Managing firms in ASEAN

Managing firms in ASEAN

By Bob Widyahartono

The following article is based on a paper presented at the opening of the Magister Management program at the Institute for Management Development in Indonesia on Jan. 27, 1996. This is the first of two articles.

JAKARTA: One challenge the countries of ASEAN countries (Brunei Darussalam, Indonesia, the Philippines, Malaysia, Singapore, Thailand and Vietnam) face as they attempt to develop a modern business and industry base is how to make the study of management more relevant.

We are aware that organizations in Japan, Korea, and ASEAN countries, has a distinctive cultural flavor with very specific structures and processes. This means, that organizations -- which are product of the human mind -- are closely related to the thinking pattern and cultural values prevailing in their respective societies.

In a study by Professor James Austin Managing in Developing Countries: Challenges for the 21st Century he mentioned that in developing countries we don't manage businesses the way they are managed in industrialized countries. In his view, not only is management in developing countries different, it is more difficult. The developing country manager must cope with the country environments that have more resource constraints, weaker institutions, greater uncertainties. Succeeding in developing countries is a true acid test of managerial capability.

Whether it is in Malaysia, the Philippines, Thailand, Vietnam or Indonesia, the knowledge requirements of managers are similar, as far as their functions and tasks are concerned. The technical preparation for management is the same in the East or the West. The fundamental issue in management is to organize work for productivity and guide the workers towards achievement of objectives.

It cannot be denied that many new ASEAN managers have become highly proficient by Western standards, particularly when exposed to the successful corporate systems evolved in the West. They acquired modern skills and techniques to become professionals to become responsive to the economic aspects of behavior and decision making. They are familiarized with the goals of management, such as profit maximization, organization efficiency and high productivity. The problem is that they try to graft these norms on a society whose value system is far from being like the West.

Our formal training teaches most of us to think that management is "culture free". It is naive to suppose that western managerial styles are universal and can therefore be copied blindly. An in-depth knowledge of local culture and of the complexities of the social environment is a necessary prerequisite to establishing a managerial system. The ASEAN business environment is not just a set of structures, different organization concepts and deeply rooted business practices. There is definitely a deeper cultural dynamic at work within the system.

The word "culture" has different meanings for different people. But the idea of culture as a pattern of development is truly significant. Culture is the set of meanings and values which people use to make sense of their lives within a certain time-place dimension. Culture is a framework that helps us make sense of an increasingly complicated world. Our culture gives us a model of how the world supposedly works and how life should be lived. It consists also of values and norms, and specifies the behaviors that give expression of these values and norms. Culture even embraces the concepts of ethics and morality -- what we judge as good or bad, right or wrong, true or false, fair or unfair, and other dualities, particularly in Chinese culture of Yin and Yang.

In the real world, knowing the values, beliefs, assumptions and practices of a culture is not enough. How the ideas connect the practices and how some particular practices manifest some particular ideas must also be studied. Different cultures also have different beliefs about human beings. For example, the concept of "face" is very prominent in several Asian cultures. One's "face" is one's good reputation. Maintaining one's face and preserving others' "face" is necessary to avoid, suppress, or shield ugly truths. "Face saving" practices may not be compatible with what we learned from the West about employee discipline.

The ASEAN business community reveals and still practice a highly personalized interaction. An unwritten code of conduct guides the relationship between business executives and their customers, and between superiors and their subordinates. Mutual respect and avoiding open criticism are practiced as much as possible.

These accepted norms aim at social harmony. While western societies love "black letter" law and contractual obligation, in ASEAN -- although many countries formally adopt modern western management -- trust and partnership understanding still form the basis of business.

In this environment it is necessary to be able to read the behavioral and cultural signals correctly and to respond in ways that will not harm people's perasaan halus (sensitivity).

Many of the observable behavior differences among different people are strongly influenced by how people value the individual to the group, how they handle time and space, social openness or ethnocentrism, how they respect tradition and the elderly, and how much value is placed on new knowledge, risk taking, efficiency and harmony.

Even with the advance of the facsimile, the Internet and E- mail as a means of business interactions, ASEAN people are still very sensitive to the moods of other people. The importance placed on respect, courtesy and harmony is reflected in their criteria of judging others. For Westerners or executive trained in a western way, where the ideal manager is portrayed as tough, competitive, result orientated and able to manage conflicts and crisis, they might find it awkward to deal with the ASEAN business community and environment.

The West operates organizations on a guilt culture; the East on a shame culture. The behavioral control mechanism in the West is therefore internal -- where people respond to their conscience and feel guilt when they don't meet the standard. The behavioral control mechanism in the East, however, is external -- the fear of "losing face" in front of others. But this does not necessarily mean Eastern managers are slow to make decisions or take action.

Motivating employees begins with communication. This is a difficult art in a mixed workforce. In Asia, managers must learn to communicate with Indonesians, Malays, Filipinos, Thais, Vietnamese and Chinese. This is not just a matter of language. Effective communication must tune into cultural sensitivities and different behavioral norms. It is a slow, hands-on process.

James Austin also revealed that being a manager in New York is simple compared to the difficulties managers face in developing countries. Succeeding in developing countries is a true acid test of managerial capability. The West works to the "order of competitiveness, challenge and confrontation or conflict situation, where as the East works by compromise, accommodation and consensus". The people of the East are basically more tolerant, fostering a negotiating climate which Westerners often find perplexing and are not always able to adapt to.