(W.E. Talk) Dialogue: When Drucker 'meets' Confucius

By Siyuan Tao

There’s a likelihood that Confucius would have been friends with Peter Drucker, who is described as the "father of modern management" in the West, if they had been living in the same time period. Whereas Confucius advocated "harmonious culture" and a "harmonious yet different" social order throughout his life, Peter Drucker similarly worked on the concept of "synergistic effectiveness" as his goal.

What are the similarities between Drucker's management philosophy and Confucianism, which has influenced China for more than 2,000 years? How can the learning of both and the integration of Eastern and Western management ideas help Chinese enterprises to develop? China News Service’s W.E. Talk recently interviewed Bernie Jaworski, the Peter F. Drucker Chair in Management and the Liberal Arts at the Drucker School of Management at Claremont Graduate University in the United States, and his student Virginia Cheung, an associate research fellow at the School of Management at Shenzhen University, about the similarities between Eastern and Western business management ideas that allow Confucius to “communicate” with Drucker in a "cross border " way.

Here's the excerpt of the dialogue.

CNS: "The cross reference between Eastern and Western civilizations" has been a long-discussed topic in the academic world, and management is a discipline that is particularly close to practice, what was the original intention to publish the book of "setting an organization's direction: building on essential Drucker and Confucianism Thinking"?

Jaworski: It originally started with Virginia’s research on a comparative study of Drucker and Confucianism. At that time, we just started working with Chinese companies, and they wanted us to help them with setting their organizational direction around mission and vision. We conducted some relevant research based on Drucker's philosophy as well as how it integrates with specific culture in Confucian society. In this process we found many Chinese companies that have achieved commercial success over the past five to 15 years that are product- and technology-driven, but if you asked them, "Who are you? Where do you want to go? What can you contribute to Chinese society?" most of them wouldn’t be able to give a clear answer. As Drucker noted, one of the most important reasons for business failure is a lack of a clear mission. As a result, Virginia and I realized this topic addressed a much broader practical need in China’s market than we had initially thought. We thought we should write a book to benefit more Chinese enterprises and their managers and make it relevant specifically to Chinese culture, and this book can be meaningful for both Eastern and Western markets.

Although our initial research was only based on Drucker, as the comparative study with Confucianism continued, we started to find more similarities between these two doctrines. We also realized that both approaches are still very practical and relevant in today’s world.

Virginia: One reason that Drucker's teachings can be inspirational for practicing managers is because of the research method Drucker used. He generated theories from best practices. Similarly, many approaches in Chinese thought are also rooted in traditional wisdom about practical applications in one’s life, and Confucianism is widely regarded as the “philosophy of practical life” with its pragmatic principles. These traditions are classic and enduring even though, of course, certain concepts have to be adjusted to better fit today’s environment.

CNS: Many Chinese companies today adopt management theories oriented from Western values? How do Western scholars view the application of Confucianism in modern management?

Jaworski: A lot of Confucian ideas are still highly relevant today. For example, the concept of "self-reflection": People are increasingly noticing the importance of self-reflection to their personal growth and business growth. The deeper question behind this is: What can I or my enterprise do to help my community (the basic unit in Confucianism is family, in the West it is community) and society in general?

Interestingly, the concept of "self-reflection" has only become gradually important in the United States and the West over the past 20 years, but Confucianism has been talking about it for more than 2,000 years.

Virginia: I like the concept of "self-cultivation" as well. Self-cultivation is another core quality of the concept of the “Gentleman” in Confucianism, and it is also a frequently mentioned concept in Western value systems. So, as we can see, although many Confucian concepts are historically rooted in Confucian societies, they can still have a broader impact in shaping today’s behavior.

Confucius realized that self-cultivation is a difficult task, but it becomes easier if we have a sense of mission, which can motivate us to maintain continuous self-cultivation and to seek out higher achievements.

CNS: Which Confucian concepts can have a profound impact in business management from your perspective? And which Confucian principle you think can be core to management application?

Virginia: In today’s China, although most of the people no longer learn Confucianism systematically, those Confucian values still have a strong impact on their business decisions and behaviors, and often these values influence them at the unconscious level.

Jaworski: I am impressed by many Confucian quotes, such as: " Do not impose on others what you yourself do not want" (mirrored in the “Golden Rule” as an “ethic of reciprocity” in the West). This is a behavior that transcends time and is still applicable in today’s business management. But in my opinion, one of the most important Confucian principles is to learn how to learn. A firm that can learn faster than its competitors is essentially a "market-oriented firm": That is, the firm is able to quickly understand the trends in marketspace, bring the information back to the members of the firm, translate information into insights and knowledge that is meaningful to its business, and react accordingly. Therefore, "learning" in Confucianism is not just about collecting information. It is also about learning to improve practices and how to learn. This is an important source of competitive advantage.

One of the biggest competitive advantages Chinese companies can have today is in their thirst to learn, which is a distinctive feature of some Chinese managers. They often ask good questions, while some Western managers are eager to get solutions rather than thinking deeply about challenges and what they mean for their company.

CNS: Culture differences can many times cause managerial inefficiencies. How do you think Drucker's management philosophy can be successfully practiced in Confucian societies?

Jaworski: Drucker made an important point that the greatest purpose of a business is to create customers. Organizations must be customer-centric, deeply understand customer demands, and serve these demands. This is the "customer-driven" concept that all businesses across the globe need. This sounds simple, but we need to rethink and customize this idea based on a company’s specific context and situation. For example, in the business environment in China, in addition to being customer-centric, what are the other factors that can play an important role? How can these factors affect the process to "create customer demand"? For example, in order for an enterprise to compete in China’s market, in addition to following customer demands, the company’s offerings also need to follow other specific standards in China market. This is just an example of customization and localization of Drucker’s principle about “understanding customer needs” in China’s context. Such “translation” does not only apply in China, but equally applies in other places such as, for example, in Germany, where managers must consider the strong influence of trade unions.

Virginia: For Chinese companies, the good practice of Drucker principles is built on a deep understanding of both generic principles and local culture. So, understanding the logic behind generic principles is the critical first step, followed by defining that enterprise’s own objective and only then "customizing" the generic principles to fit the firm’s specific context.

CNS: "Purpose economy" is an emerging concept in the West that is worthy of our attention. What’s your view of how this concept can affect Chinese enterprises?

Virginia: Some scholars think we are already in the early days of the concept of “purpose-driven economy” and that we should think beyond profit maximization and focus on contributions to society as our purpose. Of course, if we want to shape such "noble" organizations that are not solely measured by "economic outputs," it also requires supporting organizational approach and legal structure accordingly. I’ve been thinking if it would it be the case that this kind of "purpose (social value)-driven" concept is particularly applicable to Chinese enterprises, which already carry a certain degree of cultural heritage because of Confucian virtues?

Jaworski: Yes. People have been talking about mission and vision-related topics over the past 50 years, but the essence of “purpose” is this: What does the existence of this enterprise mean to society? How can our business (or a particular product, service) help this society to better function? Purpose is critical to helping employees better understand the value of this enterprise beyond its physical products.

Virginia: The younger generations today can no longer find motivation solely in monetary rewards; they want to realize the meaning of life while getting a salary. Organizations in such a "functioning society" shall undertake that role to guide these young people.

This takes us back to the topic of aligning individual purpose and organizational purpose. To achieve this alignment needs supporting theories, and our value here is to educate a broader range of people on this topic. Many managerial tools that were very useful for a period of time may be outdated today, but Drucker’s philosophy and Confucianism are still well recognized by many people now, and their continuing popularity demonstrate the power of “classic teachings” that can transcend time.