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By Philip Graham ‘96
I joined the Singapore regional headquarters of a Hong Kong based pan-Asian systems integrator as the regional business development manager in early 2000. We had offices in Beijing, Shanghai, Hong Kong, Taiwan, South Korea, Australia, Thailand, Tokyo and San Francisco. When I joined the firm, we had just gone public and were growing rapidly. The Singapore office had 100 people, with 90 being local Singaporean and the remainder either Indian or Western. Things were good.
On Chinese New Year in 2000 the Hong Kong headquarters decided to give a gift to all employees: a hong bao or red packet.
In Chinese and other East Asian societies, a red envelope or red packet (known as hong bao in Mandarin, ang pao in Hokkien, lai see in Cantonese and lì xì in Vietnamese) is a monetary gift which is given during holidays or special occasions. Red envelopes are mainly presented at social and family gatherings such as weddings or on holidays such as the lunar New Year. The red color of the envelope symbolizes good luck and is supposed to ward off evil spirits.
Normally, this gesture would be a welcome and unexpected wish to employees from their superiors. In this case, though, it went horribly wrong.
The headquarters wanted to give a nominal amount of approximately $2 to $3 U.S., but changed into the currency of the office. For example, the Taiwan office received 80 Taiwan dollars, which equates to $2.50 U.S. The Taiwan office welcomed the gesture. For the Singapore office the conversion came to four Singapore dollars.
What the headquarters failed to realize was that four is a very unlucky number in Chinese culture. This is because the word for four and the word for death are identical except for the tone that is used.
Everyone in the Singapore office received their four Singapore dollars in the red packets. Very soon thereafter it became clear that the local staff were upset. In fact, it seemed to be the straw that broke the camel’s back, in terms of morale.
The local Singaporean staff started to come late to work, spent hours gossiping during working hours and a few quit. When asked about the change in behavior, we were told that it was clear that the management wished ill will on the staff due to the four dollars in the hong bao.
The management had an emergency meeting about the matter. The management included three Americans and one Brit. The managing director was an American with little experience in Asia, while the others had considerably more.
The decision was made to communicate this error immediately to the Hong Kong headquarters. Three weeks went by waiting for an answer to this problem. In these three weeks, the morale cratered. Nonetheless, the answer came.
The answer to the problem was to give each employee another hong bao, this time with an additional four Singapore dollars. The logic behind this decision was that four plus four equals eight. Eight is considered a lucky number in Chinese culture because it sounds like the word “prosper” or “wealth.”
The local Singaporean staff didn’t see it quite this way. They thought the management now wished them double the bad luck and to “die twice.”
The Singapore office never recovered. Along with the dot-com bubble bursting, the hong bao debacle contributed to the office shrinking from over 100 people in 2000 to six in 2001 and closing in 2002.
The lesson to this story is simple to understand but often overlooked by many doing business overseas. Never underestimate the power of cultural superstition. One cannot sidestep it or ignore it.
March 10th, 2009 at 1:18 pm
Thank you, Philip, for sharing this story about the hong bao gift! You have enlivened the World Cafe resources with your experience and insight! I look forward to comments from other colleagues working around the world who may have similar stories! Thank you again!
March 27th, 2009 at 8:07 pm
Wow Phillip,
That’s an incredible story. Numbers are indeed a focal point for superstition. Just look at how much money is made at the auction for Hong Kong license plate numbers every year!
Still, though I don’t know Asian culture like I know Latino culture, I still am boggled that an entire office would believe that a company would go out of its way to insult them with that red envelope! Maybe the insult was such a paltry gift of $2.50…what do these people earn?
July 6th, 2009 at 3:17 pm
The amount in the hong bao isn’t important. But it is a tradition in greater China that few ignore.
I tried to make clear that the hong bao incident wasn’t the only issue in the office, but one that could have easily been handled better. Another issue that is quite common, I found, in Asia is when the races of management and staff are different. At Sony, where I worked, all management was Japanese. The managing director told me when I started, that even though the Japanese managers treated the locals badly, I was to treat them well. But that launches me into all the fun Sony stories.