Embeddedness: Exploring the Roots of the Eastern idea of Organizing — with Alicia Hennig

BOUNDARYLESS CONVERSATIONS PODCAST — SEASON 2 EP #2

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BOUNDARYLESS CONVERSATIONS PODCAST — SEASON 2 EP #2

Embeddedness: Exploring the Roots of the Eastern idea of Organizing — with Alicia Hennig

Alicia Hennig stresses that in the 21st century, we need a better idea about the diversity of thinking and philosophical approaches around the world, to inform management and business ethics. Chinese thinking in general — and Daoism in particular — seem to offer a fruitful ground for developing management approaches or designing organizational models rooted in embeddedness.

Podcast Notes

Today we have the pleasure of introducing a very interesting academic voice, Alicia Hennig, Associate Professor of Business Ethics.

Her research focuses on Chinese philosophy and its application in organisations in the context of values, ethics and innovation. Working with Chinese as well as foreign companies in China, she continues to promote a better understanding of Chinese culture and thinking.

This conversation with Alicia was very crucial to explore the embracing of “embeddedness” (or entanglement). It’s about the critical need for organizations to see themselves as connected to the world they exist within. It turns out that Chinese philosophies, especially Daoism, are very much based on this concept of embeddedness. Daoism can provide Chinese management thinking with mindsets that seem to be rare in most of Western cultural traditions, and that may be more apt for a time of systemic shift.

We also talk about the paradox between globalisation, technological progress and contextual, indigenous approaches to management — in relation with embeddedness. Will China’s next generation of managers resist the universalising power of technology, considering how the country has leap-frogged in recent decades? By not striving for coherence like most Western philosophies, perhaps Chinese thinking really is more resilient to such forces and can more easily provide a platform for evolution in management, as stories like that of Haier seem to demonstrate.

Alicia also talks passionately about the role of education everywhere in the world to showcase the richness of philosophies, wishing that more universities and business schools would diversify their curriculum to include Chinese, but also Indian, African and other philosophical traditions. It’s indeed a shared passion that we want to continue to explore with her in the coming months.

To find out more about Alicia’s work:

Other references and mentions:

Find out more about the show and the research at Boundaryless at: https://boundaryless.io/resources/podcast/

Thanks for the ad-hoc music to Liosound / Walter Mobilio. Find his portfolio here: www.platformdesigntoolkit.com/music

Recorded on 18 September 2020.

Key Insights

1. The idea of embeddedness — understanding inter-relationality and interdependency with our external environment — is extremely helpful to understand what ethics and ethical action means. When we really believe in embeddedness, we are forced to think more detailed about the consequences of our action on all our surroundings— something that somehow got lost in much Western philosophy. There is therefore a great potential in looking at Chinese philosophy for inspiration on how to run a company, based on which ethical principles, since it gives me a whole logical system of embeddedness: its three-way system that aims at achieving harmony not just between the human being and the cosmos (or “god”) but also with nature as it encompasses and embeds the human. This system of thought may also contribute to a layered and “networked” thinking, reckoning with the idea that my actions can resonate through two or three nodes in a network.

2. Education will be essential to nurture a wider understanding of diverse philosophical and ethical apporaches. Alicia is not for any convergence, but for an acceptance of differences, believing we can generally learn from each other’s differences. University curricula and management trainings alike need to, first of all, include the paradigm of embeddedness and learning to understand that there are interdependencies, but also put forward other streams of thinking coming from Indian philosophy, Aftrican philosophy, etc.

3. When it comes to shaping organizations, the depth of foundational ideologies and “thinking sytems” should not be underestimated. In Haier for example — a company recognized as pioneering and one we work with since long — there is a foundational ideology inspired by Daoism, infusing a consistent system of thinking. If you just try to copy this approach on the surface, the ideological part is missing that essentially holds the company together and attract people to join and thrive within the system.

Boundaryless Conversations Podcast is about exploring the future of large scale organizing by leveraging on technology, network effects and shaping narratives. We explore how platforms can help us play with a world in turmoil, change, and transformation: a world that is at the same time more interconnected and interdependent than ever but also more conflictual and rivalrous.

This podcast is also available on Apple PodcastsSpotifyGoogle PodcastsSoundcloudStitcherCastBoxRadioPublic, and other major podcasting platforms.

Transcript

This episode is hosted by Boundaryless Conversation Podcast host Simone Cicero with co-host Stina Heikkila.

The following is a semi-automatically generated transcript that has not been thoroughly revised by the podcast host or by the guest. Please check with us before using any quotations from this transcript. Thank you.

Simone Cicero:
Hello, everyone, we are back to the Boundaryless Conversation Podcast. Today, I’m hosting the conversation with my usual co-host, Stina Heikkila.

Stina Heikkila:
Hello, hello.

Simone Cicero:
And with us today, we have Alicia Hennig, who is an associate professor in business ethics. Ciao, Alicia.

Alicia Hennig:
Ah, thanks for having me. Hello.

Simone Cicero:
Hello, nice to have you, very nice. So, let me just say a couple of words on how we got in touch in the very first stance. I was basically researching on Haier. You know, our listeners know that Haier has been a topic of conversation, and we’ve been collaborating with this company. And I was just in general researching around, you know, the ideas that more or less represented the roots of Chinese management thinking. And I encountered paper that I, if I’m not wrong, it’s called the Daoism in management. And I was really intrigued with by your writing on the topic. And so, a few months ago, we got back in touch, and we had a long conversation, and I discovered that, again, you are more generally engaging with this idea of ethics in business. And I think that this is a central topic that everybody should be discussing now.

So, Alicia, I would like to start from there, and especially from my experience in getting exposed to the ideas of, you know, Lao Tzu, and with regards to management. And I recall, when I was in China, attending the annual conference that the Haier normally organizes every year, Zhang Ruimin, the CEO of the company mentioned — I think he mentioned a Daoism book — and, and the quoting Lao Tzu, he said, you know, basically “everything is part of a system”. You know, he kind of acknowledged that in his management thinking, in the way he was thinking about the company. So, this topic of embeddedness is really important, I feel, when it comes to at least a part of Chinese management thinking. Maybe you can also help us to understand the better, you know, the nuances. And sometimes, I feel like it’s not really reflected in current Western management thinking today. I feel like sometimes the Western organizations instead, have been completely, you know, detached and disentangled by things such as the landscape or the community or in general, the interdependencies that in reality are, you know, are really there when it comes to having an organization that interacts with the world. So what are your thoughts around these initial reflections?

Alicia Hennig:
So yeah, I mean, I guess, same as the Haier CEO. I got very much intrigued by the Tao Te Ching, and this is the work I’m actually focusing in my own research. Also, because they are only like two really major Daoist works on the one is the Tao Te Ching and the Zhuangzi, and still like they are like roughly, I don’t know, 200 years apart. And the message they deliver, they still fall in the same category. Nevertheless, the works are written in different styles. And yeah, the Tao Te Ching is actually a work of political philosophy. Most of philosophy back then was like to entice the ruler to use that system for ruling. So, I think it always had this kind of organizational aspect. And this is why it makes sense for me to look into that today and use it for management, right? Because even back then, it was about managing the people.

But, yeah, coming to the idea of embeddedness, the idea of embeddedness, you find all across Chinese philosophy. But I think in Daoism, it’s especially the embeddedness of a human being in its external natural environment in that sense. So, there is more emphasis on nature. And especially in my context of business ethics, I like this relation, you know, that we need to understand, we are interrelated to nature. Whatever we do to nature just comes back. So, it can potentially haunt us. And we can see that now with a climate change on the rise and things like that. So, nature… like nature is not forgiving, right? Whatever we do to nature, it comes back to us, in essence.

And I think this idea of embeddedness and we understanding this inter relationality in interdependency with our external environment is extremely helpful in a better understanding of what ethics and ethical action means. Because when we… when we really believe in embeddedness, we are forced to think more detailed about the consequences of our action. And I think this is what… what kind of is driving me. And also, because the concept of embeddedness got somehow lost in Western philosophy.

Simone Cicero:
Right. Because if I think about it, in Western organizational theory, I think naturally, we tend to think about the Protestant ethic of work and Max Weber’s work, I would say. And these doesn’t even mention the idea of embeddedness. You know, so there is not really our relationship with systems in nature in the Western ethic of work, I would say, and in the Western business ethics in general. Instead, it feels like when you work with Chinese companies, so in general, when you look into Daoism, for example, embeddedness, to some extent, is the ethic. What do you think about that?

Alicia Hennig:
Yeah, I think what the thing is, we can’t generalize all across China, right? I mean, Haier is a very fascinating example of a more like, say, Daoist practice. And there are also examples of Confucian entrepreneurs, like people sticking more clearly to Confucian principles to have… you know, to instill a sense of ethics in their companies. But still, like this is a niche phenomenon. Because when we look at Chinese companies more generally, I think they are not very driven by ethics. Because there has been a long time where ethics has been suppressed. And now, people find it more relevant again, and they are striving for, you know, implementing it in their companies. But these entrepreneurs doing that, they are still like… well, it’s still a niche phenomenon, right?

I know, researchers working on this, and I’m working on this too for a long time, and we see like it’s kind of a growing phenomenon, but is still only a comparatively small number of companies engaging in like deliberately engaging in more ethics in business. But I mean, I find like the Chinese business ethics is especially like adequate for a business ethics, because it was always very pragmatic, right? It was always about organizing, managing people. So, I think there is a great potential in looking in… especially into Chinese philosophy for inspiration of how to run a company based on which ethical principles, for example. And I think like… well, because we have these two major Chinese philosophies and they give us two different angles, it may even make sense to combine the two. And perhaps like the link between the company and its natural environment and Confucianism is more about really managing people.

Simone Cicero:
Right, and that was the topic where I was curious to ask you more, essentially. You know, this idea that the traditional ethics or in general, say, cosmology or religion, so let’s call it philosophy, — let’s call it as we want — in China, have this political nuance. You said, you know, it’s always been about managing people. It’s always been about governing, and which I can totally resonate with that. And I even read today the Tao Te Ching and being now in the process of reading Zhuangzi, if I’m not wrong. Well, if I look into the Western tradition, that’s completely different, you know? So, I was thinking maybe, can you… can you share a couple of words on, why do you think in the roots of the traditions, you know, in China, that is this nuance, this political nuance? Maybe it’s the nature of the Empire, versus maybe the fact that, in the West, our tradition is more related to these nomadic people that were the Hebrew tribes, you know, at the time, where the pillars of our, you know, religion were being written in the West.

Alicia Hennig:
What I personally find convenient so to say about Chinese philosophy, is that it gives me a whole logical system of embeddedness, of like the logic of embeddedness, right? Because they have, as you said, like this kind of cosmology, right? They believe in the harmony of heaven, earth, and the human being. So, when… when we know the standard makes a triangle relation, right? Whereas Western behavior was very much dominated by a singular connection between the human being and God, at least since the introduction of Christianity. And I think that made a major difference, because there, like in this singular relation, there is no interdependency. Whereas in a triangular relation, there is much more potential for inter dependency and inter relationality.

And, for me, this still makes a major difference. And then it’s, of course, reflected in such ideas that the human being is embedded, right, in a social system and a natural system and things like that. And, like in… in the Western thinking, we once had the idea of embeddedness. It’s not that this is totally alien to Western thinking. So, we had Karl Polanyi, for example, in the beginning of the 20thcentury, again, speaking about embeddedness. But when I look at business ethics today, for example, I mean, it’s kind of coming back through systems thinking. But I don’t see, I’m sorry to say, in a clear ideological foundation in Western thinking which would bring up the idea of embeddedness as clearly as Chinese philosophy. So, we have Karl Polanyi, but otherwise, I really would have need to dig deeper to see whether any Western philosopher would have talked about embeddedness before. Karl Polanyi is the only person I know. And so, this is why I found it so inspiring to look into a completely different philosophy, because it gives me already a very complete framework for this embeddedness. And this is for me a good starting point to formulate, yeah, different and new approaches in ethics, so to say, and also business ethics.

Stina Heikkila:
Yeah, thank you. So, what do you think then — because it’s clearly a very interesting proposition that you need to come forward with — what do you think is needed in order to nurture such a perspective that seems to be offering like a promising avenue in a way for business ethics, also in the West? So, I’m wondering where to start, in a way, how to import, how to mesh up and, you know, where can we go?

Alicia Hennig:
Right. I mean, that’s, of course, a very crucial question, how to instill this kind of thinking in people. And I think, well, then when we discuss about that, we can’t get around education. So, education will be a key. And that also means like, we have to make education more global. We have to make the curriculum of education more global. For example, in philosophy, where Chinese philosophy is still — I mean, I never had Chinese philosophy when I was studying philosophy, right? — there are not so many people who can teach Chinese philosophy in the West: it is a niche topic. It is a new subject. Ideally, what I would love to see is, for example, in philosophy, and more than just like Western philosophy, but also Indian philosophy, Chinese philosophy, whatever comes from African philosophy, right, that we have a more complete understanding of what philosophy actually is. Because the discipline was very much dominated by Western imperialism and the thinking of that West… only Western philosophy is true philosophy, right? This is a big problem in the discipline.

And then when it comes to business ethics, we need to understand, “Okay, there are also different ethical approaches to business in other countries.” So, again, we need to include that in the curriculum. And when we come to economics, for example, we also need to understand, “Well, here in the West, we have a capitalist system. We have a… perhaps in Germany, we have a social market economy. But in other countries, we have other economies.” And also, that needs to be better integrated. So, I’d say for university education, we really need a more global approach to education. This is what I’d be wishing for. And then we have these people who are already educated with a bit broader mindset, then this will trickle down in business. But of course, it takes like one or two generations, right?

Simone Cicero:
I have a kind of reflection, I was talking in the chat with Stina actually, and it seems to… there seems to be two perspectives to what you were talking about. One is the perspective of, you know, what you were saying, you know — maybe I got it wrong — but this idea that we should develop a more general curriculum of learning for management that is not to just based on one theory, but it’s much more, you know, integrating different theories and different philosophies. So, to some extent, it sounds like a universalization of the management… management theory, which, at the end of the day, sounds also, you know, meaningful in relationship with the fact that we all share the same word.

But on the other hand, I think the perspective of embeddedness and/or as somebody else calls it, that this idea of entanglement and much more relationship between the organization and a local environment is calling for rediscovering more indigenous thinking about, you know, how do we show up in the world and how we produce value interact with each other, which resonates with also the work of Hong Kong based philosopher, Yuk Hui, of whom we are big fans, I think it connects with what you said about, you know, African thinking or Indian thinking, and so on. So what is your take on these two seemingly clashing drivers, one for universalization, and one for, you know, more local, indigenous, like you could call them the cosmotechnics, local cosmotechnics, and our local ways of organizing that are, you know, able to deliver, more a local way of thinking about the humans in the world and the relationship with their landscapes and environments and communities?

Alicia Hennig:
Yeah. So, I mean, perhaps that was a misunderstanding: so, by actually offering a global curriculum, I wasn’t really thinking of a universal approach, because I don’t think there is something like a universal approach. I mean, yes, some… some aspects across philosophies, you may be able to combine, of course, and you should be able to combine later on; the same as management practices and things like that. But I wouldn’t think that leads necessarily to a universal approach. It’s still an approach like, which is made of very different aspects. So, when I’m speaking off a global curriculum, what I had in mind was more like that we owe it to our students that they know the richness of the world, right? Whatever the world has to offer, we should at least give them a glimpse of it, right? We should let them know, in India, they do things like that, in China, they may do things like this or that, yeah, compared to the US where they think… where they do things differently than in the European Union, right? So that we actually kind of get the whole diversity of this globe and its practices into the curriculum.

I know that there will be a lot of stuff, right? So, I mean, in practice, of course, we need to think about how to manage that… that material, right, because it’s quite a lot. But for students today, I think it’s very important to develop a more global mindset based on the local differences, right? So, of course, they should especially see indigenous approaches in that sense. And not like, you know, putting them all together. But understanding, “Okay, this is an approach, which is different to that one, is different to that one,” right, so that we get an idea of all these different things, and then we can… we have a better understanding of what approach works together with what else. So, that’s the idea in general. So, I’m not for any convergence, but for an acceptance of the differences, because we can generally learn from each other’s differences. So, that’s the entire idea actually behind that. I don’t believe in anything universal. I know Western philosophy is very much about universal thinking. But having lived in China for so long, I don’t think universalism is the right way to go. Of course, we have to agree at some point at some level. But, for me, it’s more about acceptance of differences than actual convergence.

Simone Cicero:
And do you think we still have this possibility? Because sometimes, it looks like and feels like technology has been such a universalizing force that, you know, it makes it harder to think beyond the frames of, you know, what do we believe it means to live in a modern society. So, for example, China has these very different bases. And I feel it’s like, you know, for example, you mentioned Polanyi, but I could mention Gregory Bateson’s work. It’s really like, you know, feels like in the West, this kind of interdependency thinking was more like some kind of academic work, while in China, is much more embedded in the, I would say, in the basics of their mindsets and thinking system. But at the end of the day, both of us have been falling into this idea that we need to live in a super technological, modern society where we control everything, and we ensure that everything works smoothly while I think we’re embracing indigenous thinking.

And I think I love your points when you make the point that we need to accept that there could be indigenous thinking about management, for example. It’s, at the end of the day, it means also accepting that we cannot control all the system, but that local systems may have some, I would say, issues and maybe we, you know, a check, accepting complexity in the interconnectedness also deals with accepting that the technosphere, the human technosphere can fail, which is also the point that the, you know, complaint, you know, Bernard Stiegler made a few times with his idea about The Neganthropocene. So, what is your point of view?

Alicia Hennig:
I think you’re totally right when you say that this embeddedness thinking is more prevalent in like daily thinking of China than it is here. I mean, here, I’d also say, like, from my experience living in Germany, and having worked across Europe, it’s more an academic thing to understand there could be embeddedness, or there is actually embeddedness and there’s also dialectics, for example. Whereas for the Chinese people, it’s just daily business, right, to kind of live your life according to this very basic logic. And, of course, that’s why they are so much better in like thinking and interdependencies and inter-relationalities compared to us.

But yeah, going to the technical stuff and like potentially a convergence to the third round of technology, I mean, this is something… of course, like, I don’t know how the next generation in China will be, right, because the technological impact is just so strong in China, through like leapfrogging of technologies within 30 years, they are more advanced than we are. So, there was like, I mean, a heavy impact in terms of changes on these generations now. I just think well, if the Chinese still stick to their traditional philosophies and they can keep their philosophical thinking alive, we will always see differences, right, between our system, for example, and their system. But if the later generations forget about their traditional thinking, I think it may lead more to convergence in, I don’t know, universalism. But I sincerely hope this is not going to happen, because we need to have all these different ways of thinking on this planet to learn from each other. So, a true convergence, just through technological advancement would be actually very sad.

But yeah, I think like in every country, because culture is a historical product, it cannot just be easily overridden by a technological convergence. At least that’s what I believe in. But of course, there is no empirical proof to that. But what I also want to say about technology, I mean, isn’t technology actually, again, the illusive attempt of human beings to control? I mean, technology… technology is nothing else than control, right? And then when we look in the Tao Te Ching, again, we actually understand we cannot control. So, I see quite a paradox here.

Simone Cicero:
Right. That’s the paradox that I wanted to stress, you know, the idea that a management thinking for the 21st century is a management thinking that accepts that we cannot control, and to some extent accept also that the illusion of control led us in a space where now, we need to deal with some outside cascading issues related to the unraveling of the biosphere, for example. So I think, today, when I speak about the management, with my colleagues, I always try to make the point that we are at an inflection point. And we need, to some extent, a management thinking that accepts new basis of, you know, operations. We’re starting from a new perspective. So, my question for you maybe could be about, how do you see these new mindsets possibly being enforced on the management community? How do you see things changing, basically? Is it just about crisis of a crisis of a crisis? Is it going to be about, you know, these geopolitical frictions and the fragmentation of the world? What do you think about how things are going to unfold from this perspective and driving finally the adoption of a new mindset in management that is much more real, I would say, even in Daoist terms?

Alicia Hennig:
Yeah. I mean, well, I’m not directly from the management discipline, right? But of course, I’m writing stuff which falls into the discipline. And the general problem is I can tell you, as a philosopher, you don’t get full recognition, this discipline. I know a number of people who are also like working on this kind of interdisciplinary thing between like philosophy, business ethics and management. And sometimes you can see discussions popping up off, yeah, do we need a kind of revolution in management and management thinking. And I think this is exactly what we need. I mean, we can look back at the financial crisis of 2008, that could have been a great starting point for something new. Unfortunately, it didn’t happen.

So, now, we have COVID-19, could be again, a great starting point for overhauling old ideas and things like that. I’m not quite sure whether this is going to happen. I wouldn’t wish for, but in practice, that means we also have to change significantly management education. And that, again, goes back to the universities. And when I look back at the universities, I’m wondering… I mean, they are slow to move in that sense. And so, hopefully, we have enough brilliant people in these disciplines who push for changes in the curriculum and different emphasizes and teaching. I tried to do that in my own seminars. At some universities, where I’m teaching, they are really open for new seminars and things like that. But generally, I find it difficult to place really interesting, entertaining, innovative seminars at universities. For me, like because they have strong bureaucratic structures, I think it will stay different difficult to introduce a significant change.

So, what else can we do then, right? We can, for example, work just on those people in management positions now, right, and offer trainings and offer seminars. So, not targeting students, but targeting professionals, that could be another option. And then yeah, of course, what… what should be in that kind of curriculum, right. Speaking of control, speaking of unexpected happenings like now COVID-19. What is the lesson learned for management? So, I think one thing we have to definitely include in… in management thinking and management education is the paradigm of embeddedness, that we learn to understand there are interdependencies, and I better need to watch out for the consequences of my actions, because they are not just affecting me as an agent. And that’s the most important part, right? Because I think Western thinking is still too much tied to the agent. And then we always believe in the agent and individuality and independence of the agent. But, as you said, reality is just a bit more complicated.

So, embeddedness. And then from that, well, where do these notions of embeddedness come from, right? So, looking deeper into different philosophies and try to break them down into something managers can work with, that’s something I’m having, on my mind.

Stina Heikkila:
Great, thanks. I actually wanted to turn the conversation a little bit to something that you also mentioned in the preparations for this episode. And it was this connection with being able to think in terms of networks. So, when you talk about the potential to maybe combine different philosophies and adding a sort of a layered thinking, whether it’s in business management or others sort of governing aspect, that it enables you to think in terms of a network and being able to see where you could have a potential impact on a node or a certain… certain player. And it would be great to hear more what you think that this could mean, both for the shift that we were talking about, you know, because we’ve seen also in the COVID, for instance, that networks have been quite powerful in building the kind of effects that can influence a huge scale, actually. So, whether you see that these dynamics could you know, how to also influence how organizations are shaped to some extent. Does that make sense?

Alicia Hennig:
Yeah, I think I get your question., I think that these are like two things for me. So, one is like the… the network phenomenon. And the other is like the second layer, although like they are connected. So, for me, like better understanding Chinese philosophy and learning from it today means, for me, I can add, let’s say a non-Western layer to my thinking, and use that for evaluating my situation, using that for finding another solution, for example, and things like that. So, for example, aspects like circularity, that time is circular and nonlinear, helps me for a better understanding of my situation and coming up with better solutions.

And other aspects, for example, dialectics, like dialectics of the Yin-Yang logic, like you know, wherever there’s shadow, there’s light, right? I mean, it sounds very simple, but it really helps you… it shaped my attitude a lot. And so, this is one thing, this is like the second layer or the additional layer we can just add on on our default layer with which we have been socialized, with which we have been raised, which has been more manifested through our education system here. Nevertheless, there is, I think, with learning the option to add some other layer on top of it. Not replacing the other one, right, it’s just something which comes on top.

And then the network thing is the other thing that I thought, “Okay, if we really believe in embeddedness and inter-relationality, we also have a… we have to adopt a more like network structure kind of thinking. Because then, I’m not the independent individual, the individual agent. And whatever I do, it doesn’t really have an impact on my surrounding. But quite the contrary, I am always within a network of relations. And whatever I do, it resonates through the network. And actually, it comes to a point where I don’t have any control anymore.” And that’s why I should be especially say… that’s why I should especially think things through in order to not cause unnecessary disturbances.

And just think about a spiderweb, right? When you take it at one point, it resonates through the whole web. And I think this could be actually true about our own relations and our own position in the world. We never know what happens when we just, you know, take that… like push that button. And because we cannot know for sure, we will never be able to know for sure, only for the next, I don’t know, let’s say 2, 3 network nodes, so to say or 2, 3 social relations in our circle. And we actually have a strong ethical responsibility to act in an ethically appropriate way. Yeah. So, from this kind of network, thinking and embeddedness actually comes a strong ethic in my opinion.

Simone Cicero:
I’m really, of course interested to this topic that you raise about networks, because we were doing platforms and ecosystems thinking here. So we are big proponents of developing this more, you know, network type organizations. And, you know, of course, we are interested in both the drivers and the effects of such… embracing such an organizational structure. So, my question would be maybe, if you think about, you know, changing these mindsets. And also, let’s say that we have these magic wand and… and we can change the mindset, and we can create this new thinking systems inside our management… you know, to present to these management community, what would it mean, in terms of — if you have ideas in terms of how do you structure an organization — how do you structure, you know, not just an organization or a business model, or leadership or practice? In general, I mean, how do we design and run our institutions, both the public and the private?

Alicia Hennig:
Yeah. I mean, I wrote about this in the past, and what I was writing was: ideally we have a more humanistic system, right, that also concerns organizations. Because the way organizations are currently run are still often very hierarchical. And then it… like, when you look at the recruiting process, it’s more like kind of interested in your technical skills. So, you’re hired for your technical skills or whatever skills you have. But you’re not hired for your personality, you’re not hired for any other like parts of, well, you as a human being, which could potentially matter, because it’s always like the technical skills, which are at the forefront when it comes to hiring.

And I think, first of all, we need to change, for example, recruiting practices. And there is already a model for that. When we look, for example, at Japanese companies, they also look for skills, of course, but they also have a strong belief in that skills can still be developed within the company, but a personality cannot. So, either your personality is in that sense, right and it fits with the company or doesn’t. So, that’s the recruitment approach of Japanese companies. And I think we can learn quite a lot from this. Because in the future, it’s not just about our technical skills, it’s also about who we are as a personality. And what else can we offer to the organization beyond our technical skills?

And so that, of course, on the back side, requires an organization which can make use of our… of us as a human being in our completeness, right? And for this, of course, structures need to be broken up. Employees need to have more autonomy, but employees also need to be educated what it means to have more autonomy, because with more autonomy… autonomy comes more responsibility. So, not every person may be fit for this kind of model too, right? Because not every person is interested in working totally autonomously, working with a lot of responsibility, right? So, we will need to create a diverse system, which on one hand, definitely allows more for realizing our human capacities than the current system. I think that would be a very important addon to organizations or organizational thinking today that we make up our mind, “How can we make use of the human being? How can we pay respect to the complete human being in organizations and not just having the skills perspective?” Yeah.

And then, like the last aspect then is of course education. Because when people are not educated to think independently, to think critically, they may not be fit to take up an autonomous and responsible role, right? So, you have this triangle of education, and then management perspectives and recruiting and organizational setup, and then you have the human being as such. And this all needs to be worked on, so to say. But, I mean, it’s not that we don’t have examples, right? I mean, when I look at Haier, we already can see a very progressed organizational structure, right? But again, I suppose also Haier knows what kind of downsides come with it, because of course, there are some kind of downsides or complications or difficulties. Nevertheless, I believe, in the future, we need to pay more attention to the human being as a whole in the organization. I think that’s also our ethical responsibility, but it’s also like for the simple sake of efficiency, right? Only when we know what the human being can bring to the organization, we can make it like working fully effective.

Simone Cicero:
Right, right. You know, I this resonates a lot with what we also discussed the last time, you know, when we spoke about the fact that, that companies like Haier, for example, or even Zappos, that use similar procedures, have tend to attract the people much more or in general a lot about how they think and how they behave, what is their culture, what is their, you know, inclination, but also kind of companies that created these influence, this field of culture that tends to attract all these certain kind of people. So, for example, we spoke about Haier having now this employee brand, that tends to attract only entrepreneurial, seriously entrepreneurial people. So, of course, I think one of the points that comes out of this conversation we’re having is that the organization of the future it really embraces this inter-relationality as a basis of its existence, it’s going to be an organization that needs to, I would say, draw a more compelling human development tissues. So, it needs to attract because it’s a space where the humans can express their full potentiality, okay? So, that’s one thing.

But another thing that I think is really important from the conversation we’re having is, again, this… this idea of embeddedness. Because if we just do the… the format, so we just say, “Okay, our organization are going to be, you know, the place where you can be expressing your… most of your creativity and whatever. And we recognize your human potential,” but then if the purpose of the organization is still completely disconnected from the embedded systems, so to some extent, you accepted the inter-relationality, but maybe we can say “you don’t accept to the interdependency” or something like that, the risk is that you just to develop a better machine for destruction, to some extent.

Sothe question is really, you know, how to recognize and to encourage this transition to a new theory of management that, you know, is based on the idea of re-entangling the organization in the local, in the context, in the indigenous, in the place where it operates? And to some extent, we can still have this globalized layer of thinking in organizations that interact in a completely disconnected way from the local, from the contextual, from the embedded. So, that’s probably the biggest question mark that I bring with me after this, at least at this part of the conversation. What do you think, Alicia?

Alicia Hennig:
Yeah. So, I will start with the first one. If I got it right, you’re wondering about like, a kind of paradox between the embeddedness or localization of indigenous approaches and the universal level of globalization, is that correct?

Simone Cicero:
Yes, to some extent, you know, the point that I was making is this paradox between acknowledging the need to embed, to re-embed, and on the other hand, you know, embracing this idea that we can continue to think about our organizing as disconnected from the local, disconnected from the contextual, and just embrace the human potential theory, the human potential thesis, you know? So, this is the paradox that I see.

Alicia Hennig:
Okay. So, yeah, regarding the paradox, I guess, like of embeddedness versus, I don’t know, universalism perhaps, I don’t know how to solve that. I think that’s just a natural result that, when you have contextual approaches in a country, they cannot be entirely universalized, right? So, there may be things which can trickle down to other contexts, but other things may not be possible, or at least we don’t know the extent to which they may be possible. I mean, we have seen pretty cultural best practices of Asian companies internationalizing, and they could still maintain these, which is quite surprising. Because when you think of that, the culture in Asia, no matter where, is very distinct to our culture in Europe or in the US, and they could still maintain those upon expansion to Europe, for example, is a good example for this. They maintained their culture in their US subsidiaries. And that’s quite a phenomenon how they did that.

Yeah, then I just think like, okay, then we have all these different contextual approaches, and the output or the result of that may be a kind of, well, convergence on the surface. But when we dig deeper, we actually know it’s not a convergence. It’s just like, all these aspects which trickle through and could be used in a global context independently of a specific local, cultural context, right? But this is something, I mean, we could see convergence and practices through the strong impact or influence of US management techniques. Also, in China, also in Europe, I think we all have us influence no matter where we go. So, this is the kind of level of universalism, but generally, I would put more emphasis on contextual approaches, because this is how we can learn from each other.

But the second thought I had about embeddedness was like: so just imagine you only have a company which believes in, “Yeah, we should put more emphasis on the human being, and we want to have more recognition… recognition of the human being,” and then they set up all these structures, for example. So, just rebuilding the structures they’ve seen elsewhere. So, let’s imagine someone wants to Haier… someone wants to copy Haier as a model, and they think like, “Okay, cool, we, we adopt the matrix structure and things like that. And then we give ourselves a purpose, which may make sense,” then I would think this system is doomed to collapse because the foundational ideology is missing.

So, when we look at Haier for example, there is a foundational ideology. And this is inspired by Daoism, right? So, with this comes into consistent thinking and consistent system of thinking. Whereas, when you have a company, which just tries to copy this approach on the surface, the ideological part is missing. And I think this ideological part, or let’s say, to keep it more neutral, like the mindset of company, that is the essential part which holds a company and its people together.

We could also see that, for example, with all the companies in the 90s copying Lean Management, copying Kaizen, they all missed the ideological foundation of these management practices, and thus, they failed, right? So, whenever we think about, like let’s think about a new business model and implement it, we should be aware of that it always must come with a foundation ideology, whatever that is, right? But there needs to be some way of thinking which holds the company together. And I think this is a very important aspect of having new business models. Without an ideology, nothing will change, because then only structures are copied, processes are copied. And, yeah, it would just collapse at some point.

Simone Cicero:
Right. And it looks like this new ideology that, apparently, we may be seeking for is an ideology that we had the same time shared and global, because it’s going to be produced by our global discourse. But it’s also eminently indigenous, it’s kind of calling us to get back to rethink our organizing in a way that is much more embedded in entangle thing in our place. Somebody is now doing research on bioregional thinking, for example. So that’s maybe the paradox, which is not a paradox at the end of the day. And because, you know, if you really accept complexity, and you really accept the fact that the world is different everywhere, you just need to acknowledge these, you know, accept that organizing needs to be different everywhere. So, we cannot come with this kind of universalizing answers to whatever we do in management and in organizing.

So, I think, somehow, we go to this final reflection. So, I mean, we covered a lot of ground, but I’m sure we forgot something very important. So, I would love to see if you still want to stress one idea that maybe needs to be on the table of our listeners when they think large scale interdependent organizing for the 21st century, whatever we forgot to maybe in the compensation.

Alicia Hennig:
Well, I’m not quite sure whether we actually forgot it, but I really need to stress that, well,
in the 21st century, you need a different mindset. And that needs to come from a better idea of what is happening on the world in terms of approaches, right, so we get a better idea of the diversity that we can actually take from ideas from which we can profit a benefit. And then the second thing is: how do we put this in practice, right? How can we make managers better managers in that sense? Yeah. How could that happen? What kind of education, right? And, I mean, I can only stress again the importance of university education. But again, like with the managers nowadays, I guess it’s really important to draw the attention to a necessary mindset shift. And this can be only accomplished through, yeah, seminars, trainings, getting out the message in that sense. And then it will still take 10 to 20 years, right, for a fundamental shift, if we are lucky enough and if that’s happening at all. But, yeah, I mean, for me, the focus is really how to change management education, what options do we have? And I can only hope for people collaborating on this, because it takes more than just a handful of people to change the system, I believe.

Simone Cicero: Right? And yeah, maybe also, the context of management will push tto be faster, you know, than 30 years. Because I think we don’t have — definitely we don’t have 20 or 30 years to change the course of modern management. So, Alicia, that was an amazing conversation. I think our listeners will have lots of, you know, food for thought. Maybe we can end with you pointing out where people can find your latest work, and also, maybe if you want to suggest people couple of reads besides the classics that they can do, you know, books or any other things that they can check it out to really start grasping the ideas that we’ve been discussing today in this conversation.

Alicia Hennig:
Yeah. So, my research is like, I usually post my research also on my LinkedIn website.. And then I have my own website, which is called newvirtues.com. So, there, I usually also have my research like in terms of abstracts and presentations and things like that. For book recommendations, what I still love the most is like, in my free time, I’m reading books by Chinese authors, because I just love their way of storytelling. It’s very different. And it’s always like kind of heartwarming, and to read all these stories. I mean, they are sometimes, of course, fictional. But still, like, you know, they have a glimpse of the truth in it. And so, for like more than 10 years now, I’m regularly reading like, yeah, Chinese authors, of course, translated in English. I just love their way of storytelling. And the same is true for Chinese films. I think that if I don’t get it wrong — Jia Zhangke — I maybe mixing it up. That’s a contemporary filmmaker, and I just love his movies. They are really like… they always show like real-life China, how… how actual people live in China. I just love the storyline and the flow of these movies.

And lastly, a good book I can recommend, which I’m currently reading now is by Michael Schuman, ‘Superpower Interrupted’. It has a lot of stuff on Chinese history, covering the past 2000 years. And it’s very interesting to read in the context of China’s ambitions today, and the history of China. And it’s very well written. It’s a definitely a good read, very accessible language. And I can just highly recommend that book like for like more contemporary stuff on China.

Simone Cicero:
Right, right. And I think I want to, again, make the case for our listeners to get interested in the two or three foundational book of Daoism as well. And we’re going to add to these links to the show notes, so check this out. Alicia, thanks very much. That was a great conversation.

Alicia Hennig:
Thank you so much. Thanks for having me, it as pleasure to talk about that in more depth.

Stina Heikkila:
Thank you, thank you.

Simone Cicero:
And for our listeners, please check out the notes and stay in touch. We’ll catch up soon