Ancient Wisdom, Management and Negotiations in China

By Alexander Goldstein

In the context of accelerated globalization, China’s stratagemical thought highlights the comparative advantage of the Chinese towards management with an adaptation of ‘ancient wisdom’ for the new times and modern environments. This edition exercises Chinese style of management and business negotiation implemented via strategic thinking worked out and developed in the Central Kingdom throughout the centuries-old history. Adopted here research methods include elemental analysis, inductive proving and deductive reasoning based on classical modelling. Developed on the linear constructive principle, this research consists of five methodological aspects which explain self-sufficiency of the total number of Chinese stratagems, their ability for introspection and pairing according to fixed enumeration, result-oriented characteristics, classification and textual criticism. After some data inquiry, I preliminary conclude that scholarship in the West is not yet got around to carry out a systematic research of Chinese stratagemical thought used for Sino-Western negotiation and collaboration in general. On the one part, Chinese strategic principles are designated by thoughtful observers and analysts who proceed from Sun-zi’s doctrine of warfare and the 36 stratagems in their idiomatic expression; on the other part, no compelling cultural explanation of them is provided in Western literature. No previous works go beyond various exemplary strategies and tactics to answer the fundamental for Chinese culture question: What is the glue that holds together all business principles of Chinese statesmen and entrepreneurs?
We are dealing with a real China, not the China of blue porcelain bowls and exquisite silk scrolls, but a China in the midst of pangs and throes of labour, a China facing the collapse and crisis of developments, a China of living millions of toiling humanity, with a desire to work and to live, struggling against floods and earthquakes, and living in a state of chaos without meaning, turmoil without direction, unrest without change, verbiage without conviction, action without purpose, and misery without hope, but a despair based on an intimate knowledge of present-day China as no foreigners know it. A madness and a loss of restraint and all decency produced by a loss of self-confidence, as if there were a common foreboding of evil, and man’s follies and evil passions are let loose in an each man for himself and scramble as one scramble can fight (category no. 4 混戰), the goal of which is the buying of a house and a car to live in security in the foreign settlements, and the holding of a large account in the Hong Kong and Shanghai Banking Corporation. Paint as one will a glorious picture of dream-China, the China of her classics and philosophy and art, sooner or later one will have to face the puzzle of a real China, and perhaps through a process of long and painful thought, demand of the past an answer to the present, and demand of the present a meaning for the future.
For China is the greatest mystifying and stupefying fact in the modern world, and that not only because of this country’s age or its geographical greatness. Among its largest population there is the oldest living nation with a continuous culture; once China was the greatest empire in the world, and it was a conqueror. It gave the world some of its most important inventions—it has a literature, a philosophy, a wisdom of life entirely its own; and in the realms of management and the art of operation, it soared where others merely made an effort to flap their wings.

• Language: English
• Publisher: Alexander Goldstein
• Release date: Aug 19, 2015
• ISBN: 9781310897474

Alexander Goldstein

Alexander Goldstein, a graduate of the Far-Eastern University in Sinology, lived and worked in mainland China for a period as a translator/interpreter, a manager, and a martial arts' practitioner. A certified instructor of ‘Chang-quan’ (external-style boxing) and ‘Taiji-quan’ (internal-style boxing), he is a lecturer of Chinese culture and traditions at the Open University in Tel-Aviv. He also is the author of Lao-zi's "Dao-De Jing," Chan (Zen) masters' paradoxes, "The Illustrated Canon of Chen Family Taiji-quan," a Chinese novel and some other editions, which are available in print and electronic publishing at most online retailers published in English, Spanish and Russian. What makes his books so appealing is profound analysis and authority with which various strains of the vigorous Chinese culture are woven into a clear and useful piece of guidance for a business person who conducts the affairs with far-eastern counterparties and for a counsellor who develops strategies that enable leaders to position their organisations effectively.

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Ancient Wisdom, Management and Negotiations in China

中華古代智慧管理學與協商

Published by Alexander Goldstein

Smashwords Edition

Copyright 2015 Alexander Goldstein

Smashwords Edition, License Notes

This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each person you share it with. If you’re reading this book and did not purchase it, or it was not purchased for your use only, then please return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.

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Contents

Author’s Notes

Part One: Psychological Background of Chinese Strategic Thinking

Chapter 1: The ‘Mental model’ Theory and ‘Psychological Patterns’ Employed in the Problem-solving Process

Chapter 2: Psychological War: Playing the Game or Bringing Ultimate Fighting into Play

Chapter 3: The Zhou Yi and What’s Wrong with the Term ‘Chinese-style Management’

Part Two: Chinese Style of Management and Decision-making: A Few Additional Thoughts

Chapter 1: Water as the Model of Chinese Managerial Constitution

Chapter 2: Chinese Style of Business Negotiating

Chapter 3: Chinese Way of Decision-making and Ancient Wisdom’s Management at Modern Enterprise

About the Author

Endnotes

Author’s Notes

In the context of accelerated globalization, China’s stratagemical thought highlights the comparative advantage of the Chinese towards management with an adaptation of ‘ancient wisdom’ for the new times and modern environments. This edition exercises Chinese style of management and business negotiation implemented via strategic thinking worked out and developed in the Central Kingdom throughout the centuries-old history. Adopted here research methods include elemental analysis, inductive proving and deductive reasoning based on classical modelling. Developed on the linear constructive principle, this research consists of five methodological aspects which explain self-sufficiency of the total number of Chinese stratagems, their ability for introspection and pairing according to fixed enumeration, result-oriented characteristics, classification and textual criticism. After some data inquiry, I preliminary conclude that scholarship in the West is not yet got around to carry out a systematic research of Chinese stratagemical thought used for Sino-Western negotiation and collaboration in general. On the one part, Chinese strategic principles are designated by thoughtful observers and analysts who proceed from Sun-zi’s doctrine of warfare and the 36 stratagems in their idiomatic expression; on the other part, no compelling cultural explanation of them is provided in Western literature. No previous works go beyond various exemplary strategies and tactics to answer the fundamental for Chinese culture question: What is the glue that holds together all business principles of Chinese statesmen and entrepreneurs?

We are dealing with a real China, not the China of blue porcelain bowls and exquisite silk scrolls, but a China in the midst of pangs and throes of labour, a China facing the collapse and crisis of developments, a China of living millions of toiling humanity, with a desire to work and to live, struggling against floods and earthquakes, and living in a state of chaos without meaning, turmoil without direction, unrest without change, verbiage without conviction, action without purpose, and misery without hope, but a despair based on an intimate knowledge of present-day China as no foreigners know it. A madness and a loss of restraint and all decency produced by a loss of self-confidence, as if there were a common foreboding of evil, and man’s follies and evil passions are let loose in an each man for himself and scramble as one scramble can fight (category no. 4 混戰), the goal of which is the buying of a house and a car to live in security in the foreign settlements, and the holding of a large account in the Hong Kong and Shanghai Banking Corporation. Paint as one will a glorious picture of dream-China, the China of her classics and philosophy and art, sooner or later one will have to face the puzzle of a real China, and perhaps through a process of long and painful thought, demand of the past an answer to the present, and demand of the present a meaning for the future.

For China is the greatest mystifying and stupefying fact in the modern world, and that not only because of this country’s age or its geographical greatness. Among its largest population there is the oldest living nation with a continuous culture; once China was the greatest empire in the world, and it was a conqueror. It gave the world some of its most important inventions—it has a literature, a philosophy, a wisdom of life entirely its own; and in the realms of management and the art of operation, it soared where others merely made an effort to flap their wings.

The word ‘to manage’ means ‘rational suitability,’ which is an equivalent of ‘governing.’ Governing can be likened to the stream canal, which also has surroundings from both sides—the left bank and the right. Therefore, governing means ‘handling with environment.’ The inner motivation can affect the outer situation and vice versa. If the inner motivation is strong, its effect on the outer situation will be wide. However, if the effect of the inner motivation upon the outer situation is too wide, then the inner motivation will be diminished. For this reason, in dealing with a situation, we have to pay attention to both the inner and outer manifestations of each stratagem in a certain phase of our activities.

As Zhu Yong Xin, a Chinese scholar, states: Yuan, Ming and Qing dynasties represent the period of decline of the psychological thought inherited from old traditions in governing. Although the three dynasties have had their heyday on the stage and from the middle of Ming dynasty some initial seeds of capitalism were planted in the feudal economy, from the viewpoint of an emperor, the ideas of effective government had no significant contribution and the ‘tree of management’ did not grow well.

In the language of Chinese martial arts, all boxing defensive process consists of three parts: acceptance, transformation (redirection or redistribution of forces) and counter-attack. Embarking on my research on Chinese business negotiating style, I asked myself: What are the acceptance, the transformation of forces and counter-attack components of Chinese business culture in general and negotiating habits particularly? The purpose of my writing is to provide an in-depth and systematic understanding of Chinese business style in sociocultural context. This ebook reports my extensive investigations of the Chinese negotiating habits in the course of the past three decades. I attempt hereby to present the richness of Chinese business negotiating process by examining systematically how the three major components of Chinese business influence the Chinese negotiating features, including the PRC’s political condition, practical philosophy and the 36 Chinese stratagems. The present edition concludes by providing a guide on how to apply stratagemical thoughts to the evolving Chinese business culture and also addresses negotiation in mainland China. Regarding this matter, there is an embarrassing problem in the existing scholarship. On the one hand, the uniqueness of Chinese negotiating habits is positioned by thoughtful observers who have painstakingly prepared a long distance of these habits; on the other hand, no compelling cultural explanation of such habits is provided. No previous work goes beyond various Chinese tactics and schemes to touch the very base of Chinese negotiating behaviour by answering the question: What is the ‘magic thread’ that holds together all the Chinese negotiating tricks, tactical moves and strategic schemes?

Technologically, the whole process can be viewed from the following three spots: the pivot points of thinking, core values and modern orientations. The pivot points of thinking consist of an impression (1), environmental analysis (2), temporary psychology (3), capability (4) and psychology of success (5). The core values are represented by truly strong transformation, social psychology, an opportune time, effectivity and excitation of attainment. The modern orientations include formal management, environmental management, opportune management, capacity-oriented management and vision management. To sum up, the planning, as a cognitive process, consists of three main aspects: applicable conditions, working schedule and reliable staff to implement successfully a devised strategy.

The stratagem applications in modern management and negotiating process are also discussed through similarities and differences in the strategic psychology and stratagemical thoughts adopted both in China and in the West. Sometimes a stratagem in its idiomatic form records a whole event or told a story. Here, an intent look at the 36 stratagems is taken from the viewpoint of the Chinese people’s psychology in order to determine their (stratagems’) constructive features in historical perspective.

On the other part, Transnational Corporations (TNC) have successfully penetrated into China’s market, proving a good practical knowledge of Stratagem 30, for example, which calls to take the lead, turning oneself into a host from being a guest and which reflects the essential idea of the market penetration. It is good to mention here that the whole procedure of penetration consists of five steps, which reflect themselves the universal algorithm for the golden number five sounds like two levels of two forms of the unity of opposites. This formula has been worked out and developed in China long ago to be exploited widely today as the market penetration model, as well. Employed by multinational corporations, the algorithm’s general procedure boils down to taking the following five-step recommendation: 1) first get your place of a common guest, or set up an office by shaping a good public image, as well as the other ways of understanding and collecting relevant market information; 2) then find a loophole or, using the open investment policy and Chinese enterprises located in the special economic zones on the Eastern Coast and infrastructure of joint ventures, factories, productions and investments to maintain your presence in the local market; 3) push you hand into the loophole or establish a Multinational Corporation’s regional headquarter as a carrier of Corporation’s strategic resources; 4) catch an opportunity and, putting your leg through it, establish an investment company, a joint venture bank, risk investment and investment in research and development, placing yourself in Chinese marketing centres and the most intensive areas where investment resources are badly required; 5) try your best to succeed as a master of the situation in seizing Chinese market’s share at a large-scale. The question is not about to invest or not to invest, but the question is how to invest.

At present, there are some research and discussions published about Chinese stratagems, but none of them bears systematic characteristics from the psychological point of view. This book tries to make a contribution in revealing the ruse of psychological war and also cover the white spots on the vast chart of psychology research. In this connection, the discussed in the previous edition (see my ebook "The Strategic Thinking and Stratagemical Thoughts in China") the stratagems’ overall characteristics, the linear structure, as well as stratagemical thoughts with respect to studying Chinese enterprise’s management and traditional decision-making will have certain theoretical significance and practical value. What’s more important is the fact that, whether in the modern enterprise management or in war, the 36 stratagems widely use the classical patterns of strategic thinking worked out and developed by the ancients throughout the ages. This edition of the Chinese people’s way of thinking and making business is an open book for anyone who cares to come near them and live and deal with them to read.

As one of the stratagems advocates: Toss out a brick to attract a piece of jade (Stratagem 17). If my writings below happen in any way to serve as a ‘brick’ that attracts many precious thoughts on Chinese business style and negotiating arrangements in the years to come, I should be heartily satisfied. Therefore, I hope the discussions, examples and models I present here will be of theoretical and practical value to scholars in Oriental cultures, social psychologists, international business people, cross-cultural managers and many others who are interested in grasping the distinctive features of the Far-Eastern nations with their so-called ‘inscrutable’ way of thinking.

—A.G.

Written on the twelfth day of the sixth lunar month of the cyclical year Yi-wei

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Part One: Psychological Background of Chinese Strategic Thinking

Think about probable damage when benefit; think about possible benefit when suffer damage.

— Cao Cao (155-220 CE)

Chapter 1: The ‘Mental model’ Theory and ‘Psychological Patterns’ Employed in the Problem-solving Process

From the legendary Xia Dynasty (23rd–18th centuries BCE) up-to-date, China demonstrates ceaseless historical continuity, appearing out as the great Western Zhou, Earlier Han, Tang, Yuan, Ming and Qing-period backbone dynasties and, of course, the new historical peak of modern civilization. No doubt, the newest Chinese achievements are most dazzling. Paying great attention to the continuation of the historical and cultural heritage, the Chinese people (not without some losses) multiply enduring vitality of one of the greatest ancient civilizations. To realize the all-round rejuvenation of Chinese nation, research of cultural inheritance of the past is an inescapable task. Basing on the cultural and scientific attitudes, the anthropologists and Sinologists try to find a balance point between the traditional heritage and present reality.

Obviously, the historical culture of China contains abundant managerial wisdom. In the past centuries, that wisdom helped the Chinese people to take the lead in many spheres of human activities, even more, to refrain from overdoing.

Speaking of PRC’s government operation and attainments, Mr. Zhu Ming-ji states, Management science and management education are the paths of a country to prosperity. Old China’s economic management and administrative thought still can be used for good references. American school of management in combination with the research of ancient philosophical thought, the cradle of Chinese cultural inheritance, can bring us to the height of business activity and economic creativity. Therefore, reinforcement of scientific management and management innovation should be made along with Chinese style of management equipped with its traditional characteristics.

On the basis of all above-mentioned wartime activities, the term ‘management’ does not sound as precisely as that of ‘governing.’ It’s because ‘governing’ is implemented on the ground of ‘internal needs’ to deal with, not because of one’s personal ambition to cope with things in an emergency.

In the field of cognitive psychology, some experts believe that due to the structure of mental modelling we draw some deductive inferences. The ‘mental model’ theory is based on such a viewpoint that due to the mental model structure we neither completely abstract nor entirely specific in our thought to draw deductive inferences about the worldly appearances; otherwise, if the worldly appearances are quite specific for us, we would not have a chance to carry our previous experience over a new situation. Theoretically, the modelling we carry out in our research seems to be partially coincided and, therefore, supported by the mental model theory. The term ‘mental model’ may seem as a simplified viewpoint, in general, like an allegation that people cannot be trusted, may also be overcomplicated theorization, such as a hypothesis of relevant methods of human interaction and so on. Our mental models are not only to determine the way to perceive the world around us but also define our everyday behaviour. This study modelling is based on the principle that people accept assumptions and imagery of this world built upon the unity of opposites. Once the models are deeply rooted in people’s mind, they affect their behaviours and activities. (As it has been mentioned earlier, the cognitive hypothesis assumed by now consists of the fact that a simple set of rules would generate similar results in the people’s minds during a virtually infinite period of time.) Therefore, by means of the ‘mental model’ theory we can re-engineer configuration of the 36 stratagems. In other words, through the use of 36 stratagems we can try to improve the way of strategic thinking. At present, some researchers in China are doing to carry a study on blending the eastern business culture and Western scientific approach, in which, by means of the ‘mental model’ theory, they endeavour to review and re-engineer the 36 stratagems in the context of globalization. To highlight the essence of Chinese style of management as an embodiment of ‘ancient wisdom,’ some people emphasize the special importance of a strategy generation and its successful implementation worked out and developed in old China.

Three Points of Thinking as Problem-solving Process

As is well-known, thinking is a reflection of objective reality; the human brains are used to process information and summarize all the date received from outside. This process runs through the use of language and can reveal the essence and internal rules of rational analysis in the course of the cognitive process. However, thinking in general and procedure of problem-solving are always run together. People think with one purpose only, and this purpose is how to solve their problems; therefore, thinking is always pointing at the problem-solving. Even psychologists admit the fact that the main mission of thinking is to solve daily problems. Wang An-sheng and other Chinese experts on psychology believe that the basic point of thinking can be summarized into three points: (1) Thinking as the means of indirect and generalized cognitive process. This kind of cognitive activity lies deeply within the brains, or cognitive system and manifests itself outside through one’s everyday demeanour. (2)Thinking is a kind of process; this process includes a series of operations (calculations) of the cognitive system. (3) As the means of problem-solving, thinking reflects one’s behaviour, which, in turn, points out at the problem that needs to be solved. Therefore, combining the general definition of thinking with that of problem solution, we determine thinking as indirect and generalized cognitive process, in the course of which we endeavour to solve incipient problems. At this, the time factor is crucial. Lao-zi advises: Deal with a problem starting from its easiest end, but accomplish a great deed in all small details (The Dao-De Jing, Verse 63).

One’s behaviour means a certain expression of one’s personality through one’s activity; it is some kind of response to external stimulus. Confucius and Mencius emphasized a direct connection between one’s virtues and one’s behaviour. When one’s behaviour matches to environmental terms one succeeds and gets proper results of one’s activity. In the Wen yan (Kun (2)) we read:

"All his excellences reside exactly in the core of his heart,

But their unimpeded manifestations are taken over his four limbs

And thus implemented in his conduct according to the state of affairs.

This is what is known as the ‘Carrying to Perfection.’"

Therefore, it is said, Going on beyond this, we can reach such a point of our attainments which is hardly possible to realize. We have thoroughly comprehended the inscrutable and spirit-like and know the processes of transformation; this state is known as ‘fullness of virtues.’ And the ‘fullness of virtues’ is the virtue of the superior man who puts it into the daily practice of governing his people and the country.

There are no insurmountable barriers in the path of Heaven because it is movable and permanent. However, it does not dwell on it; it is strong for long but does not boast about it. This is a kind of the Yang quality, perfection, a qualitative leap forward, an ability to be strong for a long period of time. To get this virtuous trait, one has to work hard relying on the heavens, no matter what others say about. What’s more, the Chinese people regard ‘strength’ in a little bit different way from that of the Westerners. The real strength, as they say, cannot exist without the earthly substance, including relaxation, rest and yielding to accomplish a matter successfully.

Strategic thinking

This study explores the well-known to every Chinese a set of stratagemical precepts entitled The Thirty-six Stratagems. Earlier, we have discussed the overall characteristics and system structure of this short treatise on warfare to return now to the problem of strategic thinking. What the strategic thinking actually is? It is a dialectical way of saying that when making decisions, one should first think about the conventional or expected methods of solving problems, then imagine what the opposite of that method might be. Once we come up with the opposite of that method, we should consider whether adopting that opposite, i.e. the unconventional method or unexpected move might be even more effective (or complementary) than the conventional method. This method of seeking the complementary from the opposite also applies to analysing the opponent’s situation. One should first consider what the opponent is most likely to do, what is the conventional or expected action; then imagine what would happen if he did the exact opposite. This concept is a fundamental point of commonality between Lao-zi’s ‘dialectics of insight’ and Chinese way of a strategy generation. It should be noted here that this concept is readily understood by most Chinese who are familiar with the common idiom xiangfan-xiangcheng (相反相成), which points out at the fact that opposing things have an identity. It means that two sides of a contradiction, which repulse and struggle against each other, join together under certain conditions and obtain identity within the law of the unity of opposites. This is the fundamental law of materialist dialectics, which reveals that all things are of the unity of opposites, and they all include contradictions. The opposing sides of a contradiction both unite and struggle, and under certain conditions transform into each other, thereby pushing forward the changing of things and their development in full accordance with the Mortar and pestle modelling. Although this modelling, by analogy with the law of unity of opposites, is conditional and temporary and transitional, and, therefore, represents the correlative system, the struggle of opposites is unconditional and absolute thus far.

Obviously, The Thirty-six Stratagems is a Classic on problem-solving, which contains a lot of notions and interesting things about strategic thinking—the subject of our interest. First of all, strategic thinking is defined as the problem-solving thinking that should be treated as indirect and summarized the cognitive process in general. Therefore, we can consider the The Thirty-six Stratagems as the work on strategic thinking. In combination with what the ancients discussed about ‘thinking’ (sixiang; 思想) this study defines strategic thinking as indirect and generalized cognitive process which is solely oriented towards strategic problem-solving. Here, we discuss the problem strictly from strategic perspective, which, in regard to the 36 stratagems, is based on the following three points for consideration: (1) since the stratagems are result-oriented precepts, strategic thinking, as their mainstream, should also be result-oriented; (2) the term ‘stratagem,’ as a precept for strategic problem-solving, should be treated as manifestation of strategic thinking expressed outside through a particular form of cognition; (3) due to our approach to the problem from strictly strategic point of view, we have to make in-depth analysis of strategic thinking inherent in the body text of 36 stratagems.

Problem-solving

Although modern psychologists approach the problem-solving from different points of view, all of them, however, can basically be boiled down to one consistent meaning. As John Anderson, an American psychologist and a representative of ‘cognitive psychology,’ advocates, the problem has the following three characteristics of solving: (1) purposiveness or ‘clarity of purpose,’ which is a very important feature of problem-solving activities; (2) a fixed sequence of psychological aspects of operation (calculation); and (3) cognitive operations. Problem-solving activity should involve cognitive components; therefore, any problem-solving can be regarded as a cognitive operation with its definite sequence of pursuing one’s aims.

All people’s wishes are aim-oriented, but the reality often brings us to something else, which is absolutely counterproductive. And this is the most beautiful point in the whole story. What is desired is often unreachable because our thoughts rely on what is good in us, our pure hearts/minds, where our dreams come true. Meanwhile, most of our ambitions are based on distracting thoughts; therefore, we cannot realize them in practice in full accord with our conscience. A pure heart/mind is easy to change into ‘a cashed dividend’ called redemption. Therefore, to be frank and honest is the best way to have the upper hand in any situation.

Lifelong we make plans and designs, but Heaven has planned for us before we realize it. You also plan for yourself; therefore, the Chinese use to say: ‘Heaven and Man make oneness’ (tian ren heyi; 天人合一), meaning once Heaven’s plan coincides with yours, it will be implemented smoothly. When your pure heart/mind follows Heaven’s will, your dreams often come true. For this reason, one should think very carefully about one’s destination in this life to increase the efficiency of one’s activity.

Strategic problem-solving

As it has been mentioned earlier, from the result-oriented point of view, a strategy is used for problem-solving; if we speak of a certain degree of strategic effectivity, namely, effectiveness of gaining victory and avoiding defeat, from the perspective of tactical operation, a strategy represents an integrated process of thinking, with which the Chinese leaders deal at solving their problems. At the same time, it is a set of precepts and methods they use as countermeasures once they face problems to be solved. Methods of problem-solving are represented by a whole set of precepts and solutions arranged according to a certain sequence of integrated cognitive operations worked out within the framework of ‘victory-defeat’ scheme in general. In addition, the 36 stratagems should be considered as some typical (classical) examples of stratagemical precepts which, owing to their belonging to the universal numbers six and nine, mean self-sufficient strategic methodology. This is why, in principle, by analogy with the 36 diagrams of the Zhou Yi, they can cover all around aspects on a strategy generation and its successful implementation. Otherwise, if we could settle only a part of problems related to strategic problem-solving or provide only a partial solution of strategy issues, is there any sense of putting the number 36 into the system structure with extant categorization of the six sorts of warfare principles?

Analysis and Conclusions on Strategic thinking

As is said, strategic thinking intimates indirect and generalized cognitive process intended for strategic problem-solving. The so-called process and modelling is mainly discussed from the standpoint of problem-solving through some strategic specifics, such as situational environment, guiding principles and operational means on two different levels of macro and microstructure. The following pages represent strategic approach to the problem-solving when the main attention is riveted on some principles and values at the cognitive level of the process and modelling, including four aspects of strategic thinking, such as guidelines, categorization, structural systematization and conclusion.

Modern decision-making on Chinese enterprises with traditional style of management

The modern theory of decision thought has been widely circulated and widely accepted. At the same time, strategic thinking in China has profound cultural origins. If modern Chinese society completely follows the ancient way of Chinese strategy and strategic thinking, employing traditional style of decision-making which has been put into practice far back in the past, it is obvious enough that this cannot be conformed to the reality regarding modern management and business decision-making. What’s more, it can have no actual effect at all. Nevertheless, to realize the organic integration between ancient decision thinking with all its methods and mechanisms and the modern device of decision-making, it makes sense to regard the essence of ancient thinking as a support and supplement (in the form of some practical ideas) for decision-making within the framework of modern conceptualization. For this, first of all, we have to sort out some relevant factors of strategic thinking, including ancient principles, theories and operating methods in order to compare them with some attributes and elements of modern decision-making. Then, based on this comparison, we can put forward a new understanding and reveal a new interspace for modern decision-making in the new surroundings.

Modern theories of decision thought derive in many from the West, while Chinese strategic thinking originates in China, in the east. As is well-known, following others, it is always difficult to surpass them; therefore, in this chapter an endeavour to explain a significance of the strategic thinking on the base of a Chinese enterprise with traditional style of management and a mechanism of decision-making is attempted. On the previous pages (See my ebook "Deciphering the 36 Chinese Stratagems") I have determined stratagemical thoughts as an integral part of strategic thinking while the latter has been defined as ‘an indirect and generalized cognitive process intended for strategic problem-solving.’ Earlier, it has also been pointed out that based on the 36 stratagems strategic thinking reveals itself as a practical method with all its ‘tricks of the trade’ formed within the frame of cognitive process with reference to strategic decision-making. What does the ‘strategic decision-making’ mean? More simply, it means the way to make a decision. Management merely consists of a series of decision-making. In fact, decision-making is a matter of making a right choice, it can be likened to ‘rapping the gavel’ or having a final say. In a word, ‘decision-making’ refers to any important activity that determines the target of an action. We often witness that public opinion is splintered now and then, sowing frictions and confusions. According to Wang An-sheng, an author of a series of publications on management psychology, every single decision is practically oriented on the forthcoming issue and intimates direction, target, principle and method of decision implementing activities. Wang An-sheng’s definition includes ‘a decision’s subject,’ which is called to realize selective behaviour of decision-making activities also known as ‘decision drafting.’ This definition includes direct transformation of the worldly conduct to be considered as ‘decision realization.’ In addition, decision realization represents the subject’s cognitive inspection and information feedback.

The main properties of decision-making

Wang An-sheng and others believe that decision-making possesses the following five main properties: (1) practicality; (2) single-purposefulness; (3) hierarchy; (4) principles; and (5) situational attribution.

Decision-making procedure and return circuit

The decision-making procedure, also known as ‘decision process,’ intimates a phased, stage-by-stage, decision-making moving towards a final decision. Actual decision process can be divided into six stages, which are: (1) empirical perceiving and examining of the problem and catching an opportunity; (2) decision goal’s confirmation; (3) analysis of alternative course of action and foreseeing of a possible result; (4) choosing a specifically appointed plan of action; (5) decision implementation and (6) providing feedback (security).

The basic materials for decision-making

Generally speaking, there are four kinds of basic materials for decision-making, which are: (1) facts, (2) information, (3) knowledge and (4) experience.

Decision thinking

As is said, decision-making intimates implemented activities oriented towards the future and consisted in direction, target, principle and method of their practical realization. In other words, decision-making is based on a judgement derived from a clear understanding of purpose with its many objects and numerous attributes; and these attributes transform into subjective effect in the process of comparison between the objects. Decision makers often resort to thought to determine values of these attributes; they also use subjective judgements for making a proper choice. Therefore, a decision thought plays the role of initial orientation, moving control and final judgement (three in one) in the whole process of decision-making. Decision thought differs from actual thinking in general and has the following five characteristics: purposiveness, effectiveness, fuzziness, feedback and system act.

Modern decision-making

As for the so-called ‘modern decision-making,’ except previously pointed out general decision-making procedure and decision-making return circuit, the American experts on modern management believe that effectiveness of decision-making consists of five profound elements, which are: (1) grasping the nature of problem, whether it is normal or not, and establish only one rule or one principle according to which the problem can be solved out; (2) for finding out the range of problem we need to define the scale of its expansion. In other words, to solve the problem with all its specifications, we have to determine the framework of its terms and qualification; (3) through a serious consideration we can pick up the right direction of the problem-solving with its specifications to examine repeatedly (double-check) the correctness of chosen direction for a matter’s solving. Then, on the basis of thorough consideration of all possibilities and probabilities of compromises and concessions, we set a matter going if the picked up decision can meet acceptance of others; (4) a making decision should take into account the method of carrying out, its operational practicability; (5) in the course of a decision’s implementation, we should devote attention to all details of ‘feedback’ and monitoring data-collection to confirm its applicability and effectiveness, also known as ‘validity and suitability of appraised decision.’

What is written in the Romance of the Three Kingdoms about the decision-making process of Sun Quan, the ruler of Wu, before the battle of Red Cliffs, is worthy of drawing lessons from for our awareness. At that time, the ambitious Cao Cao led an army south and, advancing swiftly unhindered, headed directly towards the Yangtze River. Complacent Cao Cao sent Sun Quan a letter, in which he declared that he was taking a one million strong army and that, together with the Wu army, they