18th March, 2013Staff Seminar

Antai College of Economics and Management, Shanghai Jiao Tong Univeersity

Professor Richard Li-HuaFounder and current President of China Association for Management of TechnologyDirector of International Centre for Research, Innovation, Sustainability and Entrepreneurship (RISE) Sunderland Business School University of Sunderland, UK

Integration of Western Management with Chinese Philosophy in Post Recession

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Frequent media interview www.people.com .cn

Founder and President of CAMOT

15 years of industrial working experience in China but travelled to many other countries ( Chairman & CEO)

15 years of working experiences in global higher education in the UK but teaching in UK, US, Cadada and China, mainly MBA and EMBA

Instrumental in transforming a clear vision into reality with his passionate and relentless insistence on integration of technology and innovation with business management and integration of western management with eastern philosophy

Director of RISE Research Centre at Sunderland University

Frequent keynote speaker at international conference

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Why?What?How?What time?

West Meets East

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MBA, GLMBA, IMBA, EMBAGlobal business leadersFull-fledged competitorsSustainabilityStrategic management

Strategic Visions of the International Business School

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To share the experience of Richard Li-Hua’s Interview with US Nature by Eugenie Samuel Reich

White House under fire over US-China bilateral activities

http://blogs.nature.com/news/2011/11/us_science_talks_with_china_de_1.html

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Sharp contrast in the last 30 year Western Management and Eastern Philosophies Art of War by Sun Tzu versus Strategic Management China’s secrete: Sharing Wisdom between West and

East

This presentation covers:

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Sharp Contrast between West and China in the last 30 years

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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:In the West:

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Government incapability deepened Two party/three parties – difficult to have congruence agreement on making strategic choice and 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)

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Embracing contradiction - No argument of socialism or capitalism: A contrast to “We would like to have socialist grass rather than capitalist crops” 30 years ago 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” Integration of prescriptive and emergent strategic approach - Pragmatic approach

In China:

Market economy with Chinese characteristics Integration of western technology and innovation with Chinese soft capacity – Learning and digesting 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):

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Western Management versus Chinese Philosophy

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Management is an activity with well established theories and practice in the history in the mankind21st Century problems vs 20th Century management methodsConcepts and theories of modern management were well established and developed in 19th and 20th centuries in the West 1st MBA was awarded 100 year ago at Pennsylvania while MBA was awarded in Europe 50 years laterThe Arts of War by Sun Tze has a significant conceptual influence to modern management and Strategic Management

Western Management vs Chinese PhilosophyPerspective of 21st Century

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American style is embedded in the process of self-actualization and self-achievementManagement 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

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Frederick W. Taylor ( 泰勒） 1856-1915, American mechanical engineer and father of scientific managementHeri Fayol ( 法约尔） Istanbul 1841- Paris 1925, French mining engineer and most influential contributor to modern concept of managementHarold Kootz （孔茨） 1909-1984, contributed to the principle of managementPeter Drucker ( 皮特。德鲁克） 1883-1950, invented the concept known as “management by objectives”.

Western ManagementConcepts and Theories

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Elton Mayo ( 梅奥） 1880 – 1949 An Australian psychologist and founder of human relation movement and motivation theory

Western Management

Motivation theory

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Joseph Alois Schupeter 熊皮特 1883 – 1950 He popularized creative destruction and corned the word of “innovation”.

Western Management

Innovation Theory

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Alfred Chandler examines the relationship between strategy and organizational structure Igor Ansoff, father of strategic management Henry Mintzberg, distinction between prescriptive and emergent strategy Michael Porter, competitive advantage, 5 forces, Diamond theory

Western Management

Key Figures of Strategic Management

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Embracing contradiction: Not a single homogeneous workIt draws wisdom from many philosophers, some even contradictory Concentrates on family, personal and governmental moralityCorrectness of the social relationshipJustice and sincerity “Hundred Schools” “Hundred flowers in bloom” and “numerous philosophers”

Chinese Philosophy – Hundred Schools and Embracing Contradiction

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Confucius is one of the most influencing figures in ancient Chinese philosophySelf-disciplinary first and then manage people Qiji, anren, zhiguo, pingtianxiaFocus on educating people rather than managing peopleGreat impact on behavior of Chinese peopleAnalects 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 civilizationIt has become mottos

Confucius Philosophy

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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

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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 otherEverything has both yin and yang aspectsThere 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

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Chinese and West Value Comparison

Chinese WestKnowledge 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 thinkingA perception of interrelatednessIntuition, emotionHarmony, moderation and balanceRelationships are keyObjective information is less important

Think in logical and linear patternsMeasurementAccountabilityLine of reasoningScientific method

Individual/Group

Value and recognition of group performanceFocus on a sense of contribution to group effort

Value individual performanceFocus on task accomplishment and competence

Managerial attitude

Internal orientation External orientation23

Integration of West Management with Chinese Philosophy

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The Arts of War by Sun Tzu – Ancient Strategic Management

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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.

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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

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Comparison between Art of War and Today’s Strategic Management

Five Factors in Art of War Five Elements in SM

Diao – way, moral influence Vision, mission statement

Tian – heaven, winter’s cold and summer’s heat

external environment, PEST-EL, 5 forces analyses, the diamond theory.

Di – earth, the land, whether it is open or constricted; and the place, whether is portends life or death.

internal environment, SWOT and/or RBV

Jiang – command, wisdom, trustworthiness, benevolence, courage and firmness of the commander

Fa – rules and regulations, principles guiding the organizations of arm units, the appointment and administration of officers and the management of military supplies and expenditures

leadership, commitment of senior management team, core competence

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

2. Technology, HR, finance, 3. Corporate governance, CSR

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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

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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

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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

Winner in the 21st Century

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China’s Secrets – Sharing Wisdom between China and the West

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Chinese Premier, Wenjiabao’s Keynote speech at Cambridge in 2009“Two invisible hands” – the marketing force and the moralityThe Theory of Moral SentimentsThe Wealth of NationsBy Adam Smith

Sharing Wisdom between West and East

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Adam Smith (5 June 1723 – 17 July 1790) was a Scottish moral philosopher and a pioneer of political

economy. One of the key figures of the Scottish Enlightenment,[1] Adam Smith is best known for two

classic works: The Theory of Moral Sentiments (1759), and An Inquiry into the Nature and Causes of

the Wealth of Nations (1776). 34

China’s High-speed Train

Innovation Leads to the Future

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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. 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 3rd next to US and Japan

China’s Innovation Facts

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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 How realistic? Any breakthrough? Shanghai New York University Beijing-Guangzhou High-speed-train: See 4 seasons in

a day with just 8 hours

China’s Ambition

Chinese firms are facing Chinese higher education is facing Education system in China is based on rote

learning, tend not to be critical thinkers and not to develop independent thinking

China is facing

The Challenges

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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(Answer the questions raised in the Interview)

Major Concerns from West

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多谢 Thanks

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Why?What?How?What time?

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Many Thanks