Download Knowledge Management - Plymouth University

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
Seminar, Plymouth Business School,
27th April, 2012
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.
This presentation covers:
Sharp contrast
 China’s innovation and innovation
strategy
 Ancient Chinese Philosophy
 Art of War by Sun Tzu – Ancient
Strategic Management

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
CAMOT 2010,
Shanghai, China
In the West
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 (continued)
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 China:
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 (continued):
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

Section TWO:
China’s innovation and
innovation strategy
CAMOT 2010,
Shanghai, China
China’s secret:
Sharing Wisdom between West and East
Chinese Premier, Wenjiabao
Keynote speech at Cambridge
“Two invisible hands”
Adam Smith
Moral Sentiments
The Wealth of Nations

Innovation Leads to the Future
China’s High-speed Train
China’s Innovation Facts

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In contrast to the financial bubbles, Chinese are
innovating in a uniquely Chinese manner and a
formidable challenge to western countries, i.e. highspeed 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 3rd next to US and Japan
CAMOT 2010,
Shanghai, China
China’s Ambition

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China’s ambition is to become innovationoriented society by 2020
A science and technology power by 2050
From 3I pattern of innovation strategy to
indigenous innovation
Innovation with Chinese characteristics
CAMOT 2010,
Shanghai, China
Features of Chinese Innovation at
Enterprise Level

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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
CAMOT 2010,
Shanghai, China
The Challenges


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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
CAMOT 2010,
Shanghai, China
Strategic Steps

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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)
CAMOT 2010,
Shanghai, China
Major Concerns from West

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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
CAMOT 2010,
Shanghai, China
Section THREE:
Ancient Chinese Philosophy
CAMOT 2010,
Shanghai, China
Western Management vs Chinese Philosophy
Perspective of 21st Century
Management is an activity with well established theories
and practice in the history in the mankind
21st Century problems vs 20th Century methods
th
Modern theories of management were developed in 19
and 20th centuries in the west
 1st 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

American Management
vs Chinese Philosophy
American style is embedded in the process of selfactualization
 Self-achievement
Management by objectives and driven by result

Chinese philosophy is embedded in harmonious
Environment
Discipline yourself first and then manage others

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
Chinese Philosophy – Hundred Schools
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

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Leading Schools and Strategic Value of
Ancient Chinese Philosophy
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”
Confucius 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

Wu Wei Philosophy by Lao Tzu
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”.

The Value of the Yin-yang Philosophy
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

Section FOUR:
The Arts of War by Sun
Tzu – Ancient Strategic
Management
“Let’s Win without Fighting”
“Art of War”
First Chapter: Designing a Strategy
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).
By the way (dao)
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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 haven (tian)
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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 earth (di)
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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 command (jiang)
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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 rule and regulations (fa)


1.
2.
3.
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
Rules and regulations, ethics, culture and history,
Technology, HR, finance,
Corporate governance, CSR
Win over your enemy/
Compete against your rivals

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.
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.
Winner in the 21st Century
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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
The Carpenter and the Oak Tree
Integration of West Management with
Chinese Philosophy
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 28th February, 2009
Dr Richard Li-Hua
Salford Business School
Salford University
@2009 CUALA RLH