Networking in Asia, the West (2)<\/p>\n
By Peter Verhezen<\/p>\n
This is the second of two articles exploring the concept of
\nnetworking in Asian and Western communities.<\/p>\n
JAKARTA (JP): The practice of networking based on trust has
\nbeen described by Bob Widyahartono in an Aug. 25, 1997 article in
\nthis paper as a fundamental component of long-term economic
\ngrowth in Asia. However, Asian collusion practices resulting from
\nan excessive reliance on nonbusiness-oriented networks have not
\nbeen in the interest of long-term economic growth.<\/p>\n
Widyahartono also claims in his article that networking based
\non a personal trust in somehow unique to Asia.<\/p>\n
It would be highly beneficial for the cultures of the East and
\nthe West to learn from one another. However, pointing out
\ndiscrepancies between so-called unique Asian values and the West
\ndefinitely does not serve the purpose of mutual understanding.<\/p>\n
According to some studies in Asia, real leaders are expected
\nto be trustworthy and honest. It is this honesty, rather than
\nnetworking, that is a major characteristic for successful
\nleaders.<\/p>\n
Next to honesty, Asian leaders are expected to be forward
\nlooking, inspiring, competent, fair-minded, supportive, broad-
\nminded and intelligent as they guide Asian companies into the
\nnext century -- a century in which businesses and governments
\nwill more than likely continue to face the process of
\nglobalization.<\/p>\n
Therefore, mutual understanding will become paramount for
\npolitical and economic growth.<\/p>\n
As the world becomes more interconnected, trust in the
\nbusiness and political arena will consequently play a more
\nimportant role -- independent of the so-called \"unique Asian
\nvalues\" or \"Western imperialistic tendencies\".<\/p>\n
In such a global community, economic and political players
\nwill have to abide by some common rules. Therefore, generating
\nand maintaining trust with one another should be prioritized in
\nthe quest for long-term growth.<\/p>\n
Trust can be established in the business and political world
\nby displaying three fundamental characteristics of behavior:
\nachieving results when a commitment is made, acting with
\nintegrity and demonstrating concern.<\/p>\n
In a business context, trust is always tied to the need to
\ndeliver on commitments -- beginning with the commitment to create
\nsufficient profits and shareholder return.<\/p>\n
Jack Welch of General Electric has noted: \"In the end you and
\nyour associates have to create an atmosphere where customers want
\nwhat you're delivering or all speeches about loyalty and trust
\nwon't mean a thing.\" Strong business fundamentals are therefore a
\nfoundation of trust in the business world.<\/p>\n
People trust those who are honest in what they say and do.
\nIntegrity is thus a measure of personal consistency, and is key
\nto building and sustaining trust.<\/p>\n
The level of distrust within many large firms can be traced to
\nthe failure of leadership to provide a coherent sense of
\ndirection.<\/p>\n
Integrity is the degree to which individuals, teams and
\norganizations fully embody the core values they hold to be the
\nmost important. Pepsi's chief executive officer expresses it very
\nclearly: \"People do business with those they trust, which is
\nbased in large part on integrity\".<\/p>\n
Trust goes beyond results and integrity. Responsiveness to the
\nneeds of others is an equally important component. In a fiercely
\ncompetitive environment, tensions between economic or political
\nsuccess and the basic needs of people become more pronounced.
\nTrusted companies are those who show concern for their employees,
\nor in the case of a nation, their citizens.<\/p>\n
Prof. Francis Fukuyama observes that \"all human beings believe
\nthey have a certain inherent worth of dignity. When that worth is
\nnot recognized adequately by others, they feel anger; when they
\ndon't live up to others' evaluation, they feel shame; and when
\nthey are evaluated appropriately, they feel pride. The desire for
\nrecognition is an extraordinary powerful part of the human
\npsyche\".<\/p>\n
The current financial crisis in ASEAN countries demonstrates
\nthe world's developing economic interconnectedness, especially in
\nfinancial markets. Mutual trust is becoming even more important
\nfor the improvement of each nation's welfare. But once confidence
\n-- or trust -- in a regional market evaporates, stock markets
\nimmediately lose their attraction. ASEAN countries have been
\nlearning this hard lesson over the past few months.<\/p>\n
Abiding by the common rules of the global business and
\npolitical community is one of the main factors to establishing
\nand maintaining trust internationally.<\/p>\n
Financial markets are self-regulating and are widely
\nconsidered as one of the only free markets in the world, since
\ncapital is flown borderlessly from one market to another.<\/p>\n
Investors in financial markets -- like George Soros -- have
\nrecently come under fire for \"disrupting\" the market. But
\npointing fingers at these speculators is like shooting the
\nmessenger. ASEAN countries might find it hard to accept the
\nmessage and may reject the role international capital has to play
\nin their emerging markets. But in the end, economic markets with
\nthe best prospects and performance will attract the most
\ninvestment sources.<\/p>\n
Speculation could be positively interpreted as a regulatory
\nmarket force to bring the market back into a perceived
\nequilibrium. Once a near-equilibrium point is established, there
\nis a trust in the fundamentals of the respective economy as a
\nconsequence of sound macro-economic policies -- in this case
\nexpressed in a new currency rate.<\/p>\n
Most economists agree that exchange rates should reflect
\neconomic fundamentals and that excessive volatility and
\nsignificant deviation from fundamentals is undesirable.<\/p>\n
Accountability and openness create trust and likely bring
\nstability which in themselves are major factors for growth.<\/p>\n
It is not so much democracy -- which is rather the result of a
\ncertain economic welfare and stability -- but political and
\neconomic stability on which investment expectations can be based
\nthat fuels continuous growth.<\/p>\n
If investors feel that the economic fundamentals are not in
\nline anymore with expectations, one can easily predict the
\neconomic reaction in the financial markets.<\/p>\n
Prudent economic policies, to keep economic fundamentals on
\nthe right track, include controlling inflation, limiting
\noverspending (seen in huge budget deficits, and sometimes related
\nimports) and improving the efficiency of the economy.<\/p>\n
Any closed economy which does not follow international
\neconomic standards has to endure the financial consequences of
\nthat policy. Consistency and accountability about economic
\nobjectives may help to establish trust.<\/p>\n
To deny the causes of the current Asian economic turmoil --
\nwhich came about due to huge public and private outstanding debts
\n-- would likely lead to continuous economic speculation over a
\nperceived complacent inaction. From an economic point of view,
\nthe currency crisis is a wake-up call to bring bad financing,
\nunbalanced budgets and unrealistic projects under control.<\/p>\n
Business networking can help in economic growth, but more
\nimportant is the accountability of a market, its economy and the
\nleaders monitoring the macro-economy of the country. Trust
\ngenerated through a display of honesty and accountability forms
\nthe basis of every family or organization whether it is Western
\nor Asian. Networking without trust is meaningless in both the
\nWest and Asia.<\/p>\n
It is true indeed that in absence of trust, the reliance on
\nkinship is the easiest way to provide a needed network in
\nbusiness. It is easier to control \"community members\" than
\nmembers of other \"tribes\". However, strong economic fundamentals
\nare more easily realized should businesses and governments be
\nable to transcend such a \"tribal\" system and utilize a trust that
\ngoes beyond that of the family or closely-tied group.<\/p>\n
Proclaiming so-called unique Asian values in an
\ninternationalized or globalized business environment does more
\nharm than good.<\/p>\n
Every culture is so unique that it is hard to generalize and
\nto speak of unique Asian values or Western values. The French
\nthink quite differently from the Americans, Dutch or Germans
\n(though all are Western cultures).<\/p>\n
The Chinese from mainland China could hardly be compared with
\nMalaysians or Philippines in their values (though they are all
\nAsian). Trying to elevate one cultural characteristic such as
\nnetworking to explain the difference in social qualities sounds
\nquite unscientific if not dogmatic.<\/p>\n
The recent turbulence in Indonesia and Bosnia have shown that
\nliving together is not an easy matter. The world's different
\ncultures should learn from each other instead of proclaiming
\nfalse strengths and pure philosophies.<\/p>\n
\"Unity in diversity\" is a worthy philosophy because it values
\nthe uniqueness of every community or culture and at the same time
\ntries to unite diversity in some basic mutual understanding.<\/p>\n
Self understanding and awareness of the uniqueness of other
\ncultures might be the starting point for better communication and
\nreduction of international conflict.<\/p>\n
These basic values of understanding and trust could be the
\nbasis of a more peaceful and prosperous world.<\/p>\n
The writer is the managing partner of Cimad Pacific
\nConsultants Ltd.<\/p>",
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