During the past few years, short life span has not only become a challenge for Chinese companies, but a “global problem”. According to statistics, in America, 62% of the businesses can not exist for over 5 years, only 2% of companies can subsist over 50 years. The average age of “Fortune 500” is 40-42 years, while the one of “Fortune 100” is only 30 years old. In China, the average age of Group companies is about 7 to 8 years old; as to the one of small and medeum sized companies stagnates at 2.9 years (Li Zhenghong, 2008).
One of the profound lessons drawn from the financial crisis is that, business ethics and social responsibility is not only an important constituent part of constructing a harmonious society, but also the basic requirement for to achieve sustained business development. How to achieve sustainable development through fulfilling corporate social responsibility is a challenge to both CSR researchers and practioners. Only challenging or denying “maximization of shareholders' interests”can not solve all the challenges of management science. How can we improve the hypothesis or come up with a new one? What can replace or make supplement to the classic rules? How to integrate Chinese traditional culture and thoughts of strategic management into business management? This article will discuss about some new ideas in this respect.
1. The Concept of Green Ocean Strategy
Green Ocean Strategy has come up with answers to solve the problems previously stated. It is the strategy of sustainable development under the guidance of harmonious belief; it refers to business operation theories, actions and procedures aiming at achieving sustainable development by increasing core and sustainable competence through actively undertaking CSR and balanced managment of stakeholders' interests, as well as maximizing economic and social values under the guidance of sustainable development theory. Sustainable development theory is the foundation of Green Ocean Strategy, and core competence is the source of sustainable competitive advantage; obtaining sustainable competitive advantage through systematic management of interests of stakeholdrs is the heart of Green Ocean Strategy.
Sustainable business development theory was born with the deepening of this theory from micro-fields to macro-fields. In recent years, with the first patch of businesses which from upstart due to the promulgation of some policies to stable operation, many enterprises became shooting stars and business development are facing new challenges and dilemmas. The main problem that Chinese enterprises are facing is how to achieve a sustainable development or how to build longevity businesses.
Generally speaking, the falling stars are all product-or-project successful companies, whose owners happens to grasp an opportunity, product, project or some rare resource by right of courage and insight, or luck. However, such a success does not necessarily lead to long-term success of the company. At the beginning of Dao De Jing by Laozi, it is said that “The Way that can be told of is not an Unvarying Way; The names that can be named are not unvarying names.” Under the current business environment of China, if the business strategy does not change according to the specific circumstances, some businesses are doomed to fail. Therefore, many companies and people become famous and rich overnight, while others fall and sometimes go to jail on the following day.
2. Harmonious Leadership
Companies pursuing Green Ocean Strategy seek sustainable competitive advantage with both hard competence and soft competence. Enterprises who participate in international competition need to establish a core competence. This includes “hard competence” and “soft competence”, which is like the “Yin-Yang”; in this case “Yang” would represent the hard competence, and “Yin” would represent the soft competence. Companies need both of these two kinds of competence to succeed in market competition, while soft competence plays a more important role to achieve a sustainable development.
Harmonious Leadership is ultimately about creating a business competence to achieve sustainable competitive advantage through balanced management of stakeholder relations. “Harmonious relationship is also competence”. Sustainable development is a relative concept, which means “during a long term” and be reflected specifically in the development of many elements of business operation activity. Green Ocean Strategy admits that stakeholders have different views though they share some same stakes. From the perspectives of all parties, companies should make profits for a consecutive period of time (hopefully all the time); for employees, a company should maintain or enlarge the employment scale and provide satisfactory working environment; for supplierss, a company should make new orders continually; for the government, a company should pay taxes on time; for customers, a company should keep providing products that go with the quality and price demand of the market. Of all the factors above, the most basic one is to continually provide products that meet the demand and changes of the market.
There is an old saying in China: “One could be an official owing to his academic achievements, and one could be successful if he is really good at some techniques”. The word “Success” can be interpreted in different ways, and it is divided into “big achievement” and “small ahievement”. If we consider being outstanding as “small achievement”, then “big achievement” means to treat success as a way of being and a career habit. An entrepreneur should not only be ambitious, but also be gorgeous. If a person is only willing to take the responsibilities of one, then he is working for somebody else. Only if a person is willing to take the responsibilities of thousands of people could he ignore the temporary success or failure and become a real entrepreneur.
3. Future Research of Green Ocean Strategy and Harmonious Leadership
The research of the Green Ocean Strategy has entered the second stage. In stage one, we mainly focused on nromative research, aiming at clearing up some concepts, confirming the guiding research basis, theoretical foundation and researching methodology. The fruits of the first stage, Green Ocean Strategy——Obtaining Sustainable Competence and Sailing in Green Ocean——Successful Cases of Green Ocean Strategy has been published by Tsinghua University Press. Now, we are carrying out the research of the second stage, which is the development of Harmony Monitor.
Harmony Monitor is a management and evaluating tool to help an enterprise to fulfill its social obligation, to balance the relationship of stakeholders and to obtain sustainable competence.
We hope that entrepreneurs should not only maintain “putting feet on ground” which means being realistic, but also should “turn his head towards the sky full of bright stars”, which means to assume the CSR endowed by the history. The “C” of “CSR” could represent “Corporate” and “Collegiate”, as well as “China”. In a word, realizing sustainable development by encouraging companies to fulfill CSR is not only the mandate of Chinese entrepreneurs and managers, but also joint obligation of the whole society.
Simon Zadek's remarks in China can be a conclusion of this article. “I would bet that within five years，China will be deeply involved in the management of standards. Then they'll build their own, and they'll become exporters of standards”（Simon Zadek, CEO, Accountability, UK, 2008）
References：
【1】 Hou Shengtian. Green Ocean Strategy——Obtaining Sustainable Competence [M]. Beijing：Tsinghua University Press，2007.
【2】 Deng Zhenghong. Genes that Push Sustinable Growth of Enterprises [J]. Articles of Modern Enterprises，2008（34）：16-17.
【3】 Hou Shengtian. Green Ocean Sailing——Successful Cases of Green Ocean Strategy [M]. Beijing：Tsinghua University Press，2007.
【4】 Hou Shengtian, Chen Jiancheng. Green Ocean Strategy——Discussion of Enterprises’ Sustainable Development Strategy [J]. Journal of Taiyuan University of Technology (Social Science Edition), 2006，24（2）：75-78.
Hou Shengtian, Center for International Business Ethics |
