lecture 2 - chapter 2 3 student version 2010

8/6/2019 Lecture 2 - Chapter 2 3 Student Version 2010

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Chapter 2

Waging War ()

UBMM1011

Sun Zi¶s Art of War and Business Strategies



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Chapters

1. Detailed Assessment and Planning () 2. Waging War () 3. Strategic Attack () 4. Disposition of the Army () 5. Forces ()

6. Weaknesses and Strengths () 7. Military Maneuvers () 8. Variations and Adaptability () 9. Movement and Development of Troops () 10. Terrain () 11. The Nine Battlegrounds ()

12. Attacking with Fire () 13. Intelligence and Espionage ()



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Chapter 2: Waging War ()

Chapter Outline

� Importance of swiftness

� Using resources

� Waging war � Business application: Speed and resource planning



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Importance of Swiftness

As a general rule, for military campaign, one would need 1,000speedy four-horse chariots, 1,000 heavy wagons, and 100,000fully equipped and combat-ready soldiers.

~ Sun Zi



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� Moving the army requires thousands of vehicles.

� These vehicles must be loaded thousands of times.

� The army must carry a huge supply of arms.

� You need ten thousands acres of grain.

�

This results in internal and external shortages.� Any army consumes resources like an invader.

� It uses up glue and paint for wood.

� It requires armor for its vehicles.

� People complain about the waste of a vast amount of metal.

�

It will set you back when you attempt to raise tens of thousands of troops.

~Translated by Gary Gagliardi



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� Make no assumptions about all the dangers in using military force.

� You want to make good use of war.

� Do not raise troops repeatedly.

� Do not carry too many supplies.

�

Choose to be useful to your nation.� Feed off the enemy.

� Make your army carry only the provision it needs.

~Translated by Gary Gagliardi



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Using resources

The wise general would ensure that his troops

commandeer the food supplies of the enemy.

� Consuming one cartload of provisions of the enemy istantamount to twenty cartloads of your own.

� Similarly, consuming one picul of the enemy¶s fodder istantamount to twenty piculs of your own.



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Using Resources

� In order to kill the enemy, the troopsmust hate him.

� For the troops to plunder theresources of the enemy, they must bemotivated by material rewards.

� Therefore, the first person whosucceeds in capturing ten chariots ina chariots battle should be rewarded.



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Using Resources

� Remove and replace the banner of theenemy with yours and use the capturedchariots together with yours.

� Treat the captured soldiers well (so thatthey can be used). ± This is what is meant by conquering the enemy

and becoming stronger in the process.

± In war, it is better to go far swift victories rather

than engage in prolonged military campaigns.



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Waging War

"He who wishes to fight must first count the cost.³

~ Ts`ao Kung.

"Lengthy operations mean an army growing old, wealthbeing expended, an empty exchequer and distressamong the people; true cleverness insures against theoccurrence of such calamities." ~ Wang Hsi

"So long as victory can be attained, stupid haste ispreferable to clever dilatoriness." ~ Chang Yu



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The High Costs of Waging War

� A protracted (prolonged) military campaign will bringundesirable consequences:

1. the troops at the battlefield demoralized and psychologicallyand mentally exhausted, poorer fighting spirit and can easily

get sickness and diseases.

2. the citizens at home ± inflation would arise and depleted thecitizens wealth. More taxes and tolls would be imposed onpeople to finance the war. Sun Zi argued that people wealthwill be reduced by 70%.

3. the state ± depletion of national wealth and resources,supplies and provisions. Sun Zi estimated that nationaltreasury would shrink by 60%.



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Example: Vietnam War (1960s-70s)

� American troops had to be rotated regularly to preventtroops from being too exhausted.

� Additional and compulsory military recruitment wasintroduced, causing greater resentment by public.

� More and more Americans began to question thepurpose (& cost) of the war.

� Estimated that over 2 million people (on both sides)

were killed and injury or disablement of many millionsof others.



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Example: Israeli-Palestinian conflict

� After 18 months of violence, in April 2002, Israeli wasreported to use US$2.72 billion to finance the

economy.� Destructive consequences to Israel:

± Increase of tax to 28%, a wage freeze, introduction of capitalgains tax, cuts in welfare payment that includes of pensionsand childcare support.

± Interest rates were raised. ± Unemployment rate went up to 30% in April 2002.

± Domestic economy shrunk by 50%.



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6 Strategies to End War Quickly

1. Commandeer (seize) the resources of the enemy.

- To weaken the enemy.

2. Instill the troops with hatred for the enemy so that they

would not hesitate to strike at the enemy.- Ex: suicide bombers, kamikaze attackers.

3. Motivate the troops with significant rewards obtained bypilfering the resources of the enemy.

- During WWII, Japanese army was repeatedly promised of great materials things available in China.



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6 Strategies to End War Quickly

4. Encourage risk-taking behaviors in the troops withimmediate & noticeable rewards.

5. Confuse the enemy by applying the technique of

deception.6. Treat the prisoners-of-the-war well (to win their loyalty).

- To convert the prisoners (enemy¶s army) as spies.



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USS Bunker Hill hit by kamikazes piloted by Ensign KiyoshiOgawa (see below) and another man on May 11, 1945. 372

personnel were killed from a crew of 2,600.



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Business Application

Its not the BIG that eat the SMALLits the FAST that eat the SLOW

- J. Jennings



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Financial Planning

� FP: The need to analyze short-term and long-term money flows toand from the firm.

� Objective: Optimize the firm¶s profitability and make the best use of its money resources.

� Economic realities of new ventures: ± Need to budget in detail before setting up any business.

± Need big start-up capital.

± Too little profit destroys thousands of new enterprises (Remember : 80%of small business go out of business within their 2 years!!!)

± Consider of choosing close, inexpensive and small targets (nichemarkets)



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Cost of Doing Business

� Business Operating Costs (Expenses):

± Capital Costs, Fixed Costs, Variable Costs

± supply of raw materials.

± hiring and retaining high quality and reliable employees. ± operating expenses ie rent, salaries, supplies, utilities,

insurance, advertising cost etc.

� Goal: To minimize your business expenses to necessities of you want more profit.

± MIDA¶s article: Costs of Doing Business in MALAYSIA(WBLE)



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Speed & Business Expenses

Y ou cannot move quickly if you plan large, expensive

ventures. This approach is deadly. ~ Gary Gagliardi



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Employee¶s Reward

� Reward is a symbol of success, areinforcer and motivator, a reflectionof employees performance.

� Reward will help to improve

employees¶ productivity.

� Types of Reward:

± M onetary rewards ie salary, profitsharing, bonuses, stock options.

± Non-monetary rewards ie larger office, company¶s car, flexible workhours, training, pleasant workenvironment, and sabbaticals leave.



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Non-monetary incentives desiredby different generations.

Mature Workers-Flexible schedules, Part-time hours, Temporary hours

Baby BoomersRetirement planning, Flexible retirement options, Job training,

Sabbaticals

Generation X'ersFlexible work schedules, Professional development, Feedback,Tangible rewards, Work environment

Generation Y'ersFlexible work schedules, Professional development, Feedback,Tangible rewards, Work environment, Attentive employers

Source: http://www2.inc.com/search/16431.html (Nelson, 1999).



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Chapter 3

Strategic Attacks ()

UBMM1011

Sun Zi¶s Art of War and Business Strategies



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Chapter 3: Strategic Attack ()

Chapter Outline

� Aim for the entirety (intact)

� 5 determinants of victory

� Know the other side, then know yourself � Business application: Importance of leadership,

understanding of strengths & weaknesses



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Aim for the entirety

If general, when waging war, capturing a whole nation

intact is a better strategy; to shatter and ruin it is aweaker option. ~ Sun Zi



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Aim for the entirety???

� Capturing a whole division intact is abetter strategy; destroying it is a weaker option.

� Thus, to fight a hundred battles and towin a hundred victories is not a reflectionof the most supreme strategy. ± Think of the co$$$t and damage$ of WAR ie

financial, weapons, food supplies, lost of

army, death of civilians etc. ± Think of the co$$$t of redeveloping the

damaged infrastructure, buildings, hospitals,schools, telecommunication system etc.



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� The ability to subdue the enemy without any battle is theultimate reflection of the most supreme strategy.

± The most supreme strategy is to attack the plans and strategiesof the enemy.

± The next best strategy is to attack relationships and allianceswith other nations.

± The next best strategy is to attack his army (directly).

± The worst strategy of all is to attack walled cities.

(Attack walled cities when there are no other alternatives)



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Psychological victory is far superior to physical dominance.

Ultimate step:

� The winners must win the hearts and minds of thepeople they have conquered (harmonious relationshipbetween the rulers and ruled).

� Still, need to avoid in protracted military campaigns.



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Example of diplomacy (non-direct) approach in WAR:

� The NATO alliances was formed after WWII ± Its strategic purpose is to block the expansion of Soviet Union

and its East European allies.

� In 2003, CIA (of USA) tried to disrupt the alliancesbetween Saddam Hussein and his generals by usingpsychological operations (they lure Iraqis generals defect

Saddam).



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How to predict victory???1. He who knows when he can engage in battle and

when not to do so will win (sense of timing ).

2. He who understands how to deploy large and smallforces (according to the battle situation) will win

(judgment ability).3. He who is able to unite himself with his officers and

men as one mind, spirit and purpose will win (motivateand unite army).

4. He who is proactive and well-prepared and awaits hisunprepared enemy will win (proactive).

5. He who is capable and does not have to content withinterference by the ruler will win (ability to exercise full command).

5 Determinants of Victory



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How to predict victory???1. He who knows when he can engage in battle and

when not to do so will win (sense of timing ).

2. He who understands how to deploy large and smallforces (according to the battle situation) will win

(judgment ability).3. He who is able to unite himself with his officers and

men as one mind, spirit and purpose will win (motivateand unite army).

4. He who is proactive and well-prepared and awaits hisunprepared enemy will win (proactive).

5. He who is capable and does not have to content withinterference by the ruler will win (ability to exercise full command).

5 Determinants of Victory

Superior Leadership Skills



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Importance of Leadership

�

The general is like the guardian of the nation.� If the guardian is a thoughtful and detailed person, the

nation will be strong and mighty.

� If the guardian is full of character flaws, the nation will beweak and vulnerable.

*The general must master command and the nation must supports general.*



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Importance of Leadership

The general¶s position is made more difficult bypoliticians & country¶s ruler in THREE different ways:

1. Interfering with military command and movement whenhe has no knowledge of such matters.

2. Interfering with the administration of the army when heis ignorant of such affairs.

3. Interfering with military authority and responsibility whenhe knows little about them.

This could confuse the army¶s officers.



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Know The Other Side,

Then Know Yourself

He who knows the other side (the enemy) and knowshimself will not be defeated in a hundred battles.~Sun Zi

� He who does not know the enemy, but knows himself =have an even chance of victory or defeat.

� He who does not know the enemy & himself = bound tobe defeated in every battle.



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Summary

� Strategic attack defines the source of strength as unity,not size, and the five ingredients that you need tosucceed in any war.



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Business Application

To venture into businessis to make MONEY.



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William Henry Gates III(Microsoft)

Ingvar Feodor Kamprad(IKEA)

Warren Edward Buffett(Berkshire Hathaway)

Corporate Leaders



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Lim Goh Tong(Genting Group)

Tony Fernandes

(Air Asia Berhad)

Najib Razak(Prime Minister)

Malaysian Leaders



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Transfor mational Leadership at P&G

Procter & Gamble CEO

A. G. Lafley practices

transformational leadership by

forming and communicating a clear vision and modeling that vision, he

has transformed the consumer

goods company in recent years.



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Rules of Competing

� If you are 10 times bigger than your opponents, isolateyour competitor.

� If you are 5 times bigger, go directly after their business.

� If you are 2 times bigger, divide a competitor¶s market.

� If you are smaller, defend a small segment.

� If you are much smaller, move from niche to nichemarket.

Note: Small companies usually are not powerful.

~ Gary Gagliardi



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Business Competition

� A company should avoid competing in the openfor market share, especially if :

± The product is identical or not differentiated (i.e.carbonated drinks, tea, coffee, milk, gasoline).

± The market is not growing or obsolete product (i.e.Polaroid, sewing machine).

� Instead, company should consider for diplomatic approach:

± Merger & Acquisition (M&A) ± Joint Venture (JV)



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Business Competition

Expansion Through Merger or Acquisition (M&A):

� Solid foundations and sound financial situations are thefactors vital to planning any expansion of the company.

� Only advance when the situation is favorable (ie it

enhance company¶s market position, increase marketshare, or improve company¶s product/service).

� Keep the entire future expansion program in secret.

� Before expansion, analyze the new project by usingmethod of Measuring, Estimating, Calculating andComparing in order to ensure victory.



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Joint Venture (MNC + Local Bank)



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Offensive Attack!!! How???

� Steal away competitor¶s key employees??

� Steal competitor¶s trade secret??



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Offensive Attack!!!

Example: Computer industry

� Japanese have invested heavily over the years toestablish their market dominance.

� They have out-invested the Americans since 1981.

� As a result, starting 1985, Japanese¶s share of worldchipmaking tools and chip production has surpassed US.



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FIVE Things You Must Know

About Business Success!

1. Success comes from knowing what needs to be doneand what you can leave undone.

2. Success comes from focusing your limited resources onmarkets of the appropriate size.

3. Success comes from making the organization¶s missionclear.

4. Success comes from focusing on problems that othersoverlook.

5. Success comes from providing leadership andeliminating the obstacles that interfere with your abilityto compete.

~ Gary Gagliardi



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The Advantages of SIZE

� It is quite difficult for smaller company to take on a larger company from the same industry, especially if theproduct is fairly homogeneous (ie carbonated drinks/ mineral water ).

�Therefore, this smaller company usually needs to followindustry leader (ie 4 star hotel vs 5 star hotel).



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Other Business Strategies

(Deceptive Tactics)

� Luring and attracting key personnel away from thecompetitor¶s firm using either higher salaries, fringebenefits, or both.

� Spreading rumors about the poor performance of competitor¶s firms so as to lower morale of their employees.

� Preventing the access of technology or technologicalknowledge to competitors.



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- The End -

lecture 2 - chapter 2 3 student version 2010

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