Prof Qinqin Zheng of School of Management Fudan University and Prof Yadong Luo of University of Miami analyse the differences between Western and Eastern management philosophies to propose a solution to manage complexity in the post-modern era.
By CoBS Editor Afifeh Fakori. Related research: “Competing in complex cross-cultural world: Philosophical insights from Yin-Yang” by Yadong Luo, Qinqin Zheng, Cross Cultural & Strategic Management, Vol. 23 Issue: 2, pp.386-392.
Although the acronym VUCA (Volatile, Uncertain, Complex and Ambiguous) was first coined in 1987, the concept of a ‘VUCA World’ has probably never been more relevant. How should managers operate in a VUCA world that is also more interconnected than ever before? Well, for the past five decades, Western management philosophies have prevailed. But as articulated by Prof Peter Ping Li of Copenhagen Business School, it might be time to finally pay attention to Eastern perspectives which have been in existence for much longer, and yet, have failed to quite make it into the limelight…until now, at least. Confucianism, Taoism and Legalism have been in existence for about 2,500 years now, and in his paper on Yin-Yang balancing, Professor Li asserts that Eastern philosophies may be better suited to handle some of the complexities of today.
The Yin to your Yang
The Yin-Yang philosophy is one of the central notions of Taoism which teaches us how to act in accordance with nature. “Tao” refers to a natural course, which is spontaneous, eternal and indescribable. It manifests itself through several natural principles, one of which is the Yin-Yang duality. This duality concerns complementary opposites and asserts that there is no life without death, no good without evil, and no day without night. The ubiquitous symbol of Yin-Yang – the white swirl with a black dot and the black swirl with a white dot – embodies the philosophy that coexistence and unity of opposites are necessary to form a meaningful whole.
Today’s corporate world is brimming with seemingly contradictory needs – efficiency and flexibility, competition and cooperation, stability and adaptation, exploitation and exploration, global and local, market-based and relationship-based strategies, and long-term and short-term. Such complex new business realities require ambidexterity if competing needs are to be satisfied simultaneously and dynamically. The wisdom of Yin-Yang balancing is an important guide to understanding these paradoxes and tensions. It treats two opposite elements of any paradox as partial trade-off as well as partial synergy within a spectrum of holistic balancing.
This approach can accomplish a multitude of conflictual and competing goals not just in the East but also in the more developed Western world. For instance, the Danish toy-maker Lego has already adopted eleven paradoxical principles similar to the practices in China. Lego’s paradoxical principles include “to build a close relationship with one’s staff, …and to keep a suitable distance” and “to lead, …and to hold oneself in the background.” The Chinese practices include “maintaining both distance and closeness” and “treating subordinates uniformly while allowing individualization.”
When West meets East
Eastern and Western philosophies are based on very different assumptions. For instance, ‘ambiguity’ has a rather negative connotation in the Western culture whereas the Chinese embrace ambiguity as not only inevitable but also desirable. Then there is also the fact that the concept of Yin and Yang appreciates “what is” whereas the Western style focuses more on “what ought to be.” This means that the West can often come across as more self-centred and aggressive towards the “external world.”
Aristotle’s “either/or” logic has a very strong hold on Western style of management, triggering Westerners to avoid and deny paradox with an absolute separation of mental opposites. As a result, they have a hard time reconciling intuition with analysis. They are content to sacrifice one of the two, the one often being intuition. It is true that this conscious endeavour to substitute complexity and uncertainty with simplicity and certainty, has resulted in the dramatic advances in modern sciences in the West. The Eastern approach may have failed to lead to the modern sciences, but right now it appears to be compatible with the post-modern era where business and environment must work together in pursuit of the dual goal of short-term returns and long-term growth. Business relationships with external stakeholders such as suppliers, competitors and the government are increasingly more collaborative and competitive today, and this necessitates the ambidextrous balancing between the two.
The Eastern approach is more ambidextrous in the sense that it follows a “either/and” duality, with the “either” indicating the existence of tension and trade-off, and the “and” signifying harmony, synergy and complementarity. The modern notion of “blue ocean strategy” is consistent with Yin-Yang balancing since it aims to strike a fine balance between high value and low cost, rather than pursuing the “either/or” approach. In fact, the blue ocean strategy highlights the power of Yin-Yang balancing by postulating that the best competition is no competition!
But at this point it would be unfair not to note that there are also some Western management theories, such as organisational ambidexterity, loose coupling, collaborative competitive advantage and co-opetition, which share some core values of Yin-Yang balancing. But such sharing has not been articulated explicitly yet.
How much tension is healthy?
Disagreements and conflicts are quite necessary in the early stages of organisational development. But it is also critical to ensure that paradox management leads to synergistic gains instead of just endogenous trade-offs, which may sometimes result from Ying-Yang integration. Opposing elements can find a unique fit only by sharing common objectives and emphasising on values added by the system as a whole. Since Yin-Yang balancing is more of a philosophy than a science, it is difficult to use a scientific approach to empirically verify it. But then again, one must also acknowledge that in the real business world, management is often an art rather than an exact science. As such, managerial philosophies such as Yin-Yang may be more relevant and valuable to managers than scientific hypotheses and propositions.
Opposite elements also need to be well-aligned in order to manage the right level of complementarity. For example, in business ethics we may be disturbed by legal standards that are not always consistent with ethical standards. In such cases, it is important to determine which threshold is more important to abide by for paradox management. Effective organisational practices, culture, leadership, routines and processes are required if we want to build healthy tension and achieve a good balance that leads to organisational effectiveness.
A final word on introducing calm into chaos
Increased competition and interdependence in the business world will only cause more, and not less, paradoxes than before. Western and Eastern management philosophies have their respective strengths and weaknesses, and in isolation, neither one is adequate to manage all types of problems. Thus, the panacea lies in integrating Eastern and Western systems into a geocentric meta-system. The post-modern world characterised by global inter-connectivity requires a combination of organic complexity and mechanistic simplicity and clarity.
Enlightened by Yin-Yang balancing, there is a great potential of co-evolution, convergence and co-reinforcement of different philosophies. But we still need further research to determine how micro-foundations such as teams, culture, human resources management, information sharing and inter-unit collaboration, can foster the execution of Yin-Yang balancing.
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