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Week 4, SUMMARY (Asia, especially South & South-East Asia, as a region…
Week 4
SUMMARY
Asia, especially South & South-East Asia, as a region is rapidly jumping into prominence
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
Cultural, economic, and political systems have and will continue to shape East-Asian Management systems
Why Asia
Reality of International Management
▪ Ongoing & increasing globalisation
▪ Blurring of international borders
▪ ‘Diversify or Die’
▪ Internationalise imperative
▪ Global expansion for competitiveness & survival
Why focus on management in Asia
▪ Home to 4.4 billion people (approx. 60% of world population)
▪ Accounts for 40 % of the global economy
▪ Accounts for 1/3 of total global FDI inflows: > 1/2 trillion USD
▪ 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
South & South-East Asia
Home To:
▪ 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
Regionally Unique Managerial Implications
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
West vs. East
Western Management
▪ Individualist
▪ Early adopters & proponents of capitalism
▪ Short-termism
▪ Limited hierarchy
▪ Merit-based
▪ Shareholders – primary stakeholder
Eastern Mangement
▪ Collectivist
▪ Reluctant followers of capitalism
▪ Long-termism
▪ Steep hierarchy
▪ Seniority-based
▪ Multiple equally important stakeholders
95% SIMILAR & 5% DIFFERENT?
East Asian Management Systems
Support for long-term planning and risk minimisation
▪ Large private sector organisations are major employers
▪ Closely linked with ruling political elite
▪ Social & business relationships critical for success
▪ Saving face
▪ Historically, significant state intervention
▪ Growing focus on IP protection
▪ Underrepresentation of women in labour force