Sun Tzu and the Art of Business

- Six Strategic Principles for Managers -

Mark McNeilly

I. Strategic planning. 2. Sun-tzu, 6th cent. B.C.—Views on management

Sun Tzu and the Art of Business- Six Strategic Principles for Managers
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 998 p
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 1996 by Oxford University Press, Inc 

Sun Tzu's The Art of War has proved to be a classic work on strategy,
applicable to both military and business situations. While it has been
relatively easy to apply the military concepts to wars, both past and
current, it has proved much more difficult to translate Sun Tzu's strategic
concepts into successful business strategies. The purpose of this
book is to crystalize the concepts and ideas put forth in The Art of War
into six strategic principles that can be more easily understood and
applied in the world of business. These principles are then illustrated
by business examples, which explicitly describe how the principles can
have a direct impact on the strategies of real companies around the world.

My interest in writing this book resulted from the combination of
insights I gained working as a business strategist for a major global
corporation, the thoughts I'd compiled from my readings as an amateur
military historian, and my interest in Sun Tzu's strategic philosophy.
These three forces led me to begin work on Sun Tzu and the Art of
Business five years ago.

It should be of comfort to the reader that, in the process of researching
this book, I found more and more evidence of the soundness
of its principles. For example, when I started writing, I began by using
business examples that were still in the process of sorting themselves
out. Many of the companies I followed were involved in situations that
only came to closure as the book neared its final draft. It was very
reassuring that the examples I had chosen of good and bad implementation
of strategy turned out as the principles of Sun Tzu had predicted.

The problems of Kmart, AT&T Global Information Systems, and Philip
Morris as well as the effectiveness of Southwest Airlines, to name a few,
proved that the principles are extremely useful in predicting business
success or failure and implementing strategy. I believe that if you understand
and use the principles of Sun Tzu and the Art of Business appropriately,
you too will see their effectiveness.
Zumbrota, Minnesota. May 1996

Some time around 400 B.C., during a period in China known as the
Age of the Warring States, there arose a general from the state of Ch'i
known as Sun Tzu. His ability to win victories for his warlord gained
him fame and power.

To hand down the wisdom he had gained from his years of battles,
Sun Tzu wrote a book, The Art of War, that became the classic work
on strategy in China. His book, which details a complete philosophy
on how to decisively defeat one's opponent, has given guidance to
military theorists and generals throughout the ages, both in the East and
the West. The Art of War not only contains Sun Tzu's insights but also
provides additional elucidation by military commentators who came
after him, such as Li Ch'iian, Tu Mu, and others. In The Art of War,
military readers found an holistic approach to strategy that was powerful
yet succinctly communicated—it is truly a masterpiece on strategy.1

Uses of The Art of War
In China, the first Emperor Qin Shihuang studied The Art of War.
Adhering to its principles, he united China for the first time around
200 B.C.2 Twenty-one centuries later, Mao Zedong used Sun Tzu's
writings to defeat Chiang Kai-shek and the Nationalists in 1949, again
reuniting China. Sun Tzu also influenced Mao's writings on guerilla
warfare, which in turn provided the strategy for communist insurgencies
from Southeast Asia to Africa to the Americas.

Japan was introduced to Sun Tzu's •writings around 760 A.D. and
her generals quickly absorbed its lessons. The three most well-known
of her samurai—Oda Nobunaga, Toyotomi Hideyoshi, and Tokugawa
leyasu—all mastered The Art of War. This mastery enabled them to
transform Japan from a collection of feudal states into a single nation.
In the West, The Art of War first made its appearance in 1772 in
Europe after being translated into French by a Jesuit missionary. It is
possible that Napoleon read and was influenced by Sun Tzu's work,
given both his interest in all things military and his culture's interest in
Chinese literature.

B. H. Liddell Hart, the British military historian whose theories on
armored warfare led to the development of the German blitzkrieg, was
amazed at the depth of Sun Tzu's military philosophy and instruction.
He was impressed by how closely Sun Tzu's ideas mirrored his own
theories of warfare and thought that, had The Art of War been more
widely read and accepted by World War I generals, much of the terrible
slaughter of trench warfare could have been avoided.

The principles discussed in The Art of War have been used successfully
in countless battles throughout time. Speed was an essential
factor in the victories of Genghis Khan and his Mongolian horde. Shaping
their enemies by the skillful use of alliances allowed the Romans
to expand and maintain their empire. Secrecy and deception were used
in major World War II battles, both by the Japanese in their attack on
Pearl Harbor and by the Allies to mislead the Germans about the exact
location of their invasion of France. The use of intelligence was critical
to American success in the Cuban missile crisis. The Viet Cong lived
by the rule of avoiding strength and attacking weakness, while the Red
Army used this principle to deal Germany's Sixth Army a devastating
defeat at Stalingrad.

Most recently, Sun Tzu's principles were put to the test in Desert
Storm. By controlling the air both to follow Iraqi movements and mask
his own troops' movements, General H. Norman Schwartzkopf fooled
Saddam Hussein as to the location of his attack. Threatening an amphibious
assault in the east, Schwartzkopf did an end-run on the Iraqi
army in the west, thus winning a stunning victory with extremely low
casualties. Deception, speed, and attacking the enemy's weakness—all
part of Sun Tzu's philosophy—added up to amazing success.

The Six Principles and the Plan of This Book
To make the transition from Sun Tzu's The Art of War to Sun Tzu and
the Art of Business, I have extracted what I believe are the most important
and pertinent strategic principles from Sun Tzu and devoted a
chapter to each.12 These principles are:
1. Win All Without Fighting
Capturing Your Market Without Destroying It
2. Avoid Strength, Attack Weakness
Striking Where They Least Expect It
3. Deception and Foreknowledge
Maximizing the Power of Market Information
4. Speed and Preparation
Moving Swiftly To Overcome Your Competitors
5. Shape Your Opponent
Employing Strategy To Master The Competition
6. Character-based Leadership
Providing Effective Leadership In Turbulent Times
Each chapter discusses how these principles apply in the real world
of business, giving examples of companies that have used them effectively.

The final chapter describes how to go about putting the principles
into practice. It provides a systematic way of creating winning strategies
based on the timeless ideas of Sun Tzu. The book is made complete
by the inclusion of the original translation of The Art of War by Samuel
B. Griffith. Throughout, quotations are referenced in parentheses to
that translation.

Table of Contents
Introduction 3
1. Win All Without Fighting:
Capturing Your Market Without Destroying It g
2. Avoid Strength, Attack Weakness:
Striking Where They Least Expect It 23
3. Deception and Foreknowledge;
Maximizing the Power of Market Information 40
4. Speed and Preparation:
Moving Swiftly To Overcome Your Competitors 59
5. Shape Your Opponent:
Employing Strategy To Master the Competition 90
6. Character-Based Leadership:
Providing Effective Leadership in Turbulent Times
7. Putting The Art of Business into Practice 141
Notes 155
Suggested Readings of The Art of War 165
Original Translation by Samuel B. Griffith 167
Bibliography 251
Index 257

Sun Tzu and the Art of Business- Six Strategic Principles for Managers
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