Die List in der Wirtschaft - Strategem Nr. 36

Inhaltsverzeichnis

Structure

Escape / Flight Stratagems

Stratagem no. 36

Two versions of the stratagem no. 36

Defence against stratagem no. 36

The risks of stratagem no.36

Courage or cowardice?

Conclusion

8. Appendix

9. Bibliography

Escape / Flight Stratagems

One withdraws himself smartly and timely from a precarious situation.

Stratagems No. 9, 11, 21, 36

The stratagems number 9, 11, 21 and 36 are four of a catalogue of thirty-six stratagems which have become an integral part of Chinese culture, philosophy and thinking. Although often associated with Master Sun, whose writings on warfare combined traditional and known with cunning and unconventional practices, the catalogue itself is a synthesis of various Chinese accounts from past centuries and has numerous authors.^[1] The 36 stratagems are known to every person and child in China^[2] ; they are tools and techniques whose knowledge of use is supposed to ease confrontations on the battlefield, in relationships and at the negotiations table.

The catalogue of stratagems as found in the texts of Professor Harro von Senger is split into six groups, the last of which contains the above mentioned stratagems. This group is composed of escape/flight stratagems.

Stratagem no. 36

Running away is the best of the 36 stratagems whenever the situation (or near future) looks hopeless/ the best (of all options); (if one’s own downfall looms/ if one is in an inferior position), running away is the wisest (choice).

The last of the 36 stratagems is not enveloped in an allegory as the bigger part of the catalogue is. It is straightforward and needless of interpretation. That is not to say that an explanation is not useful or required, as, left as it stands, the 36th stratagem and its meaning leaves a sour taste of cowardice.

Two versions of the stratagem no. 36

There are two forms to this stratagem; the withdrawal-stratagem and the gaining-of-distance-stratagem. They both have the same outcome but differ in the ways they reach it.

The withdrawal version sees an actor in a difficult situation, from which he wants to get away from. Depending upon the situation or the scenario it can also be described as an escape or a change of course. The higher the degree of precariousness the actor finds himself in, the stronger the urgency on his part to leave. In the extreme form the stratagem is to be understood quiet literally as a necessity to flee from a location^[3]. Although not always to be associated with such a drastic situation the withdrawal version leads to an immediate change, be it physically from a location or in another form. The actor recognizes that the near future is hopeless and that a prompt change of course or scenario is required^[4].

Analyzing this version of the stratagem under an economic aspect, it can be said that the agent’s goal has to be the salvation and conservation of resources. It is especially true if the preceding scenario saw the agent cumulating losses while maybe waiting for a turn of events. Having pulled the handbrake, the losses are thus to be regarded as sunk costs; that is costs already incurred and not to be retrieved in any way. Facing an upcoming hardship, the result becomes the minimization of losses.

Practical economic examples for this version of the stratagem abound and vary depending on the proximity of the precarious near outlook. A company facing rising costs might decide to move certain parts to another location, as for instance to a foreign country, where labor costs might be lower. Not relocating the entire company (due to historic, traditional or symbolic reasons), the firm has to at least move some parts in order as to cope with rising costs and to survive against competition.

A further example illustrating the already above mentioned extreme setting has a corrupt manager jumping onto the next plane to Brazil as he learns of his impending arrest. This example also illustrates a scenario where an agent tries to save what can be saved, be it resources, strength or his own physical self. The agent also tries to minimize his losses, in this case by avoiding a big fine or jail time^[5].

The second version of the stratagem can be described as a form of gaining-of-distance, be it from an impending unwanted outcome or from a delicate situation. Just like with the prior version the agent using the stratagem has a strong interest in changing his position or his location. He does this though less precipitously as when using the withdrawal version. It is a more tactic and strategic approach, a step by step procedure. The agent does this, so as to be able to re-evaluate his position and chances with every step he takes to distance himself. A drastic change of scenario or scenery might deny him new opportunities to gain the upper hand and come out on top. Pausing while distancing himself, the agent can examine the situation and see things from a different angle and maybe as a result stopping the use of the stratagem and make a comeback.

In practical economic terms the agent using this version of the stratagem also tries to free himself from a precarious surrounding or hopeless outcome, but he does it more planned and strategically. In some occasions it could even be regarded as a purposeful retreat or fallback, using the martial terminus, while hiding an ace up the sleeve. The agent might still have hope for the impending outcome to change so as to re-enter the arena.

The cleverest of all agents will leave a backdoor open in every negotiation and situation so as to be able to escape in difficult times. It will guarantee or at least ease the circumstances for the agent and even allow him to engage in more risky maneuvers, knowing he has a safe haven to take refuge in. This backdoor can have many forms: It can be an easily overseen clause in a contract, guaranteeing the actor a prompt ‘escape’ if things don’t turn out as planned; or entering tough negotiations with the prime candidate while having already secured the second-best candidate (so as not to be left without anyone) or a vague comment, thus not becoming subject to having expressed something untrue.

Again as with the first version of the stratagem examples abound and vary. For example a firm might decide to stop the production of a certain product once regarded as a ‘cash cow’ (‘typically evidenced (by) a return on assets that is greater than the market growth rate’) and now as a ‘dog’ (‘low market share and a low growth rate and thus neither generate nor consume a large amount of cash’).^[6] The firm will begin disinvesting and stop all if not most of its activities in this area. With the introduction of cassettes, the vinyl record market shrank quickly, just as the cassettes market has shrunk since the introduction of compact discs^[7]. Firms had to adjust and in order to survive and meet consumer demands they either specialized in the older medium or shrank their production.

A further example is a firm operating in a region or country, which is besieged by civil unrest or by an epidemic. Hoping to have an advantageous position in the region once things calm down, the company recognizes that the situation is worse than first thought, and decides to pull out most of its employees.

It might leave some presence in the region, but in the worse scenario it also would have to leave, so that in the final end the whole enterprise in the country could become a complete loss.^[8]

A small local shop sees hardship coming up especially after a similar shop in size and scope just opened for business close by. The owner decides to give up its independence and in order to survive sells the shop to a regional bigger-sized company not present in this locality. He might also decide to cooperate with the larger firm so as to get rid of the closer competitor. In this sense the shop owner would use the stratagem no. 36 in conjunction with stratagem no. 23: To ally with a remote enemy, in order as to attack the close one.

Defence against stratagem no. 36

Unlike with most of the other stratagems in the catalogue, the no.36 can be -and often is- used without another actor being involved. The main scope of this stratagem is not to trick someone out or gain the upper hand in a deal or situation; it is much more selfish, as its main objective is to save the person using it.

When used with the purpose of deceiving or tricking the opponent, there is relatively little the victim can do. The use of the stratagem is often a measure of last resort, and usually only applied when the actor has no other options left. It is also only the applicant who knows best when that moment has come and as soon as that point has arrived or been realized there is not much time to think the situation over. The opponent quickly becomes the victim and there is relatively little left what he can do at this point. The stratagem no. 36 has already been used and all that is left is for the victim to cope with the new scenario or situation.

Every scenario where at least two parties are involved, a transaction, a battle or even a relationship can create a situation where the stratagem can be used by one party. The most obvious and simple, and also only way, to prevent the counterpart to do so, is to gather as much information as possible about the other one. The more information is available about the situation and especially about the other person, the better are the odds to anticipate his actions and not to become a victim of the stratagem. Collecting information is the key, although the costs can quickly become prohibitive. Further, the situation is not like with other escape/flight stratagems or the rest of the catalogue, as the putting in use of no. 36 is usually associated with a note of urgency and thus hard to prevent or stand in its way.

One way to prevent the widespread use of stratagem no.36 is to set up specific rules and arrangements before entering into the ‘arena’ or any transaction. The more specific and comprehensive the rules are, the less likely will anyone employ stratagem no.36 for fear of getting caught and facing the consequences. The setting of a certain order with rules in order as to prevent or hinder the use of the stratagems is also a point made by Prof. von Senger:

Als staatlicher Gesetzesgeber sollte man für eine Rechtsordnung sorgen, welche die Wirtschaft nicht geradezu zwingt, in steuerlicher und anderer Hinsicht “wegzurennen”. ^[9]

Although this is of course true and indeed a right step to prevent escape/flight stratagems, an actor which reaches the point where he is contemplating whether to implement stratagem no. 36, is not prone to look at the rules of the order he finds himself in. He is faced with a precarious near future and has already passed the point where he weighs the costs of getting caught and facing the upcoming future. The actor is already a step further and it is virtually already decided that he is going to ‘flee’ or ‘escape’, in one form or the other.

The risks of stratagem no.36

When analyzing the risks of using stratagem no. 36 it becomes evident once again that this particular stratagem is somewhat different than the rest of the catalogue. As indirectly evidenced also by Prof. von Senger, who only mentions the risk of using the stratagem too early^[10], there is not much further risk involved. There also can only be that one factor, as all the other risk factors to be weighed when ‘escaping’ a situation, do not play a role anymore (as they might with no. 9, 11, and 21). The notion of using the stratagem no. 36 too early and thus missing chances or new opportunities is also faulty as it cannot be generalized for every scenario. Recognizing missed chances can usually only be done after the escape has taken place, when the actor has room and time to reflect and look back to analyze all his steps. In urgent scenarios a wait-and-see approach cannot be employed. The gaining-of-distance version allows a step-by-step approach and thus more time to see if other opportunities come up which should at least be contemplated.

An important factor not to be excluded and not yet sufficiently elaborated is the use of stratagem no. 36 as a tool of a strong rather than weak actor, one with good prospects to come on top of thing instead of facing a precarious future. As Prof. Senger explains, the catalogue can be splitted into two groups; the first 18 stratagems are usually used by the stronger and tactical actor, while the latter 18 usually by actors in a weaker position^[11]. Although no. 36 is certain to be used mainly by actors in hard situations, there are exceptions. Although daring, the cleverest of all tacticians can use no. 36 systematically with the purpose of bluffing, to confound the ‘enemy’ and maybe surprise him. In these scenarios the actor would not use 36. in order as to defend or save himself, but as part of a larger, more comprising tactical strategy to attack^[12]. In these cases no. 36 is usually used with one or more stratagems. This particular use of no. 36, albeit not the main and most common one, is nonetheless useful to demonstrate the risk involved using stratagem no. 36. Implementing it too early could just as well have disastrous consequences as using it too late.

Courage or cowardice?

It is hard to accept the notion that to run away from an uncertain and potentially precarious future has something courageous about it. Especially in the western culture, where the myths of a captain going down with his ship or of the action heroes fighting till the end, be it their deaths or the ones of all their comrades are widespread and typify courage and bravery. It is certainly understandable and most likely everyone would run if possible, but the act and the decision itself is not a message of courage.

As Prof. von Senger mentions, winners or good warriors have to be able to accept losses and defeats^[13]. The courage lies in the act of foreseeing defeat and the upcoming gloom, accepting it and choosing just the right moment to escape. There is something noble and respectful to accept ones defeat and understand how to best leave the stage. In economic terms, as already mentioned it is important to stay realistic and not hope for miracles in a certain setting, to accept losses and be able to quit. Cumulating losses is not a sign of courage when facing an impossible turn of events, being able to accept, learn from the situation and change course in time is. When it comes down to it, to put it bluntly, it is a matter of wasting more resources in hopeless situations, where every further waste adds to cowardice.

Conclusion

The stratagem no. 36 is the essence of the escape/flight stratagems. When applying this stratagem the actor is at the end or very near the end of his wits, he has come to accept the hopeless outcome of the situation and decides it is the wisest (easiest?) to escape. He is past the point of weighing the costs of ‘fighting’ or ‘fleeing’. Being stubborn and staying put would not lead to a solution but to a dead end^[14], with rising and cumulating costs. Whether the actor was clever and thought ahead strategically, he will have taken care of every eventuality securing himself a safe haven.

The stratagem can easily be illustrated by several practical examples, in everyday situations as well as economical ones. Seemingly rather trivial at first sight, the stratagem’s substance is very often ignored by managers and businessmen, refusing to ‘give up’ in hopeless cases, only to be stopped too late by outsiders. Although one can argue whether using the stratagem no. 36 is an act or decision to be regarded as an act of cowardice, panic or wisdom, it is usually understandable to most individuals - finding themselves in the same situation most people would take this action.

8. Appendix

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: Sales of full-length vinyl LPs (blue), cassettes (green) and CD's (red) in units 1989-1998

(source: http://www.icce.rug.nl/~soundscapes/VOLUME02/Trends_and_shifts_in_music_sales.html )

9. Bibliography

Literature:

VON SENGER, HARRO (1999): Strategeme Band 2, Scherz Verlag Bern, München, Wien.

VON SENGER, HARRO (2004): 36 Strategeme für Manager, Carl Hanser Verlag München

Wien.

Online Sources:

The ECONOMIC TIMES, August 17th 2005 : Unilever Nepal closes down, http://economictimes.indiatimes.com/articleshow/1202958.cms

GREENPEACE.ORG: The Bhopal Timeline, http://www.greenpeace.org/india/campaigns/toxics-free-future/the-bhopal-legacy/the-bhopal-timeline

NetMBA BUSINESS KNOWLEDGE CENTER: The BCG Growth-Share Matrix, http://www.netmba.com/strategy/matrix/bcg/

SPIEGEL ONLINE, August 25th 2005, SUCHER, JÖRN: Fabrik zu verschenken, http://www.spiegel.de/wirtschaft/0,1518,371393,00.html

SOUNDSCAPES.INFO, Volume 2, April 1999; TILLEKENS, GER: Trends and shifts in U.S. music sales (1997-1998), http://www.icce.rug.nl/~soundscapes/VOLUME02/Trends_and_shifts_in_music_sales.html

[...]

^[1] Von Senger, Harro (2004), 36 Strategeme für Manager, p. 26

^[2] Ib. p. 12

^[3] Von Senger, Harro (1999), Strategem Band 2, p.206

^[4] See http://www.spiegel.de/wirtschaft/0,1518,371393,00.html

^[5] See http://www.greenpeace.org/india/campaigns/toxics-free-future/the-bhopal-legacy/the-bhopal-timeline

^[6] See http://www.netmba.com/strategy/matrix/bcg/

^[7] See Appendix, Figure 1

^[8] See http://economictimes.indiatimes.com/articleshow/1202958.cms

^[9] Von Senger, Harro (1999), p.209

^[10] Ib. p.209

^[11] Von Senger, Harro (1999), Strategeme Band 2, pg.800-801

^[12] Ib. p. 798

^[13] Ib. p. 205

^[14] Von Senger, Harro (2004), p. 206