themes “asian business success” today is part of
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THEMES
“Asian business success” today is part of a political, economic and cultural response to
historical trauma
Asian political-economic systems challenge “the standard model”
Challenges and questions:
Rise or Rebirth? (Old traditions, New States)“Clash of civilizations”?
Globalization?Role of the state?
Development and democracy?Democratic peace?“Asian values”?
Problems of history“Scratches on our minds”
NationalismThe colonial question
CONSIDER
CULTURAL “RENAISSANCE”UP FROM POVERTY
RECOVERY FROM WAR
The “Culture Argument”
The “Asian Model Argument”
The “Political Argument” Legitimacy though economics/Nationalism
The “Globalization/American Peace Argument”
The “People Argument”Leadership
Challenges
Post-WWII Identity
ReformFDI
“Ersatz Capitalism”
GlobalizationCompeting in the global
marketplaceOEM or Branding?
BUSINESS SYSTEMS
Conditioned by history and cultureLinked elements
* What are the authoritative institutions?Law/Party/Custom
*How is the system coordinated?Ownership/Networks/Management Style
Authority & Control
*How is the system organized?Structure
Strategic OrientationMarket Relations
*What are the resources?Capital/Human Resources/Social Capital
Personnel Practices
Why should we care about “business systems”?
1.All businesses (economies) are systems
Systems key characteristic: change one part, change all other parts (problem of unintended consequences)
2.Appreciating the business system of your target market/potential partner lets you anticipate issues, plan better.
“Multiplexity” “Hierarchy”
“Social Capital” “Informality”
“Culture”
One typology: Post-Socialist economies
Emerging SEA economiesAdvanced City economiesAdvanced Northeast Asian
economies(including Japan)
Significant differences?
Using the Redding/Witt Framework, define US business system
Education/Skills FormationEmployment Relations
Financial SystemInterfirm RelationsInternal Structure
Ownership/Corporate GovernanceSocial Capital
Role of the State
China HongKong India Indonesia Japan
BUSINESS SYSTEMS
“GREATER CHINA”
PRCSOES/Private/”Local”
China’s “Golden Rule” (MG)
TaiwanEntrepreneurial/Hi-Tech/SMEs Family
Hong KongThe “Hongs”/Family/Finance
Overseas Chinese (Huaqiao 华侨 )Family
“Bamboo Network”
Economist, “Capitalism Confined” 3 Sep 11
“Multiplexity”?
JAPANKeiretsu & Sosha (Kaisha)
Employment“Patient capital”
Trust
SOUTH KOREAChaebol
Out of the 5 Year Plan
SOUTHEAST ASIAHighly varied
INDO-CHINAThailandVietnam
BUSINESS SYSTEMS (Another look)
CULTURE COORDINATION INSTITUTION
JAPAN EmploymentGroup normsNationalism
KeiretsuComplex govt/biz coordinationConsensus
“Patient capital”Strong social capitalHigh quality HR
CHINA (PRC) ConfucianistHierarchy (duties, low trust)“Communist” values
“Socialist” market econ.SOEs, “families”, private, local businessesComplex (State, JVs, WOFEs, “local”)
“Inefficient capital” (NPLs)Huge HR baseWeak societal linksStrong clan links
OVERSEAS CHINA
Complex identitiesConfucianist“China Circle”
Bamboo networkFamilyClanRegion
SMEsFamily firmPersonal networkingGuanxiFlexible politics
KOREA ConfucianistNationalismTechnology
State planCentralized authoritarian mgt.
Strong stateRespect for law
SOUTHEAST ASIA
Highly varied (religion, ethnicity)Colonial heritage
FDIEmerging marketsImportance of Overseas Chinese
“Crony capitalism”Low levels of social capital
Leadership – One of the keys
Many types , but some shared characteristics
“Confucian”Combination of
authoritative/benevolent/collective/moral
Long Term…seeing relationships, “over the horizon”
MoralFrugal, CSR
Employee-centered, firm as familyRelationships & Networks (guanxi 关系)
Work ethic
Pressing the buttonsChina: $ (instrumentalism, exploitation)
Japan: encouragement (gambate)Korea: stability
PERFORMANCE
FUTURE
GENDER =
HUMANE
POWER DISTANCEINST. COLL.
IN-GROUP
UNCERTAINTY
ASSERTIVE
CHINAJAPANKOREA
LEADERSHIP ORIENTATIONS IN ASIA
McGREGOR: CHINA AS A START-UP AND A TURN-AROUND
CAN APPLY TO ASIA AS A WHOLE
URGENCY & VISION: THE NATION-FAMILY
REFORMS: “FEELING THE STONES”
CONTROL AND ROUGH JUSTICE(RULE BY LAW, NOT RULE OF LAW)
ELITISM/INEQUALITY
•OTHER APPROACHES TO BUSINESS SYSTEMS:
•“EASE”•“GCR”•THE CHALLENGE IS TO SEE HOW
THEY ALL FIT
“EASE OF DOING BUSINESS”
• STARTING A BUSINESS
• CONSTRUCTION PERMITS
• ELECTRICITY
• REGISTERING PROPERTY
• GETTING CREDIT
• PROTECTING INVESTORS
• PAYING TAXES
• CROSS-BORDER TRADING
• ENFORCING CONTRACTS
• RESOLVING INSOLVENCY
ALL OF THESE DEAL WITH “RULE OF LAW” MATTERS;“INSTITUTIONAL” ISSUES IN THE GCR FRAMEWORK
GLOBAL COMPETITIVENESS REPORTA systematic approach to growth/”competitiveness”
From factor driven (basics) Teleological?“Institutions”Infrastructure Compare with Rostow?Macro-econ. StabilityHealth/Primary education (UNDP- HDI)
To efficiency driven (production)Higher ed”Goods market”Labor marketFinanceTech readiness/Market size
To innovation drivenManagementInnovation support
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