18 th March, 2013 Staff Seminar

1. 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 • 18th March, 2013 • Staff Seminar • Antai College of Economics and Management, Shanghai Jiao Tong Univeersity Integration of Western Management with Chinese Philosophy in Post Recession

2. Founder and President of CAMOT Frequent keynote speaker at international conference Frequent media interview www.people.com .cn Director of RISE Research Centre at Sunderland University • 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

3. West Meets East • Why? • What? • How? • What time?

4. Strategic Visions of the International Business School • MBA, GLMBA, IMBA, EMBA • Global business leaders • Full-fledged competitors • Sustainability • Strategic management

5. 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

6. This presentation covers: • 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

7. Sharp Contrast between West and China in the last 30 years

8. 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:

9. 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)

10. 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:

11. 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):

12. Western Management versus Chinese Philosophy

13. Management is an activity with well established theories and practice in the history in the mankind 21st Century problems vs 20th Century management methods Concepts 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 later The Arts of War by Sun Tze has a significant conceptual influence to modern management and Strategic Management Western Management vs Chinese Philosophy Perspective of 21st Century

14. American style is embedded in the process of self-actualization and self-achievement Management 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

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

16. Elton Mayo (梅奥）1880–1949An Australian psychologist and founder of human relation movement and motivation theory Western Management Motivation theory

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

18. 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

19. Embracing contradiction: Not a single homogeneous work It draws wisdom from many philosophers, some even contradictory Concentrates on family, personal and governmental morality Correctness of the social relationship Justice and sincerity “Hundred Schools” “Hundred flowers in bloom” and “numerous philosophers” Chinese Philosophy – Hundred Schools and Embracing Contradiction

20. 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 Confucius Philosophy

21. 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

22. 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 The Value of the Yin-yang Philosophy

23. Chinese and West Value Comparison

24. Integration of West Management with Chinese Philosophy

25. The Arts of War by Sun Tzu – Ancient Strategic Management

26. 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.

27. 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

28. Comparison between Art of War and Today’s Strategic Management

29. 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

30. 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

31. 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

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

33. Chinese Premier, Wenjiabao’s Keynote speech at Cambridgein 2009 “Two invisible hands” – the marketing force and the morality The Theory of Moral Sentiments The Wealth of Nations By Adam Smith Sharing Wisdom between West and East

34. 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).

35. China’s High-speed Train Innovation Leads to the Future

36. China’s Innovation Facts • 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

37. China’s Ambition • 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

38. The Challenges • 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

39. Major Concerns from West • 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)

42. 多谢 Thanks

44. Many Thanks • Why? • What? • How? • What time?