Three decades of unprecedented reform has created an economic miracle in China and made it the second largest economy in the world. But many Chinese enterprises, specially the medium- and small-sized ones, are still battling to improve corporate management.

The most important thing for Chinese enterprises to do is to incorporate management into Chinese society and culture, says Zhou Dajiang, author of Dangshi Shangjian (Business Wisdom as Reflected in the Communist Party of China's History, 1921-1949).

The 41-year-old independent research scholar, who graduated from Shanghai University of Finances and Economics and worked for a realty company for a short time, says: "Chinese enterprises should especially learn from the wisdom of the Communist Party of China (CPC.)" The Party has expanded from just more than 50 members in 1921 to 80 million today. It formed a growing army of members and finally founded the People's Republic of China (PRC) in 1949.

Zhou compares today's enterprises with the CPC before 1949 because he sees many similarities between the two. The Party then needed to lay out the correct and clear guiding principles, while enterprises today need to devise a correct, clear and practicable strategy. The CPC had to unite its members and army's strength and infuse in them the will to fight and succeed. Similarly, companies today need to maneuver their staff and encourage them to give vent to their creativity.

Before 1949, the CPC needed to expand the Red Army and its base areas, just like companies have to explore and gain larger shares of market today. If before 1949, the CPC needed to establish its image as the vanguard of the people, enterprises today need to mold their image and brand.

There are more similarities between the pre-1949 CPC and today's enterprises, Zhou says. The Party established the most successful management system in China's modern history. From 1921 to 1949, it had increased its members from 50-plus to about 4.5 million and expanded its army from less than 1,000 in Jinggang Mountain, Jiangxi province, in 1927 to about 4 million after winning the War of Liberation in 1949.

Three periods in the CPC's journey, from its inception to 1949 when it defeated the Kuomintang Army and founded the PRC, could correspond with the three business periods of an enterprise. The Jinggang Mountain period (1927-1929), Yan'an period (1935-1948) and the War of Liberation (1947-1949) correspond with the startup, base-cementing and rapid expansion periods of an enterprise, Zhou says.

To deal with dispirited troops, death of soldiers, and poor land and supply during the Party's Jinggang Mountain period, Mao Zedong adopted a series of measures including setting up Party branches in the Red Army, strengthening Party discipline and redistributing land among farmers. Chinese enterprises should learn from those measures to make more efforts to get brand recognition and to foster a culture of belonging among their employees, just as the CPC did to establish a system of administration, finance, medical care and education.

In Yan'an, Shaanxi province, the CPC faced several difficulties, including shortage of supplies, barren land and military threat from the Kuomintang Army as well as the Japanese invaders. What helped the Party overcome those challenges is innovative management, Zhou says.

He emphasizes four major management achievements of the CPC during the Yan'an period: thorough lectures that galvanized all CPC members into sharing the same spiritual goal of pursuing socialism and national liberation, efforts to make the management mature and effective, the thrust to make party organizations at all levels replicate the management system, and building a team of high-caliber leading cadres.

If those measures are interpreted commercially, an enterprise should learn to develop a common goal or a core value shared by all its staff members. Just like the CPC's Red Army (People's Liberation Army after World War II) fought for the same goal of socialism and national liberation, company managers should make employees believe that the organization belongs to all of them instead of only the bosses.

Based on this premise, an enterprise can increase its size and market share just like the People's Liberation Army did by incorporating 1.77 million soldiers of the Kuomintang Army during the War of Liberation, Zhou says.

In stark contrast to the CPC, Kuomintang was corrupt and lacked discipline. In 1939, Chiang Kai-shek, then head of Kuomintang, said his party's spirit was disappearing, discipline was slack, officials were fighting for personal interests and power, shirking responsibility and ignoring the Kuomintang's interests as a whole, and its members didn't care about ordinary people. Zhou says that this phenomenon can be seen in many enterprises today.

"Without an officially-guided core spirit, different thoughts will pervade an enterprise and lead to selfish, short-sighted decisions." Giving examples, he says some enterprise bosses' decisions may be offset by subordinates' countermeasures. Those who work hard get little in return whereas obsequious staff members are easily promoted. And under the slogan of team spirit, small factions are formed, which hinder cooperation among employees, teams or departments.

To develop a core spirit and maneuver employees, bosses have to be more democratic. They should stick to principles they lay out, work as hard as the rest of the staff members and become a part of the whole. Only by doing so can they instill a sense of belonging among the entire spectrum of employees.

This is what the CPC leaders did before 1949. Kuomintang officials, in contrast, were notorious for embezzling public funds and usurping even their soldiers' shares. The Kuomintang Army lost the War of Liberation despite being better equipped because its leaders had lost the trust of Kuomintang members and soldiers.

Zhou, who has been reading Mao Zedong's works since his middle school days, says he wrote the book "in pursuit of truth".

"Perhaps enterprises have not valued the CPC's wisdom as much as Sun Tzu's The Art of War, but ultimately they will realize its importance."