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&vtsloN thevirtuesofKIXA I Discover I Asianvaluesanddependence onthejob theWorld:HavetheymanagedI Japanvs. orled-,-themsehes tosuccess Ieadership in trarsition I ASEAN I Thecrisisofwestemvision& leadership

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Th6AslanManager A Publication of th6 Asian Inslituteof Management and th€ F€d66tion of lhe Asianlnstilut€ol MenagemenlAlumniAssociations.

,ffi= ASan

Publbhol FelipeB. Alfonso

2z Delegation: Leaming Frcm andDealing WithFo4lvable Mistakes

Edltor.lnChlot MichaelA. Hamlin MamEng Edltor lbarraC. Gutiearez

8y l\4ario Antonioc. Lopez Pilipinas ShellCorporation Professor in PublicAdministration

Alsbtant MamEng Edltor Kin Gatbonton

It DroJapaneseMakeBetter Managers?

It63lSr Dliscto. AlexanderBowie Alaoclato Edho.3 SalomeFlores'Aldaba FedericoS. Esguena AletaA. Tabalba Contrlb.rthg Edlto6 Bangladesh:lVilonBikashPaul,Ml\4 '88. HongKong:StephenTang WingOn, MBI\4'76. India:JuzarKhorakiwala, '75. MBM Indonesia:RobbyDjohan, ABMP'79;Christina F. Ferreros, AM[4P '82. Korea:HongSoo Lee, MM '79. Malaysia:Khoo Boo Boon,lvlDM'90. Pakistan:lshtiaqAhmadQureshi,BN4P '77. Philippines: Jesli Lapus,l\4Bl\4'73. Singapore:Gan CheongEng,MBM '82. Taiwan:HsiehLai Fa,TMP '82. ThailandiSomnukJetiiravat,BMP '81. Edhorlal Board GabinoA. l\4endoza HoracioI\,4.Borromeo,Jr. SonnyB. Coloma AsEoclato PuHbhqr & Adyodblng Dl.€ctor - lr|tgm.tlonal TrevorA. Roberls A$oclato Publlrher & Advertlslng Dhector - Phlllppln€s DeliaC. Gutierrez Aseoclate Publbhor & Clrculatlon Dlr€ctoi N4onette lturralde.Lim

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ByJohnStorey SeniorLecturer, Loughborough University BusinessSchool

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35 lhe Questfoi Perfectionat Prccter& Gamble Bylohn E. Pepper Pfesident. Procter& Gamble

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ag FinancialDerclegationand the AsiaPacific 6 Understandingleadership and Powel BvLeonardo R. Silos PLDTProfesso,T BJsinessVanagemenr.

12 AsianLeadership in Transition BySonnyColoma Professor,AsianInstituteof Managemeft M8t\4'78

16 OneMoleTime:How DoYouMotivateYour Employees

By RogerLacey lvanaging Director HongKongChineseBank

€ Indonesia 2020 8YlbafiaC. Gutierrez Managing Editor

+s TitaandRita:TheTwoTigers of DircctMatketing By MonetteltufialdeLlm Associate Publisher andCtrculation Director

+g Indonesiaand lts leading CompaniesMoveForuard ByKinGatbonton AssstantManaging Editor

ByFrederick Herzberg oistin guishedProfessor of lllanagement l.lniversitvof Utah

DlEctor iot Oporatlons PinlryL Gallegos Cov€r pnoto: @Lady Xe€nan-The tmage Aank (HK) htornationrl Fll|rt ent tiv. offcor ASIA-PACIFIC:Hong Ko.g: Pameta ChoV, Pacitic asia Media, 13a,361,363 Lockhad Foad. wanchai, Hong Kong. T6l, 834 6128, Far, 185-2)834 5980. Slngaporc: Teddy Tan, PAM Media Seryices Re. Ltd., 83A EastCoasi Boad,Tay Euancuan Shopping Cenl/e,Singapore1542.Tel,348 4495, Fax (65)a4O 8760.IndieSub-ContiMt Bh€€rnTimitsina,M€dia Soulh Asra (P) Lrd., Apartment 1A, Abhi-AnilAwas, Kant palh Jamal, Kathmandu,Neoal Tet ?21 576. Telex2606MEDBEPNP,Fax1977-1)227336.Kot.at Y.K. Chun, FlEr Media ServicesCoroo€tion, CPO Box 7919, seou, Korea.Tel. 738 3591/3592.Tetsx FMSCORP K 29137, Fax (02) 738 7970. Taiw.n: JenniferWu.JB lnternationalLtd., tF-2. No. 520, Mrn Chuan Easl Foad, TaiDei.Talwan. R,O.C. Tet. 717 2463,7199005,Fax.(02)7199587.UaA: ConoverC. Brown, Conover Brown. Inc,, 21 East 40th Stet. Suiiela0l, NewYork,NY10016.USA.Tet.2138383. Fd. {212)481 5417

4 Fromthe Editor 61 In Betlveen Classes

63 A BetterWay

34 Feedback 62 As A N4atter of Fax

65 BookReview 68 TravelNotes

office:Integrated, 55 TheAutomated NotPapertess c.pv, qhr 1992 b! The As tr Manaqer A r, ghi9,eserued Reprodlclon 'n any man.eln whore or pan 'n Engrsh or othef angLages proh b'ted The As'an Manaqer s plbr6hed^ bi mlniny by ihe Asd .sr le or Manaqement Edllonarand advon'srng oflce: a5an nsftule or tan:9em6.1. €ugen'o Lopez Folndalon Joseph F McM'ckrnscampus r2.l Ps€ de Foias, Makat. Metro Ma.'a Ph'r'ppnes T€r (632)874011 Fax (632t3179240 Fhotographs sourced by th€ A M L brary Prnled byTmes Pflfrec Ple Lid S'naapore Theasan Manaqer MTAtp)24519€1 KoN pp{s)-5l3,s2


If it's not food for the gods it mustbe for the people in econorny. Food is very much veneratedin Indonesia' That! why, every day, we offer it up to our

grow in abundance. Fruit andvegetables Other countries may be happy enough with

And why we worshipit gods,demonsand ancestors.

one variety of banana,but they can't be nearly as

ourselvesat every mealtime.

happy aswe arewith thirty-eight.

Happily,nature has given us plenty to worship.

Ethnic groups are also plentiful: over 300 at

the last count. And this ethnic melting pot is

The truth is, a Garuda Indonesia flight at

reflectedin the kitchen pot, eachregion having its

30,000 feet, could very well be the closestyou will

own uniqueculinary styleand emphasis.

everget to dining like a god.

You'll enjoy many of thesedisheson our flights, alongwith a wide choiceof internationalcuisine.

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Mlchael A. Hamlln

EvolvingChange...

Milestones: C_omings andGoings atThefuianMana[er

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8 E e 5

Thenew llna{p: Eottqn row (let to dgl ) cutlene4 Gallggos, Itunaldo.Llm;(top rcw) Bowle, Gatlonton,Robe?b.

magazne. LikeAle& Tievor Robertsand Monette Ituralde-Lim are ackrowledged experts in the rcgional publishing industry. Trevor hasbeennamed associate publisher and advertising dftector-intemational and brings with him the experience of two decades in advertising sales.In his previous position, Trevor tripled advertising revmues. Monette, an AIM distinction graduate (MBM '82), doubled circulation for her previous employer acrossthe r€gion. Shealso developed and imDlemented professional ststems for distribution, subsciiption sales and newsstand salef,' At The Asian Manager,Mo ette will s€rve as associatepublisher and cirorlation directbr. Delia Gutierrez, who hasbuilt anila - Alex Bowie, an advertising revenues hom zero award \^rhning graphic - shebeat her previous revenue record by over 307olast issue lessthan thr€eyearsago,hasbeen rcdor of TheAsian ManaleL and named associatepublisher and he has already made important, advertising dirictor-Philipand obvious, contribuhons to our pines. The work Delia hasdone development.Theinnovationshe hasbeencritical in making many hasinhoduced have been- and of the most apparcnt improve this is substantially understated n''ientsi^The Asian Maruger W- well-received. Many of the srDte. changesarc readily evident: the FormerassociateeditorsPilky new logo and cover design (the I. Gallegos and Kin Gatbonton buff border will be a permanent have also been named to new fixture), font and style changes Dositions, Pinkv is now director and our useoftints. But thereare ior operations ind will continue other subtle changeswhich we to managethe businessand op expect to continue evolving erations aspectsof the magazine. we understandthat constantim- Kin has been named assistant provement is required to satisfy managing editor and will conour "custome6,"asourlastissue tinue to coordinate editorial oDadvocated. erations.Thesetwo havebeenA former phototoumalist for and are- responsiblefor getting TIME magazine,Alex'swork has themagazinepublished.And we been published in numerous in- areboth grateful for and proud of temationalpublications,includ- the world classjob they aredoing. tng;Life,Neutsweek, Stern,andThe Anotherindividual hasmade lntemrtional Herald Tribune.He a maior contribution to the develwas formerly design director for op'i.ent of TheAsionManager;but another regional management sadly,we will no longer have the

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privilege of enjoying and benefitting from her presence. Annie E.Pundol - associateeditor since 1988- collapsed June 23 and was believed to be dinically dead by the time medical care was available. Miaculously, attmding physicianswere ableto reviveAnnie, ard withlife-supportequipment she held on another week. Howevet brain activity continued to deteriorate, and Arnie died of heart failure June 30. Alnie - who was our first columnist - suggested and helped implement many of the changeswe havehhoduced over the past four and a half years.She was also editor for the Women in BusinessOrganizationsprorectof the Asian Institute of Manasemmt. Publications arising frdm this protect- WomeltEntrcprcneursin Southeast Asia and,Bevond Pmfit: AsennWommManagersin Goaemmentand Not for Profit Organizttions -bear her imprimatur. Annie wrote entire sections of these publications, and was r€sponsiblefor ensuring that the books overall conformed to intemationally acceDtedstandards. Her fust-colunir was entitled, "A Mafter of Fax," and we are pleased that Annie's contributions will be permanentlv acknowledged $ith the addition of a new regular featute beginning this issue. We are askinq our readeF important questions regarding th-e issues our articles address and to resDond to these ouestions bv fax. ille feature is e;titled, 'A'Mafter of Fax.We will missAnnie - and her important contributions greatly. I

dUo*-a0 |fu"^aj

1992 IHEASIANMAMGER SEPTEMBEFYOCTOBER


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lnspiration andmanipulation,.,

Lhderstandine

Leader

and

Power

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to salvagethe authenhcand the relevantin authority and link thesestrengthsto a d(xtrine of leadershipthat recognizedthe vital ned for Hatltnh Aretull iti tlltsc fury couldmn rtl qualitiesof integnty,authenhcity, initiativeand f lat tlr ottirc conc4,tofleade6hiphodlostits moral re'tiolve."l Lwliditv;nlnost@eryone.ouldagretthnt thc Wc'shall try, as much as a brief article will couceptJ10dlteenonptieclol tneaningtnd allow,to developaconceptofleadershipin the clcfinit iott.The lossttwsnot sin4 v ofnstricken contextof thebusiness fiim, "thatis suitable'for docfrittes,like onpires, grow, cltrcepl the new a!!e."I would like to suggestthat the conceptof leadershiphas lost its validity be llourish, a*l decline hut ol atnhoritv thtt !,as tlot trai$fomrcditto a doctrinesuitlble causewe continueto conceiveleadershipalmost exclusively in terms of an abstractnohon t'or the nao oge.l of power There may be historicai reamns for ctuallv the conceptof leadcnl1|p has the concept. But Arendt's lament is pre{sely recentlyappearcdto haveregainedrt( that historyhasmovedon and theconcepthas validiry especiallvin the businessfirm. not. It has become a hot topic becausea In businessfirms, the equationof leadenhip certain conceptof managementhas proven with abstractpower is made concretein the inadequate to thetob.Theconceptofleadership relationship between labor and management. isnow beingadvancedtocomplementit.But,ds Iabor or tradernions area power to counterthe

power to move.It selects. It gives dirccrlon/ Procluces change, aligns and moti\?tespeople. But nobodv would call naturea leader. There is power in leadership. Butn'eare dealing with two entirely diff erentspecies when we talk of a leader's power and the power of a [ghtning bolt. That may aPPear common sensical,but it is too often forgotten in the theoryandpracticeof leadership.Forurdepower of rnanagement. It is niably, people have in the very essence of a labor n'ieldedpowerasifit union that it should not Iaat wasalightning bolt ir.r emize with management lest the hands of a Zeus. it weaken its bargaining And soit is thatthe power In thisundeEtanding, author we quoted a company r.nion that cool> abovefound it neceserateswith management is a sary to emphasizethe contradiction in terms. By distinction betweena defhition, company and unpower wielder and a lon are oPPosrnS Powers. leader. In the extreme Powef case, the power Power to move others wielder has capridoes not constitute leadercious authority over ship.I am not beingfacetious the life and property I have tried to show elsewhere,the distinction if I point out that a volcanohassuchprcwerThe of his subjects.Suchis betweenmanagement and leadershipis an ar- sunhaspower Sohasnaturein Seneral.lndeed. thepower of theabsotificial one,a dels er macfiina.teadership sud- the volcano,the sun,nahrre;canbegiven all the Iute potentateand the denly emelgesin the roleof redeemerto salvage attributesthatan authorsavsbelongto leader- slave owner or trader. Certainlv the slave owner a truncatedconceptof management.But in fact ship. Theygive direction, theyproducechange, wielJs pu wer over his slave.. But his is asmuch one cannot be a goo<tmanager without also they align people,they motivate people.{ an exercise of leadership as drivin8 cattle to the beine a leader ' It is therefore not surprising that in the slaushterhouse. But thes€ are extreme cases Liadership thereforer€maiJrsan imlD[anr moming of humanity,naturc'spower waswor- that have Dass€d into historv. [f thev still occtu issue. But, asour quotation implies, it must be shipped. It was a god to be obeyed, to be today they are more the exce'ption than the mle. rethought in the context of demooatic ideals. appeased,to bethanled. Evenserioussoenhsts In any case, it is not the sihration we have in How do we envision leadercand followers in a have explained the differencesin olhrre and mind. situation of freedom and equalitv? We need a history of peoplessolely by differencesin their A more current form of the power wielder is "new,democratized,and radicalizeddocmne... phvsical environment. The environment has the maniDulator. We would hardlv call a ma8y Leonardo R. Sllos PLDTProfessorin Business Management

"Wewouldhadly calla manbulator a leade[alhoughsomewouldnotmind callinghima manager.,., lf to the slavedealerpeoplearecommodities, to themanipulator, theyarcfke commodities."

3 9 ? a a

:

THEASIANMANAGER

mdndger need. to be (omplemented b) the concept of the leader.

Empowement Powerover others,then,doesnot define leadership.Wecanview this from the per-

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nipulator a leader,although some would not mind calling him a manager.Some management theories describethe manager as essentially a manipulator.Ifto theslavedealerpeople r/p commodities,to the rnanipulatortliey ire /lkpcommodihes,although a specialkind of commodiry they are noi supposedto know that they are bemgmanipulaled.So the manager covers up by means of human relations. We then understand whv the concept of the

SEMMBEFVOCTOBER 1992

ance of p,owers,a power versus powet a con, frontahon.lA/ha| ,houlJ t\.d last re\ort renums the general nrle. Or, and here is the point of our quoted passage,leadenihipis emphed ofmeaning: noleadership is needed, only empowered PeoPle.

slrctive of the follower lt hasbeenpointed out that even follower.havethe power to PreliminaryConcepts influence, sometimes tyrannize tieir own Therearesomepreliminaryconcepts which masters.Thus, while one author comparesa mayh€lpclariJythedistinctionbetweenpower managerto a conductor of an orchestrawho in the handsofthe power ra'ie'lder and pol'er in makesmusic out of what otherwis€would be the handsofihe leader.Theseare the three pa ir: considered nois€,another compareshim to a of concepts: effort and performance; motive pupr)eiwith hundred5ol peoplepulling the and technique; culture and system. strings,includinghis followers. Effort, motiveand culhue refer to ,,intemal,, Subjectswould thenbeleadersbv the mere events. are attihldinal, mental or ',ideal,, and fact that they influence their masiers. To a only indirectly measurable, if at all. performpopularauthocthegcrd managerempower. ance, technique and system are,,extemal,, dUemployeesinto leaden.Acompanyofficer events, empiiicallv verifiable, measurable and proudly claims that in his company the floor manipulable. sweeper is no different from a manager because "Powetoverothersdoes hemanagesa broom.Such not define looseusageso dilutes the conceptthat it is "emptied of meaning and definition." Certair y it is rendered useless for analytical purposes. Thus, the problematical relationship between power and leadership flows over into the idea of followership. The problem is ernbodied in the

leadership. lt hasbeenpointedoutthat evenbllowershavethe powerto influence andsometimes tyrannize, theirown maste6."

term, empowerment. The abus€ ofthe term reinforceri the concept of the

power wielders, there i. need to empower the people. Becauseleader.hip here appear" almost s)'nonymous with oppression, empowerment of the masses makes real sense. But the popularity of the term tends merely to perpetuate whdt in mdny grtudtions is dn anachionism. It tends to reinforce the idea that leadership and followership constihrte a bal-

These two classificationsof the tenns can help us idenhfu two fundamentallydifferent u*e. of power One reliexprincipallyon,<ystem' and the other reli6 principallyon ,culfure." Efrott and Pe omance Effort is the amount of energy we put into our work. Performanceis the a-clualwork we put forth. One can put in a lot of effort and still not perform as required by the lob. One employee cgl do a job within regt ar working hourc while anothermay requireovertimet6


finish thesamejob.On theother hand,onemay havethe skill to perform theFb asrequted but not put in the ef{ort one might be expectedto. TheskillJul worker who canperform a iobin an hour takestwo, for somereison or other.

organism; of a man-made system is the machine.The system,in this usageand asdistinguishedfromculture, is "extemal," empirically verifiable and manipulable. As such, it is related to performanci, and technique.

Motlve aN fecln W Motive rclatesdircctly to effort, while technique ielates to performance.Motive is what energizesus to put or not to put in a rcquird level of effort. Techniquerefe6 to the way of doing a thing to obtain intend€d results.Performance might be motivated but for lack of the appropriate technique,output might not be proportionate to the energy expended.An executiveneeds more time to go through re

Ihe lanlpulator

B.F.Skirmer's "behavior modification" is an exarnpleof the "system" useof power. We are backward in the managementof human behavior,claimsSkinner,becausewe persistin using pr€scimtific notioru of tracing behavior to mentalistic states like attitudes, purpose, motives, feelings,and the like. "lNhat we need is a technology of behavior."6 That is to sav to dealwith extemalbehavior that is empirically verifiable and measurable and madpulable, all we needis to apply some system of techniques.Wecanmodify behavior by systematically either rewardhg or punishin8 behavior. Eventually, you will establishthe former and eliminate the latter The ultirnate basisof this theory is Pavloy's experiments on dogs which Skinner complemented with experimentson birds. We cannot explain or control the behaviorof animals through "internal" eventsbecausewe have no accessto them. In the caseof people, we have accessto mental phenomenabut they are urmecessary,in this theory By the dever manipulati-onof external stimuli, we canelicit the right rcspons€s.If we want to induce a Dattem of behavior, we artfully apply a correspondingsystemof stimuli and the deired performarce will follow. The appeal of this technology is that it is easily operationalized. Punish the employee every time he is late,reward hirn wheneverhe is punctual. Give recognition every tirne he shows initiative. show displeasurewhen his performance is mediocre.3icientificmaragementsccalledisanapplication.Theappropriate techniquecan lead to higher poductivity with the sameamount of effort. Iloductivity is reinforcedby the appropriatercward asincennve, Its myth lies in the claim of by'passingmental phenomena.While its applicability actually depends on thesephenomenor; not only on the part of the uset but of the used.The system makes use of speec[ of undentandin& feelings, motivatioD cultur€, etc. That is why it remains usable even for thoee who, unlike Skirmer,still believein the Dle scientificnotion of mental states, In other words, vou don't haveto believein behaviorism asa pirilosophy in order to useit as a technique.It may be pure manipulation. But if it works, so what? It is a familiar pitfall,

"Consensus is moreeasilyachieved amongfriendsthanamongrivals.We easilyacceptadviceandcoachingfiom

wetust." someone

ports becausehe hasnot leam€d the technique of speedreading.On theother hand,endowed with th€ appopriate skill, he may not feellike reading the rcports. He might Fefer to play gorI.

CutturcaN Systen Culture is the set of sharedmeaningsand values that informs a way of life. By cutture then we do not mean merely the higher forms of culture, like the arts. Primitive as well as highly civilized societieshave culhres. As we said, culture involves "intemal" or mental Dhenomena,for it is about beliefs and sentihents. As such,it is closelyrelatedto effort and mouve. Culturc is "ideal" in the sens€that Emile Durkheim, for instance,describesthe collective conriousness of society. He talk of a societybecomingconsciousof itself,of an exaliation of mental life, of physical forcesof society,of ideal conceptionsa societyhasof itself, of the r€al societybeing an ideal sociery Forasocietyis not madeup merelyof the massof individuals who comDoseit, the ground which they occupy,ihe things which they use and the movements which they perform, but aboveall is the idea which it forms of iself.s System, on the other hand, rcfels to the network of interdependent functional parts. An example of a rEtural system is the living

especially in business situations, where the pragmaticcriterion of successrcigns suPrcme. But our original quetion was not whether manipulation canwork. Wearc asking what is leadership. Even slaverv used to work and some safit still does.Wi\en economiccond! tions are poor,slavewage becomeacceptable andso-calledsweatshoDsabound.Peoplethen submit not to leadership,but to circuirstance; perhapsaselementaryassunrival, one's own or one's family. Whether in the long run or in prosperoustimesuchmanipulationwill work is not the issuehe!e.

ThoBuEaucrat A more subtleform of manipulation occurs in the impeFonal organization or bureaucrary Unlike the behaviorist, the bureaucratic manager has no theoretical problems with "mentaUstiC'states,for heclaims "rationality'' to beon his side.His kind ofrationality is called "irutsurnental" becausehe hasan exdusively means-endsconceptof the organization. It is essentialto the conceptthat he think of membersas impersonalmeansto achieveimpersonalendsof the organization.The officeis obeyed,not the person.Personsare of no organizational consequenceas sudL only their skills and performance.Thatiswhydlof Orcm, belonging to labor or managemmt, arc re placeable. Thebureaucraticorganizaiionisessentially a 't'stem" apgoadl. Behavioris govemed by the conhact which eruures complianceby its members.If they do not comply, they arc re placed.The drain of command hasmer€ly to administerthesystemofinterelated ftmctions with their correspondingconhols.That is why the bureaucracvdeoends so much on hierarchy,rutesand regula^tioru.ln this organizatior! Nobody leadt the a leader is is administer€d.Arcndt Dut it svstem Tirdaywe ought to add ihe iatestand perhaps most formidable form of... domination: bureaucracyor the rule of an inkicate systemof bureausin which no mm, neitheronenor thebest,neither the few nor the many, can be held rcsponsible,and which could be properly called nrle by Nobody? Modem, especiallywestem, organizations are dominated by this impersonality. This management is usually a combination of the stimulus-responsetheorv of the behaviorist ard the instrumental rationality of the bueaucrat. Although the organization is essentially impeFonal, its management can indude an overlay of humar relations.We could righ0y call it with Skinnet a lJ.a\agemer.ttechnolov Management is fundamentally a steering mechanism of techniques.Since techniques travel weu, managementastechnologyis universal,uncnupled ftom culture. It is not surprising that authors now heitate to call such management leadership. I would not even call it management,for man-

THEASIANMANAGERSEPTEMBER/OCTOBER 1992


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Wearesoimpressedby theachievementsof "scimtific" science,anlthing that claims to be we tend to accept without question. Science rejeds the "anthrcpomorPhism" of Primifivc societieswhich perteived all things as if they wer€ hurnan. But some modem theories fall into the oppositeeror of dealing with people Th€ lodet Man's lifeworld is constitutedby meanings asif they were like any other animal. We fail to rccognizethat what is dosest to and value. The real world of men is an ideal world, ideal in its two senses.It is ideal in the us. the tEditional wav we r€late with our senseof involving mental phenomena, like familv-inand sociatcirde of friends, is also farthe workplace. A gull is createdbe beliefsand attitudes,feelingsand convictions, thet purpose and values,lt is also ideal as a world tween the Drofessionalworld where we work io aspire for, a vision of what ought to be, a and the haditional world for which we work, utopia. Their work and the goducs of their and we shrug off the dichotomy asanother of *oik, tt "it ro.ietl"u and in;titutions, arc not those factsof life. The human organizamerely "things." An ideal element is intrinsic tion canbe thou8ht of and to their rcality. Now this-consciousworld is for eachof us handled asa systemin the very private and personal.No individual can analogy of a machine or "ttt". into another's mind and think his an organism,and its manthouehs for him, perceivehis world for him, agementas technology It desG his desir€sfbr him, feel his feelings for is, howevet neither a mahim, will his willing for him and so on. Iife is chine nor an organism. It is constitutedand held toas-The Dersonalto eachof us as is death social act, the rclationship between gether by what neither human beings as human beings, therefor€ machinenor a purely bioiakesplaceonly by speakingone s mind, so to Iogical organism has: a sav eird for ttrit *ie tiave speech.The socialact consciousworld of meanings and values. is essentiallya dialogue, is communicahve The skillful manipulaThe use of power that is not merely Power wieldin* tl|at is not mercly forceor rnaniPula- tor caneven us€this ideal tion; thal is to say,the useof power that may be dimension to achieve his called leadership, moves within this sPeech ends. But we would not call him a leader.Or world.It is the rcaLn of commrmicativeaction. the confarv, we feela natural relrrlsion for the The power of leadershipis the power of mean- oerson whb useshis brilliance and talents to ing and value$.lt is the power of conviction nunipulate people. The manipuldtoris sucan: commitments.It is thi power ofdiscourse. cessfulfor aslong as he js not transparnth is this dimension of the human organizal-eadershiois effectivecorrmunicative action. tion that manaqementin the form of a techlolto change, direct, to move, to To Foduce aliqn and motivate p€ople, are actsof leader- ogy fails to take into account or iSnores or shii insofar and to the &tent that they recog- denies.lt is in essmcea reiectionof the culture nize and rcspectthe ideal side of enterPrise.Its dimension becauseit is basically maniprnaessenceis not in being soft. It can exercise tion. This characteristicrnaniPulative "culture." ForPostuJe a manauthoritv decisivelv authoritatively;some- tlrcn constitutesits own "democr-atic." -Jutocratic,"'sometimes confais a technology agement times Performatory Its essentialchancteristic is its rccognition and diction: it cannot deny or iSnore culture resDectof the idealiw of our world and there- without positing it. Thus we havi now to qualify our prelimifori is neither manipulative nor imPersonal rnry classfication above,for in fact,performbut communicative. One more easily motivates in a situahon ance,technique and system whm applied to human beingsand their organization, are not wherc people sharc common meanings ard 'erternal'but are aonstitutedby an values.'Consmsusis more easilv achieved purely The preliminarv classficaideal iirnension. more among friends than anong rivals. One easilv;ccepts adviceand coachingftom some tion was necessaryto distinguisli two basic one we trust. We tend to be suspicious of cultures corresponding to the two us€s of "them" as opposed to "us." And wi are "us" power, the power wielder,/manlPulator and becausewelhare common value and com- the leader/manager. Therc is the tdhnical cuih[e that depends mon meaninqs. That is why there can be a "sweatshops." on techniques and systerLs to producb perworld of diFerenceamong Some are imposed from without and others formance,a clrlture that is r€ally a rciection of culture, the ideal dimension of the organizaftom within i motivated workforce lf all that soundstrite it is PerhaPsbecause tion. What it doesis apply the technologyfor we fai.l to recognize that many theories of the contol of physicaland biological natur€ to orqanization that are being operatjonalized, the manaqementof human behavior. It is not as if this manipulative managementdid not igiore or deny the ideal aspectof our world.

agementis managing peopleas people.Technology may be a more aPPrcPriate term a technical method of generating a system of responsesby means of a system of stimuli or techdques.

believe in such things as trust and loyalry But it trusts the system;ather tlun the people. t eadershio, on the other hand, does not ignoreor rejecithe needfor performance,techniquesand systems. But it is very awaF that performance,techniquesand systemsare the bro,lucts of people s effort, motivation and irlture, tfrat ifrey are themselvesPart of the ideal dirnension of the organization. By its own ffaviw, it respectseven as it orders, it listenieneo-asit teIi, it truststhe peoPlerather than the slstem. For in the end, it is peoPle's meaningsand values that Produceand enerqize the system. Thereis a practical poht to all this. l€t us not exhaust our ene€ies imitating nanage-

"l.et usnotexhaustou enelgiesimltatig ol Japanese management'technQues,' Thatrvouldmissthe Japanese whatever.. le$sonentircly.Gofui thegoose,not thegoldenegg,"

"techniques," ment Japaneseor whahever,asif they constituied rnanatement or leadershiP That would miss tie Japaneseleson entilely Co for the gooae,not the golden egg. By the time we leam some Japanesetechnique which may in any casenot be aPProPriatebo ow situation - the JapanesethenLselveswill have comeup with somenewer teclurique. A motivated oiganization, on the other hand, will oroduce ttre techniquesapgopriate to its situaltion. That requires'leadr;hii. And I susgestthat communicitive leadership is the #;Eformed concePtof authority "new thai is suitable for the post-modem I ase.

Endnotes I JamesMacr€gor Bums, Izadnship. New York: HarDer Colophon Books, 9n, P.25. 'See mv review irticle 'L,eadersand Marugers: An Upaate," i^ TheAsitn ManagelJar.-Miafd:r1992, pi. Aff. lt i5 a review oflohn P. Kotter's A Forc? br Change:Hou Lqaaship Diftrs lrom Itunagemzrt. Niw York The F €e Press,1990 3 Bvns,Iadetship, p. E. a *Ktut, to above AEorcefot C[at3e, reffi 5 Emile Durkneim, TheEleflefitaryFonnsol the Re' lrgioas Lfe. Translated by f.W. Swain, New YorkThe FreePrcss,196.5,P.470 6SeeB.F.Skinner,Belpnl FrceditnandDignity.New York: Altu A. KnoPt 19n. ?Hannah AEndt, Ofl Vtolerc?.New Yotk f{ar€ourt, Brace& world, Inc , 1970,P.38.

1992 THEASIANMANAGERSEPIEMBEFYOCTOBER


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Dr. Mahathlr Mohamae

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A l c o t e i P h i lp p , n e sI n . : . G & A E u i l d i n sG r o r n d F l o o r , 2 3 0 3 P o s o n sT o m o E ! 1 M o k o i i ,M e i r o M o n i o , P h i l p p i n e s


% One More Time: How Do You

I

an &cenhve, mole status, a i"n;otion, all the quid pm quos that odst in the indushid omani&ti&." &nI motivatinevou? ", The overw&lm-~ ingopinion 1receive from management people is, 'Yes, thisis motivation" I have a year-old Schnauzer. When it was a small puppy and I wanted it to move, Ikicked it in the rear and it moved. Now that I have finished its obedience trainingI hold upa dog W t when I want the !3hnauzer tomove. In thisinstance, who is motivated -I or the dog? The dog wants the biscuit, but it is I who want it to move. Again, l am the one who is motivated,and thedogistheonewhomoves.Inthis instance all I did was apply KITA frontally; 1 exertedapdlinstead ofawsh Wheninduetrv wishes t& use such p&itive KITAs, it & available an inaedible number and variety of dogbiscuits(jel1ybeamforhumans)towavein fmnt of employees to get them to jump. Why is it that managerial audiences are quick to see that negative KITA is not motivation, while they areairnost unanimous in their judgment that positiveKITAismotivation.it is because negative KITA is rape, and positive KITAisseduction.Butitisinfinitelyworsetobe seduced than to be raped; the latter is an unfortunateoccu~lp~ll~, whiletheformersi!znifies that you were a party to your own d o h . This is whv positive KITA is so w w h it is a hadition; kk the~mericanwa<'I&eopnization does not have to kick vou; vou kick vowself. ~

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people. What is the simplest,sun?&and most direa way of getting someone to do something? Ask? But if the person responds that he or she does not want to do it, then that caUs fa psychological consubtion to determine the reason for such obstinacy. Tell the person? m e ~esponseshowsthat he or she does not understad you, and now an expert in communication methods has to be brought in to show you how to get through Give the person a monetary incentive? I do not need torwind thereaderofthemmplexity and difficulty involved in setting up and administering an i n m t i w systea

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and the appropriate methods to play tunes on them, Dsvdm1oeists h a v e ~ i b t h e & c u e o f t h o s e w h o a r e ~ possibilities ofthe KlTA are inapased many l0ngerpwitte.l tousenegativephysicalKITA. times. Ruth, the pason administering the "He took my rug away:' 'I wonda what she kick can manage to be above it all and let the Myth AbanMomatbn meant bv that:" 'The boss is alwavs mhp. sys~acc~mplishthedirty~~~kFifth,those Why is KITA not motivation? Lf I kick my who practice it tpceive some ego satisfaction (oneupmanship), w h m they would find dog (from the hunt or the back), he will move. And when I want him to move again, what drawing blood abhorrent Finally,if the emmustldo?Imustkickhimagain.Similar1y,Ican ployee does cumplain, he or she can always be d of being paranoid; the^ is no tangible charge a person's battery, and then rechargeit, eal a&anta&i over negative physical I d A . a andrrchargeitagainButitisdywhenonehas Showthepscm?Thismeansamstlyhain- k t , the cruelty is not visible; the bleeding is evidence of an a& attack. Now,whatdoesnegativeKITAacmmpkh? a generatorof one'sown that wecan talkabout intemaland mmes much later. Semnd, since it ing program.We need a simple way. Every audience containsthe "direa action" affffts the hiher cortical centers of the brah IfIkickyouinthe~(physicallyorpsycho- motivalion.One then needsnooutsidestimuladucesthe possi- logically), who is motivated? I am moti~ted; tion. One wants to do it. mamger who shouts, "Kick the person!" And withitswioryPwers,it With this in mind, we can review some bilitv of vhvsical baddash. Third, since the you move! Negative KlTA does not lead to this type of manager is nght. The surest and positive KITA personnel practices that were least chrumccuted way of getting s o m m e to n u n h df bYchoiogicalpam that a pason Illotvation but to movement Pc*ltlrslUlA.Letusfurthermnsidermoti- developed as attempts to instill "motivation": dosomethingistoadministerakickinthepants can feelis almmt W t e , thedirection and site

THE A W MANAGER

l.~ t m e . p s n t t w m k T h k r e p teadung and, in many instances, of p c t i 6 n g resents a marvelous way of motivating people psychological appmaches to handling people to work - getting them off the pb! We have have resulted in mstly human relations pro reduced ( f d v and infbmdv) the time gramsand, in theend, the samequestion: How spent0nthe~bo~erthebst500166~earsuntildo you motivate workers? Here, too, escakweare tinallv on the wav to the "six and a half- tions have taken place. Thirty years ago it was day weekend." An int&tmg variant of this necessary to request, 'Please don't spit on the appmachisthedwelopmentofoff-how-floor." Today the same admonition requirrs tionprograms.Thephilosophyhereseemstobe three "pteases" beforetheemployeefeelsthata that those who play work together. superiorhasdemonshated thepsychologically The fact is that motivated people seek more p p e r attitude. hours of work, not fewer. The failure of human relations haining to 2 SplmBngwags. Have these motivated produce motivation led to the mndusion that people? Yes, to t o k the next wage irmpase. supervisors or managem themelves were not Somemedievalistsstill can be hard to say that psychologically hue to themselves in their a good depression willgetemployee moving. practice of interpemnal deenry. So an adThey feelthat ifrising wages don't or won't do vanced formofhuinanrelatiomKITA,sensitivthe pb, reducing them will. ity training was unfolded. 3. F~IWImdts. Industry has outdone a ~bmneDoyoureally,really h e mast welfare-minded of welfare s t a b in u n d e r s t a n d ~ d o 0 y o u r e a l l y ~ r e a l l y iispensing cradle-to-the-grave NrroT. Olle company I laow of had "TOMQuellty has intmd~& a m informal " f r i n ~ benefit of the month club" going for a while. which we can use, and m t of fringe benefik in the UNted states has reached a-tely mOgf importantly, t e c h n m and L5% of the wage dollar, and we still ways of thinkil\g for US to understand TV for motivation.

e,

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ban ever bef& and the hpnd ck-

?otbefwased.Thesebenefitsareno onger m m d s ; they are rights. A 6 iay week is inhuman, a l(Fhowday is exploiation, extended medical mverage is a basic iecency, and stock option6 are the salvation of nanagerial initiative. Unless the ante is mninuously raised, the psychological reaction of mployeesis that the company is tuning back he clock. Whwindustrybegantorealizethatboththe m o m i c nerve and the lazy nerve of Uleir mployeeshad insatiableappetites,it startedto isten tothebehavioralscientistswho,morebut d a humanist tradition than from scientific itudy, aiticized management for not knowing low to deal with people. Thenext KlTAeasily ollowed. 4.Hunardatlm~Over3oyearjof

trust other people? T)o you really, really, really, reallycoopeatelThefailureof~itivityhaining is now beingqbined, by thaw who have become expoiten of the techconduct Noue. as &dmto reallvV(fivetimes) p&& sensitivity tram& causg With themahhon that thereareonlv ternporarygainsfmmcomfortandecon~cand interpwonal KITA, personnel managers concluded that the fault lay not in what they w w doine.but in theemolovee's failure toaooredate & a t they were This the field of communications. a whole new a m of *,scientifica~~ sanctioned KITA. 6. Carmunlcatbns.Themufessorof canmunietions was invited to jbin the faculty of

6.


managementtraining programs and help in manaqemakins emploveesunderstandwhat managemakingemployees ment wasdoing for them.Houseolgans,briefing sessions,supervisoryinsbuction on the im"onrtance of communiiationand allsortsof pr<ipagandahaveproliferateduntil today there is evenan lnternationalCouncilof Industrial Editors. But no motivation resulted, and the obvious thought occued that perhaps managementwas not hearingwhat the employees were saying.That led to the next KnA 7. Twcway communlcatlon. Management ordered morale surveys, suggestion plans and group participation programs. Then both employeesand managementwere communicatingand listening to eachother more than evetbut without much improvement in motivahon. The behavioral scientistsbegan to take another look at their conceptionsand their data,andtheytookhumanrelationsonestep further.Aglimmerof truth wasbeginningto showthroughin the writings of the so-called higher-order-needpsychologists.People,so thev said,want to ach]alizethemselves.Unjor"actualizing" psychologists got tunately, the mixed up wih the human rclations psychologists,and a new KIIA emerged. 8. Job partlclpatlon. Though it may not havebeenthe theoreticalintentiorLjob participation often became a "give them the big picture" apprcach. For example, iJ a man is tightening 10,000nuts a day on an assembly line with a tomue wrench, teUhim he is building a Chertolet. Another approach had the goal of giving employeesa "feeling" that they are determining in somemeasure,what they do on the iob. The goal was to provide a sense of achievementrather than a substantive achievementin the task. Realachievement,of coune, requiresa task that makesit possible. But still thercwasno motivation. This led to the inevitable 'rondusion that the employees must be sick, and thereforeto the next KIIA. 9. Enploye€ coulrsclllng.The initial useof thjs f,ormof KIIAin a systematicfashioncanbe qedited to the Hawthome exDerimentof the

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Westem Electric Company during the early 1930s.At that time, it was found that the employeesharbored irrational feelingsthat were interfering with the rational operation of the factory Counseling in this instance was a means of letting the employees unburden themselvesby talking to someoneabout their problems.Although thecounselingtechnique werc primitive, the programwas largeindeed. The counselingapproach suffered as a result of expedencesduring World War II, when the prcSams themselveswere found to be in terfering with the operation of the organizations;the counseloEhad forgoften their role of benevolent listeners and wer€ attemptingto do somethingabout the problems that they heard about. Psychologicalcounselling,however, has A. lndrFold ergln€c*€ rnanagedtosurvivethenegativeimpact loDs of World War I I experiencesand toda-sov is beginning to flourish with renewed phistication.But, alas, many of these ir.ogtutto, tike aU the others,do not seem to have lessenedthe pressureof demandsto find out how to motivate workeF. SinceKITA results only in short-terrr movement,it is safeto Dr€dictthat the cost ol these programs will increase C. E€hrvlo..l lchtr. steadilyand new varietieswill bedevelattitudes oped as old positive KITASreach their sdtiation points.

Hyglene vs. motlvatoB L€t me rephrasethe per€nnialquestionthis way: How do you install a generator in an employee?A brief review of my motivahonhygiene theory of Fb attitudes is required before theoretical and practical suggestions can be offered. The theory was first drawn from an examination of eventsin the lives of engineersand accountants.At least 16 other investigations, using a wide variety of populations (induding some in Communist countries),havesincebem completed,making the original r€searchoneof the most rcplicated studies in the field of iob attitudes. The findings of these shrdies, along with conoboration fn:m many other investigations using different p,rocedures,suggest that the factors involved in producing pb satisfaction (andmotivation) arcsepanteand distinctfrom thefacto$ that leadto iob dissatisfaction.Since separatefacton n"ed to be consider€d, depending on whaher job satisfaction or pb dissatisfaction is being examined, it follows that thesetwo feelingsarenot oppositesofeach other.The oppositeof job satisfactionis not Fb dissatisfactionbut, rather,no job safrsfaction; and similarly, the opposite of i:b dissadsfaction is not iob satisfaction,but no iob dissatisracnon. Stating the conceptprcsentsa Problem in r,emantics.for we normallv think of satisfaction and dissatisfactionai opposites- i.e.,

19S2 THEASIANMANAGERSEPIEMBEFYOCTOBER


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what is not satisfyinS must be dissatisfyin& and vice versa. But when it comesto understanding the behavior of people in their jobs, more than a olav on words is involved. Two different needsof human beines are involved here.Onesetof needscanbethoueht of assternming from humankind's animal nature-the built-in drive to avoid pain ftom the envirorunent, Dlus all the leamed drives that become conditioned to the basic biological needs.Forerample, hunger,a basicbiological drive, makesit necessaryto eam money,and Orm money becomes a specific drive. The other setof needsrclatesto that unique human characteristic,the ability to achieve and, through achievement,to experienceFychological growth. The stimuli for the grcwth needs are task that induce growth; in the industrial setting, they arc the job content. Contrariwise,the stimuli inducing painavoidancebehavior are found in the job environmmt. The growth or motivator factors that are intrinsic to th€ job are: achievement,recognition for achievemmt, the work itself,rcsponsibility and growth or advancement. The dissatisfaction-avoidanceor hygiene (KITA) factoG that arc exhinsic to the job indude: companypoliry and administration,supervision, intelpersonal relationships, working conditions, salarv,statusand s€curitvAcompositeof the factorsthat arcinvolved in causingjob satisfactionand job dissatisfaction, drawn from samplesof 1,685employees, is shown in Exhibit I. The rcsults indicate that motivators were the primarv causeof satisfaction, and hygienefa&ors thi primary causeof uniappinesson the iob.Theemployees, studied in 12 different investigations, included lower level srpervisort professionalwomen, agricultural administrators, men about to re tire from managementpositions, hospital maintenance personnel, manufacturing supervisors,nurses,food handlers,military officers, engineers, scientists, housekeepers, teachers,technicians,femaleasrmblers, accountants,Firurishforemenand Hunqarian ensineers. "They were asked what iob eventshad occured in their work that had led to extreme satisfactionor extremedissatisfactionon their Dart. Their responsesare broken down in the ixhibit into peicentagesof total "positive" job events and total "negative" tob events (lhe figurcs total more than 10070on both the "hygiene" and "motivators" sidesbecauseoften at l=east two factors can be attributed to a sinele event; advancement,for instance,often iccompaniesassumption of rcsponsibiliry). To illustrate a t'?ical responseinvolving achievementthat had a negative effectfor the employee was, "l was unhappy becauseI didn't do the iob successfr:.lly"A typical re spons€ in the small number of positive job eventsin the companypolicy and adminishahon groupin8 was, "I was happy becausethe

and adiustableto specificsituations that the major function of persomel manatement is to Prhctde ilottrdo[ lnroH beaspragmaticasthe occasion A.Removing A. Responsibility somecontrols andpeFonal demands.lf jobsareorganized whileretaining accolntability achievemerlt in a ploper manner, they reaB.lncreasing theaccountabilityB. Responsibility andccognition so& the r€sult will be the most of individuals fortheiro/fi ro* efficient job stsucture,and the C.Giyir€a person a complete C. Responsibility, *hievement,and most favorable iob attitudes mturalunitof wo.k(module, recognition will follow as a matter of division, arca,aodsoon) course. D.Grantiog additional authofity D. Responsibilig, achiewment,and Industialmgmeersholdt|at inthear to employees aclivity; recognition humankind is mechanisticaly jobfrcedon orientedand economicallyme pedodic E.Making repods E. Intemalrecognition tivated and tlEt hunan needs directly available to thewofters are best met by attuning the themseh,/es rattrer thanto individual to the most efficient superyjsols work process.The goal of perF.Intrcducing newandmore F.Grorthandleamiru soniel maiasemmt therefore difiiculttasksnotp{eviously should be to ioncoct the most handed apprcpriate incentive system glowth,and G.Assignedindividuals specific G. Responsibility, and todesign specificworkint or specialized tasks,enabling conditions in a way that facfithemto becomee4ierts tates the most efficimt use of Exhibitlll the hunan machine.By struchrrhg jobs in a manner that company rcorganized the section so that I Ieadsto the most efficimt opemtion,engrneeE didn't report any longer to the guy I didn't get believethdt theycanobtain theoptimal oBanialonewith." zation of work and the Droperwork attitudes. A3 the lower right-hand part of the exhibit Behavioralscientisti foius on gn:up sentishows, of all the factors contributing to iob ments,attitudes of individual employees,and satisfaction,81% were motivators. And of all the organization'ssocialand psychologicaldithe factors contributing to the employees mate.This peEuasionemphaszesoneor more dissatisfactionover their work, 699oinvolved of thevarious hygieneand motivator needs.Its hygieneelements. approachto personnelmanagemmt is gmerallv to emphasizesome form of human relaEtemal ldangh tionseducatioq in thehopeofinstilling healthy Therearethreegeneralph.ilosophiesof per- employeeattitudes and an orgadzational clisonnelmanasement.The first is basedon or- mate that is consider€dto be felicitous to huganizational theory the secondon industrial man values.The belief is that DroDeraftitudes engineerin& and the third on behavioral sci- will lead to efficient job and oftanizational ence. stluchtre. Organizational theorists believe that huTher€ is always a lively debateabout the man needsarc either soirrational or so varied overall effectiveness of the aDproaches of organizational eanizational theoiists and industrial engineers. Manifestly both have achieved much. But the naeging question for behavioral scientists has been:\ y'hatis the cost in Threemonthcumuhtive averag€ problems that eventuallv human P!.t rarD ftrdor causemore expenseto the organi100 zation - for instance,tumover, abAchhvl|€ senteeism,enors,violation of safety rules, strikes, rcstriction of output, higher wages and greater fringe benefits?On the othe! hand, behavioralscientistsarchard Dut to document much manifesi improvement in personnel management, using their approach. The three philosophies can be depicted asa kiangle, asis done in Exhibit II, with each persuasion 0 claiming the apex angle.The motiF.b ltlor i^pr ltLy JrIl lul A|g S.d I vation-hygiene theory claims the tlt4no||$ rtdy Ftod Exhibil lV sameangle as industrial engineer-

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ins, bu t for oppo6itegoals. Ratherthan rationaLiiing, the i"'ork to ittcreaseefficiency, the theory suggess tlut work bemriched to bring aboul effectiveuti.tizationof persornel. Sucha systematicaftempt to motivite employeesby manipulating the motivator factorsis iust begirudng. The term iob enrichment describes this embryonic m6vemmt. An older term, pb enlargement, should be avoided becaus€it is with pastfailujes stemmingfrom a as-sociated misundestanding of the problem. Jobmrichment prcvides the opportunitv for the employei's psychologiiit g.o*ifr, while job inlirge*en[ metely males a pb structurally bigger.Sincesciendficjob enrichmmt is very new, this artide only suggeststhe PrinciPles and practicatstepsthat have recentlyemerged fmm several successfirlexDerimmts in inquflry. Job loadlng In aftempting to eruich certain Fbs, managementoftenrcducesthepersonalconhibution of employeesrather than giving them opportunities for stowth in their accustomed which I shall call horiit*. Suchetrdeau-ors, 'zontal pb loading (as oppos€d to vertical loading orprovidhg motivator factors),have beenthe problem of earlier Fb enlargement programs. Job loading merely enlarge the meaninglessnessof the job. Someexarnples of this approach,and their effectare: .Challmging the employee by inqeasins the amount of production expected,lf eaih tigtrtms t OlOo6ols a day,seeiI eachcan tishten 20,000bolts a day. The arithmetic in"volvedshowsthatmu.ltiitying zeroby zerc still eoualszero. . Addinganother meaninglesstaskto the existing one, usually somerouting derical activiry The arithmetic here is adding zero to

ing of a job. The subjectsof this study werc the stockholder correspondentsernployed by a very large colporation. S€emingly,the task requfed of thesecarefirlly selectedand higNy hained corespondentswasquitecomplexand challenging.Butalrnostall indexesof performanceand iob attitudeswerc low, aJtdexit interviewing;onfirmdthatthechallengeof theiob existedmercly aswords. A iob mrichmmt ptoiect was initiated in the form of an experiment with one gauP, designatedasan achievingunit, having its pb enrichedby the principlesdes€ribedin Exhibit Itr. A conbol group continued to do its Fb in the traditional way (Ihere werc also two "uncommitted" groups of corespondents formed to measurethe so<alled Flawthorne Effecq that is, to gaugewhether Productivity

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and attitudes toward the job charged a*ificially merely becauseemployeessensedthat the company was paying more attention to zefl), . Rotating the assiSnmentsof a number of them in doing something differ€nt or novel. iob6 Orat ned to be euiched. This mears Thercsultsfor thesegroupswerc substanhally -washing dishe for a whi.lg then washing sil- the sameas for the conuol group and for the verwarc. The arithmetic is substituting one sakeof simpliciw I donot dealwith them in this summary.).No ihange in hygienewere inhozero for another zero. .Removing the mo6t diffict t pafts of the duced for either group other than those that assignmentin order to frce the worker to ac- would have beenmade an''r,vay,such as norcomplish more of the lesschalenging assign- mal Davinqeas€s. fire cfrallges for the achieving unit were ment. This traditional industrial engineering approach amounts to subtraction in the hope introduced in the first two months, averaging one per week of the sevm motivaton listed in of accomplishingaddition. These are common forms of horizontal Exhibit UI. At the end of six months the memloading that hequendy come uP in Prelimi- bers of the achievins unit were fourd to be narybrainstorming sessionsof pb mrichment. outperforrning then-counterPaftsin the conThe principles of vertical loading have not all trol group, and in addition indicated a mark€d beenworked out asyet,and they remainrather increas€in then [king for their pbs. Other smenl, but I have hrmished sevm usefir.l rcsu.ltsshowed that the achieving gouP had itarting poinc for considerationin Exhibit . lower absenteeismand, subsequendy,a much higher late of promotion. Exhibit Mllustsates the changesin Pe!A succss8ful appllcdtlon An example Irom a highly succ€ssfirliob formance,measuredin February and March, enrichmeartexDerimentcan illustrate the dis- beforethe study period began,and at the end tinction betwe&n horizontal and vertical load- of eachmonth of the studv period. The shae

holder servicehdex rcpr€sentsquality of lettels, induding acclracy of infomatioD and speed of rcsponseto stockholders' IetteE of inouiw The index of a curlent month was aroirajed irrto the average of the two pncx months, which meansthat improvement was harder to obtain if the indexe of the previous montfu were low. The "achievers" wer€ performing lesswell beforethe sir-month Period started, and thet performance service index continued to decline after the inhoduction of the motivators, evidendy becauseof uncertainty after their newly granted rcsponsibilities.In the thid month, howevel Performance improved, and soonthe menben of thisgroup hai reacheda high lwel of accomPlishment. Exhibit V shows the two groups' aftitudes toward their job,measu.redat themd of March, iust beforc the 6lst motivator was inboduced, and again at the end of September.The correspondienswereasked I6 questions,all involv"As you see ins motivation. A typical one was, it,"how many oppb'rtunities do you f;'el tlut you have in your job for making worthwhile conkibutions?" Thearuwers were scal€dftom 1 toS, with8O asthe maximum Poosiblescore. The achievers became much morc Positive about their job,while the attitude of the contol unit rcmained about the same(the drop is not statistica y significant). How was the pb of theseconesPondmts restsuchued?Exhibit VI lists the su8gestions made that were deemedto be horizontal loading and the actual vertical loading changes thit were incorDorated in the iob of the "Prinachiwing unit. The capital lefte!'sunder "Vertical loadint'' refer to tlle cip)e'after corr€spondinglettersin Exhibit III. The reader w l n6te that-therciffted forms of horizontal loading corespond dooely to the list of common manifestationsI mentioned earlier.

Stspstu lobendchment

Now that the motivator idea has been de scibed in practice,herearethe stePsthat managers should take in instituting the princiPle with their emplovees: r. SetectttrosdpUs in which a) the investment in industrial mgineering doesnot make changestoo costlyi b) attitudes ale Poor; c) hygiene is becomingvery cosdy;and, (d) motivation will makea differ€ncein Derformance. 2.Appn:ach thesepbs with tire conviction that they can be changed.Yearsof hadition have led managersto believe that the contmt of the pbs is sacrosanctand the only rope of action that they have is in ways of stimulating Deopre. ' j. B-it sto. a list of changesthat may enrich the jobs,without concemfol their Practicaiit). 4. Sq€en the list to eliminate suggestions that involve hygGne,rather than actual motivauon. 5. Sqeen the list for Seneralities,such as "givethemmorercsporuibifity," thaiar€rarely

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followed in practice.This might seemobvious, but the motivator words haveneverleft industrvi the substancehas iust been rationalized "resporuibiland organized out. Words like "achievement," " and "chality," gtowth," have been for example, elevated to the lenge," llrics of the patriotic anthem for aUolganizations. lt is the the old problem typified by the pledge of allegiance to the flag being more important than contributions to the country of following the form, rather than the substance. 6. Scleefithelist to eliminateany horizontal loading suggestions. 7. Avoid direct participation by the employeeswhose jobs are to be enriched. tdeas they have expressedpr€viously certainly constitute a valuable source for rccommended chanses,but their direct involvement contaminates the processwith human relations hygieneand, more specifically,givesthem only a senseof making a contribution. Thepb is to be chansed, and it is in the content tlat will produce the motivation, not attitudes about being involved or the challenge inhelent in setting up a ieb. That process will be over shortly, and it is what the employe€swill be doine from then on that will determine their motivation. A senseof participation wi.ll rcsult only in short-term movement. 8. In the initial attempts at Fb enrichment, set up a controlled experiment. At least two equivalent groups should be chosen,one an experimentalunit in which the motivators are systematically introduced over a period of fime, and the other one a control gourp in whichno c hangesaremade For both groups, hvsieneshould beallowed to follow its natural coursefor the duration of the experiment. Pr€and post-installationtestsof performanceand iobattitudesarcnecessaryto evaluatethe effectivenessof the i:b enrichment program. The attitudetest mustbelimited to motivator items in order to divore emplovees' views of the jobs they are grven from all the surrounding hygiene feelingsthat they may have. q. Bepreparcd for a drop in performancein the experimentalgroup in the first few weeks. The changeoverto a new iob may lead to a temporary rcduction in efficiency 10. Expect your first line supervisors to experiencesomeanxiety and ho6tility over the changesyou are making. The anxiety comes from their fear that the changeswill rcsult in poorer performance for their unit. Hostility will arise when the employeesstart assuming what the supervisor rcgard as their own refor performance.The supervisor sponsibiLity without checkingduties to pe orm may then be left with little to do. After asuccessfulexperiment,howevet the supervixrn usuallydiscoverthe supervisory and managerialfunctions they haveneglected, or which were never theirs becaus€all their time was grven over to checking the work of their subordinates. For example,in the R&D

Hotto||tal loadltE sugg€30o|r3 rqected

Vordcal loadhgrrEglldol|3 adopted

Fim quotascouldbe s€t for lettersto be answered eachday,usinga ratewhichrould b€ hardto .each.

Subjectmanerexpenstrereappointedwithineachunit for othermembersof the unitto consutt$/ithb€fore seekingsupetuisory help.fthe supedisofhadbeen answering all specjalized anddifficuhquestions.)

G

Thesecretades couldtypethe lefterc themselles, them,0r aswellas compoEe takeon anyothercledcalfunctions,

Cofiespondents sign€dthefuoywlnameson letters. (Thesuperuisor hadb€€nsigningall lette|s.)

B

All difficultor complexinqukiescouldbe channelled to a fewsecretaries so that the remainder couldachievehighrates0f outM. Thesejobscouldbe exchanged fromtimet0 !me.

Thework0f the moreexoerienced conesoondents was proofreadlessf,equentlybysupeNisors andwasdone at the c!fiespondents'desks,droppingveification (Previously, from100%to 1Cl%. all co(espondents' lettershadbee. checkedbythe supelvisor.)

a

Thesecretades couldb€ rotatedthough unitshandling differeni customeE, andthen sentbackto theirownunits.

Prcduction wasdis.ussed,bt t onlyin tems suchas 'a tull day'sworkis e$ected." Astimerent 0n,this wasno longermeition€d.(Before,the grouphadbeen constantlyrcmindedof the numberof lettec that neededto be ansrered.)

D

outgoingmail\,/entdirectlyto the mailroomwithorJt goingo\€r superyisors' desks.(Ihe lettershadaluays beeoouted throughthe supeiviso6.)

A

wereencouraged to answerlettersin a Conespondents way.(Relianc€ on the fofi efier morepersonalized approadrhadb€enstandardprac{ice.)

C

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washeldpersonally responsible B, E Eachcorespondent for the qualityandaccuracy 0f letters.(Ihis responsitility hadbeenthe provinceof the supewisorandthe verifier.)

division ofone largechemicalcompanyI know of, the supervisorsof the laboratory assistants were theoreticallv resDonsiblefor their training and evaluation.Thesefurctions, howevet had to come to be performed in a routine, unsubstantial fashion. After the job enrichmentprogram,durinSwhich the supervisors werenot mer€lvDassiveobserversofthe assistant's performince, the supervisors actually were devoting their time to reviewinB performance and administering thorough training. \{hat hasbeencalledanemDloveecentered stvle of suoervision will come abour nor through education of supervisors, but by changing the jobs that they do. Concludingnote Job enrichment will not be a one.hme proposition, but a continuous rranagement function. The initial chanqesshould last for a very long period of tirne.Therearea number of reasonsfor this: . Thechangesshould bring thepb up to the level of challensecommensuratewith the skill that was hired. . Thosewho have still morc ability evenhrallv will be able to demonshate it better and

win promotion to higher level jobs. .The very natureof motivators,asopposed to hygiene factors, is that they have a much longer term effect on employees' attitudes. Perhapsthe Pb will have to be enrichedagain, but this will not occurasfrequently asthe need for hygiene. Not all tobscanbe etu:iched,nor do all jobs needto be enriched.If only a srnallpercentage of the time and money that is now devoted to hygiene, however, were given to job enrichment effofts, the rctum in hurnar satisfaction and economicgain would be oneof the largest dividends that industry and societyhave ever rcapedthrough their effortsat betterpersonnel management. The argument for pb enrichment can be summedup quite simply: iI you haveemployeeson a job,usethem. If you can't usethem on thejob,getrid of them,eithervia automation or by selectingsomeonewith lesserability. ff you can't use them and you can't get rid of them, you will have a motivation problem. I

lThisarticleoiginally aryared in anduasreprinted with Lle,,7tissr.n {ronttheHarvard BusinessReview)

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Delegation: Learning fromand Deaffirg withForgivlble Nlistakes - feet and hands. The5eterms cormorcau- ' ftom its feudal past. Many folk savings have thoritarian, cEntralizedhierarchiesand suoer- been adopted into current wisiorir with '.|e{ef' ord indte/ subordinate relationshios. o: "goverrunmt officiat" replacing ln the headis the brain. The br;in thinls. It i "king' and "minister," and ,,nahon,,-or ,,ri elegatingis good. ttisalso necessary.lt concgtualizes. It governs how the body will publiC' replacing '1.ingdom" or "realm.,' But make life possible. There is onlv so work. The hands and feet receiveand execute the spirit of feudalism has remained in many much a managercando and therc is so orders.The handsand feetget dirty. The head communities. much to do.And subordinatesareoften must beheldhigh. ReaI d etegation will happen This iuxtaposition of haditional and modmuch more efficient at doing certainpbs than hereby accident,not by deign. ern rsmost apparcnt in thooeplaceswhere the managersare. The lnd onesians,awareof the implicatons king (in Thailand), or the iultans (in nine Delegation also helps develop subordi- of the terms, especially given the values in Malaysianstatesand two regmciesof lndonenates.They get the chanie to do what managsia) rcmain and exert great influence. While ers do. They often get a glirnpse of why traditions have pavided great stabilizing innunagers act the way they act.All this helps fluence - in the caseof Tfuihnd - they-also enswe that work gets done in the manager,s produc€ shains in day-today olganizafuonal abrnce. And managersare,therefore,not tied ure. to rcutine. They canwork on developing their organrzauons. The OrganEatlon as Machlne Delegahon also gives managers precrous - Cmtral2ed autocrary is reinlorced by the time for their own developmmt. Deiegating logc of bureaucraciesand fornal organizaalows manage$ to rest,recuperdteand rctool. tions.Bueauqacies emphasizerationality, obIt givesthem time to learn new skills and to trv tectivit, impersonality and absenie of their handsat new iJbs.Sparedfrom working emotion, accordingto Max Weber. on routines, they are lessbored and lesslikely Descarte' influmce on our view of the to suffer the malaise of mediocity ln some world asa knowable and ultimately contollacases,they are saved ftom bumout. It gives ble machineis deep.Machines,in ihis model, them time to spend with their familieiand arc composedof parts which have a perfectfit. catchup on old frimds. PancaSila(Su*amo's"FbePrincirlesoftheStatf:,' Prcperly maintained and oiled, they operate Iack of delegation sooner rather than natiora.lism,hutanism, democmc\,socialjustice smanthlv later - assurespersonal, bwines and organi- andbeli4in Alllh*eds.), changedtheset6 rtrpdl The operationsof machinesare controlled zationalstagnation. kantor- othce latheror protector- for man- by "govemors" which dictate rclationships Wht then, do we not seemore delegation? ageror leader,and arukt 4&- fruitful child with the machine, the pace of the work and Even in companies mn by gaduates of top for emplovee. how the various coFFwill operate with the busmessprograrrLswherc pains were taken to Bufthe view ofthe traditional fatherinAsia other parb of the rna-chine. ' point out the bene6tsofdalesation? hasbeenthat of tlrc critical, evm punitive, lord In the human machinethat is the organizaof tIrc house- capableof nurturing and doF tioo the govemor is the general maniger or Delegsting the tulan Way ing when pleased - but when displeased, CEO. To him is attributed perhaps suflerhuIn Asia I think thercarethreemajor reasons e\pr€ssin8 terrible anger. The baditibnal faman capabilities.The manager'knows the for this. By no meansarethesethe only reasons ther doesnot take mant painsto hide who his machine'scapabilities:he lavs out a well - but theyseemto bethethreemost iommon. favorites arc. thought-out plan of operation;; he causesthe They are: Anak, chiu, implies the capacity to grow organzahon to move to implement thes€ . The cultural antluopology of Asia; anddevelop.ft isa superi orword toktzki-taigan . plans;and sensingthe change-in the mvllono The diffianlties in assurine effectivedel- But in Asian tradition, the ara,k srows and ment which will necesgitatechanqesin the egauon;and, succeedsbecauseof his filial devotion and operationsof the machine,he initiates the necr ThewaymanyAsianmarugersdealwith attention to the teachingsof the parents (the essary steps to start the changes (Henry nustaKes. elpenenced and the wise). This may explain Minztberg makesa good distinction berween Part of the explanation lies in the cultural the appeal Filipino fotk singei Friddy thinking out a plan and crafting a plan in his _ot ",4raf ' anthropology of organizations- the pattems Aguilai's ballad, in the reion. and in- b@k, Mintzbergoa Manage.meni. oflife in theorganization and valuesand norms deed,the world. Analogiesarc slippery but it is not difficult "Prctector/' that underlie ihes€Dattems. connotes a superior/ inferior to s€eone between the benevol€nt autoqats ln BahasaMalayi and Bahae Indonesialor dependence.While the psycho-emotiona.l de- who lead statesand arrnies,and the manacers "parhe/ erample,the word which originaiJydenoted dearly of the human machinecalled the corporation Pendenryls two-way,one manageror leaderwas /c4zrla- head.The dominates iJ not dictates. which are, among modem organizations,the phras€that d enotedem ployeewaskahtangan Thefolklore ofAsia is full of valuesderived mo6tautocraticof leadersdespiteall the work IHE '"SIAN iI4ANAGER SEPTEMBER/OCTOBER 1992 By Mado Artonlo G. Lopez PilipinasShell Corporation Professorin PublicAdministration

"Wriletnditionshave povidedgeat staHlid€ - in thecase inf,uences of Thailand- theyatso produce stlains in dafto{ay organizational lih."


l

done on participative managementand all the discussionson empowerment ot work tear$. For a lone time the model and its variants worked very well. The whole indushial revolution wasmadepoaoiblebythemodel.Maybe the world was simpler then. Change6came slowly and people were able to adiust to the shocksassociatedwith changewith adequate sDeed. Manv did not but mass conscrentizatioa po[tizatlott and human rights were still decadesaway. The next marorobstadesto delegationaJe the preconditions for effectivedelegation. Dr. Quinn Vilb of garvard BusinessSchool(Rebirth ol thc C.orryntion, 191) says thar four stepsmust be undertaken to ensue effective deleqation.Theseare: jEach team mernbermust know and understand the team's mission and the role he needsto play; r Eachnember must beabteto acton their own initiative. To do this, he must have the required competence; o Membersmustmaketherightchoic€s.To do this they need accurate,valid and current information - not iust the local areainformation which they arein thebestPositionto getbut alsothe over-all picture within which they must act:and, a It is very important that people know they ar€trusted;that they will not be punished unfairly for honestmistakesthat arc a normal part of organizational lif€ in particular, and human life in general. lroking ai these four gmeral preconditions, it is not di-fficult to seewhy even in the more stableworld of the pastit was difficult to "knowabili{' of the delegate.For theultimate "world-as-machine" was at best a hope at wolst an illusion. It was impossible to draw neat and logical causal relationships among the many variablesevenin that world. As MurDhy's law states: . Nothi;g b assimpleasit looks. . Thingswill takelongerthstl theyshould. . And if thingscan&owong thty will, a At theunrst Wsible tifle! l,ong-accepted paradigms and mindsets are undergoint continual, radical changesand at grcat speed, Strategiesmust change equatly fast to take advantageof evolving environmentsand to avoid organizationaldemise. Mission statements,g;b and targets cannot be rulpted in stone nor functional descriptionsnor irb descriptionscastin brcnze. Thblesof organizationsmay not evengetto the office artisfs table for finalization beforc the need for another changebecomesaPParcnt. In this world of fastchanges,accuate, valid and current information can be hanl to come by. With changhg relationships among variable the old frameworks do not provide adeouate structures to fit information into mlrugeable pattems.\4ithout cllrrent and ac'curate information decision rnaking can be very difficult.

The uncertainty, plus the perceived high organizationaland professionalcareerco6tsof failue cqnhibut€s to a situation where subordinates pefer to passon aninoeasing number of d€cisions, complicating the lives of their mana8ers. And the rcquired competenciesto do exceL lent work arealsorapidly evolving. Becauseof the pressuresto succ€ed,there is geat fear of failure. In a higlrly competitive world, failures are oftm, if wrongly, seenasa makeor-break situation. Even in govemment thereis fear of fai.tuelestthefailuemakeabosslook bad.For manv,thedominantmindsetis, "If I am tohave a paiir in the - it mlght well be oneof my own maline!" Not a mindsetconduciveto delegatingand nurturing of any employee's professional grc\a'thand development-which will necessarily involve the commission of honet mistaKES.

Very often, problems involving technical competenceare the. least of a professional's

"Longiaccefied paradlglrs andmin&etsale unde6oingcontinual, - andd radicalchanges gteatspeed,Strategles mustchangeequallyfastto of evoMng takeadvantage andto avoid enMronrnents demise." olganizational worries, great though they ar€. Thesearc the kinds he can go thrcugh formal tlaining to remedy. The more difficutt skills to leam are the cognitive, creative and interpersonal skills. These arc only partly and not very deePly affectedby formal haining. Theseresult from long periods of socialization in kinshiP and formal groups; personal and professionalexposue; and unconsciousleaming that lead to "Eueka!" experiences.To change these one hasto go through more than iust baininS.And the kinds of interventions that produce longrun effects in these casesrequire time, carc, patienceand great fortihrde. They arc not skills one acquircsand hones from readinqs or discussionsno Eratter how wide rangrng and deep.Uke swimming they are leamed by iumping in the right waterc with the attendant pain of swallowing water and othem liquid in it and surviving to dlaw important and lasting lessons.Theseare the skills T.H. White had in mind when he wiote 'The essenceof education is exPerience,"in TheOnceAnd FutureKins.

FoElvable Mtstak6 Given all these,it is easyto seethat we will comrnit misiake in the proc€ssof teamtng. One consolationof the leaming Ploceis is that it includes leamine how to commit fewe! and fewer mistakes. If we want the delegadon Drocessto work, we wi.[ have to learn to live &eatively with the reality of mistakes being IIIaqe.

Mlls suggestssomerules-of-thumb to distinguish'forgivable rnistakes" from non-forgrvableones.He sals mistales are forgivable wnen: 1. They arc made in pusuit of the mission; 2.They aremadewhile the personis acting within the scopeof his authority, 3. They arc not paft of a paftem; and, 4. The person and the team canleam from them. Wevery easily fall into the hap of str€ssin8 pracedur€sasmuch asachievingtheir ends.It isonethins to sbessthat endsmustbeachieved by ethical;fair and iust means.To emPhasize that ends must be met by only one particular set of procedures is another. lt FesuPPoses that thereis only onebestway to do things and that managementhasaheady thought of it. Oncewe break away frorn a paternalisticauthoritarian mind set,it is easyto give subordinates authority. But the fear of failure often takes over. When it does it results in our handing over authority with very rcstrictive conditions.lna desiretoensuetotally(imPossible, realy) against mistakes and failue we not onlv hand down the muivalmt of the Ten Commindmmts but also the multiple volumesofCalon law whichservesonePurPose onlv, to burdm the subordinateinto inactiorr or worse, confused freruy. And then we zap hirn whm he makesa rnistake. As long as we believe that we made the right decision in hiring and/or Prcmoting a subordinate, we should trust his abilitie includins his abilitv to leam from honestmista-tes.N"ottrusting our subodinates, sPeaks more of our own decision maling and selection systemsthan it doesof our subordinates' oualities. It has also been said oftm enough that people really learn a lot more ftom mistakes than thev do from successes.When we succeed,we feel euphoric and are sometimesless than thorough in analyzing the leasons (at least those we arc equiPped to r€cognize)for our success.But when we fail, our resolvenot to feel humiliation again causes us to go throuSh our analysiscarefully. This is the supremevalue of humbling mistake - that we ultimatelv leam lastins lessonsfrom them. If we ian examineiheseFopositions care firlly, team to have greater faith in ourselves and in our people,theactof deletating will not only be easier,it will be done with Sreater confidencewith befter rcsults for us, our People and our organizations. I a friendt lo Anne Pundol, iThlsarlicleisdedicat?d

1992 THE ASIANMANAGER SEPTEMBER/OCTOBER


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..@ A cross{ultural comparison...

potheJapanese tlakeBetter NlanagerS? By John Storey SeniorLecturer Loughborough UniversityBusinessSchool

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arly rcsults of a comparative BritainJapanstudy of managen and their development revealed a number of surpjises- not leastbeing the finding that, despitepopular imprmsrorrsto the coni Fary British managersappeared to berecelvrng more management training than theit JapanesecounterparL5.The purpose of this article is to examinethe subtl;ties behind the headlines and to draw out the main lessons for future British management educatiorL haining and development. Thestudy on which this articledraws was a thee-year projed frLndedby the Economic and SocialResearchCouncil which formed part of that My's 'Competitive initiative.,, Themain purposeot thestudv wasto gain a deeperulderstanding of the v;rious p;ths to ma(rng_capabte managers,so the investi_ gabon took mto dccountthe interrelated paF tern of managerial recruitment, selection, evaluahoD reward and other sub-sysrems which shape the nature of the maniqement "stock." We also took into account different co.nte\ts,indudin& for example sectoraI varianons and other aspects such ds different organizationalsbrrctures, The reasonsfor comparing practicesin BriF ainwith thoeeinJapanarose;otonlyoutotthe extraordinary -performance of the ;aparese economyand thercportedcontribution bf high standards of baining and d evelopment to that ;rrformance but also from the apparentsrmrlarity betweenendenicJapanesedivelopment methodsand thekinds ofprescriptionsemergmg tor marugementdevelopmentin Britain. Wecomparedfour major ilritish companies with four match-pairedcounterpars in .;apan. To maintain comparisonsof tk;with like, the Japanesecompanieswere lesearchedsolely in transplantswerenot included |agun;overseas in the studv The companies were selectedto meet certain c teria.Electricalengineeringwas chosen as a highly competitiveinternational industryin whichtheJapanese haveparticuIarly excelled.For this sector LucasIndustries was matched with Sumitomo Electric Industries.Retailinghasbeena sectorwhere a number of Bdtish companieshave done

IHE ASIANMANAGER

comparativelywell; for the purposesof this categoryTescowas paired with Juscoin Japan. The third compadson was between NationalWestminsteiBankandMitsui Trust and Banking. It was expected that there would.be many simila ties in the developmental methods of organizations in this sector inespective of cultural differences. The fourth and final paired comparison wasbetweenBritish Telecomand NTi. These two were selectednot so much to represent an industrybut ratherto affordinsiiht into the significanceof "privatization,,-for the managementdevelopment process.Much has beensaid and written about the use of managementdevelopmentas a cruciallever in managingaculturechange,and thesetwo 'privatized' concerns had both identified managementdevelopmentasa vital areafor intervention. ln each casemanagers were given a detailed self-completionquestionnaire,followed bv an interview_ The sectoraldifferences were sufficiently marked to justify the suspicion that many generalizationsabout "Japanesemanagement" are not only superfiiial but misle;ding. There were many things in cornmon between the two seti of ritail manaeers

SEMMBER/OCTOBER 1992

which outweighed the "country effect," and the samecould be said a-bout the two setsof bank managers. Despitethesigr ificanceof the .sector effect," the analysisalso showed certain broad contrasts between the twodifferent populations of managers. Theseextend acrossthe full range of dimensions examined in our ie. search,including,Ior example,careers anq careerplanrung, how managers are evaluatedand rewardedand how satisfied or dissatisfied they are with various aspectsof their employment. This article focuseson the ien'tral aspect of trainirg and development. The overarihing theme is that, in themain, theJapanese tleatedtraining and development more seriouslv Ii Britain,despitemany good intentions and despiterecentadvances, therewas a level ofarnbiguity about the realvalue of training ard development that was not found in lapan. ttiis fundarnental underlying differmce surfaced in six marn ways.

Sinkor Swln First, theJapanee had a much higher level of educationalattainment. Not one of the Japanesemanagers had entered the labor market before the ageof 18,whereasthis had been the experienci of 45Voof the British sample.Almost aIl (94percent)of theJapanee haddegrces,comparcdwith,Osoof the Bdtish. Second, in theBritishcompaniesone was far more likely to encounter a seemingly deep-seatedpreconceptionthat people ei ther "havewhat it takes"or thevdo not.As a result it was hardly surprisins that the "sink or swim" philirsophy conftnued to enjoy much favor A corollary was the heary emphasis placed on being-exposedto responsibilityat an early ageas'acriticalexplanatory factor in success.This belief was widely held by senior respondents to the survey in explaining their own success;it is also the current conventional wisdom in westem managementdevelopment literafure. In conhast, the Japanesewere far more likely to give weighi to the imporrance of continuousdevelopment, and to rolemodels and mentors. For example,whereasiust 15


I

percentof Lucasmanagersmade reference pointment to particular jobs is a separateissue torolemodelsasakeyfactorintheir personal becausecandidatesfirst needto rcacha certain "qualification system." growth asa managetthecomParativef igure grade via the 70 percent. In contrast in Britain training was more Electric was in Sumitomo The importanceof this finding is that the oftenseenasafu e-floatingactivityonly loosely "early erposure"in the relatedto human resourceplanning. Indeed, emphasisgiven to West (a prescription which derives from a management haining often came after ap studvof ihosewhosurvivein theclimbto the pointment to a managerial post. Arguably, top) may bemisleadinginthatitmay simply even these were the lucky one: many indiadseby default; i.e.,it emergesasa signifi- viduals who had beenpracticing asmanagers cantvariablein the absenceof more system- for subgtantialperiods of time had receivedno tminine at all. atic and planned methods. The-fifthDointtoucheson a cmcial connast Crucially, many of the fast-rising "managementdevelopmenf' managment stars in our sample made the in the concqjt of "cadres" of pointthattheyhadbeenluckyin beinggiven in the two courhies. In Brihin, challenging responsibilities at ar early age p€ople hav€ b€en targeted for special atten"competenand that this chancehad come about mainly tion. The massive debateabout cies" has focused on nanagers. And within through being in the right place at the ritht time. Many went on to comment how ther€ this broad group, development activity hasin had been a great waste of talent through the tum b€en dirccted in the main at newlv aDloss of equally capable and motivated col- pointed managersof managernenttrainies. In Japantherc was much lessof a focuson leagueswho had simply not been similarly "management development" lm se. In fad, fortunate. Our interviews sutgested that the reference to "early exposure to responsiblepositions" all too frequentiy simply meant a happenchancemove in Britain, whe!€as in Japan there was mther mor€ of a suggestion that referredto a considered,planned seriesof assrgnmenB. Third, the Japanesecompanieshad gmerally stayedwith the broad contoursof a r€c(€nizably consistenthaining and development systemover many years. The notable feature in Britain,by contrast,wasapropensityto chop and change. Therewas a marked tendencyto fald.ict|mtorygammifis; i.e.,a constantsenes of newly launched programs and initiatives. The Japanesecompanieswere also lesslikely to seetheir training budgets and activities cut during recessions. Perhapsbecauseof this sustainedconsistency,training dnd developmentschemesin Japanwere more cohercnt,betterplanned and many Japanee clearly had difficulty in rclatmutually ieinforcing. Thus,the mix ofon-the pb kaining off-the-pb training and selfde ing totheconcept.Theirattentionwasdit€cted " velopment worked rather more effectively togeneral "capability development irespective of th€ kind of conhibutiorL technical,or than in Britain. Tiaining and development initiatives in otherwise, which people might be making. In Japandevelopment was a lon8{rawn Britian were of a more variablequality - some outstandins but others indifferent. Even the out process,and a wide spectrum,of employoutstanding programs were often limited in eeswas drawn in. Hence,when it cameto the their impact becausethe patchwork of prcvi- specificstageof appointment to a managerial sionandthehistoryof choppingandchanging poaition, much of the necessarypreparation led to lack of visibility and awarenessin many had alreadv beenaccomplished. This is one of the reasonswhy our survey parts of thesecomplex organizations. producedwhat at fiIst si8ht was a suprising A fourth featurewas that lapanesehainint and develoDment was on the whole better result: British managerswere experiencing integat€d v;th thefmanpower planning and more manqementtraining ddys than the deplo)'rnentsystems. ThejaPanes€retailcom- lapanese.Another erplanition is that the pany provides an excellent example of this Japanesewere relying far more on on-thejob point. t r a i n i n g , s e lf - d e v e l o p m e nt a n d In Ju-sco progess through thegradesoccurs correspondencecourses, rather than the through an interlocking seriesof stepswhich singular off-site training cource. A further embrace trainin& examinations, intervlews explanation for this startling result was the existenceof what mieht be decribed as a and performance evaluation methods. Ap

"ln Brftain,desplte manygoodintentions anddespiterccent advances. thercrvas a levelof ambiguity about the realvalueof tnining anddevelopment that wasnotbund in Japan."

confoundingvariable:theprcvalencein Britain during the past couple of year of rnajor "training"-cum awarenesscampaignon such themesas total oualitv. ln Sritish Teieco;, for examplg a large proportion of managershad spent some four to five days a year on average during the previous two yearson TQM courses. If these specialeventswere exduded from the count manyof thesemanagercwou-ldhaverecorded no training days whatsoever during this period. As was ftmuendy remarked in that organizatioa TQM-was"-oneandthesamething asmanagementdevelopment." The implication was that, when a new "performpnrgram such as total quality or ance" is launched,the whole nature of what is managementtraining in effectalsochangesfor the duration of that program. Japanesetraining and development s€emedto be less susceptible to such variabilitr. "Embeddsdness" The sixth issue is the question of "embeddedness."In Japanthe r€sponsibility of every line manager or staff manager to develop his or her subordinatesis deeply imbued within everyone's expectations. Performance against this criterion is invariably recordedon eachrnanager'sappraisalreuew. Morc importandy, it is a criterion which is regarded as oitical in judging managerial behavior. Ou Japanesemanaprs appeared typicaily to spenda good dealof time on this as a matter of course.In Britain, alihough there hasrecendybeena move to add such an itern to appraisaldocumentatiorr the development of subordinates is rarely seer as a priority when comparedwith other measur€s. Relat€dly,on-the-pb training was deeply ingrained in JapaneseFactice (parts of NTf were an exception to this). In consequence, there was far less need for companies to be issuing a cpnstantsbeam of policies and ini"develoPmenf tiatives urging and caFling activity frcm the center.In Britain the opposite was broadly true: on-the-Fb tlaining was not securelyrooted.In stark conhast,trainint and development was routinely regarded as somethingdone by, or at leastoryanized by, a department (see table). sDecialist ' The probl6m was compounded by the tendency for those who wished to make a mark h the latter role seeingthe bestway to do so as wiping the board of prcvious suites of bainingcours€sandlaunchingnewprcgrams. Hence managemmt tnining and develoF ment in Britain too often meantsendingpeople on courses,whereas for those at managerial levelin Japan,selfdevelopmmt, induding the continued and @uently extensive us€ of correspondencecourses,was a normal activ_ itv.Therewere3l suchcorrespondencecourses for manasers in the Mitsui-Bank (There was also an expectationthat manageF miSht well be spending up to tm per€nt of their own

THE ASIANMANAGER

1992 SEPTEMBEFYOCTOBEF


0nU oncIllfs m$uranGE mpa ny E0 has[eEN tltrouglt ailtl|E$8.

Ever sinccwe opcneclin 1910,wc'vc bt:crr througlr a lot. Economicrcccssions,tntnr unrest,coup attempts,cvcn World War ll. And wc'vc ncvcr rrrisscda singlcycirr of work. That's 82 ycarsof unintcrruptcdscrvice. No otlrcr insrrrancccompanycan saythc slnrc.

Tlrrouglr crisisafte.rcrisis,wc'r'c licpl 1tj1 growing.Now, wc'rc thc lirst lnti llrgcst Filipirrolifc insurlncc colrrplny. Whilc wc tlon't ltxrk lirrwirrdto irnotlrcr cltlstrophc, cxpcct us ttt bc itr()utrdshould atrotlrcr()nc c()mcirlttrrg, Wc'rc spclkirrgfronr cx;rcricncc.

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salaryin thecauseoftheirown develoPmmt.). The Jusrc managerstoo rcported an ext€trIsive range of seudevelopment activity, citing business readin& s€minar attendance and networking asfi€quent undertakings. In Britain, conversely,this was the least cid aP proach.In surn,whereascontinual education, taining and development was taken for granted among lapanesemanagers,this was far ftom the caseamong the British. Ironically, depite prcgrann is in Britain, ther€ was often rnassivermcertainty among our sample of managersas to what training couls€swere or were not avail,able. Tescp,with its centralized contr,ol shucploduct focus, tures and higNy stood out as an exceptionto this 8€neralcondition. ln the other companie, despite the desienof maior sophisticatedsuitesof courses at"deat t aii.hg &nten, therewasfrequmtly confusion out among the divisions asto what was on offer. l,o@I Fainers were the rcPositories of this lnowledge, and they ftequmdy

that decadeorevmcompletelydeshoyedw€le being r€built - and in a way that was more thoughtfullyattuned tothenewcir€rmstanc€s' But things werc not standing still in Japan either. Despite their dear lead in this arena, they appeair-dto be redoubling thei efforts at the time of our research. Nonetheles,Japaneecompanieswercalso having to conftont a new scaleof problems. Quality of working life was higher on the agmda that it had beenfor many years,and so more enrployeeswere anvjous to sp€nd the weekend away ftom the workplace and wue inotherrcgads sia*ing to chal€ngethe e)(Pectation of total commibn€nt to the Fb. h addition the Metime employment system, the bedrock on which mo6t of the advantage desqibed in this artide ar€ based,is itsell less securethan it was, and increasingnumbers of young professionalsare leaving their fust ernployer after the filst few years. Perhap6in part to comter this, there wete also departuresbeing made ftom the princi-

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failed !o diss€minateit along ttre line. For the whole range of reasonsdiscussed abover€lating !o anbiguity about the value of tsaining messagesabout alternative more pressingpricritie and awarcnessof the transient natur€ of whatev€r course Prcvision might exist, line managers tended to make very little effort to find out what training oF portunities might cunently be available. Thoseline manages who did inqute met various r€spons€s:someremarkedhowrccep tive their localtrainer tumed out bobe(this was often rcported with a dqjree of arazement); others reDorted how assistancehad been le tuctantly-prisedout of their Faining function. One middle managerwas plac€d in a suitable Eaining cou$e but was allegedly wamed: 'Don'ttell anyoneelse...they mightwanttoSo on it too." In Japan it was normal for the company'seducationand training boonets to be cirqlated to aI employees. Itwould bewrcnttosuggestthattherc was a static picture in either counFy, however. Certain trjendswere discemible in both. The optirnistic point was that therc werc sig|s that tlie situation was improving in Britain, at least during the time of the fieldwork which predatedthepesentrccession.Managemmt education,training and developmenthad become the key issueof the late 1980s.Systemswhich had beenmarkedly cut backin theearly Partof

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ples of progression bas€d on seniority. In a number of rcgards the uend in JaPanwas towards some of the featues of the w€st€rn systen - induding sudr novel featurcs as performance-relatedIervad syst€rns,ta€etbas€dassessment,expedmentationwith peychometrictestingand other featurcsof a morc individualistic apprcach. Afurther tl€trldrclatestomodes of delivery of training and developmmt. Among the British orBanisationsthele were dear signs of "nev/' techinter€st in experimmting with niques of on-the-job trainin& mentorin& coaching personat development plans and develoDmentworkbooks. f'ooirrpteaUytle fr4anagementCharterbdtiative, with its sponsoEhip of the three-tier qualificationandaccreditationsyster!itseems poGsiblethat the patchwork of provision in Britain could cometo assumea greatetcoher' enc€.At the Dresenttime the oudook on this remains disdnctly undear. The conhaveEy surrounding the MCI might indeed be seenas amiqpcosmrcIlectingthetensioruinthewider systeanof managemmt develoPmentin Brit-

OurAlwrni B6pond I receivedny copy of the latet issueof The Asian Maruger and I was pleasandy suprised by the new layout and masthead. The designof the mastheadis eyecatching.I also noticed that the quality of paper in which you print l4tf has irnprovedgoodbye to smudgy fingerprints. Theeditorial wasat its acadenic best,but I was looking forward to more artides from AIM alumni and orofussorsbased outside thePhilippines. Idf)yedmostof theartides althoughI didnoticea mistakein thecaPtions of two of your photographs. Nevertheless,rny ovqrall impession of the issuewas that its editors and aitists wele stsivinSfor a quality magazine.Congra.tulations for putting togethera betterrnagazine. lohn Cabato,MBM'92 I always find time to read artide of int€lest in our publication. Specially when they are written (by poftssors I lnow pe sorullv). HdrueveaI was surprrised to leam that Dean Bonomeo pcsesses tectnical skills. Seriously,,his artide gavenremudr corrfort inthelnowledgethatmyalma rnaterinbds to be part of the 190s and beyond. Eduardo L. David Harnhecht & Quist Philippines lnc. (Phobgrapl6 4 MnHJVI. bnon@andthatof a PLD'| o*mtor rrmeinafufitentfu511tikM. We oplogizzlor theenor-Eds.)

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IHE ASIANMAI'IAGER

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1992 SEPIEMBER/OCTOBEB


1.O HowYou ReadThe AsianManager

1.5 a.) Approximately how many times do you pick up a typical issue of ?7r Asian Managerto rcad or to look through before you are finished with the issue?

1.1 How frequently do you read TheAsian Manager? I Everyissue [ 3of4issues fl 2of 4issues [ 1 of4issues I Fewerthan 1

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1.2 How do you usually start reading an issue of TheAsian Manager?(pleax checkoneonly) I Browse through the issue I Go over the table of contents and zero in on the articles that interest you f| Go straight to the articles that interest you ! Have no particular reading paftern 1.3 How important are the following in prompting you to read an article? lfrNhnt

The title itself Blurbs Relevanceto own interest Original source of article Photos/illushations accompanying articles Name of author

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b) About how much time do you spend reading TheAsian Manager? hrs. -mins. @Qasewite in) 1.6 On average, how many other persons read your l.rcpyof The Asian Manager. (plet* atrite in numbers) a) Businessassociates b) Family/others 1.7 Where do you usually read your copy of T/reAsian Manager? . I Mostlyathome ! Mostly at work I While travelling to,/from work srycify) I Elsewhere(please

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1.4 Pleasecheck the three most important râ&#x201A;Źasonswhy you read Thc Asian Manager. ! Keep uptodate on management ! Develop staff fl Use in management activities I Use in preparing reports f| Personal development I Understand the disciplines of management othirr than my n Gain new ideas for business ! Do a better jnb managing ! Others (pleax specify)

't-5 times

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1.8 On the average to what extent do you read an issue of ?fte Asinn Manago? (pleasecheckone) I Allofit-1007o l2Oto39V. j 8Dto997o l10to19Vo | ffito79Vo fl lcss than 10%

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1.9 After you have finished reading an issue of TheAsian Manager, what do you usually do with it? (pleasecheckone) ! Saveentireissue ! Clip and save items of interest ! Place it in waiting/reception area ! Passitontoafriend I Discard it


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2.0 YourOpinionof OurEdltorial 2.1 Which of the following business and managerrent topics are you most interested in reading about? (plmx checkall that apply) fl Accounting/Finance ! Advertising and Public Relations fl Banking ! Business- Government Relations I BusinessTravel I Career Planning and Personnel Managerrent I Chinese Management I Computers and NewTechnology I Economics I International Trade/Export/Import fl JapaneseManagement ! ManagementTheory f] ManagementTechniques fl Manufacturing/Quality Control f| Personality (Success) fl Profiles ! Salesand Marketing ! Selflmprovement ! ServiceExcellence I Small/Family/Business/Entrepreneurship

I

Others@kase specifu)

Pleaseindicate which of these statements best reflects vour preference. ! I'd like to seemore general interest and less on management. ! The present balance between general interest and management artides is just right. I I'd like to seeless general interest articles and more on management. lf TheAsian Manager leatwes anticlesof general interest which of the following topics would you like to read more oQ (plense checkas manyasappliuble) I Culture and the arts ! Familylife tr Foodanddrinks E Health, fitness and sports I Leisure,sports ! Personalfinance fl Personal skill development ! Travel

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2.5 Pleaseindicate the extent to which you agree or disagree rdth the following statements aboutThe Asian Mnnager. Stug,y .88

Inforrrative Difficulttoread Entertaining Tooscholarly Practicalfor mywork Boti^g

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2.6 Pleaserate the following design aspectsof TheAsbn Mamger. a) Sizeandprinttype ! Toofine fl Too large ! fustright b) Layout I Cluttered I Neat c) Charts and Illustration I Appropriate to article ! Inappropriate to article ! Confusing ! Help explain text d) Coverdesign ! lnformative and attractive I Unattractive and uninfonnative e) Use of colors in photos and illustrations I Attractive and pleasing I Too loud and unappealing f) Photographs , f| Infonnative fl Poorly selectedand inappropriate 2.7 Could you briefly describe what in general you like and dislike abo,l:tTheAsinn Managel's &itorial content? a) Whatyoulike

Others(plmsespecifu)

How would you jtrdgeThe Asian Manager's artides? a) Lengthofarticle I Toolong I Tooshort ! Aboutright b) Treatment of subjects f| Too much ! Superficialdepth ! About right c) LevelofEnglish I Dfficult ! Over-simplified ! About right

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b) What vou don't like


3.0 AboutYourBusinessActlyities 3.1 Which of the following is closest to your own irb title or

position in your principal occupation? (pleax checkoneonly) Top Management I Board Chairman/Drector/ Member/Trustee fl President, CEO, MD, EVP, GM, Managing Partner f] Owner or Partner I Vice President, Assistant MD/GM I Treasurer, Controller, Financial Officer ! Corporateofficer ! Board,/Executive Secretary I Head of governmentdepartment ! Headofmajorfunction ! CorporateCounsel I Seniorcivilservant I Rank of Colonel/General or equivalent

fl Others(pleaxspcify) Professional in Business

I Engineer, Physician, Accountant, l,awyer, etc. Middle Mnnagement f| Manager, Section head I Assistantmanager,Supervisor ! Juniorcivilservant I Rank of Captain/Mairr or equivalent I Administrativeofficer Z Others/ (plea* srycit'y) Non-supmisory I Salesperson ! Clerical I Technical Which of the following best describes the principal activity of the business or organization for which you work or own? (pleasecheckthe principl oneonly) I Business: Manufacturing Service, Trade, etc. I Professional [aw, Accounting, Medical, etc. fl Government Ministry, Corporatiory Armed Forces,etc. I Education: University, College etc. ! Retired, unemployed, student

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a) Are you a member of the Board of Directors of your company? Yes D DNo b) Do you serve on the Board of Directors of other companies? Yes f] nNo If so, how many boards do you serve on? _ nffil',tof b.rds In which of the following functions would you say your principal duties and responsibilities lie? QleasecheckaII that

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Administration Computer/Personnel, HRD Data Processing Corporate Planning Engineering/R&D Finance/Accounting Maintenance Manufacturing Marketing and Sales Purchasing Transportation Others @leasespecify)

3.5 What is the approximate number of employees in your mtire organizatiory including all plants, divisions, brandres and subsidiaries all over the world? (pleasecheckone) I less than 50 [ 501to1,000 [ 51 to100 I More than 1,000 fl 101-s00 3.6 How many people report to yott? (plase chec*one) f| None n 2s49 [14 tr sG99

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3.7 Pleaseestimate in US dollars the gross salesrevenue for l99l of your organization, induding all planb, divisions, branches and subsidiaries all over the world. (pleasccheckone) I UnderUS$million fl US$5 million to USg10million tr US$1l million toUS$50million

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3.8 Pleaseindicate in what ways you are involved in the purchase or leaseof each of the following products or services in the course of your work (pleasecheckall that apply) fficeEquipment Copyingmachines Typewriters Word processing equiprrent Audio visual equipurent Facsimile equipment Telecommunications equipment Computers Mainframe Mini Computer Personal/micros Trawl Airlines Hotels Car rental Transportation Company cars Trucks & buses Aircraft Bank Seraice Domestic Intemational Others Heavy equipment Insurance Couiibr services Conventions & seminars

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4.O AboutTravel 4.1 How many tirnes did you and other household members visit other cogntries in the past 12 months? (plmsewite in the numberof times) Destinations in Asia-Pacific times Destinations outside Asia-Pacific times (pleaxwrite in) Most hequently visited city in Asia-Pacific Most frequently visited city outside Asia-Pacific


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4.2 Of all the above trips, how many did you or other members of your household take for each of the following purposr.s? (please write in numberof trips) trips For business purposes only trips For pleasure or personal reasons only Combined business and pleasure in the trips same trip trips For a vacation only 4.3 Which class do you usually travel? (pleasecheckone) ! Economy I Business I First Class 4.4 The last time you travelled by air, did you make a duty-free purchase either in-flight or in a duty-free shop? tn flight lNo lYes Duty-free shop I Yes f] No

5.O AboutTravellercChecksand CredltCards 5.1 How many credit cards do you own? (plcasewrite in) fl Local ! lnternational

6.1 Do you or members of your household own any personal computers?

lNo EYes If Yes,whichbrands-

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4 41

TheAsianManager Asia Magazine Asia, Inc. Asian Business AsianMoney Asian Wall Streetlournal Asiaweek ' BusinessWeek j The Economist Far Eastern Economic Review Fortunelnternational lnternational Herald Tribune Newsweek Readels Digest Time World Executive's Digest

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(All answersarestrictly confidentialand will beusl only for statisticalpurpoxs) 11.1 Are you a man or a woman? ! Woman E Man 11,.2 What is your age?Qleasecheckone) tr 4s-54 I Under25years

7.O About Gars 7.1 How many cars do you and menrbers of your household own numbrg ure or have exclusive ux of? (pleasewrite in) @leaselist nwkes)

8.1 Do you serve or drink any alcoholic drinks in your home or elsewhere nowadays? (pleasecheckone) ENo [Yes If Yes, which brands do you serve or drink most frequmtly? (pleasecheckanil write in branils) ! Cognac ! whisky

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9.O About PerconalAccessories 9.1 Do you own one or more of the following personal accessories? (please 2 3+ checkallthat applQ 1

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11.3 Are you married? (pleax checkone) DNo ! Yes

11.5. Of what country are you a citizen? Qleasewrite in) 11.6 a) What language do you norrrnlly use at home? Qlux write in) b) What is the main language in which you personally conduct your daily business?(pleasewite in)

8.2 Which of the following, if any, do you smoke? I Cga.s I Cigarettes n Pipe I Cigarillos I Don't smoke If you do smoke, which brand do you smoke most frequently?

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11.4 How many dependent children do yotthave? (pleax write in)

8.O About Beveragesand Cigalettes

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9.2 Which brands do you use most frequently? (plmsewritein) Watch Pen Lighter

10.1 How many of the last 4 issues of the following Englishlanguage publications have you read or looked through? (pleasecheckall that apply)

tl.O AboutYouand Youl Household

6.0 About Gomputers

Watch P e Lighter

1O.O About Endish-languagePublications.

71.7 What do you estimate to be the total yearly income before taxes of yourself and all other members of your family living in your house for 1991? (pleax incluile all surca suchas salary, interest,ilioiilenil, rant, royalties,bonuxs, profit, allouancu, etc.) [ US$50,000toV5574,99 I LessthanUS$10,000 E US$10,000toUS$19,999 D US$75,000toUS$9,999 I US $20,000toVS $29,99 tr US $100,000or more n US$30,000toU5$49,99 THANKYOUFOR YOUR VALIIABLE AND CONTINIIED SIIPPORT Pleasefax ot mail to: The Asian Manager, Asian lnstitute of Managemeat EugenioIlpez Founilation,losephR. McMicking Campus 723Paseode Roxas,Makati, Metro Maaila, Philippines Facsimile: (63-2) 87792U)


'@ Theflavorof themonth?

TheOuest forPerfection at Proctir&Ganrble By Jolrn E. Poppor President Procter & Gamble bout a year ago, at the lbtal Quality I Forum hosted by Xerox in teesburg, ll I indicated that TobalQuality Jlvrginia, I lwas, fiotrr my persp€ctive,thernootsignificant int€rvelrtion in the wav-busiress that hocter & Gamble has apgoached the that I had se€ninmyalmo6t30yearcar€€r.Isaidthat the signficant impov€rl€nt in ftuncial results whidt Prrocter& Gamble had adrieved over the last five years would not have been pocsiblewqe it not for the applicatiur of Total Quality principl€s. I felt that theprircipl€sof lbtal Oralig had beenernbracedso mthusiasticallv bv the ernployees of P&G beca".e, at the saire time theseemployeeswere so compatible with the unCerllirg frnciple of oru.'Cornpany and becauseour people saw an urBelrt need to apply theseprincipl€ in a mudr more disciplined way in order to achieve our buslress obiectives. I noted the three prhciples or featur€r of Total Qtrdity which I felt were having the gr€atestimpact on our busin6s. L FlEt wa tho urryinwhich it wasb,rhging all of us back to our roots in foqlsing on introving the consumer satisfaction of our bratrds. It was lea.ling us to take a mor€ databased and, I'd add irnagimtive, apprcadr ro improving consum€rsatisfaction. 2. Socod, ras |t|o tEU direction it was providing toadieving mudt moreproductive "win-urin" allianceswith our custome$. _ & t rd, wa $a b.|r3 it was bringing to the uunendous opportunities we had to imFove our r€$rlb through impoving our systems, both intemally and extemally, in a data-bas€dwalaAs partofthis, weweleseeing how the diriilined establishrnentof breakl through obiectives, combined with well prioritized sFatqiiesand plans goingftom the top to the bottom of our organization - was ur €ashingthe potential of our people better than ever before by bettenaligmmt, reduction of r€work and gr€ater own€rship and initiative. lltth this as background I vnnt to take a few minutiesto give you sornee,(amplesof the cbnhibution lbtal Quality is making in the sameprinciple arcasI mmtioned earlier.

IHEASIANI\,IANAGER

First, in Ole ar€a of improved consuner satisfaction, we aI€ starting now to gettheresultsof worldwide surveys of consurnersatisfaction - and .lissatisfaction-oneadr of ourmaior brands,corDared to our maiorrcompetition. I hrs rs a global prcgratr! using standardizrd measues throughout the world, so we can learn fiom our sucrcesses and our weak-

We are starting to 6nd higNy actionable usesfor this data. For example,in Canadaon our maior diaper brand, Pimpers, we have aiscpvtitrl Uraiao*r diapers arirdevetoping a sts€ngtheningimage for health to skiD when in fact,all the teclnical and dinical data show that Pampe'sis betterthan dotlu This haslead us to rcinstate advertising whidr communigles Pamp€trs'zuperim health bmefits for sKln. Dissatisfactiondatahasrevealeddisadvantagesin cErtainparts of the world on the taste of our toothpastesconpared to our b€stcompetition. As you canimagine this is bringing a new level of development €ffort to imprcve lffioduceda vocabulaiy our tastep€rformanc€. An exirnple of a b,randshowing impnovem€nt in consumer satisfactionis Pufb Facial Trssue.I Jehavesignificantlywidmed thegap betweenPuift and the besicompetitor in"tlie United Stat6 ov€r the past thne years. This impovemert is being drivm b}r FiFt, the development ofa dearly foqrs€d, cpnsumer-orientedbusinesssFatqj:yand getdngweryonealigned toit 1/voyeaFago,only ,18%of the categorym€rnbeGindicad what they neededto do to help achieveour strategic gdb. tday, 8,37.do: A kry patt of rfri" stratqry hasbeento apply important tedrnical innovation to the aEas of greatestconsumer neeo. A secondarea of maicn contribution frorr TotalQualityp:aaicesh;beenimprovedcu6ness€sand ap,ply there leadningselsewheG. tomer satisfaction. By customer satisfaction, I,Vearealsousint a wide variety of measur€sof here I am rcfelTint to the people who sell our sadsfaction, hcluding overall acceptanc€, products toconsln€rs-theKrug€rE,theWal yalue impression,dissa-tisfactionprodirct and Malb; the ShopRitesof the world. 'Ibtal packageip,peal. Quality hasinhoduced a vocabulary which we can use, and mo6t importandy, techniques and hrfis Vs,Kleenex ways of thinking for us to understand and dnnge our systems to drive down costs, imprcve quality and impove o r€liability of s€rvicE. Just Like a consumer satisfaction. our a people ar€ starting to measur€ t custoEr€r satisfaction worldwide. Orr pdrcipal b€nch! mark measures customer s€rvicep€rformance. In terms (' of perfectorders; i.e.,an o,rder on tine, complete and billed correctly.Servicegoalsshould

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wlrkrhrveGanuse.andmost [nportanty,tedmlqrcsand wa}sdthlnkftElbrusto undeFtild anddrage or systeflato ddveddyn qudlB ild costs,lmprove lmporc reHilltyof serulce."


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be dear and straighforwand - things we ought -Theto be able to do all the time. factis that when we startedthesemeasruem€nts a couple of years ago, our perfect order rate was an abominable,l0 to 50%. Through the ap'plication of Total Qualiry DrinciDl€s,we are starting, and I would emftrasiie starting, to maf.eiupr progress.One is Sha#s, an account in New Engi:xample -wnerc we have enhanced our servic€ Una systerns.Businessgtrowthfor Pn:cter& Gamble at Sha$/s is runnins at twice the market Fowtll At ourlargest singlecustoarerin the United States,WalMart,wearenowachievingPerfect order rates of 95Vo,we have takm up the number of inventory turns on many of our leading items by a factor of 3 to 5; at the same time rfrucing 6ut of stock,and building volume at five times the national mte. All of this has rcsdted from dramatic dunges in our plarming order processingand delivery syst€ms on a partn€rship basis. Wdre s€eing the same tyPe of P()gl€ss outside the United States.For example,our perfect order rabein Carnda was imprcved h.am4370to 68%in the tastnine monlhs and our rating for overall perfonnancearpng our top twelve customershasgone ftom seventh to fi$t. But we arc not iust looking at overall ratines. We are looking at our ratings for each f,li.tior,ul ato "t d"-" are seeing plenty d rcom for imprcvenmt. Forexample,our distribution and cnstornerservie rating still sees us as only fourth among leading consumer -Droductsmanufactuers, Third, and morebroadly oneofthebigS€st improv€rnentsthat TbtalQuality hasbrcught to6urbusinesstodateprobablyliesinthearea f vealeadytoudrcdon- idmtifyingamairr area where a breakthrough imPtavement is needed;identifying the changeswe n€ed to make in our proc€sses!o achievethat br€akthrough resrrlt And then dePloying a set of shateeies and action steps thmughout the orgarization, from top to-bottom, wittr goodfoiiow-up measures !o chart Fagress and show the way for further improvement.

Wehave a way of refearingto this in BdfevfllePlilt -ts9ol91 w' t#/87 our Cornpany - OGSM - meaning Obiective,C,oal,Shategyand Measures. 7A% DiaperToial DeliveredCosts One good exampleof what it cando ffi% Plant Exp€nse Dlap€r is found in our Irrcducl Supply and Diap€rNegativsConsumerComments U% Mantrfach[hg operations in EumP€, 36% tnv€rtory The obBtive dpsen therE was to im151% Prcductivity pove the lbtal Quality rclirabilityof our 71% Abs€nteeism svstemsand ope!'ationsand thagswhat ProductSupplyChainMeasuredin happened. Over the past 12 months, Morths from RawMaterialfrer€d to 43% ProductCon$mDtion TotalQuality reliability is up 4070;quality defectsare down 107o;and capacity output has inqeased 107" $'ith a dfuraticinqeasein customerserviceand savings and measuernentsto acheiveth€m aPPli€Eto areasoutside of the product suPPly duin. to PEG in the tensof milliors of dollars. lustone quicko(ample -d6€ toour hearts Whags m6t €ncouraging about syste[r -Gt cr.riting. Und; Ed Arzfs leadelshiP, improvenent is simultaneously adlieving frster cyde time, lower cost, better quality; we took the o$ective a couple of yearsago of b.tter ciutomer service- and moving prod- makine a dranatic improvem€nt in our rcetrectivmess.We obviouslv have aluct impmv€tn€lrts faster to the sta*et and rr.titini'rccomized that the strengih of orlr wavs aheadaf comDetitiorr the caliber of the men and fots o" Coirpanv the magnilocahon betterdemonsnaEs No tude of the benefit that the pursuit of Total women *ho pin w. Soreouiting hasalways be€nimDortahtto us. But we felt $at th€rlehad to beamuchbetter systen forcorringatthis for cpnveying information about PEG; for scree,ningipp'iicants;formeasuring treirquality and d\e duality of the i:b that we do h rcsuiting th€m. Frcm this has come an imPortant new aP proach to recuiting, based on Total Quality principles. lt is bosedon Hter und€rstanding ihe n&ds and deles of students and theh xtrools, establishingbrcakthough obi"crives in ternrs of the nunber and caliber of the studmts we seek;eetablishingbettermeasur€s of the draracteristicswe vatue and then hiring apiainsttho6estandads, all with a lot of fuedbacksowecanseewherewdredoingbesl,and apply ''Bi, tho6eb€stapgoadres more broadly.

'ls TotalQualitythe hffi ct.af.- is ltU|e prcg|anof theyear,or pefiapsofthe late'8(band$e'g0s? lts belc pittdpleshavebeen arcundbr sometimead, of couEe,it's beenffi at $e heattof prcgtess in Japanbr a matbr of decades."

upply S rp pnnaprcsb r€cruitin&

we ve made it less of an art and mor€ of a science. We re now moving to apply these samebechniqu€sto imFoving the rctentionof and careerplanning for our emPloyees. t hope theseexamplesconvey the message tlrat tlrd application oi TobalQuaiity PrinciPles is havins t maior impact on t'rccter & GamQuality canbring to a product suPPlysystqr than our diaper plant in Bellevi.lle, Canada. ble's bdin€ss i€sults-- our profits and our iheTotal Qualty effort started competitive edge and our organization --_l there in 1987 with the dePloY- shength. there are manv people who have asked, Shaw'sPeilectOrdets ment of a goal to double the '1s Total and fm sur€ wiU'cir"tlitt.e to ask, in excellence volume bv Dlant's qaze is it the ihe areas of cost, qualitY, re- Quality the latest Program of '80s and the late year, pertnps of the or the and organization time sponse 'ms?" I am certain it is not ln fact, under sirength. l-ast fiscal year, the ptaniadrieved its goal of dou- different tenns, its basicPrirciPles have been blng volume witf, significant around for sornetime and, of course,ils been stride made agairst aI key Per- rieht at the heart of ororg,essin Japan for a foflnanc€measuresasyoucansee oitt"rof d"odes. wli"trotatQuatity istringing, in mv opinioo is a fg€ater level of disciE from the chart top right. o We'rc alsos€eing€xcellmt ex- plire of s:vs6micand ctata-basedthlnking of amples of how the pocess of es' iocrrsonci-tittoing in prot'onmt-tioPrincit a b l i s h i n g a b r 6 a k t h r o u g h 'Dleswdve lons known bobe true. F M A M JdtJ A s o N D For me, ifs'most compelling featuresale obiedives and then develoPinga l1o_N_E lJ plaru tlEt seiof concretestrategiesand

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THEr'6NN MANAGER


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LINCMLN A Jardine GMG Lile Company . BetrerLifernsurance Life.tnsurance_Agency Agency P:Ij}9,:\9.1-93T9lE-lY:Fg F:?.Y:.,glfi:::.:f:P: !i9ll,'^'t'l::9:-"emr Agency.Foundation M:d.i;tllniuranceAgency.MissimLifelisuranceAgency..PreciousLif;tn;ir;;teagei,;r;'1;;;;'rr;l^;;;; L:T!if:1":,1l"l:_.-lq.,t1:tf oncept ' AR Concept' L AK lnsurance lnsurance Underwriters' underwrlters ' Milestone Mllestone Insurance . lnsurance Seruices. serylces ' Gold.en Oold-enAge Age Insurance Ins_uranie Sdrvices.Iniigiiit Services Integrity A;;;;;;;; Assurance Mtalers. Mlnalers. Juanta Juanta Assurance Assurance cltr Branch ' Cagayande oro tsrandh. DagupanCity Branch7 D'"'"; aitB;;;;r': s"t.rCi, City ait Branch B.u;"i S:::,"llT:,1:"-a^T^',.1j'ly _B..ll:,h:,.c1b1 Bacolod City Branch . Cabanatuan City Branch

222Sen.GilJ. PuyatAvenue,Makati,MetroManita Tet.Nos.958926,885336


YAZAKI

. Ifs working. . It carries great potential for continued improvement and application. . Wellutiliz€d,ithasenormouspot€rrtialto moreirlly usethetalentand eriergyofour PeoPE. As we look ahead to the coming year at Pd.C,we expectto make progr€ssin two Particular areas. Ftst, we must rnake good on r.rnderstanding and taking action on the measuremmtsof coruumer and customer satisfactionand dissatisfactionwe-re receivins. We must be sure that we push througl old plans for imrpovernent in thoseareaswhere the indicatorishow we have the need and opportunity for implavement, Second,wemustprovide consistentleadership by upper rnariagrnent to idmtify and communicate those goals that rcquir€ breakthmugh improvements and to r€move systemicbarrissthat getin thewayof ourpeoplds ablity to deliver exc€llmt r€sults. Like it or not therc'sa gr€atdeal of wastein our system in how people spend their time getting work done. Wbneed to r€duc€this. I4ba.lsoneedtoworkhardonbehgslrewe have the systems for sharing the b€st ap prcachesthat come out of our TQ leaming from better understanding and meeting consumer needs; to pmviding better customs satisfaction andiffpovingrcliability For any global corporation like ours, the effectivesharing of c1rrl€ntbest approadrcsis a gold mine, and whoever does that b€st is toing to have a main cDmpetitiveadvantage. I'll dosewith a thought onthesu@of the lin-kbetweer busines and the acad€miccommunity in developing and applyhg Total Quality prineiples. Frcm my perspective,the academiccommunity has two fteplaaeable mles to play. Of course, one is to communicate !o the yolmg mm and womm who will lead our businessesthe principles of Total Quality, h the appropriate fashior! as part of their curriculum. Theother is tocaptl[€, conc€ptualize and articl.date,in an inq€asingly cohetEnt fashior; the leaming and principles which we find are vital to adieving superior r€sdb in our businessorsanizations. Becausetheoracticalvalueofmanvof thee is beirig develTQ PrinciPles;1d aP'p,roaches oped and demonshad in busin€ss€s,eveftas we speak,I am sure there's going to be a big oremiumonbusinesses and academiaworking very dosely totether for the coming years, I

HARI{ESSIl{G THEFUTURE YAZAKI CORPORATION xftootr[t rrrHFtrfllAr0(u5 r3t06+a rcrcnt,urlari|uro i03wrr ru.r0KY0

YIZAKI INASIA

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This anicleuns reprintedfrom Mcrc,:rbeaJJjs, PBG Philippitw' in-Iwusetugazine.

19S2 rHEASIANMANAGERSEPIEMBEF/OCTOBER


Stoking grolvti... thefireof regional

Financial Deregulation andthe Asia-Pacific By Rog$ Ircey Managing Director HongKongChinese Bank undammtal changes are now taking place in the world;s political staqeat a time when ecnnomii changesin-nury counhres arc causing comment and in somealtrars,cDncern.One only has to think of lle brealup of the Soviet Union, the lraq/ KuwaitconJrontatio& the domtums in majty economiessuchasthe U.S.,U.K. and Australii to rcalizethat we aresailing on dloppy waters, and tlvrt -weare not putting total faith in the weather lorecasteE. However;onething you canbesureof. That is, whatever is happening and whatever is to happenin thefuture,wil haveadiecteffect on the financial markets worldwide either on a short-term or lons+ern basis. The free movemmt of capitat around the worl4 and the reasoru behind t}re momentum,-are _co_mplex and take in many aspects which fall beyond the scope -to of this article. What I should like to do is concenhateon what effect or otherwis€ a free flow of capital has had in a number of countries around-the PacificRim, tom a bankert viewpoint. But first some history and some self criticismaboutrny own profession,in which I have beenernployed for 35 years. Bankersare like lemrnings. In the 1970s,it was fashionableto lend large amounts of capital to South America, the Shah of Iran, and minor oil sheikdoms, in the latter caseusually against theguaranteeof therulerorone of his reh:tives. Much of this capital was invested in pmiects that franlly had no chancefor succes,'and economic downtums resulted in large sums !u1ne !o be wrltten off, to the dismai of the bank's shareholders.

Bank for International Setttem€nts(BIS) rcgarding a minirnum capital adequacyfor all ban-ks.This, very fair rcq-uirement,hasconcentrated the minds and has reinlorced the fact that capitalhasacootandis nota hton esspit of cash. _ I make no apology for what hashappened rn the past Arc we ary wiser?fue we going to be more subietive iri our businessirithe-futule? I think that these aspectsrequire very carefirl considqation if wi are to'view the

"ln $e madrushbr new hsiness,newpruducts, somebankspelhapsfurgot tte bcb fortheir existenGe."

futur€, and the flows of opita! widr any cerlamry Firstly,the questionof global risk A[ international Banks,largely becauseof what I have described above, have now a very sophisticatedsptemfor global riskassessrrient'Ihisis also featuredin magazinersiulc}r as Euromoncy and servesasa usefil indicator for theappetile of banks to l€nd inio a particu.larcounil'. Secondly,the questiin of pricins. No; that the costof Sapitalcanbeaccrirately-quantified, many banksare rcfusing tiomakeloanspriced lower that that minimum perceivedto'be adLoslngOu Way equatefor a particular bank to make a profit. The basisof banking rcrnains- to pn:vide Thirdly, the question of term and amount. a safehaven for depositors,savings,to lmd to Becauseof the BI5 resulations r€ffi hoearcustomersrn accordancewith prudent gude_ lier,and the continuinigpoor equitv markets in linesand to provide thesharch;lder wit[ divi- many parts of the woiti -aklirg it ailficult or dends and a capital appreciationin his sha.res. irnpoesible for banks to raise capital, many In the mad msh for riew business,new prod- banks are currently tryine to rcduce their -were baiucts, producing bonuses for slaff that arce sheetsize. lt ioll6ws"thereforethat manv {rc3d1 oyerlard, someban-ksperhapsforyot are chasing fee eaming businesswhich dd the basisfor their existence. not inflate thebalanc€sheetand feware wiling Possiblythis had somethingto do with the to placelargechunksof 6nely priced long-term r€qurements subsequertly laid down by the oeot onto uleu books.

lHE ASIANIVIANAGER SEPIEMBER/OCTOBER 1902

Theseaspecb may have a material influmc€ on the flow of capital in the future. The Rbo of the A3laPaclfrc Turning to the Asia Pacific Rim, if I am con€ct, what implications does this have for the futurc? I do not need to dwell on what has taken place in what we call Asia and the Far East over the last decade.I refer to the four economic tig€rs of East Asi4 South Korea, Taiwan, Singaporeand Hong Kong and four other @untsiesapprcaching ta_keoff, namely Thailand,Malaysd, hdonesla and the peopli Republicof China. China and South Korea, the two larg€st economie in this group grew on averagethree times fasterthan the OileD economie"durine the I 980s.AI eight economicshaveshown thai they canswtah gro*'th ratesof over 77oeach year.At that speedan economvdoublesin size eachdecade.lf this hertd contrhues,and World Bank reports indicate that this is entir€lv po6sible, then by the middle of the 2lst cdn'tury therewill havebesr a shift in economicpower away from Europeand North America to the Westernside of ihe Pacific Rim. Throughout the arc of countries that sweepsdown-ftom South Korcato Indoniesia,thete is a profound optimism that life will continue to get better and a readinessto work exh€rneF hard to ensue that it does. Thekeyquestionis, if counkie haveaccess to morc or less the same technology and the same rEsources,and thev all operate essentiaily free market systernsand iompete on a level playing 6eld, what makes sohe more sucressfuIthan others? I have already mertioned hard work. Thrift and Nationi pride may.be two other ingredients tlEt should be con$oerEcl. The succ€ssof the tigers hastendedto glo6s over the fact that the governmene of drose counEieshave difiercd-in the way they have gco"tagS thgr people to succeed.-Hong Kong is the onJy one-who can clairn to d laissezJaLewhereasSingaporc,on the other hand,hastendedtroeo to theauthoritian rpute. SouthKorea'sinterv:entionistgovernrnenthas conenFated on keeping fotiign compu-"" out and Taiwan's inar"rlcia situcturi of a worKorce of 8.3million employed in 150,000 factoriesis a totallv differeni coirceot_ AI tig€rshave6amed a numberbfiden&rt ressons.


. the prioritv of state action should be econornicdevelopmmt i.e., grcwth in outPut, paductivityandesP€cialyint€!'national comDetitivm€ss. Pesoul(€ poor counhies with irnall dor "rr: marketsian grow oniy if they sell at'rcad . RaPrd 8o$th is imPossible without a commihnent to rnarketsand Private ProPerty. Thiwanhasa very non inteav€attionistSovernmmt whercas in India it is the oPPosite. . Ma*ets do not have to be comPletely ftee. Apad from Hong Kong moot markets in thePacfic Rimarecontolled toa certainextent. But not to the extent of making exPorts lmcompetitive in world markets. jA rchtivelv equal distibution of income anda low taxati6npirlicvmotivatestheworker. . The tigeF slhgb biggest comParative advantageis well educatedworken.

area and globally. Surplusesreached4.3qloof GNP but sinceI 987havereducedsteadily and now onlv accountfor 1.4%.This surplus col. d reduce further becauseof reduced savings ratesin Japanand increasedpublic spending plans in the futue. In addition the Japanese barks are having to addrcss the BIS capital adequacy question referred to earlier which meansthat they will not be as aggressivein writing new loansin the future. They continue to have difficulty in raising fresh capital on accountof the downtum in the equity market. Basedon the scenarioI haveoudined, what are the various Pacific Rim countries doing about financial derceulation? \,\,ide ranging reforms have already occurred in a number of counhiesand the rcgion generaly is taking further step6to open stock markets,bankins industries and other 6nancial service to increased competition and investment. At the same time, governments Dobgt don'o Eibcts To what extmt has deregu.lationand the aresharyeningthe teethof watchdog agencies ftee movemmt of capital been a factor in the to help pr€vent up,setsin the future. The BCCI saga is a particularly s€nsitive one in Hong uernmdous erowth that I have d€€qibed. l€t Kong. Thee parallel bends of dereguJation me say somdhing about Japan. Historically Japanfor many yearshasbeen and imprcved surveillance underscore the the provider of capital both in the Pacfic Rim gradual dwelopment of the regioris financial

servic€sindustry. l4ith Japanesecapital now lessreadi.lyavailable cqmtries need to facilitate capitalinflows and financial detegulation is one way to achievethi5. This impetus also comes ftom structural changescaused by a d ecadeof steadyeconomicgrowtlt. The region has now many zubstantial privately owned companieswho needinqeasingly la€e sums for exparuion. Privabeloansand Bank finance is no longer sufficimt. As a result both companies and govemmmt rcgulators seethe stock market asa placeto raise capital. Financial-rcforns are atso getting a Uooot fromthehugefundingneedsforinfraslructura.l Drotrts in s€veral courtries. Somecounbies iike taiwan are seeking to develop their own government bond markets to avoid exc€ssive foreign borrowhg. At the same time, the rcgion's market Jiberalizatioruarebeing pusnedby heavypats surefic'rn loreign Frticipanis, sudr asoverseas brok€rage6rms and ftreign inv€skrrs. The pace oI liberaliz:tion has vaded with the more developed markets such as Kor€a and Taiwantendiirg to bernorewary offoreign participation than the lessdeveloPedmarkets such asThailand and Indonesia.

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198 THEASIANMAMGEB SEPIEMBER/OCTOBER


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Econonilc Fomula ChanghE It appea6 thereforcthat the &eemovement of capitil in iself, however generated,carmot be seenand viewed in isolalon but rather as one factor in an economic fomrula which is constantly changin& dePendenton the Position of eachcounEy within its own economic and development cvde. By the way of &ample I will outline the effecs of capital movemmt on two mai)r counhies wiihin the Pacfic Rim rnnely Indo nesiaand the Southernpart of China. sq mite Indonesia is a country of 7,10,000 and a population of 191rnillion people,makins it the fifth m6t populated country in the wdrH. Arurual GNP F rwtir averagds3.8uo, while GNP per capita totals US$420.In contrast, Canada's GNP gor*'th averc86 4,17a while its GNP Dercapita totals US$17r00. In the 197G, oil rcrrm,ro built uP the economv and the government of Pr€sident Suharto-experimen-tedwith Pptection and import rcstriction to prctect the fledgling do mestic indwtries. Wi'th the cotlapse6f tie oil Drice in the 1980s,a series of rcforms wele introduced,usuallyby pr€sidentialdeqee.The country was experiencinga Enancialsqueeze, and thi* reforiru lo-etia tarii6, UUetatizea the financial markets and encouragedthe dirnate for investmmt. The resu.ltswere striking. Non-oil exPorts doubled and approvalsfor foreign investnent rosefrom $854rnillion in 1985to $8.7billion in 190. Economicsowth reached7.4%in 1989 As I said at the beginning of ardT .77":tri.-1990-. my paper, people began to seea rcal road to pIOSpenry ' ti t990, lndonesia was the thid largest reciDientof laDanes€foreiF dir€ct inveshnmt U"hi"a ftottg Kong and'Thailand, namely US$1.1billio4 why? Becauseat that timeJaPan saw a rising yen and an urgent ne€dto obtain low coetlabor to of{sethigher costsin JaPan. That is fine for the donor country but what about the recipient?Clearly, an inflow of foreiprl imveshnent caus€sa rise in the money suppty and consequmtly inflation. There is alsoa strain on infrastmcture suchasbansPortatioD communicationand energygeneration, At the sametimebanking was d€lqjulated inOctober l9l8and the number ofcompanie on the Jakartastock exchangeroeefrorir Z+to 139.In 1990the goverunent had no oPtion but to restrictgowth and money supPlyby raising intercst lates substantially,at one stageuP to 97o. Provided this is rcgarded as a short-term mearsrle, many commentators regard this poticy asbeing successfirland the prospectsof I nriiah deviuahon have reced6d.Iietiance on oil incomecontinuesto rcduce,andinflation will reduceto around 7.5%this year.APPlications for foreign invesunent Frojeds continue to be submifted, CorpoEte eaming will be affectedthis year becauseof the squeezeand reduction of qedit. I believe that Indonesia is

an excellenterGmpleof a country where capital flows have bem given lreedorn but also where the authoriti€s have acknowledged quite quic*ly that capital inJlows have to be rcgulated and ocntrolled very carefully if the country is to benefit ov€r the long tern Finally la me say something about Hong Kong or the GreaterHong Kong as someone hasdescibed it. Hong Kon& that baren rcck asthe British describedit in the 1820snow has six million people and a GNP per capita of US$14,00. It hasthe largestcontainer port in the world where there is a container movement every ten secondsand a containervessel mtels Hong Kong waters every 8 minutes, night and day. China, America and Japanare major investoE, and the arutual GDP growth rate hasaveraged5.6%over the last ten yeals and all this on a "barren" island.It is my belief that the Hong Kong Chinesearc the hardest working people in the world. Many of the familiescamefromChina,pennilessandmary of thernar,enowmillionaires.Percapitaincome hasrisen to be the highest in Asia after JaPan Thegoverrunentis aprimeexamPleof onethat is laissezfaire and the only thing fned is the currencywhich hasbeenpeggedsince1983at

LIK$7.8to the USdollar. The stockexchargeis currendy one of the shongest in the world having beenratedearlierthis yearby severalof the USD asencies. If anyone wanted to see an examPle of capitalat work in a deregulatedeconomywith little governmmt interfercnc€,come to Hong Kons. I[anks to the decisionof Deng Xiaoping in the llX0s to inhoduce China's open door oolcv, this hasproduced an arca of economic hldne in the southem Chinese io*tio,*, ptovinces of Guangdong and Fuiian and the powerhousesofHong Kong and Taiwan.This irgion with a population of 100milion, and with a land ar€aappoximating that of EuoPe would becomethe loth most PoPulated areain the world. Hong Kong has always been the window on China and it is now estimad that threemillion mainland Chineseareemployed in factoriesfnanced by either Hong Kong or Thiwanesemonela Hong Kong is where you should at least besin to invest. -Remember within five hours flying tirne of Hong Kong live one halJ of the world's I population.

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.THE 1992 ASIANMAMGER SEMMBEFYOCTOBER


Fromanagicultural to anindustrial economy...

Indonesia 2020 By lbana C. G|rtbrsz Managing Editor

Thecunentbusinessdevelopmenttend in As hdonesia €ntersthe next c€nturv,it will indusbialized cornbies which is seeingmore continue to experi€ne change in the manuof their plants being relocatedto developing facturing and servie sectors]In the nranufacrcm a country that today is str.lllarselv countsies,particr arly in the Asia-pacific re. turing secto{,the number of indwties will dependmt ori agricutturi, tndonesa"dgion, is also e,tpecfedb have a positive effect incease significantly as the contovernment pects !o hansform itseff into a higNy on the r€structuring of Indonesia'seconomy. tinuestoprcvideinvesunmtinc€ntives bohh indusbialized eaonomyby the year2b20. With ib "op€n markef' policy designedbo foreign and domestic businesmen. These According to a counEy scrnado drawn up in atbact forcign capital, Japanese,Taiwarese, per'ls will be offured in a dimate of political connectionwith a projectof theAsian Instifute Koreanand Singaporeaninvesun€ntsarc forc- and economicstabiliw which is expected to be of Manag€rnent,lndoneia's transformation seento play rnapr rcles in the transforrnation maintained over thi 25-year developmmt will be fueled to a significant extentby for€ign of hdonesia from an agriqilturat economyto DENOCL inveshnmt and technology. Serviceindustriemeanwhilewillq.rnqnue This sc€nariowas inccrporated in a pap€r, to Ploliftrate in key Indonesiancities, side by "Asia 2020:A Scenaio of EastAsia in the Year side with the gr,owth of modem manufactu:i2020,"which was pr€sentedbv AIM professor ing concerns.Manufacturins entenrris€sneed "In'Si'arcn hild polltical vvf$ sustained \4ctor A. Lim in the conferen"ce of tha support of suchserviceiid useiesasUar*theAsianManager for theyar 2021' (wThe in& insuranc€,transportatioq telecpmmuniAsian Mnruger, Apri/May/June 1992issue). cations and power il order to survive and Theconference,held inManila, wassponsored 8row. by AIM and the Asia Pacific Economic Cooperation Human Resourtes Developmmt*rc Oontopmart hogrilt BusinessManagementNetwork. To meet tlre manpower needsof a growing industrial economy,Indonesia is e><icted 6 AttleodngFoFghInveotnents invest heavily in its rict est r€sour€e! - ib By the year 202QIndonesiais expectedto people. By the year 2@0,lndonesia'spopulahave developed an orrderly,wel+ductured tion is prcieded to rcach 253.7mitlion despite andsophisticatedsociety.Thiswillbeadrieved theexpecfedd.ropin its population growth rate through the practice of Panccsila,the Indonefrom 2.7Eoat pr€sent bo0.f67o25 vears from sianbrandof demooacywhichshallrcmainas now). Through a massiveskilb d&eb,pmenr the counbl/s political nudeus. a highly industrialized one. pogram that witl be financd by both the guch an orderly society,hand in hand with gove!:nmmt and the private s€ctot this hute sustainedpolitical stability, is expectedto en- Stro|Eu Corglotnenbs popuJationbasewill be fully h"ainedto zupply able hdonesia to athact evm more foleim In the year 2020,the Indonesian busin€ss the work force requirernentsof an indusiriaiinvestors.The governmen! in the meantirie, dimate wi.ll be characterizedby an inceasing ized economy will continue its pr€s€nt policy of plomoting number of stableand firnncially strong€rconEducation and huna.n resourcedevelooinvestmentsthat-contlUrite to expirs ar,a t6 glomerates. These conglomerites wll uace ment shall aim to poduce capable, competeirt the enhy of new technolosv. their roots to the boom yea$ of the latie1980s and professional-manaeers,a hisNv jk led etorig ttristine,fnaonesfi will alsocontinue through the l990saswell asto themergersand iabd forrc and self+ufrcient miedrqreus. to sbengthen its "growth triangle" arange- acquisitionsinitiad by bo0r larye ana srnal- This will be achievedasfollows ment with Singaiirrc and Va.livsla. Unjer s@leentemrBes. . The gov€rnment is e{xc€d to focus on thls an-angement,Singapore anit tttataysia Themaiority of theseconslomentes will be providing technological and vocational broadm their capital balri and 'exporfl' tireir involved in h;inessesthatfrdysupportafullcouses at the secondarylevel.Morc emphasis caprtal tqjether'with their marugdment and blown industrial economy.ttris is ii tine with will also be given to th6 teachingof English at marketingexpertisethrouqhout theEastAsian the govemnenfs thrust of decreasing the this levelregion.Lndonesia,on the oltherhand, prpvides economy's dependenceon agriorlturat- and . Collegesand universities-both private a rclatively dleap soure of manpow-er. oil-bas€dexports, while at the same time in- and public - shall focuson dweloping entse-capacity With lndonesia's huge land mass and qeasing its to €rport highnuality pr€neurial skills neededto start ard run busiabundant hunanr€souc;,itcan readilyoffer finisheil paddcts *trtcn ody an ilaristriajnessesin the manufacturing and agriontural alternative sites for Singaporean and ized country canefficiendyproduce.This fore- sectors. Malaysian industrie. This js-e)(p€cted!o en- s€en industrializ€d economy, however, will . The private sectoris expectedto cpnc€nhanae the Fansfer of tecfrnoto* from more continue to be supported by medium-scale trateon providing manatement d€velopnent indusb-ializedcountrie into Lrdinesia which industries and a stong agricultural sectorthat botheir employees.Trainingcourses Plotrams iscurrmdy implementing a 2tyear industri- will provide the raw materialsrequired by the commonly offered in toD businessschoolsin auzroon Ptagram. counEJ/s factories. the West;hall be made ivailable to comoanv

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IHE ASIANi'AMGER

SEPIEMBEFYOCTOBER 1S2


employees as part of carcer path programs. These coursesshould prcPare emPloyeesto take on gr€ater rcsponsibilities within their organizations. -With the foreseenhealy investment in humanresor:rcedevelopmentaswell asin toPoftheline technology and more efficient proceses, lndonesia is exPectedto Prcduce more sophisticated,functional and indePendmt businessorganizations.Most of the tirgest businessconcernswill be fully automatedand will be nrn by better educad Indonesians, thus, decreasingthe current dependenceon expensiveforeign exPerts.

SukamoandPancasila

philosophical basis for Indonesia, Asia's nationalistactionand for laBestaEhipelagostate, the future reDublic to than 36 is home to mor€ which it was leading. major ethnic groups of principles were deThe are which the Javanese vised in a form whidt the large6t, compising would, he hoped, ernnearly 50% of the nabracethe udty he so detiof s total population. sired." AwarcthatthisdiverUntil his overtluow sity ofpeople would be h 196.5,Sukamo would a hindranc€ to his councontinue to qeate simitry's develoPment, lar ideologies and titles Sukarno, Indonesia's De\rebp|ent tnfras0uctrra for himself. His was the often president, th€ first To expedite economic develoPment, pre-independence nacoined slogans and <enecessaryinfrastructue must be built to suP tionalist rallying cry, atedprogramstorcmind the flow of trade port popirlation mobility and Merdel<t(lr:LdoIndoncsia Trt" &taUtishmmt of much neededinfrastruc- Indonesian's of their and nesiia, independent destiny, of the common hlle will, thw, continue to be a Priority fiee)and thi motto ofthe Among the first was IndonesiangoverNnent. "Unity new republic, Shce much of the counqy'seconomicac- Pczcasilathe'TivePrinFor the Dversity." and tiviw is concenFatedin the westernpart of the ciplesof Statd' whichin"Greatl,eader self-sgled nationalism, particu.tarly the cludes in Javaand Sumatra, ruti6t of the Revolution" and goverrunmt pbni to batanceout this growth humanism (or interna"The Mandate of the Peoplds Tongue," the (or socia.t consent), democracy tionalism), 6y encouragingpnvate businessto setuP oP painfirl erations in the eastem regions. According to iustice and belief in Allah. Coined in 1%5 fall from Dower into ignominv was he freH thi title of Althiugh trumiiiating. and occu r/atiorLt}'ePancnsila durine the laDanese the scenario,the bulk of lndonesia's populapr€sident until I 968,Sukamo had very litde tion is expectedto be concentated in Javaand "pp"ir" i" *,i fnaonesianconstitution and a ;ctual authority and was largely ignored by Sumatn; with 527" exPected to live in the maioritv 'Sayi of statedocuments. Suharto.Aftera shortillness,he Sutumo biographer J.D. Le88e, his successor, wban areas. "Sukamo 190. in providing a died as in his Pflncasrla June saw To dispe$e the courqy's PoPulation and spreadout developmentmore equjtably,the gbvemmmt will put sPecialemPhasison infrastructurebuild-up in eastemlndonesia.This Chinesedominatedbusinesscornmunity.This indushialization program, more irbs will be build-up is expectedto be in the areasof tel- will Darticularlv be true in the sewice sector createdin various bushess sectofs.Neverthe ecommunicatibns,power, transPortation and where financiai insututions facgan unavoid- less,unemployment and urderemployment ableneedto servea wider clientelebase.Thus, will continue to be maio! concerlls. water suPPly. "Go lndonesianfinancialinstitutionsaree\Pected . The inflation rate is expectedto r€rnain govemmmt-sponsored Likewise,the This will rcsul1 ftom the commanageable. and East" program is expected to encouragethe to soon effectthe co-existenceof Chinese privati sectorto invest in minin& fishery and prib mi elementsthrough the inevitablemerg- bined;ffects of the deregulationpackagesand the implementation of a sound monetary lourism in the eastem Part of the country. els of existing enterprises. policv. to is exPected cc€xistence generate such Such to Theseindustries are forccast Produce " .'Gross domestic product (GDP) is exprofessional neededexportsand boostthe counbys export stable, aggressive and highly"new pected to enjoy a cumulative annual grolvth look" orThese business oreanizations. in more equigrowth. They will also result a The tabledistributionof income,particularlyin the eanizations shall exerciseclear and decisive iate of over 5q, through the year 2020. sectors are service and manufachrring comexhibit an overwhelrning PloEusines sense, rural arcas. mitment to protect and achievethe organiza- iected to be the maior contributo6 to CDP tior/s interests,and more importantly, Prcject groMh. followed by trade and agriculturc. Gmwlng PrhEte Socto. Role . Per caDita income is exDectedto morc In view ofthe raprddeveloPmentsexP€cted strategic visions rcquired for lonS-term surdouble. than vival and success. to takeDlacein thecountn/s variouseconomic . The armed forces(ABRI) shall tale on a sectoE the role of the private sectorin hdonenew rolg: insteadof its current rcle of ensurint A Vhr d thc Future sia wi-ll incr€asein importance in the future ln sumrnary, by the year 2020,lndonesia internal peaceand order,the ABRI sha foclls Thus, the Indonesian economy is forecastto extemal becomemore open to encouragethe entry of foreseesmaiorimprovementsin theeconomic, its efforts on improving Indonesia's social and ioliticil fietds. a snapshot of the security. ln essenc€,the ABRI is fores€ento foreign investmentsthat will adequatelysuP protect the national interests, espeoally by country's future shows the following: port the private sector ' . Indonesia'spopulation $owth is Prq insuring that no outside theat becomesbig Businessenterprises,includin8 the huSe economk conglomerates,however,will belargelyowned Bted to declinesharply,thanks to the success enough-topopardize the counhy's bv hdonesiansratherthanbyloreignersThis of its family planning program which is ex- develoDrnent. Essintially, the foresee-nindustrialization ; l resultfrom theinevihble integation ofthe pectedto particularly affect the population of able to raise shall result in a more modem society,without, will, thus be (indigenous) The countrv cultures lava. pnbrnl and Chinese i ' Betweentodav and the vear 2020 the sce- ihildrm who can spend more time with their however,losingthecountry's valuablecultuE and trad itions.-Thistransition will beachieved and who will be befter educated. nario fores€esan increasinf absorption of In- Darents t . within the parametersof Poncasila. a fast-Paced on As the country embarks donesian pribumi i\to the currently

4

IHE ASIANMAMGER

19@ SEPTEMBEF|/OCTOBER


ilanatloment The Aslan Way Its Philosophy, Practice, and Outstanding Personalities By Gaby Mendoza

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Beyolrd Prcfit: Asean Women Managers in Government ano Not-for-Profit Organizations Edited by Victoria S. Licuanan BeyondProfit exploreswhich kinds of women succeedand the influencesthat shape them. The book further discusses issues of particular relevanceto women managers,includingthe female style of management,barriersto advancementand success strategies.

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Ttp Vlrlble Hand and the Developlnt Economy ByVictorS. Limlingan

This book providesa conceptualframeworkfor explaininghow the region's overseaschinese have achievedremarkableeconomicperformance. Victor S. Limlinganholds a doctoratefrom the HarvardBusinessSchool. Ihe OverseasChinese evolvedfrom ProfessorLimlingan'sdoctoralthesis.

A series of 16 essays discussingthe relevanceof modernmanagementprinciples-largely a western, northerninvention-to today,s developing countries.

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Edited by Victoria S. Licuanan WomenEntrepreneursin SoutheastAsia includesa series of case histories and managementcases which focus on leadershipstyles, problemsfacing women managerssuch as overcomingprejudicesand blending business roles with behaviorcommonlythought appropriatefor Asian women.

By Eduardo A. Morat6, Jr. Written by one of the country's most respected proponentsof developmentmanagement,the series of case studies and essays publishedin Strategic lnteNention for DetretopmentManagers Vol l, ilaws on ProfessorMorat6's long and varied experiencein govemment,privateand international developmentagertcies.

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Thetenibletwins...

TitaandRita:TheTWoTigers ofDirectMarketing By lonetto lturaftlo{m Publisher Associate hen I first mtered the field of circulation marketing in 1 ,I knew nothing about seUingor managing magazine subsoiPions. Yet I was faced with the problern of increasingcirculation quicklyand cGt-efficiendyto a levelwhich woutd co;vince advertis€rsind advertlsing aqenciesto direct a substantialportion of their mluch<oveted advertising doilars to the regional magazineI thm worked for. Armed with an opelr.,questioning mind, I decidedto read up on all the books I could lay myhaldson-but foundatthat time,six yeaF aso, such books werc pitifirlly scance. Re' rfinded ofanold chinesiproveib which goe, "Without experience,onegainsno wisdom," I decided to seekout the gurus of cirEulation. And I dirovered that therc were rcally two tigers which must be caught and tamed to be zuccessfirlin expanding a magazine'scirculation. I call th€m Trta and Rita - the terrible tvvins. Becauselike real tigers, they cannever rcally be tarned; they can never be Fnedicted; thev can never be taken for granted. to propetly intoduce y6r, to the terrible twins, we must fiEt discuss the two main sorutesof magazinesubscriptiors: direct mail and direct+o-customersellin& or Drc. DI|!C'I Mall Direct mail - often referredto asiuJ& mail - is the mo6t common sourceof paid circulation. It is alsoajr exDensivesourcq The costof selling the subscripiionalnmt alwaysexceeds what the subscriber Davs. Becauseit is expensive, it is impordt'to zerc in on the essentialel€!'n€lttsofa gooddirectmail campaign and msure that thev work effectivelv hcidentally, we'in media use DM despite its exD€nsebecauseadvertise6 are inter€sted in paid circdation. And we publishen are intirested in advertisersasour primary sorlE€ of income. Obviously,the economicsof direct mail vary by product and indusfy. No mafter what industry you are in, however,there are three essentialsin good diect mait list, offerand package.ThelateEdMayer, considercd the dean of direct marketing for "4O.()-20mld' for many yea$, developedthe This rule implie in direct marketing. success that successis ,10%dependenton the list - or

reachingthe right audiencefor your praduct. The next ,10%depends on your offer - your blend of the four elemmts of the marketing mix, i.e.,price, Pladuct, placeand promotion. The last 20% is the package, which covers qeative, postageratesand design format. The tbt" JamesThomtor! fourder of Mailing Lists(Asia),Ltd., oneof the gurus I referred to, arguesthat the most critical aspectof any dircct mail is the quality of the mailing list. What should be an iresistible offer and an

uDircctmailis the most oommonsouloeof paid

it is alsothe circulation, mostexpensive.Thecost of sellingthe subscdption

almostduurysexcds nfiat tte srbscriberprys."

award-winningpackagewill go to wasteif you areselling ballet shoesto truck drivels. Before you start selecting lists for your diect mail offer,firstdraw adearpictue ofyour audienc€. And the b€st way to do this is to look at your Dresentdient base. Pubtishersdo this by conducting rcgular subsoiber sr.Eveyswhich tell us the ate, income level, sex,educationalattaiffnent, buying habits,readingpreferences,frequencyand mode oftravel, and many more imPortantbits of information about our readers. We also caDhre information about our subssiben at ttr6 time they subscribe,suchasthe sizeof the company they belong to, their pooition in the organization,evm the type of cad they usein the subsciPion. We track how many times they renew their subsciptions, whetheror not theybuy other PIoductsoffercd in the magazhe, what kind of Producb they

buy'AtThe and how often they buy. AsianMarugu,editors regularly interviewsub6cibersoverthetelephoneorinvite them to Foup discussionsto stay close.When you have attained an intimate understanding of the psychographicsof your market, you are r€ady to s€lect lists which best rEtch your ma*et. taFet -I{her€ canyou find Boodlists? The easiest way is to contactlist brokers who have compi.leda menu of lists available with a descrip ion ofthe lGt.the selectionsavailableandth6ir rat6. lf you arc doing a regional mailing in Asia, you can go to esiablished list brckeF suchasMailintLists (Asia)Ltd. in Hong Kong and Olfs International Dr€ct Mail Pte. Ltd. andLMAinSingapore. lf youaredoingalocal mailin& you can apprcach a local list broker like Yes! Drect Marketing. Therc is a big advantageinusinglistbroken sincetheyknow whidrlists arebeing rcnted,how manynarnes have been rented, and how oftm they have beenrented.This information goesa long way in revealing whidl lists perform well for you. Another source of lists is Published list dircctorie . For example,in the United States, vou can trv Drect Itliil Lists Rate and Data 3ervices,abook which lists ovelt0,000 differmt mailing lists. Thereis a also a monthly newsletter called Publishen Multinational Drect which qivestist update on whatlisbare ursentlv available. necmttv, pVfO puUtislea I t"r,t "lt"a 'c"iae to Mul'tinatio;l trrcmotion Lists." You canalsogo to list ownels dftect. This is particularlv usefr for compiled - or nonba;a - rcs, since they are wuallY demopgaphicaly segmmted best. This allows you io ti" ^o16 pt6"i* i" selectingthe quality of names you pucluse. For examPle,you can ask for selectionswhich b€st suit your target market, such asge raPhic location,Position, type of business and size of the company However,compiledlistsareoftenlookeddown upon astlrey are not paid rcspons€lists. Paid responselis-s are eenerdly piefened becaus€ tn& nai.,iarrals-have d6nionstsateda willmail inmesstomakepujchasesthoughdit€ct "You need noi limit vourself io the cut and dried soures, Creativiiy is also imPortant in makint list selections. I know of a magazine which drew excellent r€sponserates from a supermarkefs hst of shop-penwho filled up miry formsin the hopesof wirming a car.And

i

1992 IHE ASIANMANAGERSEPTEMBEFYOCTOBER


l

of anoth€r maBazinewhidr mailed to nanes picked out of the telephonedirciory in oneof the morc prqSressivepovincial cities and rcceived unheard of rcsoonserate. Fmally,youcan indr:aseyourown list bank at minimal cost by asking for rcfeEals ftom your pr€s€ntdimb. Also, p|Iospecbwho are not pr€pard to purhase yourFoductbutar€ inter€sH in Beltingthe premium-thegift-

and that there was a market for their product They_decided to goagainsttlreoddsaridpriced it at P 20.00. All 10,000copieswere soid out within the week! In dir€ct ma4 to establishthe terms of the offer you must look at the competitiorl lnow your co6ts,and then testwhat dre qnrket will bear. Ln the magazine business,Dric€ stsucturesareusua.tlylow, which makes'dlecf rrail expensive. At a 1% tesponserate, a $400per thousanddirect mail cannotbe paid for byihe $36_pncetag of a one year su&iption, especially since you still lrave to pay ior the premium and the printing and-deliverv oithe magazineseachn ronthi ttowever, bybfiering 2-yearsubtqiptions at a 107.discodlt insteaA of l-year subssiptions, you at least hdve a better than breakiven proposition. Another wa_ynragazine-ctculationrndndtels maxe ar offer lnterestingis to compar€the savings of subEqiption pri-cesto niwsstand coverpric€s.Couple savingswith the plorruse that the copies wiu now be delivercd to the

It is also important to consider local curr€ncy options. It is much easierfor a plwpect to takean offer whidr allows him to pay iri his local curency rather than in Ud <io[ars. However, it should be urdeFtood that sorre countries in the region continue to place restrictions on the triding of foreign eichange. In the early da1s, we-were fa&a with [re poblem of receiving checjcspayable in Indonesian Rupiah or Thai Oatt and teaming Uut Ft y.r" qtrF riti gt"&y giveyoua iist of menos ano Dusuress assoclates. our bank in Hont Kong rcftrsed to ac€€pt Ihe Oftr. Here, the four elernmts of the tnem. forturutety, tre c1irrent trena to*aid "ynkqg mix come into play - prcduct, dercgulation of forerF exchangein the region pric€, ]e,plac€ piac€ard ard prcmotion. has laryely rernoved this obstade to effefuve tttthoa&rt YourFoduct or servic€must DM campaigns. & Wcehtd \ercefuet b& tobe dtfrercntfrDm tom other oth€rftems items frp Pfu. '?lace" in dir€ct mail rcf€rs to availableinthema*et. Ihekeyispoception, the distsibution system or how the prospect not actual differcntiation. Youintlst con-vince will hale to interact with the seller iri plaiing your Plcpect thatyourpoduct/service is the the order. This usually mearu the ord& formi bestthereis ard that heshould buv it zorufrom It is necessaryto maketheorder form dear and lrgri. Sinc€the Frospectcannot actually seeor easyto understand.Providing localaddress€s touch the poduct you are offering, ydu must for order taking and local-telephones for elirninateerroneousperceptioruwhileaeaong questions makCit easier for the i:rospect to PGluve Perc€Puons. hand over his money,and reduce d,refiar that For magazines,it is important to beconsidhis order and cheqrie will eet lo6t in the mail. -poor ered ajr exlErt - or authoritative soul[e - in Considerint the relutation of some yourfield. At fft€,4sianMaruger,wergittor(r countries' poGtalservices,this may be a very this by our associationwitn tfreasian tnsUtute unportant factor in securingthe order. ofManag€ment,its pofessors and specialpru There are many promotional methods gnrs such as the ti,tanagernentei,arUs i'ro availableto magazinesubscriptiondiect mail. gram. For example, tliis regional awards Some of the more widely uied methods are prograa - which outstanding sweelxtake offers,contesb Pr€rniums which companiesin the field of managem€nt- (l) qclea-e a.senf 9f urgmcy to ac'. Rudcrs DiFst detnonshatesregular inberfacewith Asia,stop and Asrlz-arei< have specializedin sweepstake aorrpafles, e) povides first-hand knowledg-e offers. Irze recentiy conducted a contestof theseorganizationsand their management, driven direct mait cirnpaigr which offered and (3)reachesmore OranI million consumers freetrips to and seatsat the SummerOtymprcs and businessmenthrouth a rigorous nomhain Barcelona,Spain. the difficulW wiih such tion p'rccesswhich involves regional adveroffercis therenewalfaclor,Thesulrcribqmav tisernmts and direct mail. take the offer becauseof the prizes offerei Another common fear of pospective 'wiU subrather than the product iself; and will not scriben is the lmgth of tim; it take to renew unles offured a similar opportunity. deliver the product. This canbe addressedby Prcrniurnshave run the gamifof cornmerthe assuran'ce of air mail deLiveryor stamprng cialgoodssuchascalculatori,atarmaocrcana "rush" on the fomr But the best blairkii havel bags to paper-basedprcducts such as assura.nceis the unconditional guarantee. booksand reprints. I have hied books,calenPromising to return payment for a dars,and frameables,and have fotmd that the undelrver€d issues,no questionsasked if the doorstep - eliminating the frassleof looi.rng bestr€sultsarcachievedwithcondensationsof subscriber cancelsthe ordeq,nrnoves the last for the magazineat the newsstand- and thE managemmt book which deal with ,.howftars conceming value for the puchase. prospectis hooked. to s'. This worked becauseit fit the market For bestr€sults,exiol the product's benefis Paymenttermsalsoa-fu the perceptionof niche targeiedby the magazine. rather than its featur€s. Tall about results. A the faimessof theprcducfs price. By rcducing Asenseof urgencycanbeaeated by setting frequmtly used line in nragazinezubscripion the risk and miking it easier to pay a time timit requiring prompt action. We d6 'Just $ campaignsis: onegood idea eachnionth ulstalrnent, proopectsmay be more quickly this a number of ways. One way is by telling is worth morc thar the annual zubssiption.,, convincedto plac€a subsciption. This canbe the prGpect tlEt tft otrer is eood oilv if thi Ilra Prbe, The price at which vou sell the donein severalways,suchasa fteeeial period, order form is rehrmedwithin I 4daysoffuceipl. magazine_isalso_criticalin managing the per- bill me later option, money-back guarantee, Another way is to statethat the off;r is the bast c€ption of its !"lue. Avoid the zuirmaiket installrn€nt plan, or qedit card option. How- ever made and that it will never be repeated. "$23.95." discount mentality of Iistead, try ever,it rsimportant to fac-torin the risk of non- New subscibers canbe offered a chartir subpricing the quality product at 923.50or 924.00. payment Sone rcsponsesto dtect mail may saiption pric€. Aborrt-to-expire subscriben Whm one magazinewas first laulched in the behigh becauseof tlie "no.risk "Iast xrception,, on canbe senta Chanceto Subssibe" letter. Ph.ilippinesI I yearsago,most magazineswerc the part of the subsqiber,but tlie na'response One neat rnethod that we find work is sendretailing at f5.00. The founders conducted a Ete, after all the receivablesthat can & coling subscribers the cover of the matazine market suwey and most r€spondentsadvised lected are collected,Eray show that the cam- (without the inside pages)iI they still havenot them !o price the magazinein the sanrerange. pai8l was not prc_fitab6after all. A cashup renewed. This usually galvanizes them into The found€G felt that they had a good prodrict ftont offer mav sdll be tlrc bestbet. action. Two months befor€a price incease, we

',Asenseof urgencycan

be crcatedby settinga

timelimitrcquidngprcmpt

aclion. Onerrvayis by tellingthe prospectftat the oilferis goodonf it$e

oderformis rctumed

within14days."

THEASIANMANAGERSEMMBEFI/OCTOBER 1992


t.

s€nda letter to our subosibersinforming them of the impending price insease. This prcmpts then to take oui in early renewal to lock in clrlrmt pnces. Iho hst 2O9L This is the forrnat design of the dlect mail piece. Therc arc severaldifferent ways of pa'ckagingthe offer to catch the attenti<inof the reader. Sincemost diect mail piecesare given only a few secondgat-most lreforethe irospect airides to rcadon or thrcw it into the wast; paper basket,the designof the packagebecomesimportant. Therc are many iourci oi aesig", an i oneway to keePab,r€ast on as of what is avail,ableis to Dut vouself -This way, you many mai.tinglists as you can. will ionstantly beon the receivingend ofdirect mail and will have a ready supply of designs. Youmay alsoget a lot ofcomPlaints ftom your seqetary: One barly decisionthat must be madeis the een€r'allooi of thedircct nrait piece.Whilea'{iq1er, glossy direct mail pickage may be visualli atuactlve, it may iose o,rt trorriUty compahd to a lightweight, 2-color Package onceyou factor in the tesPonserate veFus the total packagecct. Aird now. I would like to induce the filst tiger I have faced. TIIA: TESTING lS THE ANSWER. Given the high mFy cct barriers of direct mail, it is important to continually test to imFove its profitability. Therearetwo ways to test, The filst is !o lest one elemsrt at a hme against a contsol. The second is io test an eitirelv new approach. In drefirst iiritance, you must fLst develoP a conhol packaqe. This is the dircct mail packagethit has-workedbestfor you historicalv. Youcanthen testoneelementat a time to dairmine whether a changecanlift rcsponse and thereby improve Profit contribution. An examplewould be price testing. One offer can be for $ gs.m "es"s another for $ '15.00 All other elementsof the packageshottld remain the same - copy, colo1,layout, format, Premium, etc. In the second instance, you can test an emtirelynew dirrt nrail aPPraadragainstthe controi package. The difficulty with this method is that whetr one Packagewins over the other, you arc not sute why. You cannot pinpoint the exacteleurenb which causedit to be successh . In direct mail,I havefound that oPinionsdo not count. The r€sponserales and the Prcfit andlooswilldearlypointtothehterPackage. ln testing, there ale some tried and true conceDtswhich should be followed. One is to keep recoFdsof what is being testedand what resultsareachieved. To do this accuratelyit is necessarvto code each test element. when more than one Ustis used, code the rcsponse device to determine what list works best. lt is al5o important to back tsults over time. Esiablishine when the filst responsecomes in, when the"mid-Dointis achievid, and when the mapnty of the;e6Ponsesar€r€ceivedwill helP rl8

you forccast r€sponsefor future camPaiSns. Tracking list per{ormancewill etablish your "list universe" for the nextcampaign. Mailthe entir€ test at the sametime to ensureuniform conditionsforthetest. Testand rctesttoensure that the lift in rcsponsein not a simPle fluke. Keep on testing. And discovering the way to higher profitability.

Salllng Dhectto Customer

The ouickest wav I have fqund to inqease paid clriuJation is-to appoint subscipion agenciesto sell tlrc magazine to PosPects. H'owever.therewereanuirUer of nuiutd t naa to over€omebefor€agenciesstartedto actively the masazine I previously worked for. Dush ' The 6rst ;b6baclewas lackbf krowledge. "train" them Mo6t agmcies tire sa.lespeople, for one?ay, give tlem a product broctrure,teu them what their comrnission and incentive structue is and releasethem into the world. Armed with a catalogueof magazines,sales people tend to sell magazinesthat have e6-

"ln dircctmail| havefound that opiniomdo not

count Thercsponserates andprcfitandlosswill clearlypointto $e better package."

tablishedbland namesand that areeasily rccognizable by prospects, such as TIME, DtSest. REsder's NaDsuJeek.and I found that the magazinewas sold mainly becauseit was the lowest-pricedamongall the intemationalpublicatiorscarried. Ratherthan leavethe sal* catl without an order,the sales personsold the maqazineon price. To corr€ct itris.t preparedprod-uctknowied gebrochules, "i"it"i the ".tticripio" agenci*, and spent hours trainine and inieracting with their sales people. I wai told that I wis the very first represetrtauue of the pubLshe$ that sales piple had evermet and soI left an impression bn them. Armed with knowledqe about who the magazines reader is, whaihe wants to read, wlat he can read in the magazine and how to sellit, thesal€speoplehad a Hter story to tell.

The secondobotadewas lack of pubtisher support. Sal6 peopleareeasilydirouraged if tniy sell a magizlrie only to beat the receiving end of comp[ins b.ca:,rseof non-receip oi issuesor premiums or late delivery. It became evide,nt immediately that tiShtming uP of backrcomoperationswasnecessaryThisl did by providing subssiption agenci* with preniil.i- sto.L"r" tt ut ttiey coutiaeffea immldiate delivery of the plemium. We explained how an order was proc€ssd and what the maeazineprintingschedul€swerc. This taught the-sale ieens not to prcmise impossible deliveries. ftegave th" aginsattd zubscriben brochuresondnrice, sothat they knew who to ca.tlin case of problems. By removing the neSativeelements,we w€re ableto encourage salespeople bo sell the masazhe, confident *ut tliey i,vould not be at th; rcceiving end of complains. lie third obstade was keeping the business. Moot publishers view salesa8€nts as competitors, especially when it comes to re' newing subscri'ptions: Irr5tead,we h€at the agmci"esas parLrers. We introduce them to ditabase marketine, and teach their sales peopteto keep eack-oftheir cnslomersfor the furfose of cnirs-seUingother magazines.This way we lift the agenb' income, and we oPen rtre doors of their in-house lists to our magazne. As a r€sult of these charges, subscriPtion agenciesheat The.AsianMmuget as a naipr Droductinsteadof iust one of the tide in their iatalozue. ,qna tnG brings me to the second tiEEI i RITA: RECRUffMENTTls THE ANSWER Given the natwe of the direcl-to-customer selling business,tumover among sales peopleis very high. Agenciesconsistentlytum broei,rp to 5bz" of thfu salesione each year. This nieans that we must continually trah thensahs peopleto keep TheAsiaflMtruger at the forefront of their conriou.sness. And there you have it - the s€cretof successin dircct n-railand dir€ct to customersellins - tamins the wild beastsfita and Rita. Cintinually tLt your diect mail Packagebo makesurethat vou havethe bestlists,the mo6t attractive offer, and the right package for maximum r€turns on your investn€lrt. Acwidom thr,oughexperience. auire ^ Enluncr proepeiG foisuccess in direct to customer sellinq bv showing your intet€st ln the reoole who-seliyour proaia. t'leet *rem, shai<eti.reir hatta", show thern Orat ttrey are important partnersin buiiding your business. Neit, proviae them ttre tools they IEquie bodo theirj6b: knowledge aswell asPackageTNrd, remove barriers to success:deliver on the promises vou ask salespeople to make. ' tamn! ttre Ueass doesn't guaranteesucctss. They may still tr-rn on you - probably when vou leasi expectit. But it do€s substantalv dnhancevoui dunces for success- and sunlirrine long enough to becomea grrru oI I thesetec[niqries in your industry.

1992 lHE PSIANMANAGERSEMMBER/OCTOBER


, @ superachiever... Asia'snewest Southeast

krdonesia andItsLeadins MoveForwald Companies By Xln Gatbodon AssistantManagingEditor I n Asia, Fosperity is trick| ling downwards. The sucI cess of Asia's dragons I Singapore, Taiwan, Hongkong and South Korea - has inspted the govemments of Malaysi4 Thailand and lrdonesia to build up their manufacturing and export sectors substantially.While Thailand and Malaysia are clearfavorite and well ahead, bureaucraticand chaotichdonesiais fastcatchingup. In the hecount{/s countq/s economyhasperlast few yea6, the formed well and, happily, investols - both domesticand international - are keento Dart with their money in Aseans most populbus nation.While Thailandand Malaysiastillbring in the lion's share of Japareseinvesftnents, Japan'sprofligacy has not b'?assed Indone

still moving forward at a Iate of which, says one political columnist, "most countries can only dream."

R63llient lndonesla Among the six A,seannations,nonewasbetterprepared than lndonesiato dealwith the worldwide economic downhrm resulting from the Gulf War. While the rest of SoutheastAsia, particularly the Philippines, felt the squeezeftom the surge of oil prices worldwide, the oil-rich Indonesian economy "received a strong Bank Ball: UPtothemlnute Intometbn. boost;" a suddenreversalfrom the situation in 198d9, whm weak world dustrial policie, among them the shift ftom price for cmde oil plagued the counqa basic commodity exports, the prcmotion of The'80srccessionwascathartic,forcing the competibon among industries and genuine Suharto govemment to make mapr policy effortstowards deregulation.Reformsinclude changesand initiate a program of economic the simplification of customs procedures,the reforms aimed at liberalizing the econom). reduction of import tarif{s and the removal of 1bday,very litde of Indonesia'sgrcwing pros- duties on irnports used to prcduc€ exports. sEl. Uberalization of exDort conhols has been In 1989,Indonesia had app,roximately0.8 perity hasto do with inflated oil prices. In fact, percentof total Japanesedir€ct investment in the entire complexion of Indonesia'sexports vigorously pursued. For instanc€,most expor haschanged. The country licenseshavebeenabotshed. Export bansand contrast to Malaysia's one is now much lessdeperrd- quotashavealsobeenlifted. As a rcsult Indopercent and Thailand's PT Aqua Gol.len Mlsslsslppl: ent on oil: the percentage nesia is pnrbablv less vunerable to volatile two percent. By the filst Succe3s In a bottle. share of oil and gas rev- world prices than at any tim€ in its history half of 1991, all three enuefell ftom 68.6peE€nt Perhaps the best examDleof Indoneia's countrie werc well within in 1980to 39.1 percent in new-found entrepreneuriil spirit may be 0.5 percent of each other 19'19. found intheSalimGroup'srcc€ntventurewith with Indonesiaat thelower Much of the country's Singaporeto develop tlie tiny island of Batam end with two percent of e c o n o m i c g a i n s a r e - iust 30minutes boat ride away ftom Singatotal investments, Malayoccuring in non-oil ex- pore- into what onercporter calls "a floating sia with 2.3 % and Thaiports, particularly manu- factorv;" SoutheastAsia'sown Guanzhou. land with 2.5 %. Total Known as the Batam hdustsial Corporafactures. In 1990, investments from Japan, lndonesia's non-oil ex- tion (Batamindo), the venture is lO peircent Asean, the NlCs and the ports grew by morethan 18 Singapore-owned. The Ernaining 60 percent United Statesamounted to percent, amounting to is owned.by Liem Sioe long's Salim Group, US$8.4 billion in 1990, US$18billion. The contri- oneof Indonesia'slarget (tie Group accounts nearly twice the sum of bution of manufacturing for approximately five percentof Indonesia's total investmentsfor 1989. and servicesto lndonesia's GDP) and most progessive firms. Batamindo More encouragingly, GDP increased signifi- will prcvide custom-built factorieson 3Gyear thanks to its sizable recantly ftom 10.9 percent leasesand secue the necessarypermits and servesof oil and gas,Indo and 36 percent in 1980to licenses, tabor will cone ftom lndonesia nesiais the only country in 19.1percentand 39per€€nt where it is in abundant supply. SoutheastAsia that has a respectivelyin 1990. Although this decadehas been one of astrade surplus with Japan. Like Malaysia, a large tonishing pl%rcss and optimism - for the Although growth has part of the counq/s suc- future seernsassuled - Indonesiansshould slow€d somewhat (from ' anenviable7.0%in'1989to cess can be attributed to not celebrateiust yet. The questionof governreforms in trade and in- ment still remains. lndonesia's Dr€dictable 5.5%in 191),lndon€siais

1992 IHEASIANMANAGERSEPTEMBER/OCTOBER


economic environment has been cmcial to developing capital-intensivebasicindustries. Investmentsin theseindushies arc lons-term understandably risk-averse and executivesare when thefutur€ appearsevenrcmotely doudy or uncertarn. Like Malaysia, and until recently,Singapore, Indonesia has been nrled by a single authoritarian administration since Sukamo was toppled in 1965. In recentyears,Indone. sianshave beenmuch more vocal about who succeedsSularto, whose Golkar ftarty won handily in the Jure elections.The quality of central leadeEhip in a nation fragmented by lingustic and ethnic loyalties is increasingly cmcial in assuring a prosperousfuturc. 'The range of achievement,"Asian specialistJohn Badgley hassaid,'1smost dependenton political fortune and eenius." In thelasttwo decades,Suhartohascharted Indonesia'scourse,"rarely flinching from taki n g t o u g h m e as u r e s t o m a i n t a i n maqoeconomic stability," saysa political observer.As in Malavsia and Thailand, the concmtmtion of wealth inthe Chineseminorityalthough the Chinee constitute mercly five percent of the total population they conhol apFoximately 75 percentof corporate assets - may yet have a deleteriouseffect on longtermeconomicintegrationand maybea source of underlying tension in the future. Despite thes€problems,Indonesia'sresiliency- and its confidencein its ability for further growth -.remain strong indicators of continued de. veloDmenL As elsewherein the rcgion, lndonesian companiesaretaking the greatleapforward in competitive quality of products, s€rvicesand managementpiocess€s.This month's issueof TheAsitn MMtrger examinesIndonesia'smost excellmt companies; the winneE of the 199.1 ManagementAwards.

General Managemont 7f Aqn Go,.bn Ml&slss,ppl Althqugh bottled mineml water has been on supermarketshelvesin the west for morc than thr€edecades(and ouncefor ource prob. PT Wasklta Karya: Sound inenclal pollcles,

E

ably costsmore than a bottle of cheapwine i& say,Fnnce) it is only in the last 10 years or so that mineral water has begun replacing trusty boiled tap water in Asian hotelt r€staurants and middle- and upperclasshomes.SowhenPTAqua Colden Mississippifilst begun bottling mineral water in 1974, it was capitalizing on an idea that waswell aheadof its timeEvm today,most of PTAqua's l3Tcompetitorsar€small-scale home industries.Among local producers of mineral water, only PTAqua investssubstan- BNKBN: Sproadlng the wod. tiallv in researchand develoo prcducesits own plastic botdecontaineD. Bement, advertisina and distribution. h the last decade,the company has man- causepackaging constitutesan estimated 65 aged to generatewide acceptance(it has a 70 percentoI total poduction costs,PTAqua has percentmarket share)for its Foduct through lowered production costs considerably and savlymarketingpttchesand patience.Sayslta hasalsoeliminated theproblem of middlemen and suppliers. Sin&-thecompany'sinceptior! the number of factorieshasinqeased ftom five to ll and manufacturine facilitieshavebeenestablished in neighborindBrunei. What of thefuturc? "In the next few yea$," says Prcsident Drcctor Willy Sidharta, "we hope to inqease Foduction caDacitvftom 365milion lihes in 1992to +gs miilion litres in t93. We will also widm our distribution network and set un a customer rclations department. PT A$; setthe hend for theentirc industryand I am confident that in the futurc we will continue to do so"

"AsIndonsiagets

dmvmintothe rcgion's tnde andeconomic oftit. modesof communicdion andtEnsporthave hadto become moreefficient."

InfomationTechnolo$l

Thaher, director for businessoperations, "In the filst five years,PIAqua lo6tmoney. It was only in our fifth year that we broke even." The produds sheerworth hasalsohelped boo6tsalesenormously.Saysoneof PTAqua's directors, 'We sell pue, hygimic water, and although a Sreatnumber of Indonesiansstill rely on tap water, as lifestyles change we're slowly winning advocates. Ir the'70s, tourists and Westemexpats comprised our onlv market." The company,which has dealin8s in Australia, Europe, the United States and Asia emDlovs approximately 4,000people in Ihdonesiaand around the world. At pres€nt,the company exdusively producesbotdedwatet,but Thaher says that in the future, PT Aqua may include sparkling mineral water in its range of prcducts. A few years ago the company expandedinto packagingand now

8d (Hl The 191 award for InJormation Technology went to Bank Bali a venerablebanking chain with branches in the Asia-Pacific, Europe, North America and the Middle East. During the period 198&190, grcss rcvenue grew from US$8.63 million to $19.53 million. Averageretum on salescame to an impEssive 40 percentfor the sameperiod. The bank employs dose to 3500 people worldwide. In mid-1989, one year after the Indonesianbankingindustrywasderegulated, BankBali beganto investheavily in IT under a five-yeardevelopmentplan designedwith the help of Andersen Consulting. In 190 the information servicesdepartment, originally staffu by 20 employeei, erDandedto indude morc than 100personnel. iriow h its secondyear,the plan his put into place numerous application programs. Among them: the CardPac Credit Banking System;MDAS Banking System,Executive Information System; Computrac; Chase REALM Systemand the Jack Henry Associates0HA) RetailBankingSystem.Banl Bali's newestacquisitionis theSAPFinancialSystem which is currently being us€d as the bank's branch-wide generalledger.

19S2 THEASIANi,4ANAGERSEPIEMBEF/OCTOBER


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Local Area Network (LAN) are also used to handle branch delivery systems and arc connected to the headquarteF' data center' Ten branchesand three;utomatic teller machinesarc directly courccted to the datacealter usingtheJHA aPPlication.By theendof 1992, Bank Bali hoDesto have connectedover 23 branchesin Jikarta to its headquarters. "The role of II," saysone banking executive, "is to securcup-tqthe-minute information for both manigement and Bank Bat's ostomers. That managementreceivessPeedy and accnrateinformation will be rcflected in decision-making.And becausewewill beable to maMge deposits, loans and other services more efficiently, IT will also dwelop our customer's confidencein us." Headds:'Themdresultof everyITimple"is mentatiory" he says, increas€dProductiviry Our main criteria in choosinSProiectsis inqeasing each departmenfls and each emplovee's iroductivi-ty while at the same time haintaining the intefuative Possibilitiesfor IL Forerample, we've first chosenhoexpandour network 6f branche. Despitetherc 6eing too few personnel,we've managed to rctain the samenumber of people,spead them out and Erakethem work more efficiendy through extensiveuseof IL"

D'evelopmert Management Wdr r(@ilna6,, lG,MEa Pf,,rcrrc a N'€hnal (Bt$Bil) WhenDr. HaryonoSuyono of the Indonesian Family Planning Coordinating Board acceptedthe 191 award for development managementat the award ceremonies in Jakarta, he was subiecd to gentle ribbing from the six otherwinnen. Throughoutthe entire evmin& BKKBN was the target of slighdy risque commmts. Suyonocan afford PT Telekom: Outstandlng cot|3umel 3€rvlc6. to rcmain sood-natur€dabout t h e s n i g g e r i n g b e c a u s e B K K B N ' s cent are sold at heavily subsidized prices), consultations and actual contlacePtive servachievementsarc not to be laughed at. ln the 22 years sinc€its inception, BKKBN icesinduding IUD implants and sterilization. Since190. BKKBN hashelped lower fertilhasprovided family plarning servicesto over 19 million famfies through a network of ity rates dramatically from a-lwel of 5.6 per 220,m0 family planning centeF and half a 1,000in 1971to a mor€ manageable3.1in 191. As a rcsult of BKKBN'S tir€lesscampaign,94 million family planning health workers. BKKBN'S s€rvices include providing basic o€rcentof Indonesianwomm arEnow aware farnily planning information, distributing a if modem conhaceptive methods and more wide rangeofconhaceptive (787oof whichare than 50 percentof eligible couplesuse contradistributed f!€e, while the remaining 22 per- ceptiveson a regular basis.

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1992 THEASIANMANAGER SEPTEMBEFI/OCTOBER


- @ Health Survev revealedthat deDendency on public family planning serviceshasdedined from 22percentto 12 pe(ent. Wanting to share its success, BKKBN ha: develooed an htemational Training Progrim which offers consultine and technical servicesto countries such as Frji, \tetnam, Pakistan, Zimbabwe, Bangladesh,Tltnzania and PapuaNew Cuinea.

employsdose to 1,250emptoyees- hasmaintained a high level of liquidity and good standing with suppliers and lending institutions. frrcject cost budgeting and office overhead budgeting are used as effectivefinancial conkols.

People D,evelopnsnt and ManagenFnt Fl Tebkontunikas,i The ever-more valuable connection be tween consumer sergiceand emolovee satisfaction has forced today's compinies to pay Financial Managomont more attention to once-neglectedareas like Pl WBkfta Xarya Human ResourceDevelopment. The winner of the 1991Financial Like most outstanding corporations, PT PT Sempatl Alr: Glvlng Garuda a run 60r lls money. Manasement Award, Ff Waskita Telekomunikasi,Indonesia'spremier telecomKarya, one of lndonesia'sleading munications company recently privaBKKBN has also involved the private sec- general contractors,is also among the most tLed- realizesthe importanceof investing in tor in its family planning efforts. Recently,the profitable. FIom 198&90,thecompany'sietum the poductivity of its employeesto maintain oreanization induced the Blue Circle Pro- on stockholder's equity was markedly higher competitiveness. Telkom's expendituresper grarn which makes use of private sectorpar- than cornmercialbank time deposit rates: rn employeehave increasedsteadily. ticiDation. Prior to the introduction of this 1988,returns were 35.3perceni in 1989,38.3 In 1988,the company spent an averageof '1990, program, family planning was exdusively ini- percent,and in 45.8percert. Return on US$,669 on eachof its nearly,10,000employtiated by govemment agencies. Through the ass€tshas also &rown consistendy.Lr 1988,it ees.Bv 1990,this amount inqeasedbv over 100 Blue Circle, private agenciesare promoted as was 10.9percent in the following year, 12.8 petcetttto US$10,1t6. At pesent 30iercent of additional servicepoints. BKKBN's long+erm percent;and in 19q1,rehrm on assetsclirnbed Telkom's top management r€ceive haining goal is to encourage self-reliance in family to 19.2percent. every year,while 20 percentof middle manplanning and rccent surveys show that their Through sound financial policiessupport- agementand 10percentof thecompany'sran-k effortsarepaying off. The latestDemographic ive of overall strategies,the compary - which and file are s€nt to baining prograrns and

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IHE ASIANMANAGERSEMMBEFI/OCTOBER 1992


inter€sted in the size of an ailine's fleet, the number of its hansars or its state-of+he-art haining facilities. Our competitor has a tremendous advantase over us becauseit is a stateowned company with govemment financingand a worldwide computeriz€dres€rvation network. But businesshaveUershave become more dissiminating. They'le interested in convenience,and the rcliability of serviceon-ground and in the aix "Ifs helped that our rtajor comPetitorsare rather infamous for late departu€s and delaved arrivals. Perhapsbecausethere sbeena h& of seriouscompetition in the industry for a lons time, the more establishedailines have become complacent. Customers have been krown to complain of thei ground and air qews' lack of courtesy. "On the other hand, PI Sempati Air has identified threegoalsand has'ronsistendyaied to make sur€ that theseare achieved.The first is on-time Derformance. For instance,we ve RP.1,000 madeit a policy to pay our Passengers for everyminute our flights aredelayed. We're also cornmitted to efficient on-ground service - we boastof 12-minutebaggageretrieval and suDerior.courteouscabin service. '€ervice and servicealone distinsuish€sa geat airlinefrom othergoodairlines,"hesays.I

Maftetilg Management n*|''//,€';lAtl

As Indonesiasetsdmwn into the region's trade and economic orbit, modesof domesticand rcgional hansport and communication have had to becomemore soDhisticatedand efficient. Over tha hst thee years,SempatiAir, an air charter company founded in 1 9, has given Indonesia's flagship carrier,Garuda,arun for its money. This prompted The Post to note in 1991, ]akLrta "Sempati Air is poised to grab a siFrfica nt shar€of d omeshcand PT Bluebltd'sioet. regional markets." 's F-27ttubcpops, tn F-100 hlrbcplops, FokkerFl Sempati's seminars. Says Mr. Mulharioko, a director at Tetkom,'"Iiaining indudes sPecializedrcsearch, jets,and Boeing737s- which have since the honins of vocational and functional skills added hvice daily flights to Singapore- fly and managerial knowledge where and when moEtly local rcutes: to Surabaya,Denpasar, Solo,Yogyakarta,Medan,Batam,BalikPaPan appropriate. ' _"Our programshavecredteda senseof secu- and Manado. For the pedod 1988-1990,Sempati's rity among our employeeswhich in tum has worKorce hal grown lrom 200to nearly 950 strengthenedtheir loyalty to the firm." Annual revenue per employee has also in- employees. How did dris relatively young creasedfrom US$9,405in 1987to US18,580in upstart becomea formidable challenger to Group? Says 1990and the eamings to emPloyee ratio has the morc establishedGaruda"PeoPle aren't sirnilarlv increasedfrom 2.36 to 6.54 over the one top S€mpati executive, sameperiod.TheaverageTelkomemployeehas beenwith the company for mor€ than 25 years and in-house surveys reveal that emPloyees take pride in their associationwith a worldclass corDontion. Clearlv both Telkom and its emINTERNASIONAL PERDAGANGAN P.T.ASSOSIASI ployeesare benefiting from mana8ement'sen1 73€658,t 1 7/ 1112 PHONE JALAN MELAWAI FAYA NO,22 lightened appoach to HRD. . :,r71:l6APlNTlA TELEX JAKAFTA 12'160 INOONESIA

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OperationsManagement PTElue d If New York hasits distinctive chequercabs and England its stunly, btack British Leylands, Indonesia has its reliable blue sedans, aptly known as Bluebirds. PT Bluebird provides mund-the-clock 2'f hour servicethrough its fleet of 2,600taxi cabs, buses and limousines. The company has 22 outletsin Jakartaalone,coveringall major hotels and shopping centeG- and the domestic and intemational airports. PI Blueb d has also recentlv expanded into Indonesia's favoured touristspot Bali. Overa threeyearperiod,the company has tumed in morc-than-respectable salerj revenues, which increased from US$25 million in 1988to U5$33rnillion in 190. Retum on saleshasgrown an averageof 16% over the same period. None of Bluebird's competitorsares€riousrivals: theclosest,Steady Safeiasonly500cabs,whileintemationally-loown Hertz has a Daltrv 80 limousin€s. The seqet of iciencvandimprovedservBluebird'ssuir:ess?'Tff "Our oldet bxis ice,"savsoneBluebtd executive. areno moretlun five yearsold. Although we still have a long way to go, in the last year we've managed to cut down consumer complaints from 701 to 650 per vear The numbs of car breakdownshasdeoeised from 1,180to 970."

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:"*" ?gLr-,*,."ffi fei{"lH'S,:.;f 1992 THEASIANMANAGER SEPfEMBEFYOCTOBER


A morerealistic viewoftheofiiceof thefuture...

TheAutomated 0ffice:hileEated, I\otPaperless ByP.W.Wong Pnbllshe,, Co,fnpttf|r Jt/o/dd8]PCAgsgl hat you need is not lesspapet but better ways to merge the various types of information that flow in and out of your office. The next time somevisionary of automation (or supersalesmanfrom your office equipment supplier) blithely tells you about the coming of the paperlessoffice (any day now!), resist the ute torushoutandbuythe latesttedmological marvels.Instead,try oneof the following things IOra cwrnSe: a) Mummiiy him, using the meters upon metersof rolled payrr spewing forth from your fax rrachine, as evervMy in the world seemingly decidesto test out your fax numbe4 b) Bury him under the reamsand reamsof neady word-piocess€d or desktogpublished reports and inter-office memo6 (including rcquestsfor vacation leave,nicely laser-prind) your staff has gleefully chumed out sinceyou bought your lts; o1, c) Tosshim onto your nice,soft sofa,so that he can appreciatehow you productively used your ton of shreddedpaper ftom last month as cheapstuffing far your cushions. Theseactions,and the assumotionsbehind them,ar€ of cou6e extreme;evenabsurd.They are offered here merely as hyperbolic ways of inducing a reality check.Such a ieality check showsa cleardis€repancvbetweenthe vision of the paperles office,and'the achralstateof that dream. Office equipment and prsotul compute6 havebecomemote powerful and affordable over the years - but instead of reducing theamountof paperwe all wadethroughin thi couse of business,they seem to have multiplied it. Aiming for the paperles office is like walking towardsan ever-receding horizon. One, l{ot None A mor€ realisticexpectation,onethat shows actualsignsof fulfillment in theieal world, is the integration of businessinformation. This refers to the ability to effectively piece together and use information that comesinto your office in various forms. Consider the different ways that information flowsintoand out of,and is storedin, your office: , . telephoneconversations . fax transmissions

above, perhaps your head office would send you the price list not asa fax,but asan eleclrrmic spr€adsheet(via modem, or put on disk and sent by courier) which you could then diectly rcad into your rc and integrateinto your Inoposal.Inthesecondexarnple,pqhapE thephone list file would be read direcdy by a lt-based dia.lingprogram. The IrC,equipped with a modem, would thm b€ used to do the calling.

n|e PC: TheGrcatInteglator Unlike the paperlessoffice,integration is not a drcam; to a great extent,it is aLeady herc.For example,the Ploducls which makepoesiblethe two solutiors mentioned in the prcvious paragaph are already available. The two solutions have one thing rn common: the personal comDuter.&om its humble starting roie asa replaceirmt for the typewriter or dedicatedword processorand the ca.lculatot the ItrCnow hasthe potential for a greaterrole in your offics integrator of the various forms of data you receiveand work with. The PC is ideal for that rcle becauseit can The FC: lndbpemlblewo mate. proces data which hasbeenrcduced to digital . correspondmce form. 'Digrtal" data is simply data reprcsented .internal rcports, memos by 0s ard 1s.Think of a newspaperphoto of a .telex messages pelson's face.We s€ethe pictue of a pe6on .accounting ledgen but if we examinethe photo clcely, we seethat o magazines,newspapen.books,broclrures it is composedof black and white dots. Com.lne-ryotaea messages(answering ma pute$ proce6sdata that way, too: they use iust cllm€s, two values-onoroff,0 or I -to constmcteven .comDuter sueadsheets very complex data stmctures. iMth ihe technobgy used in most offices Datainiust aboutany form-voices over the today, if you neededto bansform inJorrnation telephone, images sent over by fax, text sent from one form to anothet you would find over by modem, and so on - canbe trarslated yourself rc-entering information. into 0s and 1s.This is the key to office integaForexample,if yowhead officefaxesyou the tion: find a common fomlai for data (disital) latest prcduct price list, and you want to rclay and usea devicewhich can flexibly manipulate this information to your dient in a Drofessional- that data (thePC).Onceyou have datain d igital looking formal proposal, your si-"tary *itt form, th€ rccanbeprygammed to manipulate have-tott?e in the data from the fax into your It. woftr prDcessor. In contrasl other office machines usually Or, say that you have a list of r€gular dients work onlv with specfic and limited forrns 6f storedasa document on your rc, and want to data.Aptionew lbringyouahurranvoice,not enter their telephone numbers inbo your key a picture. A fax will never speak to you. And telephonesystem'smemory Sinceyour phone even the mo6t advancedelecbonic tlDewriter can't readrc files,somebodyis going to haveto produce only words on paper,neverphotos or pnnt out your phone [ist, thm pulch t]re num- graphic images.A I{, however,canreceiveand bels ink) lhe ohonesvstem. produce sound, words and graphics. tn the integrated office, information would beseamlesslypassedaround from onemedium PiCFar Show6 the Way to anothet and thercwould be no rc-enterins of To perform its role as integmtof, however,a huge amounts ol data. In the filst example rc must receive data in digital form - a tall

THEASIANMANAGER SEPIEMBEFYOCTOBER 1992

55


ordet considerinqthat fax machinesand other office equipment generallydon't generatedata in that form. Fortunatelt deviceshave become available in the market which (an work with I{s while providing firnctions normally found in specializedoffice machines. Fax modems are Derhapsthe b€st-known examples of the IrC's partners in office data integAdon. A fax modim is a PC knrd, containing fax ciroitry (usuatly Group III compliant), that is plugged into a free slot inside your PC. The fax modem is then connectedto your ohone line in the samewav that a standard fax machineis. A rc equipped with a fax modem can receivehansmissionsfrom a rezular fax machine. (Usinga I{ for fax doesnot tie up the computer solely for this purpos€,by the way The bestfax modemscomewith softwarethat allows you to keepon using the IrCfor other tasks,evenasthe computerp(xessesfaxes.)Insteadof spewing out printed output on paper, however, a fax modem storesthe messagein di8tal form on your rcs disk storage.You then us€ the software thatcomeswith thefaxmodem to view the fax messageon yow computer screen.If you wish, you canprint out a hard copy (i.e.,paper copy) of the messageusing the printer connectedto your rc. (Thisview-before-you-print capability,by the way,is a good way to filter out "junk fax" - possibly leading to a significant savingsin fax paper!) A fax mes"saee storcd on the f{ can also be used in coniunctionwith other programs.If the was a gaphic (for example,a product mes"sage photo or a chart), the image can be further enhancedusing PCgraphicsoftware.Thephoto or chartcanalsobeincluded asan illustration in a documentyou arepreparing,usinga PCword processingpackage. If the fax messagewas text, and if your fax software can do optical characterrccognition (OCR), the messagecan actually be hanslated into a form that you canreadand modfy astext with your word processor. On the sendingside,using a fax modem can be assimple aspreparing a letter on your usual word processor,then instructing the fax software to send the message.The fax software takescareof converhngyour word processing Faxmodem:Computercum tax,

t''

, l &

56

document to fax format, dialing the number, and transmitting the letter to a standard fax machine. Recently,the fax-to-rc interfacetook another technological leap forward, as Xerox introduced a software package called Paper Work, designed to work with rcs equipped with certain fax modems. With this package, you can use specialfax forms (printed by your ft) to run your rc by remotecontrol,evenwhen vou're on the ()ad without a computer. When you're away from the office, you *:,... canindicate vour instructions on the specialfaxformlandfaxit tusLnganordiniry ] far machine)to your office ['C. Amor,5 other things,you canaskyour rc to locate a document storedon your hard disk and CompaqpC: Theotfic€ integatof. to fax it to you at your pr€sent location. You can also send a fax to the rc and tell it to ing machineswhich produce digital, compuroute the messageto designatedpeople. ter-manageable data ratherthanpapercopies Yet another development linking faxesand - to "capture" what's on paper. I{s involves new models of fax modems that SomeEI packagesmay also include OCR functions, enabling you not only to storeelechonic picturesof your paperwork, but to convert these into ftles that you can fuither edit using your word processor Unless you're a very big company with paper files thr€atening to evict you from the prernises,however, EI may at the moment be too much to bite off. EI requiresthe useof fast, high-end PCs,an optical scanner,and EI software (which ranges from $3,000to $14000). Thereare also vmdors selling s,stems which come bundled with their own computers naturally, thes€ dedicated systemscost even more, Although EtisnotquitewithineveryHy's budget, there are indications that inqeased demand will eventuallv make it morc affordable. A report by the-Cartner Grcup cited can be used with cellular phones.Thus, if you elechonicimaging asa sbategictechnologyfor own a laptop or notebookrc, you cancombine 257oof the Forbes100in 190. with the total the two technologres on the road.Assume,for market exceeding$l billion. Clearly, EI is a example, that you've composed a memo or technology to keep an eye on, even while rcport on your portable rc, which you want to cunent costskeepyour feetplanted solidly on faxtrunediately to your headoffice.Using your the ground. fax modem, hooked up to your cellular phone, you can transmit your messageto the office fax E lall: Tenddb to the Wodd macnrne_ So far, wdve been looking at information that's beensetdown on paper.ln many offices toda, though, inJormation never reachesthe Electtonlc lmaglng: Infomation at Your papeJstag€- thanlG to the wonderc of elecFlngelps Fax messagesmake up rrst part of the t l o r u C m a , paper flow into and within your office, of Known ase-mailfor short,elechonicmail is cowse. The bulk of your pdper resou(es is es,sentiallysoftwarewhich allows Ks to send prcbably made up of old files, reports and messagesto one another lts hooked up for ecorrespondence,and whatnot that you can't mail may be connectedvia long cableswithin afford to throw awayiust yet.Keepingall that the sameofficeor buildine. If the communipaper - and worse, looking for something cating PCsare in different buildings, cities,or - can presentquite a problem. even countries, the connection may be via Enter electronicimaging (EI): transform- modem and standardphone lines. If you know word processing,the concept ing paper images into electronic form, and cataloSuingthem for easy retrieval and of e-mail is quite simple. When you composea viewing. Aside ftom rcs, EI involvesthe use document on your word proces-sor, you norof optical scanners- essentiallyphotocopy- mally saveit to disk, then print out a copy for

"ln manyofficestoday

informationneverrcaches the paperstage- thanks to the wondersof eleclnonic mail."

THEASIANMANAGER

SEP-TEMBEFI/OCTOBER 1992


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sendingout to your intendedaudience.With email, nistead oi printing out the message,you sendit dircctly, in elechonicform, to thecomPuter of the party you wereaddressing. The addressee'scomputet running e-mail software, alerts hjm thaf mail is awaihng him. With manv e-mail mckases, you can also sendand receivenot iuit te'.tfbut alsographics and worksheets - all in comPuter-rcadable form. An e-mail messagecan thus be easily incorporated into a document you are PrcParing. For example,if you are prcParing a sales reoort on vour comDuter,and vour southem relotral -arraget e-ti-its you his latestfigures, "Paste"his rcPorlyou cansirnply electronlcally (Think of prcparing. onto the report vou are how it would be with fai: vou would have to type - - in the figures faxed inio you.) lf vou do; lot of intemationalcommunication a'ndde.il mostly with text messages,e-mail may also prove cheaPertlun fax lt takes less time to transmit text messages(everything you send by fax is actua.llya graphic).Also, email canalsobecomPress€deitherby your m€ssages emailbackage or by your modem for shorter hansmission tim6, ind therefore lower telcosts. eDhone Long-distance email does carry hidden costswith it, thou8h. \ 4rcn you make an international call with t fax machine,you pay purely for the time you areactually on the phone.I{ith e-mail servicesoffered by telecommunication carriers,howevel, you suddenly 6nd yourself in a mazeof charges-connect charges,volume charges,and whatnot. Be sure you properly estimatethe costsbeforeyou iumP in Pr€padng Now bl the Int6grated ofrce You don't have to iurnP right away into any of the above areas,in fact, in order to reaP the benefitsof an inte$ated office.Thereare ways to easeyour comPanyinto an integratedsettin& even with your qIIIent office equipment. Here are some: Check if yow PC has enough comPuting power for the eventual integration of your office. Your office computer may be fine for vour curent word prccessing rcqufements, 6u t you may needmorecomputing musde later Multlmodoff E{r8llwotlt|rltlde'

on to run some of Programsdesignedto integrateyour businessdata.ForexamPle, a fai modem can probablv be instaUedur vour arrmt l(],'but vou may find the lf vou haven't furformance molasses--like. been keeping up with the chinges in I( technology,ask your K dealer for more information. Along tlrc sameline , it maYbe time to Iook ar upgrading your IrC's peripherals - that is. the devics such as printe6 which are comected to your I|c. laser printers (also called page Printers) and inkiet or bubbleFt printers, for erample, have dramatically deceasedin Priceover thelastfew years,and Providemudt better output than their dot matrix ancestoF A Faclt typewdten Qualttywodploc€sslng laser oarticularlv will come in handy if vou d'ecideto usefar modems:graphii images porarily storemessa8esreceived,and that such rc rcr for Permato a rL transfened toa data can then be hanslerred ind riuci faster and PerrnaLnt bv fax will print out much sent over by nent storage.(SomeelectronicPocketPlanners better. - -'Jee it tt e"" are ways to avoid redundant or calendaisalready have sucti a capabiliry) . When buying new€quiPment' consider if enky of infomration in your current systern'

,,llrorkins tre towads

*:;1il:i'f'"#:JiffiIi::T4'i$::.fi

foresightastowhatyou

optionalinterfaceswhich allow them to serye

intesraredofficerequires LW,f""g?$lffiti:l;ffi',li*'1,.?i I:[-5:ITf:fHT,^1i"Tj1*:?::

t'?e of tvPeil rc pti"t"l.. Bybuyingthis "talk"

ShOUldbUy fOf the futUrc.

that can't

a'ian*a'| frar+ra frame inregration-odented

casi vour resular PC printer conks out' Or,

i-+;rnliar

you can usethe typewriter to Print out those ;X'j#"#"fliffilili"J;:,1f,,lili* 'word-processed ieitersto clientswhich won't

Of mind."

look impressive enough whm printed out on dot-matrix Printer. vour A less obvious example involves I unintermptible power supplies(LrISes),which Do vou regularlv leceive tl'pewritten salesrc- you 'tricalmay need if your area is plagued by elecpower interruPtions For your immediate -.L fr"niuo* t"eional dfhces,then re-enter dly rrrtlcr vt 'nio^your it'eslesrigi,'e" yordRry111f-o.rlEqurErrrclrD, Y5151t:.1lI_T*:i:t_YT-nf?;it{,Y yoi ptantoPut up" localareanetwork(LAN)' the sales hqur€s rnto youl woro procq.tsor ror

-ntoUa"t& reports/Seeif youi regionaloF ficescansendydutheinformiuononiomputer diskette aswJll ason paper.That way, yoir can sirnplyrcadinthedatifrbmthediskeitd,saving timi 6therwise spent on retFPing find ways tdlinl up y6iu itrent equip ment io work witi four PC.Installing a modem and the appopriate dial-up softI ware,for example,inay makeit easierfor I """'.",'*t -.;o*i"smeruorever,vou yoursalesmen.orevenyou yoursecretary, 'voutr.f to tiuie O*t calls You ':an inltmct your PC to keep trying to reachthe -1 *iil" you .otta-igt"t.il .[""#y."

t""" "Jo*-g ;" otherthings.

With som; devices,it miy not yet be possibie io forge a PC ti*uf r"epi yout ives open, though, in casesuch oPportumome!'attre uLE xru'rc'ti For €xdrrrPr.' ittample' d( irise rur ruues nities irrrse

pocketpagersarenotnormallyinterfaced with rcs (although paging servicesmay use rcs to reldy the messages to you). lfs conceivable, though, that, in the futur€, pagers will be given thecaPdbility to tem-

58

torcs at

insteadof one j writer ;ii,ilffi,;il;iyp!*-.it",u,"uu.r'p.in

h alsorcquiresan

ihat is,a SrouPof rcs [nled togetherin order to shaie gat4jnd peripherals, you-may want to consrderUISesthat ar€ designedto work Particularly well with such setups' Asthesesuggestionsshowworkingtowar-ds the integrated of6ce does not involve iust changesintheway you useyour currentequiP ment.It alsorequles foresiShtas to what you r€quires Most of ofa[, aU,itlt r€qures futue -Most buy for the futuJe should buY an integr;tion-oriented- frame of mind - in whicl yo1.9r.eionsta]ltly aware that inf,ormation is ihe lif-eblood of your office,and that the

theinPul 9"q PY"""tg moresearnless

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formatio4 the more efficient and comPetitive l your businesswill be @ Ph iplhePhilipconputersandlhe otlpersofial mohthlumacaiine monthlv '":,i,.'"itiiii raeazireon wrsonal conpulersand

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1992 THEASIANMANAGEBSEPTEMBER/OCTOBER


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d

t "Sy remembers quitevividlythe skepticismof Ayala executives whenhe informedthemof his plansto put up a shopping mall."

fracted on the wavesof Taallake, Mr. Sy rcflected upon his life his philosophy of doing businessartd his dreamsfor 'Iaal Msta todge. Inter€stingly, Mr. Sy - ;ho migrated to the Philippines at the age of twelve - define himself as a second geneEtion Ffipino Chinese who"developed a competitive edge. He does not consider his heritagea disadwntage in doing bushes in the Phili"e pines. He explains this bv nofuie ihat his knowleds" 6r uotX Pfipino and Chinesl provided hirnwiththeinsightof thepuipino massrnarket as well as accessto the Chinesebusinesscommuniry Master in Business Moreover to offta his lack of f lV Matagenent students formal busines trainin& Sy in,art at theAsianb5titute of v6ted in rceular tra velsabroadto ,4, a J a Mawqetnnttellmethat observethe"latestin merrhandiswhile their lhxs tay rewhn amund ing hends. For example,he was thecasernms,theydohaoeactirtities able to spot the emerying bend in outsidetheInstitute, Haaine stated shoppingmall developmmt lons that, they are almostakoalti aston- bef<iri lGnh ippine cirmpeutorsl ishedto find out that Wfessorsalso He remembers ouite vividlv haoeactiaitiesin-behoeen theirhectic the skepticismof theAvala execriteachingschcdules. Thiscolumnwill tives wheh he informid them of try to gioe a glimry of what thb hisplanstoputupshoppingmals. profussor does" in-behoeat"classes, l,1y'hat to them wasa riskv ventue. wasfor him merelyriding thecrest As adviserfor thedoctoraldiF ofa sprcading marketing innovasertationof DeanLydia Echauzof uon. the la Salle Graduate School of While Mr. Sy relied on his Businessand Economics,I had the travels to spot marketing trmds, good fortune of sifting in on her he evolved a philosophy of busiinterview with Mr. Henry Sy,one nessulriqu€ly his own. His belief of the most successful'Fiiioino has alwals been that anv plokc.t Chinesebusinessmenin the irhil- (i.e.,SM Meeamal) heunite.tai.es ipprnes. must be so good that everybody The interview began in Sy's will beamplv benefitted, 6m tlie. spartanoffice at the Makati Stock customerswho flock to thernall to ExchangeBuilding, moved to his the concessionair€swho rent the pnthouse overlooking Thallake spac€s.Sye(pectstomake money and ended in a sumphrous sea- neither by shortchanglnghis cusfood dinner personallycookedbv tomers nor squeezinqhis suopliMr. Sv. ers but rather bv-packaiine At his office,the interview was superior quality pir<iucts t6 # very businesslike,with Mr Sygiv- sold at a fair qemium. As futther ing a short l€ctureon the econdm- illushation, he pointed to his rubicsofconskuctingofficebuildings. ber sandals whidr he produces At Tagaytay,wher€we talkedls underthebrand nameBeachwalk. the sun's waning languid rays re Despite being priced at double

THEASIANMAMGER SEPTEMBEFY@TOBER 1992

thatof itscompetitors itcontinues to be the leading brand becauseof its durability'Mr and shenqth. Finally, 5v ar;ues that while businessmenareiupposed to bereatistsand hald-nosed-the.' all start with a &eam. At presenl, Mr. Sy's&eam is tobuild a 2,00G room hotelcomplexon thepresent siteof the TaalVrstaLodei Hotel. With his rcputation aid soUd qedit standing Mr. Sy could very well start the proiecf riSht awav That he has riot,- is d-ue to trl in6istencethat the prcF1 as conceived must be so qood, that it would be a balgain to the tourists who come,a boon to his carefullv nurtured supplie$ and a plofii able investm€;t for his inv;stors. As we talked well into the nieht I had the impression ftom his-hieh spidts tllaaMr. Sy,as in the pait, has already solved the crihcal problemof lumrng this ambitious dr€am lnto a rcwading rcality. I

0t


A GREATDEAL FOR ESSTRAVEI,LERS BUSIi'\"

0n Leadership sharinginlormationhelpsmanagersevaluatetheilowneffe€tivenessandtheeffectivenessof a their orgaiizations and thet subordinates. To further our goal of nakirJ|' The Asian Mafuger "om.,iicationsfo*-folPracticingrnanagers,thisissueweareinducing"AMatterofFax"We your resPonsesare imPortant in helPing us Saugehow wiU publish the tesults in subsequeniissues manleers fuel about critlcal issueslhey face So-pleasecomplete this form and fax us your resPonseriSht away! 1. Ale Managers different

from Leaders?

lNo

Yes

E

should a leaderexhibit? 2. Which of the following characteristics I ! Ll I

Trust subordinates DeveloP a vision KeeP rus/ ner caol Encouragerisk

Invite dissent Simplify situations Deal honestly with the stakeholders of the compary

! I !

3. Which of these chaEcterfutics aPPly to your bo38? Invite dissent I ! Trustsubordinates Simplify situations ! fl DeveloPa vision Deal honestly with the stakeholders ! E KeePhis/her cool of the conpany risk Encourage !

aPPlyto you? 4 Which characteristicE E Trustsubordinates Developa vision I fr f""p nl7ne. c*t Encouragerisk ! 5. Do you coneider yourself prinarily a manager? fl l-l a leader?

I ! !

Ilrvite dissent Simplifysituations , -Dealhonestlywith the staleholders of thecomPany

! !

both a manager or a leader? neither a manager nor a leader?

5. ls your companyableto recognize,developand useleadetEhiPtalent properly?

trvo

DNo

7. Which of the following statemenb do you agree with? fresher approachesto E Manage$ act to limit choices.LeadeF develop long standinS Problems - AbtahamZaleznik fl

Leadership is often equated with autoqatic demand

!

kadership should have been seenas a Processrather than as Particular pattem of PersonalitYtraits

!

A managerial culture emPhasizesrationality and control'

!

What it takes to develop managersmay inhibtt developing leaders- AbrahamZabznik

!

Companiesasa whole are over-managed'

(684$7 Vn trhh|ill Far(lh

(6f'2)374M60/374867 lndonesia: Fax(627) 5702fi6/ 79811'!0' Thailand:: Fax Malaysia: Fax(603)244 1696 ' United States: Fax(4'I5l956 W7

Pancla Holel ' At Kowloon give busness we reattYoo Iravellers a greal oeal V t Morerooms lhan any olner hotel in llong Kong Two execulive Iloors with an exclusive lounge Pnvale rooms lor meeljngs and funclions A business cenlre equipped with lhe lalesl facilities Choicesof European Asian weslern anal chinese cuisine. Relaxing bars and lounges with live enlenalnmenl Fony lwo privale Karaokerooms To keep fil - a heallhclub. saunaand swimming Pool For accessibility - complimenlary shultlebus, a fbel of volvo eslalecars ajroorl bus and lhe nealby MTtl link you to everywhere and anywhere And for shopping - Iheres lhe Yaohdn Depaimenl Store ano our shopping arcade For a really great deal - slay al Kowloon Panda ltolel. Ilong Kong s largesll

Ar<ffif

t(owooN tsNa _llQlE! 3 Tsuen Wah greet Tsuen Wan Kowloon. Hong KonS Tel (a52)409 llll Fax: (as2)400_la€ TCI€X: 476II KPHHK HX @b|e: PAND.\HTI- HK

Managcd by MEGA HOTELS 55o7to Hopewell c-€nre la3 Qu€en s Road Eai Hong Kong Td: (452) s27 63o5 Fax: (as2)527 3634

il3f*LTJ['."'"l ,

199 rHensnnrUru'nOenSEPIEMBER/CCTOBER


'I

@ Prot.ReneDomlngo

Building a cathedral...

Maintenance: tbom Backroom toFlontline

6 !l

9

"Oneof the biggestobstacles to maintenance perfomance is the Iabel 'maintenance' itself."

tuming out mountains of defects, nance people will causethe conor ftequent breakdowns that dis- tinuous imprcvementprogram of rupt delivery rhedu.les. the company to dlag. -The maintenancestaff should In most companies, -arrives,when a concenhatenot only on Dreven- new equipment the prition but also on teaching opera- mary goal of the production and tors to do minol reoa-irs-and maintmance people is to install it a d j u s t m e nt s . M a n i g e m e n t and run it ascloseto ratedcapacitv -manv should empower operatorsto in- as possible. However, in tegrate this as part of their dailv Jap;nes€factories,the first thini work routine. bperators arc th'e they would do is disassemblethe fust to spot maihine problems machine,and nodify it so that it through their senses- iight ana canrun beyond its rat€d capaciry sound. Most of the time, thev can Maintenance should be inperforrn the minor adiustrnents volved not only in preventine that prevmt malrr btd"kdorr* breakdowru,and f ixini machine] and production of piles of defects but also in continuouslv imotovin the futurc - without waitins ing theperfomunceana catr;b i, for the maintenancestaff. ties of existing equipment, In Japarf most operators do an! processes.Among not go home until their broken ;yslems tne rnnovahons matntenancecan machine is fixed. They beat their perform are foolproofins maequipment with -te;der loving ;:hinesso that thev'will sto;autG care;" a poster wdtten bv one matically when defecis are Japaneseoperator on his rnichine produced or received fmm pre. says, "This is my machjne ard I cedin€ stations, and instaliing will die for it." \6ual control systemson equip Becauseof rnaintenanceca- mentsothatat anltime, anybody pable operato$, it takes on the will know the siahrs of the maaverage 15 minutes to fix a ma- chine without having.to ask AJr chine in Japaresefactories,while example of this could be a haffic ittakes thrcehous in USfactories light systemattachedto eachpiec€ which rely on conventionalmain- of equipment:a gr€enlight means tenance.In one company, when itis operatingnorrnally,red mearu lack of lubrication wai discovered breakdown, and yellow means as the causeof 707oof downtime, set-up or waiting for inconing the responsibility of lubrication parts or materials. wasimmediately following trainMaintenance is now comin& after they wer€ trained by the monly referredto asTotalPncducmaintenancepeople. And as the tiveMaintmance (TPM)tosignify maintenancedepartmmt handed its new role of improving producover many of its tasksto the Dro-- tivity and Frofitability. T?M mduction people,it becamea leiner s u r e s t h e c o n t i n u o u s but meaner(more effective)serv- conrpetitivenessand respotrsiveice center. ntss of any manulacturing orOne of the biggestobstaclesk) girnization. Just like the two marntenanceperformance is the c'arpentersofwhich onesaid"I am label"maintenance"itself.Unftr- makinga dool'ard the other mid tunatelt "maintain" subcotr- "l am building a cathedral," sciously implies "maintain the maintmance p€ople should shift status quo." This attitude is op paradigms which read, "I am posed to the spiit of kaizen,or increasingmarka sharcand pofcontinuous improvemmt. If atti- its," rather than "l am fixins a -l hrdesdo not change,the mainte- machine."

I L:H*"J"trf,:1fflilse

I i,'?,tril9H$ftr;ilf

qualiti, at lowd costsand irith fister'delivery rcquir€s systems and equipm€nt u/ith the highest r€liability that canassue continuousand flexibleoperation.ln most industries,faulty machinesarcthe primary soure of qua.lity prcblems ard defecs. Toichiivd zero def€ct levels maintmance has to play a vital frontline role,and shed its backroom image. Zero downtime is a must for companiesaspiring to be world class. In the Indianapolis 500 race, victory is determined not onlv bv 'ani the d;(terity of the driver power of the car,but also the efficiency of the maintenance qew When we are on board a plane, whether we land "safe and sound" depends equally on the skill ofthe pilotand thequalityof the maintenanceon theground. If problems occ|rr d-uring a flight,the pilot may be ableto do somethingwithinhiscapabilitvas a pilot.but problemsdui to fa,itty marntenanceare alrnost beyond solution. In much the same way, when factoriesgo to full massproduction, ifs alwaystoo lateto atop badly maintained machinesfroir

THEASIANMANAGERSEPTEMBEF/OCTOBER 1992

03


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The Bujrc8s PlanWo.l6ook

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The Ma*eling Ptanworldook byJarn6C.Makons

by Gafy A Cooper

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l21l DLcoun$uddf,

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TTIE MARTTTn{G PI.AN WORKBOOK IArcac. M^r@6 223rE€6 Hddcow wit' firgbitd€'

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The Asian Manager, September 1992 Issue