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Tian-ren-he-yi strategy: An Eastern perspective

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Abstract

Research on the business-environment dilemma has traditionally focused on strategies based on isolated, either/or mindsets, such as economically-oriented and environmentally-oriented strategies. Drawing on the cultural, philosophical, and intellectual traditions of China, we sketch the contours of a new holism-based strategic mindset, which results in a tian-ren-he-yi strategy. As an Eastern perspective, tian-ren-he-yi means “nature and mankind combined as one” or “nature-human harmony.” We leverage both qualitative and quantitative investigations to first identify the underlying mechanisms connecting tian-ren-he-yi strategy and firm performance, and then to compare the performance-enhancing potential of tian-ren-he-yi strategy with the two strategies based on the isolated mindset. Our analysis shows that when managing the business-environment dilemma, tian-ren-he-yi strategy has stronger performance-enhancing potential than either economically-oriented or environmentally-oriented strategies.

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Notes

  1. There is a debate on whether the business-environment dilemma should be the primary responsibility of firms. One side of the debate argues that since the environmental issue is a public good, protecting the environment should be the primary job of governments (Friedman, 1970). However, the other side of the debate argues that firms should shoulder more responsibilities. This is because “in recent years, business increasingly has been viewed as a major cause of social, environmental, and economic problems, and companies are widely perceived to be prospering at the expense of the broader community. Moreover, business will often be far more effective than governments and nonprofits are at marketing that motivates customers to embrace products and services that create societal benefits” (Porter & Kramer, 2011: 4). While joining this debate is beyond the scope of our study, it is useful to disclose that we—as well as many executives that we interviewed—share the second view in the debate.

  2. Li (2016) suggested that tian-ren-he-yi can be translated as “heaven-nature integration.”

  3. Such a voice represents a minority in Chinese academia. In the Chinese academia at large, there is “a dramatic dominance” of economically-oriented studies relatively to human welfare-oriented studies, as documented by Tsui and Jia (2013: 1) using articles published in three leading Chinese-language journals in management.

  4. In comparison, manufacturing contributes 28 % of South Korea’s GDP (the second highest in the world), 20 % of Japan’s, 19 % of Germany’s, 13 % of Brazil’s and India’s, and 12 % of the United States’ (McKinsey Global Institute, 2012: 24).

  5. Firms in three regions (Guangdong, Shandong, and Shanghai) were involved in both qualitative and quantitative phases. However, within these three regions, we sampled different firms to obtain qualitative and quantitative data.

  6. For example, firm X simultaneously implements economically-oriented strategy and environmentally-oriented strategy. Our measurement of balance indicates that when the respondent of X scored economically-oriented strategy and environmentally-oriented strategy, the basic assumption is that the score of Likert scale reflects the effort employed by X. We assume X has five options (scenarios) to split its efforts (100) into economically-oriented strategy and environmentally-oriented strategy. The more efforts X devotes to implement economically-oriented strategy, the higher score of its Likert scale. The same holds for environmentally-oriented strategy. Please see the following table.

    Scenario

    Efforts devoted to economically-oriented strategy by X

    Likert scale score of X in economically- oriented strategy

    Efforts devoted to environmentally-oriented strategy by X

    Likert scale score of X in environmentally-oriented strategy

    Absolute difference of efforts

    Absolute difference of Likert scale score

    1

    90

    5

    10

    1

    80

    4

    2

    80

    4

    20

    2

    60

    2

    3

    70

    3

    30

    3

    40

    0

    4

    60

    2

    40

    4

    20

    2

    5

    50

    1

    50

    5

    0

    4

    This table shows how our balance measure reflects the asymmetry principle. In this case, the strongest balance is scenario 3, in which X splits 70 of its efforts to economically-oriented strategy and 30 to environmentally-oriented strategy. However, the difference of Likert scale score between these two strategies is 0. In other words, when our measure of balance equals 0, the actual efforts of balance are 40. This scenario thus reflects the balance asymmetry principle of yin-yang.

  7. This is a subsample (subgroup) analysis since we could not obtain such data for all sampled firms. Overall, 191 firms reported such data. We ran a t-test to ascertain whether these 191 firms and the rest of the sample had significant differences in terms of age and size. We found that firms that reported the objective environmental index were not statistically different from those not reporting such data (age: F = 2.00, p = .16; size: F = 1.89, p = .17).

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Acknowledgments

We thank Peter Li (Senior Editor), Mick Carney (Editor-in-Chief), and an anonymous reviewer for constructive guidance. This research was supported in part by the Natural Science Foundation of China (NSFC 71132006, 71421002) and by the Jindal Chair at UT Dallas.

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  1. Jindal School of Management, University of Texas at Dallas, 800 West Campbell, SM43, Richardson, TX, 75080, USA

    Mike W. Peng

  2. Antai College of Economics and Management, Shanghai Jiao Tong University, 1954 Huashan Road, Shanghai, 200030, China

    Yuan Li & Longwei Tian

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Peng, M.W., Li, Y. & Tian, L. Tian-ren-he-yi strategy: An Eastern perspective. Asia Pac J Manag 33, 695–722 (2016). https://doi.org/10.1007/s10490-015-9448-6

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