Management Science and Engineering

 

In Search of Harmony Under Fast-Changing And Uncertain Environment:

 The Evolving He-Xie Management Theory

 

LI  Rui-li[1]    

 

 

Abstract:  In front of more and more uncertain and fast-changing environment, modern management science with ground roots on Western reductionism philosophy is tending to be not applicable in many cases. Through the lens of holistic perspective from Chinese philosophical intelligence, the Confucian concept of harmony was introduced and compared with the Chinese pronunciation of harmony, He-Xie to help find the way to effective organizational management. The proposed He-Xie Management Theory (HXM) contains constructivism and evolutionary perspectives, adopting ��design and optimizing�� and ��inducement evolution�� mechanisms respectively, provides a pragmatic methodology and tool kits to both scholars and practitioners for cope with fast-changing and complex uncertain world by integrating traditional Chinese philosophical intelligence and modern scientific knowledge and techniques on problem-solving. This indigenous approach is supposed to offer a holistic intelligence towards bridging the current gap between micro and macro domains in management field.

Key words:  harmony; uncertainty; complexity; He-Xie Management Theory

 

 

1.  Changing environment and challenges to Western management and the opportunities for Asian management

 

In a more and more uncertain and complex environment, the occurrence of kinds of disastrous happenings, such as the subprime mortgage crisis in America, the milk powder scandal in China, disclose that mature and complete institutions at macro level are not enough for an effective management when facing uncertain and complex problems in real life, more problems from the uncertain aspects of human behavior at micro level should be considered. In fact, the division of micro and macro level in management research domains can be attributed to the Western epistemology on analyzing and solving problems, the reductionism-based philosophy and analytic reconstruction methodology. In terms of the methodology for coping with uncertainty and complexity, reductionism based philosophy has been the core pillar of modern Western science, including management science. Thus, when facing more and more uncertain and complex world, some Western scholars stick to original thinking, throwing endlessly new managerial fashions as solutions for confronted problems. Though the reductionism-based method has contributed greatly to the development of modern science, due to the inherent limitations on treating whole and complexity, the method of analytic reconstruction has met refutation by holists (Gunaratne, 2003, 2004). Some scholars even think that humankind is in crisis due to lack of holism and too much reductionism (Mulej, 2007).

In view of the dilemma in front of modern management science, with a Western philosophical root in reductionism, there has been a surge in complex adaptive system theory (CAS) research involving many management related issues during the last two decades, aiming to disclose the hidden mechanism of the forming of complexity and to offer practicable measures to cope with uncertainty and complexity. By means of many innovative efforts including simulating and computational methods, the development of CAS has promoted to a certain degree our understanding to the forming of complexity, i.e. the ��What�� question, what kind of factors and mechanisms lead to the formation of complexity. For example, the computational aspects of complexity have been studied extensively; the concepts of time and space complexity of different kinds of algorithms are also well understood. However, the human aspect of complexity is still poorly understood. This human aspect of complexity is a significant challenge today, requiring urgent solutions. Because of the embeddedness and interactivity management activities with human being, more and more increased uncertainty and complexity in real life could be traced back to the complexity of human aspect. No wonder some scholars even think that humankind is in crisis due to lack of holism and due to too much reductionism. Apart from knowing answers to ��What�� questions of complexity, we should know further answers in front of real issues to ��How�� questions, i.e. the mechanisms and solutions for coping with complexity and problem-solving.

In front of the difficult issue, scholars like d��Espagnat have told us clearly the roadmap to solve difficulties a realist faces, i.e. we shall establish that ��a link with some philosophical or cultural tradition is necessary��. The successful infiltration of Prigogine��s theory of dissipative structures in many natural/physical and social sciences is a good example (Straussfogel, 2000). As Prigogine acknowledged and advocated, its roots may extend much deeper into Confucius's classical thinking and modern science should absorb more intellectual thinking from Eastern philosophy.

In the wave of the deepening and widening of globalization, context is becoming a variable for many scholars in management field. Especially with the emerging important role of Chinese economy on world market, context represented by Confucian Culture Circle is attracting more and more sights from scholars around the world. This offers a true precious chance for Asian scholars since in the wave of the rapidly rising economic and social development in Asia, Asian scholars could and should contribute some indigenous management theory, enriching and contributing better understanding to this complex world. However, as Bruton & Lau (2008) pointed, too many studies simply use Asia as a setting for the research and do not seek to expand the theoretical understanding of Asia. The more insightful research is that which takes theory and uses it to theoretically expand a field, or empowers new theory development (Van de Ven, 2007).

Considering the tradition of Chinese culture on human-orientation and its intelligence on tolerating and coping with ambiguity, uncertainty and complexity, we think it would be an interesting issue by borrowing Eastern philosophical intelligence for problem solving to see how it could be possible to seek for harmony when situated in a fast-changing and uncertain environment. In fact, decades ago, there have some famous scholars who advocated strengthening understanding to and learning from Chinese philosophy. As Prigogine indicated in 1997, the development of modern science needs integrate western scientific tradition, which stresses experiment, analysis and quantitative description, with Chinese philosophy tradition, which emphases holistic coordination and collaboration relationship (Prigogine, 1997). Apart from Prigogine, among which who advocated strengthening understanding to and learning from Chinese philosophy include also Drucker (Romar, 2004). Golden (2006) stated also, ��the ability to harmonize diversity is a major function of Chinese political and cultural thought��.

Though more and more scholars are turning their sights to Chinese context, harvesting from this context fruitful academic achievements, and even some indigenous words with special contextual meanings (e.g. Guanxi, Mianzi) have been exported to, circulated among and accepted by Western scholars, they did not help reducing the gap between macro and micro domains of management.

Since the issue of transferability of management knowledge has been widely criticized, many researchers, not confined to scholars in Asia, have proposed to take action with self-confidence to explore and develop indigenous theories to advance management research (Meyer, 2006). Similarly, Özkazanc-Pan (2008) also advocated ��management researchers can coproduce knowledge with ��the Rest of the world�� rather than about ��the Rest of the world�� and disrupt the hegemony of Western epistemology in IM (international management) research��. In fact more and more increasing demand for the turning from Anglo-American based theory application to developing new theories in Asia is becoming an important and urgent agenda especially for scholars who have comprehensive and profound understanding to native culture tradition.

In view of the rising urgency to make indigenous contribution to management theory development as well as avoiding to be part of the ��collective phenomena�� in current Asian management research (Meyer, 2007), we believe it is a ripe time to present He-Xie Management Theory (HXM, He-Xie means harmony in Chinese) as a potential approach which might address uncertain and complex issues on the one hand and enhance organizational performance when facing unpredictable and complex environment effectively on the other hand. We look forward to inspiring wider debates and getting constructive feedbacks from scholars both in Great China Regions and in Anglo-American contexts.

This article intends to introduce He-Xie Management Theory, the indigenous theory in Chinese context, to spread widely this methodology. This article will put emphasis on illustrating how HXM could be applied as a new methodology for coping with fast-changing and uncertain environment. The inner mechanisms of HXM for problem-solving in facing of uncertainty and complexity would be analyzed. We will describe our own approach, which is characterized by a combination of organization��s optimized design at macro-level and exertion of individual��s enabling power at micro-level, with both constructivism and evolutionism mechanisms as effective responses for the fulfillment of organizational order and organizational performance. We will show, in particular, why and how this approach can contribute to solve complex problems under an uncertain and fast-changing environment. And we show how He-Xie Management Theory could be a kind of methodology with a holistic perspective and meanwhile a valuable toolkit in providing effective solutions for the achievement of organizational performance.

 

2.  Harmony and He-Xie

 

With Confucian principles once again openly thriving in China, the word ��harmony�� is becoming a popular slogan around China and is penetrating into other culture circles, not limited to Great China Region and Confucian Culture Circle. Fox example, on his welcoming speech on the 2007 Summer World Economic Forum held in Dalian, China, Klaus Schwab, Forum founder and Executive Chairman of WEF, echoed also the concept of harmony, calling for "a new harmonious relationship among business, governments, society, and the environment". This could be seen as an extension of what Drucker (1981) has reviewed several decades ago, ����Confucianism�� is a universal ethic in which the rules and imperatives of behavior hold for all individuals.����

Harmony, in itself, should be a common idea for human being since the roots of harmony could also be found in Western culture, like the cradle of Western culture, Greece. In Western civilization, harmony has been primarily conceptualized as an aesthetic state with an ideal form from a rational and mathematical point of view, like the symmetric picture, concord of music. Now, harmony is being regarded as a universal principle and ideal status in Confucian.

However, in the wave of the emerging renaissance to Confucianism in China, there exists a potential risk that the essential idea of Confucian concept of Harmony is being misunderstood due to different perspectives from many scholars with different backgrounds. For example, at management field, the Confucian concept of harmony has been used and analyzed recently to deal with related issues on business negotiation, team-working, social capital and conflict resolution in Chinese context (Graham & Lam, 2003). But most of these researches understood harmony as a final status for the sake of winning Mianzi and avoiding conflict. However, harmony should not be a uniformity of thinking and behavior in organization. From a process viewpoint, the final status should keep on changing with external factors. And effective methods and mechanisms contributed to achieving the final harmony embody inherently the status of harmony. Because harmony could also be understood as a containing of diversified and varied ideas but acts towards the same purpose. What we understand harmony is this kind. It is just like an orchestral performance, with different instruments and roles in organization. Thus, many scholars who understood harmony only as a final status haven��t got the essence of harmony.

In view of the potential ambiguity of previous researches and use of the term ��harmony�� with our understanding to harmony, we use the Chinese pronunciation of the world ��harmony��, He-Xie, to replace it. Thus, He-Xie, is used as a special term in our theory framework. To our understanding, He-Xie contains wider meaning and is consistent to the true meaning of Confucius concept of harmony, differentiating it thus with general understanding to harmony which is regarded as a final status with the character of ideological homogeneity or homogenization. As Confucius stated, ��Junzi he er bu tong, Xiaoren tong er buhe�� (which could be understood as follows: ��Educated persons are in relational harmony while holding different views; uneducated persons are in disharmony even while holding the same views��) (Confucius, 1992).

Considering the incomplete and incorrect understanding to the concept of harmony, many of those previous researches have explained the issue in Chinese context with Western managerial theories, lacking a deeper and wider understanding to the special meaning and phenomena in Chinese context and correspondent theory building. As Meyer suggested, for those who have deeper understanding to indigenous cultural context, they should devote more efforts to develop context-free theory. According to the criteria of Meyer (2007), however, more valuable work should be pursued in making contextualization research, namely, contributing more context-free researches instead of using context itself as a field for theory testing.

With a different epistemology to the possible contribution of Chinese cultural elements to modern management science, we are expecting the evolving He-Xie Management Theory, an indigenous management theory with but not limited to traditional Chinese culture elements, could offer a systematic methodological solution for coping with uncertain and fast-changing environment.

 

3.  The Evolving He-Xie Management Theory

             

3.1 The origin of He-Xie Management Theory

He-Xie (the Chinese equivalent of Harmony) Management Theory was first advanced by Xi (1989) in his doctoral dissertation. Starting from the confronted low-level, non-scientific decision-making and disharmonious phenomena like serious internal friction when taking part in many huge projects decision-making in China at the mid 1980��s, such as the evaluation and decision of the Three Gorges Project on the Yangtze River, the assessment and evaluation for exploiting the Yinggehai oil field in Southern Sea of China, Xi explored modern management science with inspiration from Chinese culture, in particular the concept of He-Xie (harmony in Chinese), to find out effective management methods in Chinese context. Aiming at exploring and solving real world issues with an effective management theory, He-Xie Management Theory, which was put forwarded with thought grounded in Chinese cultural context (e.g. Confucian culture, emphasis on harmony), however, has been making efforts to absorb and also integrate modern management theories and methods from occidental world. After almost decades of development, this theory has been improved and enriched, and can now be said to possess an integrated and systematical theoretical framework, which has brought forth a series of research. (Xi & Shang, 2002; Xi & Zeng, 2005; Xi, Han & Ge, 2006; Xi & Wang, 2006; Ma, Xi, Li & Guo, 2007). This theory can be applied to solve complex managerial problems in modern organizations in front of uncertainty and turbulence. From the perspective of He-Xie Management Theory, the development of management research and practice faces great challenges in today��s complex and rapidly changing environment. The most serious problems in front of current management research could be summarized into the following two aspects.

First, because of the philosophical tradition of occident civilization on reductionism, at the first beginning, the holisticity of management tasks was fragmented, and scholars in management research domains viewed only bits and pieces of management tasks. The development of management science, such as Taylor��s theory and practice, is just an example of making dismemberment to the holisticity of management tasks. With this logic, it is not surprising that more and more modern management theory are presented in the wave of the dynamic changing world, forming a denser jungle of management theory. That explains the observed emerging division and gap between ��macro�� and ��micro�� management research domains.

Second, traditional scientific tools, such as statistical methods, are losing power to explain and explore the link between cause and effect. What we have found, however, are possibly not the truth behind causal chain, while minor probability events, random events stand behind the true causal chain. In this case, dominant management theories which rooted on occidental reductionism present a malfunction in the face of more and more complex and uncertainty world.

Starting from the level of epistemology, He-Xie Management Theory aims at achievement of order for organization as a whole to be the final target of management. Here, He-Xie means harmony in Chinese expression. With management words, the target of He-Xie Management Theory is to make strategic alignment in organization come into being, including the fit and consistence between people-people, people-thing, and people-environment.

The evolving concept of He-Xie Management Theory

The concept of Harmony is not an unacquainted term for the west since the Confucian concept of Harmony has been widely introduced to Western for a long time and was circulated and acknowledged among scholars. Despite the wide introduction and spread of ancient Chinese philosophy including the Confucian concept of Harmony, we think it is still necessary to clarify and differentiate the concepts of harmony with what we named He-Xie (harmony in Chinese).

In terms of the field of management science, the Confucian concept of harmony has been used and analyzed recently to deal with related issues on business negotiation, team working, and social capital (Graham & Lam, 2003). In fact, in the wave of the emerging renaissance of Confucianism in China, the essential idea of Confucian concept of Harmony is being misunderstood due to different perspectives adopted by many scholars with different backgrounds. Considering the potential ambiguity of previous research and use of the term harmony with our definition of Harmony, the Chinese expression of Harmony, He-Xie, is used as a special term in our theoretical framework. To our understanding, He-Xie contains essentially a co-existence of diversity and harmony, differentiating it thus from the general understanding of Harmony which is regarded as a final status characterized by ideological homogeneity or homogenization.

As a matter of fact, the word harmony is composed of two Chinese characters in Chinese, He-Xie. And the whole meaning of harmony (He-Xie) should be understood together from the respective meaning of ��He�� and ��Xie��.  ��He�� means harmony but not sameness, while ��Xie�� means coordination and order. In this case, we would use the Chinese pronunciation He-Xie to express the meaning of harmony, so as to avoid the understanding of harmony to be a final status, and to reflect correctly the essence of He-Xie as two different mechanisms and methodology for problem-solving in the face of complexity and uncertainty.

 

3.2 The framework of He-Xie Management Theory

 

 

         Note: Dot path means the steps and path of problem solving in practice.

Dot circle around S means strategy could also be impossible to describe or make in uncertain environment. In this case, HT (He-Xie Theme) is very important to guarantee the effective running of organization when facing complex and uncertain environment.

 

Figure 1:  The Theoretical Framework of He-Xie Management Theory

 

The following explained further the components of He-Xie Management Theory and its mechanisms in coping with uncertainty and complexity.

 

3.2.1  He-Xie theme

This is defined as the most important, Issue and core task within a certain period. Since it��s becoming more and more difficult and impossible with traditional strategy planning tools with the ��design�� thinking in today��s uncertain world, the success of organization is relying more on flexible and rapid response to external changing which in turn could only be achieved by means of identifying firstly the correct strategy theme. He-Xie Management Theory makes the searching for and identification of He-Xie theme the most important task for leaders in organization. Effective leader will lead the nose of the most important issues in front of organizations within specific period, namely here strategy theme, for the sake of organizational sustainable development instead of being led be the nose of other trivial and even false issues.

 

3.2.2  ��Xie�� Principle

The principle of ��Xie�� refers to a control mechanism based on rational design and optimization, and is defined as the principle and mechanism to promote organizational development and create organizational value by designing the concrete behavioral path of organizational members and putting rigorous process control on them, based on a consideration of statistical certainty in management process. It aims at optimizing the factors outside the system. ��Xie�� sets its basis on expectation about certainty in organizational environment and emphasizes designing and planning; while ��He�� takes into account the uncertainty in organizational environment and focuses on the emergence and evolution of organizational behaviors. With a word, Xie Principle applies a constructivism perspective, coping with complexity and uncertainty by means of rational design and optimization.

 

3.2.3  ��He�� Principle

In front of uncertainty and complexity, HXM tries to take advantage of complexity and uncertainty instead of trying to avoid them. By means of exploring and inspiring the intrinsic enabling power of human being, especially the intellectual irritability when facing complexity and unexpected changing, HXM provides such a mentality to cope with external uncertainty and complexity. ��He�� Principle refers to an evolvement mechanism based on organizational members�� initiative and self-determination, and is defined as the principle and mechanism to promote organizational development and create organizational value by constructing necessary organizational circumstances, atmosphere or conditions and providing a platform for initiative and self-determination of organizational members based on the consideration of the eternal uncertainty in management world (Xi & Shang, 2002; Xi, Han & Ge, 2006). With a word, He Principle entails an evolutionary perspective, using environment inducement and self evolution to eliminate and utilize the uncertainty of human being.

 

3.2.4  Coupling

Actually, the principle of ��He�� and the principle of ��Xie�� are a unified body among which the two parts interact with each other. And a double helix model could be imaged to understand the coupling process of these two principles. He-Xie Coupling is a dynamic and evolving process��during which ��He�� Principle and ��Xie�� Principle can convert each other according to changing contexts and conditions. It is He-Xie Coupling that helps the co-involvement of both induced evolution and rational design, realizing the dynamic coherence of organization as a whole. In this way, organization development could be juxtaposed in achieving desired harmony.

The Characters of He-Xie Management Theory (HXM)

To our understanding, modern organization could be perceived as a multi-brain system, with distributed intellectual agents in organization. These distributed intellectual agents, by means of enabling knowledge acquisition at individual level, could contribute to the micro-evolutionary dynamics in organization, facilitating the alignment and adjustment of organizational adaptability in uncertainties. In turn, such bottom-up dynamics, with a process-view, could also stimulate the scientific and optimization of the macro context, e.g. organizational structure and process. The virtuous coupling between micro-evolutionistic, characterized by making use of human intelligence and enabling power and macro-constructivism dynamics through taking advantage of scientific methods to ��design�� and ��optimize�� activities in organization, finally promotes the fulfillment of organizational order and performance in face of uncertainty and complexity. Thus, HXM could be regarded as a methodology as well as a toolkit system, contributing potentially towards bridging the gap between micro and macro division in management domains, answering problems in organizational management with a systematic mechanisms.

 

Table 1:  Distinction between Xie Principle and He Principle

 

 

To sum up, the methodology of He-Xie Management Theory follows a logic path as the red dot-line in figure 1 showed. Firstly, through common influence of the triangle factors (Environment, Organization, Leader), He-Xie Theme should be recognized and identified for coping effectively with confronted uncertainties and complexity. Secondly, after He-Xie Theme is identified, the following implementation to organizational tasks could adopt Xie Principle to maximize the parts which could be better finished by means of application of scientific methods; then He Principle could be employed for issues which involve the aspect of human (behavior). As mentioned before, He Principle aims to explore the potential enabling power of actors in organization, to cope with uncertainties and complexities by taking advantage of potential intelligence from spontaneous irritability of actors in the face of change. Thirdly, as Xie Principle and He Principle were applied respectively according to the changing issue, the whole organization is expected to achieve a coupling from the two Principles and a final harmonious status would be envisalized in organization.

 

4.  Conclusion and discussion

 

The objective of He-Xie Management Theory is to achieve strategic alignment, i.e. the alignment between organizational strategy and individual��s behavior. This kind alignment embodies the final harmony in organization, including the fit between people and people, fit between people and work, fit between business strategy and environment.

Generally speaking, there is some fundamental difference between traditional strategic management and He-Xie Management Theory.

Firstly, in terms of the philosophical aspect, traditional strategic management follows a constructivism thinking, which could be seen from the measures uses, such as making design for future action planning, centering decision-making; while the philosophical foundation of HXM combines both constructivism and evolutionary thinking. Secondly, in term of the difference on strategy, traditional strategic management tries to offer always a clear strategy map to guide following actions even under uncertain and opaque environment; while a clear, recognizable He-Xie Theme is introduced as a priority under the framework of HXM for coping with uncertainties and complexity. Thirdly, as regards decision-making, HXM applies a distributed decision-making mechanism since individual members in organization are regarded as actors with intrinsic enabling power and potential intelligence to cope with improvisational changing and complexity. In front of increasing uncertainties and complexities, integrating the distributed individual��s knowledge and paving the way for improving organizational intelligence are more powerful and effective ways than centralized decision-making. Fourth, by means of diversified methods to problem-solving, especially through exploring the enabling power of actors HXM differentiate it from traditional strategic management on methodological aspect. In traditional strategic management, scientific methods such as optimizing, operation research, and algorithm and so on are more often applied to solve complex problems while cultural, psychological, behavior aspects of human behavior are less considered. The two mechanisms of HXM, He Principle and Xie Principle, offer methodological guide respectively from human-oriented tools and scientific-oriented tools.

from the concepts and framework mentioned above the hidden logic and mechanisms of He-Xie Management Theory (HXM) could be summarized as follows. The first is objective-orientation. Under the framework of HXM, the objective of organization is expressed as He-Xie Theme, the most important core tasks within a certain period. The second point is scientific design. Based on criticisms to the ��design�� school in management science, however, HXM doesn��t exclude scientific design, on the contrary, the Xie Principle of HXM follows the logic of taking advantage of scientific design methods as much as possible as long as tasks could be regulated and standardized by means of technical code. In face of increasing uncertainty and complexity, especially the issue of human uncertainty and complexity, HXM explores the evolutionary power of human being to cope with unpredicted things and emerging complexity, inspiring and enabling the intrinsic power of human being to contribute to the achievement of organizational objectives. This is the He Principle of HXM. Finally, with an integrative coupling of He Principle and Xie Principle with He-Xie Theme as the focus and guideline for activities, organization is expected to be in an ideal harmonious status finally. HXM thus provides a clear methodological guideline and roadmap for both scholars and practitioners. The contained mechanisms, He Principle and Xie Principle respectively, could be used in practice along with the two logics to ��design and optimize�� on the one hand those issues that could be solved by means of scientific methods; and to ��induce and ignite�� on the other hand the intrinsic enabling power of distributed individuals intelligence in front of uncertainty and complexity.

Different with common understanding to harmony, which was understood as an ideal fundamental value and status, seeming to be an equivalent symbol of Utopia of human being, He-Xie should better to be understood as two principles for the achievement of unity in variety and diversity, as Fernandez (2004) once explained. HXM provides a pragmatic approach and tool kits to cope with fast-changing and uncertain environment by integrating traditional Chinese philosophical intelligence and modern scientific knowledge and techniques on problem-solving. HXM is firstly a new methodology in coping with complexity and uncertainty through integrating the constructivism and evolutionism epistemology.

Considering the familiarity of the concept harmony to western scholars, this article, could adopt the way of ��making the Familiar Appear Novel�� as Tsui (2004) advocated. However, this article is absolutely not an ��old wine in a new bottle�� or what Whetten (2002) recommended ��using the new to describe the familiar��. Though Meyer (2007) advocated that ��management research can be pushed forward by taking ideas about contextual variation��, he had to admit that ��a general theory would be more desirable than a context-specific one��. As Meyer (2006) suggested, management research in Asia should have more self-confidence, contributing more context-free knowledge and focusing on theory-building work. But this requires scholars ��directly challenging the boundary assumptions of the paradigms�� (Bamberger, 2008).

With these encouragement to do more challenging and meaningful work, we would not be immersed into the ��collective phenomena��, i.e. making Chinese context as a field and target for research, instead, we insist on following our independent thinking on exploring the value and explaining power of He-Xie Management Theory in real world. And we believe it is a ripe time to present He-Xie Management Theory as a potential method which might address uncertainties and enhance organizational effectiveness in responding to changes by filling the gap between macro and micro domains in front of management scholars. HXM is striving towards developing a common paradigm for solving organizational management problems. We look forward to inspiring wider and diverse responses and getting constructive feedbacks from scholars both in Great China Regions and in Anglo-American contexts.

 

Acknowledgement

 

We would like to express our sincere appreciation to all members in our research team for their contribution and efforts to the development of He-Xie Management Theory. Financial support from Excellent Innovation Research Group Project (No. 70121001) of National Natural Science Foundation of China is gratefully acknowledged.

 

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