From Factory Floor to Digital Innovation: Contrasting Applications of Confucian Principles in Chinese Manufacturing and IT Sectors

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Salinee Chaiwattanaporn
Prasutr Luangsmarnkul
Ratana Palasak

Abstract

This study adopted a comparative approach to examine the application of Confucian principles in China’s manufacturing and technology sectors, with the aim of understanding how Confucianism was practiced within modern industries characterized by contrasting organizational structures. Data were collected from 278 junior- and middle-level managers in small and medium-sized enterprises (SMEs), comprising 148 respondents from the manufacturing sector and 130 from the technology sector, located in Beijing, Shanghai, and Guangzhou. The data were analyzed using t-tests and Partial Least Squares Structural Equation Modeling (PLS-SEM).  The results indicate that the manufacturing sector placed significantly greater emphasis on behavioral relationships (BR) and ethical leadership (EL) than the technology sector (p < 0.05), while both sectors attached a similar level of importance to social harmony (SH) (p = 0.127). However, in-depth interviews revealed clear differences in interpretation: the manufacturing sector emphasized conflict avoidance to maintain stability, whereas the technology sector valued openness to diverse opinions to foster innovation. Overall, the findings demonstrated that all three dimensions of Confucian principles had significant positive effects on business success (p < .001), with BR showing the strongest influence (β = 0.41), followed by EL (β = 0.39) and SH (β = 0.37) The model explained 60.6-68.4% of the variance in business success (R² = 0.606-0.684) on business performance, business sustainability, and competitive advantage." These results suggested that Confucian principles are not an obstacle to modern business management rather, they can be flexibly applied and adapted according to the specific context of each industry.

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