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SUN TZU: WAR AND MANAGEMENT Chapter 9

The Art of Strategic Management and Thinking Chapter 9

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Sun Tzus Art of War Model

Situation Appraisal

Formulation Of Goals And Strategies

Evaluation Of Strategies

Implementation Of Strategies

Strategic Controls

S I T UA T I O N A P P R A I S A L
SELF FACTOR ENEMY FACTOR ENVIRONMENT FACTOR

ANALYSIS OF STRENGTHS AND WEAKNESSES

ENVIRONMENT FACTOR Which ruler possesses more moral influence? Which army is more able to obtain the advantages of climate? Which army is more able to obtain the advantages of terrain?

Which general is ore able? Which troops are stronger? Which army has better trained officers and men? Which army executes law and instructions more effectively? Which army better administers rewards and punishments?

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S I T UA T I O N A P P R A I S A L c o n t

DESIRABILITY OF WAR?
NO

Definite Advantages Strong assurance of victory As a last resort Defense invincibility

NO

SEEK NON-WAR ALTERNATIVES

PREPARATION FOR WAR

Prepare and strengthen defense Consolidate resources

Formulation of Goals Strategies

F O R M UL A T I O N O F G O A L S AND STRATEGIES
GOALS FORMULATION

FORMULATION OF STRATEGIES
CHOICE OF BATTLEGROUND

Areas with distinctive advantages Areas ignored by enemy Characteristics of battleground

CONCENTRATION OF FORCES

Prioritizing of Goals 1. Attack enemys strategies 2. Disrupt enemys alliances 3. Attack enemys army 4. Besiege walled cities Achievability of Goals Results in net positive gains

Gain relative superiority Secrecy of battle plan Deception

ATTACKING

Need to attack Need to win profitably Relative advantages in numbers Possibility of niching
CONTINGENCY PLANNING

Flexible interchange of direct and indirect forces

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STRATEGICE CONTROLS

PRINCIPLE OF INTELLIGENCE (Information Acquisition)

PRINCIPLE OF SECURITY (Information Proctection)

ESPIONAGE Local Agents Inside Agents Double Agents Doomed Agents Living Agents

SECRECY Withholding strategic plans Tight security measures Punitive deterrents Creation of unpredictability Use of deception

E V A L UA T I O N O F S T R A T E G I E S
STRATEGY EFFECTIVENESS SUBJECTIVE EVALUATION Strategic target Strategic fit Strategic advantage Strategic timing

Strong chance of victory Profitable gains

NUMERICAL (OBJECTIVE) EVALUATION (Based on understanding of market and environment forces)

Definition of scope Estimation of experiments Calculation of resources Weighing chances for success Planning for victory

IS STRATEGY EFFECTIVE?

NO REFORMULATE

YES IMPLEMENTATION OF STRATEGIES

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I M P L E M E N TA T I O N O F S T R A T E G I E S
HUMAN FACTOR
The Sovereign
Non-interference in military affairs Avoidance of political appointments The Commanders Essential traits and qualities Cautiousness Courage Composition Pragmatism Sincerity Ability to: Strategies Execute Manage

The Army
Army effectiveness depends on:

Quantity (strength) Quality (training) Control, which includes: Doctrine (structure and organization) Discipline Communication

I M P L E M E N TA T I O N O F S T R A T E G I E S
OPERATIONAL FACTOR
Principle of Swiftness
Timing Momentum Avoidance of Protracted Campaigns

Principle of Adaptability
Baits Illusions and Fakery Use of Contingency Zheng and Qi Forces Direct and indirect approaches Kidnapping and Pilferage

Principle of Swiftness
Shaping and Flexibility Innovativeness Use of Initiative

Capitalize on Available Means

Water Fire

Anticipation of:
Enemy and reactions Environmental Changes

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Sun Tzus Art of War Model

These basic principles also form the basic thrust or central theme of Sun Tzus Art of War . They are important for the development of strategies in war as well as business. Together , they form what we call the Art of Strategic Management.

The Art of Strategic Management

7 Key Concepts: detailed planning market intelligence choice of battleground swiftness in execution of plans adaptability in maneuvers creation of strategic advantages through deception attack, if one has to fight in the open

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Detailed Planning
It has to be exhaustive in coverage and considerations. Planning must be detailed and includes: Political leadership ( moral influence ) Corporate leadership ( generalship ) External factor ( climate ) Physical or infrastructural factor ( terrain ) Corporate structure and organization ( doctrine or law ) Competitive edges ( strengths ) Human resource development ( training ) Motivation ( discipline )

Market Intelligence According to Sun Tzu ;

This intelligence cannot be obtained from spirits nor from

the gods, nor by inductive thinking; nor by deductive calculations. It can be obtained by men who have knowledge of the enemys situation. Thus, there is a need to actively collect, store , analyze and utilize information for the development of more effective strategies.

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Market Intelligence
Detailed planning must be based on intelligence. Cannot be carried out on the basis of intuition, gut feeling, calculated guesses or other subjective means. The successful acquisition and utilization of information for strategic purposes will definitely be one of the factors that determines the competitiveness of organizations in the future.

Market Intelligence
Deals with : Collection Evaluation Final dissemination of intelligence Collection Info. Re: enemys location , strengths and plans, Evaluation These collection will then serve as data about the weather, the terrain of the battleground, and the movement of troops and civilians

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Market Intelligence
Final dissemination of intelligence Means the final execution of the information obtained or the so called foreknowledge by Sun Tzu to be used in the planning strategies. According to Sun Tzu: The reason why the enlightened ruler and the wise general are able to conquer the enemy whenever they lead the army, and to achieve the victories that surpass those of others is because of foreknowledge

Choice of battleground
In military combat, choosing battlegrounds carefully will ensure success. In business, choosing the right battleground will enable the company to exhibit its strengths better and camouflage its weaknesses. It will also enable the firm to exploit marketplace. opportunities in the

Through nicheing strategies and cushion the effects of threats and the environment.

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Choice of battleground
A company should opt for one in which it has distinct advantages over its competitors. Look for areas ignored by competitors. An understanding and appreciation of the characteristics of different battlegrounds will help decide what kind of strategies would be appropriate and effective.

Swiftness in execution of plans

Swiftness includes :
Perfect Timing Maintenance of momentum Avoidance of protracted campaigns Coordination must be perfect

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Swiftness in execution of plans

Several Advantages: Element of surprise When events move quickly it has a mesmerizing effect. Plans are executed quickly Does not allow the competitors much time to react and their defense strategies can be threatened. It also denies competitors time to read the various strategies and maneuvers in the plan makes it difficult for them to counter strategize.

Swiftness in execution of plans cont

Counter-espionage effect Minimizes the chance that the plan will be leaked or spied upon

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Adaptability in Maneuvers
Requires the practice of shaping and flexibility , as battle conditions in war are never static. Various Factors that affects business situations: Consumers Competitors Government General public State of technology State of economy

Adaptability in Maneuvers
Entails the provision for innovation and exercise of initiatives Company must encourage the flow of innovative ideas on all fronts. When opportunities arise, as a result of the changing environment or other factors, the company must be capable of capitalizing on them. It may also entail changes to plans that are already made.

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Adaptability in Maneuvers

In short, when plans should be adhered to as much as possible, bearing in mind the principle of detailed planning and the principle of security, a company must still be BOLD and FLEXIBLE enough to DEVIATE when NECESSARY.

Creation of Strategic Advantages through Deception

The use of deception such as Baits Illusions Fakery And the use of contingent planning are all designed to gain strategic advantages And morality of their use in war has seldom been questioned.

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Creation of Strategic Advantages through Deception

Concern for business ethics Deceptive strategies and fraudulent practices of a company can harm their reputations and market shares. Unethical practices can also hurt both honest and dishonest companies and could also threaten the economic stability of whole industries. Depends on moral standards of an individual and the company that he is operating in and the code of conduct of the competitors both domestic and international.

Attack when in combat

When in combat or faced in an open competition, the best way to win is to attack offensively. Defense can only result in a non lose situation and cannot guarantee success.

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Attack when in combat

PRIORITY
1. The highest form of generalship is to attack the enemys strategy. 2. The next best policy is to disrupt the alliance. 3. The next best is to attack his army.

RATIONALE
When victory is long delayed, the ardor and morale of the army will be depressed. When the siege of a city is prolonged, the army will be exhausted. When the army engages in protracted campaigns, the resources of the state will be impoverished.

4. The worst policy of all is to besiege walled cities.

The Gurus of the Art of War

The Japanese companies have been practicing many of the military-like strategies of Sun Tzu in business. Scholars who described the Japanese economic conquest of the world as a militaristic campaign: PHILIP KOTLER KENICHI OHMAE

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The Gurus of the Art of War

A BOOK OF FIVE RINGS By Musashi Miyamoto A military text that is reputedly read by most Japanese CEOs Became a best seller in the US Was written around 1645 A.D. Contained many thoughts parallel to Sun Tzus Art of War Musashi must have obtained much of his inspiration from Sun Tzu, whos works had been translated into Japanese as early as 716 A.D.

The Gurus of the Art of War

The Japanese could have perfected Sun Tzus strategies because it was known to the top military and political echelons of Japan for more than a thousand years. And institutionalized the thinking's of Sun Tzu into their military, then to their corporate strategies and practices. These influences have become intrinsic to Japanese corporate values and behavior.

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Rethinking of Japan
REVISIONISM A new school of thought Begun to emerge in the US since mid-1980s REVISIONIST Clyde V. Prestowitz US trade official, author of Trading Places ( 1988 ) Karel van Wolferen Dutch journalist, author of The Enigma of Japanese Power (1989) James Fallows Journalist, political scientist Chalmers Johnson published MITI and the Japanese Miracle

Rethinking of Japan
REVISIONIST Reject the Western Tenet that capitalism and democracy are fundamentally similar everywhere. They argue that Japan operates on a different set of economic and political imperatives. They thought that Japanese are only interested on making Japan become a dominant economic power in the world and less concerned with following market rules

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Rethinking of Japan
REVISIONIST Advocate various measures to break the economic stronghold of Japan Advocating economic war against the Japanese REVISIONISTS DEMANDS Seeking guaranteed market shares or measurable results for American products Supercomputers Semiconductors plywood

Rethinking of Japan
Reciprocity in highly protected sectors should be demanded such as: Banking, construction and insurance Japanese companies should exercise voluntary export restraints in areas that are currently hurting US industries. Japan must undertake various measures to untangle their various invisible trade obstacles so that American firms can compete effectively in Japan

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Rethinking of Japan
2 Approaches of the Japanese
HARD Approach They stood up against the American pride Mr. Shintaro Ishihara advocated strongly in his book The Japan that can say no. Argued that Americans pride are too strong, arrogant and they ignore the high culture of Japan.

Rethinking of Japan

Kazuhisa Ogawa another Japanese publication entitled Japan as the Enemy, A New Scenario for US Strategy The general theme of Ogawas book is that American anger at Japan has been increasing on a subliminal level and that Japan is now ranked as the USs third enemy after the Soviet Union and China.

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Rethinking of Japan

Morita Author of well known book, which has been translated in English called, Made in Japan Japan is being blame for an America that has been fat and complacent. They tend to appeal on an increasing number of Japanese who are getting tired and impatient with complaints by Americans.

Rethinking of Japan
SOFT Approach Japanese companies are today spending heavily to shape the way Americans view them. They are donating millions of dollars to US Education. From colleges to universities Various philanthropic activities They donated over US$310 million to various organizations in America.

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Rethinking of Japan
They attempted to shape decision making in Washington through influence peddling. Example: Japans new clout in Washington (1989), when Toshiba Corp succeeded in defeating efforts to impose harsh sanctions on it because of its involvement in selling restricted technology to Soviet Union.

Rethinking of Japan
They want to reinforce notions that American problems are not caused by Japanese. Japanese have demonstrated that their economic prowess does not exist in a vacuum. Japanese made inroads in waging a new war to shape the minds and thinking of the average Americans, their policy makers and their institutions!

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Conclusion

Sun Tzus reflections on the Art of winning military conflict with the enemy, have been seen to shed light not only on the nature of the US-Japan Trade conflict but also the different ways in which business life is understood and conducted around the world.

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