Analysis of Asian Management - Case Study Example

ASIAN MANAGEMENT Name Code + Course Name Professor Date Asian Management The high rates of self-employment among the Asian community illustrate the group strength of entrepreneurialism. The Chinese, Indian, and Pakistani individuals are more likely to be self-employed compared to the rest of the groups. Entrepreneurship is an effective and alternative means of social mobility within the Asian community. The growth in business ownership among the Asians is the fastest of any other group. Most Asian-owned businesses depend on family labor. Family ownership of businesses is partly a function of the “relative youth of modern economic development in most of Asia, in the sense that many firms, even large ones, were founded relatively recently” (Witt and Redding 2013, 266). In addition, due to the relative recency or absence of institutionalized trust; this deters delegation and the separation of ownership from control that is very important for contemporary businesses. For Koreans, most of the firms are publicly owned however controlled by family via ingenious shareholding structures such as circular and pyramidal shareholdings. For Japanese, businesses control themselves; this is realized through combining high friendly levels, accommodating long-term shareholders as well as quite weak implementation of formal strong company governance rules (Witt and Redding 2013, 267). Most Asian owned businesses are in the retail, wholesale and business services sector and their systems are institutionally and socially embedded. Culture is an important determinant of business performance among the Asians and it dictates the hierarchical corporate structure, protecting thrift and values that were viewed as business drivers of economic growth (Axel, Wu, and Chow 2010, 18). This is referred to as Confucian capitalism and it leads to nepotism and hence leads to lack of transparency, inefficiency and corruption. According to some scholars such as Kulwant (2007, 421), this was one of the major reasons of the Asian financial crisis in 1997 (Hwa 2003, 481). Confucian concepts are evident in Chinese family businesses in Southeast Asia. A patriarchal manager who establishes morals and direction through exercising Confucian virtues manages these businesses (Neelankavil, Mathur, and Zhang 2000, 121). Nonetheless, this is usually reduced to crude dictatorship (Neelankavil, Mathur, and Zhang 2000, 122). The chain of command normally follows a kinship composition where the position of those employed is dependent on their relationship with the leader instead of professional qualification. Although the leader monopolizes and shares at discretion most of the organizational knowledge, subordinates usually know their responsibilities and work within a particular level of autonomy. The performance of the business is very subjective and personal relationship play a vital function in the decision making process. The performance of these businesses is usually not optimal due to their nepotistic character. Additionally, one of the key goals is to avoid conflict and uphold harmony in the business as a way of maintaining stability. Business process outsourcing and call centres are some of the major businesses that have emerged as major employers because of the availability of a large number of English speaking and highly skilled workers. They largely contribute to the living conditions in among the Asian communities and countries. Outsourcing has significantly increased and this had led to the rise of China and India as financial centres. India has become a major hub for outsourcing due to its extremely competitive and large information technology industry. The other major businesses are in the power and manufacturing and automobile industry. Among the Asians, the hydro, thermal, and power businesses have developed very rapidly. The last decade has seen an astonishing increase in nuclear power demand in Asia, particularly in South Korea, India, and China. A number of Asian states, including Vietnam, Thailand, the Philippines, Malaysia, Indonesia, and Bangladesh have put forwards a plan of obtaining their first nuclear power plant. Some plants are under construction, proposed or planned. From 2010, over two-thirds of the reactors being constructed are in Asia (Tellis, Marble, and Tanner 2010, 145). Currently, China is ranked second in terms of installed capacity of generators as well as generated electricity. The main power grid covers most rural areas and cities in China. The growth of this industry has created numerous related businesses in Asia as well as created employment opportunities. The sufficient power supply in most Asian countries has resulted from rapid growth of fuel coal output. The gradual increase of coal output has resulted from increased investment from the government and businesspersons in coal mining; this has led to realization of national economic development goals. China has the capacity to design, administer, equip, construct, and administer medium and large sized mining regions and open-cut mines. The growth of the manufacturing and automobiles industry has also led to numerous industry related businesses that help support the living conditions of the Asian community. The governments have important impact on business strategy; most of them accord economic development their highest priority, and offer considerable financial and other incentives to support their development agendas. These incentives have major impact on business profitability, such as when financial and other incentives are offered for investments (Delios and Singh 2005, 34). The manufacturing industry provide complete sets of large advanced machinery, for instance, power generation equipment such as nuclear power sets, large pump storage groups, large gas turbines, petro-chemical and fertilizer equipment, transport equipment, textile and paper making machinery among others. Provision of these equipments has led to establishment of related businesses. The automobile industry has also developed as one of the key industry in most Asian countries; it has created employment as well as related businesses. In China, cars have become a commodity with a very fast growing rate. The potential development of the industry and related businesses is also very high and this has increased its attractiveness in terms of investment. The production of major industrial products such as power, steel, crude oil, raw coal, cement, automobiles, cloth, sugar, yarn, chemical fibres, colour TV sets, yarn, telephones, program-controlled switchboard, ethylene, fertilizers, and micro-electronic computers have led to establishment of related business for producing these products. The other businesses that contribute to the living conditions of Asian community are hotels and restaurant, transport and communication and business services. The business organizations in Asia are single proprietorship, partnerships, and other corporate types. Other businesspersons also engage in retail business, agri-business, and aquamarine. Most of the businesses in the wholesale sector are in food processing services and foreign exchange. Some businesses are localized, on national scale, whereas others have foreign ventures. The local business networks have created connections with networks of capitalists in Asia and this has led to the rapid institution of a dynamic local manufacturing base. There are ethnic business networks that encompass social and professional connections among businesspersons sharing a specific cultural or ethnic background (Harukiyo and Noronha 2014, 24). The relationships exists in various separate forms; for instance, relationship ties that connect together constituents of extended family businesses; social ties that are created via collective social histories, for instance being members in the same club or attendance of same schools. The other ties are profession and they depend on links created due to repeated business dealings; subcontracting, buying, or selling. The categories cross the scope of formal to informal, and they mostly overlap. Stands of information, investment or credit (finance), shared contracts, as well as degree of trust wove together these business networks. A key aspect of exclusion is evident in the idea of networks, and the expression “old boys” network epitomizes it. Networks are one of the reasons why capitalism in most Asian countries remain a social occurrence entrenched in some places and cultures (Crawford 2000, 72). There are strong ethnic business networks in South-East Asia. A good case in point is the Chinese business networks that link export-manufacturing businesses in Singapore, Hong Kong, Taiwan, as well as part of South-east Asia. The business networks are the main means via which business group in China and India access ideas, finance, as well as overseas markets. In Thailand and Philippines, the Chinese trading company connections and informal credit networks are crucial for firms trying to change into export-oriented manufacturing in the auto sector. In Korea, these business networks provided the same benefits. In Asia, businesses are thus characterized by excessive reliance on family and personal relationships in business dealings, differentiated function of inward-looking interim networks, as well as strong intervention on government in the businesses and the economy. Most of these businesses are in hotels and restaurant, transport, and communication, business services, business process outsourcing, call centres, retail and wholesale sector. Bibliography Cha, Seong H. "Myth and Reality in the Discourse of Confucian Capitalism in Korea." Asian Survey 43, no. 3 (2003): 485. doi:10.1525/as.2003.43.3.485. Crawford, Darryl. "Chinese capitalism: Cultures, the Southeast Asian region and economic globalisation." Third World Quarterly 21, no. 1 (2000): 72. doi:10.1080/01436590013233. Hasegawa, Harukiyo, and Carlos Noronha. Asian Business & Management: Theory, Practice and Perspectives. Houndmills, Basingstoke: Palgrave Macmillan, 2009. Neelankavil, James P., Anil Mathur, and Yong Zhang. 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Tellis, Ashley J., Andrew Marble, and Travis Tanner. Asia's Rising Power and America's Continued Purpose. Seattle: National Bureau of Asian Research, 2010. Read More