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Strategy: Tao and Tactics

Oct 05-2020   



Chinese and Western competitive strategies took the center stage at one of the recent forums by the NSD. Prof. Gong Yuzhen, a management professor and Deputy Dean of the NSD, and Xie Xuanli, associate professor of management of the NSD, conducted an in-depth dialogue on the topic after each giving an insightful speech.

 

As the leading scholar specializing in the application of Sun Zi’s Art of War in business, Prof. Gong said that both advantages and disadvantages are salient in China’s traditional competitive philosophy. They can be boiled down to ‘focusing on Tao (the way) while downplaying tactics’.  In other words, deep-level thoughts go into moral, philosophical, and conceptual aspects, but relatively little is concerned with the ‘tools’, i.e. practical methods. Western strategic theories might be the opposite. In this sense, the two are complementary and offer different dimensions for evaluating competition. A good way forward can be explored if one stays rooted in the fundamental spirit of Chinese competitive philosophy while learning from the Western counterpart to develop a set of practical tools.  

 

Chinese culture values long-term and strategic view, but why have many enterprises failed to do so? Prof. Xie cited Japanese management guru Kenichi Ohmae, whose opinion was that Chinese firms found it easy to make money without having to invest much in innovation. Prof. Gong added that the exponential growth of the Chinese economy over the last 40 years has afforded such opportunities for easy gains. The danger, though, might be to win a battle and lose a war. This has become the toughest challenge for Chinese firms.

 

In contrast, Amazon has demonstrated unwavering strategic determination in the face of unprofitability in its first 20 years, said Prof. Xie. Not that its e-commerce did lousily; it’s just that Jeff Bezos was bent on delivering long-term values for customers and kept investing in new areas such as Kindle and cloud computing. True victories are certainly the victories of long-termism, commented Prof. Gong, and Chinese companies still have a long way to go in this regard. Yet there does exist some good examples. Jack Ma’s decision to foray into cloud computing, despite knowing very little of it, has provided a quintessential example of long-termism.

 

Jack Ma’s decision on cloud computing also reflects the critical role of corporate mission, particularly in today’s uncertain environment. Bezos thinks alike and keeps asking about what remains unchanged amid all the changes, said Prof. Gong. The Chinese philosophical classic Book of Changes actually carries three layers of connotations: change and adapt; simplify for better execution; and seek out the unchanged. They remain valuable for strategic making in today’s VUCA environment, he said.

 

The two professors also discussed and sparred on the strategies for the international drive of Chinese companies. They drew attention to both market and non-market factors, especially political ones.

 

Strategy: Tao and Tactics

Oct 05-2020   



Chinese and Western competitive strategies took the center stage at one of the recent forums by the NSD. Prof. Gong Yuzhen, a management professor and Deputy Dean of the NSD, and Xie Xuanli, associate professor of management of the NSD, conducted an in-depth dialogue on the topic after each giving an insightful speech.

 

As the leading scholar specializing in the application of Sun Zi’s Art of War in business, Prof. Gong said that both advantages and disadvantages are salient in China’s traditional competitive philosophy. They can be boiled down to ‘focusing on Tao (the way) while downplaying tactics’.  In other words, deep-level thoughts go into moral, philosophical, and conceptual aspects, but relatively little is concerned with the ‘tools’, i.e. practical methods. Western strategic theories might be the opposite. In this sense, the two are complementary and offer different dimensions for evaluating competition. A good way forward can be explored if one stays rooted in the fundamental spirit of Chinese competitive philosophy while learning from the Western counterpart to develop a set of practical tools.  

 

Chinese culture values long-term and strategic view, but why have many enterprises failed to do so? Prof. Xie cited Japanese management guru Kenichi Ohmae, whose opinion was that Chinese firms found it easy to make money without having to invest much in innovation. Prof. Gong added that the exponential growth of the Chinese economy over the last 40 years has afforded such opportunities for easy gains. The danger, though, might be to win a battle and lose a war. This has become the toughest challenge for Chinese firms.

 

In contrast, Amazon has demonstrated unwavering strategic determination in the face of unprofitability in its first 20 years, said Prof. Xie. Not that its e-commerce did lousily; it’s just that Jeff Bezos was bent on delivering long-term values for customers and kept investing in new areas such as Kindle and cloud computing. True victories are certainly the victories of long-termism, commented Prof. Gong, and Chinese companies still have a long way to go in this regard. Yet there does exist some good examples. Jack Ma’s decision to foray into cloud computing, despite knowing very little of it, has provided a quintessential example of long-termism.

 

Jack Ma’s decision on cloud computing also reflects the critical role of corporate mission, particularly in today’s uncertain environment. Bezos thinks alike and keeps asking about what remains unchanged amid all the changes, said Prof. Gong. The Chinese philosophical classic Book of Changes actually carries three layers of connotations: change and adapt; simplify for better execution; and seek out the unchanged. They remain valuable for strategic making in today’s VUCA environment, he said.

 

The two professors also discussed and sparred on the strategies for the international drive of Chinese companies. They drew attention to both market and non-market factors, especially political ones.