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WEEK 4: Management in Asia (West vs. East- What's Different? (West:,…
WEEK 4: Management in Asia
Why is understanding management in Asia important?
(GHG) emissions grew faster than the global average
§ Over the past decade, the region’s total greenhouse gas
predicted to double by 2030: > three billion
§ Rising middle class - size of the middle class in Asia
in the region
people’s general living standards have improved significantly
reducing poverty whilst education and health outcomes and
§ Over the past 35 years has been the world’s leader in
§ Accounts for 1/3 of total global FDI inflows: > 1/2 trillion USD
momentum, stands to deliver nearly 2/3 of global growth
§ Over the next four years, even with slightly declining
§ Accounts for 40 % of the global economy
Home to 4.4 billion people (approx. 60% of world population)
South & South-East Asia- The Engine
– PRC & Indian, the two most populous and
largest transition economies in the world
– Former (Japan) & current (PRC) greatest
competitor to US
– Tiger economies of Taiwan, S’pore, Hong
Kong & South Korea
– Global brands: Samsung, Toyota, Honda,
Hyundai, HSBC, Acer, Tata, Lenovo,
Alibaba
– Rapidly expanding skilled labour force –
both within as well as outside the region
West vs. East- What's Different?
West:
Individualist
– Early adopters &
proponents of
capitalism
– Short-termism
– Limited hierarchy
– Merit-based
– Shareholders – primary
stakeholder
East
Collectivist
– Reluctant followers of
capitalism
– Long-termism
– Steep hierarchy
– Seniority-based
– Multiple equally
important stakeholders
East- Asian Management Systems:
Support for long-term planning and risk
minimisation through diversification
§ Large private sector organisations are major
employers critical to each country’s national
economy
§ Closely linked with ruling political elite
§ Social & business relationships critical for success
§ Saving face
§ Historically, significant state intervention (e.g.
price controls)
§ Growing focus on IP protection
§ Underrepresentation of women in labour force
Impact of Cultural, economic & political factors on East- Asian Management
Confucianism
High morals, ethical conduct, and loyalty
to others are stressed
– Three key teachings - loyalty, reciprocal
obligations, and honesty - may lower
cost of doing business
§ Emphasis on education
§ Value hierarchy/seniority
§ Relationships important – are all?
§ Savings driven
Economic factors
Rising powerhouse of global
economy
§ Embracing capitalistic pursuits
despite limited political freedom
§ Privatisation of previously statecontrolled
entities
§ Growing income gaps within
countries
Political Factors
Tension within East-Asia due to shared
complex history
§ Close relationship between political and
business leaders, often men
§ Growing political influence in other regions
through business expansion (e.g. Africa)
§ Protection of IP – ownership & enforcement
§ Due to significant exposure to western
education (i.e. US, UK, Aus) future political &
business leaders may embrace more
‘western’ values
Conclusion
Asia, especially South & South-East Asia, as a
region is rapidly jumping into prominence due to
rapid economic growth and enhancement of
quality of life
§ While differing in many important aspects, there is
significant overlap between western and eastern
management systems
§ East-Asian Management systems have a number
of unique characteristics that must be understood
by anyone performing a managerial role or
engaging in business dealings in the region
§ Cultural, economic, and political systems have
and will continue to shape East-Asian
Management systems