Confucian and Taoist Work Values: An Exploratory Study of the Chinese Transformational Leadership Behavior



Confucian and Taoist Work Values: An Exploratory Study

of the Chinese Transformational Leadership Behavior

Liang-Hung Lin•Yu-Ling HoWei-Hsin Eugenia Lin

Received: 14 September 2011 / Accepted: 10 March 2012 / Published online: 27 March 2012  Springer Science+Business Media B.V. 2012

Abstract When it comes to Chinese transformational leadership behavior, the focus seems to be Confucian work value; nonetheless, it represents only one of the Chinese traditions. In order to have a better understanding the relationship between Chinese traditional values and trans-formational leadership behavior, Taoist work value should also be taken into consideration. Thus, this study firstly develops Confucian and Taoist work value scale (study 1) and then applies this scale to examine its relationship with transformational leadership (study 2). The results show that while Confucian work value is the most consistent pre-dictor of core transformational leader behavior and high-performance expectations, Taoist work value is the most consistent predictor of intellectual stimulation.

Keywords Confucian work value Taoist work value  Transformational leadership


Studies concerning cultural effect on international business practice have been increasing, and recent studies further

point out the need of understanding Chinese culture, for many people around the world do business or work with Chinese (Hofstede 2007). This understanding is important due to the unique characteristics of Chinese culture, which distinguishes Chinese management from Western man-agement. According to the dimensions of national culture developed by Hofstede and his colleagues (e.g. Hofstede

1980; Hofstede and Bond1988; Franke et al.1991), studies on cultural characteristics in China and East Asia are long limited to Confucian dynamism or long-term orientation, referring to ‘‘the acceptance of the legitimacy of hierarchy and the valuing of perseverance and thrift, all without undue emphasis on tradition and social obligations which could impede business initiative’’ (Franke et al. 1991, p. 167). In order to place Chinese culture in a one-dimensional construct which can fit into statistical models, complex and tacit phenomena are therefore simplified (Shenkar et al.2008), which consequently prevents people from seeing the complete picture of the complex reality (Hofstede 1996; Hofstede et al. 2002). It is especially dangerous in cross-cultural studies, in which the under-standing of a complex society on multi-disciplinary aspects is required to avoid misunderstanding. Confucian dyna-mism and the ethnocratic style of Chinese management derive mainly from Confucian philosophy, representing, however, only one of Chinese cultural traditions. In order to have a balanced view of Chinese culture and manage-ment, the doctrine of Taoism, which is quite different from and sometimes antagonistic to that of Confucianism, is required to be taken into consideration.

During the Warring States Period (475–221 BC),

Con-fucius constructed philosophy of moral order, duty, cere-mony, as well as respect of family and authority. Confucianism was deeply adopted by the ancient China’s feudal rulers because of its strong emphasis on duty and L.-H. Lin (&)  W.-H. E. Lin

Department of International Business, National Kaohsiung University of Applied Sciences, 415 Chien Kung Road, Kaohsiung 807, Taiwan, ROC

e-mail:; W.-H. E. Lin

e-mail: Y.-L. Ho

General Education Center, National Taitung Junior College, No.889, Jhengci N. Rd., Taitung 95045, Taiwan

e-mail: DOI 10.1007/s10551-012-1284-8


ethics. Confucian leaders, including Confucius and his students, acted as the agent of control responsible for the unity of the society and country. In contrast to Confucius’ emphasis on moral and social orders, his contemporary Lao Tzu elaborated the dynamic philosophy of Taoism. Observing the natural cycles such as flowing water and changing seasons, Lao Tzu understood that nature cannot be controlled and that nothing in the cosmos stands still. These two contrasting philosophies have different influence on Chinese leaders. The Confucian teachings emphasize social harmony, which is based on the duty of social roles and the conformity to external expectation. Confucian leaders, therefore, found themselves secured in the social hierarchy around them. Taoist leaders respected the nature of everyone in the group and considered that harmony does not come from repression but from expression of every member. Taoists thus found their security within them, as they navigate the very essence of life and the nature (Dreher1996). Chinese management scholars (e.g. Cheung and Chan 2005; Davis 2004; Durlabhji 2004) argue that leaders of Confucian style have dramatically different leadership behavior from those of Taoist style. Based on interviews of Chinese CEOs in Hong Kong, Cheung and Chan (2005) verified that Confucian leaders advocate benevolence, loyalty, harmony, and righteousness. Con-versely, Taoist leaders emphasize flexibility and submis-sion. The central premise of flexibility is that conditions are protean so that leaders must cope with environmental uncertainty flexibly. Submission states that the weak can defeat the strong, and evacuation may become the pre-cursor of victory.

Though the differences between these two Chinese values are well documented in popular journals (Chia

2003; Hahn and Waterhouse 1972; Yeh and Lawrence

1995), they seldom become the subject in serious studies. One of the reasons might be due to the elusive nature and mystical connotations of Confucian and Taoist values. Without a conceptual framework, researchers also find it difficult to operate both values to identify the antecedents and outcomes that influence their development. In view of traditional Chinese philosophy and thoughts, instead of merely focusing on the understanding of Confucian work value, one purpose of this study is to bring up the idea of Taoist work value and then quantify it. The other purpose is to find out whether Confucian and Taoist work value influences Chinese leadership behavior.

Two Sides of Chinese Culture: Confucianism and Taoism

In addition to the identification of Chinese cultural idio-syncrasies, such as guanxi and long-term orientation, a

thorough understanding of Chinese culture relies on its logical roots, including thoughts of Confucianism, Taoism, Mohism, Legalism, and so on. Among them, Confucian and Taoist thoughts play a crucial role in the Chinese culture through ages (Lau 1984, 1992, 2001). Obviously, Chinese culture has developed into a refined synthesis of several philosophers, involving Confucius (551–479 BC)

and Mencius (372–289 BC, a follower of the Confucian

school), Lao Tzu (580–470BC), and Chuang Tzu (369–288 BC, a philosopher of the Taoist school). Although each

Chinese thought may correspond to respective part of Chinese culture, this convergence of thoughts still distin-guishes Chinese culture from others. With regard to iso-lation, Confucianism is similar to Christian ethics because both have formalist doctrines and Aristotelian ethics (Cheung and Chan 2005). Harmony and benevolence in Confucianism, for example, are mostly applied to in-group and family. The preference for collectivism also differentiates Confucianism from Taoism, which prefers liberalism.

In the Chinese history, Taoism does not have a straightforward influence on Chinese society. While Tao-ists were highly honored by emperors, especially in Hang and Tang Dynasties that are considered as the golden age of Chinese culture, Taoists were condemned by literati-officials, usually the followers of Confucianism. In Lao tzu and Chuang tzu, the paradoxical strength of passivity and the power of compliance are the central topics. Based on the descriptions of Lao tzu and Chuang tzu, it can be clearly seen that the society at that time (the Warring States Period, 475–221BC) fell into great disorder and confusion

due to the condition that China was divided into competing states and involved in power struggles (Cleary1991). Lao Tzu and Chuang Tzu thus wrote and taught their followers the way to restore peace and freedom to the society. Taoists then further advocated a doctrine of liberation through control by means of noninterference and through tran-scendence by mental regimens (Verellen 1995). The lib-eration from epistemological and social constraints then turned into a form of immoralism. The ethical characters (e.g. jen, chung, shu, hsin, and yi) which were honored by Confucians were no longer the focus of the Taoism.

Characteristics of the Confucian Thought

The terms ‘‘ethics’’ and ‘‘morality’’ are very close to the way (tao) and virtue (te) in Chinese. While way (tao) is close to ‘‘truth’’ in Western philosophy, virtue (te) is a cognate of the word ‘‘get,’’ the expanded meaning of which is ‘‘forthright heart’’ in ancient China (Lau 1992, p. xi). Confucius said, ‘‘He has not lived in vain who dies in the evening, having been told about the way in the morning’’ (The Analects, IV/8), and ‘‘I set my heart on the way, based


myself on virtue, lean upon benevolence for support and take my recreation in the arts’’ (The Analects, VII/6). Thus, the terms tao and te must have developed as moral terms in the Confucius’ time and have become something for cul-tivation, which at the same time enables a gentlemen to turn himself into a good leader.

In order to implement the ideal of tao and te, Confucius taught his disciples to practice more moralities. Among them, benevolence (jen) is the most important one a gen-tleman should possess. The term jen means ‘‘to love your people’’ (The Analects, XII/22) and the central moralities of Confucius are the practice of benevolence. Within Confucian benevolence, loyalty (chung) and magnimity (shu) are the core concepts. In his explanation of the teaching of the Way, Confucius said, ‘‘Ts’an! There is one single threat binding my way together’’ (The Analects, IV/ 15), and Ts’an added ‘‘The way of the Master consists in loyalty and magnanimity. That is all’’ (The Analects, IV/ 15). The meaning of chung is thus close to doing one’s best, while shu implies consideration and reciprocation of others’ feeling. When a student asked, ‘‘Is there a single word which can be guide to conduct throughout one’s life?’’ the master replied, ‘‘It is perhaps the word ‘shu’. Do not impose on others what you yourself do not desire’’ (The Analects, XV/24). Then, shu indicates self-examination before doing benevolence. The ethics of loyalty and mag-nanimity play an important role in the classical Confucian philosophy, as well as influence behaviors in traditional and modern Chinese organizations. The other two major Confucian ethics are promise (hsin) and righteousness (yi). Hsin in English means promise, trust, or plain statement of fact. As for yi, it is generally the opposite of ‘‘profit’’ or ‘‘gain.’’ Regarding the morality of righteousness, Confu-cius and MenConfu-cius were both opposed to the excessive desire for profit and gain. Confucius said, ‘‘The gentleman is versed in what is righteous. The small man is versed in what is profitable’’ (The Analects, IV/16); and Mencius said, ‘‘Why must your Majesty use that word ‘profit’? What I am provided with, are counsels to benevolence and righteousness’’ (Mencius, Book I, Part I, Chapter I). It is clear, then, chung, shu, hsin, and yi take the central position in Confucian ethics. Finally, all Confucian moralities are represented and regulated by decorum (li), implying that the body of norms, rites, and regulations governs action in every respect of dairy life (Lau1992).

With regard to governance in the Confucian thought, the ruler (or king) obeys his mandate and plays his role. He does not have the right to rule, but a command (ming) to order the ritual system (Hansen 1992). This ritual role is given by the command of heaven (t’ien). The ruler triggers the ritual structure and concerns the structural conformity with heaven because he is the liaison between heaven and human society. Moreover, the ruler is responsible for

operating the ritual system smoothly and establishing an example of decorum in model social behavior. In Chi K’ang Tzu’s inquiry about government (cheng), Confucius answered, ‘‘Government is being correct. If you give a lead in being correct, who would dare to be incorrect?’’ (The Analects, XII/17).

Confucius preferred education and was opposed to using coercion to get ritual order and social behavior (Hansen

1992). ‘‘Guide the people by coercion, keep them in line with punishments and the common people will stay out of trouble but will have no sense of shame. Guide them by virtue, keep them in line with the rites, and they will, besides having a sense of shame, reform themselves’’ (The Analects, II/3). Furthermore, ‘‘In administering your gov-ernment, just desire the good yourself and the common people will be good. By nature the gentleman is like wind and the small man like grass. Let the wind sweep over the grass and it is sure to bend’’ (The Analects, XII/19). An ideal leader in Confucian thought, then, is a sage, or a gentleman (chun tzu), the latter of which refers to an official governor or a nobleman in the social stratification before Confucius’ time. However, Confucius taught stu-dents to break the inequality in the ancient social stratifi-cation. The distinction between a ‘‘chun tzu’’ and a ‘‘small man’’ is based on virtue and personal ability, which are the only criteria to choose leaders or governors in the gov-ernment. In other words, instead of position, it is person-ality and morperson-ality which make a ‘‘chun tzu.’’ In order to become a gentleman with complete moral character, one must self-cultivate by a great number of virtues, including, as discussed in the previous sections, jen, li, chung, shu, hsin, and yi.

Characteristics of the Taoist Thought

Originating in more than 2,000 years ago, Taoism and Taoist philosophy is one of the oldest belief systems in the world (Davis2004). The Lao tzu is widely studied in China as the classic in the Taoist thought. In the traditional view, it is written by a sage named Lao Tzu who was an older contemporary of Confucius. The text of the Lao tzu con-sists of two parts, namely the Tao ching (Book of the way) and the Te ching (Book of the virtue). It was also known by the second century AD as Tao te ching, the title of which

indicates tao and te as two major concerns in the Taoist thought. However, the characteristics of tao and te in Taoist thought are not similar to that in Confucian thought. While tao in Confucianism means ‘‘the way of some-thing,’’ tao in Tao te ching and other Taoist classics (e.g. Chuang tzu) means completely independent entity, and replace heaven (t’ien) in all its functions (Lau2001). ‘‘The way begets one; one begets two, two gets three; three gets the myriad creatures.’’ (Tao te ching, XLII/93) and ‘‘It is


the way of heaven to show no favouritism. It is for ever on the side of the good man’’ (Tao te ching, LXXIX/192). Moreover, in the description of the tao, the lower terms or negative forms are preferred. Taking pairs of opposite terms such as something and nothing (wu), nothing is often used to describe the tao. ‘‘The myriad creatures in the world are born from Something, and Something from Nothing’’ (Tao te ching, XL/89); ‘‘[t]hus what we gain is Something, yet it is by virtue of Nothing that this can be put to use’’ (Tao te ching, XI/27a). In the pair of strong and weak, weak is often used to indicate the tao. ‘‘Turning back is how the way moves; Weakness is the means the way employs’’ (Tao te ching, XL/88). Therefore, nothing, weakness, and other lower terms are considered more useful than the higher ones and sum up the way that the tao functions (Lau2001). The weak and the submissive (jou) are the crucial concepts in Taoism because they have the qualities that tao exhibits. ‘‘To see the small is called discernment; to hold fast to the submissive is called strength’’ (Tao te ching, LII/119). The weak and the sub-missive overcome the strong and the hard because ‘‘[…] it does not contend that it is never at fault’’ (Tao te ching, VIII/22). The Taoist value holds fast to the submissive lies in its usefulness as a means to survival.

Concerning governance, Taoism is considered as the art of government (Cheung and Chan 2005). Two of the negative terms, namely without action (wu-wei) and with-out name (wu-ming), are important to the function of leaders and rulers in Taoism (Lau2001). By doing some-thing, other things must be left undone. To say without action at least leaves it unlimited. Thus, ‘‘[t]he way never acts yet nothing is left undone’’ (Tao te ching, XXXVII/81) and ‘‘[w]hoever takes the empire and wishes to do anything to it I see will have no respite’’ (Tao te ching, XXIX/66). The ruler is considered as one part of the nature. He shall model himself on the tao and follow the policy of non-action because his interference will interrupt the balance of the nature. As Lao Tzu said, ‘‘Man models himself on earth, earth on heaven, heaven on tao, and tao on that which is naturally so’’ (Tao te ching, XXV/58) and ‘‘When his task is accomplished and his work done, the people all say it happened to us naturally’’ (Tao te ching, XVII/41), ‘‘natural’’ denotes the opposite term of ‘‘artificial.’’ The ideal state of the Taoist is to keep themselves innocent from knowledge and free from desire (wu-yu), so ‘‘[…] the people of themselves become simple like the uncarved block’’ (Tao te ching, LVII/133). The avoidance of doing anything is the task of a ruler, so that the people will not acquire fresh desires. The uncarved block means a state yet untouched by the artificial intervention of human ingenuity. Thus, ‘‘In governing the people, the sage empties their minds but fills their bellies, weakens their wills but strengthens their bones. He always keeps them innocent of

knowledge and free from desire’’ (Tao te ching, III/9). Being simple and harmony with the tao is the central concept of the Taoist. Living in harmony with the tao follows the law of nature and benefits everyone (Davis


Chuang Tzu is always mentioned with Lao Tzu as the second Taoist master. In Chuang tzu (written by Chuang Tzu), judgments of being right or wrong are always made from different point of view. For instance, Chuang Tzu suggested a higher point of view which is impartial in its attitude toward all possible points of view (Lau 2001). It follows the argument that the worry for the length of life and the fear of death are only from the viewpoint of living. Life may be prolonged by exercising and reaching a free and unfettered state (xiao yao). In describing a man of xiao yao, Chuang Tzu said, ‘‘[i]f one can ride on the reality of heaven and earth, harnessing the expression of the six energies to travel through infinity, then what would one depend on? Therefore complete people have no self, spiritual people have no merit, saintly people have no name’’ (Chuang tzu, Chapter 1, xiao yao). This implies that one’s life is a journey of xiao yao if he is close to the tao. In pursuit of xiao yao, living independently is also the emphasis of Chuang Tzu. ‘‘He was not encouraged even everyone praised him, and he was not discouraged even when everyone denounced him. His determination of the division between inside and outside, his discernment of the boundary between glory and disgrace, only went this far’’ (Chuang tzu, Chapter 1, xiao yao). One should do things he considers to be right, without considering to be praised from others.

Ethical Elements in Chinese and Western Societies

Considering the core elements in Confucianism and Tao-ism, the West has also similar ideas but not identical. For instance, benevolence in English is close to the idea of jen in Chinese, which indicates the personality of kindness and generosity. Righteousness in English is close to the idea of yi in Chinese, referring to a moral of rightness and good-ness. Nonetheless, the major difference may be that qual-ities such as benevolence or righteousness in Western countries are innate, deriving from intrinsic, whereas those qualities in Chinese society are relational. In other words, a person in Chinese society will be considered benevolent or righteous, only when their deeds or behaviors conform to the criteria as a benevolent or righteous person by the society. As for the measures for ethnical elements, the ethical climate questionnaire (ECQ) by Victor and Cullen (1988) is widely applied in research concerning ethical climate in organizations. In ECQ, five types of ethical climate are identified, namely caring, law and code, rules, instrumental, as well as independence. Moreover, these five


types resemble five ethical elements in traditional Chinese ethics. The caring type, concerning persons who always concern for others, is close to benevolence (jen). The law and code type is close to decorum (li), for this ethnical type concerns that employee behavior is regulated by laws and professional codes. The rule type indicates a climate in which employees follow rules and procedures in organi-zations, and is therefore close to Chinese loyalty (chung). The instrumental type refers to an organizational climate in which personal interests are highly emphasized regardless of the consequences; therefore, this type is close to Chinese profit (li). Finally, the independence type is close to Chi-nese virtue (te), because employees in this type of ethical climate should act following their moral belief. Even though these types seem quite close to Chinese ethical elements, yet they cannot fully capture the ideas of Chinese traditional ethics, which in turn give the rationale for developing a new measure for Confucian and Taoist work value in this study.

Confucianism, Taoism, and Transformational Leadership

Previous research justifies the need to understand the ethics of Chinese leadership by Chinese managers’ involvement in global business (Chia 2003; Hofstede et al. 2002). The emphasis on leadership by ethical virtues characterizes the Chinese leadership style as theocracy, which emphasizes the practice of a leader (Cheung and Chan2005). Among con-temporary theories of leadership, Chinese traditional thought considerably fits transformational leadership behavior (Avolio et al.1999; Bass 1985; Podsakoff et al.

1996), the paradigm of which is at present mostly wide accepted (Rubin et al.2005). Transformational leadership represents an active form of leadership, in which leaders are closely engaged with subordinates, motivating them to perform beyond the transactional contracts. Moreover, leaders tend to give an impression that they have the com-petence and vision to achieve success. Followers then respond with enthusiasm and commitment to the group’s objective (Keller,2006). Since the style of leadership rep-resents the cultural characteristics of a leader’s nationality, transformational leadership is expected to function differ-ently under different culture. One of the important features in a transformational culture is that Chinese leaders tend to create an atmosphere of ‘‘family,’’ in which harmony and loyalty are emphasized. Moreover, Chinese followers are not encouraged to participate in the decision-making pro-cess, which indicates a challenge to leaders’ authority and consequently spoils the harmony in organizations. Trans-formational leaders in the West, in addition to being inspiring and supportive, tend to have a relatively closer

relationship with their followers and encourage followers to participate in the management process (Smith and Peterson

1988; Hofstede1980). From the perspective of followers, a qualified Chinese transformational leader tends to fit the characteristics as a good or effective leader, whereas a qualified Western transformational leader depends on the outcomes of organizational performance (Va¨likangas and Okumura1997). In spite of these cultural differences, the components of transformational leadership generally involve core transformational leader behavior, high-perfor-mance expectations, intellectual stimulation, and supportive leader behavior (MacKenzie et al. 2001; Podsakoff et al.

1996), which will be discussed in the following sections. Previous meta-analyses (DeGroot et al. 2000; Lowe et al. 1996) confirm the positive influence of transforma-tional leadership on performance, for transformatransforma-tional leaders create an inspired, committed, and cohesive culture in organizations (Bass et al. 2003). The emergence of transformational leadership consists of a context, in which leaders and followers interact, and on the interplay of leadership and culture (Bass et al.2003; MacKenzie et al.

2001; Podsakoff et al. 1996). In addition, leaders usually create a culture, in which reinforced behaviors are expressed. The norms and values of an organization’s culture are taught by leaders and eventually adopted by all subordinates (Bass and Avolio 1993a). In a transforma-tional culture, ‘‘there is generally a sense of purpose and a feeling of family,’’ because ‘‘leaders and followers share mutual interests and a sense of shared fates and interde-pendence’’ (Bass and Avolio 1993b, p. 116). The shared values and long-term commitments include individuals’ pursuit of their own rewards, as both sides of leaders and subordinates go beyond their self-interest to achieve the goals of organizations. In such culture, coordination and harmony between leaders and followers are emphasized because leaders feel obligated to perform as the roles of mentors, coaches, and role models.

Confucian Work Value and Transformational Leadership

The primary component of transformational leadership is core transformational leader behavior, in which leaders are admired, respected, and trusted by their followers, for they are the role models performing ethical behaviors. Organi-zational ethics is cultivated when leaders exert the core transformational leader behavior and give long-term com-mitment into an organization’s ethical system (Carlson and Perrewe 1995). Transformational leadership involves not only the moral dignity of leaders, but also collective efforts, which infuse ethical standards into followers. In these processes, both leaders and followers will be trans-formed (Yukl2002).


The spirit of the Confucian thought lies in the ethics (Qian 1976). Among those ethical characters similar to ethical culture containing ‘‘perceptions that are psycho-logically meaningful and moral descriptions that people agree characterized system practice and procedures’’ (Schneider1975, p. 474), Confucius firstly emphasized the importance of benevolence (jen), righteousness (yi), deco-rum (li), and loyalty (chung). Additionally, these characters are important to a healthy business environment, although they may be presented in a different form. For example, benevolence (jen) in Confucian ethics resembles the caring type of ethics in Schneider (1975) and Victor and Cullen (1988), loyalty (chung) the rules type of ethics, and virtue (te) the independence type of ethics (Lin and Ho 2009). The idealized paragon in Confucian ethics is a gentleman (chun tzu), who would be rather poor with honor than rich with shame. The joy and satisfaction of a gentleman in tra-ditional Confucianism derives not from the gains or profits, but from self-fulfillment and his peace of mind. In the Chinese society, a gentlemanly leader is highly honored. Based on the available literature and logic above, this study proposes: Hypothesis 1 Confucian work value is positively asso-ciated with ore transformational leader behavior.

The second component of transformational leadership is high-performance expectations, in which followers are inspired to perform beyond normal expectations to achieve the appealing future through enthusiasm and optimism (MacKenzie et al. 2001). Moreover, high-performance expectations represent a feeling which is infused with energy because transformational leaders energize followers by treating them not as detachable human resource but as ‘‘respected members of a cohesive social system’’ (Mintzberg 1998, p. 145). Such culture, purposes, vision, and values are taught without emphasizing the formal agreements and controls. Trust and harmony are internal-ized rather than depend on transactional contracts. The feeling of harmony and family-like relationship is stressed by the Confucians. One of the most important Confucian classics, The Great Learning (translate by Dr. Yu-tang Lin

1938), said, ‘‘[t]hose who wishes to order their national life, would first set about regulation their family life. Those who wishes to regulate their family life would set about cultivating their personal life,’’ and ‘‘There is no one who fails in teaching the members of his own family and yet is capable of teaching others outside the family. Therefore the gentleman spreads his culture to the entire nation by merely remaining at home. The teaching of filial piety is a prep-aration for serving the ruler of the state; the teaching of respect to one’s elder brothers is a preparation for serving all the elders of the country; and the teaching of kindness in parents is a training for ruling over the people’’. Thus, the

feature of Chinese individual–family–society relationship is in a sense of harmony. A leader as a parent in family is highly honored in Chinese society. In view of the available literature and above logic, this study proposes:

Hypothesis 2 Confucian work value is positively asso-ciated with leader high performance expectations.

Taoist Work Value and Transformational Leadership

The third component of transformational leadership is intellectual stimulation, in which leaders stimulate crea-tivity of their followers and encourage them to question the methods they used to improve upon them (MacKenzie et al. 2001). In intellectual stimulation, Taoists always transform their followers with true wisdom of nature and the tao. At the same time, they oppose benevolence, righteousness, and decorum in the Confucian teaching. The fundamental concept is that when human beings original nature is not yet spoiled, they act in accordance with the tao and entirely obey their intuition, which is unconsciously good. The tao, nevertheless, starts to fall, as the artificial knowledge develops and the consciousness of virtues is established by the promotions and punishments of the government. With the teaching of virtues comes pretense and with pretense comes chaos. Hence, ‘‘[h]eaven and earth are ruthless’’ and ‘‘[t]he sage is ruthless’’ (Tao te ching, V/14). In other words, the tao is completely impersonal and impartial in its workings. Tao also resem-bles the scientist’s concept of impersonal law and indi-viduals are no exception. Therefore, true virtues and wisdom (or the tao) transcend the Confucian partial love of one’s relatives (Lin1948).

Since the Taoist thought prefers lower terms or negative forms, tao is the mother of all things; it cannot be named; it does not act; it is immanent and impartial; and it functions in cycles by the principle of reversion, which causes the leveling of all opposites, making hardness and softness, success and failure, and strength and weakness alike. The most important characteristics of Taoist are non-conten-tion, modesty, submissive, and seeking the lower posinon-conten-tion, of which water represents gentleness, wisdom, and tran-quility of human spirit (Lin1948). This water-like wisdom is then further expanded into the concept of learning, ‘‘[e]xterminate learning and there will no longer worries’’ (Tao te ching, XX/44) and ‘‘[i]n the pursuit of learning one knows more every day; in the pursuit of the tao one does less every day’’ because ‘‘[o]ne does less and less until one does nothing at all, and when one does nothing at all there is nothing that is undone’’ (Tao te ching, XLVIII/108). The doctrine of nothing and inaction seems difficult to be understood. In Taoism, it means making use of the natural force to achieve one’s goal with the greatest economy. In


the light of science, pursuit of learning is interpreted as the method of addition and pursuit of the tao as the method of subtraction. Both addition and subtraction provide a wider range of alternatives while making decisions. According to the above logic, this study proposes:

Hypothesis 3 Taoist work value is positively associated with leader intellectual stimulation.

Study 1

Sample, Procedure, and Measure

In Study 1, two samples are used to develop Confucian work values scale. One of them consists of 112 Chinese managers and employees who are enrolled in the part-time Master of Business Administration (MBA) at the National Kaohsiung University of Applied Sciences (KUAS) in Taiwan. 70 % of the respondents have more than 5 years of full-time work experience, and 40 % of them are managers. The study co-author (holds a Ph.D in Chinese philosophy and traditional thought) presents the respondents with broad concepts of values and examples of Confucianism and Taoism. Each respondent is asked to generate self-reported items on values which would describe a worker with a high-level of Chinese traditional values. Based on my judgment, three item types are deleted: overlapping items, items with unclear meaning; and items which do not match the definition of Confucian and Taoist values. We finally extract 16 items, making a 20-item preliminary measure of the Confucian and Taoist work value.

These 20 items are then tested on an independent sample of 250 workers with at least 3 years of work experience in China (34 %), Hong Kong (17 %), and Taiwan (49 %) by using a 5-point Likert scale, ranging from 1 (strongly dis-agree) to 5 (strongly dis-agree). The China sample involves workers from Peking, Shanghai, Canton (coastal areas in China), Szechwan, and Sian (inland areas in China). In order to assess the Confucian and Taoist value scale, the item-total score correlation is firstly calculated. Moreover, four items are deleted due to low-item total score correlation (less than .50), and an exploratory factor analysis is conducted using the maximum likelihood method with varimax rotation on the remaining 18 items. This analysis shows a two-factor solution with 10 and eight items loading on each dimension. From a detailed look at the factor loading of these two fac-tors, we conduct a 6-item Confucian work value scale and a 6-item Taoist work value scale by deleting six items with low-factor loadings (less than .50).

This 12-item Confucian and Taoist work values scale is then applied to the third sample, which includes 280 supervisors enrolled in the part-time MBA at KUAS in

Taiwan, and which will be surveyed in Study 2. This study conducts a confirmatory factor analysis of 12 items using LISREL (Jo¨reskog and So¨rbom 1993) to analyze its covariance matrix. With the items loading on their respective dimensions, the model V2is 101.51 (d.f. = 53). The standardized RMR is 0.07, CFI 0.95, and TLI 0.92. All model fit indices indicate that the two-factor model fits the data reasonably well. Table 1 shows the results of the confirmatory factor analysis. It should be also noted that items in Table 1 are translated into Chinese. In order to check its accuracy, these items are translated back into English by a different person. Necessary modifications are made for the sake of clarity and consistency between translations.

Dimensions of Confucian work value and Taoist work value are mildly correlated (r = 0.25), indicating that they are two related but not identical dimensions. It is argued that Confucian and Taoist work values are positively related to the Chinese traditionality (e.g. Ralston et al.

1992; Farh et al. 1997). Described by Yang (1989) and Farh et al. (1997), respect for authority is a key aspect of individual traditionality for Chinese people. Theoretically, people with high Confucian and Taoist values are consid-ered to have high degree of Chinese traditionality. In order to show the predictive validity of the Confucian and Taoist values construct, we conduct a hierarchical linear regres-sion of the Confucian and Taoist values on Chinese tradi-tionality. The rating of Confucian and Taoist values are significant predictors of traditionality trend, after control-ling for demographic variables and personality traits (b = .24, p \ .01; DR2= .08, p \ .01).

Table 1 Confirmatory factor analysis for the Chinese Confucian and Taoist work values scale

1. The Confucian work value

a. I never forget my goals even in the face of adversity b. I avoid offending others

c. I think that harmony should be highly valued in workplace, in other words, conflict should be avoided

d. I am loyal to the organization e. I am always kind to my colleagues f. I will forgive others who make mistakes 2. The Taoist work value

a. I am not desperate for a raise or promotion to obtain material enjoyment

b. I respect individual differences among my subordinates c. I am willing to do what my superior tells me to do without arguing (submissive)

d. I do not compete with others (weak)

e. I give subordinates autonomy to do their work without intervention (wu-wei)


Study 2

The purpose of Study 2 is to test the hypotheses concerning Confucian and Taoist work values measure.


Sample and Procedure

The sample of this study comprised 280 managers enrolled in the part-time MBA program at KUAS (also participated in Study 1) and their 1,390 subordinates in Taiwan. While each of these 280 leaders is asked to rate the measures of the Confucian and Taoist work values and the personality traits, each subordinate is asked to rate the focal leader’s leadership behavior, which means each subordinate rates his/her direct leader only. Leaders who satisfy both criteria below will be included in Study 2: (1) completing measures of Confucian and Taoist work value and personality traits and (2) having at least two subordinates completing the leadership measures. Of 280 participating leaders, 225 satisfy both criteria. The leaders averaged 40.5 years in age and 10.9 years in tenure. 65 % are male, all with a college or higher educational background. A total of 720 subordi-nates for 3.20 respondents per leader (min = 2; max = 9) in average is included in this study. Our purpose is to aggregate subordinate ratings for each leader. To check whether the subordinates see the same thing, we compute a measure of with-in group agreement (rwg) for each com-ponent of transformational leadership scale (four compo-nents in MLQ-Form 5X). With regard to each leader’s transformational leadership dimensions, the mean rwg ranges from .91 to .95, suggesting that aggregation of the group level is valid (James et al.1984).


Confucian and Taoist Work Values

Leader’s Confucian and Taoist work values are measured by the 12-item scale described in Study 1.

Transformational Leadership

The measure of 20-item transformational leadership scale used in this study is based on Bass and colleagues’ 5-point Likert Multifactor Leadership Questionnaire (MLQ-Form 5X, MacKenzie et al.2001; Podsakoff et al.1996). General components include core transformational leader behavior (e.g. ‘‘Articulating a vision’’), high performance expecta-tions (e.g. ‘‘Insists on only the best performance’’), intel-lectual stimulation (e.g. ‘‘Challenges me to think about old problems in new ways’’), and supportive leader behavior

(e.g. ‘‘Considers my personal feeling before acting’’). The Cronbach’s alpha for each component is from .85 to .91.

Demographic and Control Variables

Three leader’s demographic attributes are used in this study. Age is measured by seven categories (i.e., 1 = under 25, 2 = 26–30, 3 = 31–35, 4 = 36–40, 5 = 41–45, 6 = 46–50, 7 = above 50). In gender, 1 represents desig-nating male and 0 desigdesig-nating female. Tenure is measured in years.

Personality Traits

In recent research of leadership, leader’s personality traits are found to be predictive in transformational leadership behavior (e.g. Bono and Judge2004; Judge and Bono2000; Rubin et al. 2005). This study uses NEO-FFI (Costa and McCrae 1992) to measure the well-known five-factor model personality traits (FFM), which includes five com-ponents: neuroticism, the tendency to experience negative effects, such as fear, sadness, anger, guilt, and disturb; extraversion, the tendency to be assertive, active, talkative, energetic, and optimistic; openness to experience, repre-sentation of individual’s tendency to be creative, imagi-native, resourceful, and insightful; agreeableness, a tendency to be sympathetic, cooperative, trusting, and gentle; and conscientiousness, the tendency to have a strong sense of direction and hard-working to achieve goals (Bono and Judge 2004; Bruck and Allen2003; Costa and McCrae 1992). There are 12 items per subsection and 60 items in total. The Cronbach’s alpha for each component is from .74 to .88.


Table2shows the means, standard deviations, reliabilities, and correlations of variables used in Study 2, which indi-cates that the internal consistency reliabilities for all multi-item scales are reasonable.

We examine the effects of Confucian and Taoist work values on transformational leadership behavior by regressing transformational leadership variables on the two value variables, along with leaders’ demographics and personality traits. This analysis allows me to examine the unique effects of Confucian and Taoist work values when controlling other variables. Step 1 of Table 3 shows that personality variables have significant influence on trans-formational leadership behavior. Four of the five FFM variables are significant in this analysis (i.e. extraversion on core transformational leader behavior and high perfor-mance expectations; openness on intellectual stimulation


Table 2 Means, standard deviations, reliabilities, and correlations of variables 1 2 34 56 78 9 1 0 1 1 1 2 1 3 1 4 1. Core transformational leader behavior (.86) 2. High performance expectation .48** (.85) 3. Intellectual stimulation .56** .44** (.91) 4. Supportive leader behavior .47** .38** .43** (.88) 5. Confucian work value .28** .36** .18* .13 (.86) 6. Taoist work value .20* .12 .28** .18* .25** (.81) 7. Neuroticism .01 .00 -.07 .01 -.07 -.23** (.88) 8. Extraversion .16* .15* .16* .14* .13 .00 -.14* (.81) 9. Openness .10 .08 .15* .08 .12 .22** -.11 .14 (.74) 10. Agreeableness .15* .17* .10 .14* .53** .33** -.10* .09 .12 (.74) 11. Conscientiousness .07 .04 .02 .25** .49** .12 -.20* .23** .14* .15* (.85) 12. Age .17* .01 .03 .01 .25** .26** .22** .07 .07 .13* .13* NA 13. Gender .07 .00 .05 .06 .15* .01 .22** .03 .04 .07 .04 .02 NA 14. Tenure .03 .04 .14* .10 .00 .01 .06 .06 .13* .09 .08 .07 .09 NA Mean 3.89 4.11 3.99 3.94 4.07 3.62 3.01 3.14 3.48 3.75 3.99 4.06 .65 10.8 SD .61 .76 .65 .62 .40 .49 .83 .77 .64 .57 .47 1.31 .48 4.55 N = 225. Numbers in parentheses represent coefficient alphas * p \ .05; ** p \ .01


and supportive leader behavior; agreeableness on core transformational leader behavior and intellectual stimula-tion; conscientiousness on supportive leader behavior). Demographic variables, on the contrary, have less influ-ence on transformational leadership behavior. Only two of the combinations are significant (i.e. age on core transfor-mational leader behavior and tenure on intellectual stimulation).

As it can be seen by the DR2associated with Step 2 of each regression equation, Confucian and Taoist work value still has significant effect on three of the four transforma-tional leadership behaviors, after controlling leaders’ demographic and personality trait variables. Among the two value predictors, while Confucian work value is the most consistent predictor of core transformational leader behavior and high performance expectations, Taoist work value the most consistent predictor of intellectual stimu-lation. Nevertheless, neither Confucian nor Taoist work value has significant effect on supportive leader behavior. Details of the main effects are shown in Table3.


The Confucian and Taoist work value scale developed in Study 1 has some striking results when it is used to survey leaders and subordinates in Study 2. The measure contains two parts. While one with Confucian work value empha-sizes more on Confucian ethics, that is, benevolence, righteousness, decorum, and seeking harmony in hierar-chical social structure, and the other with Taoist work

value emphasizes more Taoist values, that is, on non-contention, modesty, submissive, and seeking the lower position. Even based on the same ancient indigenous thought, the development of Confucian and Taoist thoughts and the process of achieving one’s ultimate spiritual state are somewhat different. Taoists began with a naturalistic focus on a socially learned skill toward relativism, whereas Confucians reacted as cultural conservatives, preferring old doctrines, and conventional standards. Moreover, both of them have a close affinity in history and tradition, and are more interested in transmitting than creating (Hansen

1992). Thus, the traditional moral standards, such as jen, yi, and li are highly honored by them. However, Taoists are inclined to a different direction from Confucians. An interesting example is the difference between Confucian harmony and Taoist modesty. Confucians always have a strong tie to their organization based on the expectation of different roles in social traditions, such as wu-lun (five formal hierarchical relationships in Confucian thought) or values approved through socialized role concerns (Farh et al. 1997). Seeking harmony in the hierarchical social structure is necessary to perform each role capably in the society and respecting the authority is the key element to maintain interpersonal harmony in the workplace (Yang

1989). Taoists, on the contrary, have a weak tie to the organization and society, partly because of their naturalism and relativism, the former of which indicates following the rules of nature without putting emphasis on artificial affection. In Taoist philosophy, being modest derives from the realization that oneself is nothing, while the tao is everything. Following this selfless perspective, the Table 3 Regression analysis of

effects of Confucian and Taoist work values on transformational leadership, controlling for individual characteristics and personality traits

N = 225. Standardized regression coefficients reported * p \ 0.05; ** p \ 0.01 (two-tailed tested) Core transformational leader behavior High performance expectation Intellectual stimulation Supportive leader behavior Step 1 Age .19* -.02 .03 -.07 Gender -.05 .09 .08 .11 Tenure .12 .10 .18* .10 Neuroticism .12 -.02 -.08 .08 Extraversion .28** .29** .12 -.10 Openness .09 .13 .33** .19* Agreeableness .27** .10 .20* .09 Conscientiousness .15 -.05 .05 .23** 4R2 .26** .19** .25** .20** Step 2 Confucian work value .32** .33** .13 .12

Taoist work value .09 .11 .28** .10

4R2 .08** .07** .08** .03


occurrence of success and failure, of fortune and misfor-tune, is therefore considered superficial and unimportant (Lin1948).

The results of Study 2, as have predicted, show that cultural values have strong influence on leaders’ transfor-mational leadership behavior. On the one hand, Confucian work value has positive influence on core transformational leader behavior and high performance expectations. Con-fucian leaders tend to transform not merely themselves into a moral model, a gentleman, but also their followers by means of emphasizing the importance of benevolence. Taoist work value, on the other hand, has positive influence on leader’s intellectual stimulation. Taoist leaders attempt to stimulate their followers’ intellectual by pursuing true wisdom and the tao. It should be also noted that few other consistencies, such as the effect of Confucianism and Taoism on supportive leader behavior, the fourth compo-nent of transformational leadership, are not observed. One of the possible explanations is that, supportive leader behavior of a manager, according to MacKenzie et al. (2001), can be indicated that ‘‘he or she respects subordi-nates and oversees their individual development with concern about their personal feelings and needs’’ (p. 119). Within a transformational culture, each individual’s needs and interests are taken into consideration because ‘‘indi-vidual differences are recognized by members’’ (Avolio and Bass1995, p. 211). This component is related to the cultural dimension of individualism versus collectivism (Hofstede 1980, 1996). A leader with high supportive leader behavior is associated with a high tendency of individualism, suggesting that everyone in the society is expected to look after themselves and their self-interests (Hofstede 2007). In the societies of China, Taiwan, and Hong Kong, however, all scores are low in individualism (Hofstede 2007; Yeh and Lawrence 1995) since Chinese traditional thought does not pay much attention to values of individualism.

Concerning non-individualism, Confucianism and Tao-ism are different in their concepts. Consistent with the Chinese traditions of collectivism, Confucians have a ten-dency that people are integrated into strong and cohesive groups (Hofstede 2007), and a tendency to use personal criteria and relationships as a basis for decision and action (Farh et al.1997). These traditions originate mainly from the concept of decorum (li) which implies the body of norms, rites, and regulations governing action in every respect of daily life (Lin and Ho2009). The Chinese term (decorum) derives from the ancient word , in which denotes two strings of jades in a container and

denotes an ancient vessel for ritual use. Thus, means offering jades and meats in containers in an altar for gods. In other words, the original meaning of is

honoring gods and is afterward extended to a gentleman who should conform to norms and codes (Wong 1993). One of the most important Confucian classics, The Liki (means ‘‘The Book of Li’’, translate by Dr. Yu-tang Lin

1938) said, ‘‘[l]i, or the principle of social order, prevents the rise of moral or social chaos as a dam prevents flood’’ because ‘‘[t]he li concerning a court audience are for the purpose of defining the proper relationships between the rulers and the ministers. The li of exchange of visits by diplomats are for the purpose of maintaining mutual respect among the rulers of the different states. The li of funeral ceremonies and sacrifice are for the purpose of showing the gratitude of children and subject’’. Thus, the Confucian wu-lun and collectivism derive from the concept of li, which prevents the tendency of individualism.

The Taoist non-individualism derives from a different logical root. In Taoist philosophy, the definite function of tao is that there is a silent process of changes going round all the time and an eternal cycle of activity and of things reverting to the opposites. The silent tao becomes the model for the Taoists who wish to keep their original nature. Hence, the emphasis of not claiming credit for one’s actions and forgetting one’s individuality reflects the doctrines of non-action, non-contention, as well as calm and peace. This emancipation of individualism and self-interests is based on the realization that an individual self is nothing and the great tao is everything. Such non-indi-vidualism tendency comes from one’s consciousness of selflessness, instead of from a tendency of collectivism.

Concerning contributions, this study firstly adopts an iterative procedure of item generation and establishes the Chinese Confucian and Taoist work value scale to examine their different effect on transformational leadership behavior. Although the Chinese leadership in the sample is influenced by the variable of demographic and personality, the traditional values still significantly affect Chinese lea-der’s behavior. Second, this study represents a new style of Chinese value and culture research. It is common for cross-cultural researchers to measure cross-cultural values by individ-ual’s nationality and conduct comparative studies accord-ing to national culture differences. For example, Chinese society is usually considered to have a strong tendency to develop interpersonal relationship and maintain group harmony. Referred to as long-term orientation (Franke et al. 1991), collectivism (Hofstede 1980), or Confucian work dynamism (Bond et al.1987; Ralston et al.1992), this tendency is captured by several essences of Confucianism, such as benevolence, righteousness, decorum, and seeking harmony in hierarchical social structure. Therefore, the Confucian ethics and values seem to dominate all cross-cultural studies as comparing Chinese management with western countries (Hofstede2007). Nevertheless, this study explores variations in the Chinese traditional values of


Confucianism and Taoism and elucidates different views that Chinese people have about the world around them. Researchers thus can compare people who accept a given set of values with those who approve contrasting values in the Chinese society.

Yet, limitations still exist in this study. First, the Con-fucian value is important in affecting individual behavior and national culture in the Pacific Rim. Is the Taoist value also influential in these Asia countries? Second, will globalization and economic growth in China, Taiwan, and Hong Kong decrease the impact of traditional values? There is no doubt that social change and economic growth will induce changes in interpersonal and individual–orga-nization relationships, and these changes also reflect in different style of leadership behavior. Only when those Chinese traditional values are understood first, one can understand these changes better.


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Table 1 Confirmatory factor analysis for the Chinese Confucian and Taoist work values scale

Table 1

Confirmatory factor analysis for the Chinese Confucian and Taoist work values scale p.7



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