George Kencana

1
ORGANIZATIONAL CULTURE, SOCIAL EMBEDDEDNESS, AND KNOWLEDGE LOSS:
A CASE STUDY OF CHINA CENTRAL TELEVISION (CCTV)

George Surya Kencana PhD(1)
GEORGE & PARTNER CONSULTING
Singapore
Email: gsk062002@yahoo.com.sg

Following the organic approach to knowledge management, this paper argues for
a clear focus on people and organizational culture in knowledge management
practice. With a case study of China Central Television (CCTV), this paper
analyzes the importance and difference of knowledge management in the
broadcasting industry under Chinese context. By highlighting the social
embeddedness of organizational culture, the author intends to analyze how
traditional hierarchical ideology and management style, guanxi oriented culture
and Chinese communication styles have resulted in knowledge loss in this
particular organization during its transitional period.

1. Introduction

The term of knowledge management itself was introduced into popular discourse during
the early 1990s, however, it is still uncertain if there is one commonly accepted
definition of knowledge management. A huge amount of research has been done to
disclose the essence of knowledge and knowledge management. Among them, De Long
and Fahey (2000) regarded knowledge as a product of human reflection and experience
which is dependent on context and a resource that is always located in an individual or a
collective, or embedded in a routine or process. From these and many other similar
analyses on knowledge, it is clear that two elements are highlighted to make the
difference: people and context (Davenport, 1997; Blackler, 1995; De Long & Fahey,
2000; Barth, 2002).

From what we understand about organizational learning and previous experience
in knowledge management, organizational culture background and social settings of an
organization seem to be the most intangible but influential factors of this process.
Following organic approaches to knowledge management, this paper argues that in
knowledge management practices, a focus on human connectivity is necessary in order
to get an understanding of the environment and a comprehensive picture of how things
are done naturally in a particular society or organization(2). In practice, the following
listed obstacles (Table 1) to knowledge management implementation provides further
evidence that knowledge management practice, to a great extent, is related to
organizational culture. Most importantly, we could also find evidence that the
organizational cultures role in knowledge management has been undervalued.


Organizational Culture, Social Embeddedness, and Knowledge Loss
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Table 1. Obstacles for Knowledge Management Implementation (Ram, 2002) (3)
KM implementation obstacles %
Employees have no time for KM 41%
Current culture does not encourage sharing 36.6%
Lack of understanding of KM and benefits 29.5%
Inability to measure financial benefits of KM 24.5%
Lack of skill in KM techniques 22.7%
Organizations processes are not designed for KM 22.2%
Lack of funding for KM 21.8%
Lack of incentives, rewards to share 19.9%
Have not yet begun implementing KM 18.7%
Lack of appropriate technology 17.4%
Lack of commitment from 3.9%
No challenges encountered 4.3%

The most cited obstacle for knowledge management implementation is that "employees
have no time for knowledge management. As we have discussed previously, the most
important aspect of knowledge management practice is deeply buried in the daily
working routine, and human resource management practice. When people say they
have no time for knowledge management, it means that they still do not know what
knowledge management is really about. The second most cited obstacle is that "current
culture does not encourage sharing, which directly points out the importance of culture
in knowledge management practice. The third obstacle is related to the first one in
terms of understanding and attitudes to knowledge management, which is also inevitably
involved with organizational culture and most of the times, national culture and ideology
as well. The number six most cited obstacle refers to organizational processes, as one of
the important aspects of the "way things are done here is actually a major part of the
organizations culture.
To sum up, the obstacles to knowledge management implementation are very
much related to organizational culture. The main aspect involves peoples understanding
and attitudes to knowledge management, the traditional way of daily work practice and
the way people are treated in an organization. All of these will reflect on the
implementation and effect of knowledge management eventually.

2. Knowledge Management and CCTV Case
Just as some companies like Sun are very good in knowledge management practice, but
dont think they are actually doing anything called "knowledge management, there are
other companies like China Central Television who are experiencing very serious harm to
knowledge management without being aware of it. Moreover, dominating position in
domestic market and huge advertising profits seems to gloss over the potential problems
in the CCTV.
Like argued before in this paper, organizational culture as a main influence to
knowledge management practice is so intangible and embedded in the traditional
management style and routine that it is always the most easily forgotten and ignored
factor. Due to the mission transfer, there are a series of changes taking place in China
Central Television(4). Like many other state-owned enterprises in China, to a great
extent, the challenges confronting CCTV on the way from a government ruling tool to a
modern enterprise are not infrastructural or financial, but the ideological one which has
influence on every aspect of the daily managerial practice. So far, infrastructural
changes do not seem so painful compare to traditional management cultural and
ideological changes.
According to Therivel (1995, pp. 73-92), a farming society with a stable feudal
structure would be one where tradition counts more than novelty. The reform of state-
owned enterprises in China was introduced from 1979. Even after more than 20 years,
change in Chinese campaign for "modernization is still not necessarily a process of
George Kencana
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change in Chinese peoples fundamental mentality or behavior. State-owned enterprises
and organizations still need a break through from the passive, to-be-planned ideology.
In terms of knowledge management, it is not that there is no IT platform to support it,
most of the time; it is the invisible traditional culture and ideology that are the
"stumbling blocks.
This paper will analyze the relationship between Knowledge loss, organizational
culture and social environment. By knowledge loss, the author indicates failure or
ineffectiveness in cultivating, capturing, sharing and sustaining knowledge and
knowledge resources. With CCTV case, the author intends to unfurl some potential risks
and difficulties a knowledge-intensive company in the Chinese context may have. In this
paper, I am going to focus on the way people communicate and the way things are done
in CCTV. I am also going to discuss how traditional Chinese State-owned Enterprise
(SOE) management culture and ideology influences the daily managerial practices which
make knowledge creation, sharing and transfer difficult if not impossible; and how the
most invisible organizational culture result in knowledge loss of a Chinese broadcaster in
its transitional period.

3. The CCTV Case: how culture become a problem in the CCTV
As the most protected industry in China, reform in media was delayed intentionally by
the central government. China Central Television with 45 years of history, mostly
supported and controlled by government, traditional ideology and managerial style was
even more deeply rooted, any changes takes even longer. The influence of
organizational culture on knowledge management can be analyzed in great detail, but in
this paper I intend to focus on three dominating aspects of culture and their impact on
knowledge loss. The dominating culture in this 45 years old national broadcaster could
be summarized under three main headings: A) Hierarchy and its influence on
communication styles in CCTV, B) Guai/to be obedient and knowledge sharing, and C)
Guanxi oriented culture and its effects.

3.1. Hierarchy and communication in CCTV
Most Asian cultures retain hierarchical structures and traditions than those in the West.
This is especially so in China, where Confucianism originated. One of the focuses of
Confucianism is on the five hierarchical relationships, on which the social stability is
based on. These five relationships are called "Wulun, or five basic relationships(5).
The importance of individuals place in the hierarchy of social relationships is stressed. A
persons fulfillment of the responsibilities of a given role ensures the smoother
functioning of society. Social hierarchy and relations of subordinates and superiority are
considered natural and proper. Apart from the performance of assigned duties, filial
submission, loyalty, decency, or reciprocity are also required(6).
Confucian principles provide the basis for Chinese organizational bureaucracy,
respect for seniority, rituals of etiquette, ceremony and various types of business
relationships. This hierarchical tradition in Chinese society has a great impact on
knowledge sharing in families, among clans, between groups and within the
danwei/work unit(7). Status-free communication and expressions are thus limited due
to ones position in the social hierarchy. In an organizational context, work is organized
through mutual understanding and acceptance of the informal cultural boundary in terms
of administrative status, age difference, difference in appearance, etc.
Apart from the influence of traditional founding efforts, the hierarchical culture in
China Central Television is also a direct result of its status in the Chinese danwei/work
unit administrative system. Originally, a party mouthpiece representing the central
government, CCTV, under direct control of the Publicity Department and State
Administration of Radio, Film and Television (SARFT)(8) of the Chinese Government
Party (CCP) is ranked at the vice-ministry level in the CCPs administrative ranking
system(9). CCTV enjoyed monopoly status in mainland China for 30 years before the
first provincial satellite TV channels transmitted all over the country(10). But it is still in
a dominant position in terms of coverage, advertising, and access to news resource.
Organizational Culture, Social Embeddedness, and Knowledge Loss
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Moreover, government media policies and regulation continue to privilege it over other
television stations in China. All these advantages make the CCTV more like a
government sector and a mouthpiece than a company, especially a creative business
company. Having been regarded as top level of TV stations representing the central
government, bureaucracy is a dominating style, not only for content censorship, but also
in daily management culture.
The hierarchical environment in CCTV is so obvious that once can easily feel it
when stepping into the organization for the first time. The general way for a new
member to address everybody older, higher in status or people who joined the CCTV
earlier, is "laoshi, means "master/teacher. And one can easily tell the status of people
in an office by whether they have their own desk or they share with others; whether
they make the effort to talk to other people and whether they come to the office early or
late everyday. Officially, there is another important system categorizing people into
different groups by their employment contract status with different colored ID cards -
white, pink or blue. People with white and pink cards are employed temporarily by a
certain department or channel. Different color of the ID card indicates different level of
access to CCTVs resources. Due to the rapid expansion, there are still a lot of people do
not have an ID card, which means they are not allowed to get into the CCTV main
building, therefore have no rights to attend the monthly or weekly meetings held there.
Surprisingly, many of these no ID staff have been working in the CCTV for more than a
year.
The invisible cast system put people off in communicating with each other freely,
let alone to share with no reservation. Junior/less, experienced staff may not be willing
to disagree with their laoshi(s)/senior in order to keep the balance of hierarchy. This
may lessen the possibility of creating positive results or innovative ideas through
"creative friction. One extreme example is that the contact list of people in the
production team I used to work for was listed according to administrative status, and
time working in the division. In this way, the producer was listed on top, directly below
them are editors in chief, and editors or researchers who joined the team earlier, with
the most recent on the bottom. When having weekly group meeting, after the
producers summary and report on viewing the figures, the discussion is always
conducted in the order of seniority under the prompt of producer. The sharing is
therefore constrained by the procedure and the mutual understanding of the invisible
"order. With limited time available, people may really want to share problems and
ideas but have given the chance and will have to save it till next time, or even forget
about it.
One recent recruit complained in the interview: "Everything - visible or invisible
reminds you that you are not important in this team. Therefore, your ideas are not
valuable. Under these circumstances, you sometimes do not want to bother. To a
certain extent, "brainstorming is never a brainstorming in its real value in the CCTV.
Even though the new 16 characters guideline of the News Commentary Department
highlighted innovation, it is hardly the case in its managerial practice. Like Bilton (2002,
p. 52) argued that the brainstorming process deliberately postpones any value judgment
on the quality of the ideas produced. But in this case, the value of ideas is ignored both
by managers and non-managers rather unconsciously or habitually instead of
deliberately. The communal space and time are artificially interfered with an invisible
hand. If there is no equality in life, there is no freedom in sharing and communication.

3.2. Guai/being obedient and knowledge sharing
As cultural guideline accommodating hierarchy, guai or being obedient is regarded as the
standard of a good child, student and employee in Chinese society. From a very early
stage of life, Chinese people were taught to be guai, and listen to parents, teachers, and
leaders. Therefore, people are not used to say "no, let along being straightforward in
saying it. More over, Chinese people are encouraged to keep a low profile in public to
fulfill the Confucian guidance on maintaining good manners. Western people may see
someone expressive as a sign of confidence, but Chinese people may view this as being
George Kencana
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too talkative or vain (trying to overshadow others, related to group oriented culture).
Therefore, the result is an indirect, hinting, subtle and accommodating communication
style. This may not be conducive to effective knowledge sharing because honesty and
open discussion of ideas would facilitate the flow of knowledge as a social process.
In terms of production, one producer in CCTVs News Commentary Department
mentioned the embarrassment they experienced when they had to sacrifice the creative
independence to show respect to comments from their line managers(11). What is
interesting is that, on the one hand, CCTV staff are complaining about the lack of
freedom for creativity, on the other hand, people who are complaining themselves have
been so used to it that they have been numb and even follow suit. It is dangerous that
most of people working in CCTV know the problems, but they feel that they have no say
or power to change it. And this is why following the governments voice and waiting for
instructions from top down, is still the dominate working culture.
As the example above demonstrates, with people obedient to their seniors, what
senior people said was obeyed and reinforced, and what they did not know was kept
away from them longer. This communication style always result in a late response to
possible problems or risks, a careless environment for creative ideas, and a devastating
response to the desire to raise problems, be different, or shout in different voice. It is
important that decision makers have authority and decisions can be carried out to its full
value. But in the artistic production process, it is also important that creativity could be
respected and encouraged by authority so that it can grow and flourish to its full
potential. It is doubtful that being guai / obedient and try to follow suit will help to
achieve innovation or just make it more difficult for a healthy knowledge creating and
sharing environment.

3.3. Guanxi effect and the damage of trust among team members
It has been argued that strong ties between co-workers appear to facilitate knowledge
sharing. A study by IBM Institute for Knowledge-Based Organizations shows that the
"magic ingredient that links strong ties and knowledge sharing is trust(12). Fukuyama
(1995) categorizes China into low trust countries, where it is not impossible but highly
difficult to build up trust without guanxi/connection. Guanxi/connection effect has
been acknowledged by many as a vital factor in doing business successfully in China
(Yeung and Tung, 1996, p.60). In the CCTV case, we will see how this penetrating
guanxi effect in Chinese society act as a negative influence on trust building in this
organization.
Due to its prominence, working in television, especially in CCTV has been a
symbol of status. Given the difficulties to work in CCTV, guanxi/connection is proved to
be a must. Many of those I interviewed at CCTV confirmed that when they start working
in CCTV, one of the first questions they were asked by co-workers either directly or
indirectly was "who recommended you here?. As Sun Yusheng (2003, p.61), one of the
founders of the best known CCTV programme Horizon (Dongfang Shikong) documented
in his book Ten Years, at the beginning of the public recruitment for this programme in
1993, many people were recommended to him by the then team members, or their
friends. Sun, in his book, called the connections between his team members as "kinship
by guanxi (renji xueyuan guanxi).
With every body tied up to a certain network of guanxi, the whole organization
and work culture was obscured with layers and layers of network under the surface (Sun,
2003, p.60). When who you know matters more than what you know, it is obviously a
problem to management. Sun has realized, the intangible network will bring
unnecessary difficulties to management in the long-term, and will distort the relationship
between colleagues (Sun, 2003, p.87). Indeed, with this huge intangible network, if one
connection does not work, it will influence the whole situation. According to many
interviewees, the communication between colleagues is full of understatement, and the
process of decision making lacks transparency. In one interview, a CCTV producer
complained that it does not matter whether they really needs somebody to fill a position,
if there is a strong recommendation from the top, he could not say no, due to the fear of
Organizational Culture, Social Embeddedness, and Knowledge Loss
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the consequence of this refusal. Similarly, when there is a need to slim down, he had to
make his decision based on a comparison of each ones connection (guanxi) background,
and the length of the time they served in the team. Most of the time, it is not the least
able who get fired; it is the ones most vulnerable and new to the team who suffer the
consequence.
Many interviewees have argued that they cannot feel safe and loyal to their team.
The relationship between team members is very cold, and sometimes hostile, especially
to new comers. Some new comers even adopt the term "three weeks silence to
describe the situation when they first started working in CCTV. They explained that
during those three/four weeks, no one will talk to you actively and sociably, they felt
that they were not welcomed, and people were checking them out, as if they were trying
to work out their background network before they started talking to them in a friendly
way. Obviously, under an atmosphere lack of transparency, it is highly difficult to
promote an honest and open discussion environment for knowledge sharing with a low
trust team.

4. What is vital in the transitional period?
With the launch of a new TV-magazine programme Horizon (Dongfang Shikong) and
later Focus (Jiaodian Fangtan) in 1993, CCTV started the most influential reform in
the Chinese television sector ever by introducing a brand new institutional system of
production named "Producer Responsibility System starting in its News Commentary
Department. This new reform entitles the producers of each programme autonomy in
personnel, finance and production management within their own teams. Among other
policies geared to avoid red tape and inefficiency, the department may autonomously
employ people on a temporary basis, without the limit of the traditional employment
quota(13). The most widely acknowledged contribution of `Producer Responsibility
System is the break through from the traditional employment system. It would be a
great employment stereotype, and fundamentally broke the `iron rice bowl. However,
there seems to be a double standard as a consequence of an incomplete reform. The
breaking of the `iron rice bowl seems only for those inferior in this organization.
Ten years after the introduction of the reform in 2003, when the author visited
the CCTV News Commentary Department with great anticipation of witnessing a brave
new world of Chinese television, it was disheartening to see that the spirit of innovation
and creativity is fading away. The general morale and loyalty towards the organizations
is very low, and the reforming force is losing the battle; while the traditional SOE
management culture and hierarchical style as government sector is still deeply rooted in
the organization. In an online interview series commemorating the 10-year anniversary
of Horizon, one of the programs founders admitted that there is a bottleneck in further
development of Horizon and CCTV itself(14).
From 1993 till now, people employed on temporary contracts or with no contract
base have been dominating the Chinese television workforce. Take the News
Commentary Department of CCTV as example (see Table 2): the total number of people
working on a temporary contract basis increased from 0 to 50 within the first 5 years.
People working with no contract have increased from 92 to 290 in the meantime. The
ratio of people formally employed and informally employed was 1:2 in 1993 and 1:10.3
in 1998. There is no access to the latest data, but with the CCTVs transition increase to
15 terrestrial channels, 270 hourly daily transmission and 406 programmes(15), it
would not be an exaggeration to estimate that the number of temporarily employed
people has doubled, or even tripled, compared to the 1998 numbers. On the one hand,
as acknowledged by Qian (2002, p. 113), people working on temporary contract or no
contract are now the founding blocks for the smooth operation of the CCTV. On the
other hand, with the explosive employee increase at CCTV, it seems that people are the
least valuable asset, let alone to consider what they think, how they feel, how they work.
One producer said in the interview "we never worry there is no people working for us.
George Kencana
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Table 2. CCTV News Commentary Department Employment Type 1993-1998(16)
1993 1994 1995 1996 1997 1998
Formally employed with
quota 31 24 25 30 32 33
Temporary contract based 0 8 16 28 47 50
No contract 61 108 126 225 230 290
Total 92 140 167 283 309 373

Whats course, due to their special employment status, there is less opportunity for
people work with temporary contract or no contract to get promoted. According to a
1997 survey by Prof. Guoming Yu, 96.3% of the then producers in the CCTV were
formally employed with quota. Only 3.7% of them were originally from public
recruitment(17). Given the fact that enhances to become Producer is slim for the
majority of people working in CCTV, it is therefore a very unpredictable future and career
path in front of them. Some of the very successful TV professionals left CCTV finally for
"Phenonix in Hong Kong or Oriental TV in Shanghai. Someare now working for their
own business. Most of them are still fighting for a decent identity in CCTV, or looking for
other development opportunities, this is a great knowledge loss.

5. Conclusion
It was argued that any discussion of knowledge in organizational settings without explicit
reference to its cultural context is likely to be misleading (DeLong & Fahey, 2000). We
have seen in the CCTV case that knowledge and culture are inextricably linked in this
organization. We could also see in the CCTV case that to some extent, a particular
organizations culture is embedded in its national culture and dominant ideology, and
sometimes, this embeddedness of organizational culture could be the obstacle in change.
In this paper, by analyzing three aspects of the dominant culture, we have
discussed different communication styles under the influence of organizational culture,
and shown how there result in knowledge loss. Both formal broadcasting sessions and
informal daily communication style in the CCTV have been considered and it is clear that
the hierarchical culture has initiated creativity, and willingness to share ideas. The
mysterious guanxi elements make internal relationships more obscure and therefore
less transparent in facilitating an open and easy environment for daily communication in
CCTV. The existing two managerial circles also serve as another intangible line
separating people into different categories. I have argued that all these factors are toxic
to a healthy knowledge management system. Furthermore, since these factors are so
embedded in the cultural heritage and social changes of the country, it makes it harder
for people to identify their importance. As we have argued in the former part of this
paper, serious damage has been caused without intention or awareness. Indeed, most
of the time, it is just "the way things are done for so many years that cause the
problem; it is the informal cultural boundaries that prevent knowledge transfer. It is not
difficult to see how "the way we do things is a critical success factor for organizational
knowledge management (Knapp & Yu, 1999, p. 16).
This paper has focused on organizational culture and the communication styles in
China Central Television, and how they result in knowledge loss. The hierarchical and
guanxi oriented culture is not unique to CCTV, but due to its position as the biggest and
most important media organization in China, especially when media in general and
television in particular are still under direct government control, CCTV serves as typical
case highlighting a more general problem in Chinese media organizations.
Organizational Culture, Social Embeddedness, and Knowledge Loss
8
Endnote(s):
(1) The author would like to thank Dr Don Robert and two referees for their kind
comment on the earlier version of this paper.
(2) Next Generation Knowledge Management: The Complexity of Humans, in
Executive Tek Report, November 18, 2002, p. 2.
(3) Suresh Ram, Knowledge Management - An Overview, in
KnowledgeBoard.com. 13
th
June 2002.
http://www.knowledgeboard.com
(4) To summarize, main changes lie in the following three aspects: financial
system changes, personnel system changes, infrastructure and contents
providing changes.
(5) Five relationships refer to relationships between father and son, ruler and
ruled, husband and wife, elder brother and younger brother, and friend and
friend (this pair is equal in position).
(6) Fan Xing, The Chinese Cultural System Implications for Cross Cultural
Management, SAM Advanced Management Journal, winter 1995, V. 60., n.1, p.
17.
(7) In China, danwei, or work unit, refers to those urban workplaces through
which the CCP-state administrates and control economic activities and
arranges the jobs and lives of people. For more information, see Quishi Liu,
Danwei-oriented System and the Formations of Social Organizations
in Urban China: An Institutional Perspective, Fourth Annual Conference
on East Asia, Harvard University, April 7
th
, 2001.
(8) The CCPs Publicity Department is subject to the heavy influence of the
ideological group of the CCPs Politburo and is responsible for setting
ideological and propaganda themes in programmes The State Administration
of Radio, Film and Television (SARFT). The former deals with regulatory,
technological, and administrative affairs. See John Sinclaire, Elizabeth Jacka,
and Stuart Cunningham (eds.) New Patterns in global Television: Peripheral
Vision (Oxford: Oxford University Press, 1996), pp.134.
(9) Originally, the rank system was implemented only in the army. This military
rank system, accomplished with a parallel CCP rank system, had been
adapted as a basic structure of rank system after 1950 and still exists
nowadays. The level of administrative rank of a danwei usually relate to the
ability of that danwei to obtain resources from the state, and therefore, relate
to its possibility of providing benefits for its leaders and members. See Zhang
Quanjing, 1996, pp. 3-4.
(10) Guizhou, and Yunnan satellite TV are the ones who first started to transmit on
satellite, Yunnan Satellite TV started from Feb 1989.
(11) From personal interview in Beijing, September 2003
(12) Daniel Z., Levin, Rob Cross, Lisa C. Abrams and Eric L. Lesser, Trust and
Knowledge Sharing: a Critical combination, IBM Institute for Knowledge-
Based Organizations, p. 2. From: http://www-
1.ibm.com/services/strategy/e_strategy/trust.html.
(13) In a decision on Unifying the State Financial and Economic Work issued
by the State Council for Political Affairs in March 1950, it was stipulated that
the numbers of personnel at all government departments, public schools and
SOEs should be fixed. (See Xinhua shishi congkanshe, 1950, p.4).
(14) Meng Chen in Horizon 10
th
Anniversary Online Interview series,
news.tom.com, 3
rd
Sept 2003.
(15) Data collected from CCTV website: www.cctv.com
(16) Wei Qian, Politics, Zhengzhi, Shichang Yu Dianshi Zhidu - Zhongguo
Dianshi Zhidu Bianqian Yanju (Market and Media - A Study on
Chinese Television Institutional Change) (Zhengzhou, Henan Peoples
Publishing House, 2002), p. 113.
George Kencana
9
(17) Guoming, Yu, Survey of CCTV Porducers Status, 8
th
Aug 1997, Pu Wang,
Current Status of Television Producers and Prospects (Dianshi Zhipianren
de Xianzhuang yu Fazhan Qianjing), (Beijing, Chinese Broadcasting and
Television Publishing House (Zhongguo Guangbo Dianshi Chubanshe),
1998), p. 298.


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