Integration of Western Management with

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Nov 6, 2013 (4 years and 7 days ago)

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Seminar, Plymouth Business School,

27
th

April, 2012


Professor Richard Li
-
Hua

Founder and current President of

China Association for Management of Technology

Director of International Centre for Research, Innovation, Sustainability
and Entrepreneurship (RISE)

Sunderland Business School

University of Sunderland, UK



Integration of Western Management with
Chinese Philosophy





Robert Morrison

5 January 1782 in
Bullers Green
, near
Morpeth
,
Northumberland



1 August 1834 in
Guangzhou
) was an Anglo
-
Scottish evangelist
and the first Christian
Protestant

missionary

in
China
.





Sun Tzu, also known as Sun Tze or Sun Wu in other translations,
was a historical figure whose authenticity is questioned by
historians. Traditional accounts place him in the
Spring and
Autumn Period

of China (722

481 BC) as a military general
serving under
King Helü of Wu
, who lived c. 544

496 BC.

CAMOT 2010,
Shanghai, China



Sharp contrast


China’s innovation and innovation
strategy


Ancient Chinese Philosophy


Art of War by Sun Tzu


Ancient
Strategic Management






This presentation covers:

CAMOT 2010,
Shanghai, China


Section ONE:

Sharp Contrast between
West and China in the last
30 years






CAMOT 2010,
Shanghai, China


China has been regarded as “a learning
society” while West has been a
“talking society”

-

John Naisbitt, Author of China’s
Megatrends












The political and economic consensus


The New Right and economic liberation


The watchwords


privatization, liberation and
deregulation


Minimizing the state activities


Maximizing private sector activities


The “irrational” sphere becomes stronger while the
“rational” sphere become weaker


“the flowed business model”




In the West






2012 is still eventful


after Libya issue now Syria issue



Government incapability deepened


Two party systems/three parties


difficult to have
agreement on strategic decision


Downgrade of credits rating, in US, some countries in
Europe makes the economy even worse


Debt crises in Europe threaten very future of Euro


99% against 1% and occupation of Wall Street


Un
-
employment rate increase is a big issue









In the West (continued)






After 30 years of “class struggle”, it has been a period of 30
years of “harmonious society”


“It does not matter if the cat is black or white as long as it
catches mice”.



“Cross the river with a stone”



No argument of socialism or capitalism


a contrast to “We
would like to have socialist grass rather than capitalist crops” 30
years ago



Integration of prescriptive and emergent strategic approach
-

Pragmatic approach



In China:






Market economy with Chinese characteristics


Unwavering government commitment


“A political counter model” to “Western modern democracy”


Central command economy


Integration of western technology and Chinese soft capacity



Learning anything better and more advanced from west for
China’s technology capacity building



“Market in exchange of technology”



Technology transfer based innovation



Indigenous/home grown innovation


Innovation with Chinese characteristics




In China (continued):

CAMOT 2010,
Shanghai, China


Section TWO:

China’s innovation and
innovation strategy












Chinese Premier, Wenjiabao


Keynote speech at Cambridge


“Two invisible hands”


Adam Smith


Moral Sentiments


The Wealth of Nations




China’s secret:

Sharing Wisdom between West and East

China’s High
-
speed Train

Innovation Leads to the Future

CAMOT 2010,
Shanghai, China


In contrast to the financial bubbles, Chinese are
innovating in a uniquely Chinese manner and a
formidable challenge to western countries, i.e. high
-
speed train system and megliv rail
-
way


However, China has been seeking innovation
framework and implementation strategy for sustaining
and up
-
grading its economy


China took 12.3% of the world total R&D spending in
2010, second only to the US


China had 200,300 patent applications in 2008 alone,
which ranks the 3
rd

next to US and Japan








China’s Innovation Facts

CAMOT 2010,
Shanghai, China


China’s ambition is to become innovation
-
oriented society by 2020


A science and technology power by 2050


From 3I pattern of innovation strategy to
indigenous innovation


Innovation with Chinese characteristics







China’s Ambition

CAMOT 2010,
Shanghai, China


Technology transfer based innovation


Innovation on site, not in the laboratory


Innovation with a focus on costs


Product features and function tailored to local
requirement


“Haier’s washing
-
machine sold to Sichuan”


Rapid product innovation






Features of Chinese Innovation at
Enterprise Level

CAMOT 2010,
Shanghai, China



China’s research environment is detrimental
to individual creativity, too political charged


Science and technology policy
-
makers have
been regarded as overbearing


Education system in China is based on rote
learning, tend not to be critical thinkers and
not to develop independent thinking


Chinese tradition of deferring to authority is
not conducive to innovation




The Challenges

CAMOT 2010,
Shanghai, China



R&D has been increased substaintialy


2005


1.3% of the GDP


2010


2.0% of the GDP


2020


2.5% of the GDP, which means the
same level of several countries of
Organization of Economic Cooperation and
Development (OECD)



Strategic Steps

CAMOT 2010,
Shanghai, China



Interview with “Nature” from US


China’s pro
-
active acquisition strategy and
technology purchasing


From green technology to renewable
technology in the US


From air bus technology to manufacturing
technology in Europe


Fear of loosing competitive advantages


Major Concerns from West

CAMOT 2010,
Shanghai, China


Section THREE:

Ancient Chinese Philosophy











Management is an activity with well established theories
and practice in the history in the mankind


21
st

Century problems vs 20
th

Century methods


Modern theories of management were developed in 19
th

and 20
th

centuries in the west



1
st

MBA was awarded 100 year ago at Pennsylvania
University


Plymouth EMBA Technology Strategy
-

Featured MBA


The Arts of War by Sun Tze has a significant conceptual
influence to modern management




Western Management vs Chinese Philosophy

Perspective of 21
st

Century






American style is embedded in the process of self
-
actualization



Self
-
achievement


Management by objectives and driven by result



Chinese philosophy is embedded in harmonious

Environment


Discipline yourself first and then manage others







American Management


vs Chinese Philosophy









Chinese and West Value Comparison

Chinese

West

Knowledge

Simultaneous validity of contradictory
circumstances embodied in the Tao
experience

There is no greater truth than
what can be objectively measured
and tested. The opposite of that
shown to be true must be false

Process of
thinking

Holistic thinking

A perception of interrelatedness

Intuition, emotion

Harmony, moderation and balance

Relationships are key

Objective information is less
important

Think in logical and linear patterns

Measurement

Accountability

Line of reasoning

Scientific method

Individual/

Group

Value and recognition of group
performance

Focus on a sense of contribution to
group effort

Value individual performance

Focus on task accomplishment and
competence

Managerial
attitude

Internal orientation

External orientation







Not a single homogeneous work


It draws wisdom from many philosophers, some even
contradictory


The classical period of Chinese philosophy extends from
earliest time through Confucius to the end of Qin Dynasty


It was the period of great originality and creativity in
China












Chinese Philosophy


Hundred Schools






Chinese management concentrates


Personal and governmental morality


Correctness of the social relationship


Justice and sincerity


Chinese philosophy is not a homogeneous work but
draws wisdom from many philosophers, some even
contradictory


“Hundred Schools” “Hundred flowers in bloom” and
“numerous philosophers”



Leading Schools and Strategic Value of

Ancient Chinese Philosophy






Confucius is one of the most influencing figures in
ancient Chinese philosophy


Self
-
disciplinary first and then manage people



Qiji, anren, zhiguo, pingtianxia


Focus on educating people rather than managing people


Great impact on behavior of Chinese people


Analects of Confucius (or the Analects), the deeds and
speeches of Confucius with only 20,000 words, has been a
shining gem in Chinese culture and civilization


It has become mottos



Confucius Philosophy






He developed his philosophical idea of personal
development by following nature


He recommended its application to politics


Dao Te Ching


81 chapters (37+44), explaining his
theory of natural thinking, natural laws, social phenomena
and Wu Wei philosophy


Wu Wei


Action without Action


“Being soft can conquer the hard”


“Resigning before achieving the top of a successful
career”; “Seek for opening to stick in a pin”, “To be the
second best”, “Stop at the right time”.







Wu Wei Philosophy by Lao Tzu






Yin and yang is used to describe how polar opposites or
seemingly contrary forces are interconnected and
interdependent in the natural world and how they give rise
to each other


Everything has both yin and yang aspects


There is a perception in the West that yin and yang
correspond to evil and good



Yin and yang way of thinking resembles the holistic
view



The Value of the Yin
-
yang Philosophy





Section FOUR:

The Arts of War by Sun
Tzu


Ancient Strategic
Management







To design a strategy of a war, we need to examine the
belligerent parties and compare them in terms of the
five fundamental factors:


The first is the “way” (dao);


the second, “haven” (tian);


the third, “earth”; (di)


the fourth, “command” (jiang);


and the fifth, “rules and regulations” (fa).




“Let’s Win without Fighting”

“Art of War”

First Chapter: Designing a Strategy






I mean the moral influence, or that causes the
people to think in line with their sovereign so that
they will follow him through every vicissitude,
whether to live or to die, without fear of mortal
peril


To compare with strategic management, this may
mean the vision, and/or mission statement




By the way (
dao
)






I mean the effects of night and day, of good and bad
weather, of winter’s cold and summer’s heat; in
short, the conduct of military operations in
accordance with the changes of natural forces.


To compare with strategic management, this may
mean external environment, PEST
-
EL, 5 forces
analyses, the diamond theory.




By haven (
tian
)






I mean distance, whether it is great or small; the
terrain, whether it is treacherous or secure; the land,
whether it is open or constricted; and the place,
whether is portends life or death.


To compare with strategic management, this may
mean internal environment, SWOT and/or RBV




By earth (
di
)






I mean the wisdom, trustworthiness, benevolence,
courage and firmness of the commander.


To compare with strategic management, this may
mean leadership, commitment of senior
management team, core competence




By command (
jiang
)






I mean the wisdom, trustworthiness, benevolence,
courage and firmness of the commander.


To compare with strategic management, this may
mean leadership, commitment of senior
management team, core competence




By command (
jiang
)






I mean the principles guiding the organizations of
arm units, the appointment and administration of
officers and the management of military supplies
and expenditures.


To compare with strategic management, this may
mean

1.
Rules and regulations, ethics, culture and history,

2.
Technology, HR, finance,

3.
Corporate governance, CSR




By rule and regulations (
fa
)






There is no general/
CEO

who has not heard of
these 5 factors. Yet it is he who masters them that
wins and he who does not that loses. Therefore,
when assessing the outcome of a war/
business in a
global environment
, compare the two
sides/
compete against your rivals

in terms of the
above factors and appraise the situation accordingly.




Win over your enemy/

Compete against your rivals






Find out which sovereign/
firm

possesses more
moral influence/
a clear vision
, which general/
CEO

is more capable, which side/
firm

has the
advantages of heaven/
external environment
and
earth/
internal environment
, which
army/
department

is better disciplined, whose
troops/
teams

are better armed and trained, which
command/
manager

is more is more impartial in
meting out rewards and punishments and I will be
able to forecast which side will be victorious.




Compete against your rivals






Western management and Chinese management
are equally important


Western management will not be replaced by
Chinese management


Integration of Western management and Chinese
philosophy


Those who neglect these two factors will be lame
ducks





Winner in the 21
st

Century










The Carpenter and the Oak Tree














Integration of West Management with

Chinese Philosophy

@2009 CUALA RLH





Dr Richard Li
-
Hua

Salford Business School

Salford University


Integration of Western Management
and Chinese Philosophy in the
Current Economic Recession

Keynote Speech delivered at Cambridge
University Asia Law and Business Annual
Conference on 28
th

February, 2009