Shattering The Myths About Asian Businesses

READERS of management books satiated with American and Japanese models of successful companies now find relief in the recently published book, “Asia’s Best: The Myth and Reality of Asia’s Most Successful Companies.

Written by Michael Alan Hamlin, a longtime Asian-based management consultant, this book attempts to shatter the myths about Asian business and its so-called “inscrutable” management ways and shows how Asia’s best companies are really part of the world’s best.

Being a non-Asian, Hamlin is able to look at Asian companies with a clinical eye and discusses the performance of individual companies against the backdrop of the over-all Asian business scenario.

For Asians jaded with the inefficiency and corruption often seen in everyday business life in a developing economy, Hamlin’s insights provide a refreshing outlook and hope for Asian business.

Fallacies

With surgical precision, Hamlin dissects four myths on Asian business which he identifies. First, he states that there is no such thing as a unique Asian management style. He believes that what works for the world’s best apparently work also for Asia’s best. The factors for corporate success seem to cut across borders and culture.

He concedes though that there are some management practices that are more widely accepted in Asia that in the West which he claims are due to situations rather than philosophies, techniques or insights.

Second, Hamlin observes that Asian companies acquire technology “by outright purchase rather than by sharing through joint venture agreements or alliances.” However, some companies choose not to use high-end technologies but rather adopt appropriate ones based on the market situation. The challenge therefor for these companies, he writes, is “to push their technologies forward.

Third, Hamlin makes a rather hard conclusion regarding the state of innovation among Asian companies. He states: “Basic research throughout Asia, despite rapid, sustained growth over two decades is virtually nonexistent.
He says Asian companies usually focus on research that improves existing technologies rather than develop new ones.

Fourth, Hamlin points out that successful Asian companies are “masters of nichemanship” rather than “sprawling conglomerates.” Thus, multinationals aiming at Asia to look for new markets should be well-prepared to do battle with “homegrown competition.

Realities

Hamlin holds a mirror to Asian business and in the process, reveals some painful truths and realities that are sometimes ignored.

Hamlin notes that: “Rapid market expansion and increased competition have put new pressure on Asia’s best to manage great leaps in expansion, the introduction of new technology and, the recruitment of qualified managers.” As such, Asian companies are racing to grow talent in the region.

He also points out that Asian business is being led by rising prosperity in the region to concentrate on productivity and be more focused in its businesses.

Hamlin believes that Asian companies are lacking in forging strategic alliances. He writes: “Although intra-Asian alliances are on the rise, we believe they are primarily marriages of convenience and do not represent strategic efforts to enhance competitiveness or establish industry leadership.

In the final analysis, Hamlin concludes that Asian businesses will have to compete for the future and compete hard.

He assesses the situation thus: “While productivity in Asia has been rising, very little purely Asian technology has accounted for the increase. As the region enters a new era of liberalization and intense competition, its reliance on Western technology and low value-added exports is dangerously high. Worse, not enough investment has been made in education and the development of research centers necessary to support the creation of indigenous, productivity-enhancing technology. Massive public and private investment in educational infrastructure will be required to sustain rapid growth in Southeast Asia.

Participating Companies

As educational is Hamlin’s dissertation is the list of companies that participated in the research for the book. The book’s introduction explains that originally the manuscript was titled “Asia’s Best: Winners of the Asian Management Awards.” The book is tied up with The Asian Management Awards undertaken by the Asian Institute of Management and some corporate partners but the actual research for the book was undertaken independently.

The Philippine companies included in the list are revealing. These are: Ayala Corp., Citytrust Banking Corp., Development Bank of the Philippines, Eastern Telecommunications Philippines Inc., Intel Philippines Manufacturing Inc., Johnson & Johnson (Philippines) Inc., Jollibee Foods Corp., Kimberly-Clark (Philippines) Inc.

Manila Electric Co., Megalink Inc., National Steel Corp., Perton Corp., Philippine Appliance Corp., Philippine Business for Social Progress, Philippine Long Distance Telephone Co., Proctor & Gamble (Phils.) Inc., San Miguel Corp., Social Security System.

St. Luke’s Medical Center, Tahanang Walang Hagdanan Inc., Texas Instruments (Phils.) Inc., The Philippine Americal Life Insurance Co. Inc., and Visayas Cooperative Development Center.

Management Books

For management nerds steeped in management literature, it is perhaps easier to accept concepts and conclusions of books based on experiences abroad for we may not have as much access to the actual situations discussed in those books. The tendency is to accept and extol all these theories.

For example, “Built to Last: Successful Habits of Visionary Companies” by James Collins and Jerry Porras is hugely popular in local management circles (one company even brought copies for all its management personnel).

Perhaps, one reason for its success, aside from it being such a highly readable book, is that it is about companies which most Filipino readers may have no personal experience of.

Hamlin’s book, which can be said to be an Asian version of Collins and Porras’ best seller, may not enjoy the same level of uncritical acceptance. An excellently researched and written book, it does talk about some companies whose services may avail of or whose activities are well reported in the local media.

As such, the Filipino reader may tend to take this book which is written in a critical and objective manner with a critical but subjective perspective. Thus, the ultimate test of the success of this book in the Philippines is really in its accurate reading of Asian business.

Hamlin’s book is a milestone in Asian management literature. It definitely has a place in every Filipino businessman’s library. Hopefully, with its anticipated success, more books on Asian business will follow.

Asia’s Best: The Myth and Reality of Asia’s Most Successful Companies
by Michael Alan Hamlin, Simon & Schuster (Asia),
Singapore 1998, 295 pages

Author: Regina Galang Reyes. First published in the Philippine Daily Inquirer April 13, 1998.

Photo credit: www.sxc.hu

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