Yin yang and company growth: a case study of a coal company of Shanxi in China

Abstract

PurposeChina has long been dedicated to introducing the Western management ideas to the local enterprise practice. But the situation has changed since the financial crisis, and the China model has become a hot word with its fast recovery from crisis. Moreover, Chinese traditional culture has become increasingly popular. Yin and yang are the most familiar Chinese philosophical terms to Western minds, and also the core concept of Chinese Taoist philosophy. The purpose of this paper is to analyze how the yin yang or lao‐tzu influences a firm's core competence and performance, and to demonstrate that the Taoist‐oriented Chinese culture remains meaningful and in many situations powerful in enterprise practice.Design/methodology/approachA case study is carried out from Town Star Ltd, established in 2001, and located in Linfen city, Shanxi province, China, a city which topped the list of the world's most polluted cities. It is an integrated joint‐stock company, specializing in coal coking chemical industry, gardening, logistics and technology development. Based on the humanized management doctrine, the company has formed the 5S management model which boosts its rapid and sustainable development. It coped well in major junctures such as industry restructuring and transferring, financial crisis, etc. Five key dimensions of the yin and yang, which were applied to the leader's daily behaviors and management style, are: Wu‐wei (inaction), Wu (emptiness), hardness with softness, moderation and He‐xie (harmony). First, this paper built a dynamic company growth model based on this philosophy which enhanced the core competitiveness effectively by emotional management innovation and personalized HRM, among which its pivotal regulator of variables is just yin yang conversion degree. Then an approach is provided to validate the model with empirical data collected from the years 2001‐2010 (2001‐2005, 2006‐2008, 2009‐2010) of Town Star Ltd.FindingsIt is demonstrated that yin yang ideology embedded in the company growth model organically is an important means to increase marginal benefit. In practice, the firm with yin yang philosophical ideology would shape a management paradigm which combined rules and human nature appropriately to a family‐oriented business atmosphere. Based on the above philosophical wisdom, Town Star Ltd has harvested good economic and social benefits, strong core competence through the elaborately constructed unique management model and harmonious humanity environment.Originality/valueThis paper opens an avenue for indigenous firms, as a framework for guiding management research and practice in coping with the post‐crisis era. In addition, it is expected to attract more attention from scholars, entrepreneurs both in China and in the rest of the world, to contribute to knowledge creation in Chinese management studies.