for their employees’ well-being through behaviors that included showing sympathy, putting themselves in the shoes of the local employees, providing coaching and mentoring, and cultivating a friendly work environment. For example, one leader (Leader 1) explicitly displayed a form of individualized care by describing himself as a mentor: “Some employees may be frustrated by failure. As a leader, I help him/her get past difficult times. I try to be a mentor for my employees.” The Netherlands is known for its strongly regulated national wage policy, which reduces opportunities for performance-related pay (Verburg et al., 1999). As noted by one leader (Leader 5), “In China, managers like to motivate employees with better salaries, but in the Netherlands, people focus more on the opportunity for personal development.” Accordingly, a number of interviewees (12/30) reported a strong commitment to employee development. Confucianism advocates the notion of encouraging people to grow based on their merits. The attitudes and behaviors described above reveal a benevolent concern rooted in Confucianism (Farh and Cheng, 2000), suggesting that Confucian philosophy is prevalent among Chinese expatriates. As one leader (Leader 8) explained:

I help employees to grow based on their interests and abilities. I constantly have one-on-one conversations with employees to find their potential, based on which I can provide them with training opportunities. For example, one young employee was lost about his future. I had small talks with him during lunch time. He found himself better at analyzing than marketing. So, I asked him to analyze the purchasing data. He did well, so I recommended him to the supply department.

Taoism-based leadership behaviors

Leadership flexibility entails accurately diagnosing a situation and adjusting leadership behavior accordingly (Yukl and Mahsud, 2010; Kaiser and Overfield, 2010). As mentioned in the previous section, flexible leadership was considered a double-edged sword. Some leaders doubted the positive outcomes of flexible leadership, whereas others believed in its positive attributes. One regional leader (Leader 7) proudly stated his understanding of flexibility as follows: “Based on different situations in the local market, we adjust our organizational structure every year. We identified the weaknesses in our early structure and are constantly changing. One of the most effective leadership behaviors is adjustment.” The ideal Taoist leader believes in the good nature of human beings and therefore maintains a low profile and allows followers to take ownership (Wang et al., 2012). Several leaders exhibited elements of Taoism in their tendency to delegate authority to employees. They respected the autonomy and freedom of Dutch society, recognizing the importance of work-related autonomy to the local employees. Leader 4, supply director of a large Chinese telecommunications company in the Netherlands, said:

Local employees favor a high degree of autonomy. In the Netherlands, the leader’s job is to inspire employees instead of micro-managing every step. You need to give the Dutch enough autonomy to work on their own. If you give guidance to Dutch employees in every small step, they will not feel grateful and will instead feel dissatisfaction with their self-development. He/she may be confused about who is the actual decision-maker in this job.

The concept of balance was also frequently mentioned by the interviewees. The Chinese expatriates recognized the absolute inevitability of various types of conflict: conflicts among employees with different cultural backgrounds; gaps between targets set by headquarters and the abilities of local offices; and the internal tension of leaders regarding self-consistency. In terms of balancing conflicts among employees with different backgrounds, several interviewees mentioned their leadership role as coordinators. As one leader (Leader 10) said, “It’s important to keep a balance when dealing with Dutch and Chinese employees. They have different communication behaviors. My major task is to be a coordinator between the two cultures, creating a positive team climate and encouraging mutual communication.” For expatriates who worked for Chinese MNCs, the role involved more than “simple” cultural translations. Taoism emphasizes the role of power and position in leadership when facilitating communication and relations. Specifically, those leaders found themselves continually serving as “bridge builders” between headquarters and the local offices. The important task for bridge builders in business is to bridge national differences to enable effective headquarters-to-local office communication. Leader 15 shared the following thought:

Most of the time, the local employees respect the demands from headquarters. But sometimes, they have different opinions about the demands. I have my own evaluation system. If the headquarters is correct, I will clearly explain it to the local employees. If the headquarters is indeed wrong, I will state so myself and speak up for my Dutch colleagues. Here, I act as a bridge between the headquarters and my local team.

Furthermore, Chinese leaders in the Netherlands experience internal conflicts regarding self-value. Specifically, Leader 23, a Chinese entrepreneur in the Netherlands, said:

The Chinese need to be more outspoken in the Netherlands. We were educated to think through everything before taking action. But by the time you figure everything out, the meeting is over. However, speaking all the time can make people feel dominated. A leader needs to find a good communication balance between modesty and dominance in the Netherlands.

Finally, a successful balancing of the contradictions requires dialectic thinking based on an accurate diagnosis of the inter-cultural situation (Luo and Zheng, 2016). Accordingly, these managers suggested that the ability of a leader to balance competing cultural values depends on his/her capacity for observation in a dynamic situation. The interviewed leaders (9/30) frequently mentioned that leaders should possess observational abilities to reach accurate conclusions. Specifically, one leader noted that “I need to observe whether their direct arguments are nonsense or make a valid point.” The idea of decoding Dutch directness was reinforced by another leader (Leader 13, Director of an education institution):

We generally believe that the Chinese are indirect because as a Chinese person, I can decode my own communication behaviors. The Dutch are known for their directness. However, the Dutch have an indirectness behind their direct behaviors. The challenge for Chinese managers to work with Dutch colleagues is to decode the Dutch directness.

Legalism-based leadership behaviors

Many of the leaders had learned of evidence-based practices based on western management theories and attempted to promote a professional work climate (Ma and Tsui, 2015). In total, 28 of the leaders emphasized the establishment of policies with reasonable clarity and concreteness to document workflows and shape employee behavior. Although none of the leaders specifically presumed that human nature is evil, they led their employees by implementing universal organizational rules to regulate potential misbehavior. This statement by Leader 10 reflects an obvious Legalistic approach to the universal application of organizational policies:

The leader holds a critical position in establishing the team climate, regardless of the employees’ nationality. The leader should establish a punishment and reward system and rigorously implement it. Those who perform their duties well should be rewarded. Those who break the rules should be punished. This is how a leader ensures transparency and justice.

Regarding the work-life attitude of the local employees, one leader described his experience as follows: “Compared to Chinese employees, the Dutch have less emotional attachment to their work. They tend to set clear boundaries between work and life. It’s more important to describe their job duties clearly to them” (Leader 13). In general, Dutch employees do not welcome their leaders’ intervention in their personal lives, which leads to an emphasis on leadership professionalism. One leader (Leader 20) shared his opinion: “People have different personalities, and we allow these differences. The point is to create a professional environment and to act professionally.” The concept of professionalism also applies to the supervisor-employee relationship. For example, one leader (Leader 27) said, “A leader just needs to keep a polite and professional relationship with Dutch employees.” Consequently, it is of the utmost importance for inter-cultural leaders to be cautious about the closeness of the supervisor-employee relationship.

Confucianism frictions in the Dutch context

During the interviews, several Chinese leaders recalled the awkward feeling when a Dutch employee directly and publicly challenged their authority. Unlike Chinese employees, “who are to some extent afraid of the boss” (Leader 12), “the Dutch advocate freedom of expression” (Leader 26). As one leader (Leader 5) clarified:

The Dutch value equality and freedom of expression. It is different from the hierarchical value in China. At the beginning, those endless meetings were frustrating. The point of endless meetings is to explain an order in detail and reach an agreement.

In addition, the interviewees complained that working in a society that respects and tolerates everyone’s voice greatly affects execution efficiency when enforcing orders from above. Several leaders admitted that working with Dutch employees required patience. Leader 16, who manages a financial team at a non-Chinese MNC, shared her experience:

My team is composed of different nationalities. Indians are like Chinese people, they are easier to lead. You just set the goal and in the meantime provide some guidance. But it takes more energy to deal with Dutch employees. They tend to argue a lot. I have to be patient when explaining things to them and discussing things with them.

In terms of relationalism, Confucianism encourages leaders to bond with their employees, to build a “family culture” in an organization and to support employees in all aspects of their lives, both at work and in life. However, it appears to be far more difficult to bond with Dutch employees outside of work. One leader from a Chinese MNC (Leader 12) explicitly described the different interpersonal relationships between leaders and their Dutch and Chinese employees:

I tend to form family-like relationships and emotional bonds with my Chinese employees so that they view the company as their family business, whereas the relationship with Dutch employees is based on equality and respect rather than the creation of family ties.

In addition, Confucianism advises people to be polite and modest when communicating with others. Maintaining harmony is a critical value that is rooted in Chinese culture. Chinese leaders tend to avoid publicly embarrassing subordinates, and public criticism is often delicately disguised as suggestions for improvement. In practice, however, several expatriates suggested that the emphasis on harmony should be set aside in favor of more direct communications with Dutch employees. One leader at a Dutch MNC described his experience as follows: “I used to communicate in an indirect way, using hints in order to maintain a supervisor-employee relationship, but being indirect is inappropriate in this Dutch company. It is a big change for me” (Leader 11).

Moreover, several managers mentioned that during the period of their initial culture shock, they witnessed low commitment among their subordinates and perceived it as originating from a work ethic rooted in western culture. One leader (Leader 23) reported, “My Dutch employees rarely work overtime. They won’t even check e-mail after work. I have to adjust myself to their general work routine. I have no right to ask my assistant to work on the weekends. They tend to enjoy life instead of tirelessly accumulating more wealth.” Thus, Chinese managers should consider the relevance of Confucian philosophy, especially relationalism and hierarchical values, when working in a western environment.

Taoism frictions in the Dutch context

Dutch culture encourages individuals to freely, openly, and honestly express their opinions. Six leaders mentioned that in a multicultural environment, respecting the true nature of the business and of the people is the starting point for avoiding unnecessary conflicts. As one leader (Leader 8) stated, “Essentially, leadership is about communications between humans. It is important not to judge based on your first impression.” Furthermore, by interacting frequently with their Dutch employees, the Chinese managers recognized the positive outcomes of direct and open discussions. Several managers perceived Dutch employees’ directness positively. Some leaders even encouraged their Chinese peers to join the discussions, with the aim of creating an environment of open communication. One leader (Leader 14) described his opinion as follows:

Chinese bosses are used to lecturing their subordinates. In a meeting, the boss has the loudest voice. This is very unacceptable in the Netherlands. In the long term, fewer employees are willing to have open discussions with the boss. Directness is an advantage of Dutch employees. If the leader does not accept this characteristic, over the long term, Dutch employees may become as silent as the Chinese. Then, this advantage would be turned into a disadvantage for organizational development. Chinese leaders in the Netherlands should also encourage Chinese employees to join the discussion.

In addition, the investigation found negative opinions about one of the core themes of Taoism: flexibility. Flexibility largely entails a leader’s ability to adapt to the dynamics of change. Relevant practices revolve around the notions of non-absolutism and opportunity, the use of game-playing strategies, and the availability of alternatives. The central premise of flexibility is that environments are complex and mutable; thus, leaders should vary their behaviors accordingly (Cheung and Chan, 2005). In the current study, however, 9 of the 30 Chinese managers specifically expressed concern about exercising flexibility in the Dutch workplace. For example, one leader (Leader 14) said, “The Dutch are not flexible about changing their opinions or plans.” The following narrative illuminates this concern (Leader 13): “In the Netherlands, it’s important to set a specific goal. Rather than a goal of ‘aiming for a bigger market,’ we have to be specific about which market to target. [For example,] if Beijing is the target market, they won’t consider opportunities in Shanghai and Guangzhou. My Dutch team can’t understand the idea of a ‘moving target.’” In Taoism, the water metaphor describes an extreme case in which water immediately changes direction when it encounters an obstacle. In discussing international leadership, the Chinese leaders acknowledged that flexible leadership or practices in business might lead to a perception of unprofessionalism by employees. Leader 7, as a district director at a Chinese MNC, shared the following insight:

In general, I agree that Chinese companies are sometimes aggressive and inpatient. In the beginning, we were a team of eight people. We worked like entrepreneurs. The headquarters did not even give us job descriptions. We grew to understand local market by going through constant trials and tests. Within four years, the team expanded to 120 employees. However, the leader must be aware that flexibility is both a strength and a weakness. On the one hand, a flexible leader responds quickly to the environment and makes adjustments. On the other hand, flexibility gives people an impression of unprofessionalism. The result of the constant adjustments was a high level of turnover at the beginning.

Legalism frictions in the Dutch context

Partially expected but also partially surprising, there was little evidence of possible frictions between Legalistic behaviors and the Dutch cultural context. The lack of inter-cultural friction in this domain reveals that distinctive cultures do share something in common, so friction or conflict does not provide the whole picture of inter-cultural interaction. This interesting finding reminds us of the unique Chinese perspective of yin-yang balancing as a duality in the sense that diverse cultures are not only conflicting in all aspects, but also complementary in some respects. In other words, distinctive cultures are not fully in conflict (nor fully complementary) but are only partially in conflict (and also only partially complementary). In the next section, we will explore the key reasons for inter-cultural interaction as a balance between diverse cultures as partially in conflict and partially complementary.

The balanced dimensions of Confucianism in the Dutch context

In China, managers expect their employees to follow orders without question or disagreement. The above analysis and early research indicate that the Confucius perspective of hierarchy contrasts with the Dutch principle of freedom of expression and the norm of questioning authority. The Dutch attach more importance to autonomy. Referring to Weber’s (1965) thesis, the Protestant ethic emphasizes “the sinfulness of the belief in authority, which is only permissible in the form of an impersonal authority” (p. 224). A leader consults with the employees and ensures that the employees have the autonomy to adopt their own approach to a job (Hofstede, 1993). The findings of Den Hartog et al. (1999) confirm that there is a strong preference in the Netherlands for leaders who involve subordinates in decision making instead of relying on a hierarchical order. Similarly, De Waal et al. (2012) showed that managers who encourage their employees to take the initiative are highly valued. Rather than accepting an order without question, Dutch employees tend to express their views and opinions. Hence, Chinese leaders who strongly believe in exerting the power of their position may experience friction when attempting to enforce an order. In addition, the Confucian emphasis on developing interpersonal relationships beyond the work relationship (guanxi) contrasts with the Dutch culture. As shown above, the Dutch value superior-subordinate relationships that foster independence and that allow the subordinates to experience autonomy. Openness is generally accepted and preferred as a result of egalitarian norms (Hofstede, 1993; House et al., 2004). Tolerance of individual autonomy is a basic principle (Van Der Burg, 1998), and individuals are free to choose their own lifestyle. Unlike Chinese employees, Dutch employees are unlikely to be grateful for a leader’s intervention in their personal lives. In the business context, the Dutch may complain about a lack of professionalism among Chinese managers who tend to intervene in both work and personal settings. Hence, Chinese leaders who possess strong beliefs about maintaining close relationships outside of work are likely to experience friction when interacting with Dutch employees.

However, within the work domain, the Confucian values of personalized caring and holistic concern for employees are appreciated in the Dutch cultural context. Confucius advises leaders to undertake genuine actions at work that benefit the people around them for the common good (Farh and Cheng, 2000). It is the leader’s obligation to act kindly and charitably toward all employees. The leader can also demonstrate a form of individualized care, including providing mentoring and coaching, showing concern for followers’ career development, and allowing opportunities to correct mistakes (Wang and Cheng, 2010). These behaviors make the employees feel that the leader acts in their interests. Accordingly, employees react positively to the leader. Research in the Dutch context shows that Dutch employees perceive benevolent leaders as charismatic (van Dijke and De Cremer, 2010):

The balanced dimensions of Taoism in the Dutch context

Taoism advocates that instead of becoming actively involved in solving problems by forcing the situation or even going against the flow of nature, leaders should embrace the natural self and thereby gain a deeper capacity to obtain success without effort (Xing and Sims, 2011). In practice, Taoism suggests that effective leaders are those who can utilize the strengths of others. This way of thinking is consistent with Dutch employees’ preference for managers who trust and empower them to do a good job (De Waal et al., 2012). Taoist leaders respect the nature of everyone in society and believe that harmony comes not from repression but from allowing expression by every member (Lin et al., 2013). This particular idea of nature is consistent with the Dutch custom of free expression. We believe that Chinese expatriates following the Taoist doctrine will proactively embrace the natural characteristics of local cultures, such as Dutch employees’ direct confrontation of authority and their preference for autonomy.

Taoism also emphasizes flexibility, which ideologically reflects flowing water. The central premise of flexibility is that conditions are protean, and thus the leader must be able to adapt to and cope with changing conditions. Taoism asserts that all things – including leaders and other people – are changing and unpredictable. There are such diverse alternatives and opportunities that things are never absolute (Cheung and Chan, 2005). In the Netherlands, the purpose of reaching consensus is to set aside differences and agree on detailed procedures to achieve a common goal. Diverse and changing opinions are encouraged and taken into consideration. A business plan requires a certain mindset and an openness to adventurous ideas, which also requires flexibility. In general, flexibility is needed during the decision-making process. Once an agreement is achieved, Dutch employees are unlikely to deviate from the goal and the agreed-upon procedures. A change in the agreement will cause ambiguity and require extra effort to discuss a new plan, and the development of the new plan can be as lengthy as the process for the old plan. Hence, the flexible idea of Taoist leadership contrasts with the Dutch planning culture, that is, the custom of adhering to an agreement:

The balanced dimensions of Legalism in the Dutch context

Similar to the transactional leadership model, Legalist leaders emphasize the leader’s power to reinforce followers’ goal attainment using “carrot and stick” instruments (Wang et al., 2012). This philosophy assumes the self-interest of human nature and, thus, maintains that the best way to regulate behaviors is through contingent reward and punishment rather than moral values. Total obedience to the law and punishment are essential for establishing a self-governing system. However, heavy reliance on rewards and penalty policies is ineffective in the long term (Bass, 1990). Regarding the leadership role, Legalism does not regard leaders as active or interfering players in organizational activities but rather as establishers and maintainers of order. Dutch people have a custom of spending hours in meetings. Employees have preferences to be heard by their leader; therefore, decision-making processes are complex. However, once a compromise is reached and the entire team agrees, the work can progress without interruption. With all this planning and structure, little room is left for the unexpected (Faludi, 2005), and the flexibility to change an agreement is limited. After agreement is reached, employees expect their leaders to maintain “rule and order” (Faludi and Van der Valk, 2013), which is aligned with the core concepts of Legalism. In addition, the Dutch set clear boundaries between work and personal life, so they prefer to maintain a professional work relationship with their leader. Legalistic leaders initiate structures with clear rules, role specifications, and power limits. Hence, in this respect, the notions of Legalism are highly consistent with the Dutch preference for a rational model of leadership:

Implications for theory and practice

Prior research in the area of international leadership indicates that there are contextual boundaries for cultural characteristics (Dickson et al., 2003). Much of the literature focuses on intra-cultural comparisons. For example, the GLOBE Project observed and studied leadership preferences across cultural groups. However, far less attention has been paid to the dynamics of culture or philosophies in inter-cultural encounters (Gelfand et al., 2007). This study sees cultural differences as opportunities for inter- and intra-organizational learning, “an area that has been rarely addressed” (Fang, 2012, p. 30). The present study is one of the first to offer a nuanced, contextualized understanding of managers from an emerging market (i.e. China) who manage local employees in a developed country (i.e. the Netherlands). By shifting the focus from indigenous leadership studies to inter-cultural interface dynamics, this study combines philosophy-based cultural aspects with western culture to explain Chinese expatriates’ leadership behaviors. Several related studies have suggested that Confucianism, Taoism, and Legalism are the foundations for Chinese management philosophies and are exhibited in contemporary leadership behaviors in China (Ma and Tsui, 2015; Barkema et al., 2015). Chinese expatriates can reflect on the traditional philosophies embedded in their own culture and infuse elements from other cultures to facilitate local acceptance of their leadership behaviors. For instance, Fang (2012) recognizes the applicability of Chinese yin-yang philosophy for cross-cultural research. The proposed yin-yang perspective frames culture as a paradoxical phenomenon. A culture is incomplete without two opposite elements (“+Vi” and “−Vi” representing two paradoxical values), and a local community can choose to evoke and focus on certain values (“+Vi”s) as their primary and dominant values, while treating the opposite values (“−Vi”) as secondary and latent. Globalization, however, gives rise to intense and frequent interaction and penetration across diverse cultures, thus enabling the more balanced co-existence of opposite values in each culture as more mixed than before. Nevertheless, this mixed culture does not deny the fact that traditional or indigenous culture still lie deeply, such as the vast cultural distinction between the east and the West (Li, 2016). Hence, at the current stage, if scholars fail to recognize a society’s traditional philosophies and also the particular aspects of foreign cultures, expatriate leadership cannot be fully understood, including Chinese expatriates working in the west. Further research is needed to investigate how different philosophy-based cultural identities are made salient in the cultural interface.

Additional inter-cultural research is warranted to describe, analyze, and document variations in expatriate leadership styles. For example, Xing et al. (2016) observed that cultural proximity between African “Ubuntu” and Chinese Confucianism significantly influenced the management of African employees by Chinese firms. The cultural proximity of Ubuntu and Confucianism acted as a converging force and facilitated the emergence of hybridization in practice. Such efforts represent a direct response to the call for hybridization research in multicultural contexts (Jacob, 2005; Xing et al., 2016). In the literature, hybridization is a thinking manager’s passport to engaging in leadership behaviors that are considered to be both efficient and congruent with the local culture (Jacob, 2005). Hybridization blurs the existing distinctions between the culture of the leader and that of the local employees and thus disrupts universally adopted standard managerial categories. Rather than measuring leadership using dimensions, researchers are urged to categorize Asian expatriates’ leadership behavior into patterns that reflect traditional philosophies and the local culture. In so doing, practitioners can integrate modern leadership techniques into their own versions of hybridization. There are ample and promising research opportunities to advance the study of cultural hybridization in different settings.

A thorough examination of traditional Chinese philosophies and their core principles is needed (Ma and Tsui, 2015), and researchers are encouraged to conduct component analyses to delineate the relevant core content. Lee et al. (2013) found that Taoist leadership includes five components, i.e., perseverance, modesty, altruism, flexibility, and honesty. The results obtained by those authors also revealed differences in endorsement as a function of nationality. From a modern leadership perspective, Lin et al. (2013) developed a Confucian and Taoist work value scale and applied the scale to examine the relationship between these philosophies and transformational leadership. It would be interesting to determine empirically how the philosophical components impact expatriate leadership emotions (George, 2000), work-life balance (Lyness and Judiesch, 2008), and leadership effectiveness (Ng et al., 2009). Notably, the interviewees in the current study demonstrated benevolent behaviors toward their local employees, including sympathy, interest in employee development and the desire to cultivate a friendly work environment. Given that benevolent leadership is embedded in Confucianism, it is not surprising to observe Chinese expatriates demonstrating these behaviors. In the Chinese context, benevolent leadership causes subordinates to feel obligated to reciprocate and obey their leader (Farh and Cheng, 2000), which in turn produces a variety of favorable outcomes for subordinates (for a review, see Pellegrini and Scandura, 2008). However, the prior literature has also proposed that benevolent leadership is not expected to be consistent across all situations (Wang and Cheng, 2010). For example, Chen and Kao (2009) show that paternalistic leadership by Chinese expatriates negatively impacts the psychological health of subordinates in the local country. In an inter-cultural context, the extent to which Chinese expatriates can expect reciprocity from local employees is another open question. The proposed studies offer promising avenues for gaining a comprehensive understanding of the cultural interface.

This study reveals inconsistent views of leadership flexibility, which is a key component of Taoist philosophy. Consulting psychologists and researchers frequently mention the benefits of flexible leadership in an international environment (Kaiser and Overfield, 2010; Yukl and Mahsud, 2010). Although the Chinese managers in the present study perceived the Dutch to be inflexible in the face of new ideas and approaches, several authors have asserted that the Dutch tend to improvise more than the Germans (Thesing, 2016). According to Ernst (2007), “If things have to be changed during the process of realization, Germans see this as a sign of bad planning, whereas the Dutch are proud of their ability to improvise” (p. 56). Thus, flexibility is a subjective concept, and its definition depends largely on the conditions. In the current research, the Chinese expatriates believed that flexible leadership did not guarantee a positive leader image or leadership effectiveness. Researchers are urged to carefully define the concept of flexible leadership and its constructs, antecedents, and consequences. Future research should respect the inherent complexity of leadership behaviors in terms of cross-border effectiveness when developing a general assessment tool for flexible leadership.

In our case, the Chinese expatriate leaders frequently mentioned the “art of keeping a balance” (e.g. Leaders 8, 13 and 20) between Dutch and Chinese cultural values. Expatriate leaders are expected to comply with strict requirements from headquarters while still considering the local market and local employees’ demands; in addition, they must treat their followers equally and uniformly while accounting for their individual needs (Zhang et al., 2015). The ability to respond to such contradictory or paradoxical challenges is crucial to inter-cultural management. To manage the opposing components, western scholars have developed several leadership approaches, including flexible leadership (Kaiser and Overfield, 2010) and behavioral complexity (Kaiser and Overfield, 2010; Yukl and Mahsud, 2010), while eastern scholars suggest approaching paradoxical values from the Taoist yin-yang philosophy (Fang, 2012). Embracing the connections and interdependence between opposites in a holistic and dynamic system instead of absolutely separating the opposites (Fang, 2012; Li, 2014), the Taoist perspective of yin-yang balancing is widely shared by all of the other traditional Chinese philosophies, including Confucianism and Legalism (see Li, 2016 for a recent review). If approached correctly, the perspective of yin-yang balancing can be applied in various domains of management research, such as cooperation-competition balancing, globalization-localization balancing, and exploration-exploitation balancing (Li, 2016). As richly illustrated by Li (2016), the frame of yin-yang balancing is highly relevant to our study in the sense that the inherent link between the traditional Chinese philosophies and the modern western theories (as well as the modern business contexts in both China and the west) can be best framed as a duality (sometimes also called a “paradox”) in terms of having two opposite elements in a holistic and dynamic balance as partially conflicting and partially complementary, so the ideal-typical link between the east and the west is their geocentric balance as partially global and partially local (Li, 1998, 2016). We suggest that future research should expand our research on culture to the potential advantages and disadvantages of yin-yang balancing across culturally diverse contexts. Specifically, the three mechanisms of yin-yang balancing, i.e., asymmetrical, transitional, and curvilinear balancing, can be applied to the research on inter-cultural leadership. For instance, those expatriate leaders with strong yin-yang mindset may be more capable of balancing relational distance with relational closeness in people management; treating subordinates uniformly while allowing individualization, enforcing work requirements while encouraging flexibility, as well as balancing control with autonomy (Zhang et al., 2015). For such paradoxical issues, the newly proposed scale to empirically measure curvilinear relationship is highly relevant, i.e., TLTM scale (Vergauwe et al., 2017; also see Zhang et al., 2016).

Regarding practical implications, the current study offers guidance for the selection of personnel for assignments in the Netherlands. Chinese expatriate leaders’ tactical knowledge of Chinese philosophy may enhance their chances for success in such an assignment. For instance, the findings suggest that an expatriate’s observational ability may indicate the potential for strong leadership. In other words, by listening to an employee’s words and observing his or her behaviors, a leader can learn about that employee. Consequently, organizations should consider a candidate’s observational ability when selecting and training new expatriates. As Confucius asserted, “not understanding a person’s words, one has no way to know that person.” Confucius also noted that one of the characteristics of an accomplished person is his ability to “examine the words and observe the countenances” of others (Xu, 2004). For Chinese expatriate managers in the Netherlands, our findings provide a unique frame for understanding the Dutch cultural context. Leaders’ reflection of traditional Chinese philosophies in the Dutch cultural context reveals the possibility of blending Dutch cultural contexts with traditional Chinese philosophies. This frame is also useful for Chinese leadership activities outside the Netherlands. Instead of completely adapting to local practices and norms, aspects from one’s own culture can help explain how to frame distinctive foreign cultural contexts from the perspectives of traditional Chinese philosophies.

Leadership training for Asian leaders abroad, particularly in developed countries, is excessively reliant on western-developed business school curricula. Such reliance may create internal tension for Chinese leaders. Instead, management behaviors should reflect expatriate leaders’ cultural roots as well as western realities. Exposure to another culture may induce expatriates to simultaneously adopt several cultural identities (Kohonen, 2005; Jacob, 2005). By recognizing the strengths and weaknesses of both their own and the local culture, expatriate managers can integrate diverse cultural elements in a manner that both enables them to internally accept the local culture and helps them be accepted locally. Otherwise, expatriates could experience negative internal emotional anxiety. It would be worthwhile for expatriates to accurately decipher the deep-rooted philosophies they use as a basis for gauging local cultures. In this study, a dialectical philosophy (Taoism) was found to be deeply embedded in several Chinese expatriates. Such managers feel less compelled to rate Dutch directness and bluntness negatively. Instead, they tend to have a neutral view of Dutch culture. Taoist dialectic philosophies do not consider opposites to be contradictory (Li, 2014), and Taoist principles provide a positivist analytical approach for leaders to accommodate the rapid changes in multicultural situations. As proposed by Bai and Morris (2014), “Asian wisdom based, for example, on Taoism, is good at holistic observation, whereas western science is good at positivism and analysis. Combining the two provides a useful tool for exploring the realities of organizational behavior.” Organizations should consider introducing Taoist principles into adaptive leadership training because this philosophy may contribute to greater understanding among leaders in a dynamic work environment.