In one Shanghai office, tearing down hierarchy means never saying ‘boss’

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In the Shanghai office of China's biggest builder of homes and condominiums, the boss is no longer "boss." Employees have instead been told to refer to their superiors by their names, or perhaps their nicknames, as Shanghai Vanke does battle on stifling bureaucracy and stultifying hierarchy.

Enemy number one: zong, the Chinese term for boss that is often the only title used by employees in addressing those in a higher position. Now, anyone at the firm caught using the term in any place – at work, in conferences, e-mails or electronic chats – faces a 100 yuan fine, about $20.75, which is nearly a day's worth of the average disposable income in the city.

But in a twist, the fine is payable by the boss, not the employee, a fact included in "About the Demand to Implement No 'zong' Title Use," a leaked internal document that describes the attempt to engineer a "partnership" workplace that is more open and innovative. It comes amid a tumultuous time for corporate China, which faces a slowing economy that is damaging old business models – but also providing a reason for companies to try something new.

Shanghai Vanke has been singled out for praise. Expunging zong shows it is "determined to cut through red tape and boost inner vitality," Xue Jianxiong, chief research executive at China Real Estate Information Corp., told the Daily Economic News.

China Vanke, the parent company of the Shanghai office, builds more residential housing than anyone else in China. But the golden age of Chinese real estate is coming to a close, amid weaker house prices and double-digit declines in housing starts by area. "The time when one could expect property values to only go up is over and accumulating land is also not a guarantee of riches," Yu Liang, Vanke's president, said earlier this year.

Vanke has attempted to compensate, in part, by turning its focus to "smart homes." It's already making wall-mounted smog-cleaning devices, water purifiers and robots.

Re-engineering office culture is part of the broader attempt to re-engineer the business.

It's no small ambition. By tossing zong, Shanghai Vanke is trying to break a link in what Zhou Xiaozheng, a noted Chinese sociologist, has called China's "power-based society," which dates back to imperial times and has found modern expression in a Communist Party that soon after taking over divided officials into nearly 20 ranks. Those ranks determined "the size of allocated houses, the displacement of cars, whether they were entitled to a one-bed hospital room or a suite," Mr. Zhou said.

In the West, "power comes from the ballot, but in China it comes through an appointment," he said. "So rank means everything."

Getting rid of it, though, might mean a lot to China's future.

In a 2012 report on innovation in China, consultancy McKinsey pointed to the work environment as one of the key priorities for China. Advances in Western firms often come through a collision of internal ideas, but "in many Chinese companies, traditional organizational and cultural barriers inhibit such exchanges," it noted.

"You shouldn't be thinking about your boss – you should be thinking about the right answer. That is a cultural shift," said Jonathan Woetzel, Shanghai-based director of the McKinsey Global Institute.

The idea of striking titles is not new in China, where the lead-up to the Cultural Revolution saw the military under Mao Zedong delete all trappings of hierarchy. In their place was a mandate that everyone in uniform be called "comrade."

"In June, 1965, all formal saluting, epaulettes, hard-peaked caps, medals, insignia of rank, tailored uniforms for officers and other privileges in the People's Liberation Army were abolished. From a general all the way down to a soldier, every fighter had to wear a single red star on an identical cap," said Frank Dikotter, professor at the University of Hong Kong whose books on China include a history of the Cultural Revolution.

But if the idea was to impose egalitarianism, it didn't work. No one forgot who the generals were. "It's an extraordinarily hierarchy-conscious society," Prof. Dikotter said. And by 1968, China had become even more hierarchical than before, effectively transforming into a military dictatorship.

Elsewhere in Asia, however, the deletion of titles has seen a modern resurgence. At Kakao Corp., the pioneering South Korean company behind the KakaoTalk messaging service, new employees choose an English name before they show up for their first day of work.

In Korean, bosses are often referred to by title alone. In a traditional workplace, no one would dare use a first name, which means "consciously or not, people think about power dynamics when they speak to each other," said Adrian Shin, Kakao's chief human-resources officer. "Using English names has helped make Kakao a more dynamic and efficient organization. People are free to express ideas."

But, he cautioned, names can be cosmetic. "As long as companies continue to be concerned about arbitrary things like who sits where, who speaks at meetings, et cetera, just using English names isn't going to change anything," he said.

Still, there is power in changing the way people address each other, said David Moser, a China commentator who is academic director at CET Chinese Studies at Beijing Capital Normal. Living in China, he has noticed that the use of saozi, to refer to a friend's wife or girlfriend – the term means sister-in-law – "makes her part of the family," he said. "She's my saozi, she's not just Jane."

In the office, meanwhile, as long as an employee is obligated to use "boss," then "every word you say reinforces the fact that he's a zong, and you're just an ordinary schlump," Mr. Moser said.

He is intrigued by the idea of banning zong.

If Chinese workplaces "want to get a more democratic work force and one where people feel free to come up with ideas or challenge the orthodoxy, then they need to get away from these titles or ranks that show up everywhere in speech."