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BOOK REVIEW
Rocky 'way' to success in China
The Chinese Tao of Business, by George T Haley, Usha C V Haley and Chin Tiong Tan

Reviewed by Gary LaMoshi

The Tao Te Ching is the bedrock of Chinese philosophy, a collection of sayings by Lao Tzu around 500 BC, about the same time as the rise of Athenian democracy. Tao translates as "the

way", and The Chinese Tao of Business attempts to use the tao to trace paths to success for Eastern and Western managers in our globalized world. The book maps some promising routes amid a number of dead ends.

The most compelling portion of the book contends that Asian and Western management styles are converging, despite their different underlying philosophies, dissimilar styles of cognition and reasoning, and divergent business strategies and objectives. According to the authors - two business school professors from American schools and one from Singapore - "managerial convergence" is a historical phenomenon that enables upstarts to overtake the leaders of their times. The upstarts add international best practices to their inherent strengths and their underdog's drive to reach the top. Using those extra tricks, wannabes - such as the United States in early last century or Japan late in it - reach the top of the heap. The former champs and new challengers learn from these new leaders' success and begin their crusades to regain supremacy.

Looking at China today, the authors see numerous examples of convergence and its results. Established Chinese companies are adopting the practices of their foreign partners. Chinese business leaders increasingly are learning Western techniques, either by studying at Western business schools or their improving Asian counterparts. (Co-author Chin Tiong Tan is provost at Singapore Management University, and his US collaborators have taught in Asian and other overseas business programs.)

Convergence converted
In this environment of convergence - how refreshing to rehabilitate this fine word after Pacific Century Cyberworks chairman Richard Li hijacked it for his Internet fantasies - Chinese family business by instincts and connections becomes leavened with Western attention to research and process. As Western corporate culture becomes intimate with Asian focus on speed and flexibility, it may pick up a dose of new strategic perspectives.

This managerial convergence produces a new tao, an eight-stage "Silk Road to Strategic Planning", combining Chinese family business values and Western thinking, paved with common sense and practical lessons. This 21st century way is less a guide to doing business in mainland China than to doing business like the Chinese, a difference the authors try to obscure using the tao and other tools.

Perhaps the authors' greatest insight along their new Silk Road comes on the "Road of Results". They assert that success in China grows out of short-term moves that leverage further victories, rather than long-term strategies that don't produce intermediate returns. Microsoft and Philip Morris' tobacco division are giants that stumbled along this road. If you only invest for tomorrow, you will never reach payday: that's a malleable epigram worthy of the original tao.

The trouble with tao
There's a big problem with using the tao as a guide to business success, however. Lao Tzu's philosophy denounces profits and looks down on merchants as the lowest social class, reflecting the norms of imperial China. In trying to make the connection between Chinese business norms and the tao, the authors pursue a variety of largely unsuccessful lines, including lumping Taoism with Confucianism, Buddhism and other elements of Chinese thinking, right up through Maoism and Deng Xiaoping's socialism with Chinese characteristics.

Less understandably, the authors prove largely inept at using contemporary business cases to illustrate their points about the Chinese tao or their own Silk Road. In some instances, they trot out the usual suspects, such as Chinese refrigerator maker Haier that has opened a (not-yet-profitable) plant in South Carolina, or introduce obscure Western players in mainland China, such as Canadian baby clothes maker Kooshies or US computer component specialist Artesyn Technologies. Too often the examples fail to make the designated point or deepen readers' understanding of doing business in China. The book frequently reads like a grab bag of Chinese business anecdotes rather than a set of carefully selected case studies substantiating key assertions and leading to firm conclusions.

Part of the problem is that there really isn't that much to say about succeeding in business in the Middle Kingdom. Despite the many changes in China's economy since 1979, winning still depends largely on the goodwill of the Chinese government and the Communist Party. If you have sufficient support from the right people - and, the authors note, those relationships are entirely personal; that combination of respect, relationship and obligation doesn't extend to institutions or to successors on any side - then you'll do well. If you cross your sponsors, or if your sponsors cross the wrong folks, or they're crooks, then you'll lose. That's a tough thing for experts on business in China to admit since it means that even the best advice may lead to failure.

Yang Bing, Tulip King
To their credit, the authors of The Chinese Tao of Business stress the importance of relationships in Asia. They even point out mainland cases where networking failures or shifting tides proved costly, citing Yang Bing, China's former Tulip King, who went to jail on corruption charges last year after his backers in Shenyang province fell from grace and North Korea tapped him as viceroy of its free-trade zone on China's border. Pepsi succeeded in the Soviet Union but failed in China mainly because it had the wrong partners, while Coca-Cola made better strategic choices, including teaming up with ethnic Chinese Malaysian Robert Kuok, the leading individual foreign investor in China.

But too many examples miss their marks. Hong Kong investment bank Peregrine is used to illustrate a failure of Chinese networks, even though Peregrine was run by a patrician Brit and crashed in 1998 due to a US$260 million bad loan secured by the daughter of Indonesia's then-president Suharto. Ethnic identity aside, Peregrine's real mistake was trusting people who stole from everyone not to steal from them, too. China's mistakes facing the severe acute respiratory syndrome (SARS) outbreak of 2003 are also presented as networking failures. Moreover, the authors offer breathless predictions about SARS's long-term impact, commonly heard during the dark days of the virus and its aftermath but largely disproved by events since the panic faded.

Much of The Chinese Tao of Business feels as if it were written as journal articles for publication months or years ago and cobbled together into an inconsistent whole. Some glitches may be a consequence of having three authors on two continents. Sloppy editing, a recent trend in business books from publisher John Wiley & Sons, adds to the uneven feel. Along with spelling errors and typos, some sections present data from 2002 as current rather than using available updates, and the book includes references to 2004 as if it lies in the distant future.

The book may simply strain under the conflicting demands of trying to put the tao into the context of modern Chinese business, while assessing the opportunities and problems of doing business in mainland China and offering a new theory of strategic planning based on managerial convergence. The authors have mapped the way of Chinese business and laid out their own path for better strategic planning. But travelers should be prepared for a bumpy ride in these pages and when doing business in Asia.

The Chinese Tao of Business, by George T Haley, Usha C V Haley and Chin Tiong Tan. John Wiley & Sons (Asia), July 2004, Singapore. ISBN: 0-470-82059-4. Price: US$19.95 (paper), 329 pages.

Gary LaMoshi has worked as a broadcast news producer and print writer and editor in the US and Asia. Longtime editor of investor rights advocate eRaider.com, he's also a contributor to Slate and Salon.com.

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Dec 4, 2004

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