We explore the meaning of parochialism (xiao nong yi shi, 小农意识) to explain certain paradoxical Chinese managerial behaviors. We discuss how cultural, political, and economic traditions in China formed a salient context to cultivate parochialism. Qualitative data from Chinese and American managers reveal that the conceptual framework of parochialism includes a cognitive dimension of closed-mindedness, a behavioral dimension of self-protection, and a relational dimension of in-group focused social relationship. Parochialism hampers effective globalization of Chinese firms because it negatively impacts key facets of organizational culture: employee development, communication, customer orientation, social responsibility, strategic planning, and innovation. The study offers theoretical and practical implications for Chinese management research and the development of global competence.