The New Wangdao: Developing Leadership, Cultivating Entrepreneurship from Communities

Author

Stan Shih

Pan-Acer Business Family

Biography

Stan Shih is a member of the founding board of the Center for Asia-Pacific Resilience and Innovation. He is also chairman of the StanShih Foundation and founder and honorary chairman of Acer Group, now the Pan-Acer Business Family. Throughout his life and career, he has been a social entrepreneur. Since January 2017, he has served as the honorary chairman of Major League IoT to promote the rapid transformation of Taiwan’s industry to face critical challenges in the future. He is a strong supporter of arts and technology development. He is currently the chairman of Cloud Gate Culture and Arts Foundation, the head of Taiwan Connection Fun Club and One Song Orchestra Fun Club, the convener of the Cultural Tech Alliance, Taiwan, and the chairman of CT Ambi Inc.

Mencius developed the Wangdao, or “the king’s way,” 2500 years ago. He proposed that “the people are the most important, the state comes second, and the ruler is the least significant.” In today’s context, this philosophy can be used as a foundation to think about entrepreneurship. I reinterpret it as the New Wangdao, or the New Leader’s Way, wherein leadership places communities, not individuals, at the center of value creation.

The New Wangdao style of management reimagines entrepreneurship by breaking free from usual top-down management methods and simulating value cocreation. By introducing foundational ideas of New Wangdao and providing case studies of Acer, Porrima, and Cruise10 ventures, this memo demonstrates how New Wangdao operates in practice from a local venture to a global enterprise and how I have expanded it to my own personal social responsibility.

Traditional management versus New Wangdao

Traditional leadership centralizes decision-making, focusing on the CEO and shareholders. However, this top-down approach often clashes with individual interests, creates disagreements, and hinders teamwork. By contrast, the New Wangdao reframes leadership as stewardship built on three values: creating value, balancing interests, and ensuring sustainable development. These values steer away from the concepts of “winner-takes-all” and imbalance between the rich and poor and guides leaders—individuals or businesses—to communicate, build consensus, and commit to the common good. Indeed, high-quality products and services take an entire ecosystem to function, including talented individuals, different business units, and external partners.

At its core, the New Wangdao is about managing the entire ecosystem through cocreation while encouraging interdependence. It is how a company fosters symbiotic common interests by investing in the shared goals of both the business and individuals. Every contributor has a stake both in ownership and ideas. A CEO or headquarters in this sense is not a boss but a partner. In this paradigm, no single party would, for example, be blamed for “losing the boss’s money”; if mistakes are made, everyone shares the loss, with the CEO simply taking on a bigger share. Employees are thus willing to give their best to the company, as it benefits their own interests.

The New Wangdao incentivizes all members to share both responsibility and rewards, thereby cultivating in employees the sense that they can thrive in partnership with the company. This approach benefits both the employees and the company, the headquarters, and the collaborating suppliers and partners.

Entrepreneurship rooted in shared ownership

Power concentration can make a business look strong, but Wangdao and cocreation can make that strength last. A business can only grow stronger when it is collective and synchronized.

Acer has applied the New Wangdao from the beginning, when we were collecting capital. After graduating in 1971, I led a team to develop Taiwan’s first calculator, which used a 4-bit microprocessor. Five years later, my cofounders and I established Acer to bring US microprocessor technology to Taiwan. At that time, venture capital did not exist in Taiwan, and few understood microprocessors, so I turned inward to my employees: I invited them to invest 20% of their salary and 50% of their bonus over 2-year installments. Asking employees to fund their own company was a fresh financing model. It also showed my faith in cocreation through the New Wangdao.

These investing employees could voice their perspectives as shareholders and grow with the company. In this model, the employees are shareholders, and their benefits align with the company’s mission, leading them to give their best. The value of employees flows smoothly into the organization’s internal value chain. Acer’s Stock Ownership Program remains active today. Even though stock ownership has changed, the idea of shared ownership remains: Employees are cocreators of the business’s future.

Scaling cocreation and interdependence

As a company expands, it must adapt from a horizontal control structure to a vertical operative structure. When Acer expanded, we applied the New Wangdao by building a “global brand with a local touch.” Instead of strict hierarchical control, we opted for a decentralized model. Headquarters only oversees the brand name and research and development (R&D) support. Key decision-making processes were handed over to local shareholders. A process documented by the Harvard Business School in 2001 illustrates how cocreation and interdependence can be designed into a company’s strategy.^[i]

Acer treats each regional business unit (RBU) as a separate “client” of headquarters. Each RBU handles its own strategies, risks, and outcomes. Acer’s headquarters does not “invade” local operations or decisions from afar but only provides brand support and R&D resources. This structure allows the local units to boost innovation tailored to local needs.

With a global brand such as Acer’s, efforts must scale to the entire company. Acer encourages interdependence by creating policies that trigger symbiotic common interest between units. For example, while RBUs focus on sales and distribution, Acer also maintains strategic business units (SBUs), which focus on R&D and manufacturing. Both RBUs and SBUs need each other. To further encourage local employees to contribute to the global chain of Acer, the company also introduced global key performance indicators, in which 50% of performance evaluation depends on global sales. Therefore, employees can pursue local innovation but also work toward a global shared goal and have influence in the company.

In a traditional hierarchy, communication and innovation are rigid and slow because they move through multiple layers. A scalable ecosystem can only function effectively and sustainably when each unit and employee does what they do best. Acer policy at the unit-based and employee-based levels represents cocreation and interdependence in the New Wangdao through which innovation can be localized, move fast, and become more effective.

Transitioning from business innovation to global influence

I revisited the idea of New Wangdao in 2016, when I created an idea for Taiwan: similar to Silicon Valley, I imagined Taiwan as a Si-nnovation Island within an oriental Si-vilization (silicon civilization). Taiwan led the world in computers and semiconductors, and zero-emission transportation will be the next big breakthrough. Innovations in this regard include the Porrima ship and its electric vehicle counterpart, Cruise10. These projects utilize solar and hydro energy and are constructed using recyclable materials. However, commercializing these ideas has not been easy. It requires balancing comfort, stability, cost efficiency, and sustainability. And this requires skills and teamwork with the right vendors and partners.

In 1991, an article on vertical disintegration in the Harvard Business Review described the computerless computer company and fabless semiconductor firm.^[ii] For these firms, the use of hardware made globally can reduce manufacturing costs, enabling them to focus on their own strengths. By outsourcing manufacturing, Porrima and Cruise10 became a ship-less ship company and a car-less car company, respectively.^[iii] Ship and vehicle manufacturing does not occur in Taiwan but is sourced from abroad, with the Taiwan offices providing core components and key technology by overseeing design, quality, and branding, similar to Acer’s model. This model reflects the New Wangdao principles of stewardship and cocreation. By outsourcing manufacturing, the zero-emission ecosystem can grow, and other countries can expand their shipbuilding industry capacity and cocreate with Taiwan in the field of sustainability.

Conclusion

I have continued to promote the New Wangdao as I have focused on my personal social responsibility by helping Taiwan develop the next generation of global leaders.^[iv] Together with Professor Chen Ming-Jer, a chaired professor at the Darden School of Business, University of Virginia, we developed a program to train global Chinese leaders to focus on cocreation and mutual prosperity: the Wangdao Management Program.

Taiwan’s economic structure, wherein 95% of its gross national product is related to global markets, has made Acer’s model of cocreation and interdependence possible. Businesses not only in Taiwan but all over the world can scale with globalization, cocreating with local partners without the traditional top-down approach. This type of management will likely grow as supply chains become more interdependent for cost management. Acer’s success in cocreation with interdependence shows that innovation is not a zero-sum game. Any entrepreneur—individuals, businesses, or countries—can drive sustainable innovation when responsibilities and risks are shared.

^[i] Bartlett, Christopher A., and Anthony St. George. “Acer America: Development of the Aspire.” Harvard Business School Case 399-011. Boston: Harvard Business School Publishing, January 1998. Revised April 2001.

^[ii] Rappaport, Andrew S., and Shmuel Halevi. “The Computerless Computer Company.” Harvard Business Review 69, no. 4 (July–August 1991): 69–80. https://hbr.org/1991/07/the-computerless-computer-company.

^[iii] “About,” Porrima Inc., accessed November 26, 2025,https://www.porrima.comcarryout their.tw/about; “About Us,” Cruise10 CO., LTD., accessed November 26, 2025,https://encruise10-ev.com/about/2.

^[iv] Service for Executive Education Development (SEED), “‘2015 Wangdao Management Program’ Delivers the Integrated Thinking of Chinese and Western in ‘Wangdao’,” College of Management, National Taiwan University, September 21, 2015, https://management.ntu.edu.tw/news/detail/sn/255.