Review: Pragmatic management wisdom from the East

By Edward Hadas
September 21, 2012

By Edward Hadas
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The industrial economy was developed in the West, but it is increasingly global. The same can be said of management studies. Starting with the “scientific management” of Frederick Taylor in the 1880s, the field has been dominated by writers trained in the rationalist tradition of the European Enlightenment. Ikujiro Nonaka and Zhichang Zhu think that Eastern philosophical traditions, in particular the teachings identified as Confucian, offer an alternative perspective.

The two professors, one Japanese and the other Chinese but long established in the UK, make their case in “Pragmatic Strategy: Eastern Wisdom, Global Success”. The book offers a blend of case histories, cross-cultural philosophical analysis and suggestions for managers. The mix works nicely.

In the authors’ view, the standard Western approach to management is too rigid, too confrontational and not sufficiently ethical or social. The basic complaint has been around since Taylor’s time, and is probably still justified. Western managers and their academic mentors tend to think of business as war, or at best as a “well-mannered dog-fight”. Nonaka and Zhu are not the first management gurus to offer an alternative vision. They liberally cite Henry Mintzberg and Sumantra Ghoshal. Their own offering has three novelties.

The first and most impressive is the tripartite division of wuli, shili and renli. The “li” part of each of those words connotes order, patterns and reason. Wu refers to things, efficiency, hard assets and the sort of objective knowledge associated with scientific management. Shi refers to imagination, interpretation and creativity. Ren takes in the effective organisation, interactions and values of the people who make up economic communities.

As is the habit in the West, this approach is turned into an abbreviation: WSR. The three elements are not considered a hierarchy or even a rigorous analytic tool, rather as a way of seeing the different aspects of a single reality. The use of these categories could help managers think more deeply about apparently technical decisions, cultivate creativity and integrate ethical considerations into daily life.

The Confucian resonance captures something valuable about the ambiguity of experience and the limited but significant human ability to shape the world. There’s a persuasive tie-in to Eastern wisdom: “Since events are never repeated, their production is unfathomable. The Tao of heaven and earth is broad, is thick, is high, is brilliant, is far-reaching, is enduring.”

The second idea is shizhong, translated as “timely balance” – a principle which should help apply WSR to actual situations. The authors argue that Westerners, trained to look for a way to navigate “dualist extremes and antagonistic contradictions”, see the world as basically filled with hostility. A more Eastern perspective is to see the world as marked by “interdependences and complementarities”.

Western managers could learn something valuable from this philosophy, although, as Nonaka and Zhu admit, their dualist worldview is too entrenched to be abandoned easily. And it’s a question of degree: Too much avoidance of confrontation and tough decisions hasn’t always served Japanese companies, for instance, especially well.

Finally, Nonaka and Zhu try to tie their ideas into the pragmatic tradition of Western philosophy. “Pragmatic” is certainly a less alienating word than “Confucian” for most Western managers, and the effort to place the study of management in the domain of Aristotle’s practical wisdom has some merit. Overall, however, the authors’ admitted ignorance of Western philosophy takes a serious toll. For example, anyone who has read much of Martin Heidegger will be quite surprised to hear that he was “a pragmatist at heart”.

The pure philosophy is sometimes frustrating. Also, while some of the case studies are excellent, in particular a discussion of the mechanisms of Chinese agricultural reform, too many are glib. Overall, though, “Pragmatic Strategy” succeeds in what it sets out to do: to show that Eastern thinking can help improve global management.


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