The Tao meets the dow

Examines the value of ancient Chinese management teachings for modern business leaders. Opinion of psychologist Eric Abramson on the advice of military strategist Sun Tzu for business leaders; Reason for the inapplicability of such rules in other countries.

By PT Staff, published on May 01, 1998

What's the missing ingredient in modern business leadership? Ancient Chinesesecret.

Chinese philosophy--from the writings of the ancient military strategist Sun Tzu to the Tao Te Ching, a fifth century B.C. treatise on leadership--is all the rage in management and investment circles. Yet much of its message runs counter to the drumbeat of capitalism.

Take, for example, Real Power: Business Lessons from the Tao Te Ching (Riverhead). It instructs the "wise business leader" that "yielding can be the equivalent of winning"--a negotiation tactic not likely to be kind to the bottom line.

The fortune cookie nature of such ancient counsel is often ill-suited to the complex, situation-specific management problems modem business leaders face, contends Eric Abramson, Ph.D., a Columbia University organizational psychologist who studies management fads. He believes that its popularity has more to do with the insecurity of management in an age of global markets than with the intrinsic value of the advice.

American executives may take China's phenomenal economic growth over the past decade as proof that the Chinese know something we don't. But a country's economic success often has little to do with its management theory. And one country's techniques cannot easily be grafted onto the organizational culture of another.

These facts have not impeded the appearance in America's bookstores of hundreds of these management books. Remember all the Japanese business secrets enlightening American corporations in the 1980s? Now that Japan's boom economy has gone bust, so has the market for books on Japanese management techniques.

Likewise, the recent collapse of Asian markets may cause managers to stop looking for leadership lessons in fortune cookies--and go back to reading Fortune.

--M.J.