International Journal of Social Science and Humanity, Vol. 4, No. 5, September 2014 The Application of Confucius Practice in Management at the Largest Agriculture-Based Conglomerate Group of Companies in Thailand Athapol Ruangkanjanases, Narumon Posinsomwong, and Chenin Chen It is believed that traditional Chinese families, wherever Abstract—This study is a case analysis of the application of they are, always uphold the Confucian concept in leading Confucius practice in management specifically pertaining to the their lives. Confucius is a philosopher who lived during the management practice of Charoen Pokphand Group of early times in China. He had since influenced the Companies. CP Group is one of the leading companies in consciousness of Chinese people, making them more adept Thailand, in which its operation started centuries back, and is run by a Chinese family. Confucius has influenced much of the with the brilliance of his teachings and philosophies such that Chinese consciousness such that his teachings and philosophies even at this present moment it is evident among their are practiced from then until now, and have been applied in individual practices and could be gleaned through the many different areas including business. CP Group as it is management system of many of Chinese-ran companies. largely a Chinese family business adheres to Confucian Confucius’s practices always emphasize on how relationship philosophy where it maintains hierarchy in its organizational of people in society should be, and how morality should lead structure, practices leadership by example, and sustains relationship to society through corporate philanthropy. people to have better lives. The CP Group may have been no exception on this matter. Index Terms—Confucian practice, management, governance, Their successes and their long history of business operation social ethics, paternalistic leadership in Thailand may also have been guided by the immense work of Confucius. Thus, this study is guided by its three main objectives: NTRODUCTION I. I 1) To verify the application of Confucian practice in the In recent years, Asian economy has spurred up its management of CP Group. performance to compete head on with other economies 2) To examine how the Confucian practice works in around the world. With positive notes conferred by management and brings the group to success. economic analysts, the upcoming years will be robust for 3) To explore more about the way the Confucian practice Asian economies with China leading the pack, and Japan’s can be applied in management. transformation to a new governmental administration is As there are several books that mentioned about expected to bring growth to its dwindling economy. The Confucius’s teachings and practices as written by his anticipated economic cooperation among the Southeast disciples [1]. This study only emphasized on the business Asian nation in the next two years is also expected to application of Confucius’s practices as observed and stimulate better economic activities among the region. followed by the CP Group. Thailand has been considered as one of the main players on this economic endeavor thus local Thai companies are gearing up themselves towards this transformation. II. LITERATURE REVIEW One of the companies which may play an important role on this matter will be the Charoen Phokphand Group of A. Confucius’s Philosophy Companies, which is considered one of the leading local Confucius or Kong Fu Zi in Chinese (551-479 B.C.) was a companies in Thailand. Established in early 1920s by thinker, philosopher, teacher and politic figure. He lived in Chinese immigrant brothers, the once small vegetable seed the period of Warring States (403-221 B.C.) in which shop has grown to be as what is now known as the CP Chinese states fought each other’s. It was a time that politic, Group of Companies which operates various businesses society and morality was disordered [2]-[4]. that range from agriculture, telecommunication, His doctrines can be categorized into three main groups, petrochemical, automobile, retail, property development which are related to governance philosophy, social ethics among others all over Thailand. Their management system philosophy, and education [1], [5]. The relationship among has long been considered as the keystone to their success, and these three groups is considered as development roots to it is on this purpose that this study was conducted. bring prosperity in term of mind, body and society to human being. Confucius’s philosophy diagram is shown in Fig. 1. Manuscript received August 31, 2013; revised October 30, 2013. This B. Government Philosophy work was supported in part by Chulalongkorn Business School, Chulalongkorn University. In order to make society to be discipline, leader must be a The authors are with the Chulalongkorn Business School, Chulalongkorn sample of high standard of virtues. The very first thing to do University, Thailand (e-mail: [email protected]; is Zheng Ming, meaning Rectification of Name [6], [7]. If a [email protected]; [email protected]). DOI: 10.7763/IJSSH.2014.V4.378 354 International Journal of Social Science and Humanity, Vol. 4, No. 5, September 2014 person claims a title for himself in order to be in one of the Li or Propriety – It means doing everything properly. hierarchical relationship, then he must have the virtue high There are 4 dimensions of Li: Rites, Manners, Ethical enough to that particular title in order to be suitable to be in behaviors and Culture. Confucius thinks that Ren is the basic that title. Therefore, Confucius believes that if the ruler’s factor of having Li. Li is used as a mechanism to control and behavior is rectified, the governed people will then follow his adapt Ren to be in proper way [8]. virtues [5]. Yi or Righteousness – It means doing things that are legitimated to do. It is the right actions that are from benevolent heart as Mencius said that Ren is the heart and Yi is the path. The people who are righteous in their hearts don’t think of how correct of their actions would be because their hearts are already in the right place. Righteousness doesn’t involve with any benefits to oneself but would do for the good sake of others [10]. D. Education Confucius believes that education will bring Zhi or Wisdom, which will change people’s behaviors and encourage them to live morally and harmoniously with other people [11]. There are three learning fundamental from Fig.1. Overall picture of Confucius’s philosophy. Confucius. First is to learn by experience. It is different from People must know their roles and duties of being in their the Western’s way focusing on external environments. On titles [7]. Confucius also introduces the Rectification of the other hand, Confucius focuses on experience from human Name in term of the Five Relationships (king and citizen, relationships through the following characters, which are father and son, husband and wife, elder and younger, friend gentle, kindness, respect, simple, ease and honor. A person and friend), which support the idea of the rectification [6], with these characters will be pleased and welcomed by others. [8]. It is knowledge derived from good relationships. Next is to Governance will be smooth when the rulers are moral, learn about cultures and rites. These cultures and rites such as justice and have virtues. Confucius believes in these virtues history, poet, arts and etc. are used as medium to learn how to that will be more effective than orders [7]. In order to make it behave morally [1]. People have to be able to classify effective, Confucius also recommends 3 factors to support cultures and rites whether they are right or wrong. The the assumption [8]. decision will be based on the fact that the cultures or rites First is mutual understanding about moral of both ruler and support or lead to harmonized society. Last is to admire, people. If both sides do not share the same understanding, compare with and adapt from others. People must have open then acceptance from the people will be hard to happen [8]. heart to integrate with others in order to get the perfect beauty. Wisdom or Zhi is required in order to achieve the same With experiences, people will be able to pick the right understanding in this stage. cultures and rites [8]. Second, people must be able to recognize that the rulers The real objective of Confucius is to create Junzi or have these virtues and have faith in it. Trustworthy or Xin, Gentleman [5]. Confucius categorized people into groups by then, is the most importance in this stage. Being trustworthy using 2 systems. First is the social position such as prince, means that when the leaders said something they will do minister, father, son, brother and etc. Second is the quality of according to what they said that they would do [9]. mind to measure people in term of knowledge, virtues and etc. Hierarchical structure- the Five Relationships and the roles Under this system, two ends are Junzi and Xiaoren [7]. and duties of people in society create social organization, The most important category is Junzi or Gentleman. Junzi which means organizing people. It is to keep people in the is a person who has studied and sought for moral quality harmonious relationships when a lot of people living together. through personal development or self-cultivation. This will Confucius focuses on family and the responsibility to the bring order and harmony to society and the advancement of whole society. If the society is secured in peace, the the mankind at the end [3]. The growth of the moral quality individual will be able to perform their functions well. In depends on level of education. Then people with moral return, the society will be effective and peaceful [9].