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Chapter 02 - The External and Internal Environments

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chapter
2
The External and Internal
Environments
CHAPTER CONTENTS
Learning Objectives 2

Key Student Questions 2

Class Roadmap 3

Key Terms Presented in This Chapter 11

Lecturettes 13

Discussion Questions 14

Concluding Case 17

Experiential Exercises 18

Examples 21

Supplemental Features 23

Chapter Video 23

Manager’s Hot Seat 23

2-1
Chapter 02 - The External and Internal Environments

Self Assessment 23

Test Your Knowledge 23

Expanded PowerPoint Slide Show 55

2-2
Chapter 02 - The External and Internal Environments

Expanded PowerPoint Slide Show 24

LEARNING OBJECTIVES

1 Describe how environmental forces influence organizations and

how organizations can influence their environments.
2 Distinguish between the macroenvironment and the competitive
environment .

3 Explain why managers and organizations should pay attention to

economic and social developments.

4 Identify elements of the competitive environment.

5 Summarize how organizations respond to environmental uncer-

tainty.

6 Define elements of an organization’s culture.

7 Discuss how an organization’s culture and climate affect its re-

sponse to its external environment.

KEY STUDENT QUESTIONS

The two questions that come up most often for this chapter are:


1. “Can you explain the difference between the macroenvironment
and the task environment?” (Or a request to explain a particular
element of either environment.)
2. “As a manager, what should I do to respond to a changing environment?”

Fortunately, the text has tools to help you deal with both of these questions more effectively.

The first question is best addressed with examples, and students often find it useful to go
through an example or two for a specific company. Start by discussing the high tech indus-
try, using the information in the text and the “Management Connection” section called “Ap-
ple’s Rocky Relationships.” Next, ask students to name a company with which they are fa-
miliar, and have them identify examples of each of the different environmental factors for

2-3
Chapter 02 - The External and Internal Environments

that organization. If your students can’t think of an organization, try using something with
which they are likely to be familiar, such as Kaiser Permanente (a large national HMO.) A
completed example appears below in the instructions for Experiential Exercise 2.1, “External
Environment Analysis”.

The second question is best addressed by having students work together to complete the con-
cluding case study “Wild Water Gets Soaked.” The brainstorming activity that students
complete for the third discussion question on the case also serves as an excellent introduction
to Chapter 3 - Decision Making.

“Now, create a plan for Wild Water. In your plan, describe what changes the organization
needs to make to its culture to meet the upcoming challenges in the external environment.
Then describe steps that Wild Water can take to compete successfully against the new
amusement park. How can the Salernos keep their loyal customers happy while attracting
new ones?”

CLASS ROADMAP

Management Connection
What Makes Apple a Winner in a Fast-Changing Environment?

In the 1970s consumers fell in love with Apple’s spreadsheets and desktop publishing tools, but
in the 80s and 90s, Apple lost significant market share as consumers got on board in droves with
the Microsoft operating system. As technology advanced, Apple dropped the word “computer”
from the corporate name and focused on providing a wide array of tools to tap into the internet
for entertainment, communication, and expressing creativity. Apple also provides a software de-
velopment kit which will allow any programmer to create new applications which can be pur-
chased online at Apple’s App Store. Over 100 million apps were downloaded in the first two
months. What could Apple do to further enhance their brand and enhance their share of the
technology market?

2-4
Chapter 02 - The External and Internal Environments

Introduction
A. Organizations are open systems (Figure 2.1) LO 1: Describe how environ-
mental forces influence or-
1. Receive raw materials, services, and financial, hu- ganizations, and how organi-
man, and information resources from the environ- zations can influence their
ment, called inputs environments
2. Transform resources into finished goods and ser-
vices
3. Send outputs back into the environment

B. External Environment Influences

1. When resources change, environment influences the

organization
E.G.
2. When outputs differ, organization influences the en- Use Example 2.1 – Environment
vironment Influences here
3. The organization operates in a competitive envi-
ronment.

I. The Macroenvironment
4. Macroenvironment is defined by the most general ele-
ments in the external environment that can potentially in-
fluence strategic decisions
A. The Econonmy (Figure 2.3)
LO 2: Distinguish between
a. The economic environment dramatically affects
the macroenvironment and
companies’ ability to function effectively and in-
the competitive environment
fluences their strategic choices.
b. Interest and inflation rates affect the availability
and cost of capital, the ability to expand, prices,
costs, and consumer demand for products.
c. Unemployment rates affect labor availability
and the wages the firm must pass, as well as
product demand.

B. Technology
a. Technological advances create new products.
As technology evolves, new industries, markets,
and competitive niches develop.
b. New technologies provide new production tech-
niques. Sophisticated robots perform jobs with-
out suffering fatigue.
c. New technologies also provide new ways to
manage and communicate. Computerized man-

2-5
Chapter 02 - The External and Internal Environments

agement information systems (MIS) make in-

formation available when needed.
C. Laws and Regulations

1. U.S. government policies both impose strategic con-

straints and provide opportunities.
E.G.
Use Example 2.2 – Laws and
2. Government can affect business opportunities Regulations here
through tax laws, economic policies, and interna-
tional trade rulings.

3. Regulators are specific government organizations in

a firm’s more immediate task environment.

4. Regulatory agencies have the power to investigate

company practices and take legal actions to ensure
compliance with the laws are:

i. Occupational Safety and Health Administra-

tion (OSHA)
ii. Interstate Commerce Commission (ICC)
iii. Federal Aviation Administration (FAA)
iv. Equal Employment Opportunity Commis-
sion (EEOC)
v. National Labor Relations Board (NLRB)
vi. Office of Federal Contract Compliance Pro-
grams (OFCCP)
vii. Environmental Protection Agency (EPA)

D. Demographics

a. Demographics measures of various characteris-

tics of the people comprising groups or other so-
cial units.
b. Work groups, organizations, countries, markets,
or societies can be described statistically by re-
ferring to their members’ age, gender, family
size, income, education, occupation, and so
forth.
LO 3: Explain why managers
E. Social Issues and organizations should at-
tend to economic and social
a. Societal trends regarding how people think and developments
behave have major implications for management
of the labor force, corporate social actions, and

2-6
Chapter 02 - The External and Internal Environments

strategic decisions about products and markets.

b. Companies have introduced more supportive
policies, including family leave, flexible work-
ing hours, and childcare assistance.

F. The Natural Environment

a. Prominent issues in today’s press pertain to nat-

ural resources.
b. The protection of the natural environment is im-
portant to managerial decisions.

II. The Competitive Environment LO 4: Identify elements of the

competitive environment
A. Competitors

a. As a first step in understanding their competitive

environment, organizations must identify their TEXT REFERENCE
competitors, which may include: Management Connection –
Progress Report
i. small domestic firms
ii. overseas firms As part of its innovation, Apple has
iii. new domestic companies exploring new needed to forge new relationships with
creators of online content which includes
markets recording companies. More recently,
iv. strong regional competitors magazines publishers are joining the App
v. unusual entries, such as Internet shopping Store to provide their products to con-
sumers in a digital format. Publishers
b. The next step is to analyze how they compete. must pay 30% of revenues to Apple, so
they are reducing their income per sub-
B. New Entrants scription, but the iPod and other Apply
devices are so popular that publishers are
afraid not to jump on board. With so
a. Barriers to entry are conditions that prevent many applications and devices coming
new companies from entering an industry. into the market, these complex relation-
ships can get stormy. In some cases
b. Some major barriers to entry are government Apply and its competitors are buying
policy, capital requirements, brand identifica- components from the same suppliers,
tion, cost disadvantages, and distribution chan- such as with Samsung.
• How do you think things will work out
nels. between the Google Android platform
and the Apple platform with regard to
C. Substitutes and Complements (Table 2.1) cell phones and tablet computers?
• Which company has the most power
and leverage in Apple’s supply chain?
a. Technological advances and economic efficien- Why?
cies are among the ways that firms can develop
substitutes for existing products.

2-7
Chapter 02 - The External and Internal Environments

D. Suppliers

a. Suppliers provide the resources needed for pro-

duction and may come in the form of people,
raw materials, information, and financial capital. Teaching Tip:
b. Suppliers can raise their prices or provide poor Have students review and give
quality goods and services. feedback on each others’ respons-
c. Labor unions can go on strike or demand higher es to the pre-class assignment
(Experiential Exercise 2.1) at this
wages.
point in the lecture. The best way
d. Workers may produce defective work. to do this is in pairs. Each student
reads the other’s paper, and then
E. Customers both students talk about environ-
mental factors that have been mis-
a. Customers purchase the products or services the classified, and other environmen-
organization offers. tal factors that could be added.
b. Final consumers are those who purchase prod- Students should correct their own
ucts in their finished form. papers before turning them in, and
c. Intermediate consumers are customers who if possible, students should get
purchase raw materials or wholesale products feedback from the professor or
teaching assistant about both the
before selling them to final customers.
paper and the corrections.
i. Customer service means giving customers
what they want or need, the way they want
it, the first time.
ii. Actions and attitudes that mean excellent
customer service include:
a.) Speed of filling and delivering normal
orders. LO 5: Summarize how organ-
b.) Willingness to meet emergency needs. izations respond to environ-
c.) Merchandise delivered in good condi- mental uncertainty
tion.
d.) Readiness to take back defective goods
and re-supply quickly.
e.) Availability of installation and repair
services and parts.
f.) Service charges (that is, whether services
are “free” or priced separately).

III. Environmental Analysis

a. Developments outside the organization can have a
profound impact on the way managers operate.
E.G.
Use Example 2.3 – Environmen-
b. Example: if little is known about customer likes and tal Complexity here
dislikes, organizations will have a difficult time de-
signing new products, scheduling production, or de-
veloping market plans.
c. Environmental uncertainty means that managers do

2-8
Chapter 02 - The External and Internal Environments

not have enough information about the environment

to understand or predict the future.
d. Uncertainty arises from two related factors:
1. Environmental complexity, or the number of is-
sues to which a manager must attend, as well as E.G.
their interconnectedness. Use Example 2.4 – Competitive
2. Dynamism, or the degree of discontinuous Intelligence here
change that occurs within the industry.

A. Environmental scanning

a. A process that involves searching out information

that is unavailable to most people and sorting
through that information in order to interpret what is
important and what is not. Teaching Tip:
b. Competitive intelligence is the information neces- Ask students to image different
sary to decide how best to manage in the competi- scenarios that might impact your
tive environment they have identified. (Table 2.2) school, and to develop contingen-
cy plans that might address those
B. Scenario Development scenarios. This can either be
done as a discussion question
a. Scenario is a narrative that describes a particular set with the entire class, or students
of future conditions. can work in groups to answer the
b. Best-case scenario--events occur that are favorable question, and report back. For
to the firm. example, a possible scenario
might center around a population
c. Worst-case scenario--events are all unfavorable.
boom or bust. In a population
d. Scenario development helps managers develop con- boom, universities might respond
tingency plans for what they might do given differ- by setting up satellite campuses,
ent outcomes. whereas in a bust, universities
might look for additional students
C. Forecasting by setting up international pro-
grams and/or programs targeted
a. Used to predict exactly how some variable or varia- to meet the needs of working pro-
bles will change in the future. fessionals.
b. The best advice for using forecasts might include
the following:
1. Use multiple forecasts
2. Accuracy decreases the farther into the future
you are trying to predict.
3. Forecasts are no better than the data used to con-
struct them
4. Use simple forecasts
5. Important events often are surprises and repre-
sent a departure from predictions

2-9
Chapter 02 - The External and Internal Environments

D. Benchmarking

a. Benchmarking is the process of comparing the or-

ganization’s practices and technologies with those
of other companies.
b. Benchmarking means identifying the best-in-class
performance by a company in a given area.

IV. Responding to the Environment E.G.

Use Example 2.5 Independent
A. Changing the Environment You Are In Strategies here

1. Strategic maneuvering is the organization’s con-

scious efforts to change the boundaries of its task
environment. It can take four basic forms:
a. Domain selection is the entrance by a company
into another suitable market or industry.
b. Diversification occurs when a firm invests in
different types of businesses or products, or
when it expands geographically to reduce its de-
pendence on a single market or technology. LO 6: Define elements of an
c. A merger or acquisition takes place when two organization’s culture
or more firms combine, or one firm buys anoth-
er, to form a single company.
d. Divestiture occurs when a company sells one or
more businesses.
2. Prospectors are companies that continuously change
the boundaries of their task environments by seeking
new products and markets, diversifying and merg-
ing, or acquiring new enterprises.
3. Defenders are companies that stay within a more
limited, stable product domain

B. Influencing your environment

1. Independent strategies are strategies that an organi-

zation acting on its own uses to change some aspect
of its current environment. (Table 2.4)
2. Cooperative strategies are strategies used by two or
more organizations working together to manage the LO 7: Discuss how an organ-
external environment. (Table 2.5) ization’s culture affects its
response to its external envi-
C. Adapting to the Environment: Changing Yourself ronment

1. Four different approaches that organizations can

2-10
Chapter 02 - The External and Internal Environments

take in adapting to environmental uncertainty are:

(Table 2.3)
a. Decentralized bureaucratic (stable, complex en-
vironment)
b. Centralized bureaucratic (stable, simple envi-
ronment)
c. Decentralized organic (dynamic, complex envi-
ronment)
d. Centralized organic (dynamic, simple environ-
ment) E.G.
Use Example 2.6 Corporate
2. Adapting at the boundaries. Culture here
a. Buffering is creating supplies of excess re-
sources in case of unpredictable needs.
b. Smoothing is leveling normal fluctuations at the TEXT REFERENCE
boundaries of the environment. Management Connection –
Onward
Apple’s CEO, Steve Jobs, has described
3. Adapting at the core. Apple’s culture as “that of a start-up.” A
a. Flexible process allows for adaptation in the new company typically is run by the
technical core to meet the varied and changing founder, who has a passion for some new
idea or a desire to create something new
demands of customers. (the organization) to deliver a product or
service better than others do. As noted at
the beginning of this chapter, Apple
ended the previous century with a doubt-
D. Choosing a Response Approach ful future. The customers for its comput-
ers were a loyal but small sliver of the
1. Three general considerations help guide manage- personal computer market. Investors
were so doubtful about Apple’s prospects
ment’s response to the environment. that the company’s stock was trading for
a. Change appropriate elements of the environ- a few dollars per share. Jobs returned to
ment. Apple and made some changes that refo-
cused the company on its start-up cul-
b. Choose responses that focus on pertinent ele- ture. He discontinued projects that were
ments of the environment. unrelated to his vision, encouraged active
c. Choose responses that offer the most benefit at debate about new ideas, and
forced people in different functions to
the lowest cost. work together on strategy—for example,
seeing the retail activities as related to
product design activities. Together, these
efforts enabled the company to drive
V. The Internal Environment of Organiza- innovation as it had when it was a start-
up. Jobs was able to lead this effort be-
tions: Culture and Climate cause he was respected as the founder
and as someone with visionary ideas plus
A. Organization culture is the set of important assump- the ability to sell them. In 2011, Jobs lost
his personal battle with pancreatic cancer
tions about the organization and its goals and practices and Apple’s chief operating officer, Tim
that members of the company share. Cook, was selected to lead the company.
1. Strong cultures Cook is widely respected, but not
because he is a clone of Jobs. Quite the
a. Everyone understands and believes in firm’s contrary—he is known for being calm,
goals, priorities, and practices. quiet, and serious-minded, managing
processes more than pitching new prod-
b. An advantage if appropriate behaviors are sup- ucts. Cook is, however, respected for his
ported. track record.

2-11
Chapter 02 - The External and Internal Environments

2. Weak cultures • Using the model of cultural types in

Figure 2.6, which type of culture do you
a. Different people hold different values think Apple has? Why?
b. Confusion about corporate goals • How can Apple’s managers reinforce
c. Not clear what principles should guide decisions Apple’s culture in the absence of Steve
Jobs?

B. Diagnosing Culture

1. Culture can be diagnosed through the following:

a. Corporate mission statements and
official goals. (Figure 2.5)
b. Business practices.
c. Symbols, rites, and ceremonies.
d. The stories people tell.
2. Four types of organizational culture (Figure 2.6)
a. Group culture - flexible, internal
focus
b. Hierarchical structure - control-
ling, internal focus
c. Rational culture - controlling, ex-
ternal focus
d. Adhocracy - flexible, external fo-
cus
C. Managing Culture

1. Espouse lofty ideals and visions for the company

2. Give constant attention to mundane, daily details
3. CEO’s need to embody the vision of the company

D. Organizational Climate

KEY TERMS PRESENTED IN THIS CHAPTER

Acquisition One firm buying another

Barriers to entry Conditions that prevent new companies from entering an industry
Benchmarking The process of comparing an organization’s practices and technologies with those of oth-
er companies
Buffering Creating supplies of excess resources in case of unpredictable needs
Competitive environment The immediate environment surrounding a firm; includes suppliers, customers,
rivals, and the like
Competitive intelligence Information that helps managers determine how to compete better
Cooperative strategies: Strategies used by two or more working organizations working together to man-
age the external environment

2-12
Chapter 02 - The External and Internal Environments

Defenders Companies that stay within a stable product domain as a strategic maneuver
Demographics Measures of various characteristics of the people who make up groups or other social
units
Diversification A firm’s investment in a different product, business, or geographic area
Divestiture A firm selling one or more businesses
Domain selection Entering a new market or industry with an existing expertise
Empowerment The process of sharing power with employees, thereby enhancing their confidence in
their ability to perform their jobs and their belief that they are influential contributors to
the organization
Environmental scanning Searching for and sorting through information about the environment
Environmental uncertainty Lack of information needed to understand or predict the future
External environment All relevant forces outside a firm’s boundaries, such as competitors, customers,
the government, and the economy
Final consumer Those who purchase products in their finished form
Flexible processes Methods for adapting the technical core to changes in the environment
Forecasting Method for predicting how variables will change the future
Independent strategies Strategies that an organization acting on its own uses to change some aspect of its
current environment
Inputs Goods and services organizations take in and use to create products or services
Intermediate consumer A customer who purchases raw materials or wholesale products before selling
them to final customers
Macroenvironment The general environment; includes governments, economic conditions, and other
fundamental factors that generally affect all organizations
Merger One or more companies combining with another
Open systems Organizations that are affected by, and that affect, their environment
Organizational climate: The patterns of attitudes and behavior that shape people’s experience of an or-
ganization
Organization culture The set of important assumptions about the organization and its goals and practices
that members of the company share
Outputs The products and services organizations create
Prospectors Companies that continually change the boundaries for their task environments by seeking
new products and markets, diversifying and merging, or acquiring new enterprises
Scenario A narrative that describes a particular set of future conditions
Smoothing Leveling normal fluctuations at the boundaries of the environment
Strategic maneuvering An organization’s conscious efforts to change the boundaries of its task envi-
ronment
Supply chain management The managing of the network of facilities and people that obtain materials
from outside the organization, transform them into products, and distribute
them to customers
Switching costs Fixed costs buyers face when they change suppliers

2-13
Chapter 02 - The External and Internal Environments

LECTURETTES

LECTURETTE 2.1

Being Mindful instead of Mindless: Johnsonville Sausage

As noted in this chapter, excelling at the profession of management takes careful thinking and
learning. Harvard psychologist Ellen Langer calls this “being mindful.” How can a company inspire em-
ployees to adopt this approach to their work? Johnsonville Sausage has managed to craft a company cul-
ture that asks employees to keep their minds engaged at all times. Their company creed makes it clear.
What they call “The Johnsonville Way” is posted on their website, and their success as an organization
suggests that they “walk the talk.”
The Johnsonville Way
Date Posted: 04/08/2007
We at Johnsonville have a moral responsibility to become the Best Company in the World.

We will accomplish this as each one of us becomes better than anyone else at defining, and then serving, the best inter-
ests of all those who have a stake in our success.
We will succeed by setting near-term objectives and long-term goals that will require personal growth and superlative
performance by each of us. We will change any objectives or goals that no longer require personal growth and superla-
tive performance to ones that do.
As an individual, I understand The Johnsonville Way is about my performance and my accountability to the team. My
commitment to stretch, grow and excel is an unending one.
This is The Johnsonville Way and I am committed to it.

The Johnsonville Way also indicates the company’s belief in management science. Their focus on
“setting near-term objectives and long terms goals” suggests that they carefully measure and monitor their
progress toward those objectives and goals.
Johnsonville is more than just an organization that is focused on management science and keeping
employees mindful. Their commitment to “change any objectives or goals that no longer require personal
growth and superlative performance to ones that do” suggests that this organization prides itself on being
a learning organization. As evidenced by the number of concepts this company creed conveys in just a
few lines, “The Johnsonville Way” has been carefully crafted to indicate in a powerful way just exactly
the kind of mindset the organization expects from its employees.

(Source: http://www.johnsonville.com/home/press-room/corp-info/the-johnsonville-way)

2-14
Chapter 02 - The External and Internal Environments

LECTURETTE 2.2

Operations and Human Resources: IBM’s Workforce Management Initiative

As the book explains, one way in which an organization can manage its competitive environment
is through becoming a globally integrated enterprise. IBM has adopted a human capital management ap-
proach to better utilize its talented workforce. Considering labor as an input and IBM products as an out-
put, the company launched its Workforce Management Initiative (WMI) to capture and effectively lever-
age every employee’s skill set and training. All of IBM’s approximately 330,000 employees are captured
in this database. Having this database allows managers to search for employee talent within the compa- ny-
--around the world---rather than having to look outside to recruit talent and fill current needs. The
company estimates that this initiative has saved over $500 million. In addition to saving the company
money, applying this supply chain approach allows the company to estimate its talent capacity for future
anticipated needs as well, and to train individuals in a proactive fashion. In 2007, the IBM Institute for
Business Value published seven keys to succeed in a globally integrated world of business, written by
Eric Lesser, Tim Ringo, and Andrea Blumberg. The seven principles are:
1. Understanding the demographics and capabilities of the workforce.
2. Predicting the future labor supply and demand.
3. Utilizing social networks to increase visibility and application of knowledge across the organiza-
tion.
4. Enabling individuals to perform work regardless of location.
5. Facilitating collaboration across traditional organizational boundaries.
6. Driving the rapid development of skills and capabilities to meet changing business conditions.
7. Evaluating employee performance and providing appropriate feedback.

Sources:
http://intelligententerprise.informationweek.com/showArticle.jhtml;jsessionid=FRFIJGEA3BMIXQE1G
HPSKHWATMY32JVN?articleID=175002433 (accessed on December 22, 2009)

http://www.shrm.org/Education/hreducation/Documents/Boudreau_IBM%20Case%20Study%20with%20
Teaching%20Notes_FINAL.pdf (accessed on November 9, 2011)
accessed on December 22, 2009)

DISCUSSION QUESTIONS

.
1. This chapter’s opening quote by Peter Drucker said, “The essence of a business is outside it-
self.” What do you think this means? Do you agree?

Students may ask: What is meant by the word “essence?” It has a number of meanings. How-
ever, according the dictionary, it means “that which makes something what it is.” It is im-
portant to remember that the purpose of a successful business is to get customers and to retain
customers.

Using the definition above, Drucker’s statement can be interpreted to mean that it is the out-
side environments that determine the nature of business. This can be illustrated through the
use of an example. A new automobile manufacturer entering the U.S. market is faced with

2-15
Chapter 02 - The External and Internal Environments

three large domestic companies and a number of well-established foreign firms. The newcom-
er’s strategy has to take this external environment into consideration. This can be contrasted
with a new company entering a business in which the competition is limited to three or four
small firms.

However, one can argue that even though the external environments can have a dramatic im-
pact on a business, it is still management’s responsibility to develop a strategy to enable the
organization to grow and prosper.

2. What are the most important forces in the macroenvironment facing companies today?

In order to answer this question, the student probably needs to recognize that different compa-
nies operate in different industries and a critical macroenvironment force facing one company
may be a minor factor for another. Three examples are given below:
Economy. The economy is always a factor. A booming economy may allow a new
business to grow and prosper while a depressed economy would cause it to fail. Some
businesses do very well in booming economies whereas others (notably the entertainment
industry) seem to flourish during times when the economy is weak.
Technology. Consider the impact of rapidly changing technology on the computer
industry. Most of the early innovators are no longer in business, and many of the current
leaders might not survive another dramatic change in technology. And yet, in other in-
dustries (such as candy making), the technology has been unchanged for many years.
Political/legal. This factor is having a major impact on the televi-
sion/telephone/computer interface. Political efforts to increase competition in the cable
television industry will probably be a major factor for many years to come.
Students should be able to identify industries in which each of the forces in the macroen-
vironment is playing a major role or, at least, have done so in the past.

3. What are the main differences between the macroenvironment and the competitive environ-
ment?

The macroenvironment consists of the major forces (international, economic, social and natural,
demographic, technological, and political/legal) which affect all businesses to some degree.

The competitive environment. While this is also part of the external environment, it is viewed
separately from the macroenvironment in that it focuses on the competitive forces that are specif-
ic to each business.

4. What kinds of changes do companies make in response to environmental uncertainty?

Organizations may adapt to the environment by altering their work structures and work processes
in order to reduce uncertainty. When uncertainty arises due to environmental complexity, many
organizations adopt more decentralized decision-making structures. This allows people with the
most direct knowledge of a particular product or operation to make important decisions rather
than a centralized unit that may be more removed from the daily business activities.

When uncertainty arises due to changes in the environment, many organizations adopt more flex-
ible structures. When technologies, customers, and competitors change rapidly, a highly rigid,
bureaucratized organization is less able to respond effectively, thus responsiveness and innova-
tion become priorities

2-16
Chapter 02 - The External and Internal Environments

Organizations can adapt to uncertainty by buffering at both the input and output sides of their
boundaries. They may do this by hiring temporary workers during rush periods on the input side,
and by maintaining adequate inventory in order to manage a rush of orders on the output side.
Organizations may also adapt at their core by establishing flexible processes such as mass cus-
tomization which allows an organization to produce large quantities at low cost, yet still offer in-
dividual customization.

5. We outlined several proactive responses organization can make to the environment. What
examples have you seen recently of an organization responding effectively to its environment?
Did the effectiveness of the response depend upon whether the organization was facing a
threat or an opportunity?

A number of proactive responses to the environment are identified in the text:

Independent strategies: The firm acts on its own to change some aspect of the current environ-
ment through competitive aggression, competitive pacification, public relations, voluntary action,
legal action, or political action.

Cooperative strategies: The firm collaborates with another organization to either reduce their
costs and risks or increase their power relative to the environment.

Strategic maneuvering: The firm attempts to change the boundaries of its competitive environ-
ment through domain selection (entering new markets with limited competition or regulation), di-
versification (investing in different types of business), mergers and acquisitions, or divestiture.

Challenge students to identify firms that are adopting each of these strategies and whether or not
they are doing so in response to a threat or an opportunity.

6. Select two organizations that you are interested in. Research information about the firms or
talk with an employee if possible. What types of cultures do they have? Write a paragraph
that describes each culture.

EXAMPLE: “Company X seems to really care about their new employees. The employee I
spoke to told me that the company actively encourages employees to move from job to job within
the organization - that sounded great to me. In addition, I found out that people have a lot of flex-
ibility to work on their terms - for example, being in the office at 9am doesn’t matter as much as
whether or not you get the job done. To me, this company looks like it has a group culture.”

7. When you were visiting colleges to decide where to attend, were there cultural differences in
the campuses that made a difference in your choice? How did these differences impact your
decision on which college to attend?

Student responses to this question will differ widely, but if they understand the concept of culture,
they should talk about the “feeling” a place has - organized, productive, friendly, etc. If students
have visited several college campuses, they should definitely be able to talk about difference in
culture for each campus. For example, in California, one might have perceive USC as being very
sports-oriented, Occidental as being very arts-oriented and exclusive, UCSD as a school that pro-
duced “renaissance people”, CalTech as being a place for brains and geeks, and San Diego State
as a party school. Note that all of these perceptions of culture have value judgments attached to
them, and they may or may not be accurate.

2-17
Chapter 02 - The External and Internal Environments

CONCLUDING CASE

Wild Water Gets Soaked

Case Summary:

This case reveals how important it is to organizations of all sizes to be prepared and ready to im-
plement changes in business scope and even product mix in order to combat the effects of external
forces. As the case depicts, external environmental changes – changes in competition and con-
sumers’ preference, to name a few - often strongly impact companies. Changes such as these ne-
cessitate that an organization, desiring to remain profitable, must be willing to modify operations
to better accommodate its changing consumers’ needs.

Chapter Topics Related to the Case:

Discuss how environmental forces impact organizations

Describe the purpose of an environmental analysis
Discuss how organizations like the Salernos operation can conduct environmental analyses
Identify how an organization can better adapt to the demands of its external environment
Identify how an organization can influence its external environment
Differentiate between an organization’s external and competitive environments

Case Discussion Questions:

1. Imagine that you are a management consultant hired by the Salernos to help them navigate
the choppy waters ahead. First, describe the elements of the macroenvironment and compet-
itive environment that affect Wild Water now. Then describe elements that you anticipate
will affect the water park in the next few years.
The elements of the macroenvironment that are going to be affecting Wild Water are de-
mographics (the changing clientele attracted by the new condos), technology (the upscale chain
park), the economy (the price of tickets, along with the costs of running the park), laws and poli-
tics (the new state safety law). Wild Water will also be affected by the competitive environment in
the form of rivals (the chain park), substitutes (golf, deep-sea fishing trips), and a customer base
that is potentially changing.

2. Next, describe the organization’s culture. Discuss how the current culture affects the way it
responds to the organization’s external environment.

Wild Water has a strong group culture. Despite the “hierarchy”, employees at Wild Water are
considered “family”, and there is a sense of cohesiveness, participation, and teamwork. Having a
group culture means that the staff at Wild Water are probably going to care more about loyalty,
tradition, and developing employees than they will about gaining a competitive advantage or mar-
ket superiority. Having a strong culture means that Wild Water can identify and support appropri-
ate behaviors for moving the company forward.

3. Now, create a plan for Wild Water. In your plan, describe what changes the organization
needs to make in its culture to meet upcoming challenges in the external environment. Then

2-18
Chapter 02 - The External and Internal Environments

describe steps that Wild Water can take to compete successfully against the new amusement
park. How can the Salernos keep their loyal customers happy while attracting new ones?

The first thing Wild Water managers will need to do is to understand the changes to their envi-
ronmental and competitive environments. As noted in the text, there are three considerations that
guide the choice of a response approach to the environment: 1) changing the appropriate elements
of the environment; 2) choosing responses that focus on pertinent elements of the environment;
and 3) choosing responses that offer the most benefit at the lowest cost. In this case, independent
action may be the best way for Wild Water to change the environment. If they started working
right away, they would be able to bring their park up to the new safety standard laws. The next
thing they need to do is embark on a public relations campaign - making sure that their best fea-
tures are highlighted in advertising, and that the advertising reaches the right people. They may
not be able to compete head-to-head with the new chain park, but they may still be able to engage
in competitive aggression through the use of aggressive pricing.

EXPERIENTIAL EXERCISE

EXERCISE 2.1: EXTERNAL ENVIRONMENT ANALYSIS

Objective

To give students the experience of performing an analysis of a company’s external environment.

Suggested Responses to Student Questions

1. Laws and Regulations. What are some key laws and regulations under which this company and
the music industry must operate?

Key laws and regulations in the music industry might include copyright regulations, contracts, royalty
practices in retail sales and radio broadcasting, anti-trust, advertising regulations, foreign-trade prac-
tices.

2. The Economy. How does the state of the economy influence the sales of this company’s
products?

The state of the economy has traditionally had less of an immediate impact on the music industry than
on some others. CDs and on-line music sales tend to be low-ticket items and are less likely to be af-
fected too adversely even by a recession. A key driver of sales is the presence or absence of popular
new talent.

3. Technology. What new technologies strongly affect the company you have selected?

New technologies permitting on-line music sales, like iTunes, and recording and playing devices like
iPod and upcoming cellphone technologies, increase the easy availability and sale of music products.
They also allow music companies to avoid the expense of manufacturing and distributing CDs, and
sharing sales revenues with retailers. A major downside is that new technologies permit easy copying
of music without payment. Technology that can provide copyright protection (e.g., preventing unau-
thorized copying) may be one solution to this problem.

2-19
Chapter 02 - The External and Internal Environments

4. Demographics. What changes in the population might affect the company’s customer base?

Demographics affecting the company might include changes in the population of young people who
are the primary purchasers of pop music (conversely, the gradual decrease in classical music sales as
the demographic for that segment ages) and the growing importance of the Hispanic market.

5. Social Issues. What changes in society affect the market for your company’s music products?

Social issues affecting the company include not only the increased tolerance for illegal copying of
music, but also the increased fragmentation of public tastes and interests. Objections to obscenity in
lyrics and the rising influence of the religious market, are other social factors influencing the music
business.

6. Suppliers. How does your company’s relationship with suppliers affect its profitability?

The lower the cost of supplies, the more profit the company will make. In the music industry, sup-
plies are both tangible (the cost of CDs and jewel cases, for example) and intangible (the money paid
to artists.) Companies that introduce new artists may take bigger risks, but also have smaller costs
than companies that record and distribute the music of established acts.

7. Competitors. What companies compete with the firm you have selected? Do they compete on
price, on quality, or on other factors?

Key competitors in the industry include Bertelsmann, EMI, Sony, Universal, and Warner Music. In
the past, many more companies existed, but the industry has experienced considerable consolidation.
(There might be even more consolidation but for anti-trust regulations in the U.S. and Europe.) The
companies do not compete on price at all, or even on the quality of their products per se; the main
sources of competitive advantage are the companies' backlist - the music copyrights they own - and,
even more important, the new talent they are able to find and sign. Most music buyers do not know
or care which company is selling the music they are buying.

8. New entrants. Are new competitors to the company likely? Possible?

Traditionally, new entrants were extremely unlikely; given the large capital investment the music
business requires (millions to launch a new album, for example). That may still be the case, but today
potential new entrants include music distributors themselves, like Apple, who can decide to bypass
music companies and sign new talent on their own. This is unlikely, as companies like Apple current-
ly do not have the expertise, experience, or perhaps even interest in the business. But it remains a
possibility that music companies need to take into account, particularly as on-line distributors become
an increasingly important part of the supply chain. In addition, the ability to sell music on-line may
reduce the need for some well-known artists to rely on the marketing and distribution capabilities of
music companies, and to sell directly to consumers on their own.

9. Substitutes. Is there a threat of substitutes for the music industry’s existing products?

There are many substitute delivery systems for music, and the music industry is constantly being
threatened by non-paying delivery systems. Music itself is more difficult to replace, however time
spent on other forms of entertainment may decrease the amount of time and money spent on music.

2-20
Another Random Scribd Document
with Unrelated Content
The Project Gutenberg eBook of History of the
Pirates Who Infested the China Sea From 1807
to 1810
This ebook is for the use of anyone anywhere in the United States
and most other parts of the world at no cost and with almost no
restrictions whatsoever. You may copy it, give it away or re-use it
under the terms of the Project Gutenberg License included with this
ebook or online at www.gutenberg.org. If you are not located in the
United States, you will have to check the laws of the country where
you are located before using this eBook.

Title: History of the Pirates Who Infested the China Sea From 1807
to 1810

Author: Yung-lun Yüan

Translator: Karl Friedrich Neumann

Release date: November 23, 2013 [eBook #44261]

Most recently updated: October 23, 2024

Language: English

Credits: Produced by Charlene Taylor and the Online Distributed

Proofreading Team at http://www.pgdp.net (This file was
produced from images generously made available by The
Internet Archive/American Libraries.)

*** START OF THE PROJECT GUTENBERG EBOOK HISTORY OF THE

PIRATES WHO INFESTED THE CHINA SEA FROM 1807 TO 1810 ***
 HISTORY

OF

THE PIRATES

WHO

INFESTED THE CHINA SEA,

From 1807 to 1810.

TRANSLATED FROM THE CHINESE ORIGINAL,

WITH

NOTES AND ILLUSTRATIONS,

BY

C H ARL ES FRIED. NEUMANN.

 LONDON:
PRINTED FOR THE ORIENTAL TRANSLATION FUND,

And Sold by

J. MURRAY, ALBEMARLE STREET;

PARBURY, ALLEN, & CO., LEADENHALL STREET;

THACKER & CO., CALCUTTA; TREUTTEL & WÜRTZ, PARIS;

AND E. FLEISCHER, LEIPSIG.

1831.
LONDON
Printed by J. L. Cox, Great Queen Street,
Lincoln's-Inn Fields
 CONTENTS
TRANSLATOR'S PREFACE.
YING HING SOO's PREFACE.
KING CHUNG HO's PREFACE.
BOOK FIRST.
BOOK SECOND.
APPENDIX.
 TRANSLATOR'S PREFACE.
Conquerors are deemed successful robbers, while robbers are
unsuccessful conquerors. If the founder of the dynasty of the Ming
had failed in his rebellion against the Moguls, history would have
called him a robber; and if any one of the various robber-chiefs, who
in the course of the two last centuries made war against the reigning
Manchow, had overthrown the government of the foreigners, the
official historiographers of the "Middle empire" would have called
him the far-famed, illustrious elder father of the new dynasty.
Robbers or pirates are usually ignorant of the principles concerning
human society. They are not aware that power is derived from the
people for the general advantage, and that when it is abused to a
certain extent, all means of redress resorted to are legitimate. But
they feel most violently the abuse of power. The fruit of labour is too
often taken out of their hands, justice sold for money, and nothing is
safe from their rapacious and luxurious masters. People arise to
oppose, and act according to the philosophical principles of human
society, without having any clear idea about them. Robbers and
pirates are, in fact, the opposition party in the despotical empires of
the East; and their history is far more interesting than that of the
reigning despot.[1] The sameness which is to be observed in the
history of all Asiatic governments, presents a great difficulty to any
historian who wishes to write a history of any nation in Asia for the
general reader.
The history of the transactions between Europeans and the Chinese
is intimately connected with that of the pirate chiefs who appeared
from time to time in the Chinese Sea, or Southern Ocean. The
Europeans themselves, at their first appearance in the middle
empire, only became known as pirates. Simon de Andrada, the first
Portuguese who (1521) tried to establish any regular trade with
China, committed violence against the merchants, and bought young
Chinese to use them as slaves; and it is known that it was the policy
of the civilized foreigners from the "Great Western Ocean" (which is
the Chinese name for Europe) to decry their competitors in trade as
pirates and outlaws.
The footing which Europeans and Americans now enjoy in China,
originated from the assistance given by the Portuguese to the
Manchow against the Patriots, otherwise called pirates, who would
not submit to the sway of foreigners. Macao, the only residence (or
large prison) in which foreigners are shut up, is not considered by
the Chinese Government as belonging exclusively to the Portuguese.
The Dutch, on not being allowed to remain in Macao, complained to
the Chinese Government, and the authorities of the middle empire
commanded the Portuguese to grant houses to the newly arrived
Holan or Hollander, "since Macao was to be considered as the abode
of all foreigners trading with China." The edicts concerning this
transaction are stated to be now in the archives of the Dutch factory
at Macao.
It is one of the most interesting facts in the history of the Chinese
empire, that the various barbarous tribes, who subdued either the
whole or a part of this singular country, were themselves ultimately
subdued by the peculiar civilization of their subjects. The Kitans,
Moguls, and Manchow, became, in the course of time, Chinese
people; like the Ostro, and Visigoths, and Longobards—Romans. But
we may remark, that both the Chinese and the Roman civilization
under the Emperors recommended itself to the conquerors, as
connected with a despotism which particularly suited the views of
the conquerors. Though this large division of the human race, which
we are accustomed to call Tatars, never felt a spark of that liberty
which everywhere animated the various German nations and tribes,
and the Khakhans, in consequence of this, were not in need of any
foreign policy to enslave their compatriots; yet it may be said, that
neither Moguls nor Manchow were able to establish a despotic form
of government which worked so well for a large nation as that of the
Chinese.
The extremes of both despotism and democracy acknowledge no
intermediary power or rank. The sovereign is the vice-regent of
heaven, and all in all; he is the only rule of right and wrong, and
commands both what shall be done in this world and thought of
concerning the next. It may be easily imagined, that the Jesuits, on
their first arrival in China, were delighted with such a perfect
specimen of government according to their political sentiments. They
tried all that human power could command to succeed in the
conversion of this worldly paradise. The fathers disguised themselves
as astronomers, watchmakers, painters, musicians, and engineers.[2]
They forged inscriptions[3] and invented miracles, and almost went
to the extent of canonizing Confucius. But this cunning deference to
Chinese customs involved the Jesuits in a dispute with their more
pious but less prudent competitors; and notwithstanding all the
cleverness of the Jesuits, the Chinese saw at last, that in becoming
Roman Catholic Christians they must cease to be Chinese, and obey
a foreign sovereign in the Great Western Ocean. Toland affirms, that
the Chinese and the Irish, in the time of their heathen monarch
Laogirius, were the only nations in which religious persecutions
never existed;[4] this praise now refers exclusively to Ireland. Roman
Catholicism is at this moment nearly extinguished in China. To
become a Christian is considered high-treason, and the only Roman
Catholic priest at Canton at the present time, is compelled to hide
himself under the mask of shopkeeper. In their successful times,
during the seventeenth century, the Roman Catholic Missionaries
published in Europe, that no nation was more virtuous, nor any
government more enlightened than that of the Chinese; these false
eulogies were the source of that high opinion in which the Chinese
were formerly held in Europe.
The merchants and adventurers who came to China "to make
money" found both the government and people widely different from
descriptions given by the Jesuits. They found that the Chinese
officers of government, commonly called Mandarins, would think
themselves defiled by the least intercourse with foreigners,
particularly merchants; and that the laws are often interpreted quite
differently before and after receiving bribes. The Europeans were
proud of their civilization and cleverness in mercantile transactions,
and considered the inhabitants of all the other parts of the world as
barbarians; but they found, to their astonishment and
disappointment, the Chinese still more proud and cunning. We may
easily presume that these deluded merchants became very irritated,
and in their anger they reported to their countrymen in Europe that
the Chinese were the most treacherous and abandoned people in
the world,[5] that "they were only a peculiar race of savages," and
required to be chastised in one way or another; which would
certainly be very easy. Commodore Anson, with a single weather-
beaten sixty-gun ship, in fact, set the whole power of the Chinese
Government at defiance.
The Translator of the History of the Pirates ventures to affirm, that
the Chinese system of government is by far the best that ever
existed in Asia; not excepting any of the different monarchies
founded by the followers of Alexander, the government of the
Roman Prætors and of Byzantine Dukes, or that of Christian Kings
and Barons who reigned in various parts of the East during the
middle ages. The principles of Chinese government are those of
virtue and justice; but they are greatly corrupted by the passions
and vices of men. The greater part of their laws are good and just,
though the practice is often bad; but unfortunately this is generally
not known to the "Son of Heaven." It is the interest of the Emperor
to deal out justice to the lowest of his subjects; but, supposing it
were possible that one man could manage the government of such
an immense empire, who either could or would dare to denounce
every vicious or unjust act of the officers employed by government?
The Chinese themselves are a clever shrewd sort of people; deceit
and falsehood are, perhaps, more generally found in the "flowery
empire" than any where else; but take them all in all, they rank high
in the scale of nations, and the generality of the people seem to be
quite satisfied with their government; they may wish for a change of
masters, but certainly not for an entire change of the system of
government.
There has existed for a long period, and still exists, a powerful party
in the Chinese Empire, which is against the dominion of the
Manchow; the different mountainous tribes maintain, even now, in
the interior of China, a certain independence of the Tay tsing
dynasty. The Meao tsze, who were in Canton some years ago,
stated, with a proud feeling, that they were Ming jin, people of Ming;
the title of the native sovereigns of China before the conquest of the
Manchow. It is said, that the whole disaffected party is united in a
society—generally called the Triade-Union—and that they aimed at
the overthrow of the Tatars, particularly under the weak government
of the late Emperor; but the rebels totally failed in their object both
by sea and land.
It has been falsely reported in Europe, that it is not allowed by the
laws of China to publish the transactions of the reigning dynasty. It
is true that the history written by the official or imperial historians is
not published; but there is no statute which prohibits other persons
from writing the occurrences of their times. It may be easily
imagined that such authors will take especial care not to state any
thing which may be offensive to persons in power. There is, however,
no official court in China to regulate the course of the human
understanding, there is nothing like that tribunal which in the
greater part of the Continent of Europe is called the Censorship. Fear
alone is quite sufficient to check the rising spirits of the liberals in
the middle empire. The reader, therefore, should not expect that
either the author of the "History of the Rebellions in the Interior of
China," or the writer of the "Pacification of the Pirates," would
presume to state that persons whom government is pleased to style
robbers and pirates, are in reality enemies of the present dynasty;
neither would they state that government, not being able to quell
these rebellions, are compelled to give large recompenses to the
different chiefs who submit. These facts are scarcely hinted at in the
Chinese histories. The government officers are usually delineated as
the most excellent men in the world. When they run away, they
know before-hand that fighting will avail nothing; and when they
pardon, they are not said to be compelled by necessity, but it is
described as an act of heavenly virtue! From what we learn by the
statements of a Chinese executioner, we should be led to form a bad
opinion of the veracity of these historians, and the heavenly virtue of
their government; for it is said, that one Chinese executioner
beheaded a thousand pirates in one year.[6]
The author of the following work is a certain Yung lun yuen, called
Jang sëen,[7] a native of the city or market town Shun tih, eighty le
southerly from Canton. The great number of proper names, of
persons and places, to be found in the "History of the Pacification of
the Pirates," together with the nicknames and thieves' slang
employed by the followers of Ching yĭh, presented peculiar
difficulties in the translation of Yuen's publication. The work was
published in November 1830 at Canton; and it is to be regretted, for
the fame of the author in the Great Western Ocean, that he used
provincial and abbreviated characters. I will not complain that by so
doing he caused many difficulties to his translator, for a native of
Shun tih would not trouble himself on that point; but I have reason
to believe that the head schoolmaster of Kwang tung will think it an
abomination that Yung lun yuen should dare take such liberties in a
historical composition. Schoolmasters have a greater sway in China
than any where else, and they like not to be trifled with. These are
particularly the men, who, above all others, oppose any innovation
or reform; scholars, who presume to know every thing between
heaven and earth: and they may certainly satisfy every man, who
will rest satisfied by mere words. These learned gentlemen are too
much occupied with their own philosophical and literary disquisitions,
to have any time, or to think it worth their notice, to pay attention to
surrounding empires or nations. If we consider the scanty and
foolish notices which are found in recent Chinese publications
regarding those nations with which the Chinese should be well
acquainted, we cannot but form a very low estimate of the present
state of Chinese literature. How far otherwise are the accounts of
foreign nations, which are to be found in the great work of
Matuanlin! It will, perhaps, be interesting to the European reader to
learn, what the Chinese know and report concerning the nations of
Ta se yang, or the Great Western Ocean. I therefore take an
opportunity here to give some extracts from a Chinese publication
relative to European nations, printed last year at Canton.
The fifty-seventh book of the Memoirs concerning the South of the
Mei ling Mountains, contains a history of all the Southern barbarians
(or foreigners); and here are mentioned—with the Tanka people and
other barbarous tribes of Kwang tung and Kwang se—the Siamese,
the Mahometans, the French, Dutch, English, Portuguese, Austrians,
Prussians, and Americans. The work was published by the command
of Yuen, the ex-Governor-General of Canton, who is considered one
of the principal living literary characters of China, and it consists
chiefly of extracts from the voluminous history of the province
Kwang tung, published by his Excellency:—

The Religion of the Hwy hwy, or Mahometans.

"This religion is professed by various sorts of barbarians who
live southerly beyond Chen ching (Tséamba, or Zeampa), to the
Se yu. Their doctrines originated in the kingdom of Me tih no
(Medina). They say that heaven is the origin of all things; they
do not use any images. Their country is close to Tëen choo
(India); their customs are quite different from those of the
Buddhists; they kill living creatures, but they do not eat
indiscriminately all that is killed; they eat not hog's flesh, and
this is the essence of the doctrine of Hwy hwy. They have now a
foreign pagoda (fan tă), near the temple of the compassionate
saint (in Canton), which exists since the time of the Tang. It is
of a spiral form, and 163 cubits high.[8] They go every day
therein to say prayers."

By the kindness of Dr. Morrison, the translator had the pleasure to

converse with a member of the Mahometan clergy at Canton. He
stated, that in the Mosque at Canton is a tablet, whereon it is
written, that the religion of the Prophet of Mecca was brought to
China, Tang ching yuen san nëen, that is, in the third year of the
period called Ching yuen, under the Tang dynasty, i.e. 787 of our
era.[9] The compilers of the Memoirs, &c. have taken their extract
from the historical work of Ho (4051, M.); they seem not to have any
knowledge of Matuanlin, where the Arabs are spoken of under the
name of Ta she. See the notes to my translation of the Chronicle of
Vahram, p. 76. During the time the translator was at Canton, there
arrived a pilgrim from Pekin on his way to Mecca.

The Fa lan se, Francs and Frenchmen.

"The Fa lan se are also called Fo lang se, and now Fo lang ke. In
the beginning they adopted the religion of Buddha, but
afterwards they received the religion of the Lord of Heaven.
They are assembled together and stay in Leu song (Spain?);
they strive now very hard with the Hung maou or red-haired
people (the Dutch), and the Ying keih le (English); but the Fa
lan se have rather the worst of it. These foreigners, or
barbarians (e jin) wear white caps and black woollen hats; they
salute one another by taking off the hat. Regarding their
garments and eating and drinking, they have the same customs
as the people of Great Leu song and Small Leu song (Spain and
Manilla)."

This extract is taken from the Hwang tsing chĭh kung too, or the
Register of the Tribute as recorded under the present dynasty
(Memoirs, l. c. p. 10 v., p. 11 r.). I am not sure if Ke tsew (10,869)
keu (6,063) Leu song, can really be translated by the words—they
are assembled together and stay in Leu song. The use of tsew in the
place of tseu (10,826) is confirmed by the authorities in Kang he;
but does Leu song really mean Spain? The Philippinas are called Leu
song (Luzon), from the island whereon Manilla is, and in opposition
to Spain (Ta Leu song, the great L. s.), Seao Leu song, the small Leu
song. It may be doubted whether Leu song without Ta, great, can be
taken for Spain. The Chinese have moreover learned from Matthæus
Ricci the proper name of Spain, and write it She pan ya. The Dutch,
the English, and the Germans, are, from a reddish colour of their
hair, called Hung maou. This peculiar colour of the hair found among
people of German origin, is often spoken of by the ancient Roman
authors; as for instance in Tacitus, Germania, c. 4. Juvenal says, Sat.
XIII. v. 164,

Cærula quis stupuit Germani lumina? flavam

Cæsariem, et madido torquentem cornua cirro?

It would carry us too far at present to translate the statements of

the Chinese concerning the Portuguese and Dutch. Under the head
of Se yang, or Portugal, may be read an extract of the account of
Europe (Gow lo pa) the Chinese received by Paulus Matthæus Ricci
(Le ma paou). The Chinese know that the European Universities are
divided into four faculties; and his Excellency Yuen is aware of the
great similarity between the ceremonies of the Buddhists and those
of the Roman Catholic church (l. c. 17 v). The present Translator of
the "History of the Pirates" intends to translate the whole of the 57th
book of the often-quoted Memoirs, and to subjoin copious extracts
of other works, particularly from the Hae kwŏ hëen këen lăh, or
"Memoirs concerning the Empires surrounded by the Ocean." This
very interesting small work is divided into two books; one containing
the text, and the other the maps. The text consists of eight
chapters, including a description of the sea-coast of China, with a
map, constructed on a large scale, of the nations to the east, the
south-east, and the south; then follows a topography of Portugal
and Europe generally. Concerning England we find:—

The Kingdom of the Ying keih le, or English.

"The kingdom of the Ying keih le is a dependent or tributary
state[10] to Ho lan (Holland). Their garments and manners in
eating and drinking are the same. This kingdom is rather rich.
The males use much cloth and like to drink wine. The females,
before marriage, bind the waist, being desirous to look slender;
their hair hangs in curls over the neck; they use a short
 garment and petticoats, but dress in a larger cloth when they go
out. They take snuff out of boxes made from gold and threads."

This extract is taken from the "Register of the Tribute as recorded

under the present dynasty."

"Ying keih le is a kingdom composed of three islands: it is in the

middle of four kingdoms, called Lin yin:[11] Hwang ke, the
yellow flag (Denmark), Ho lan, and Fo lang se. The Great
Western Ocean (Europe) worships the Lord of Heaven; and
there are, firstly, She pan ya (Spain), Poo keăh ya (Portugal),
the yellow flag, &c.; but there are too many kingdoms to
nominate them one by one. Ying keih le is a kingdom which
produces silver, woollen cloths,[12] camlets, peih ke, or English
cloth, called long ells,[13] glass, and other things of this kind."

This extract is taken from the Hae kwŏ hëen këen lăh, book i. p. 34
v. 35 r; and I am sorry to see that in the "Memoirs" it is abbreviated
in such a manner that the sense is materially changed.

"Ying keih le," says the author of the Hae kwo hëen këen lăh (l.
c.), "is a realm composed out of three islands. To the west and
the north of the four kingdoms of Lin yin, the Yellow flag, Holan,
and Fo lang se, is the ocean. From Lin yin the ocean takes its
direction to the east, and surrounds Go lo sse (Russia); and
from Go lo sse, yet more to the east, Se me le (Siberia?).
Through the northern sea you cannot sail; the sea is frozen, and
does not thaw, and for this reason it is called the Frozen Ocean.
From Lin yin, to the south, are the various empires of the Woo
and Kwei (Crows and Demons), and they all belong to the red-
haired people of the Great Western Ocean. On the west and on
the north there are different barbarians under various names;
******
but they are, in one word, similar to the Go lo sse (Russians),
who stay in the metropolis (Pekin). It is said that the Kaou chun
 peih mow (?) are similar to the inhabitants of the Middle
Empire; they are of a vigorous body and an ingenious mind. All
that they produce is fine and strong; their attention is directed
to making fire-arms. They make researches in astronomy and
geography, and generally they do not marry. Every kingdom has
a particular language, and they greet one another by taking off
the hat. They worship," &c. (The same as p. xxx.)

My copy of the Hae kwŏ hëen këen lăh was printed in the province
Che keang, in the year 1794.

"In the narrative regarding foreign countries, and forming part

of the history of the Ming, the English are called Yen go le; in
the Hae kwŏ hëen këen lŭh, Ying ke le (5272, 6950); but in the
maps the name is now always written Ying keih le (5018, 6947).
In expressing the sound of words we sometimes use different
characters. This kingdom lies to the west of Gow lo pa (Europa),
and was originally a tributary state to Ho lan (Holland); but in
the course of time it became richer and more powerful than Ho
lan, and revolted. These kingdoms are, therefore, enemies. It is
not known at what time the Ying keih le grasped the country of
North O mŏ le kea (America), which is called Kea no (Canada).
Great Ying keih le is a kingdom of Gow lo pa (Europe.)[14] In
the twelfth year of Yung ching (1735), they came the first time
to Canton for trade. Their country produces wheat, with which
they trade to all the neighboring countries. They are generally
called Keang heŏ (that is, English ships from India, or country
ships), and there arrive many vessels."

This extract is taken from the Tan chay hëen këen lăh, and it is all
that we find regarding England in the Memoirs concerning the south
of the Mei ling Mountains (p. 18 r. v.). In the latter extract, the
author appears to confound the country trade of India and China
with that of the mother country. England is again mentioned in the
notice regarding Me le keih (America), taken out of Yuen's History of
Canton. It is there said, that the Me le keih passed, in the 52d year
of Këen lung (1788), the Bocca Tigris, and that they then separated
from the Ying keih le (p. 19 r.) At the end of the extract concerning
the Americans (p. 190) we read the following words:

"The characters which are used in the writings of these realms

are, according to the statements of Ma lo ko, twenty-six; all
sounds can be sufficiently expressed by these characters. Every
realm has large and small characters; they are called La ting
characters, and La te na (Latin) characters."

It is pleasing to observe that his Excellency Yuen had some

knowledge of Dr. Morrison's Dictionary. In the third part of his
Dictionary, Dr. Morrison has given, in Chinese, a short and clear
notice concerning the European alphabet. Yuen seems to have taken
his statements from this notice, and to have written the name of the
author, by a mistake, Ma lo ko, for Ma le so, as Dr. Morrison is
generally called by the Chinese.

The Man ying, the Double Eagle, or

Austrians.
"The Man ying passed the Bocca Tigris the first time in the 45th
year of Këen lung (1781), and are called Ta chen (Teutchen).
They have accepted the religion of the Lord of Heaven. In
customs and manners they are similar to the Se yang, or
Portuguese; they are the brethren of the Tan ying, or Single
eagle kingdom (Prussia); in difficulties and distress they help
one another. Their ships which came to Canton had a white flag,
on which an eagle was painted with two heads."

This extract is taken from the History of Yuen. I take the liberty to
observe, that the Chinese scholar must be careful not to take the Sui
chen, or Chen kwŏ (the Swedes), for the Ta chen (the Teutchen). In
the Memoirs, l. c. p. 19 v., we read the following notice on the Chen
kwŏ (the Swedes):
 "The Chen realm is also called Tan (Denmark) realm, and now
the yellow flag. This country is opposite to that of the Ho lan,
and a little farther off from the sea. There are two realms called
Sui chen, and they border both on the Go lo sse, or Russia.
They passed the Bocca Tigris the first year of Këen lung
(1765)."

The Tan ying, the Single Eagle or Prussians.

"The Tan ying passed the Bocca Tigris the 52d year of Këen
lung (1788.) They live to the west and north of the Man ying
(Austrians). In customs and manners they are similar to them.
On their ships flies a white flag, on which an eagle is painted."

This last extract is also taken from the History of Canton, published
by his Excellency Yuen.
If we consider how easily the Chinese could procure information
regarding foreign countries during the course of the two last
centuries, and then see how shamefully they let pass all such
opportunities to inform and improve themselves, we can only look
upon these proud slaves of hereditary customs with the utmost
disgust and contempt. The ancient Britons and Germans had no
books; yet what perfect descriptions of those barbarian nations have
been handed down to us by the immortal genius of Tacitus!
Montesquieu says, that "in Cæsar and Tacitus we read the code of
barbarian laws; and in the code we read Cæsar and Tacitus." In the
statement of the modern Chinese regarding foreign nations, we see,
on the contrary, both the want of enquiry, and the childish remarks
of unenlightened and uncultivated minds.[15]
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