The Philosophy of Taoism and Art of War

Xuezhu BaiPhD of Management (La Trobe University)

Deputy Director General of Academicsand Head of International TeachingDepartment of Academics, CELAP

Supervisor of MPA at Fudan UniversityVice President of Institute of International Leadership Studies, SJTU

Content

I, Philosophy of TaoismII, Art of WarIII, Implications for Business OperationIV, Discussion

I The Philosophy of Taoism

I, Philosophy of Taoism 1, Origin of Taoism

The Book of Changes or I-Ching (3,000～2,000 BC) and the ClassicBook Shangshu (about 2,600 BC) were the earliest records ofYin and Yang, Five Elements and Taoism theories.

YangActive Proactive Hard Open Optimistic

Yin Quiet Passive Soft Conservative Pessimistic

I, Philosophy of Taoism 2, Quantum Theory-(String Theory)

String Theory (M-Physics) : Five Strings of Quantum andthe universe

I, Philosophy of Taoism 3, Yin-Yang and Five-Element Theory

Yin-Yang and Five-Element Theory, Chinese Traditional Medicinedemonstrate the philosophy of Taoism

I, Philosophy of Taoism 4, Eight-Diagram Theory

Eight-Diagram Theory demonstrates eight scenarios of Yin-Yangand five energies

5--宇宙抽象框架

Model of

Taosim

a

Spleen

EarthFaithfulness

Liver

WoodBenevolence

Kidney

WaterWisdom

Heart

FirePropriety

Lungs

MetalJustice

6, Nature and Body in TaoismNature Human Body

Five Eleme

nts Sound Taste Color Direction season function

Inter-organs(yin)

Ex-organs Tissues Emotio

nsBody

liquids

Inter-Organs (yang)

wood shu sour Green East spring birth Liver Eyes Tendons Anger Tears Gall-bladder

Fire ker bitter Red South Summer Growth Heart Tongue Blood Vessels Joy Sweat Small

Intestine

Earth whoo sweet Yellow Middle Indian Summer

Transformation Spleen Mouth Flesh Worries Saliva Stomach

Metal shee pungent White West Autumn Harvest Lungs Nose Skin Grief mucous Big

Intestine

Water chwea salty Black North Winter Storage Kidney Ears Bones Fear urine Bladder

I, Philosophy of Taoism 7, Bridging Different Cultures

The core value system of Confucianism is from Taoism. Later,Chinese Buddhism accepted Taoism as part of its system

Modern Chinese culture is a combination of Chinese traditional culture,communism and other cultural elements

I, Philosophy of Taoism 8, Impact of Taoist Mentality on Chinese Culture

Sun Tzu

IIArt of War

Army 止：Stop 戈：Fight or War

II, Art of War1, The Chinese Wisdom of Army

Sun Tzu: The highest state of war is to win without the use of force,

that is, to win by the use non-violence strategyThe Book “Arts of War” is based on Taoist philosophy and Sun Tzu’s own warfare

experience.

II, Art of War2, Tao-oriented Art

Yin-Yang and Five Element TheoryYang: direct methodsYin: indirect methods1,Five major factors of war:The Moral Law; Heaven; Earth; the

Commander; Method and discipline.2, Five virtues of commanders: wisdom,

courage, benevolence, faithfulness, andstrictness

The five elements (water, fire, wood, metal, earth) are not always equallypredominant; the four seasons make way for each other in turn. There areshort days and long; the moon has its periods of waning and waxing.(Lionel Giles Translation)

4,

TaoistPrinciples

inArtof

War

a

Earth

EarthFaithfulness

Wood

HeavenBenevolence

Water

TaoWisdom

FireCommanderCourage

Metal

MethodsStrictness

II, Art of War5, Mission: Defend for Peace

As Taoist philosophy upholds values of the Great Tao,therefore, the utmost goal of warfare is to defend thecountry so that the people can live and work in peace.

Warfare is ominous, and Saints only resort to weapons of war when out ofabsolute necessity. (Lao Tzu: Tao Te Jing)

But a kingdom that has once been destroyed can never come again into being;nor can the dead ever be brought back to life.

II, Art of War6, Virtue-oriented Principles

Enlightened ruler and the good general are required to cultivate theirmoral virtues (Cultivating Tao)

Hence the enlightened ruler is heedful, and the good general fullof caution. This is the way to keep a country at peace and anarmy intact.

The consummate leader cultivates the moral law(Tao), and strictlyadheres to method and discipline; thus it is in his power to controlsuccess.

In the practical art of war, the best thing of all is to take the enemy’s countrywhole and intact; to shatter and destroy it is not so good. So, too, it is betterto recapture an army entire than to destroy it, to capture a regiment, adetachment or a company entire than to destroy them.

II, Art of War7, Nature of War: Yin/Justice

Warfare is ominous, and Saints only resort to weapons of war whenout of absolute necessity. (Lao Tzu: Tao Te Jing)

But a kingdom that has once been destroyed can never come againinto being; nor can the dead ever be brought back to life.

It is only one who is thoroughly acquainted with the evils of war thatcan thoroughly understand the profitable way of carrying it on.

All warfare is based on deception but for justice.

II, Art of War8, Being Cautious in War

No ruler should put troops into the field merely to gratify his ownspleen; no general should fight a battle simply out of pique(Anger).

Move not unless you see an advantage; use not your troops unlessthere is something to be gained; fight not unless the position iscritical.

II, Art of War9, Importance of Commanders

A commander of armies is the arbiter of the people’s fate, theman on whom it depends whether the nation shall be inpeace or in peril.

He who can modify his tactics in relation to his opponent and therebysucceed in winning, may be called a heaven-born commander.

Know when to fight and when not to fight: avoid what is strongand strike at what is weak.

Know how to deceive the enemy: appear weak when you arestrong, and strong when you are weak.

Know your strengths and weaknesses: if you know the enemyand know yourself, you need not fear the result of a hundredbattles

II, Art of War10, Importance of Loving Soldiers

Regard your soldiers as your children, and they will follow you intothe deepest valleys; look upon them as your own belovedsons, and they will stand by you even unto death.

II, Art of War11, Methods of Army (1)

All warfare is based on deception.Attack him where he is unprepared, appear where you are not expected.

In all fighting, the direct method may be used for joining battle, butindirect methods will be needed in order to secure victory.

II, Art of War11,Methods of Army (2)

Military tactics are like water.For water, in its natural course, runs away from high places and

hastens downwards. So, in war, the way is to avoid what isstrong and strike at what is weak

A clever general, therefore, avoids an army when its spirit is keen,but attacks it when it is sluggish and inclined to return.

Ponder and deliberate before you make a move.

II, Art of War12, Tendency Building in War (1)

“In war, the victorious strategist only seeks battle after thevictory has been won.”

The good fighters first put themselves beyond the possibility ofdefeat, and then waited for an opportunity of defeating theenemy.

The general who is skilled in defense hides in the most secret recesses ofthe earth; he who is skilled in attack flashes forth from the topmostheights of heaven. Thus on the one hand we have ability to protectourselves; on the other, a victory that is complete.

II, Art of War13, Tendency Building in War (2)

A victorious army opposed to a routed one, is as a pound’sweight placed in the scale against a single grain.

The onrush of a conquering force is like the bursting of pent-upwaters into a chasm a thousand fathoms deep.

Let your plans be dark and impenetrable as night, and when youmove fall like a thunderbolt.

When you surround an army, leave an outlet free. Do not press adesperate foe too hard.

III Implications

for Business Operation

III, Implications for Business Operation1, Some Hints

1, Holistic thinking: Compete with all resources2, Business is in the Yang (Earth, trust), opposite to War (Yin),thus Win-Win strategy is the best for business3, Great values and vision are vital for starting a business4, Virtual leaders are key to success and to maintain success5, Strategies and methods must change with time6, Strong morale (business culture) is crucial for business

7, No business war unless all other options are exhausted8, Never give up even at the most critical time

III, Implications for Business Operation 2, Model Of

Strategic Leadership

Tendency -SHI

Execution -SHU

Strategy -FA

Vision/values-TAO

Mission -DE

III, Implications for Business Operation 3, Holistic Thinking of Strategic Leadership

TAO-Vision (Values): Water, wisdom, long-term objective guidedby values.

DE-Mission: Wood, benevolence, short-term goals serve for vision.

FA-Strategy: Fire, propriety, well-weighted plan to fulfill missions.

SHU-Execution: Earth, faithfulness, faithful actions executed tocomplete strategy.

SHI-Tendency (Context, field): Metal, justice, all resourcesand actions coordinated to bring about an expected outcome(New tendency, context and unchangeable field)

4, Strategic Leadership

Earth ShuExecutionFaithfulness

WoodDeMissionBenevolence

Water

TaoVision

Wisdom

FireFaStrategyPropriety

Metal

ShiTendencyJustice

III, Implications for Business Operation5, Following Tao is of vital importance:

Values and VisionsEstablish moral values and visions for your business

6, Tao: Macro-Environment Analysis

Demographic & environmental

EarthFaithfulness

Technological

WoodBenevolence

Social & Cultural

WaterWisdom

Economic

FirePropriety

Legal & Political

MetalJustice

.7, Tao: Macro-Environment Analysis

Names Wood Benevolence

Fire Propriety

EarthFaithfulness

MetalJustice

WaterWisdom

Economic Forces Technological Economic Demographic +Environmental

Legal + Political Social + Culture

Function Original Force Developing force

Transforming force

Regulating force Inertia Force

Description A comprehension of revolutionary technology, skills, systems, and innovation in production, resulting in the beginning of a totally new era..

A comprehension of economic factors, such as finance, production, technology, market, labor and others, showing dynamic development.

A comprehension of demographic and environmental factors, such as education, health, welfare, environment protection, maturing at this stage

A comprehension of legal and political factors, such as legislation, jurisdiction, administration, politics, military, police, and others, functioning as protection of the system

A comprehension of social and cultural factors, such as history, culture, religion, customs, education, media and others, trying to maintain the old order.At the same time, new thoughts for a new era are born as well.

Stage Infancy Youth Maturity Declining Dying

III, Implications for Business Operation8, De: Mission and Virtual Leaders

Set up sound mission and select virtual leaders foryour business

9, De: Virtual Leaders

aou

EarthFaithfulness

Loyalty

WoodBenevolence

Water

Wisdom

FirePropriety

Courage

MetalJustice

Strictness

10, De: Traits of Virtual Leaders

Names Wood Fire Earth Metal WaterTraits of Leaders Benevolence Propriety Faithfulness Justice Wisdom

Traits of Successful leaders

Compassion, Easy-going, Care, listen to others,

Tolerance

Doing things or treating followers to the right point, convincing by demonstrating good balance in actions and behaviors

Consistence of behaviors, faithful to words and acts, loyal to vision and mission, democratic way of doing things

Power of Cohesion

Strong responsibility, doing things by law and regulations, justice on reward and punishment

Visionary, farsighted, super-cognitive capability

Leadership style Power of Embracing

Power of Convincing

Power of Cohesion Power of Accountability

Power of Inspiring

Best theories charismatic Traits/behavioral

Transformational or Transactional

Behavioral（Managerial）

Visional

Organizational Stage

Infancy Youth Maturity Declining Dying

III, Implications for Business Operation11, Fa: Adaptive Strategies

Make your strategies adaptive to the changes ofbusiness environment

12, Fa: Adaptive Strategies

ShuExecutionFaithfulnessHuman Resource -leading Strategy

DeMissionBenevolenceTechnology- leading StrategyTao

VisionWisdomCulture-TransformationStrategy

FaStrategy

ProprietyCapital- Leading Strategy

ShiTendencyJustice

System and Mechanism Reengineering Strategy

.13, Fa: Adaptive Strategies

Names TaoVision (values)WaterWisdom

DeMissionWoodBenevolence

FaStrategyFire Propriety

ShuExecutionEarthFaithfulness

ShiTendency (Shi)MetalJustice

External and Internal Leading Forces

Social + Culture

Organizational culture

Technological

Technological

Economic

Financial

Demographic +Environmental

Human resources

Legal + Political

System and mechanism

Strategies Culture Transformation

Technology-Leading

Capital-Leading Human Resource-leading

System and MechanismReengineering

Description Follow a new vision totransform corruptedorganizational culture ,cultivate positive culture,to prepare of a new cycle

Introduce newtechnology orinnovative model bycultivating tolerant andbenevolent environmentto encourage creativeand innovation peopleand activities

To strengtheneconomic power orfinancial capabilitiesby cultivating tolerantenvironment andencouragingappropriatecompetition.

To emphasize the strategyof best using humanresources and building upbrand by taking advantageof human potentials

Reform andReengineering rigidsystem and mechanism bymanagerial techniques,encourage technologicalinnovation and strengthen

capital accumulation

Stage Dying/Birth Infancy Youth Maturity Declining

III, Implications for Business Operation14, Shu: Flexible Approaches

(Faithful Execution)

Implement strategic plans by faithful and flexibleexecution to realize your mission.

15, Shu: Flexible Approaches

Earth（faithfulness）

CooperativeapproachHuman Resource -leading Strategy

Wood（benevolence）

ParticipatoryapproachTechnology-leading Strategy

Water（wisdom）

IncentiveapproachCulture-TransformationStrategy

Fire（propriety）

AuthorizedapproachCapital- Leading Strategy

Metal（justice）

Instructive approachSystem and Mechanism Reengineering Strategy

16, Shu: Flexible Approaches (Faithful Execution)

Strategy Technology-leading Strategy

Capital-Leading Strategy

Human Resource -leading Strategy

System and Mechanism Reengineering Strategy

Culture-TransformationStrategy

Approaches Participatory Authorized Cooperative Instructive Incentive

Managerialmethods

InterpersonalRelationship+Economicmanagement

Goalmanagement+administration

Human capital(transaction )+Systemmanagement

Institutional+Task+Systemmanagement

Education,Incentive (vision+Changemanagement)+Systemmanagement

LeadershipTheories

Charismatic Behavioral/Traits

Transactional/contingent

Managerial Visionary /Transformational

Organizational Stage

Infancy Youth Maturity Declining Dying

Names Wood Fire Earth Metal Water

III, Implications for Business Operation17, Shi: Secure Victorious Tendency

Secure an advantageous market position by utilizingall methods and resources

道学--战略态势模型

18, Shi: Securing Victorious Tendency

Earth（transform）

Maturing stageTransforming ShiContriving/Plotting

Wood（grow）

Starting stageInitiating Shi

Talents Selection

Water（hide）

Hidden stageAccumulatingShiProbing

Fire （expand）

Developing stage

Maneuvering ShiUtilizing Resources

Metal（harvest）

Final stageWinning ShiInspiring passion

19, Shi: Securing Victorious Tendency

Five factors of Shi

Probing （Observing the trend）

Selecting（Talents Selection）

Utilizing(Utilizing Resources)

Plotting(Contriving/Plotting)

Inspiring(Inspiring passion )

Core element Leadership law Value orientation

Strategic Decision Executive ability

Leadership authority

Definition Identify the overall situation of objective factors for formulating overall strategies

Leaders select talents and rely on the masses to carry on potential strategies

Leaders use all resources to create a favorable position

The leader’s specific planning and layout

Leaders hold high the banner of justice to build a positive group mentality

Leadership concepts

Organizational Stage, Internal and External Environment, Contexts, Soft Power

Recruitment, selection, appointment, promotion, authorization

Cost accounting, resource management, technology development, time control and information utilization

operational planning, planning and implementation ability

Leadership authority, vision, communication, motivation, performance appraisal, organizational culture, team building

“Seven Valued" principles

"Store"Hide one's capacities and bide one's time

“Grow”Start out of thin air

“Make”Build up “shi” by all means

“Transform”Change “shi”by plotting

“Harvest”Fight for justice and gather people

“Think over" (weighing pros and cons), “Change accordingly" (changing with time)

Stage Hidden Starting Developing Maturing Final

Category Water Wood Fire Earth Metal

IV

Discussion

IV, Discussion (1)Sun Tzu’s Art of War is based on Taoism which emphasizes

moral values and principles of executing practicalmethods.

Cultivating Tao (moral virtues) is a must for businessleaders

IV, Discussion (2)

Western business theoriesare good at positivismand analysis, yetChinese Taoism is goodat holistic studies. Acombination of bothmay provide a bettersolution to existingproblems.

End

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