Page 1


voL ilr No. 1 / MARCH1990

tl,lc, Sr'uesrno,



just an investment house' All Asia All Asia Capital is more than just a financing company.And more than to its publics:to provide commitment a single *iih C^pitul i, Uotn ".rd *o... a multi-dime.,slorial.ole unequalledservice. service the needsof both financing and investment concerns.Integrating into its All Asia Capital addresses and banking, investment financing, leasing, p"r,r.f- u.rd relevanr facilitiesinto the fields Jf which is more flexible in i,o.t L."f.r"g.. tt " result is a new synergismin service.A combinedcapability in execution' effective more and in approach; single-minded more *""rlJrs challenges; scanthe investment horizon more All Asia Capital's distinct and strategicposition enablesthe company-to businessclimate with the disciplineof reading'the pinpointing-;;;;;;;;r "nd "..,rr"lf ;.h thoroughly. financial institutions' i,.,T"p,I """fvrir. fnir-o.l"lt"tio.r has made the companyone of the fastest'growing for you in the fields of: All Asia Capital's new dimensionin financial services.Opening opportunities STOCKBROKERAGE INVESTMENT BANKING ' Equippedwith 24-hour . Lo*71."r. syndication . bebt/equity'u.,d..*riiing r.t."t.h capabilitythat . Securitiesdealership keepsclients up to date with . Investment managementservices globalfinancial markets' 'Project finance ' Mergers& acquisitions

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TheFirstTelephone CreditCard

[-etsyouhaveyourcallsin theU.S. char$edto you?PLDT numbr When you'rein the U.S.A.- especiallyon businessyou haveto makea lot ofcalls and pay in dollars. But here'sgoodnewsfrom PLDT. Now you can pay for your overseasanddomesticlong distancecalls in the U.S. in pesos.How? By chargingthosecallsto your TELECHARGECard. With your TELECHARGECard,all callsyou placeon theAT&T networkin the U.S. arechargedto your PLDT accountand are includedin your monthly PLDT bill. So, insteadof spendingdollarsfor your calls in the U.S., you pay in pesosin the Philippines.A big dollar saverfor frequenttravellersto the U.S. Act now! You can apply for the TELECHARGE Card at any Metro Manila PLDT businessoffice or call 833-3777. will be glad to Our TELECHARGECard Specialists answeryour questionsabouttheTELECHARGECard.

PTDT Thefelecommunicolions Company THE ASIANMANAGERr MARCH1990 3

T H EE D I T O R FtomtlteMitor

AIM's21st Joint Board of Governors and TrusteesMeeting fhe Asian Institute of Management refers to the annual I event taking place March 1,-3this year as the joint board of governors and trustees meeting. It is an inportant time for the Institute, for it is during these few short days that businessmenfrom throughout Asia, Europe and North America assembleto review the past year's programs and to d e l i b e r a t e u p o n t h e a c a d e m i c a n d b u s i n e s sa c t i v i t i e s programmed for the newyear. AIM does much more than conduct the annual meeting of its boards during this hectic and exciting week, however. Joining the governors and trustees are the trustees of the AIM Scientifrc Research Foundation (10 AIM alumni sit on the 15-personboard), the officers of the Federation of Asian Institute of Management Alumni Associations and the Institute's representatives in Asia. These organizations, too, review and approve news plans and strategiesfor the rapidly unfolding year. 1990promises to become a special year for this formal gathering

Asian management education and its growing role in public affairs affecting Asian governments,societiesand organizations. This second and relatively new role for AIM comes at a time when demand for its programs is outpacing the lnstitute's capacity to meet that demand. Although plans are being made to construct an additional building where the student parking area is now located, AIM's governors and trustees will be both pleased and concerned that the need to address the issue ofresources to support increased faculty and facility demand i5 Sessming critical. In the meantime, expect to read more about the Institute's Global Conference and the March meetings in the next issue of THE ASIAN MANAGER.


with the conduct of a special half-day management conference titled, THE GLOBAL 90s:A Focus on the Asisn Manager. In the afternoon of March 2, governors,trustees,alumni, students, faculty, representatives of the Institute's donor community and managementexpertswill attend two plenary sessions:1) The Implications of Developments in East Europe on [nvestment and Businessin Asia; and,2) Intra-Asian Trade and Investment. AIM governor and Rentokil Group PLC chairman David K. Newbigging will deliver the keynote address for the frst session.Co-chairman of the Institute, Washington SyCip, will addressthe issueof intra-regional trade in the second session.A two-man panel composed of enterprise and media representativesshall react to their comments,and a subsequentopen forum will conclude each session. The conference representsthe Institute's central role in


AlumniFund Update asterin Business M anagement Class'70will announce during the joint board of governorsand trusteesmeeting,that it is establishinga five-year facultychairwith a contribution of P1,000,0(X) ( U S $ 4 5 , 0 0 0 )t o t h e A l u m n i F u n d .C l a s s r e p r e s e n t a t i v em s et early in Januaryto formalizntheir plansfor the donationand to plan yet another businessconferenceduring the Alumni Homecomingin May.The donationwill be conveyedin five,equalannualinstallments.the first to be handedoverto theAIM Scientific ResearchFoundationduring the HomecomingDinner. IndividualCommitmentsto the Alumni Fund (US$125 annually)increasedby over US$8,000in the first three weeksfollowingdistributionof the Decemberissueof now exTHE ASIAN MANAGER.Total commitments ceedUS$80,000. The administrationandfacultywouldlike to acknowledge the generosityof thesemostrecentdonorsand the many otherswhohavemadeandconveyeddonationstothe Alumni Fund and the TwentiethAnniversaryFund RaisingProgramsince1988. _MAH

And in the businessof Iife insurance,Insular Life shouldbe the leastlikely to go. You see,for eighty straight years,Insular Life has been providing dependable protectionand seanrityto generationsof Filipinos.We havtn't misseda single year of work since 1910.And not even a catastropheas grave as $UorldWar II was able to stop us. Of courseit wasn't easytrying to work at all during a lVorld lJ7ar iust ask all the other insurancefirms that closeddown at that time! Today,InsularLife is the first and largestFilipino life insurancecompany with the longest unbroken service record in the industry. In 1988,we rankia &th in the nation's top 1000corg;rations- Last year, our assetstotalled P4 billion. Now who sayswe can'r be in the businessof life for gmd?


Something permanent in a passingworld.


globalbanking:an ideathat'sworking for BankLeu.

flattening their chancesto own homes or rent decent,convenientlylocated apartments and housing.



LegalStruc{ureslo Liberalize Markets:The Philippine Experience by Prof.Wtor S. Limlingan What can government do for small and micro enterprises? Stay out of the way, according to Vic, known in the Philip pines asthe father of the Law of Twenty.


BeyondStrategy:TheCEOas Maestro by Dean Horacio M. Bonomeo, fn For an organization to live its mission, the corporate culture must be real permeating each level and functional area. Transforming culture and values from sterile corporate pronouncements requires the organization's leader to do more than just lead: he or she must orchestratea harmony among its parts and its people. Junbo shareshis experiences with corporations privileged by the direction of maestrosand those mired in convention by leaders who fail to ever take the podium - and the risk - of leadership.

From the Editor



AIM's21stJoint Boardof Governorsand TrusteesMeeting



"The RealEstateBoom" - lts Effecton IncomeRedistribution byProf. Donilo A- Antonio in disguise; We haveheardof blessings now, Danny opens our eyesto tragedieshiddenby the euphoriaof long-awaitedand rapid growthin the real estatesector.Without incentives from governmentto direct private capitaltoward projectswhich benefit the poor, the real estatesteamrolleris

Association of Asian Management Organizations November 27-D last year, the Association of Asian Management Organizations held its tenth annual conference in Hong Kong focusing on entrepreneurship and management. The editors of THE ASIAN MANAGER havechosena seriesofthe papers delivered at the conference to publish for the benefit of its readers.Two,we arepleasedtonote,are authored by AIM governors.

40 Modelsfor Cebu:The Newly

TigerEconomies Industrialized of HongKong,Taiwanand Singapore

by Prof. GsbinoA. Mendaza The first thing a developing country government should do is decide what it will not do.

45 lmprovingCorporateCaPital

InvestmentPerformance byProf.EmmanuelL. Santiago

A systematicapproach to corporate investment ensuresmaxmum returns.

Alumni News tar

+6 17 p TheClassol'Tl organizingtor Entrepreneurshi by Tanin N imm anahaeminda Breathing small team entrepreneurship into large organizations.

2 1 in SustainingEntrepreneurship larye Organizations

byYotaro l{obayashi "big comHow to avoid the dreaded pany disease":Take a few risks.

26 in the Public EnUepreneurship Sector byMou-HuiKing Breathinglife intosemi-bureaucratic organizations may not be easy,but it can be done.


Manufacturing Technology byDr. ReinosukeHara Computersprovidetheintegratingsystem for manufacturingprocessesand global management.


Slnprq a SwissBankbrthe 1990s byDr.Iturt Schiltnecht Strategic withdrawal from direct




A Publicdion of thcAlumni Bebtims and Pleemfft OfiicE sd the Fcdqâ‚Źtion of the Asim Instiluie of Mmagement AlumniAssiations

Publisher FelipeAlfonso

Editor-in-Chief MichaelHamlin

Editors SusieAroyo,AnniePundol,SallyFlores

DesignEditor Al Ballesca

MarketingDirector Delia Gutienez

EdinrialBurd GastonOrtigas,GabinoMendoza HoracioBorromeo Tomaslopez,Sonnv@loma

AssocrateEditors Effie Goh (Malaysia,MBM'78) lshtiaq Qureshi (Pakistan,BMP 7/) Gan Cheong Eng (SingaPore,MBM A2) TeerachaiChemnasirifihailand, MBM'73) BhaskarBose (hdia, MM'77) Copyngftl t99o by thc Aim lrranagcr. Al rilhls rcwd. Rasoacf im in any matmar in v*lob o. in pad in Ehglbh q ottid hnguagc p.ohittit.d. Thc Aslsn iranagr. is publishcd qusddy byllEAumri Fbldimsard BaffirntO{fic6 of thc Asie lFtitlj|c ot iranagGmnl'

'An original mural by Carlo V. Franciscqat the Administralion Building ol United Laboraloris

Bayanihanin United means.. . we care for people

w sfl U ilITED

Bayanihan it is the old Filipino custom of working together for a common goal and sharing the fruits of harvest. To us, in United, Bayanihan means commitment fo people. As markedly expressed in the how and the why we do things. Whether in assuring the excellence of our products. Or in getting involved in socialupliftment. Or in doing our mighty best to contribute more meaningfullyto our country's health, its economy, and the improvement of the quality of life. Caring for people. That's Bayanihan in Unilab.

United Laboratories,Inc. United Street, Mardaluyong Metro Manila,PhiliWbps Sewingryr in the Philippina and$utheas.t Asia: Eliomediso MedichemPharmaceuticalso Pedhtrica o Theraphannao United AmericanPhamceuticals o WestnrontPharmaceutbalsr Myra Pharmaceuticals. Unilab Genâ‚Źricsa United Home Mucts a Univet Agricultural Products


COVERSTORY Living themissian...

Beyond Strategy: The

CEOas Maestro by Dean Horacio M. Bonomeo, Ir. USIPHIL Professor of Business Management

lntroduction I n the middle of the concerto'sthird ! and final movement.the conductorturned hisbacktoth" o.- fchestra, descendedthe stage, and seated himself in the front row. Leonard Bernstein. who had nurtured the New York PhilharmonicOrchestra into one of the world's greatest,was, o in his own inimitable and uncon0'0 his ventional style, announcing retirement. The musicians,as s u r p r i s e d a n d a m a z e da s t h e Philharmonic'spatrons, never misseda beat. Indeed, they Bernstein's punctuated dramatic statement by finishing his farewell performance magnificently, as if still guidedby the maestro's hand. M a n y a c h i e f e x e c u t i v eh a s likened his task to that of an orchestra conductor. His musicians are the individuals of the enterprise; the string, wind, brass and percussionsectionsare the d e p a r t m e n t s a n d d i v i s i o n s .H i s audience is the market, responding to his creative interpretations. To please this audience and earn anencore, he must inspire the segmentsof the corporation in order that they perform harmoniously, and motivate his people to executetheir parts masterfullv. Working closely with corPorate ntaestrosover several years has fortified my belief that strong personal leadership, and the creative use ofthe power that leadershipbegets,are the key to orchestrating an organization to

a fine pitch. Most corporations todaYhave a strategy which they formulate and document after countless hours of conferences,workshops and meetings during which key managers review past perfornance, study opportunities and threats in the environment, analyze the company's strengths and

weaknesses,set goals and objectives, and evaluateand decide upon alternative courses of action. The final document that results from these efforts is then bound attractivelY, with "strategic Plan" proudly embossedin gold letters on the cover, and enshrined in the CEO's office, beside the coffee table books and other decor. Copies are prepared for the operating departments,where theYare quickly filed awayand forgotten. After L2 months of hibernation, these documents are resurrected and the strategic planning cycle continues,


with their yellowed pages seeingsome use as inputs or reference for next year's strategic plan. CEOs, by this time, have discovered that strategy,by itself, does not ensure attainment of goals and objectives. Neither can the most comprehensivc information and control systems(albeit developed from, and built into, the strategy) guarantee success. My own experience assisting companies in the development of strategic plans suggeststhat it is not enough for a comPanY to arrive at a strategJ - it must spawn one. The difference lies in the extent of involvement of people in conceiving and giving birth to the stratery. From this s h a r e d p a r e n t a g ec o m e s t h e responsibilityand commitment of parenthood, to nurse the strategy,to see it grow, mature and succeed. Stratery is a people-oriented process,hence the importance of leadership.It is the CEO who initiates this process,who invites his managers to participate, who inspires in them the yearning to father a strategY and attend to its birth, who instills in them the responsibility to nurture it. The CEO cannot accomplish this without focusing the organization around a fundamental common cause - the mission.

Livingthe Mission 1 1 m o n g t h e m a n y f a s h i o n st h a t lhe fancy of the manageAcaught "Corment world in the 80s was the porate Mission Statement." It seemed every company had to announce and assert its purpose, its reason for existence - to draw a vision of its present and future businessand its relationship to the world outside.Yet despite

the enormous amounts of time, money and effort spent on the formulation and promulgation of such mission statements,often they merely served to decorate annual reports and rarely permeated the organizational fiber. Every corporate mission is ambitious, as it should be, for man finds n o c h a l l e n g ei n m e d i o c r i t y . S a d l y , however, this same lofty aspiration is too easily lost and forgotten in the maze and morass of corporate life's day-to-day realities. The way out of this trap lies in discerning the mission in everyday life and making the mission a part of life's realities; i.e., in living the mission.

quality products in selected healthcare categoriesfor the benefit o f o u r c u s t o m e r s , e m p l o y e e sa n d shareownersaround the world." Goals are statementsof excellence, or distinctive competence,that are necessaryto fulfill the mission. In establishing goals, the question is: What areasdo we need to be reallygood at in order to be true to our mission? Through intensive discussionsand deliberations at various levels of the organization, management identifi ed six areaswhere the company needed to excel in order to realize its mission. I will enumerate three of the six, along with their corresponding goal statements.

Strategyas a Wayof Life Every CEO would probably like to E seoall his manaeers.ciownto the lowest levels,-ulking decisions strategically. This does not mean that frontline managerswill dictate or even pre-empt a company's strategy. Rather, it suggeststhat managers,at all levels, should make decisions,even (and perhaps especially) the day-today ones, in accordance with the corporate strategy.Indeed, the ultimate goal of strateg5ris to guide such day-today decisions(As more and more information becomes available to frontline/firstline managers due to increasing technological sophistication, and as the companies'needto react faster to such information in order to remain competitive becomes critical, the day-to-day situations of frontline/firstline managers will become major strategic decision points.). The strategyitself (i.e., the substance of the final document) must originate from the corporate mission, or the reason for the company's existence. From the mission statementwill evolve goals, objectives, strategies and action plans. These are arrived at by asking a series of questions. Irt us take the mission statementof a multinational pharmaceutical company in the Asia-Pacific region as an example. The mission statement, which itself was finalized only after much discussion and collaboration among key personnel from corporate headquarters, regional offices, and country operations, reads: "Our mission is to be the leading developer and marketer of premium

GOALAREA MarketingexcsllerrceProduclleadershiB


indigenous management development." From each cluster of objectives, management then designsstrategic programs (clusters of related activities) for achieving the objectives. Here the key question is: what programs do we put in place to achieve these objectives?For instance,the objectives supporting the "Marketing Excellence Goal" might have strategic programs centering on "market research" capabilities, product management systems,and salesforce development. Finally, for each strategic program, management will formulate action plans. The questionsto ask are: what GOAL$TATEIITTTT &railistr awoiA Uase whbh effestfuelyreryonds tomerrpedsln eachd ourmarkets. Provideprodtictswhichresultin superior cuslomersaiis{actionso as to achbve and sustainbrand leadershipin our chosenssoments. Develop end {nalntajn a motivatâ‚Źd taarn ot high qualr.typeoplo wo*ing in an environrnehl that fostere acoomdishrnent, delegation; oreEtiviE, mulual tosp6ct and pâ‚ŹEonal development.

specific steps do we undertake this Necessarily,becauseof the longterm natureof a corporatemission year in each program? who will be responsible? when do we start/frnish? (the missionalwaysassumes that the I have elaborated at some length on companywill existindefinitely),the the above example to make the point timeframefor the goalswill tendto be unspecified;they, like the mission, that the seriesofquestions (and necessarily the discussions they engender) representa continuingeffort (like that lead to a strategic plan may apmoving target). tracking a On the other hand specificobjectives pear tedious and at times redundant, mark the organization'sprogress seeminglya matter of semantics(as in towardsitsgoals(andultimatelythereby differentiating goals from objectives, or strategies from action plans). Intowardsits mission).Objectivesreflecr deed the process may take months. thoseareaswheresignificantresultsare But its purpose is to bring minds necessary to arriveatthe statesofexcellencethe goalsdefine.Theyrepresent together, to explore meaningsandmotives, and to achieveconsensus.It is an measurablelevelsof expectedperforoccasion for dialogue, whether that mance,Expressedin-moreilearly definedimperativesand time frames. takes place in a seminar, the executive suite, a workshop or the shop floor. The keyquestionhereis: vfrat mustwe achieveand how soondo we need to - And leadership is necessaryfor this dialogue to be sustained, meaningful achievethesethingsin order to get goals? and productive. closerto our For strategic management to beEachgoalareawill havea setof such come a way of life, for the strategy to objectives."The PeopleGoal" in the be a living one, people need to be inaboveexamplemight haveas objecvolved from its very beginnings, not tives:"to havein placein 1989the full just as owners, but as fathers of the teamof qualitypeopleneededto fulfill strategy.The process described above our mission,"and"to upgradeperformanceand attitudelevelsin anticipa- involves many people from different levels of the organization, each bringtion of 1988-92Long-RangePlan ing expertise and points of view. It is growth attainments,with emphasison


not an easy process. To harness the diverse expertise and to reconcile even more diverse perspectives, the CEO must keep everyone focused on themission, as theymove fromgoals to objectivesto strategiesto action plans. As people participate in the strategy formulation process,the more aware they will be of the larger parameters for decision-making. Consequently, the more there are involved in this process,the more therewill be among them those who think. and make

At that decisions, strategically. point,the companyispracticing s t r a t e g i cm a n a g e m e n at n d strategybecomesa wayof life. is Since strategy operationalizationof the missionstatement,resultsshould be viewedin light of the corporate mission.All too frequently,especiallyat annual managersevaluate conferences, performanceagainstbudgets. This is important enough,since budgetsreflect objectives.Yet veryfew managersaskthemselvesif their periodicresultshave broughtthemanycloserto their mission,if theyhaveperformed a c c o r d i n gt o t h e i r u l t i m a t e The CEO mustconaspirations. sistentlyand continuallyraise thisquestion. This entireprocessrequires stronghands-onleadershipby the CEO. He moves,guides, oversees anddirectstheeffort through taskgroups,eachdealingwith greater or lesser,higheror lowerpartsof the strategy,eachspinningoffother task groupsasneeded,therebystrengthening further the strategy'spedigree. Agreementwith the missionis fundamentaland a sourceof unified thinking,for it is the missionthat justifieseverythingelsethat theorganization does.

andinterpretingtheproblemsandopportunitiesit presents. Centralto anycultureare the values From these from which it emanates. valuesspringnormsandstandardsfor behavior,and the attitudesnecessary to successfullycarry out the corporate In strategies. missionthroughbusiness manycorporations,thesevaluesare thoseof the founders. Once in a while, a corporationhas the opportunityto identi$, to choose its values.This can happenwhen

be served and reinforced, an environment that will facilitate and encourage commitment to these values. This requires the creation ofheroes, establishing rites and rituals, holding ceremonies, writing and telling myths and legends;all these in support ofthe values, constantly transmitting the messagethat these values are important, that these values are what the organization lives by. Leadership therefore must inspire and excite, rather than direct, because the development of a corporate culture is a process of discovery. The same multhational company I cited earlier, after several months of implementing their strategic plan, observed that progress was smoother where people displayed a certain spirit, a certain attitude toward their work, their products and their customers, a conviction about themselves and their colleagues. What they had observed were values. To get a better handle on these values in order to promote them in the organization, the managerswho had put together the strategyrecruited others and reflected at great length on the mission statement as well as corporate history and various inputs from all sectors and segments.They concluded

managementdiscoversthat evenas they implementtheir strategies,certain attitudesandbehavioreitherhelp or hinder their efforts.They then deliberatelyset out to create,or recreate,the corporateculture.They beginto askwhattheybelievein, what beliefswill guidethem.Without these beliefs about themselvesand those they dealwith, without thesevalues, the highestorganizationalpurpose providesinsufhcientmotivationfor its achievement.

that for their missionto be truly meaningful, their actionsneededto be guided alwaysby the followingcore values:total commitmentto quality, respectand care for people and sensitivityto customers'needs. Claiming (in their missionstatement) to be a marketing-orientedorganization,theyappliedtheir business c o m p e t e n c i e st o t h e b u s i n e s so f marketingthe culture.The CEO led the effort by "anointing high priests" who would "convert" othersto the new faith. They devisedprogramsto communicateand reinforce those valuesthroughoutthe organization. recastto ensure Rewardsystemswere that thosewho behavedaccordingto the core valueswould be recognized andheldup asheroesand champions. It was no longer sufficient, for example,merelyto reachsalestargets; people had to demonstratethat in achievingthosetargetstheyhad acted

A Processof Discovery ; f strategyand strategic management laretherepertoire - the musical scores - that the organization plays, then surely culture must be its unique tone and timbre. Every corporation has a culture. It is the sum total of collective experiences translated into a spirit of coping with the environment

1 n creatinga culture,leadershipis inThe CEO mustchalI dispensable. lengehis managersand the entire organizationto reflect onwhat is important to them and what will give meaning to their work. Havingidentified thesevalues,he mustthen designthe envirorunentin which thesevaluescan


By example andbyfiat,the CEO must point the wayto perfection.He must encourage,facilitate and reward any and all efforts at self-improvement.His vision for the compan/s future mustdepict in the clearestimages possiblethe kind of peoplethat future demands.This meanschampioning thehumanresourcecause- bygrui"g it all the importanceand support it deserves, staffingthe humanresource unit with professionalsasgood as any in other department,promotingits role, and consistentlyendorsingits work and worth. Similarly,he must People dignify and [snq1 threugh all possible Devblopmentand meansthosewho makeof themselves Succeision thekind of peoplethecompanyneeds. Planning A key to any effective human programis sucresourcedevelopment 11I ot everymusiciancanbecomea llvirtuoso, but everyonetries to cessionplanning.The CEO can inexcelat his art. Even if his ambition is itiate this at his level.He shouldhave tobecomea soloist,he knowshe must the courageand the confidenceto set perform with others.As a soloist,he a time frame for vacatinghis office. mustbe better than the accompanylng This necessitates that he cultivate instrumentalists. As a memberof a thosewho report to him, preparing symphony,an ensemble,or evena trio, them to be good enough,when the he must be at leastas good as the time comes,to take over hisjob. The others.So the questfor excellence processcan movedownwards;i.e., neverceases. who will take over from the person Developingthe humanresourceis whotakesoverthe CEO, andsoon.In alsoa never-endingprocess.The skills fact, at any and everylevel of the orof today are nevergood enoughfor ganization,the questioncanbe asked: tomorrov/scompetitionand the ever- w h o w i l l s u c c e e dt h e d i r e c t o r , ghangingenvironment. manager,supervisor,or foremanand As an organizationdevelopsits when?Other importantquestionswill strategy,its managersbeginto discern follow logically:what skills and comthe skills that people need to petencieswill the successor need?if strengthenor acquire.As the corhe doesnot havethemyet,howcanhe porate culture takesroot and thrives, acquirethem?how longwill it take? winning attitudesbecomeevident. Oncethis processpervadesthe orHuman resourcsdevelopmentenganization,humanresourcedevelopsuresthat the organizationwill always ment acquiresits own momentum. havea pool of competentpeople, Developingpotentialsuccessors besteepedin strategicmanagement, comesthe responsibilityof eachand committedto the company'score everymanager,equalto the classic values,and honed in the skills of their managerialfunctionsof planning,imdisciplines. plementingand controlling.SuccesThe multinationalcompanyin our sion planniqgcao createmany earlier examplesformally reviewsand anxieties.Through his own self-asupgradesits strategiestwicea year.In surance,in his relationsand dealings November1989,two yearsafter they with hisheirsapparent,theCEO leads fust adaptedthe strategicframework, by example,thus providing the imand a year after implantingthe culpetusfor peopledevelopment. ture, theylooked to the coming d e c a d e .T h e y w e r e s u r e o f t h e i r l-eadership strategiesand confidentof their purpose.It was an opportune time to leaderFvervdav a CEO exercises launcha humanresourcedevelop- Eship overthe menandwomenof m e n t p r o g r a m ,t o p r e p a r e t h e i r the organization,manytimesdirectly people to meet the challengesof the (as the boss),more often in lessob90s. As a vious,yetmoremeaningful,ways. according to the corporation's values. Support staff began to identify their internal clients so that thev could learn to be sensitiveto the oeeds oftheir "customers," and their internal services would be of the highest quality. For the CEO to succeed in fostering a culture, he himself must be an example to others - a role model - one who hasreached the corporate heights by living accordirg to the core values. In this way will he animate the organization.

role model,he inspires.As a teacher, he instructsand directs, influences a n d t r a n s f o r m s .A s a f r i e n d , h e rewardsand acknowledges; sometines he chidesand a.l-onishes. When all is said and done,management is not as cerebrala processas businessschoolsunwittinglymakeit to be, with their frameworks,models, tools and techniques.To be sure, managementdemandsintellectual andtechnicalskillsofthe highestlevel. But in the final analysis,management is aboutpeople - peoplein searchof meanings. There are numerousopportunities for a CEO to helpthe peopleof theorganizationfind thesemeanings.The processes ofstrategy,cultureandsucof cessionplanningarethreeexamples suchopportunities,which themselves canopenmanymore.It is throughhis leadershipofthese processesthat a CEO givesthe organizationa meaningful life of its own, or at leasthelps the organizationdiscoverit. When Bernsteinretired as music directorandresidentconductorofthe New York Philharmonic,he wassucceededbyZubin Mehta. A fewyears later,DannyKaye,a comedianandaccomplishedmusicianwho could not read a note of music,conductedthe Philharmonicat a specialconcertfor charity. He took the podium after Mehtahadled the orchestrathrougha brilliant renditionof a Strausswaltz. DannyKayeclowned,giggled,teased the musicians,heckledthe audience, and evenconductedthe Triumphal March fromAida with his backto the orchestra.Throughit all, the menand womenof theNewYork Philharmonic playedbeautifully.This orchestrahad a life of its own,unrnistakably.


ARTICLE Ttwmmifesntionof irresponsibkgrowthand ircfficierugovernmenl...

"The Real Estate Boom" lts Effect On lncome Redistribution by Prof. Danilo A. Antonio 1 1 n y k e e n o b s e r v c ro f P h i l i p p i n e f{business would asreelhal the real estatesector in geneial has been experiencing unparallelcd growth patterns in the years following the 1986 EDSA uprising. The generalconsensusis that the upsurge in businessconfidcnce,led by a previouslyhibernatinginvestorbase, servedas a stimulusin waking up the rest of the entrepreneurial class,particularly in the area of real estateinv c s t m e n t .S i n c e r e t u r n s f r o m s u c h l a n d - b a s e da c t i v i t i c sn o r m a l l y t a k e t i m e t o g e n e r a t e ,t h e r e n e w c d a n d v i g o r o u sa c t i v i t y i n t h e p r o p e r t y development sceneservesas a conc r c t c m a n i f e s t a t i o no f t h e b u s i n e s s scctor'sfaith in the country'sstability. Whilc on the surfaceit looked likc s u c h o p t i m i s t i c a n a l y s e sa n d c o n s e quent actionstaken by businesswould produce bcneficial "trickle-down" eff c c t s t o o t h e r s e c t o r so f P h i l i p p i n e socicty,a deeper analysisofthe consequcnceso[the "Real EstateBoom" at b e s t p r o d u c e s m i x e d r e s u l t s ,a n d raiscsfurther issueswhich shouldconcern public sectorpolicy makers.We specificallypoint to the variousrepercussionswhich unrestrictedgrowth in thc rcal estatesector could produce on income redistributionand related issues.

CondoBoomAs "Foreign"-Bred "con1 . h c r e a r e e a s i l yo v e r 5 0 I dominium" building projectsnow ongoing all over Metro Manila, most of which are concentratedin the Makati and the Ortigas-Greenhills arcas.By the end of 1990to early 199L, there will be about 10,000more cond o m i n i u m u n i t s a v a i l a b l ei n t h e market, with prices rangingfrom P 2 5 , 0 0 0 / s q u a r em e t e r t o a h i g h o f

meter. An 80 square P35,000/square meter uniL(typicallytwo-bedrooms) will therefore cost anywherebetween P2 million to P3 million. It is a fact that evenas of this writing, condominiumunits are still being sold at a brisk pace,slowedonly to a limited degree by the December 1989coup. Yet, if we consider that there are less than 10,000Filipino familieswho earn more than P500,000per annum and therefore can afford such high priced units, we now begin to wonder where the demand for suchplush units is coming from. 'Even assumingfor the sake of argument that at least50% of all high-income families will buy one additional condo unit (probably as an investment), it will still take two yearsfor the local market to absorbthe 10,000unit supply. Demand thereforehas to come from outside buyers,foreignerswho consider the price of condo units in the Philippinesa bargain.Thesewould include investorswith US$1 million to US$3 million from Hong Kong, Taiwan, Japan,South Korea and Singapore,or individualswho would have difficultybuying the sametype of units at suchprices in their home countries. With the sustainedlevel of demand from these sources,it is therefore no small wonder that prices of condo units continue to move up. T h i s h a s ,i n f a c t , s p u r r e d l o c a l property owners and developersto continuewith their plansof putting up more condo units, in view of the profit bonanza expected.Property owners indeed are reaping the benefits of the favorable market demand in increasing numbers. It is conceded that the continuous levelof constructiondoesspur a lot of activity in the focal economy. Although this provides a continuing source of employment for the labor sector and income opportunities for all construction-relatedbusinesses, the samedevelopmentalso contains


within itself the seedsof further fissure among the various sectorsof Philippine society.The rich and the propert i e d c l a s sw i l l c o n t i n u e t o a m a s s wealth through generation of more value-addedfrom their land holdings. On the other hand, apart from partaking of the crumbs of such bonanza, (like temporary and contractual employment,etc.) the low-income classcs ate further pushed downward, with the increasing distant possibilityof their ever acquiringtheir own homes.With units at the high-end market already costing P2 million, the price for low-cost housing units has also been inevitablypushed upward, suchthat an increasingnumber of lowincome householdsalreadyconsidcr "low-priced masshousing" the cost of units out of reach. Taken in this light, therefore,it appears that the condominium boom is n o t h i n g m o r e t h a n a s i g n a lt h a t t h e "inflaPhilippines has imported the tion" of its prosperousneighbors,with the net effect of driving up overall real estate prices. While this is beneficial for the very few landed families, the inflationary situation only further exacerbatesthe plight of the poor. What makesthe situationevenworse is the fact that construction activities a r e c o n c e n t r a t e di n M e t r o M a n i l a , further compounding the imbalance "over-developed" between an "underdeveloped" metropolis and an rural sector.

fhe."ShoppingCenter" tsxprosron 11 nother visible upswing in conactivity is in the l{struction of development/construction numerousshoppingcenter projectsin Metro Manila, initiated mainly by the SM and Robinson groups. SM in itself has three projects in Metro Manila which when completed will have a total gross floor area of 60 hectares. Robinson also will finish

about25 hectaresofgross spaceby the end of 1990. Other traditional d e v e l o p e r sl i k e t h e A r a n e t a s i n C u b a o , t h e O r t i g a s e si n G r e e n h i l l s and thc Ayalas in Makati are also emb a r k i n g o n r e d e v e l o p m en t o f t h e i r respectivecenters,which should easily doublc their current building floor areas. All told therefore,the total gross floor areaofall theseshoppingccnters will increaseby morc than thrce times the total selling area of Metro Manila shoppingcentcrsby the end of 1991. Sincedemand (as indicatcd by overall GNP growth) can growno higher than 6Voper year,in rcal terms,it is obvious that growth in demand will bc insufficient to provide needed revenuesfor t h e l e s s e e so f t h e s e n e w s h o p p i n g c e n t e r s .T h e s e c e n t c r sw i l l b c c o m pelled to compete for saleswith the o l d e r c e n t e r so r d r a w f r o m t h e s o callcd "unorganized" retail sector in Divisoria, Baclaran, etc. If this happens,a lot of small-timeentrepreneurs w i l l b c d i s p l a c e db y t h e n e w " m a l l operators," who almost always belongsto the high and middle income classes.In the final analysis,therefore, i t i s a g a i nt h e s m a l l - t i m eb u s i n e s s e s who gct caughtby the so-called"shop-

ping center boom." Corollary to this,the new centersfurt h e r t a x t h e a l r e a d yo v e r - b u r d e n e d road and utilitics networksof Metro Manila, which havenot kept pacewith the growth of the private sector. Necdlessto say,this will causemore strain on the chaotic traffic system. The new centerswill likewise necd more manpowcr to staff their stores, which will be an incerrtivefor the influx o f m o r e j o b s e e k e r si n t o M e t r o Manila. Sincc there arc insufficient housingunits for theseemployees,this will again add more problems to the a l r e a d y u n m a n a g e a b l eh o u s i n g shortagesituation in the metropolis.

Low Cogt HousingAs Laggard 1111tith grossprofit potentialsgrowU U ins even more lucrative in the high-en*clhousing sector, there has been a noticeableshift by subdivision dcvclopcrsinto higher priced lots. A casein point would be the North Fairview Subdivisionstartcd in the 1970s. T h e a r e a h a s r e c e n t l yb e e n t r a n s formed into a medium to high priccd subdivisionby its new developers,with sellingrates alrcady reachingP3,000

per square meter. This is definitely out of reach of the ordinary Filipino family. The fact however remainsthat high-priced lots continuc to bc sold "hotcakes"thereby like proverbial providing furthcr incentivesto private dcvelopersto develop more such lots. In fact, the situation has reachedtho extcnt wherein raw land in the Cavite and Laguna area, which a fcw years ago could be bought at lessthan P50 per square meter, is now priccd at a minimum of P200 per squarc mcter. At theseacquisitionrates,dcvclopcrs really have no altcrnative but to pricc developedsalcablolots at no lessthan P2,000per squarc mctcr. Again, this transformsthese aroasinto thc domainsof the high and mcdium class markct.

LowIncome"Driven Households Out"Of MetroManila 1l\ver the long run, uncheckedand l\Junfcttercd erowth in hieh income housingw , h i c f ic n c r o a c h c so n t h c domain of propcrtics hcretofore intended for low incomehouseholds, f u r t h e r l i m i t s t h c p o s s i b i l i t i e so f t h e latter to own property. Thc only arcas


availableto them will increasinglybe thosewith very low appreciation v a l u e sl y i n g o n t h e o u t s k i r t s o f t h e metropolis, where employment opportunities are scarce. Hence, by force of circumstance,the distancebetween the place of work and place of residence for the low income households will become greater. This forces minimum wage earnersto squeezethemselvesinto the slums of Metro Manila, where their jobs are situated. This of course further underscoresthe widening gap in the lifestyle "numerous of the "few rich" and the poor," as exemplified by the ultimate proliferation of "plush enclaves" sideby-side with bursting squatter slums.

PrivateSectorTakes the Lead manifest 11 ll thesedevelopments l{the net elfect of untrammeled growthof privatebusinessinitiativeon overallsocietalstructures.The public sectorhasdefinitelyfallen behind, especiallyin the provisionof basicinfrastructureandserviceswhichshould have guided private expansion developmentand perhapsplacedit in a moreorganizsdSetting. Thewonderof it allisthatdespitethe absenceof public sectorsupport, privateinvestments in the real estate s e c t o r c o n t i n u et o p o u r i n . T h e danger,asalreadycited,lies in the

concentration of projects in g e o g r a p h i c a r e a sw h e r e p r i v a t e moneyexpectsthe bestreturns,and on investmentprojects which are expected to provide maximum profits. U n d e r t h e p r e s e n t s y s t e m ,M e t r o Manila continues to be a favorite site. while shopping centers, plush condominiums and high-income subdivisions remain the preferred haven of real property investmentcapital. Although very profitable to their proponents,these sameprojects contribute little, if any, to the overall "balanced" public sector objective of development and more equitable sharing of income.

Prospects do not forsee any slowdown in llte U U activiw in the real estatesector for the next year or so. Barring further coups (which affect all sectors of the economy anywa, businessis expected to expand, perhaps in a less overheated and logical manner, but still toward investment areas which are concentrated in Metro Manila and mostly in plush residential housing areas.Only a few enlightened individuals in the industry even think of training their guns on lowcost housing, where margins are tight and profit potentials quite narrow, espe"newcomers." cially for Should this type of development be stopped? We submit that government


should pursue policies which will rechannel available investment funds "free market" through the use of the mechanism and fiscal-policy medium. More incentives, such as tax-breaks, subsidized funding and liberalized credit should be provided to convince private investors to begin low-cost housing projects in areas outsidc Metro Manila. The entry of private investment in the industry should r e m a i n u n r e s t r i c t e d .H o w e v e r , i f government wants to rechannel evena tiny segment of the industry's investible funds to suit its overall development and income redistribution objectives, much has to be done to convince these private interests that it is worth their while to do so. Otherwise, we will just continue to witnessthe ever ex"haves" and the panding gulf of the "have-nots," with all its consequent social implications over the long run.

Freedonfrornthc hreancra4t- rtu fostStftgowmrnenl cut give...

Legal Structures to Libetalize Markets: The Philippine Experience

(This paper was deliveredat the Con"Microenterpisesand the ference on Informal Sector,' sponsoredby the Centerfor International Private Enterpise, Lahore, Pakistan,December11, 1989- Eds.)

effectivelyregulatetheir operations. To try to do so would require much more manpowerthan Government can ever afford to marshal.Government regulationsare therefore impossible to enforceuniformly and equitably. They servemerelyto give the grafters in governmentopportunities to harass,takeadvantage ofand extort moneyfrom thesesmallbusinesses; c o n s e q u e n t l y ,r e t a r d i n g t h e i r proliferationand growth.

1n February1986,asthe resultof a I peacefuluprisingof the peopleof the Philippines,CorazonC. Aquino becamepresidentof our Republic. The governmentthat sheformed was democraticin its political orientation andfreemarketbasedin its economic prescriptions. I n f u r t h e r a n c eo f i t s e c o n o m i c philosophy,the Aquino administration immediatelydismantledthe government'smonopolypowersover sugarand coconut,disposedofseveral state-ownedenterprisesandplacedits relianceon the private sectorasthe main engineof economicdevelopment. Moreover, the private sector wasexpectedto accomplishits role with aslittle supportaspossiblefrom the government.Thus,the government liberalizedimports,removed subsidiesfrom credit and soughtto withdraw from an activerole in labormanagement negotiations. Suchpublic policieswere easilyapplicable to mediumand largebusiness enterprises.But what aboutthe small and micro enterprises?Do they not needthe help of thegoverttment? The traditional responsehasbeenthat governmentassistance is necessary for the survivalof theseenterprises. We took the oppositeview.We argued that Government,in a developing countrylike the philippines,does not havethe resourcesto reachdown to the hundredsof thousandsof small businesses, either to assistthem or to

Behind this observationis the belief that the governmentbureaucracy underthe previouspresidenthas,with its numerousregulations,deniedour peoplenot onlytheirpoliticalfreedom but alsotheir economicfreedomas well. Furthermore,we held to the belief that, left to themselves,the Filipino people havethe capacity,the industriousness and the will to perform economicmiracles. In lieu of thegovernment, we argued for dependingon the highly resilient Filipino family to be both the focus nanely: andcoreof microenterprises, o Filipinoswhowishto earna decentliving and haveorganirsd themselvesinto family firms mustbe freed from harassment by the government

byProf.WctorS.Limlingan Ludo Professorof Business Management

bureaucracy. o Filipinos organizedinto family firms are better ableto look after the welfareof their members.In an Asian society wherepersonalrelationships are paramount,who is more likely to care about the welfare of a worker,the ownerof the family frm or a bureaucrat who does161ftae1vhim! o Filipinos organi"ed into family firms,lookingafter their members shouldbe rewardedby the governmentbYbeingexemptedfrom the gleatestnumber of governmentregulations includi"g taxesand fees. o Filipinos organizedinto family frrms deservingof suchreward from the governmentneed only to be registeredwith the lowestlevelof government authoritY,namelythe municipality, which is most awareof the conditionsunder which thesefamily firms operate. On the basisof suchprinciples,we wereableto obtainthe supportof our legislatorsto file a bill entitled, "The Magna Carta for Countrysideand BarangayBusinessEnterprises"or as more popularly called,Kalakalan ng Beinte(Businessof T*enty). Basically the bill seeksto exempt from all governmentrules and regulations,including income taxes,family firms which meetthreebasicrequirements: o They are engagedin economically productive activity; o They have?nor less employees;and, o Their initial capitalis lessthan P500,000(aboutUS$22,500). Furthermore,to formallyavail of suchexemption,all the fanily firm hasto do is registerwith the municipality (town government)and pay a minimal fee. The proposedbill found readysup-


port in the legislaturewhich percieved You may recall that the Kalakalan bil/ it as basicallya populist measure.In sought to liberste the entrepreneurial fact the problem was in trying to adeneryiesof our people in the countryside here to the basicprinciple of "no by exemptingthe certified Kalakalan ng 20firms from all govemmentrules and governmentintcrfcrence" as the legisregulations. latorswanted to provide a full rangeof The basic idea behind this law is very a s s i s t a n c et o t h e s e e n t e r p r i s e s . s imple. Filipino family enterprises Moreover, as the bill was not officially should not be harassedby the heavY c e r t i f i e d u r g e n t b y t h e p r e s i d e n t .i t had to go though a long public hearing hand of our govemment. More imporprocessbefore being enactedinto law. tantly, the Filipino entrepreneur, if entrusted with the well-being of his Obtaining the certification of the workers, can be expectedto treat them p r e s i d e n tw a s n o t e a s yb e c a u s et h e as if they were hisfamily. bureaucracywas againstthe bill. This With the passageof this bill, its imis understandablebecausethe bill was plementation is now inyourhands. For based on thc premise that the bureaucracywas at best unnecessary Congress,in formulating the bill also saw in its implementation the opporand at worst harmful to the growth and tttrity to strengthenthe autonomy of our developmentof microenterprises. local govemmentwits. CongressmanFortunately through the efforts of dated that the licensing o/Kalakalan CongressmanOscar Orbos, we were ablc to obtain an audiencewith Presifirms be the sole responsibility of the Municipality and that thefees to be coldent Aquino who liked the idea and lected be placed in an infrastructure certifiedthe bill urgcnt. The president's certification fund to be used at the discretion of the Municipal Council. speededup the legislativeprocessbut At our request,the Department of openedup a new forum for discussion, Finance and the Depaftment of Trade the media.The opponentsof the bill and Industry have agreedto tap the serraisedcertain issuesabout the legislavicesof ourfinancial instirufions in im' t i o n . B e i n g a f i r m b e l i e v e ri n a f r e e plementing the Kalakalan Law. The marketplacefor ideas,we soughtto inresult of such discussiottshas resulted form the public about its benefits.This "Two StepProcessof in whst wecall the meant interviews with the print and Becoming a Kalakalan ng20." b r o a d c a s t m e d i a , s p e e c h e sb e f o r e Any entrepreneur wishing to register schoolsand civic organizations,aswell as testimoniesin the public hearings has to go through only two stePs: o 1. He approachesany rePutable conductedby legislators. offrcer,usually the branch The bill was passedby the legislature manogerof a financial instittrin November 1989and was signedinto tion like the Philippine Nationlaw by presidentAquino the following al Banlg to certify that his month. But this signingdoesnot end Kalakalan operatesin the the fight to liberalize the markets for countryside,has twentYor less microenterprises.What lies aheadare employees,is engagedin a s t i l l t w o f o r m i d a b l e t a s k s ;n a m e l y , productive businessand is caPiconvincingthe bureaucracyto formutalized at P500,000.00or less. late simple guidelinesfor registration, . 2. With tltis cerriftcate,he and more importantly, convincingthe proceedsto the MunicipalitY, microenterprisesthat freedom from pays the appropiate fee and is governmentregulationsis the best gift issueda certificatesigrcd bY that a government can bestow on its tlte nwyor that he is now a entrepreneurs. r egistered Kalakalan fi rm. In connectionwith the formulation For your information, the procedure of simple guidelines,Speaker of the above was devisedby our V. described Ramon House of Representatives, ntanagenlent expertsat the Asian InM i t r a , e x p l a i n e di n a l e t t e r t o t h e stitute of Manogement. They advised mayorsthe proceduresfor registering the use of financial institutions for Kalakulan firms. The letter stated: severalreasons: o 1. Thefinancial institntions, Dear Mayor, and not the govemmentagenCongresshas just passed and Presicies,are in the bestPosition to law the signed into dentAquino hasiust certify that the requirententsof Kalakalan ng2fr bill.


the Kalakalanbill have been met; o 2. They would not be able to extort facilitation fees from the applicants. Unlike with the govemmenL ertofiion by a branch manager of PNB for the cer' tification would only mean that the entrepreneurgoesto the branch manager of Land Bank or DBP for the certification; o 3. They would not need additional fundingfrom the govemment to do the certification. The incentive to get the business of the entrepreneur will justW their doingthe certification for free; o 4. As o group, they would have a wider coveragethan our govemment agencies ; and, o 5. As a group, they have better systemsof control than our govemnrcnt agenciesso that the issuanceof fake or froudulant ceftificatescan be minimized. I and my fellow legislators Plan to meet with you in the verynearfuture to discuss the implementation of the Kalakalan L aw nrore fu Ily. Veryttru1Ytourt, RumonV. Mitra Speaker We end with the thought that we have been thrice blest. We have seen our research efforts crystalize into a public policy proposal. We have seen our public policy proposal enacted into law. Lastly we have seen the law presented in this international forum. S u r e l y ,w e c a n l o o k f o r w a r d t o t h e final blessingof seeingthis law transform the lives of our countrymen for the better.

:*1 -'*.-

Prof. Wctor S. Limlingan

AMMO.IO tndividnls in lnrge orgmizdions... Dewlqing entrepreneurial

Organizingfor Entrepreneurship by Tanin Nimmonohaemindo Presidentand ChiefExccutiveOfficer Siam CommercialBank Ltd. (Delivered at the AAMO-10 Con"Entrepreneurship and ference on Managemenl"Hong Kong November 27-291989.- Eds.) aFlver ayear ago,when I allowed lJmyself to be persuadedby Mr. David K.P. Li, chairmanof the conference,to acceptthis taskofaddressing you, I wascertainly far too confidentin my ability to explainthe elusive art of entrepreneurship.However, since my topic is "Organizing for Entrepreneurship,"I shall take the liberty of dwelling mainly on organizationalaspectswhich induce entrepreneurshipin larger organizations. As such,my attempt to understandthe art shallbe through identification of its associatedelements.In thisway,itwill be mypleasureto share someof my thoughtsv16 tou, and also to havethe opportunity to hear your viewsin the discussionafterwards.

Corporate Entfepreneurshap when one talks about an 6ften lJentreprenelu, one usually has in mind an individual or a small company who is a risk taker, an innovator, a "entercoordinator; essentially, an priser." The emphasis seemsto be on smallness, a high degree of independence and speedy decision making. However, it is also evident that all these functions are performed by managers in larger corporations as well. Corporate managers can be innovative, take risks, orgarnzs resources and produce advancements for their corporations in the same ways that an individual entrepreneur can for his enterprise. Moreover, larger organizations as a whole can exhibit entrepreneurship. Some or ganiza-

tions are dynamic and innovative. Somesimply coast alongbased on past success,established routines or inertia. Accordingly,I shall approach my subject of organizing for entreprenuership in larger organizations in two different dimensions. First, I shall examine the issue of an entrepreneurial organization itself by identi$ing the critical factors which make it such an innovative organization. These successfactors will therefore be aset of mustsin organizing coordinating and managing all the resources available to that organization. And once these factors are identified, the most suitable organizational chart can then be easily and intuitively derived depending upon the nature of the business and whether it is an industrial, service or commercial operation. Second, at another dimension of encouraging individual or small team entrepreneurship within a larger organization, I shall try to describe some of the usual organizational methods used to induce and encourage corporate entrepreneurs. The first dimension is therefore entrepreneurship of the whole; the second dimension is that of the parts.

CriticalSuccessFactors I et me now turn to the successfacL t o . s w h i c h a r e a s s o c i a t e dw i t h dpamic and advancing operations. I would say there are six such critical factors; they are: o clear recognition of objectives and responsibilities; o a corporate culture of progressive values; o an orientation towards rnarkethg; o a strongtechnologicalbase; o accurate and economical information processing for decision making and finally and perhaps most importantlY, r a conviction that the firm's most important resource is the

human resource.

Clearrecognitionof obiectives and responsibilities aFln recognition of objectives and a corporate enl/responsibilities, tity, to realize its full potential, needs to be keenly aware of its operating fra-ework, both physical and moral. While it is a common precept that the bottom line profit for shareholders is what counts the most, there should be modifications to this rationale. Is it short run or long run profit? In fact, long run proht maximization may call for completely different sets of action and strategies from those required to maximize profit in the short run. Again, is it maximization or optimization of profit? And then is profit only for the shareholders? How about the customers and the employees?When does profit actually become excessive? All these are relevant questions. And now one more. How about the socially acceptable operating norms, respect for the law and maintenance of ethical standards?To sum up, mYview is that an entrepreneurial corporation starts by being profit motivated but only optimally and for the long run, with benefits distributed equitably between shareholders, customers and employees, and also behaving in a socially responsible manner.

A corporateculture ot progressivevalues I et us nowturn to the secondcharLacteristic of an entrepreneurial org a n i z a t i o n , t h a t o f p o s s e s s i n ga progressive corporate culture. To be successftrl, an organization must have establishe d values, traditions and beliefs which are conducive to producing a competitive work atmosphere. Here, I shall point out a few such values. First is the apprcciation of the value of time. The organization should always remind its staff that time is a scarce resource and timing is every-


t h i n g i n c a p t u r i n g b u s i n e s so p p o r tunities.After all, all the yardsticksfor o p e r a t i n g r e s u l t s a r e e x p r e s s e di n time, either in terms of a spot or at an interval. S e c o n di s a b e l i e f i n t h e p o w e r o f reasonand imagination. Decision making should always be made systematicallywith all risks well understood and trade offs examined with care. Corporate planning for the future should be tightly and realistically drawn with alternativestrategiesfully explored. The future must be viewed with a vision. Third is a realization that achievements are possibleonly through hard w o r k .H a r d w o r k e t h i c s m u s t b e promoted. Recognition of "champions" or "winning teams" is usually effective in promoting job devotion and motivation. Finally, proper delegationof power and responsibility should be promoted under a situation of free and open two-way communication, both up and down the corporate chain of command. The foregoing are then some of the useful values and attitudes which should not be confined only to the managementlevel but widely distributed down to the generalstafflevel aswell.Also, theyshouldhavereal and practical applicationsand not remain only theoretical.

An orientationtowardsmarketing I et me now turn to the third characLteristic of an entrepreneurialcorp o r a t i o n : a s t r o n g e m p h a s i so n

marketing. Usually, an organization that is production oriented is concerned about its ability to sell existing goods.But an organizationthat is marketing oriented is concerned about creating goods and servicesthat satisfy current as well as future customer needs. Always, an entrepreneurial organization gives utmost attention to satisfyingcustomer needs and arranging organizational objectives in terms of customer satisfaction. Typically, such an organization tends to be organized in a way that allows marketing functions to have overall authority over planning, production and after-saleservices.Also, a high valueis givento attainingmarket share a n d t h e a b i l i t y t o i n c r e a s em a r k e t share over time; often, at a significant cost to short run profit. Major Japanesecorporationsare well known to carry this practicein their approach t o o v e r s e a sm a r k e t s . M o r e o v e r , i n such an organization managersand staff are urged to keep close contact with customersthrough advertising and salespromotions and after-sale serviceactivities.And, typical to such an organization,marketing coststend to be substantial, often comparable to production costs.

A strongtechnologicalbase I et us now explore the fourth charLacteristic of a successfulorganization: heavy reliance on technological superioriy to either create quality products or to lower production costs. Rising incomes of consumers worldwide means forever changing


consumer tastesand demandsin favour of better quality. A premium is increasinglypaid for quality, sometimes in astonishingamounts.Companies with strong research and development departments have a cutting edge over their competitors in new technological breakthroughs contributing to upgrading the quality of their products or even creating new products altogether. Also in the production process,if proper infusion of technology is incorporated in production systemsand engineering w o r k s , s i g n i f i c a n t c o s t s a v i n g so r steeplyrising economies of scaleoften result. However, possessionof technological know-how and developingsuccessful products are vastworlds apart. It is important therefore that the technical team is supervised by a good overall generalist manager in order to maximize the applications of technology to the other functions of the company. Also, there is likely to be a long time lag between R & D expendituresincurred and increasesin productivity and therefore much managementattention is required to transfer new technologyinto operations. For major innovations involving basic research, the lag may be as long as ten years or more. IBM has recently obtained patent rights for the composition of materials capable of superconductivity at around -2.ffiF. This is after more than five years of basic research, and the objective in the product development of raising that super conductive temperature to "near-room temperature" is still a

long way off. However, the time lag between the successful application of R & D and adaptive or imitative products can be much shorter. One has recently witnessed a very short time span between the lrst SLR autofocus camera developed by Minolta and a host of autofocus SLR cameras which followed.

Accurateand economical informationprocessingfor decisionmakang I et me moveon now to the fifth L c o m m o n c h a r a c t e r i s t i c ,a n e m phasis on the importance of information management and controls. Increasing complexities, and the speed of change in the modern business world coupled with rapid advancements in electronic data processing mean that a dynamic businessfirm must continually upgrade its capability to convert an avalancheof raw facts into usable and relevant information. There is a definite trend whereby firms are downsizing their asset base without affecting earnings capacity.And thisis made possiblebecause of the availability of new communications technologies and effective use of data processing capabilities. Examples for this substitution of information for assetsare many for instance, the rise in automated teller machines (ATMs) have expanded the deposit gathering network multifold and have rendered obsolete some brick and mortar approaches to conventional retail banking. For industrial and commercial companiesinventories generally havebeen pared down due to better controls and accessibility to quick replacement. Also, some newproducts are possible entirely because of rapid information handling. Think of the widespread use of credit cards in the world today. This partial successin attaining a cashless society was only made possible because of sophisticated communications and computing capacities. Moreover, in the field of decision making, top management in large organizations simply cannot operate without the full scale back-up of a management information system;or MIS, as it is generally known. Complicated issues requiring exhaustive examination of alternatives are now quickly handled by modern day

management,but this is made possible only because of good MIS. Information managementis therefore critical to entrepreneurship.

A convictionthat the firm's most importantresourceis the human resource 11low, let us take a look at the last I U but perhaps the most significant aspectof an entrepreneurial organization - the treatmentofhumanresources. Everyone would likely agree that the most important resource to an organization is its human element. How

to best treat, motivate and bring out creativity from this basic resource is surely the key to the dynamism of any company'slong run performance. But, taking proper care of human resourcesoverall may involve the full cycle of a g o o d r e c r u i t m e n t p r o c e s sa t t h e beginning to ensure a minimum quality in personnel; then, compensating them at market rates plus productivity rewards and finally motivating them towards attaining objectives and goals to bring out their best potential and creativity. ln The Art of lapanese Management,the authors point out l.he principles which underline the

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Japaneseform o[ managcmentas the " 7 - S M o d e l . " T h c h y p o t h e s i si s t h a t o r g a n i z a t i o n asl u c c e s so c c u r sw h c n these7-S'sarc carefully activatedand integratedin the long term. Thc 7-S'sare strategy,structurc,syst c m s , s t a f f , s t y l e ,s k i l l a n d s u p o r o r dinate goals.The authorsalso statcd t h a t a l t h o u g hA m e r i c a n m a n a g e r s h a v e f o c u s e do n s t r a t c g y ,s t r u c t u r e and systemsfor a long time, thcy have becn payingmuch lcssattention to the remainingsofter S's:staff,style,skills and supcrordinategoals.The implication is that this may help cxplainwhy on thc whole, Amcrican firms do not s e e mt o b e a s p r o d u c t i v c a s t h c i r Japancsccounterparts. So, six charactcristics,namely,clcar objectivcs,progressivecorporatc cult u r c , i n t c n s i v em a r k c t o r i e n t a t i o n , strong tcchnologicalbasc,keen information managcmentand finally careful cultivationof the human resource, are, in my mind, the most significant a s p c c t so f a n e n t r c p r e n e u r i a l o r ganization.

Entrepreneurial in Large Itrdivid-uals Organizations hat I havedwelt on at length so far hasbcen the lcvcl of tht: e n t r c p r c n e u r i a lo r g a n i z a t i o na s a wholc. However,there is anol.her dimcnsionof entrcpreneurshipat thc individual levcl within the organization. How to organizethe work units w i t h i n a l a r g e r o r g a n i z a t i o nt o b e s t b r i n g o u t t h e e n t r e p r e n e u r i a al c tivities of individuals or tcams of individualshasrecentlybeena matterof v e r y k c c n i n t e r e s ta m o n g o r g a n i z a tional cxperts.This subject was wcll e x p l o r e di n a n a r t i c l c b y M o s e s S h a p i r o ,c h a i r m a n o f t h e e x c c u t i v c committee,GencralInstrumcntsCorporation, in his book, The Entrepreneuial Individual in the Lorge OtganizatiortAnd I shall rcly heavily o n t h e d i s c u s s i o ni n t h a t a r t i c l e t o p r e s e n tt o y o u s o m e o r g a n i z a t i o n a l i d e a s o r t e c h n i q u e sf o r d c v e l o p i n g entreprencurialindividuals. Before exploring somc of the p o p u l a r m o d e l sf o r e n t r e p r e n e u r i a l s t r u c t u r e si n s i d e a c o r p o r a t i o n , S h a p i r os t a t e dt w o b a s i cp r c - c o n d i t ust t i o n s .F i r s t , t o p m a n a g e m e n m havestrong egos - as opposcd to big "aleqos.Hc maintainedthat thcre is,

most a L:1 correlation bctweenemotionally-sccurechief exccutiveofficcrs and the number of truly entreprencurial typesin a company."The chief executivethat inspireshis staff and invokcs positive reactions from h i s t e a m h a s t o b e a s t r o n gY e ts y m p a t h c t i c l e a d e r s i m u l t a n e o u s l yH. i s p o w c r o f p e r s u a s i o nt o b r i n g a b o u t rcsults from othcrs will be the key to . econd, h i s o r g a n i z a t i o n ' ss u c c e s sS "careful and within thc organization, constantattentionmust be paid to internal communication.Communication is pivotal for it is both a meansand an end to involvementand participation." Good internal communication brings about a strong organizational identity and cnsuressmoothteam efforts. Participativcmanagementtends to allow ontrepreneurialstaff to surfacewithin the organization. S h a p i r o t h e n e x p l o r e ss o m c o f t h e organizationaltcchniquesto breed intcrnal entreprencurswhich havebeen popularly tried in the past 20-30years. And theseare: l. The "Franchise" aPProachin which, "an individual entrepreneur contracts with the large corporation for the right to produce or market its products." And within the corporatedomain,this concePtis onc o[ the most common whcreby the organizationrelies "product heavilyon its managers"to be totally responsiblc for certain segmentso[ its production. 2. The "Corporate Spin-Off' method where,"large corPorations give their employeesan opportunity to buY divisions of the company,while the Parent corporation retains equitYin and perhaps a buy back-right in the new comPanY."Again this concept goeseven further on the idea of segmenting products and markets and treats diffcrent businessunits as separateentitics so that each has to fend for itself. However,all units are ultimatelYaccountableto one lcadershiP. 3. The new"Yenture" concePt where,"... a group of in' dividuals work together on a project while still in the employ of the corPoration. The


group is organizedand remains in existence only as long as it takes to reach a particular goal." This is more a prototypc project devcloPment effort where emphasiswould be on experimentingand testing. 4. The "Profit Center" concePt where a manager has more accountability for the "proht" of his work unit. This is probablY the most widely used method of encouragingdifferent businessunits to act as indepcndcnt enlrcprencursin Pursuit of agrccd corporate goals; and lastly, 5. "Big BusinessSmall Investment Company" where t'big businessesactively search for and make themselvesavailable to new operations in need of capital but possessedofinnovative and potentiallY prolitable ideas.The entreprcneur gets his caPital from the corporation but runs his small busincssas if it werc his own." This idea is, of course.modelled aftcr thc venture capital concept which has sccn many successfulapplications over thc years. Thcse are someof thc organizational techniquesto induce entrepreneurship within a large organization. You may find them to be interestingconcepts which merit further refinemcnt and consideration. Now, I have surely taken altogether too much of your time to sharesomeof my thoughts on organizing for entreprencurship.I hope at least that you find them relevantand I would indeed be vcry happy if you find them uscful.

AMMO.lO Guardingagainst*big canpty diseose..."

Sustaining Entrepreneurshipin large Organizations byYotaro Kobayashi President, Fuji Xerox Co., LtdGovemor, Asian Institute of Management (This paper wos oiginally delivered at the AAMO-10 Conference on "Entrepreneurship and Management, " Hong Kong November 27-29, 1989 Eds.)

of Fuji Ihe E <perience ' Xerox Introduction nl ot solong ago,a theoryprevailed llthroughout Japanthat the life spanof a companywasapproximately 30years.This implied that a company which wasnegligentin innovation would get the so-called"big company disease"and its businesswould begin to declineafter 30 yearsof operation. When a companyreaches"big company''status,its employeestendto become complacent.A bureaucraticatmospheredominatesin which employees feel,"HoweverhardI try I cannotinfluencethe generalsituation of thecompany,"or, "Evenif I wanted to challengesomethingnew,the companywould not approveit." As a result, large companiesare being seriouslychallengedby smaller,more entrepreneurialfirms. In this sense,for most large companies,makingtheir corporateculture entrepreneurialisbecomingmoreand more critical. PeterF. Drucker,in hisbookInnovation and Entrepreneunhip,yuinted out that the problem of innovationand entrepreneurshipmattersgreatlynot only to small venturebusinesscompaniesbut also to large,established comparues. As he suggested,most large companiesare trying to integratesrnall

company entrepreneurship and agility into their organizations. In this sense,Fuji Xerox is no exc6ption. In just two decades, we have grown from being strictly a sales organization with 19 employees into a completely self-sufficient, high-technology company with more than 11000 employees. Though we do not think of ourselves as one of the Goliaths, the total number of employees, including our subsidiaries, amounts to as many as 18,000. Fortunately or unfortunately, we are now perceived as a big company and quite a fewjob applicants tell us that they chose us because of perceived job stability based on our size. As our thirtieth anniversary approaches in just three short years, *'e at Fuji Xerox are trying hard to reinvigorate the corporation in order to

"big company disease." challenge What should be done to keep the corporate culture young and innovative? Fuji Xerox is now learning by trial and error. Let me relate to you our approaches to these challenges.

Overview of Fuii Xerox Business Businessareas t Fuji Xerox, we believe that im-

provingthe qualityof documentationis as important to a company as enhancingthe quality or value of its products. Equally important is document management, the practice of controlling the production of quality documents.

Sinceintroducingthe first plain papercopier (PPC)into theJapanese


market,Fuji Xerox hasmadeseveral contributionsto documentationin Japan,and in so doing, our company hasdeliveredproductswhich have beenwell receivedby our customers. However,Fuji Xero>Cinvolvementis no longerlimited to xerography(See Fig.1). Our servicesnow extendto the inentireprocessof documentation, cluding effectivedocumentmanagement. As the late Mr. JosephC. Wilson, chairmanof Xerox Corporation,used to say,Xerox shouldnot only provide customerswith copiersor hardware for documentproductionbut alsotry to contributeto effectivecommunication in a broadersense.We wantto contributeto fosteringa betterunderstandingamongmenin a globalsense. in This hasled us to start businesses educationsuchasinterculturalcommunicationand strategicpresentation. History of FujiXerox F uii Xeroxis indeedoneof themost F s u c c e s s f u lj o i n t v e n t u r e si n Japanese businesshistory(SeeFig.2). Inl962Fuji Xerox Co. Ltd. wasestablishedasa 50/50joint venturecompanybetweenFuji Photo Film and RankXerox capitalizedat ZX)million yen.From the beginning,Fuji Xerox wasgivenfull autonomy,thanksto the relationshipof deeptrustbetweenthe of Xerox Corporatop management tion, the parent companyof Rank Xerox,andFuji Xerox.I would like to tell you briefly aboutour company's history. 1960s,period of businesscommencement.Until 1968,Fuji Xerox held exclusivepatent rights in Japanto xerographytechnology,andin the absenceof competition,it flourishedby leapsand bounds. 1970s,periodof increasingcompetition. After the exclusiverightsto xerographytechnologyexpired in 1968,Japanesecompetitorsincluding Canon,Ricoh and othersrushedinto the PPCmarketone after another.In order to overcomesuchdifficulties and regainmuch of its lost market share,Fuji Xerox adopted Total QualityControl(TQC) underthebanner of the "New Xerox Movement" beginningin1976. The objectiveof TQC is to improve qualitythroughstandardizationand

e l i m i n a t i o n o f d i s p e r s i o n .T h i s method clearsup and eliminatesthe root causeof a particularproblem basedon thoroughanalysisof facts. TQC is effectivein improvingthe eff i c i e n c yo f a n y k i n d o f j o b , b e i t manufacturing,R&D, salesor plannrng. By initiatingthe TQC movement, Fuji Xerox succeededin developing an "absolutelybrilliant" copier,the Fuji Xerox3500in just two shortyears from1976to 1978.It shockedthe market,but most of all, it shocked Xerox Corporation. Concurrentlywith the introduction of of TQC, throughthe establishment a corporatephilosophyand courseof action in1979,Fuji Xerox succeeded its identityto all in disseminating employeesand integratingtheir views aboutcompanyattitudesin the corporatephilosophy. 1 9 8 0 s p, e r i o d o f r e s t r u c t u r i n g . Throughthis movement,Fuji Xerox in regainingits technologisucceeded cal leadin PPCsandrestoredits price Fuji Xerox' effortsin competitiveness. improvingquality control culminated with the awardof the DemingPrizein 1980. In1982,Fuji Xeroxbeganto transform itself from a PPC manufacturer


to an information processingcompany,advocatingthe Office Information Systems(OIS) concept. Subsequently,Fuji Xerox made dedicatedeffortsto restructureits organizationby introducing the business unit systemin 1983and by strengthening its R&D function throughthe establishmentof the Corporate ResearchLaboratory in 1982. 198E,secondperiod ofgrowth. Becauseof changesin the businessenvironment,suchasappreciationof the yenandthematuredPPCmarket,Fuji Xerox felt the need to make a breakthroughin its businessstrategy. TQC alone,strippedof all its content by then,wasnot sufficient. In 1988,Fuji Xeroxstartedthe"New Work Way" a programto provide "New Quality" to customersby encouragingindividualthinkingin all Pleaserememberthat employees. New Quality doesnot necessarily meanonly the quality of product,but also the quality of service,management, administrationand everyother aspectofbusiness. Adoption of the New Work Way doesnot meanthat Fuji Xerox has abandonedTQC. On top of TQC, which we considerbasic,we renewed our understandingof creativity,in-

of FuiiXerox'sBusiness Fig. 1 Diversitication


dividuality and sensitivityto be responsiveto customerneeds. Now,Iwouldlike to explainthe New Work Way in greaterdetail.

the New lmolementinq WdrkWavtolt/leetthe Challeng6sof the 1990s Environmental changes propellingthe adoptionof the NewWork Way oday,the following changesare I evidentin the businessenvironment. 1.Customerneedsarc changing.We seeincreasingneedfor value-added services,informationsystems,and unique,creativeproducts. 2.The olliceis changing.Needsfor a comfortableofficeenvironmentbased on ergonomicsare increasing.Office buildings will be required to have more.,intelligence." 3. Work is changing.Using the electronicnetwork,working at home will becomemore commonplace. Sinceinstantaneouscommunication with other countrieshasbecomepossible,the wayto conductglobalbusinesshasdrasticallychanged. 4. Man is changing(Valuesystemof f

the individual is changing).Because of progressionto a more agedsociety and diversificationof valuesystems, the Japaneseare seekingself-fulfillment in their jobs, aswell astheir private life. People havecometo reject makingpersonalsacrificesfor thegoodofthejob. ThesechangeshavespurredFuji Xeroxto takeup a completelynewway of approachingproblemsaswell as completelynewwork ways. Objectives of the New Work Way The objectiveof theNewWorkWay I is, in brief, to harnessthe thoughts and actionsof eachemployeeand to encouragethe individualto givefull play to his creativity. The New Work Way tries to actualae: o breakthroughof the work way; r innovationin management; ild,

o a comfortablebusinessenvironment. ln theNewWorkWay,it is important of difto encourageunderstanding ferencesbetweenindividualsand to makethe mostof individualityand creativeness. Fuji Xerox aimsto be a highlysensi-

tive company(SeeFig.3).In other words,Fuji Xerox is trying to transform itself to effectivelydeal with changesin the businessenvironment. To alwaysbe highly sensitive,companiesmustrepeatedlyaskthemselves what they contribute to societyand what valuesthey can and will offer to people. Next, throughthe New Work Way, Fuji Xerox tries to offer new added value,suchas new products,systems andservicesto its customersandeventually provide an environmentwhere customerscan realizetheir own New WorkWay. Again, pleasedo not think that we havegivenup TQC. The TQC theory itseHisquitevalid.However,sinceit is a methodto eliminatedeviation,it sometimeswent asfar asto eliminate good deviation as well as bad. Moreover,as a negativeinfluence, w o r k e r sb e c a m em o r e a n d m o r e which,asa result,suphomogenous, pressedcreativityand individuality. So our conclusionwasto adoptthe New Work Way asa new tool which complementsTQC, evenat the risk of lossof organizationalharmony.This trend is not unique to Fuji Xerox. ManyJapanesecompanidb,especially in the electricalmanufacturingandin-

Fig.2 FujiXeroxSo Far:Historyand Plateau

Y lT Concept DemingAward PBU/MSUOrg. MultiChannel






formationindustries,havestartedto adopt the samekind of movement throughflexitime,renewalof the performanceappraisalsystemand many other systems,attachingimportance to individualityand creativity.

Fag.3 Obiectivesof the NewWorkWay

Activities in the New Work Way 1 l nder the nameof the New Work lJWay, Fuji Xerox is now trying to makea breakthroughin the work way by trying out new ideasgeneratedby employees. One of our trialswasthe "Vision 100Committee."[t wasorganizedin 1987to generateideasconcerningFuji Xerox' long-termvision andfuture direction.It comprised100 employeesaged24to36.Out of 5,0fi) employees fallingunderthisclassification, asmanyas L,8fi)peopleapplied for thecommittee. Manyof theirideas haveactuallybeenput into practice, suchas satelliteoffices,resortoffices and flexitime and thesecontributeto the provisionof a new,comfortable workingenvironment. Theotherwasthe"VentureBusiness ChallengeProgran" which aimedto enhanceentrepreneurshipamong employees.Under this program,if an idea passesthe final examination,the applicanthimselfcanbethe president of the newventurecompanyand bear the responsibilityfor all of the operationsof the company.This resultedin the foundationof two venturecompaniesin 1988:Fuji-SystemBrain Co., Ltd. and ProtecCo., Ltd. The fcirmer dealswith total systemintegrationservicesfor small and mediumsized e n t e r p r i s e s a, n d t h e l a t t e r , t r i a l manufacturingand manufacturingof office automationtools. In L988,Fuji Xerox enteredthe temporaryhelp businessby foundingFuji Xerox CareernetCo., Ltd. which originatedfrom a proposalby a saleswomanwho felt the strongneedfor temporaryworkerson the part of the customers. In order to developcreativityand originalityin employees, we had to innovatemanagementaswell. First, we changedthe performanceappraisal systemto onethat placesmoreimporBetanceon the employees'merits. causeof this change,employeeqlave becomemorewilling to try something new without being afraid of making mistakes.We alsosimplified the Ringi


Highlysenstive to customer neeos

Provide appealling


iitliil,;!.:!il.!/ ..-"d,6'il#;'i'-*..\i:ili:iiiii

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Hishlvsensrtive and responsible in changes

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systemand transferred more authority to managers on the line. The New Work Way resulted in not only innovation of the work way and management but also a product completely new to Fuji Xerox'past businessdomain. In L988,with the introduction of Sharaku,a handy copier, Fuji Xerox entered the personal products market. Sharuku was developedbased on a concept created by only a handful of employees who were seriously tackling problems in the low-end market. In other words, Sharaku was developed through a bottom-up approach and is'defined as a "New Work Way-like" product. The marketing of Sharaku,named after a famotsukiyoe artist of the Edo period, was an enormous challengefor Fuji Xerox since we have been successful mostly in products targeting large-scale companies, not individual consumers.In spite of our concern over our inexperience in the home and personal products market, as soon as the product made its debut in the market, it attained popularityamong a



wide rangeofpeople from variedage groupsand manyoccupations,suchas businesspeople students,housewives, a n d d e s i g n e r st o n a m e a f e w . I n responseto an advertisementinviting L00peopleto monitorSharaku,more than 141,000peopleapplied,some from abroad. The introductionofSharakuinto the massmarketresultedin greatsuccess. Even though,Sharaku's sales contribute little to Fuji Xerox'total sales of US$3.6million, it hasbecomethe symbolof Fuji Xerox' NewWork Way, the driving force changingthe direction of Fuji Xerot' business.

A Hvbridof Japanese and?merican Management Style 1.he introduction of the New Work I Way may sound like nothing new to you, since your cultures place a great deal of importance on individuality. However, Japanese companies, as the result of giving top priority to their market share, tended

to sacrifice individuality, originality and creativity in their employees.In the meantime, this trend has been forcing Japanesecompaniesto behave similarly, in other words, to be homogenous. In order to change this attitude, some farsighted Japanese companies have started to introduce management which differentiates itself from other companiei; that is, in originality of products, services, business cor cepts and corporate philosophy. On the contrary, managers in western companies tend to introduce the advantages ofJapanese management style into their management, such as functions to grasp customer needs, informal communication and TQC. In this sense,I believe management of Japanese and western companies will increase the degree of cross-overs and become more and more hybrid. "export" One example of this is the of TQC to our parent company, Xerox Corporation. Fuji Xerot' commitment to quality through TQC activities influenced Xerox Corporation and inspired them to initiate their Leadership Through Quality Program in t9f34. It has changed Xerot' corporate culture and brought about dynamic and satisfuing results. Xerox Corporation has became a contender for the Baldridge Prize and has been propelling company wide quality control. This year alone, more than 80 Xerox people, including their top executives, visited Japan to study TQC.

KevFactorsfor Subtaininq in finlrgB.rqn-eurhip Established Companies I 11te startedtheNewWork WaybeUU causewe witnesseda lack of willingressto try out newideasamong employees.We are now trying to changeour corporatecultureto make it more adventurous,creativeand courageousto challenges;all the while beingquality-conscious. Peter F. Drucker pointed out in his book,The Frontiersof Management, that the innovativecompanyunderstandsthat innovationstartswith an idea.He continuesthat, "ideasare somewhatlike babies...thev areborn

and small,immatureand shapeless... that in the innovativecompanyexecutives say,"What would be neededto make this embryonic,half-baked, foolishideainls s66slhingthatmakes sense,that is feasible,that is anoppor"this is tunity for us," insteadof saying, a damn-foolidea." I believethe key for innovation within a companydirectlyrelatesto, as Prof. Drucker said,executiveswho encouragework"tt 1s[ring up newideas and give employeeschancesto trY themout if the ideascontributeto the businessevenin the long term. The secondpoint, whichI think is important, is to communicateto each worker the idea that everYoneis a catalystof innovation. Robert B. Relch,a professorat the John F. KennedySchoolof Government,HarvardUniversity,wrotein his paper "EntrepreneurshiPReconsidered:The Team As flero" in 1987: "In the new economicparadigm, e n t r e p r e n e u r s h i pi s n ' t t h e s o l e province of the compan/s founder or i t s t o p m a n a g e r s ,r a t h e r , i t i s a capabilityand attitude that is diffused through the company." He is right in the sensethat each memberof the companyhasa commitment to the compant'scontinuedsuccess.Therefore,it is important for top managementto enhanceflexibilitY and creativity of both middle management and workers.Now we need to "collective bring in the so-called, entrepreneurship"asa bannerfor the oompany.

Gonclusion ginally, I am going to offer tips for F making your organization more entrepreneurial. 1. To be morc innovative, it is neces' sary to motivate each and every employee... clear down to the bottom levels of the organization. Companies which make continuous innovations use a structure designed to spur innovation at all levels. 2. Top management should selectat' tractive corporate goals to which employceswould like to commit them' selves... goals which do not hamper individual goals. Don't let workers feel that they sacrifice themselvesfor "Visionary managethe company. ment" becomes more and more important.

3. To motivate workers, it is imPor' tant to first activate middle' managers. 4. It is important for companies to balance the courage of taking risks and a senseof modesty to rrcsPondto customer needs and to maintain quality products. Robert Waterman, former director of McKinsey and co-author of 1z seorch of Ercellence, concluded in his latest book, The Renewal Factor, that innovative management fights stagnation and welcomes changes and that without changes,it is impossible for future companies to maintain a competitive edge. Innovative companies should be readily cogrrizant of existing products, services,processesand markets that are heading toward obsolescence, and bewillingto quicklyshift gears;that is, abandon obsolete disciplines. Sometimes it is a dilemma for companies to give up old customs. However, entrepreneurial companies should abandon the obsolete rather thanhave themselvesmade obsolete bythe competition. I strongly believe that, in the coming century, constant self-innovation will be a prerequisite for successful companies. Changes are no longer planned or forecast, it is an everyday practice companiesmust undergo. We must take changespositively, and find excitement in the creative process. Only through ceaselessself-innovation, can companies maintain their competitive edge. In other words, companies must create change and provide new values or what we call "NewQualit/'to society. It is the one approach that can maintain entrepreneurship and improve performance in large organizations.


AMMO.IO Ertdowingresources witlt rcw wealth-prdrcingcrybihty...

Entrepreneurshipln the Public Sector by Mou-Hui King Chairman,ChinaSteelCorporation Govemor,Asian Instituteof Management (This paper wasoiginally deliveredat the AAMO-L0 Conferenceon uEntrepreneurshipand Management,"Hong KongoNovember27-29, 1989- Eds.) 6 eforeI beginI wishto qualifythat EDmv remarksrelate onlv to the public sectorin market-oriented economiesbecausethat is wheremy e x p e r i e n c eo r i g i n a t e s .I a m n o t preparedto commenton the centrally plannedeconomiesbecauseI have neverhad anye4periencethere. Usuallya rigorouspresentation beginswith a seriesof definitions,for only by knowingwhat one is talking aboutcanonetreat the subjectmatter intelligently.

o o o o o o

expandproduction capacity; improve productivitg installnewproductionprocess; install new personnelsystems; revampold equipment; reorganize;and, manyother activities. In all cases,resourcesmustbe committedandrisked.I sayriskedbecause successis neverguaranteed.In all casesthe objectiveis to endowthe resourcewith newwealth-producing capability.So one cansaythat the action ofentrepreneurshipis carriedout

everydayin an enterprise. One Thenlet usturn to management. definition is that managementconsists of activitiesundertakenby one or more personsto coordinatethe activitiesof other personsto achieve resultsnot achievableby any one personalone.Pleasenote:theword "person" appearsthree timesin this short definition.This leadsone to believe the most commonlyuseddefinition with only four words is adequate, namely "Doing things through people."

SimpleDefinitions Many definiE ntrepreneurship: Etionshave appearedfor tiiis term. In the earlydayswhenit first becamea favorite subjectfor dissertations,this term referredto the startingof new business, usuallywitha nuanceof high return and high risk. As progress developsin managementscience, there are addedon to this definition innovation,flexibility,dynamicthinking, creativeness and growth.I have revieweda number of others and believethebest,all inclusivedefinition is that of the greatmasterof management,Dr. PeterDrucker.It is simple. An entrepreneuris somebodywhoendowsresourceswith new wealthproducing capacity. One can enumeratea great manythingsthat are beingdone in businesstodaythat demonstratea closefit to this definition. For example: o bring newproductsinto the product line; 26 THE ASIANMANAGERo MARCH 1990



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withaName TheMeat Out there are cattle and hogs with no name. They are slaughtered for their meats. You buy them. You eat them. But you don't really know from where they came. What they ate. How they were raised and slaughtered for your meal. But at long last, there's a meat with a name. Monterey. Quality meats that come only from well-bred, well-fed, well-cared for cattle and hogs. So you'll have the freshest, most tender and flavorful beef and pork. Truly deserving to be served to your family and friends. Monterev. The name is -vour guarantee bf qudity beef and pork. Well, isn't it nice to know the meat you eat?


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AMMO.IO gracdMmSacwringin thcglfuL econarny... Ccnryter-Inte

M anufacturing Technology by Dr. ReinosukeHara President,SeikoInstruments,Inc. (Thispaper wasoriginally deliveredat the AAMO-10 Conference on nEntrepreneurship and Management,' HongKong November2T-29,1989.Edt.)

TheTraditional Manufacturing Industry Massproductionvs. new productionsystems

tem" developedby ToyotaMotors presentsa t'?ical exampleof production processproducinga wide variety of productsin smallquanties.The basic conceptof the "just-in-time production system"was to avoid all possible"waste" generatedduring productionprocesssuchas: o Over-production; o Wastedmachinetime; . Wasteinvolvedin the shipment of units and parts; o Wastein processing; o Wastein taking inventory; o Wasteof motion;and o Wastein the form of defective nni19.

ith extensive efforts directed

towardthedevelopmentof mass production systemsbasedon robotics and automation,the manufacturing industryunderwenta remarkableexpansionperiod spanningthe 1960s and the 1970s.The manufacturingindustrybenefitedmuchfrom the introduction of massproduction.Someof the important accomplishments include:higfi speedproduction,highaccuracyin production processes,lower costs,and uniform and high quality finished products. The conceptof massproductionwas hardware as well as manufactureroriented. Customerswere satisfied with standardizedproductssupplied by massproduction systems,aslong as the productsmet their requirements for quality and price. In the latter part of the 1970s,the manufacturingindustry underwenta change in character from mass production to production of a wider variety of productsin smalllots, mainly to copewith the increaseddiversity of customers'needs.Technologies were also rapidly advancingas illustratedby the appearanceof semiconductor and micro-electronics technology.Suchrapid changehas madeproduct life-cyclesshort.Mass production involved a risk of overproduction. The "just-in-time production sys-

Further improvementshavesince been made in the "just-in-time productionsystem,"lsndingto the establishmentof the "product system without loss."The basicconceptof this systemwasto achievethe followingin productionprocesses: no-defective products,no machinefailures,no needfor the transportof parts,complete synchronizationof line speed and machinecycles,and full-automation to permit 24-hourunmanned operation.

Both the "just-in-time production system"and the "production system without loss"were markeVcustomeroriented and software-oriented,as againstthe mass-productionsystem whichwasmanufacturer-orientedand hardware-oriented. Conventionaltechnologies vs science-basedtechnologies echnologies can be classified into two categories according to their nature: o Conventional technologies whose mechanism and performance are well established. Examples include conventional mechanical ettgltreering, chemical engineering, and electrical englneering. o Modern high-technologies which are based on science and are in the stage of constant advancement.Exanples include high-temperature superconductivity, semiconductors, misls-slectronics, DNA recombination, new materials and artifi cial intelligence. Recently developed high-technologies are all based on science.In some technologies, both mechanism and theory are not fully clarified. A feature of these technologies is the need for highly sophisticated production equipment and facilities. Often super-clean laboratories are needed. They also are highly capital intensive, and a large amount of investment is required for equipment and facilities.

External elements Fturing the period of massproducl/tion, the manufacturingindustry actedbasedon thefollowingtraditional assumptions:resourcesare infinite, energysupplyis infinite, productionrelated spaceis infinite, market expansionis infinite, consumptionis infinite, and people'sdesiresare infinite. Theseassumptions,however,have


lost their legitimacyfor the current manufacturingindustry. Recent developmentsindicatethat therewill be shortagesin resourcesand energ5r supply,spaceislimited,marketexpansionwill not last forever,consumption w i l l a l s ob e c o m es a t u r a t e d ,a n d peoplesdesiresare alsolimited and arebecomingincreasinglyspecific. To copewith this new situation,the manufacturingindustryhasbeen taking measuresto replacethe old assunptions.Someof the measuresare: high functional performancefor a limited supplyof resources;energy conservationand savingsand developmentof alternativeenergysourcesfor a limited energysupply;compact design,miniaturizationand high density to solvespaceproblems;flexible productionfor limited marketexpanproducsion;consumption-oriented tion to compensatefor limitations in consumption; developmentof productswhich customerswant for their specificneeds. There are also someexternalelementswhich standin the wayof linear expansionof the manufacturingindustry.Theseexternalelementsarose in relation to limited capacityfor wastetreatment and disposal,environmentalpollution problems,and safetyof new productsor new technologies.Processingand disposalof industrialwastespresenta serious problemin the industfializednations, as the amountof wasteexceedstheir capacityfor disposal.Environmental pollution hasbecomea seriousproblem,asthe manufacturingindustryexpandedits production and consumption by consumersincreased. Typicalof suchenvirott^entalpollution hazardsare the destructionof the ozonelayer by fluorocarboncompounds and the green-houseeffect causedby carbondioxide.The safety andproductsalso ofnew technologies presentsa problem for public acceptance.long-term effortsare required to demonstratethe reliability and safetyof new technologies.

lobalBusiness peration Verticaloperationvs. horizontal operation he manufacturingindustry is now going into global operationsand

there are four main elementsresponsiblefor the manufacturingindustr/s moveto globaloperations: r Politicalelementsasrepresentedby tradefriction; o Marketingelementssuchas diversified customers'needs; r Formationof regional economicblocs;an4 r Technologicalelementswhich includeneedsfor sophisticatedscientific research

overseas sales offices. Offshore production was carried out mainly for e c o n o m i c r e a s o n ss u c h a s m o d e s t labor costs. Only standardized products with established production process and market needs were transferred to offshore production. Later, production technology and some R&D work were transferred to offshore operations. The manufacturing industry was operated on a vertically integrated scheme.

Marketing r CountrYA R&D tI Production

O{frlw}q p rodd#t i$il CountryC

Offshore production Country B


softwareand cooperative developmentprojects. With regardto marketing,there is recentlya trend in whichproductsare beingproducedwithin or near the marketplacebecauseof diversified

Now that the manufacturingindustry is operatedon a globalbasis,all the necessaryfulctions are scattered worldwide with equal participation of eachfunction in the businessoperation. :

fi*D <-> C.cmlryA

customerneeds.The technological aspectis alsoan importantelementto be consideredfor global operations. natureof Becauseofthe sophisticated r e c e n t l y - d e v e l o p e dh i g h - t e c h nologies,no singlecountry canfulfill all necessaryR&D rangingfrom scienceto software.Ithasnowbecome necessaryfor the manufacturingindustryto seektechnologicalexpertise and skills on a global basis. It is not unusualto seebasicR&D carried out in the US or EuroPe, designingof commercialproductsin Japan,softwaredevelopmentin a developingnation and commercial productionin NIEs. In the 11b0sandpart of the 1970s,all functions of the manufacturingindustryincludingmarketi.g,R&D and production,were performedin one country and finishedproductswere exportedto world marketsthrough


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Presentglobalbusinessoperations arebasedon a horizontalscheme.The manufacturingindustryin short has shiftedits operationfrom a vertically integratedschemeto a horizontallyintegratedscheme. Technology-sharing akinga closelook at the historyof I scienceand technology,one can observethat thereis a shortfall in technology-sharingamongcountries. Europeancountriesand the United Stateshaveplayedlsxdingrolesin the field of scientificresearch.Manynew technologiesbasedon sciencewere first developedin Europeandbrought to the level of engineeringin the US. The US effort focusedon the development of super-hightechnologiesand ultra-largescaleengl"eelingprojects, while Japanhasbeenactivein improvf

ingnewly-developed technologies and productionprocesses. Japanalso devotesa large amountof her efforts to applyingnew technologiesto conproducts.NIEs are sumer-oriented showingexcellentcapabilitiesin commercial production and software development. US vs. Japan technologies

Recently published reports point out that US engineersand scientiststhink in terms of defenseapplicationsfirst, w h i l e t h e i r J a p a n e s ec o u n t e r p a r t s think in terms of consumer applications. For example,in the United States, alarge amount ofcarbon fiber has been consumed by aircraft and defenseindustries,whereasin Japan t h e y h a v e b e e n e x t e n s i v e l yu s e d i n sporting goods.

l.echnologies in the US andJapan I presenttwo extremes.Thereare Productinnovation numerousreports comparingthe characteristics of US and Japanese There was a beliel that marketsfor technologies.The followingis a comI conventional consumer products parisonof the characteristicsof techare already saturated with little or no nologiesin the two countries. possibility for expansion.Markets for



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in the US and Japan presenttwo extreme=. ,, refrigerators, washing machines and cameraswere believed saturated. This belief, however, proved incorrect when a refrigerator with a new dooropening mechanism,a quiet washing m a c h i n e a n d a d i s p o s a b l ec a m e r a contributed to generating markedly increased demand. This is indicative of possibilities for future innovation in the conventional durable consumer goods industry.


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Currentand Future lndustry Manufiacturing Changesand measurestakenin marketand technology rj'f';.1"';;:1i ':-ri

1t is important to review once again I changes in market trends and technologies. In the 1960s, the manufacturer-oriented approach was practiced and standardized products were m a s s - p r o d u c e d f o r m a s s s a l e sb y employing conventional technologies such as mechanical engineering, electrical engineering and chemical engineering. In the 1970s,market needs began to diversify and newly developed technologies such as semiconductors and micro-electronics were extensively adopted, lssufting in further diversification of market needs in the L980s, along with consumer tastes reoriented toward luxury goods. Newly-developed sciencebased or software-basedtechnologies such as new materials and artificial intelligence have begun to be applied to the consumer market. T o m e e t s u c h c h a n g e si n m a r k e t trends and customer tastes as well as to cope with rapidly advancing technologies, the manufacturing industry has been taking a seriesof measures which call for operations on a global


basis.Thc following tablc showsthe s u m m a r y o f m e a s u r e st a k e n b y t h e manufacluring induslry.

turingindustryrequiresworldwideeffortsnot onlyfor marketing,R&D and production,but alsofor the purchase

(( Markettrend


+ Diversified-a Manufacturermarketneeds orientedapproach

Needsfor luxuryproducts

Standardized -> Prsductwith .-+ Systemproduct for individual productwith multi$e laste function simplified function Science-based Conventional -> Semi, -> technologies conductors technologies Software-based Microtechnologies electronics


times have changed ,,

stepin CIM operationis the establishment of company CIM. The following figure showsa schematic diagram of CIM, with the data baseat the center.

Summary flexible HighlY Production of Mass production "'D varietiesof -+ production productsin smalllots Shortterm delivery Short life-cycle of products

Long-term detivery Longlife-cycle of products line Production

Automation > Flexible manufacturing NC machine system(FMS)

Information | ComPuter integrated manufacturing


Globaloperation Horizontally integrated scheme

Operationon the nationalbasis Vertically integrated scheme

Computcr integratedmanufacturing (CIM) is dcfined as an integratedsyst e m o f m a r k e t i n g ,p r o d u c t i o n a n d d e l i v e r yt o m e e t h i g h l y d i v e r s i f i c d , specificconsumerneeds.As marketi n g , R & D , p r o d u c t i o n a n d s a l e sa r e performed on a global basis,CIM is bclievedto serveas a powerful tool for global operations. Today's manufac-

o f m a t e r i a l s ,e m p l o y m e n t o f s u b c o n t r a c t o r s ,f i n a n c i n g a n d r e c r u i t ment of personnel. The whole CIM operation is databased.In pursuingcomputcr integrated manufacturing,careful steps must be taken.First, production CIM must be completed,followed bY the establishmentof factory CIM. The last


= h s r n s n uf a c tu r i n g i n d u s t r yw a s I on.e labor- and cquipment-intcnsive with mass production and mass salesas its major objcctives.And its globalization advancedon this mass productiorVmasssalesconccPt. N o w t i m c s h a v e c h a n g c d :m a r k e t needshave diversified,technologics havebecomehighly sophisticatedand formation of rcgional economicblocs is underway. Current globalization is going on due to thesepolitical, economic,marketing and technological dcvelopments. The manufacturingindustry hasthus become information-intcnsivc.CIM servesasa tool for the operationofthc m a n u f a c t u r i n gi n d u s t r y o n a g l o b a l b a s i s . F u t u r e m a n u f a c t u r i n gi n dustries will become knowledge-intcnsive. Future CIM, therefore, will require highly integrated inteliigent planning and automation.

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AMMO.lO A differeruqprmch to tlu advmtof Sbbalfutking...

Shapinga Swiss Bank for the 199Os by Dr Kutt Schiltnecht Chairman of the Board Bank Leu Ltd. (This paper was oiginally delivered at the AAMO- 10 Conference on "Entrepreneurshipand Management," Hong Kong November 27-29, 1989. Eds.)

I n thc period after World War II, I S w i s sb a n k s h a v e f l o u r i s h e d a n d their intcrnational activity has assumed impressivedimensions. The figuresin the balance shect,howcvcr,do not tell the full story. Swissbanks have alwayshad a vcry strong position in off-balanccshcetoperations. Thc political, economicand soc i a l s t a b i l i t yd u r i n g a n d a f t e r World War II aswell asthe stablccurrcncy havecreateda u n i q u c s i t u a t i o nf o r S w i s s banks,particularly in thc field of portfolio management.The large amounts of funds under managementstimulatedother typcs of activities (gold and f o r c i g n e x c h a n g ed e a l i n g s , capital export, etc.) as well. During the past 20 years,the number of banksin Switzerland hasincreasedto almost700 and a b o u t 5 V oo f t h e t o t a l l a b o r forcc is employedby banks and financialinstitutions.Almost all of the leadingbanks of the world have opcned a branch in Switzerland.As a result, competition has become more and more intense in domestic as well a s i n i n t e r n a t i o n a lm a r k e t s .I n p a r ticular, deregulation has led to an erosionin profit margins. In recent years there has been some doubt as to Switzerland's position vlsa-r'rsthe European Economic Community (EEC) and the international markets atter 1992 in general and the S w i s sb a n k s i n p a r t i c u l a r . T h e s e doubts have been accentuatedbv the

publication of the SwissCartell Commissionreport on certain banking conventions.Without any doubt, some of the existing conventions will disappear in the near future. Even if the importance of theseconventionsfor the banks is overstatedin general,their abolishment will make competition more keen and will lead to smaller profit margins. Not all Swissbanks are aware of the implicationsof the ongoingchangesin the international markets and have, therefore,not taken appropriate measuresto adjust to the changing financial world. Bank Leu is a typical


s' ":d*t'


e x a m p l e o f t h e p a s s i v ea t t i t u d e o f many Swissbanks in the past, neglecting the still very high potential of Swiss banks. Over time, Bank Iru was been weakened financially by a lack of investmentin electronic data processing (EDP) researchand adjustmentsto new trends in financial markets. As a result, profits eroded, requiring a cut in dividends. In L988 a management shake-up took place and a new chairmanwasappointed.The newmanagement team had to tackle these problems and to shapethebank up for the 1D0s. The pressureshave yielded


a fresh approach to all aspectsof organizational design and strategy.

Shiftingthe Focus r o u n d e d i n 1 7 5 5 .B a n k L e u i s t h e F sixth largest bank in Switzerland. Like most other Swissbanks. it is a socalled universal bank, playing an active role in traditional banking businessas well as in the stock market and in portfolio management.In the 1970s and early 1980sBank Leu made rather late - an effort to become an international commercial bank to maintain its relative position to the three big Swissbanks. In order to expand business volume at a high rate, Bank Leu offered several servicesat discount prices and started to expand its activities on a worldwide basis (operations in London, New York, Luxembourg, and the Bahamas;and representativeoffices in Hong Kong and Tokyo). This expansion was not backed by systematic planning, budgeting and controlling. In general,it can be said that planning and was undercontrolling developed at Bank Leu, in particular there was no cost and :. profit-center analysisand no detailed management information system. The lack of such important management instruments might be surprising. It can, however, easily be explained by the fact that Swissbanks could increase profits for manyyears without any difficulty. The unique situation of the Swisseconomy and the stability of the Swiss crurency created an environment in which it was too easy to make a profit. Deregulation of the financial markets increasing competition and worldwide changed this situation and banks like Bank Leu were in no way prepared for the new and more competitive situation, and its relatively aggressive expansion at discount prices

reducedprofitability. Confrontedwith this situation,the newmanagementdecidedto shift the bank's focus from growth to profitability and to define the new strategic objective as the establishmentof a top classSwissbank with high-qualityservicesand products. T h i s s h i f t w a s c o u p l e dw i t h t h e decisionto abstainfromdiscountpricing.The strategyof"cheap"priceshas provento be unsuccessfuland in addition had had a bad impacton the businessattitudeof the staff of Banklru. The willingnessto provide an outstandingserviceeroded (why should the servicebe outstandingwhenit was provided at a discountprice?) and the aggressiveness to sell the bank's productsfaded. In the bankingbusiness,where the quality of the service and the selling is of so much importance,sucha developmentcanbs disastrous. Recognizingthesedevelopments, t h e n e w m a n a g e m e n st t a r t e dt o changethe imageand the cultural termsof thebank;e.g.,from a "cheap" bank to a high quality and relatively "expensive"bank. The position that high-qualityserviceshavetheir price is becoming more and more the generalattitude. Today, the bank's staffis awarethat high commissionsor prices haveto be defendedby outstandingservices. Such a shift in attitude, however, takestime and not all the staff membershavebeenwilling or ableto make the change.To reach the ultimate goal it will not only require time and new and highly qualified people,but alsocontinuouseffort to train the staff and to put tearyrstogetherwhich are not only willing but also able to provide the outstandingservicewhich customersare demandingand with which the bank can generateprofit. It hasto be admitted that the intended changesare not nowfullyrealized but it can be said that the changeis completed at leastin the major areasof the bank's activities.In thesesegments Bank ku can againcompetewith the best.

Ilefininq Products and ServiceE The Bank Leu Group, which 1,700people, isnot I employsabout in apositionto offer mostbankingser-

vices on a world-wide basis. Therefore, the new management abstained from the old and popular idea ofbecoming a large international commercial bank. Instead it decided to focus primarily on products and services for which Bank Iru has a "natural" comparative advantage. The decision to define the bank clearly and to determine not to be all things to all people was done with the view that such a move will not only have a positive effect on the bank its el f , b u t a l s o o n i t s c l i e n t s . T h e strategic objective today is to become a top-class Swissbank specializing in activities which are linked in one way or another to Switzerland to the Swiss economy, to the Swiss currency and to the Swiss financial markets. The decision to focus mostly on these segments is based on the assumption that the globalization phenomenon in banking and investment will increase

i1r^n* Leu... will always be

one of the leading advisersfor the Swiss markets... ,,

further and that the trend towardsinternational diversificationof assets, liabilities and risks will continue.On theonehand thisimpliesenlargedactivities in financial markets;on the other hand, arbitrage betweenfinancial marketswill be more efficient. Thereis no doubt that thesedevelop mentswill reduce profit potential. Basedon the actua!and probablefuture situation,bankshaveto be aware of two facts: first, they haveto realizn that the extremelyprosperousyears for financialinstitutionsduring the secondhalf of the 1970sand the first half of the 1980swere due to the long

lastingdeclinein inflationary expectations and long-terminterestrates(an event,which can only be seenafter a long period of inllation andwhich will, therefore,not take placetoo often). Second,bankshaveto take into account that the prosperousyearshave led to overcapacityin financial markets.Under suchcircumstances only thoseinstitutions which can provide outstanding services and productsdistinguishingthemfrom the majorityofbankswillhavea chanceto succeedin the future. In order to be one of the successfulinstitutions, Bank Leu decidedto concentrateits efforts on a limited number of productsand servicesand to "buy'' the remaining products from other topclassinstitutions if necessary. Bank Leq to illustrate this point, is increasingthe number of researchers who analyzethe Swissstock market, Swissstocks and SFr.-bonds.At the sametime, the nunber of analysts coveringother markets(e.g.Asian and American stock markets) is decliningin relativeterms.In addition, theyare not carryingout basicresearchon the companylevel; instead, they are evaluatingthe quality ofresearch material which the bank receivesfrom, for example,the specialistsof the Asian or American stock markets. The investmentdecisionsof Bank Leu in foreignnarkets relytherefore heavilyon the adviceoflocal experts. Bank Leu doesnot intend tobethe specialistfor the Hong Kong or Tokyo stockmarkets,but it will alwaysbeone of.theleading advisersfor the Swiss marketsand for all operationsrelated to Switzerland or to the Swiss economy.Inaddition, the exchangeof research, advice and services strengthenscooperationwith middlesized institutions abroad, who are facing the samelimitations in international marketsas Bank Leu. Such loose cooperation can be extremely fruitful and can lead to institutional cooperationin the long run. Another exampledescribingthe "Swiss' approach in the business strategyof the bank is related to the special conditions for portfolio managementin Switzerland.It is a well-knom fact that Switzerlandis excellentlyplacedfor portfolio management. In particular, political, social andmonetarystability aswell asbank-


ing secrecyhavemadeSwitzerlanda safehavenfor the assetsof foreigners. Foreign clientsof Swissbanksare often risk averseand are lookingfor investmentswith stablereturnsand low risk. It is relativelyseldomthat private foreign investorsare going for high returns and high risk in Switzerland. For this reason,Bank Leu has shifteditsemphasistothe supplyofinvestmentproductswith low risk and stablereturns. One of theselow risk oroductsis the so-calledfiduciarydeposit.Fiduciary depositsare madeby the bank in its own namebut for the accountof the client. The discreetcharacterof fiduciary depositsrelativeto a direct placementis an advantagefor many clients.The detourthrough a fiduciarytransaction helpsto disguisethe identity of a personor institution. In order to attract a large amount of fiduciary deposits,a bankhasto have an excellentrating.In order to keep the current high rating and the excellent q u a l i t y o f a s s e t so n t h e balancesheet(BankLeu h a s a l m o s tn o p r o b l e m loans),the bank decidedto abstainfrom high-risklending and to focusprimarily on domesticloans.The risk on domesticloanscanbe estimatedmuchbetter than thosefor foreign loans. Loansto institutionsand privateindividualsabroad areonlygrantedto topborr o w e r so r o n a c o v e r e d

take it in Switzerland where the risk/return potential is much more attractive, at least for a leading commercial bank in Switzerland. A risk averse l o a n s t r a t e g yi s c o n s i d e r e d t o b e necessaryin order to qualiff as a top bank in the private banking business and to sustain profitability in the long run. This strategy is underlined by the fact that Bank Leu keeps - even by Swiss standards - a very high capitaVasset-ratio.

basis. Such loans are, however, not very profitable and profit can onlybe made if refinancing can be done at relatively low rates. Given the difficulties of attracting relatively cheap funds in foreign markets, banks can only operate profitably in the international loan business if they are willing to grant loans with higher risk. This was the dilemma with which the New York branch of Rank Leu was confronted. Since the new managementwas neither willing to accept high risk loans;e.g.,to participate in LBOfinancing, nor losses,it decided to close the New York branch. If risk has to be taken, the bank will

and services.For many years, clients from all over the world came to Swiss banks and there was no need for active selling. In recent years,however, it became - even for Swissbanks - more and more difficult to attract new clients and to keep old ones. Faced with this situation, the new managementof Bank Leu began to reorganize the selling staffand to trim the administrative staff of the bank. Compared with successfulfinancial institutions the ratio of front to backoffice staffwas very low at Bank Leu. Therefore, it was decided to increase this ratio without expanding the total number of employees.However, since the productivity of the bank compared

Chanqinqthe OrgariizalionDesign of Swiss 1llne of the weaknesses lJbanks in seneralandBankLeu in particularwai the sellingof products


to other banks was very low, the managementlater decided to reduce the overall number of employeesby aboutl}Vo over a period ofone to two years.While the reduction of the staff is almost complete, the restructuring still continues. In order to make selling more effective, marketing committees have been introduced.One of the reasonsfor the establishment of these committees was to provide information on marketing plans, programs and successfrom one businessunit to another. Another reasonwasto improve the information flow between research, trading, portfolio managers and clients. In addition, these committees identify potential clients and regions where the bank will target its future marketing efforts. They also coordinate cross selling in the bank. The experience resulting from the reorganization of the selling staff has so far has been very promising. T h e b u s i n e s sv o l u m e i n some sectors,in particular in security trading with ins t i t u t i o n a l i n v e s t o r sa n d large private clients, was increasedat a rate greater than market growth. It is the explicit target of the new management to strengthen the selling organizatiot further. In order to create incentives for increased business activity and better performance, the compensation to be system had redesigned.Under the old system, the variable part of the salary was very low and there were almost no bonus paymentsfor outstanding performance. The only flexible part of the salarywas linked to the total results of the bank and was very low (a few percent of the total salary at best). Today's compensation system,which will be effective at the end of this year, is quite different. The variable part is linked - as in the past - to the total profit of the bank, to the result of a division or to the single employee.But in addition, abonus canbegranted for solving difficult problems in time or for providing outstanding service to thc bank. This meansthat more or less everybody in the bank can qualify for a

bonus. The amount of the bonus can go up to about 5OVoof the salary. It is hoped that the new compensation scheme will facilitate the hiring of excellent people. A prerequisite for meaningful application of the bonus systemis the introduction of cost/profit-center analysisas well as detailed planning, budgeting and controlling on different company levels. Despite the fact that all these management tools, which are needed to implement the new compensation scheme, have to be improved further, they already allow quite a lot of conclusions for fixing bonuses and for analyzing the quality and efficiency of work done in the bank. The new planning and controlling process makes it easier to check whether the units are using the strategic input of top management in an appropriate way. It also helps to fix realistic targets.Realistic targets are a key factor to success. Wishful thinking has no place in planning and targeting. Aside from the technical improvements in the flow of information, other measureshave been taken to facilitate reporting and decision making. One of the more important decisions was to eliminate one level in the hierarchy and to put very small units together. Fewer reporting levels are not only reducing the bureaucracy but also improving the flow of information and facilitating the decision-making process. In order to streamline the bureaucratic organization a task force was established. It is an ad hoc committee of members of middle management and it was directed to identi$ inefficient units and divisions. The task force came up with several proposals for improving productivity. Their implementation, however, has taken more time than e4pected. The careful redesign of inefficient divisions proves to be a time consuming task, particularly if there is resistance to the redesign. There are still a few managers left who are more concerned about the size or existence of their division or unit than about profit for the bank. The willingness of the staff to cooperate, to develop and support new ideas and to accept changes will be crucial for further success.Such a positive attitude can onlybe reached if

the flow of informationbetweentop management and the staff and vice versafunctions;and, finally, when t h e r e i s a c l e a r l i n k b e t w e e nt h e individual'swork and his othercompensation.Under thesecircumstances it will be possibleto changetheculture of the bank and to strengthen entrepreneurialthinkingon all levels. The organizationof the wholegroup will go alongtheselines.Efforts are beingmadeto makecertainunits moreindependentandto decentralize operations.The benefitsof more autonomylie in the transparencyof results.Suddenlythere is no longera discussionaboutresponsibilityfor costs,risks,businessactivitiesor profits. For this reasonthe daughter banksin Basleand Geneva,aswell as the securityhousein London and the r e a l e s t a t e c o m p a n yi n Z u r i c h , operatequite independently.It is hopedthat the banksin Luxembourg andtheBahamaswill becomemoreind e p e n d e n ta s w e l l . T h e t r e n d t o "breakup" thebankandto form independentunitsdoesnot meanthat no efforts are made to strengthen cooperationwithin the group or to c e n t r a l i z et e c h n i c a l p r o c e s s e s . Cooperationmust,however,be based on commercialconditions.A unit should only buy a serviceor product from anotherof the group whenthe quality and the price is in line with marketconditions. An important stephasbeentaken in the data processingorganization. Insteadof developinginternally an integratedEDP solution,a software packagewith an integratedsolution wasboughtfrom anotherinstitution andhasbeenadjustedto theneedsof the bank. It wasdifficult for the new managementto decidewhetherthe bank shouldcontinueto work on the inhousesolutionor buy an external softwarepackage.The uncertainty aboutthe terminationof the ongoing internal project - it wasalready delayedmanytimes- wasin the end decisivefor the choiceof the external solution,which doesnot suit all the needsof the bankbut will allow u s t o i m p l e m e n tt h e a p p l i c a t o n s Therealonga fixedtime schedule. fore, quite a lot of the previousuncertaintywasreducedandthestaffis moreconfidentthat it will getthe ann o u n c e dE D P s o l u t i o na t t h e a n nounceddate.

SomeFirstConclusions 1'he shaping-upeffort of BankLeu I is showingits first results.Cashflow hasincreasedsignificantly.The profitabilityof the bank is betterbut notyet good.Part of the irnprovement is alsodue to excellentmarketconditions,which havefacilitatedimprovement in profitability and havemade the necessaryorganizatiola[sfuanges possiblewithout destabilizingthe banktoo much.Therefore,it wouldbe wrong to stop the redesignand reorganizationofthe bank. The new managementis awarethat only the most urgentand important measureshavebeentakenand many othershavestill to be implemented. Many difficulties still haveto be resolved.The neworganizationhasto be stabilizedand hasto be tested under more difficult market conditions.The current targetshaveto be defined more sharply,unprofitable activitieshaveto be given up or sold and new attractivebusinesshasto be developed. Thisprocessrequiresleadershipand highly qualified staff.To upgradethe work force continuously,a clear strategyis inevitable.A recruiting policy aswell astraining, development and careerprogramsare still missing. The human factor will finally be decisivewhether the measurestaken up to nowwill leadto further improvement in profitability and whetherthe bank will achieveflexibility, in particular the ability to adjustto changing financialmarkets.Judgingby the increasein profits, by the responseof clients,and by the attitudeof the staff in the first round ofshapingthe bank, thereare good reasonsto believethat Bank Leu has an excellentchanceto be successfulin the 1990s.


F E A T URE S DoingoferythingsweU- veryweA...

Models for Gebu:The Newly IndustrializedTiger Economiesof Hong Kong, Taiwanand Singapore by Prof. Gabino A. Mendoza Ri ch ard Weath erhead F ou n dat i on Professor of Business Management rG tratesv must be directed toward D a t t a i i l i U l e g o a l s .W h e r h e r i t b e strategy for a company, or a country, or even a city, it must be a realitybound set of competencies,skills and c o m p e t i t i v e a d v a n t a g e sd i r e c t e d toward attainable goals. Second, strategyis not about everyt h i n g t h a t c a n b e d o n e . S t r a t e g yi s about choosing from the many possible things that canbe done; choosing the crucial things, choosing the few things that must be done so that the vision can be attained. Too often, strategy is presented as a list of 20 dif-

ferent thingsthat can be done. That is not strategy,that is a wish list; because definitely strategy involves a focusing of efforts, a massingof resources;it is choosing the few key things that should be done to reach an objective, to bring about a desiredoutcome. The third thing that I would like to emphasizehas to do with the role of government.Governmentcannotbe all thingsto all men.The countriesthat have tried to do that, like China and Russia,have found that they cannot p l a n e v e r y t h i n g , d o e v e r y t h i n gf o r e v e r y o n e .G o v e r n m e n t w o r k s b e s t when it clearly defineswhat it will do and clearly defineswhat it will not do so that the rest of the society knows what it must do for itself, so that the private sector knows precisely what its sphereof action can and should be.

z.*tr ':-'_1 -r:l'i


Moreover, governmentworks best when it picks out a few things that it will do and then does thesefew things well, rather than trying to do everything and doing them badly.The effective government prudcntly chooscs the few strategic things that it can do well and concentrateson doing an excellentjob on them. That's the essence of my messageto you today. Let's take a look now at three newly i n d u s t r i a l i z e d c o u n t r i e s- H o n g Kong, Taiwan and Singapore- and see what we can learn from their experience about developmentstrategy and government'srole in its formulat i o n a n d i m p l e m en t a t i o n . I h a v c chosenthese three bccauscthey are either small cities or an island. Their experience is closer to Cebu's than those of Japan or South Korea, or

Malaysia, all of which are large countries.

HongKong IJ ong Kong started out, not with a Jlvision but with an ideology:a belief in minimalist governmenl /cissez-faire economicsand free trade. The theory in Hong Kong wasthat the governmentshould do aslittle aspossible; the governnent should be as small as possible;the government should be as inexpensiveaspossible. The role of governmentwaspreserving law and order, doing someinfrastructure- roads,water, etc.- and providing low costhousing.Thqsefew activitieswerefundedwithaminimum of taxes and with income that it derived from auctioning off prime land which it ovmed.A lot of activities in Hong Kong ins[gdingthe provision of power and masstransportation, were inprivate hands.The theorywas to let the private sector do as many thingsasit could possiblydobecauseit could do thembetter thrh government could. It was the great Hongs-Jardin Matheson, Wheelock Marden, Hutchison, Wampoa, Swire, among others - that had a vision of what Hong Kong should be. It wasa vision built onyftat theywere good at trading and putting dealstogether.They sawHong Kong as the trading post and financial conduit for China. And that'swhat theymadeHong Kong into a financial center and half-wayhouse where goods from all over the world weregatlered and sold to the Chinese and all the goodsfrom China were soldto the rest of theworld. Hqng Kong started its post World War II developmentsometimein 1949 when the communiststook over the mainlsld. llsy &ove the Hongsfron their outpostsin Shanghai Foochow, Tientsin, Hankow and Ichangback to their main basein Hong Kong. They also causedthe Chineseindustrialiss of Shanghaitoflee from the mainland and settle in HongKong The Hongswheeledand dealedfrom Hong Kong as only they knew how. Theyfound waln to re-establishtheir contacts inside China and exercised their age-olde:pertise at penetrating closed markets. In the process,they developedHong Konginto the international marketplace and financial

centerthat it is today. The Shanghaiindustrialists,on the other hand cameout of China knowing how to run textile mills. They startedbuilding textile mills in Hong Kong.Littleby liftle, their supervisors, their technicians,their skilled workers also came out of China and they started to produce very competitive products.Sincethe marketsof the mainlandwere closedto them,they started to look around for alternative markets.Theywereluckythe Korean War broke out in 1950.The Allied

- -t

I I I -


The role of government in Taiwan was a very activist one, the opposite

So, from textiles,they went into garments,which had a bigger value added.From low cost garmentsthey g31wentupmarket into high fn5fuisa mentswherethevalueaddedwaseven higher.They allied themselveswith the West, Hong Kong becamethe workshopwhereall the namebrand garmentswere made.They became original manufacturersfor the big namesin Europe and in the United States.They also went into electronic products,againwith peoplefrom the Westbringing in the technology.With their low cost and highly skilled labor, theywere ableto invadethe United States. The successof Hong.Kongwasbuilt on its strengths:the tradingHongsand the ShanghaiIndustrialistswho were given a free hand by the government and who took advantageof it. And they grew. Oh how they grew!


of Hong*o"n,

Forces in Korea becamea lucrative market for a lot of their goods.When the war ended, they looked to SoutheastAsia for markets and startedto serveIndonesiawherethere was plenty of pent up demandfor cloth. After a few years,they visited the United Kingdom and realizedthat becauseof their lowcostlabor,andthe newequipmentthat they hadbeenacquiring, they could undersell Manchesterwhichwasthenthe center of the textile world. In fact, they could serve Manchester's traditional marketscheaperthan the Manchester mills coul4 so they startedto sell first to England;then to the United States. That is how they began.Later, they went into the production of other labor-intensive consumergoods like wigs and plastic flowers, plastic combs,and all kinds of simihl things. As other developingcountries startedto invadethe marketsof Hong Kong offering them cheaper goods, Hong Kong deliberately movedup.

I et us moveon from Hong Kong to LTaiwan. Taiwanalsostartedon its upward movementafter the fall of the Ifuomintang in China. They all ran to Taiwan:the discreditedpoliticians, the failed military men, the intellectuals,the Nobel Prize winners.What drovethem afterwardswasa dream:a dreamof recapturingthe mainland. Tbey rcalized that the only way that they could do this wasto convincethe Chinesepeoplewho had driventhem awaythat thelir systemof government wassuperior to the communistsystem of government.Theyhadto provethat thelivesof peoplewouldbebetterin a private enterprisesystemrather than inacommunist system. Theyfrst startedout to improvethe systemin Taiwan.Taiwanwasessentiallyan agricultural state.Andso they started to upgradeits agriculture. They did this through a very drastic land refonn program. They took the farmlands from the big land owners and distributed theseto the farmers. Then, governmenttook over the big industries- the utilities, cement, steel- that hadbeenleft behindby the Japaneseand ran thesethemselves. Beyond tha! they encouragedprivate entrepreneursto start producing goods for the home markets of Taiwan. While theywere trying to developan internal market, they were very con-


sciousofthe fact that there should not be too big a gap between the rich and the poor in Taiwan. To track this, they made use of a very interesting tool, called the Gini index. They were, as far asI know, the only country in the world thatwas usingthis tool. The Gini index i s t h e r a t i o b e t w e en t h e i n c o m e received by the richest 20Voof the population and that received by thc bottom ?n%. And they kept watching this index to make sure that the gap between the rich and the poor would not be too much. Theministers of government kept watch on it. Whenever it started to move upward, they would talkwith the private sector and suggest they do 5smsthing about the wagesof their workers. They tried very hard to make sure that the gap did not widen becausethey kept looking at China and saying to themselves,"We should be able to prove to them that we can have a just society under the free enterprise system." During the 50sthey concerned themselveswith increasing their capacity to satisfy the basic needs of the local market, supplanting goods they had had to import with those of local manufactures.In the 60s,they decided that they had done all they could for the local economy and so they adopted an export orientation. They decided that their market was the United

States and so that is what they targeted. They got together with the Japanese who were gradually being easedout of the U.S. market because theywere getting too rich. They used the Japanese as their souroe of technology and as their marketing arm. They invaded the United Statesusing Japanose technology and Japanese marketing know-how. They were willing to go into partnership with the Japanese because they figured that was the fastestway to fulfill their aims. They surprised even themselves on how successful the strateg5rwas. Then, as they got richer, they realized that they could not stay longwith the labor-intensive, low-cost items that they were exporting. They moved up from low-tech industries to hi-tech industries. They welcomed foreign investors from the United States and from Europe. They opened up science and industrial parks where high technology industries would come in. They were already very dependent on the United States for their defense, for their security. They also became very dependent on the United States for their capital and for their markets. So that when you take a look at Taiwan, you will notice that Americans can do no wrong in Taiwan because the country is completely dependent on t h e U n i t e d S t a t e s .T h e l a s t t i m e I


looked, Taiwan had foreign exchange reserves that would cover our Philippine debt twice over and still leave something to fund their own operations. It was at the level of more than US$70 billion. So, being willing to be completely dependent has made them very rich. The role of government in Taiwan was a very activist one, the opposite of Hong Kong. They ran the big companies.Theypushed the private sector into investing in Taiwan's growth. They encouraged them by giving them incentives. They gaye them cheap loans. They even set up marketing facilities for them. They did not, however,go into the consumer goods business themselves.They left the private sector to deal with consumer markets because they figured this was something that private business could do better than government.

Singapore SinI et us take a look at Singapore. "double whamLgaporewas hit bya my''sometime in the 1950s.First, the British set them free and they became a part of Malaysia; and then Indonesia declared war against Malaysia. Now, one of the hinterlands of Singapore was Indonesia. And when Indonesia declared war against Malaysia, they

were in danger of losing that part of their traditional market.Second,they were kicked out of the Malaysian Federation by the Malays under Tunku Abdul Rahm31.f fiis wasa very traumaticthing for the Singaporeans. They had alwaysthought of themselvesas part of Malaysia.The Malay Malaysians, thebumiputro,the sonsof the soil, however,had taken a look at - there the numberof Singaporeans weretwo million of them at that time, mostlyChinese- and realizedthat theywouldtip the racialbalancein the Federation making the Chineseinsteadof the Malaysthe dominant group.And so the Malayssaid"out" which meantthat Singapore'smarket in Malaysiawasalsothreatened. At that point, Lee Kuan Yew realized that they had a problem of sur-

healthfacilities.And finally, wewillbe very activein picking out the strategic industries that Singaporeshould concentrateon, where we shouldbe the best.That's all. All the rest shouldbe left to the privatesector." He also decidedthat with only two million Singaporea',sthey would welcomeforeign talent, foreign technologyandforeign capitalinto Singapore. "Wewill notbe afraidof theforeigner. We will welcomehim into SingaFnreif he hastalent, skill, technolog5lor capital.He iswelcometo helpusmakeSingaporegreat." Originally, Singaporewasthe trading centerfor Malaysiaand Indonesia andan Imperialfuelingstationfor the British fleet.Realizingthat theywere very strategicallylocatedbetweenthe oil of theMiddle Eastandthemarkets

vival.Theyweretwo million peoplein a little islandwith no resources.Even their water had to come from Malaysia;lre KuanYew alsorealized that in order to survivethey would haveto be very disciplined.And in o r d e r t o b e v e r y d i s c i p l i n e d ,t h e governmentwould haveto be very crediblebecauseif governmentwas not credible,then their tryingto discipline the peoplewould causeall kindsof disruptions,would causeall kindsof dissent.He decidedthat the crucial thing that they had to do wasto establishthe integrityand effectivenessof government.And so he said, "There are only a few thingsthat governmentwill do but it will do them well. First, we will provide low-cost housing.Second,we will makesure our youngpeopleget a good education. Third, we will haveexcellent

of East Asia, theydecidedto expand their role.Theydecidedto becomethe regionaltrading centernot only for MalaysiaandIndonesiabut alsofor all of Asia.Thevwouldalsotrv to become the servicecenter for shipping the oil processingand petroleumproducts distribution center,and the financial centerfor the region.Government thereforemadesubstantialinvestmentsin modernport facilities,ship repair and shipbuildingfacilities,and o11efiningcapacity.Theymadeit very easyfor the local banksto expandand for the major City Banksof the world to setup shopin Singapore. As they moved forward and developed,they startedto run out of people.Theybeganto haveto irnport Malaysianworkersinto Singapore.So theydecidedto adopt a new strategy. Insteadof merelybeinga regionalcen-

ter, they decided that they were going to be a globalhigh-techmanufacturing center.They deliberatelyset out to upgrade the structure of manufacturrngin Srngaporefrom low-tech,laborintensiveoperations to high-tech knowledgeableworker-oriented operations.To do this they raisedthe minimum wagein Singaporeby?n% annuallyfor a period of years.In effect, by abruptly raisinglabor rates, they forced their manufacturersto get out of the low-tech businessesthat they were in and to go into the hightechindustries.They alsoput up a new school:a computer institute which is arguablythe most sophisticatedcomputer center in all of SoutheastAsia, probably in all the developingworld. Theyalsopouredin alot of moneyinto upgradingthe teachingof scienceand technologyin SingaporeUniversity. Singaporehasnow turned into a very high-techmanufacturingcountry. The role of governmentin Singapore,as I havepointed out, had to do with a very few things: housing, education,health,andinve5lingin certain strategicindustrieswherethe private sectorwasnot willing to invest. But eventhesethey did with a difference.When they investedin an industry, they made sure it wasadequatelycapitalizedand managedlike a privatesectoroperation,responsive to the market and with an eyefixed on profits. If one or two of thesedid not makemoney,theydid not shorethem up with additionalcapital,theylet them die. They sometimesalsowent into joint ventureswith privateinvestors. Even when the governmentwas the majority investor,the privatesector group was askedto managethe company.The governmentkept its h a n d so f f a s l o n g a s t h e p r i v a t e managersdid a goodjob of running the company.And of course,what happenedwasthat theycreatedsome of the most competitivecompanis5i11 the world. gingaporeAirlines, for example,is oneof the bestrun and most profitablein the world.

Conclusion I11te havelooked at Hong Kong, We have UU TaiwanandSingapore. seenthe sourcesof their visions.We haveseenhowtheytried to attaintheir visionswith different kinds of strategies.We haveseenhow their


strategieschanged over time based on the changing environment and on the increasing skills and technological knowledge that they were able to acquire along the way. We have also seen how their governments assumeddifferent kinds ofroles in relation to the development of the society.We have seenhow important it was for government to be very clear on what it wanted to do. They could be very passivelike Hong Kong or they could be activist like Taiwan and Singapore. What was important was that they madc it clear to the private sector, "This is as far as we will go. No further. The rest is your responsibility." Finally, we have seen that they did not try to do too much.

They did not try to be everythingto everybodybecausethey recognized the reality that they could not. Let me conclude by reiterating that vision is not a blue sky thing. It is grounded in reality: the reality of attainable opportunities, the reality of available resources and of skills. the reality of distinctive competenceand of competitive advantage. Second, strategy is not about everything that can be done. It is about choosinga few key things, a few crucial things that must be done so that development can ensue. And third, government cannot be all things to all men. Government works best when it clearly defines what it will

do and what it will not do: when it picks out a few things it will do and does those things well.

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lmproving GorporateGapital Investment Performance by Prof.Emmanuel S. Santiago

The lmoortanceof the CapitalInvestment Prdcess 41

apital investment opportunities

(. :::i:,:"":',#? :;:l:ffi::: Each investmentis an attempt to assuresomefacet of the company'swellbeing. The selectionof investment projects and the allocation of corporate capital are among top management'sprimary responsibilities.A good corporateinvestment program can meansustained growth; failure to investwiselycanimpedegrowth or threatencompanysurvival. Capital expeddituresrequire usageof scarcecorporate resources and thus shouldbe undertakenin a mannerthat will maximizecontribution to the value of the firm. Appropriate steps,therefore,mustbe taken to ensurethat capital investmentswill producemost,if not all, of their expectedbenefits.A systematic a p p r o a c ht o u n d e r s t a n d i n gt h e processis to divide it into six distinct but interrelatedstages. These are; identification of problems/opportunities; generation of benefitsand costsfor different alternatives;evaluationof costsand benefits for different alternatives; selectionof the bestalternative;implementationof selectedproject; monitoring; and, post-project evaluation. Thesedifferent stagescanbe the basisfor allocatingresourses,responsibilitiesand outputswithin the company.

CapitalBudqetinq Prdctices inlhe US. I n the U.S.,capitalbudgetingpracI ticeshavealwavsbeena favorite topic of academicresearch.Studies

havebeendesignedto developa better picture of how corporationsmake capitalexpendituredecisions,and alsoto determinewhethertheyrepresent theoreticallysound,superior capitalbudgetingtechniques.The main focusof mostpreviousstudiesis the project choiceof evaluation methods:discounted,time-weighted methodssuch as Internal Rate of Return (IRR) and Net PresentValue (NPV) non-discounted vs."naive" methodssuchas Return on Investment (ROI) and Payback. Researchliterature aboundsin proof of the theoreticalsuperiorityof discountedmodelsover naivemodels. Use of IRR and NPV will lead to the selectionof investmentsthat will maximize the value of the companyand thuscorporationsshouldapplythese techniquesin their capital investment decision-makingprocesses.Resultsof surveysconductedinthe60'sand early 70'srevealthe contrary:mostcorporations wereusingROI and Paybackinstead of IRR and NPV as their primary methodsin evaluatinginvestment proposals.A switch to IRR and NPV as primary capital budgeting techniqueswasobservedduring the mid-70's.Studiesconductedin the 80'sindicate that althoughROI and Paybackremain popular, they have howeverbeen relegatedto secondary importancewith IRR and NPV being the primary methodsused. Discussionswith corporate practitioners haveelicited comrnentson why the transition to discountedcashflow models took sometime. These canbe summarizedasfollows: lack of familiaritywith IRR and NPV; ROI and Paybackare easierto compute and interpret; usageof discounted metiods requiresan information set that is not easilyavailable.IRRand NPV modelswill generatereliable resultsonly when the correct data is used.This meens1y6 things;the data for all relevantvariablesare estimated,and, theymustbe highlyac-

curate. These conditions are necessary because discounted cash-flow models are sensitive to the data utilized. As the saying goes'Junk it\ junk out." If the needed data are not available, then IRR and NPV are no better than the ROI and Payback. Among the above mentioned impediments, the information constraint is regarded as the most formidable. But with the advent of minicomputers and microcomputers, the task has been reduced to manageable proportions.

CashFlow Estimation Practices ?e dsleppiaehowUS corporations I generatetheir cashflow information for capital investmentpurposes,a surveyof the Fortune 5fi) firms was conductedin 1986.The frndingsreveal information which has not been reported in previouscapitalbudgeting studies.Most of the resultsare summarizedin ExhibitsL,2and3. As an indicator of the extent of organizationalsupport that firms provide to their cashflow estimation process,respondentswere askedif their companyhasa personor persons responsiblefor coordinating/supervisingthe generationof cashflow data. Over two.thirds replied affirmatively. The positionsthat overseethe process include staff accountant,financial analyst,treasu rer, vice-president, department manager,controller, division director, assistantcontroller, or assistanttreasurer. Resultsshow that firms which are capital intensive and highly levered are more likely to havea person or personscoordinating/supervsingcashfl ow forecasting thanthosewhich are not capital intensive and havelow debt ratios. This result is not surprising, considering the magnitudeof capital expenditures andthe levelof frnancialrisksinvolved (as indicated by a higher debt ratio). Becausecapital intensivefirms are more likelv to havenemerousinvest-


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mcnt proposalsto cvaluatc,having an cxpcricncedand capableolficer ofthc firm supcrvise the process not only s c r v c st o f a c i l i t a t c t h c c x c h a n g eo f vital information amongunits involvcd.but also cnhancesthc ovcrall c f f i c i c n c y o f L h ef i r m ' s p l a n n i n g p r o c c s s .T h i s c o u l d a l s o b c a c o m p o n c n t o f c o r p o r a t e s t r a t c g yt o managoor reduce businessriskswhcn financial risks arc high. Anothcr indicator of thc ins t i t u t i o n a l i z a t i o no f t h c c a s h f l o w lorccasting processis the availabilityof company-widcstandardpracticesin gcncrating cashflow information. Exhibit 2 summarizcsresgrndents' rcplies to thcqucstions.Overall about eightout of ten samplc firms had a company manual prepared for capital invcstmcnt purlnscs. The manualusuallyprovided d c t a i l s o f p r o c e d u r e st o f o l l o w i n prcparing a capital budgct rcquest,the cashflow inlormation needed,aswcll as thc forccastinghorizon.The forms to bc complctcd rangc from a single page to scvcral pagcsdcpending on the type of project and the amount of funds involvcd. Thc results indicate that thc prcscncc of an individual within the organization responsiblefor coordinating/supcrvisingthe firm's cash flow estimation proccss is positively relatef, with the adoption ofcompany-wideprg cedures.Firms which have a person in charge of their cash flow forecasting processare likely to have a more structured approach for gcneratingcapital investment information. Exhibit 2 shows the different forecasting methods respondent fi rms usein estimatingcashflows for capital investment. Among the seven methods listed, four are reportedly


















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uscd by a majority of the samplefirms: m a n a g e m e n t ' s u b j e c t i v ee s t i m a t e s , s e n s i t i v i t ya n a l y s i s ,c o n s e n s u so f cxperts' opinions, and computer simulation. This indicates that, although qualitative forecastingmethods (such as management'ssubjectiveestimatesand consensusof experts' opinions) are popular and perceivedto be highly important when generating cash flow forecast, corporations clearly do not rely solely on them. Instead, estimates from sophisticatedquantitative models are given ample consideration.This ob' servation is reinforced by results showing that over two-thirds of the companies in the study reported using three or more techniquesin forecastingcapital expenditurecashflows. Further analysisreveals that corporations with larger capital expenditures do not only adopt multiple forecasting methods, but are also inclined to be more quantitatively oriented. Additionally, firms with longer forecasting periods ar€ more l i k c l y t o r e q u i r e s e v e r a le s t i m a t e s d e r i v e d b y n u m e r o u s m e t h o d s .T o find out more about the cashflow forecastingexperiencesof corporations, respondentswere askedif they conduct post audits on completed projects.Three-fourths of the sample firms responded positively. The magnitude of forecastingerrors reported by sample firms by type of cash flow are presentedin Exhibit 3. Among the three different types of cash flows, initial investment has the largest percentage (about 68%) ot respondentsclaiming a9OVolevel of e s t i m a t i o n a c c u r a c y ,w h i l e a n n u a l operating cash flows hold the smallest percentage (about a3%) of respondents claiming the same level of ac-


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curacy. This result is not surprising; the forecast of initial outlays rypically involves estimates of current costs. whereas annual operating cash flows are based on forecasts of a number of variables - some of which are highly dependent on fluctuations in economic conditions. Further analysisreveals undcrlying factors that contribute to higher forecasting accuracy. Firms that have someonecoordinating/supervising the information gathering system and use company-wide standard practices experienced relatively smaller errors in their projections. A balanced mix of qualitative and quantitative forecasting tools provided more reliable estimates. Preparation of cash flow information for all types of investments (vs. selected ones only) and for different capital budget sizes (instead of large amounts only) have yielded more accurate forecastsfor corporate c a p i t a l i n v e s t m c n t s .L a s t , b u t n o t least, post-audits are functional and will go a long way in continuously improving a corporation's capital investment program.

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TheClassot'77:PartI MasterIn Business Managemenl,lgTT Abdul Rahman bln Mohamed,MBM'77 AssistanlDirector Jabatan Odit Negara Jalan Tugu 50518KualaLumpur,Malaysia Tel.0$299001 Agulnaldo, Franclsco, MBM'77 17691lslandInletCourp Fort Myers, Florida 33908


Aller, Regino Supangan, I|BM '77 GeneralManager Cebu TradecraftInternational Highway, Mandaue City Gebu Tel.835@ Ang, Anlhony Y., MBM '77 828 N. El Camino#16 San Mateo, California94401


Au Yong Mun Bong, MBM 'ft Agency Supervisor Great EasternLife lnsuranceSdn. Bhd. 19th Floor, Semua House Jalan MasjidIndia,50100KualaLumpur Malaysia Tel. 2934921/2939066 Azcuela, Honorlo Sunico, MBM'77 President EurasiaCarriersCompany, Inc. RoyalMatch Bldg.,2111PasongTamo Makati, Metro Manila Te|.881290 Balleoleros, Je3u. Slchon, MBtrl'77 Director,Mgt. Info. Consulting SGV-NaThalang & Company Limited 514/1 LarnluangRoad, Dusit P.O. Box 812, Bangkok 10300 Thailand Te|.2800900 Bartolome, Ellzabeth Eugenlot, MBil'77 6 Macopa Street,Sta. Mesa Heights Quezon City, Metro Manila Binrmlra, Jerur Salnz, )IBn'Tl c/o Mrs. Elizabeth Zuniaga 3019&nnifer Drive College Station,Texas 77840


Brlmo,GerardHenry,llBM'77 Presideni PhilexMiningCorporation Brixtoncor.FairlaneStreets Pasig,MetroManila Tel.786351/6731971 Bullnlrrllkul, Somporn,MBM'77 A9/20SoiPongdamri2 Road,Bangkok Ngarmwongan Thailand

Cabarrubla, Gll dol Cadlllo, nBn'Tf Group FinanceConttoller GunungSewuKencana,P.T. Chase PlazaTower,22nd Floor Jl. Jend. SudirmanKav21, Jakarta12910 lndonesia Tel.5782O3O Cha Yong Shllq MBM '7l Manager,Int'|. BusinessDePt. Shin Han Bank 10 Dadong, Ghoong-ku Seoul, Korea Te|.7564505 Chan, Vlclorlano Jr. Gochanco, llBM'77 Orner EnhanceEnviaonment 5 Dainty Boad, \Mtite Plains Quezon City, Metro Manila fel722NO Ghan, Wilcon Llu, MBM 'ft President UnimastersConglomerate,Inc. 60 Times Street,West Triangle Quezon City, Metro Manila fel98228315fi1122 Chanyungco, Rene Florencio, MBM'7/ Vice PresidenVTreasurer Manila Mining Corporation 2oth Floor, BA Lepanto Building Paseode Roxas,Makati, Metro Manila Tel. 819iY86/8159447 Chec Klm Meng, llBM'77 GeneralManager Matang Holdings Berhad Orchid Plaza,lorong Satu Jalan Wong Alt Fook,Johor Bharu,Johor Malaysia Tel.07-27211 Chen Kee Chong, Joceph, nBn'Tl 706880 Lucas Road, Richmond British Columbia WC4T8 Canada Chue Kok lleng, Vlctor*, ilBll'7t 66 Tiong Poh Road Singapore Corpuz, Angol ilag3ay3ay, nBil'Tl Vico President,Treasury& Trust Group Land Bank ol the Philippines 319 Sen. Gil PuyatAvenue Makati,Metro Manila Tel. 8837828189411 '7l Cua, Fobort T., MBll Part Orner Pedro Trading Corporation Room 30i|, 1386NarcisaRizalStreet Tondo,Manila Tel.2s€6,27 Dayama, AMnd Sllaram, llBM'77 Proprietor Functional&rsiness Servicee 70 ShalmaliCoop HSG Society ldeal Colony, Kothrud, Pune 411 029 hdia Te1.434661


Dayrlt, Conrado lll Mlllar, MBlt'Tl ConsultanuDirector ScanningTechnologiesol the Phils.,Inc. 3rd Floor,MidlandBuendiaBuilding Sen. Gil J. Puyal Avenue,Makati, M.M. Tel.8180131/8173930 '77 De Leon, Carmellla L, itBM ExecutiveDirector Valdes Consultants,Inc. lOth Floor,ManilabankBuilding Ayala Avenue,Makati, M.M. Tel.8181987/8101601 Dlaz, Peter Cabotale, MBM'77 Director,Human ResourcesDept. Tuppenrare'Philippines,Inc. 1ah Floor,Alied Bank Center Ayala Avenue,Makati, Metro Manila Te|.8159616 Dy PIco, Robert Siao, MBM'77 Manager Dy Pico Sons, Inc. J. Famiro Street lligan City, Lanao del Norte felm67l21067 'z Estrada, Jocelyn Minda P., MBM President Inter-AsiaProperty ManagementCorporation Room 313,Atriumot Makati MakatiAvenue, Makati, Metro Manila Tel.81@2118171352 '77 Evangelbla, Caezar Paragas, MBM Asst.Mce Pr€sident Asia Trust DevelopmentBank 1'l(X Asia Trust Building, Quezon Avenue Quezon City, Metro Manila Tel.921242719229o18 Faustlno, Manuel Otdoveza, MBM'77 President Faustino-BaronFood Services 2220 Robert Street Pasay City, Metro Manila Tel. 8319811/81s5{3i} Ferrer, Jalme lV Bernabei, ltBil'rt 7605 V. Medina Street Paranaque,lt/letroManila Ferret, Renalo Samanlego, I{,AII'Tl President Erecsa,Inc, 7th Floor, MGF Champaca Bldg. ArnorsoloStreet, Makati, M€tro Manila Tel. I 185971-zl81 85976 Fr8n@, Gabrlel Alonlo, MBll'77 Prop€rty Manager Trizec Equities Limited 2900ts7002nd St. SW Cafgary, Alberta f 2PAt't2 Ganada Tef. (cgg1xtr7lzJ Garcla, Raymund Locrln, MBM'7t GeneralManager R.J. Garcia Enlerprises,Inc. La SalleAvenue Bacolod City, l,legros Occidental Te|.26596/20885

Herera, Edgardo Mayuga, MBM '77 Mce President/Controller CFC/URCGroupof Companies Avenue CFGBldg.,110E. Rodriguez Libis,QuezonCity, MetroManila f e!.721n77

Mehta, Rajiv Ajit, llBM '77 Plan'9. GeneralManager,Treasury/Fin'1. UnitedBreweriesGroup UB House1, GrantRoad 24 G, Bangalore560 001, India Tel.57880e9

Honrado,Antonio Panuncialman,MBM '77 Asst.ManagingDirector,EIMP Technology& LivelihoodResourceCenter TLRCBldg.,Sen.Gil J. PuyatAvenue Makati,Metro Manila Tel.81714851864248 Huang, Gary Chen, MBM '77

Mendieta,Luis Mari Bilbao, MBM'77 ExportManager,BayexDiv. Bay MillsLimited P.O.Box 728, St. Catherines Ontario L2R6Y3.Canada Tel. (a16)6883160

Mce President,Marketing CenlralAzucarerade la Carlota FJE Bldg., 105 EstebanStreet LegaspiVillage,Makati,MetroManila T e l .8 1 5 9 1 3 1 Huang, Philip Tan, MBM'77 Exec.Mce President,Mgt. Services CommonwealthFoods,Inc. Sen.Gil J. PuyatAvenue Makati.MetroManila Te|.855661-79 Humam bin Haji Mohamed*, MBM'77 MaraInstituteof Technology ShahAlam Selangor,Malaysia Javelhna, Emmanuel Hamon O., MBM'7t Manager,New Products Standard(Phils.)FruitCorporation LadislawaMllage,Buhangin GeneralSantos City, South Cotabato fel.7U41 Kannan,Sivaramakrisflna*,MBM'77 AssistantVice President Group Developers,Inc. 6th Floor,UnitedLife Building 837 PasayRoad, Makati, Metro Manila Khaw Pe€ Seng @ Koh Pee Seng, MBM '77 GeneralManager Arab-MalaysianFinance Berhad 1OthFloor,Arab-Malaysian Bldg. 55 Jalan RajaChulan,50200KualaLumpur Malaysia Tel.03-2382100 tai Kim Leong, MBM'77 Director/GeneralManager PublicInternationalInvestmentLtd. '1903 \Mng On Centre 71 Des Voeux Road. Central Hong Kong Tel. *222101 |.au Kwok Hang, Clarence,MBM'77 SeniorTreasuryMarketingOfficer ChaseManhattanBank,N.A.fihe) One ExchangeSquare,39/F Central Hong Kong Tel. 5-245153/S8109311 Um Boon Koi, MBM'77 FinanceManager/Trader Soctek Sdn. Bhd. 5/F,Wisma KualaLumpur Plaza Jalan BukitBintang,a5100KualaLumpur Malaysia Tel.0$2€0419 Llm, Philip Lester, MBM'77 Vce President,Administration PeggyMills,Inc. 'l 1th Floor,BA-LepantoBuilding Paseode Roxas,Makati,MetroManila Te|.8158787

'77 Soon Kian Tiong, MBM PersonnelManager Multi PurposeHoldingsBerhad 4th Floor,Magnum Plaza Jalan Pudu,5O917KualaLumpur Malaysia Te!.2tt8802212417599 Suarez, Jose Jr. Narciso, MBM '77 Unit 45. Townhouse AyalaAlabangMllage,Muntinlupa,M.M. Tan, Wilson Hao, MBM'77 Unit Head, Accounts Payable Citibank 123 Front StreetW. Toronto,Ontario,Canada Tel. (a16)9475619

Mohamed bin Jamrah, MBM'77 Member PKNS 4lATingkat1, KompleksPKNS MedanGopeng,lpoh, Perak Malaysia Tel.05-518955 Nicdao, Ruperto Jr. Songco, MBM '77 Sr.Mce President,Finance CentralAzucareradela Callota '105Esteban Street,LegaspiVillage Makati,MetroManila Tel.8159131 '77 Parayno, Guillermo Jr. L, MBM FlegionalDirector,NCR EconomicIntelligence& lnvestigation Bureau Departmentof National Defense Camp Aguinaldo,QuezonCity, M.M. Te!.792718n83624 Peckson,Winaton Ll., MBM'77 Manager,CorporateBanking Lloyds Bank PLC SlF,Tower l, AdmiraltyCentre Harcourt Road, Hong Kong rel ffi2322il Phang Thiam, MBM '77 Oriental Bank Berhad 14th Floor,MenaraPromet Jalan Sultanlsmail,50250KualaLumpur Malaysia Tef. (03)241ffi24 '77 Reyee, Pedro lll Evangelista, MBM Manager Asst.Mc€ Pres./DeputyGeneral PhilippineNationalBank Phil.CenterBldg.,556 sth Avenue New York, New York 10036,U.S.A. rel. (212)3823300 '77 Risbud, Sudhir Vasantt, MBM Flat No. 1, lndrayaniApts. B PrabhatHoad,Lane 15,Poona lndia Sansingkeo, Piseksook, MBM'77 Deceased Sen, Tifak, MBn'Tl ExecutiveMce President GeneralDieselPower Corporation 6305 South Expressway Makati, Meiro Manila Tel.8152181/85{}956

Taniuatco, Joee Sumulong, MBM'77 Exec.Assistant,Office of the President Phil.Long DistanceTelephoneCompany lOth Floor,PLDTBuilding Legaspi Street, Makati, Metro Manila Tel.8168077 Tiu, Roberl Tan, MBM '77 President Inc. WoodchipsInternational, Suite 224, Equibank ll, Ortigas Street San Juan. Metro Manila f e!.7214191172'14194 Tolentino,Conrado Kasilag, MBM'77 18 BiscayneStreet FairviewPark,OuezonCity Tel.907197 Tong Kam-Shek,Pelet, MBM'77 Director,Card Marketing Inc. ArnericanExpressInternational, 23lF, New World Tower 16-18Queen'sRoad,Central Hong Kong Tel.5€431718 Wei Huang, Janei, MBM'77 3969 Alley, 205 lane 1ZthChang,HsinTien,Taipei Taiwan Wong Hung Kok, David, MBM'27 Branch Manager Pacific Bank Berhad (Ihe) GroundFloor,Wsma Genting Jalan Sultanlsmail,50730KualaLumpur Malaysia feL 2613€,2812614822 Yip Weng Gheng, MBM'77 FlegionalManager Fraser& Neave (M) Sdn. Bhd. P. O. Box 228 81200Johor Bharu,Johor Malaysia Tel.O7-3224* 'Zl Yu, Luis Jr, Ng, MBM 14 Pikador Street,Midtown Subd. San Roque,Marikina,MetroManila Te|.9479033

Master In Management,1977

Shen Kuo-Chuan*,MBM'77 T7-1,Lane132 Fu Lin Street,Taipei Taiwan Siglos,Thelma Sanla Cruf, MBM'77 1067E 1ah Avenue Vancouver,BC V5T2J7 Canada

Abdul Karim bin Tun Abang HJ Openg, MM'77 lnterfinanceBe.had \Msma Bukit Mata Kuching,JalanTunku Abdul Rahman,93100 Kuching, Sarawak Malaysia Tel.B2-2fi2U141O434


Abduf Latif bin Nordin, MM'77 Director-General JabatanPerhutananNegeriPahang Tingkat2, Wisma Seri Pahang 25990Kuantan,Pahang Malaysia Tel. 09-522589 Adnan bin Maaruf, MM'77 ManagingDirector MARAHoldingsSdn. Bhd. 22nd Floor, Medan MARA,Jalan Raja Laut 50350KualaLumpur,Malaysia Tel.03-2985122 Arevalo, Manuel Serranilla,MM'77 GeneralManager JimenezOil Mills,Inc. 19thFloor,BA-LepantoBuilding Paseode Roxas,Makati,MetroManila Tel.8166801-O5 Arora, Satya Prakash, HM'77 Chief Executive Smit Def Tech Limited D 105AnandNiiketan NewDelhi| 10 021.India Te|.6093il Baharuddin Haji Ghazali, ll$'Tl DirectorGeneral MalaysianTimber IndustriesBoard Sth Floor, Bangunan Sateras JalanAmpang,50728KualaLumPur Malaysia Tel. (03)246233 Borromeo,Horaclo Jr. Melo, MM'77 AssociateDean, Mid-CareerPrograms AsianInstituteo{ Management 123 Paseode Roxas Makati.MetroManila Tel.874011-19 Bose, Bha:kar, lil|il'TI Manager,ManagementConsultancy DevelopmentConsultantsInt'|. Limited P.O. Box 2067 Secunderabad500 003, India Tel.24€153 Bradberry, Wlllhm James T., Mil'77 Asso. Professor,Int'|. Management Loyola University 6363 St. CharlesAvenue New Orleans,Louisiana70118


Tel. (504)86524,18 '77 Bumanglag, Hon€alo Pablo, llM Asst.Chief of Staff, B/Director, Opns. IniegratedNational Police (lNP) INP Headquarter,Camp Crame OuezonCity, MetroManila Tel.7218598 '77 Catibog, Mercela dela Roea, llil Chief, ManagementServices Departmenlof Sciencaand Technology Bicutan Taguig,MetroManila Tel. 822@61€718220575 Choo Jee Sam, MM'77 Chief Operating Officer MBf Card ServicesSdn. Bhd. 1ah Roor,Wisma MCA,JalanArnpang P.O.Box 10486,50714KualaLumPur Malaysia Tel.0$2612566

'77 Das, Tushar Kantl, MM Collegeof BusinessAdministration TexasTechnicalUniversity U.S.A. Lubbock,Texas79u109, Tel. (806)7427533 '77 Datu, Danilo Matic, MM Manager,FinancialPlanning TupperwarePhils.,Inc. AlliedCenterBuilding,AyalaAvenue Makati,MetroManila Te|.8159622-25 De Guia, Eduardo Bartolome,MM'77 Partner,Audit Division SyCip,Gorres,Velayo& ComPanY 6760 Ayala Avenue Makati,MetroManila 1 Tel.819301 '77 De Luzuriaga,Robert Jr. M.R.r' MM 939 MaligayaStreet,LeonGuinto Malate,Manila Gavino,Angel Q., MM'77 PresidenVOivner ReputableProtectiveSecurity,Inc. 312 SantolanStreet SanJuan, MetroManila Te|.700190 Guadalquiver,Rogelio Mesina, MM'77 Partner,Audit Division SyCip, Gorres,Velayo & ComPanY MalayanHouse,Km 7, J.P. LaurelAvenue Lanang, DavaoCity, Davaodel Sur Te|.79328[9333 Gutierrez,Beniamin Evangelisla,MM'77 AirlineCaptain,FlightOperations PhilippineAirlines,Inc. Manila DomesticAirport Paranaque,MetroManila Hashim Haji Haron, Mln'Tl Chief Administtator/Socretary Majlis PerbandaranJohor Bharu P.O. Box 232 80000Johor Bharu,Johor Malaysia Tel. (07)21446, ll,or Kim Choon, nln'TI 3 FaberGreen Singapore fel.mWT '77 Kong Yong Yeo, MM Group Corporate Planner PrimaUmited 201 Keppel Road Singapore Tel.2228811

Madera,Ambrosio Ahsiong, MM'77 ProductionManager KTBIndustries.Inc. Jose C. Cruz Street,Bo. Ugong Pasig,MetroManila Te|.6737361-65 '77 Marasigan,Rodolfo Vasquez*, MM 91 FleetwoodDrive,GlendaleHeights lllinois60139,U.S.A. 312-6653660 McDougald,Charles CamPbellt, MM'77 ManagingDirector Scotch VvhiskyBrokers Umited J. HotungHouse,B-2,11thFlr Kowloon,Hong Kong Tel.693735 '77 Molato, Ruperto Jr. Concepcion, MM Chief Security Officer ComsavingsBank 7 Real Street,Zapote Las Pinas.Metro Manila Tel. 8280s98/8201061 '77 Nepomuceno,Luis Carbungco, MM Consultant SkywaysDevelopmentCorPoration 11-ACountrySpaceI Building Sen.Gil J. PuyatAvenue,Makati,M.M. Tel.8188,222 '77 Non, Alfredo Jacinto, MM Partner,Audit Division SyOip,Gorres,Velayo& ComPanY 6760 Ayala Avenue Makati,Metro Manila Tel.8193011 @ij Chin Lye, MM'77 GeneralManager,ConsumerProducts East Asiatic Co. (S) Pte. Ltd. fihe) 5 Namly Drive Singapore1026 feL7347877 Pe Benllo, Segundino g.*, MM'77 41-G Narra St.eet, Project3 Quezon City, Metto Manila Ramfi bln Othman, Mlt|'77 Director.Administration Instituteof Strategic& lnt'|. Studies 1 Jalan SultanSalahuddin P.O.Box 12424,fi48o KualaLumPur Malaysia Tel. (03) n39437 Rao, RamanandaSaniiwa*, MM'77 4 Velayudha Mudali Street Nungambakkam, Madras600 03f lndia

lacar, $ylvio g.r, MM'77 1511 AbilaAvenue Carson,California90745 U.S.A.

Sibal, Rosauro Villadolid' Mlt'77 Assistant Secretary Dept. of Transportation& Communications A. Boces Ave. cor. Scout FleYes Quezon City, Metro Manila Tel. 973559/921892

'77 Lim, Roberto Veloeo, MM SalesManager,Eveready EvereadyBatteryCo. (Phils.),Inc. EOSA Mandaluyong,MetroManila Te!.78ffi71

Snyder, Mirlam Eslher, MM'77 Head of School Harley School fihe) 1981Clover Street Rochester,New Yotk, U.S.A. Tef. (716) 4421770

Lorenzo, llario Cruz, MM'77 FirstVice President,Legal DePt. SecurityBank and Trust ComPanY 6718 Security Bank Building AyalaAvenue,Makati, Metro Manila Tel.8187677

Subedl, Bharat Prasat' MM'77 Marketing Managet RoyalNepalArlines Katipath Kathmandu, NePal fe!.2fr757


Suronegoro,Sublyanto,MM'77 Representative Bank lndonesiaSingapore 11 CollyerQuay 08{1 8th Storey,The Arcade Singapore Te1.2232700 Tampf, Indar L.ngco*, MM'77 AssistantManager Lanaodel Sur ElectricCooperative,Inc. MarawiCity Lanaodel Sur Tan Kian Chung, MM'77 ManagingDirector TechnoServicesUmited Rm.911-912,SincereBuilding 173 DesVouexRoad.Central Hong Kong Tel.5{158386 Teo [am-Am, MM'Tl DresserSingaporePte.Ltd. 't22Middle Road #07{6 Singapore Te|.3373030 Vafdes, Antonio Abad Sanlos, MM'77 SeniorManagingPartner CarlosJ. Valdes& Company CJVCBuilding,AguirreStreet LegaspiMllage,Makati,MetroManila Te|.8175769 Villanueva, Rafael Sian, MM'77 c/o LourdesJalandoni,12 EDSABroadway New Manila,QuezonCity, MetroManila fel.7U927 Violago, Bernabe Jr. Rueda, MM'77 A.V.P./Area Head, North M.M.Area United Coconut PlantersBank AuroraBoulevard.Cubao QuezonCity, MetroManila Te!.7214971 '77 Wan Zaid bin Wan Abdullah, MM ManagingDirector Zaibi Group of Companies 3774 Jalan Hospital 15730Kota Bharu, Kelantan Malaysia Tel. (09)743397 Yabut,Cecilia Oue, MM'77 Director PhilvilleDevelopmentHousingCorp. 17 Gov. PascualStreet Malabon,Metro Manila Tel.3624179 Yangas, Robert Allen, MM'77 lmplementationand Training National Daia Corporation 13O0Piccard Drive Bockville,MD 2085G43O3


Tel. (847)5710203

Management Development Program,March1977 Antonlo, Alberto Jr. Mendoza, MDP'77 14 Tirona Str€et, Project4 Quezon City, Metro Manila Tel.7211769 Araneta, Jesus Aldeguer, MDP'77 Mce Chairman of the Board Ore-LineMining Corporation R.T. Lim Street Zamboanga City, Zamboanga del Sur

Dato'Haji Khalidbin Muhammad,MDP '77

Aehak bin lahak Hassan*,MOP'77 Manager,ProjectAnalysis MalayanBankingBerhad 92 Jalan Bandar KualaLumpur,Malaysia Tel.87451

Deceased Dato'fsmail bin Mansor, MOP'77 43, Jalan Maktab 54O00KualaLumPur,MalaYsia 2937763

Bautista, Ceferino F., MOP'Tl Mce President,Marketing Team Pacilic Corporation ElectronicsAvenue,FTIComPlex Taguig,MetroManila Tel.8163261/81ffi244

De Guzman, Uldarico Franco, MDP'77 Deceased E}eLeon, Abelardo Ouinlo, MOP'77 Officer's Row, Navy Road BaguioCity, Benguet

Bautista,Felix E., MDP'77 Asst.Vice President,Treasury San MiguelCorporation ,10San Miguel Avenue Mandaluyong,MetroManila Te!.7223ffir22ffi

Empainado,Magdaleno L, MDP'77 5 San PabloStreet,CapitolSubd. Pasig,Meko Manila Te|.6733412

Belamide, Josolito Kiamzon, llDP'77 President Spica,Inc. 11thFloor,Unit C, Strata100 Building EmeraldAvenue,Pasig,MetroManila Te!.6732222

Esguerra,Hernani Carlitos, MDP'77 Mce President,Finance& Admin. IndustrialProductsCorporation Suite212,SarmientoCondominium YakalStreet,Makati,Metro Manila Tel. 866868

Blanch,Ramon Garrido, MDP'77 EastDrive,CountrysideHomes MarikinaHeights,MetroManila

Franco, Salvador 8., MDP'77 Mce Presidentand GeneralManager Inc. MedichemPharmaceuticals, 5th Floor,DynaMsion Building 108 RadaStreet,Makati,Metro Manila Tel.8158501/8186O52

Bonoan,Dionisio S.V.,MDP'77 Director,Hong Kong Region Mallinckrodt,lnc. Room316, MarsmanBuilding Sen.Gil J. PuyatAvenue,Makati,M.M. Tel.8170351/889731

Gandaprawira,Dllmitro, MDP'77 ProgramDirector,PLKP LembagaPengembanganPerbankanIndonesia Jalan KemangRaya35 JakartaSelatan,Indonesia f el,799{)8€717992012

Bulaun,Orlando Galcia, MDP'77 Manager,GeneralSantosZone Standard(Phils.)FruitCorporation Yap Building,NationalHighway GeneralSantos City, South Cotabato Tel. zloo3

Goh Peng Khim*, MDP'77 48 Jalan lkan Merah Singapore

Carino, Jaime M., MDP'77 14 SalviRoad,Tiena PuraSubd. Diliman,QuezonCity, MetroManila Philippines 995721 Chafermsaphayakorn, Phaibul, ]lDP'77 Chairman Co., Ltd. UniqueGas & Petrochemicals 33121-22 Sukhumvit11, KlongToeY Prakanong,Bangkok10110 Thailand Tel.25?0€,ml2s.72fi Chang, Edward,MDP'77 60 Sir Tze, lah Street Shihlim,Taipei,Taiwan

Hung Hak-Tai, l-arry, MDP'77 Manager OverseasUnion Bank Ltd. 5&52 Queen's Road Central,Hong Kong

Ching, Warmelo Galamiton,MOP'77 ExecutiveVice PresiJent VitarichCorporation AbanganSur Marilao.Bulacan Te!.81672A18167461 Claravall, Eduardo Paredes, MDP'77 c/o George Claravall 44 T. MascardoStreet,QuezonCity, M.M. Tel.7922ffi

Cula, Gener B.*, MDP'77 9452 San Pablo Street SanAntonioValleyl, Paranaque,M.M'

Hain, Jose Bonita, MOP'77 Manager Asst.Mce PresidenVSales AG&PAMSCOFoundry,Inc. A. BautistaSireet Punta,Sta.Ana, Manila Tel. 707830285931 Ho Kim Bing', MDP'77 162SeningGarden,Kg. Boyan Taiping,Perak,Malaysia

Chew Fook Yew, Alan*, MDP'77 10, SS3/29,Taman Sentosa Selangor,Malaysia

Cruz, Lorenzo Ctuz.-ltDP'77 Deceased

Guerreto, Toribio Santoa, jl'-OP'77 176TironaStreel,BF Homes Las Pinas,Metro Manila Te|.8425186

Jaurlgue, Edgardo lantin, MDP'77 Manager PresidenVGeneral UltramarReinsuranceBrokers,Inc. Room 205, Dona NarcisaBuilding 8751Paseode Roxas,Makati,M.M. Tel. 889247/889185 Jomiffa,EdwSnL., MOP'77 InternalAudit Manager NationalSteelCorporation 377 Sen.Gil J. PuyatAvenue Makati,Metrc Manila Tel. 889540/8162036


Kishan Singh Gill, MDP'77 Deputy Managing Director AgricultureBank of PNG P.O.Box 6310 Boroko,PapuaNew Guinea fe!.247fi

Pacho,Allredo G., MDP'77 President& GeneralManager PriconMicroelectronics, Inc. 1stAvcnue,ManalacInd'|.Estate Km. 16, EastServiceRoad,Taguig,M.M. Tel.8220453

Villamor, Melchor O., liDP'77 DivisionManager,Flat Product National Steel Corporation NSCBuilding 377 Sen.Gil J. PuyatAve.,Makati,M.M. Te|.8162036

Kok Ah Foong, P€tor, MDP'Tl Director BylanderMeinhardtPartnership '162Bukit Merah Central #04-3555 Singapore Tel. 02-2735255

Rafael,Bayanl S,, MDP'77 Consultant funon TradingCorporation 2231PasongTamo Makati,MetroManila Tel.815081 1-20

Lee Boon Hing, MDP'77 AdministrativeManager CentralMercantileCorp. (M) Sdn. Bhd. Penthouse,\Msma Central JalanAmpang,50450KualaLumpur Malaysia

Refova, Rogelio Jr. Palisoc*, iLDP'77 AssistantGeneralManager NaturalAero ManufacturingCorporation DomesticAlrport PasayCity, Metro Manila

Yang Yim Mlng, Vincenl, MDP'77 Controller,MIS Rothmansof Pall Mall (M) Berhad MrginiaPark,Jalan University 46300PetalingJaya,Selangor Malaysia Tel.03-7566899

Lee Meow Lock, MDP'77 Manager,KL AutomatedGlearingHouse Bank Negara Malaysia P.O. Box 1@2/ Jalan Kuching 5O€129 Kuala Lumpur Malaysia Tel.0$2988014 Llmuaco,Pelagio Cabale, MOP'77 President PCL International, Inc. 47 Sc-outFernandezStreet,Diliman 1103QuezonCity, Metro Manila Te|.984020 Lforin, Carloe Jr. Ocampo, MDP'77 Manager,Corp. Comm. & Project San MiguelCorporation MagnoliaDivision,710 AuroraBlvd. Cubao,QuezonCity, Metro Manila feL721n41 Local358 Mahtoz bin Khalid, nDP'Tl Deceased Manfgeaca, Romulo Meralles, MDP'77 Manager,Materialsand Supplies San Miguel Crcrporation Beer Division,Mandaue Brewery Mandaue City, @bu Tel.87W187214 Mardhl, Wang Sutyono*, llDP'77 DivisionManager Wijaya Karya,P.T. Jl. D.l. PanjaitanKav. 3 & 4 Cawang,Jakarta, lndonesia Tel.84017 llaloma, Joso Jr. Buck*, MDP'77 7 HolidayDrive,GSISHol. Hill San Pedro, laguna llanono, l'nDP'Tl Managing Direc{or Askrindo Jl. Cikini Raya99 Jakarta, Indonesia

Rodif, Deograciao Jr. T.*, |lDP'Tl 242Hen. T. de Leon Street Valenzuela,MetroManila Salazar, Mariano de Sena, MDP '77 AssistantS€cretary PresidentialManagementStaff PMSBuilding,ArleguiStreet SanMiguel,Manila Te!.7419377 Salvador,Jose Alivio, MDP'77 Orvner/GeneralManager JA SalvadorContruction 62 DunwoodyTech.St.,UniversityHills CaloocanCity, Metro Manila Te|.3622861 Saphakkul, Suphak, )lDP'TI 11 Soi 13,Seri2 Road,Phangkanong Ladprao Road, Bangkok Thailand 3145060 Sapie bln AlF, MDP'77 AssistantBranch Manager Bank PertanianMalaysia No. 19Jalan Sultanah 83000 Batu Pahat,Johor Malaysia Sfenes, Jose Villarosa, nDP'Tl Onner BWT Enterprises 43 Kowloon Street,BF Homes Paranaque,M€tro Manila Tel.8279318 Skulralana,Tlra, MDP'77 2,14Soi Roong Aroon, ladprao tadyao, Bangkaen,Bangkok Thailand Talan, Benlamln Anacleto Sosito, MDP ,TI Asst.Mce Pres..BusinessDev't.Int'|. United Laboratories,Inc. 66 United Street Mandaluyong,MetroManila Te|.7216501-50

Yaplangco,Rogelio 3.*, MDP'77 235 Ortega Street San Juan, MetroManila Z, Anthony Louls, MDP'77 296 Prince Edward Fbad, 1/F Kowloon,Hong Kong @SUBHEAD: Management D€velopment Program, Jultt 19Tl Achacon, Epifanio C., MDP'77 Part O/vner Jebon Garments 14thSwimmingSt., New St. FrancisSubd. Cainta,Rizal Tel. 6654740 Adhikary, Ganesh Prasad', MDP'77 Officer,O&MBranch Nepal Raska Bank Central Office Kathmandu,Nepal Te|.15159 Aguado, Jose Roco, MDP'77 President BasicMachineries GroundFloor,RevillaBuilding AguirreStreet,Makati,MetroManila Tel.8163521/8163522 Aguinaldo, Carmelito Evora, MDP'77 Vice President,Technology& Development FilsynCorporation 14th Floor,BA-LepantoBldg. Paseode Roxas,Makati, Metro Manila Tel.8162790/8159319 Alcaraz, Eduardo S., MDP'7r7 AssistantGeneral Manager MedifarmaLab. Inc.,P.T. P.O.Box 110 Jakarta, lndonesia Tel.489913i] Alicbusan, Leopoldo Carandang,MDP '77 President PhiltrancoServiceEnterprises,lnc. EDSAcor. Apelo Cruz Streets PasayGity, Metro Manila Tel. 8337180/8335O61

llfranda, Jore Galang, nDP'Tl 62 Summit Avenue,Cedar Knolls l.lew Jersey07927, U.S.A.

Tan Kim Swee, Francle,nDP'77 Managing Director Consult ManagemontServicesPte. Ltd. 1 SelegieRoad #03-07 Singaporo0718

Alikpala, Erequlel G., MDP'Zz Vics President GovernmentServicelnsuranceSystem Office of the Chairman Arroceros,Manila Tel. ,034n?496628

NadrArfi $DP'TI PurchasingOperationsManager Datuk KeramatGroup ol Companies 73 Jalan Daiuk Keramat 10150Penang,Malaysia Tel.0+27166

Tecron, Fernando Jr. V.,MDP'Tl Plant Manager,Tijuana, MEX Plant EvenlloJuv. Furn. Co. 6235 South Saint Andews Places Los Angeles,CA 9@f7, U.S.A. Tel. (213)7s99191

Ang Kim Thlah, MDP'77 OperationsManager Port ol SingaporeAJthority P.O.Box 300, PSABuilding Post Otfice, Singapore f eL 271221'l


Anie, Nazarlo Aguirre, nDP'Tl Commissioner Commissionon Audit CommonwealthAvenue,ConstitutionHills QuezonCity, MetroManila Tel.971067 Antafan, Rogelio Paralso, MDP'Tl Mce President,Human ResourcesDivision Far East Bank and Trust Company MurallaStreet Intramuros,Manila Tel. 47ffi491401021-39 Avena, Juanito C.t, MDP'77 Poblacion,San Jose del Monte Bulacan Avendano, Ernanl Valencia,MDP'77 25 Marikit cor. MasayaSts. WestTriangle,QuezonCity, MetroManila Tel.971002 Balderas,Fauslino Jr. Lachica,MDP'77 Mce President,Manufacturing AlliedMetals,Inc. z160Quirino Highway, Bo. Talipapa Novaliches,Quezon City, Metro Manila fel.9n,2272l9o5788 Barretlo, Federico Jr. Oclavio, MDP'77 114 K€, KamiasDistrict Quezon City, Metro Manila Tel.9218752 Barsabal, Benito Balenton, MDP'77 Managing Partner B. Barsabaland Company 2nd Floor, GreenfieldBdg. I 750 ShawBlvd.,Mandaluyong,M.M. Tel.789911 Basco, Edilberto Sanchez, )IOP'Tl Manager,Management ServicesDiv. SyGip,Gones, Velayo & Company 105 Dela Rosa Street,Legaspi Mllage Makati, Metro Manila Tel.8170301 Basri, Jurnalie Hasan, ltlDP'77 Superintendent, ComputerCenterOpns. Caltex Pacific Indonesia,P.T. Pekanbaru Sumatra,Indonesia Te!.21377 Batugal, Ponciano Abedesr, MDP '77 AssistantDrector Phil. Council for Agric. & ResourcesResearch College Los Banos, Laguna Tel.2308 Bos, Joeo Ante, llDP'77 Plant Manager lligan Coconut Oil Milling Sanla Pilomeng lligan City,lanao del lrlorte Teln422-24 Boey Soc't{en,n0P'Tl Doputy Manager,Sales Mala),wata Steel Berhad P.O. Box 60 12700 Butterworth, Penang Malaysia Tel.331814 Boeano, Antonlo Pona, mDP'77 Proprietor& Orner Miriam Marketing 68 Emerald Street,City FleightsSuM. Bacolod City, l,IegrosOccidental Te|.22366

Dato'Oltrman bin Abdul Manan, MDP'Tl Asst. DirectorGeneral,ForestryHQ ForestryDepartment Jalan Mahameru KualaLumpur,Malaysia Tel. 03-29286&t Dimaporo,Apipa Dimakuta,MDP'77 Treasurer Corporation LanaoAgro-lndustrial Room 307,Jovan Condominium ShawBlvd.,Mandaluyong,MetroManila Tel.783051-53

Boucher, Therosa A., MDP'77 Deceased Bueno, Conrado Hernando, MDP'77 Manager PresidenVDivision BenguetManagementCorporation WagnerRoad,P.O.Box 105 Baguio City, Benguet Tel. /142-5393/442-n51 Bulaong,Amado Jr. A., MDP'77 Deceased Caasi, Vicencio Camangian, MDP'77 Consultant FinancialBanking Corporation OUROtficesBuilding,EstebanStreet Makati,MetroManila Tel.8109603/881294

Divinagracia,Jose Parrenas,MOP'77 Force41 Dy. Cmdr-NavalDist.4/Cmdr-Task PhilippineNavy Naval Station PuerioPrincesa,Palawan

Caritativo, Ernesto Cunanan*, MDP'77 EmbassyGardenHomes,G#5 Benitez cor. BayanihanSts.,QuezonCity, M.M. Chan, Ruperto C., MOP'TI Audit Manager Erectors,Inc. 2nd Floor,MantradeBuilding PasongTamo Ext.,Makati,MetroManila fel 8187721Local 24 Chen Jung-Chung,Johnt, MDP'7V Branch Manager Ekmanand Company,Limited P.O. Box 22603 Taipei,Taiwan fel.O7-252W

Dizon,Ceoilio Lorelo, MDP'77 Asst.Commissioner Commissionon Audit CommonwealthAvenue,ConstitutionHills QuezonCity, MetroManila Te|.963358 Diamoeddin,Radius*, MOP'77 Superintendent CaltexPacificlndonesia,P.T. Pekanbaru Sumatra.Indonesia Tel. 44385 Elizaga,Noe Calinawan,MDP'77 ExecutiveVice President DavaoFruits Corporation Bo. Pampanga DavaoCity, Davaodel Sur f e!.7277'l-s

Choo Wee Liang, MDP'77 Manager,Operations Port of SingaporeAuthority P.O. Box 300 Singapore fe!.2712211 Chung Kwok Kel, Simon, nDP'77 Clirecto, lndosuezAsia Umited Room 2601 Aexandra Flouse,Hong Kong Tel.$211501 Cochrane, Raymond Clifford, MDP'77 RegionalManager,Waikato Westpac Banking Corporation P.O. Box 50 Hamilton, l.lew Zealand Te1.391780 Coyukiaq llavH Clroa, nDP'Tl PresidenUGhiefExecutiveOfficer Pioneerlnsurance& Surety Corpotation 109 Pas€o de Roxas Makati.iletro Manila Te|.817907'lLocal216 Damole, Cerar Aslbal, nOP'Tl Director, Regional Cilf'rceX Commission on Ardit Davao Oity, Davao del $rr "Z7 llapat Sablno R, UDP Flesident Partne. SyCip, C'orres,Velap & Company ?F, Philamlife Building, Jones Avenue Cebu City, C.;ebu Te].743(J1n43fl,2 Ilrrflr!, ,ldy,||'DP'Tl CroodyearMargonda Tire Service Center Jl. Margonda Raya l,lo. 156 Depok, lndonesia Tel.021*511274

Flores, Enrique Ericta, MDP'77 OperatingOfficer Mce PresidenVChief AsianArts, Inc. SalvadorStreet,labangon Cebu City, Cebu Tel.90331 Galvez,AgripanoGacal, MDP'77 RegionalDirector,Region 4 Bureauof Budget and Management 4th Floor,Ven-Lor Bldg. Annex QuezonAvenue,QuezonCity, MetroManila Te|.998692 Gonzales, Manolilo Fernandez, MDP'77 Partner,Ardit Division SyCip, Gones, Velayo & Company 6760 AyalaAvenue Makati, Metro Manila Te|.8193011 Gorrez, Femando D.*, llDP'77 5$l KatipunanStreet, Loyola Fleights Quezon Clity, l\tletro Manila Gouch, Warren Eernaby, llDP'77 13 Silver Lane, Etillingshurst West Sussex RH149RP,England 040381-2415 Grapa, Edgard V., nDP'Tl Mce PresidenVResidentManager Hiio Plantation,lnc. Madaum, Tagum Davao del lrlorte tfamami, llann Hamzar, )lDP'TI C}irector,Administration Trakindo lrtarna, P.T. P.O.lbx282 Jakada, lndonesia Tel.781G)3

The Class of 77 listingwill continue nert issue.


AIM l0ternationalManagementGonference

Hostedby the IndianChapter October25-27, lSX) Bombay,Indh

writeor call: ForInquiries, HildaTolentinoor ArleneAguilar 123Paseode Roxas,MCCP.O.Box898 Makati,MetroManila,PhiliPPines Tel: 87-40-11o TelercAIMPN Gabfe:AIMMANILA o Fax (632) 817-9240



Moy 1-1_

AlMAlumni Association

T H E 1 9 9 0A L U M N IH O M E C O M I N G


Nightdinnerand show Homecoming Thetraditional at the MainHall of the ManilaPoloclub! An excitingraffle during HomecomingNight with grandprizesanddoorprizesforluckyalumni!


Familyfun at the sportfestand golf tournament! Publicationof a first-of-its-kindAlumni Directory, with a newTradesection- AIM'sownYellowPages. toolforthe90's,atP395.00 Theultimatenetworking per copy,deliveryincluded! or US$ 20.00 A ticket for the HomecomingNight, that covers anda rafflestub,willcostonly dinner,entertainment per person. F 300.00

So, keepMay 11 free. Get in touchwithyourclass representative or contactthe AIM AlumniRelations Office (TEL#874011or FAX#8179240'llordetails. Cometo the 1990AlumniHomecoming. It always pays to keep in touch. THE ASIAN ilAflAGER

o IIARGH 1990 s5

MCC P.O.8ox 898 Makati, Metro Manila,Philippines

The Asian Manager, March 1990 Issue  

March 1990 issue

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