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.