A new management model coming from China will change the way business is done in the country, and possibly around the world

• Charles-Edouard Bouée, Member of the Global Executive Committee of Roland Berger Strategy Consultants, predicts a "Management Revolution" coming from China
• China's entrepreneurs are developing a distinct management style that fits today's fast and volatile business world
• Spirituality, mutuality and flexibility are some of the ways the model suggests for dealing with modern business
• International companies need to understand whom they are dealing with, otherwise they will fail in this market
• The book is based on interviews with Chinese CEOs plus the author's own business experiences and observations

A new management model on the rise in China will change the way business is done in the country, and possibly around the world. In his book "China's Management Revolution", Charles-Edouard Bouée, Member of the Global Executive Committee of Roland Berger Strategy Consultants and President of RBSC Asia, argues that the new and distinctively Chinese style of management fits the fast, unpredictable and volatile business world of today. The book will be available as of December 3.

Creating value in China is becoming more difficult for all foreign companies. They are having to work harder in an environment that is becoming less and less like the American and European environments for business, and where the domestic competition is better adapted and growing stronger, smarter and more self-assured.

As a long-standing expert on the Chinese and Asian markets, Charles-Edouard Bouée argues that one of the most important issues for foreign companies to watch in this context is a new Chinese management style, which started to emerge in 2008 as a result of the financial and economic crisis. The new management style or model is fuelled by Chinese private sector entrepreneurs who have become skeptical about the applicability of Western-style management to Chinese companies and markets.

The significance of spirit, land, and energy

These entrepreneurs are returning back to their cultural roots, a trinity of spirit, land and energy. In doing so, they are developing a new and distinctively Chinese style of management.

The integration of the spiritual with the material world affects the emerging management style in at least three ways, argues Bouée: "The I Ching, a Chinese system of divination that evolved into a moral philosophy, has fostered an acceptance of the inevitability of change and yet a belief that if change is spotted early enough, it can be controlled. Second, following the teachings of Confucius that a well-ordered society emerges from 'morally correct' behavior, the power of a ruler (whether the emperor or the Communist Party of China – or a CEO) is conditional on his or her good behavior. And third, the group (family, organization, society at large), rather than the individual, is the unit of agency in China; 'ego-tripping' is frowned upon."

This spirit rooted in the Chinese culture has to be seen in a certain context – the land, the framework for the commercial activity provided by the government. "And while China's culture contributes a spiritual component and the government provides the context and the environment, China's entrepreneurs and merchants are contributing the energy – based not least on the conviction that through their activities they are strengthening China," explains Bouée.

"Spirit, land, and energy are powerful in their own right," Bouée says, "but together, they create a robust and stable foundation in which each element supports the other two."

The new model – inchoate but distinctive

The Chinese style of management may still be inchoate and unformed, but it is already distinctive, and some of its distinctive qualities have become visible. According to the author, the new management model has nine defining characteristics that are likely to distinguish it from other management styles: it's dynamic, adapted, flexible, synthetic, mutual, consensual, spiritual, disciplined and natural.

"Spirituality, mutuality, adaptability, flexibility, being able to process massive amounts of information in a simpler way – these are some of the ways the new model suggests for dealing with modern business environments," says Bouée.

The Chinese view: interviews with Chinese CEOs

The book illustrates its point by offering profiles, based on interviews, of several Chinese business leaders who have adopted the "new" management style. The profiles illustrate how these leaders are trying to develop a way of doing business that's better suited to China's environment than the "American way".

"The CEOs I interviewed all believe that there is a new management model emerging in China, even though they could not put their finger on it when I asked them to describe it," explains Bouée. "So we've been trying to put some words behind their thoughts and carve out this new management model. But as one of the interviewees said, 'This is going to be a long endeavor'. The Chinese management model will take another 10 to 15 years to grow. We are just describing its infancy."

But according to Bouée, the new model has already passed the viability test. In 2008/2009, when the economic crisis hit the world, the Chinese management model proved to be extremely resilient and well adapted to the new global economic environment. "Just as the American management model was the backbone for the development of the US, the new Chinese management model will be the backbone for the further development of China," predicts the author.

The beginning of a conversation

The book is trying to start a conversation, to build a bridge between Western and Chinese business people, says the author. "The CEOs I spoke with cared deeply about the issue, although they are still trying to put what's happening into words. On the Western side, people need to get ready for a new style of management that's going to last. Not understanding what's coming up and not adapting to it will be a mistake."

Foreign managers need to learn about the new way of doing business that is emerging in China. Its familiarity is deceptive, a consequence of China's 30-year – but now concluded – American experiment. It borrows ideas and principles from the West when they seem useful and don't violate the spirit/land/energy trinity, but ultimately, says Bouée, "the combination adds up to something original and new".