Integration of Western Management with


Nov 6, 2013 (4 years and 8 months ago)


Seminar, Plymouth Business School,


April, 2012

Professor Richard Li

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

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



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

Ancient Chinese Philosophy

Art of War by Sun Tzu

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

The political and economic consensus

The New Right and economic liberation

The watchwords

privatization, liberation and

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

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

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

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

“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


1.3% of the GDP


2.0% of the GDP


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


Century problems vs 20

Century methods

Modern theories of management were developed in 19

and 20

centuries in the west


MBA was awarded 100 year ago at Pennsylvania

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


American style is embedded in the process of self


Management by objectives and driven by result

Chinese philosophy is embedded in harmonious


Discipline yourself first and then manage others

American Management

vs Chinese Philosophy

Chinese and West Value Comparison




Simultaneous validity of contradictory
circumstances embodied in the Tao

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

Holistic thinking

A perception of interrelatedness

Intuition, emotion

Harmony, moderation and balance

Relationships are key

Objective information is less

Think in logical and linear patterns



Line of reasoning

Scientific method



Value and recognition of group

Focus on a sense of contribution to
group effort

Value individual performance

Focus on task accomplishment and


Internal orientation

External orientation

Not a single homogeneous work

It draws wisdom from many philosophers, some even

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

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

“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

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

The Value of the Yin
yang Philosophy

Section FOUR:

The Arts of War by Sun

Ancient Strategic

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

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

By the way (

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 (

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 (

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 (

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 (

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

Rules and regulations, ethics, culture and history,

Technology, HR, finance,

Corporate governance, CSR

By rule and regulations (

There is no general/

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
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/

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

is more capable, which side/

has the
advantages of heaven/
external environment
internal environment
, which

is better disciplined, whose

are better armed and trained, which

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

Those who neglect these two factors will be lame

Winner in the 21


The Carpenter and the Oak Tree

Integration of West Management with

Chinese Philosophy


Dr Richard Li

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

February, 2009