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Management in Asia: Week 4 Management (East Asian Management Systems…
Management in Asia:
Week 4 Management
Why is understanding management in Asia important
§ Home to 4.4 billion people (approx. 60% of world population)
§ Accounts for 40 % of the global economy
§ Over the next four years, even with slightly declining momentum, stands to deliver nearly 2/3 of global growth
§ Accounts for 1/3 of total global FDI inflows: > 1/2 trillion USD
§ Over the past 35 years has been the world’s leader in reducing poverty whilst education and health outcomes and people’s general living standards have improved significantly in the region
§ Rising middle class - size of the middle class in Asia predicted to double by 2030: > three billion
§ Over the past decade, the region’s total greenhouse gas (GHG) emissions grew faster than the global average. Sources: IMF, UNCTAD, World Bank, DFAT
Differences in Management
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
Cultural Factors
§ 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 state controlled 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
https://youtu.be/WsQ7ysVt-0A