New Asian Emperors

Southeast Asia has a population of more than half a billion, yet its economy is dominated by about 40 families, most of Overseas Chinese descent. Their conglomerates span sectors as diverse as real estate, telecommunications, hotels, industrial goods, computers and sugar plantations. New Asian Emperors shows how and why Overseas Chinese companies continue to dominate the region and have extended their reach in East Asia, despite the Asian financial and SARS crises of the past decade. The authors base their conclusions on in-depth structured interviews spanning a decade with the often elusive Overseas Chinese CEOs including Li Ka-shing, Stan Shih, Victor Fung, Stephen Riady and Sukanto Tanoto, as well as on the strategic information that their companies use. The analysis of the New Asian Emperors' present-day management techniques and practices draws on the history, culture and philosophical perspectives of the Overseas Chinese in Southeast Asia. In the midst of today's global economic crisis, this book also takes a fresh look at the role and management practices of the Overseas Chinese as they continue to create some of Asia's wealthiest and most successful companies. New Asian Emperors explains: * The sources and characteristics of Overseas Chinese management * Whether Overseas Chinese management practices will spread in the same way that Japanese management did in the 1970s * Whether Western management technologies have found themselves outmaneuvered in Asia's post-crisis arena * The Overseas Chinese managers' strategies for the informational black hole of Southeast Asia and what Western managers can learn from them * The New Asian Emperors' unique strategic perspectives and management styles revealed through exclusive, in-depth interviews * The implications for successfully co-operating and competing with the Overseas Chinese of Southeast Asia New Asian Emperors offers key insights into the Overseas Chinese and the important role that cultural roots play in their dominance of Southeast Asian business.

George T. Haley (PhD, University of Texas at Austin) is Professor of Marketing, University of New Haven and Founding Director, Center for International Industry Competitiveness. He has been faculty at ITESM-Monterrey (Mexico), National University of Singapore, Queensland University of Technology (Aus.), DePaul, Fordham, and Baruch College. He has presented seminars to managers/policymakers on four continents, including for the National Intelligence Council, and the United States International Trade Commission and testified before the US-China Economic and Security Review Commission. He has over 100 articles, presentations and books including The Chinese Tao of Business. He consults with several multinational companies and governments in Asia, Australia, Latin America and the USA and serves on the Boards of Directors of listed companies, manufacturing organizations and government agencies. Usha C. V. Haley (PhD, New York University) is Asia Programs Fellow, Ash Institute for Democratic Governance and Innovation, Harvard Kennedy School, Harvard University and Research Associate at the Economic Policy Institute in Washington, DC. She has been Professor at the University of New Haven and prior at University of Tennessee-Knoxville, New Jersey Institute of Technology, Australian National University, National University of Singapore and ITESM-Monterrey, Mexico. She has more than 150 publications, presentations and books including Multinational Corporations in Political Environments and The Chinese Tao of Business. She has testified before the Congressionally mandated US-China Economic and Security Review Commission and the Committee on Ways and Means, and presented before the US International Trade Commission. She serves on several corporate and government boards. Chin Tiong Tan (PhD, Pennsylvania State University) is the Deputy President of Singapore Management University. He was a founding member of SMU and was its Provost from 1999 to 2008. He is active in management development and consulting. He designed and taught in many executive programs around the world, and is a regular speaker in the US, Europe, Australia, New Zealand, Asia and South Africa. He was the Academic Advisor to Singapore Airline's Management Development Centre for more than 15 years. He is on the Boards of Directors of several listed companies and served as strategic and business advisor to many organizations. He is the co-author of Marketing Management: An Asian Perspective, 5th Edition, 2009, Prentice Hall (with Philip Kotler).

Preface xi Acknowledgments xiii Part I: The Foundations of Understanding Chapter 1: Introducing the Overseas Chinese of Southeast Asia 3 Patterns of Chinese Migration 6 The trader pattern 6 The coolie pattern 7 The sojourner pattern 7 The re-migrant pattern 7 Who Are the Overseas Chinese? 8 What Is a Network? 15 The Role of the Overseas Chinese in Southeast Asia 26 The Role of the Overseas Chinese Worldwide 30 Following Chapters 31 Chapter 2: Confucianism Plus: The Philosophical and Cultural Roots of the Overseas Chinese 33 Confucianism's Influence on Chinese Trade and Economics 42 The Family 50 The Relationships and Ethical Behavior 54 Differing Ethical Concepts 57 Chapter 3: The Overseas Chinese Today: Not the Family Business, But the Family as a Business 61 What Is a Chinese Network? 62 Discontinuity 62 Hierarchical and dyadic ties 63 Uprightness 65 Contextual morality 67 Flexible boundaries 68 Historical and Environmental Effects on the Overseas Chinese Business Networks 68 Distinguishing Cultural Traits 79 Firm-related attributes 80 Loyalty-related attributes 82 Trust-related attributes 83 How Networks Permeate Formal Structures 85 Part II: The Foundations of Analysis Chapter 4: Introduction to an Informational Void: The Black Hole of Southeast Asia 91 The Informational Black Hole of Southeast Asia 94 Operating in an Informational Black Hole 114 Hands-on experience 127 Transfer of knowledge 128 Qualitative information 130 Holistic information processing 132 Action-driven decision making 132 Emergent planning 133 Chapter 5: Strategic Management of the Overseas Chinese Business Groups: Deciphering Patterns 137 Tacit Knowledge and the Informational Black Hole 138 Strategic Planning and the Networks 141 Planning, classically 142 Developing core competencies 144 Crafting strategies 145 A Summary of Overseas Chinese Management Practices 148 The Overseas Chinese and crafting strategy 149 How the Overseas Chinese plan 151 The Overseas Chinese and their core competencies 158 Part III: The Implications for Business Chapter 6: In the Aftermath of the Asian Crises: Revolution or Evolution? 169 The Path of Destruction 170 The 1997-1998 Asian financial crisis 170 The 2002-2004 SARS crisis 173 The Post-crises Evolution of Overseas Chinese Business Groups 175 Competitive Advantages of the Overseas Chinese 180 Speed 182 Knowledge 183 Guanxi 185 Empowerment 188 Competitive Disadvantages of the Overseas Chinese 190 Home turf only 190 Susceptibility to blind-siding 192 Poor proprietary capabilities 193 x new asian emperors Family limits 194 Lack of professionalization 196 Chapter 7: Competitive Implications of the Overseas Chinese: Doing Business with the New Asian Emperors 199 General Implications for Multinationals 200 Specific Implications for Multinationals 204 Strategic competitiveness 204 Human resource practices 206 Products and technology 209 Contract flexibility 211 Distribution 212 Promotion and pricing 213 Implications for Regional Governments 213 Implications for Researchers 219 Speculations About the Future 221 The Adaptive-Action Road Map 224 The road of knowledge 228 The road of speed 229 The road of action 229 The road of results 230 The road of relationships 230 The road of quality 232 The road of passion 232 The road of legacy 233 Bibliography 235 Appendix: List of Interviewees 245 Index 247