Please enable JavaScript.

Coggle requires JavaScript to display documents.

Week 4: Management in Asia (Impact of cultural economic, & political…

- - - - For any organisation it makes sense to understand how people think in this region, what of sort of consumer practices do they have, how do indigenous organisations within this region facilitate those consumer needs, do they do something different, do they employ people in a different way and etc
    - - It's collectively found within the Asian continent which means that they're significant players whereas economic output is concerned at a global level.
    - - According to the International Monetary Fund, some of the tiger economy as well as PRC's has slowed down economic growth over the past few years compared to the really high levels that was found ten years ago, it still stands to deliver almost 2/3 of global economic growth, so without this region the world as a whole will not grow at a significant rate, so it's important to ensure that any organization especially those who are in the business of making profits understand what this region is like, how people work in this region as it could have a significant impact on their bottom line.
    - - One of the unique thing about this continent now is that it attracts the largest amount of foreign direct investment, so this is FDI coming into countries residing within Asia out perform as well as attracting FDI compared to all other continents in the world.
      - Historically, this was mainly found or the highest amount of foreign direct investment was found within Europe initially and in North America, but this has shifted now to Asia, so most of the money or investors who are looking to put their money into better use tend to direct it to a firm space within Asia or projects or equivalent to over a half trillion US dollars annually so this is a large number of money.
    - - The general living standards have been a significant focus for a large number of countries in this region which had historically suffered from very extreme poverty, this is not to suggest that there isn't poverty in this region, its widespread poverty in this region however the % of widespread poverty has come down all the past 35 years
    - - If Australia is being compared where there's only 20 million people or 20-23 million residing and of that you know people with purchasing power is even less, you're talking about 3 billion people, this is a huge market and the engine of both regional as well as global economic growth for Australia in particular given the proximity to Asia as a continent compared to Europe or North America, it makes a lot of sense for Australian organisations and those working within Australian organisations to take an interest and try to understand our business is transacted in this region as it'll make a huge difference with regards to the growth of Australian base if you have the right relationships with businesses in Asia, you've got a better chance of growing in the future due to the proximity of the landmass to the Australian landmass.
  - - - Collectively these two countries have over two and a half billion people residing in their countries which is equivalent to almost one third of the world's population and they're also two of the largest transition economies, transition economies that were previously state-owned or state led economies which are now moving into market-led economies
        
        Historically, firms within People's Republic of China and India would state-owned or owned by the actual government whereas today they are now becoming increasingly privatized and they're trying to move into a form of governance where you rely on the principles of the market of demand and supply to dictate what gets produced in which quality for which quantity and so on.
      - Former (Japan) & current (PRC) greater competitor to US
        
        As the leading country as controlling global economic growth and also politics in the case of Japan and then the current greatest competitor in the PRC, it's predicted that the PRC would supersede the United States of America as the number one economy by 2050 if they keep growing at the rate that they're going at present
      - Tiger economies of Taiwan, S'pore, Hong Kong & South Korea
        
        They're expanding rapidly and make a significant contribution to the global economy in terms of innovation, creative thinking, and variety of products & services for consumers
      - Global brands such as Samsung, Toyota, Honda, Hyundai, HSBC, Acer, Tata, Lenovo, Alibaba
        
        These are all companies that originated and grew out of Asia, if you go to what the world was at the conclusion of World War 2, you wouldn't find many organizations based in Asia being a global player, it was mainly companies based in North America and Western Europe in particular North America as Europe was struggling after the World War 2 used the destruction so 60's/70's onward things have changed rapidly especially for 1970 where these countries made significant changes the way they govern themselves and how they viewed the market itself and as a consequence of that you've had a significant growth of a large number of multinational corporations who are significant global brands and players as far as economic performance is concerned at a global level.
- - - - It is directional rather than specific so it provides the general direction in which the organization is heading but it has inbuilt mechanisms to have flexibility to alter the plan depending on changes to external environment
      - They also attempt to minimize risk through product or service diversification. Large organisation tend to be inferior in different types of business, it could be creating consumable consumer electronics by the same time creating automotive vehicles, it could be creating consumer electronics but also operating in the steel industry
      - The idea behind this is that if there's a downturn in one product area for a specific period, you're able to cover the losses associate with that product area by drawing upon the profit margins that you'd make another product area
    - - They are a significant value to the government of this region which is quite unique to the East Asian blocks, there's a large number of people who reside 4.4 billion people end of that almost 3 billion of it reside within the East Asian Block so it's important to remember that you need to ensure that there are jobs available for these people as without jobs people fall into poverty, and once you get into extreme poverty, it's quite easy for people to radicalize people to move into forms of revolution and armed conflict because people see as there's no other way out of the way that they're living in.
    - - Historically, the evolution of some of the large organizations fault was found within South East Asia. For example, Korea's got a high and in the case of Toyota, Honda and even Sony in Japan, in the case of Alibaba, in China or HSBC in Hong Kong or ASA in Taiwan
        
        The growth of these organizations run almost parallel to the economies of these countries and this is in part due to the close relationship found between decision-makers of these organizations and the decision makers of the political elite in these countries as well, it gives them significant control and access to resources.
    - - It's unusual for people working for each other to know personal details about each other so one way in which business relationships are established is initially by understanding individuals engaging business transactions at a personal level which is very different to the way business is transacted in places like Australia, NZ, or US, where it;s very much a business relationship and you tend to talk business rather than personal matters whereas in Southeast Asia, it's not unusual to have these personal discussions as that is how trust is initially established and without trust you're not going to have any form of business relationship
    - - It's the important characteristic in this relationship so even if you're a representative of an Australian organization you're engaging in discussions with a organization in China or in South Korea, your counterpart might say I'll think about it about an idea that you have pitched but in reality what they really mean is that they're not interested but they don't say it to your face because they believe that no one should be faced with that kind of situation where your toes to your face, so it's very much indirect in the way communication is transacted, these are high context cultures where non-verbal cues play a significant part in the way people communicate, understand each other, so for someone coming from outside this region, sometimes you may not actually have that understanding hence why it's important to talk to your colleagues who come from this part of the world to say what does it really mean when someone's acting or behaving in this manner or saying this these particular things
- - - - High morals, ethical conduct, and loyalty to each others are stressed
      - Three key teachings - loyalty, reciprocal obligations, and honestly may lower cost of doing business
      - Emphasis on education
        
        You would see even with migrant communities that come into Australia or go and reside in the US or UK, where it's very much an emphasis on educational attainment as the belief is that it's only though educational attainment that you'd get out of the cycle of poverty where alot of people have unfortunately experienced.
        
        So if you're educated, you acquire a certain number of technical and other types of skills which is pretty much the limit so if you look at what Japan at the end of World War 2, where the economy was in the pits what they did was they invested heavily in education because they understood that if we invest in education in 20/30 years time, the people we have invested in would then start being creative coming up with new innovative business practices, innovative ideas and products & services
      - Value hierarchy/ seniority
        
        Being respectful for senior figures especially seniority that's derived from age and respecting individuals in decision making positions due to hierarchy rather than competence is an important factor and that's coming through cultural values found within the region
      - Relationships important - are all?
        
        Important but doesn't mean you have to maintain relationship with everybody because not everyone is going to get along with everybody so you have to be selective in the way you establish relationships, if you're establishing distance relationships in the context of it, Asia might be worthwhile establishing business relation with people that you actually do get along at personal level which is different to say the Western view where you establish a business relationship
      - Savings Driven