A Daoist perspective on leadership: reputation-building in Chinese SMEs

Purpose: This article examines the influence of Daoist nothingness on leadership in growing Chinese small and medium enterprises (SMEs). Daoism is based on a “letting-go” approach through maintaining inherent openness, which challenges goal-oriented and hierarchical approaches typical of Western and Confucian leadership theories. This facilitates the cross-fertilization of ideas related to the effective management of smaller firms. Design/methodology/approach: This study focuses on SME leaders in a group of 12 growing SMEs in the Shanghai logistics industry in China. Narrative and semi-structured interviews explored emerging aspects beyond the established model of leadership associated with reputation-building. This led to in-depth, thick descriptions, broadening our understanding of leadership and reputation-building. Findings: SME leaders follow nothingness by continuously adopting a letting-go approach which spontaneously fosters reputation-building. By maintaining inherent openness, nothingness functions as an enabling principle that mobilizes multi-beings leading to reputation-building in unintended ways. Research limitations/implications: A greater plurality of empirical and methodological contexts in Western and non-Western countries helps to understand the dynamics and intersection of Daoist nothingness, leadership and reputation-building. Practical implications: SME leaders recounted how they discursively practised nothingness for extended periods in their everyday practice. The study shows the significance of nothingness for SME leaders who aspire to grow their businesses by reputation-building among salient stakeholders. Social implications: Daoist nothingness provides insights into the distinctive approach of Chinese SME leaders and their relationships with local and distant stakeholders. By engaging in active non-action they relax pre-determined intentions and immerse themselves in the process of leading, where the connections between goals and processes are automatically animated. Such an approach differs from the top-down and goal-oriented approach to leadership adopted in many Western SMEs. Originality/value: This paper makes two theoretical contributions. First, it indicates the powerful influence of Daoist nothingness on leadership by drawing on the broader context of entrepreneurship in Chinese SMEs. Secondly, it enriches existing concepts such as reputation by endowment and reputation borrowing by demonstrating how Daoist nothingness silently fosters both local reputation and generalized reputation.