Networking in Asia, the West (2)
Networking in Asia, the West (2)
By Peter Verhezen
This is the second of two articles exploring the concept of
networking in Asian and Western communities.
JAKARTA (JP): The practice of networking based on trust has
been described by Bob Widyahartono in an Aug. 25, 1997 article in
this paper as a fundamental component of long-term economic
growth in Asia. However, Asian collusion practices resulting from
an excessive reliance on nonbusiness-oriented networks have not
been in the interest of long-term economic growth.
Widyahartono also claims in his article that networking based
on a personal trust in somehow unique to Asia.
It would be highly beneficial for the cultures of the East and
the West to learn from one another. However, pointing out
discrepancies between so-called unique Asian values and the West
definitely does not serve the purpose of mutual understanding.
According to some studies in Asia, real leaders are expected
to be trustworthy and honest. It is this honesty, rather than
networking, that is a major characteristic for successful
leaders.
Next to honesty, Asian leaders are expected to be forward
looking, inspiring, competent, fair-minded, supportive, broad-
minded and intelligent as they guide Asian companies into the
next century -- a century in which businesses and governments
will more than likely continue to face the process of
globalization.
Therefore, mutual understanding will become paramount for
political and economic growth.
As the world becomes more interconnected, trust in the
business and political arena will consequently play a more
important role -- independent of the so-called "unique Asian
values" or "Western imperialistic tendencies".
In such a global community, economic and political players
will have to abide by some common rules. Therefore, generating
and maintaining trust with one another should be prioritized in
the quest for long-term growth.
Trust can be established in the business and political world
by displaying three fundamental characteristics of behavior:
achieving results when a commitment is made, acting with
integrity and demonstrating concern.
In a business context, trust is always tied to the need to
deliver on commitments -- beginning with the commitment to create
sufficient profits and shareholder return.
Jack Welch of General Electric has noted: "In the end you and
your associates have to create an atmosphere where customers want
what you're delivering or all speeches about loyalty and trust
won't mean a thing." Strong business fundamentals are therefore a
foundation of trust in the business world.
People trust those who are honest in what they say and do.
Integrity is thus a measure of personal consistency, and is key
to building and sustaining trust.
The level of distrust within many large firms can be traced to
the failure of leadership to provide a coherent sense of
direction.
Integrity is the degree to which individuals, teams and
organizations fully embody the core values they hold to be the
most important. Pepsi's chief executive officer expresses it very
clearly: "People do business with those they trust, which is
based in large part on integrity".
Trust goes beyond results and integrity. Responsiveness to the
needs of others is an equally important component. In a fiercely
competitive environment, tensions between economic or political
success and the basic needs of people become more pronounced.
Trusted companies are those who show concern for their employees,
or in the case of a nation, their citizens.
Prof. Francis Fukuyama observes that "all human beings believe
they have a certain inherent worth of dignity. When that worth is
not recognized adequately by others, they feel anger; when they
don't live up to others' evaluation, they feel shame; and when
they are evaluated appropriately, they feel pride. The desire for
recognition is an extraordinary powerful part of the human
psyche".
The current financial crisis in ASEAN countries demonstrates
the world's developing economic interconnectedness, especially in
financial markets. Mutual trust is becoming even more important
for the improvement of each nation's welfare. But once confidence
-- or trust -- in a regional market evaporates, stock markets
immediately lose their attraction. ASEAN countries have been
learning this hard lesson over the past few months.
Abiding by the common rules of the global business and
political community is one of the main factors to establishing
and maintaining trust internationally.
Financial markets are self-regulating and are widely
considered as one of the only free markets in the world, since
capital is flown borderlessly from one market to another.
Investors in financial markets -- like George Soros -- have
recently come under fire for "disrupting" the market. But
pointing fingers at these speculators is like shooting the
messenger. ASEAN countries might find it hard to accept the
message and may reject the role international capital has to play
in their emerging markets. But in the end, economic markets with
the best prospects and performance will attract the most
investment sources.
Speculation could be positively interpreted as a regulatory
market force to bring the market back into a perceived
equilibrium. Once a near-equilibrium point is established, there
is a trust in the fundamentals of the respective economy as a
consequence of sound macro-economic policies -- in this case
expressed in a new currency rate.
Most economists agree that exchange rates should reflect
economic fundamentals and that excessive volatility and
significant deviation from fundamentals is undesirable.
Accountability and openness create trust and likely bring
stability which in themselves are major factors for growth.
It is not so much democracy -- which is rather the result of a
certain economic welfare and stability -- but political and
economic stability on which investment expectations can be based
that fuels continuous growth.
If investors feel that the economic fundamentals are not in
line anymore with expectations, one can easily predict the
economic reaction in the financial markets.
Prudent economic policies, to keep economic fundamentals on
the right track, include controlling inflation, limiting
overspending (seen in huge budget deficits, and sometimes related
imports) and improving the efficiency of the economy.
Any closed economy which does not follow international
economic standards has to endure the financial consequences of
that policy. Consistency and accountability about economic
objectives may help to establish trust.
To deny the causes of the current Asian economic turmoil --
which came about due to huge public and private outstanding debts
-- would likely lead to continuous economic speculation over a
perceived complacent inaction. From an economic point of view,
the currency crisis is a wake-up call to bring bad financing,
unbalanced budgets and unrealistic projects under control.
Business networking can help in economic growth, but more
important is the accountability of a market, its economy and the
leaders monitoring the macro-economy of the country. Trust
generated through a display of honesty and accountability forms
the basis of every family or organization whether it is Western
or Asian. Networking without trust is meaningless in both the
West and Asia.
It is true indeed that in absence of trust, the reliance on
kinship is the easiest way to provide a needed network in
business. It is easier to control "community members" than
members of other "tribes". However, strong economic fundamentals
are more easily realized should businesses and governments be
able to transcend such a "tribal" system and utilize a trust that
goes beyond that of the family or closely-tied group.
Proclaiming so-called unique Asian values in an
internationalized or globalized business environment does more
harm than good.
Every culture is so unique that it is hard to generalize and
to speak of unique Asian values or Western values. The French
think quite differently from the Americans, Dutch or Germans
(though all are Western cultures).
The Chinese from mainland China could hardly be compared with
Malaysians or Philippines in their values (though they are all
Asian). Trying to elevate one cultural characteristic such as
networking to explain the difference in social qualities sounds
quite unscientific if not dogmatic.
The recent turbulence in Indonesia and Bosnia have shown that
living together is not an easy matter. The world's different
cultures should learn from each other instead of proclaiming
false strengths and pure philosophies.
"Unity in diversity" is a worthy philosophy because it values
the uniqueness of every community or culture and at the same time
tries to unite diversity in some basic mutual understanding.
Self understanding and awareness of the uniqueness of other
cultures might be the starting point for better communication and
reduction of international conflict.
These basic values of understanding and trust could be the
basis of a more peaceful and prosperous world.
The writer is the managing partner of Cimad Pacific
Consultants Ltd.