China Business

China’s Mao School Of Business.

Doing business with China

Just finished The Little Red Book of China Business, a book written by Sheila Melvin.

Ms. Melvin called me a few weeks ago, told me of her book and asked if I would be interested in reading it. I told her I would, but that I was highly skeptical of its thesis: that understanding Mao’s thoughts is critical for doing business in China. I have read the book, very much enjoyed it, but I remain skeptical.

Here’s the deal. Ms. Melvin clearly knows her Mao and she clearly knows Chinese business and those two things combine to make this an enjoyable and worthwhile read. I have not read about Mao for a long time and reading this book refreshed my recollection of his thoughts and taught me new things about him as well. I give the book an A for this. Ms. Melvin spent seven years with the US-China Business Council and she obviously has a deep understanding of how business is conducted in China and she does an excellent job conveying this. I give the book an A for this as well. This book makes for an excellent introduction to both Mao and to China business and I highly recommend it.


I still question its thesis, which is as follows:

The current generation of Chinese businesspeople grew up with the lessons and teachings of Mao’s Little Red Book, and these lessons guide their actions in business and culture. If you don’t understand Mao and the Little Red Book, you don’t understand China business.

The funny thing is that there  has all of a sudden been a spurt of writings on this very topic. The Harvard Business Review says China’s capitalists are deeply influenced by Mao Zedong thought:

Our research on the practices and attitudes of Chinese CEOs offers abundant evidence that Mao’s principles continue to influence top executives: All but one of 15 CEOs we interviewed told us they often turned to Mao’s teachings for management ideas. Consider the manner in which Mao wielded power: by keeping the country in a state of chaotic flux, often playing one group against another. To make a change in the political landscape, Mao would orchestrate a movement that sucked in the entire population, such as the campaign against Liu Shaoqi (the number two leader in the Chinese Communist Party) and his allies, then resort to a mixture of agitation, networking, and rallying to mobilize people at the grass roots to denounce certain cadres, or senior officials. Most of the cadres would be forced out of their jobs, and Mao would rehabilitate a few. Deng Xiaoping was denounced in this manner, rehabilitated, and denounced again.

China Hearsay ain’t buying this:

I don’t like doing this, but I’m going to have to call bullshit here, even based on my limited knowledge of this. First, I can think of lots of reasons why Chinese CEOs might want to cite Mao when asked about significant influences. Doesn’t necessarily mean it’s true. Second, the type of management style described sounds a lot like every boss I’ve ever had, most of whom couldn’t tell Mao from Ayn Rand. Third, the “management techniques” described also sound a lot like other world leaders over the years. Was that style really something that Mao invented? I don’t think so. Cute angle for an article, but not so convincing.

Many years ago, I was discussing the role of women in China with a female lawyer friend of mine, with whom I have worked on many cases. This lawyer holds a very prominent position with what is arguably Dalian’s top law firm and I remarked on how something like this would almost certainly not be possible in Korea. I then (thinking myself very wise) asked her if her position might not have been made possible, at least in part, by Communism. She immediately pointed out to me that China has a long history of strong women and that Communism has had little impact one way or the other on that. Good point.

My Chinese history is too weak to state this with any degree of confidence, but I wonder if Mao’s thoughts as applied to business are not really just Chinese thought, particularly since Mao was himself such a student of Chinese history and thought. In other words, is knowing Mao really any different from knowing China, at least as applied to business? And anyway, is it not more efficient to focus on China’s current business culture, rather than digging one level deeper to see where that culture originated?

I give the Mao as business professor portion of the book a C, subject to possible revising based on comments received. Is it just a gimmick?

Leave a Reply

Your email address will not be published. Required fields are marked *