The Regional Context Chapter 14 Prepared by C.J. Bamforth

Learning Objectives LO1 – Analysing geographic and economic regions. LO2 – Differences in management practices in ASEAN. LO3 – S.E. Asia social changes. LO4 – Similarities in management philosophies in SE Asia. LO5 – Your own country’s management practices and affecting factors. LO6 – Issues faced by S.E. Asia. LO7 – Factors affecting your country’s development over the last ten years. LO8 – Factors affecting future relationships between trading partners of S.E. Asia region. Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e 14-2

LO1 Analysing geographic and economic regions Group by geographic location Group by trading agreements Group by economic development stage Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e What is the most useful way to group countries? 14-3

LO2 Differences in management practices in ASEAN Operating in Asia: Major considerations Religions Level of democracy Size of population Cultural and traditional roots Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e Why are these of particular significant to a manager operating in Asia? 14-4

LO3 S.E. Asia social changes Australia strengthening its ties within S.E. Asia: –Entered partnership with ASEAN in 2007 to improve political, economic and sociocultural development and security. –Almost 60% of Australian exports go to Asia. –Australia is becoming more multicultural because of its non- discriminatory migration policy –Australia’s focus is on building friendships & partnerships to advance trade and relationships within the region. Is Australia doing enough? Should they do more, if so how? Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e 14-5

LO4 Similarities in management philosophies in SE Asia CountryManagement approach JapanOutsourcing of production but Japanese managers in positions of power. Lifetime employment, seniority system. ChinaBusiness relationships developed through social or interpersonal networks. Relationships often determine who gets what. Importance placed on ‘face’. S. KoreaHigh work ethic, focus on relationships and respect. N.ZealandMore individualist culture except for Maoris who follow collectivist principles. SingaporeMulticultural approach – managers seen as conservative and risk averse. ThailandPassive and contemplative way of dealing with problems – focus on conflict avoidance. MalaysiaMulticultural, importance place on ‘face’. IndonesiaTendency to adopt American or European management styles, hierarchical management structures. Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e What is the same and what is different? 14-6

LO5 How management practices vary by country The next few slides provide an overview of the management issues facing managers from the following countries: –Japan –China –South Korea –New Zealand –Singapore –Thailand –Malaysia –Indonesia Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e 14-7

Issues confronting Japanese Managers Relationship with Australia Largest export marketThird largest source of imports Issues Production offshore to access cheaper labour At home: political strife, high unemployment, rising homeless, closed economy Background Population: million Import raw material, export high value- added goods, ethnocentric managers Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e 14-8

Issues confronting Chinese Managers Directions for future Legal environment; human resources; Corruption, bureaucracy Growing trading relationship with Australia Issues Economic report, labour shortage, leadership (guanxi), overpopulation Challenges around legal structure, banking system, ownership structures Background Population: billionSuccess based on who you know 14-9 Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e

Issues confronting South Korean Managers Relationship with Australia 6 th largest trading partner Preferred education destination for S.Koreans 3 rd largest export market Issues Well established legal, political and administrative systems Low birth rate, aging population, women paid 38% less than men Background Population: millionModern but ongoing disputes with North Korea Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e 14-10

Issues confronting New Zealand Managers Relationships Active pursuer of agreements with Asian countries; education destination for China & Taiwan Strong ties to Australia; 5 th largest export market Issues Economic reform, Labour shortagesGrowing Maori influence in economic sector Background Population: 4.3 millionShift from regulated to liberal economy Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e 14-11

Issues facing Singaporean Managers Future Directions Vision “the intelligent island” Long standing relationship with Australia. Issues Shortage of skilled labour, aging demographic Economic restructuring, productivity & quality of life Background Population: 4.9 millionMultinational trading hub Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e 14-12

Issues facing Thai managers Relationships Traditionally good relationship with Australia 10 th largest export market for Australia Issues Incompatible business law; demand for infrastructure Low skilled workforce; rising cost of labour Background Population: 65.9 million Commodity production & importation; tourism & finance Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e 14-13

Issues facing Malaysian managers Directions for future Proactive in pursuing trading agreements & in developing economic cooperation in region Low trading partner with Australia, 11 th largest trading partner Issues MulticulturalismShortage of workersDecision making practices Background Population: million Multi racial state; focus on attracting foreign investment; Vision 2020 and National Mission Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e 14-14

Issues facing Indonesian Managers Directions for future Needs to move from labour intensive industry to higher technology areas 13 th largest trading partner, improving relations Issues Relevance of management to society Background Population: million Young and increasingly educated population. The 5 pillars dominate society. Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e 14-15

LO6 Issues faced by S.E. Asia Aging population Labour & skill shortages Global Financial Crisis Multi- culturalism Differing business approaches Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e 14-16

LO7 Factors affecting your country’s development over the last ten years CountryFactors affecting development JapanAging demographic, lower labour costs overseas, high unemployment, political strife, move to more open economy, global financial crisis ChinaAging demographic, rising labour costs, embryonic business environment, labour shortage, overpopulation, desire for higher standards of living South KoreaUnrest with North Korea, global financial crisis New ZealandRegulatory changes, global financial crisis SingaporeGlobal financial crisis, tight labour market, need to develop labour skills, desire for higher standards of living ThailandUndereducated low skilled workforce, rising labour costs, need for infrastructure MalaysiaMulticulturalism, desire to improve standards of living IndonesiaGlobal financial crisis, large, young work force Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e 14-17

Where do the opportunities lie? CountryPopulation characteristics (% over 60) Labour characteristics – Economically Active Female and males as % of total population, Ages 15+, Japan2009: 30%; 2050: 44%Male: 74%; Female: 48% China2009: 12%; 2050: 31%Male: 86%; Female: 74% South Korea2009: 15%; 2050: 41%Male: 75%; Female: 49% New Zealand2009: 18%; 2050: 29%Male: 72%; Female: 57% Singapore2009: 15%; 2050: 40%Male: 81%; Female: 56% Thailand2009: 11%; 2050: 26%Male: 81%; Female: 65% Malaysia2009: 8%; 2050: 22%Male: 79%; Female: 44% Indonesia2009: 9%; 2050: 25%Male: 85%; Female: 52% Once you have identified your opportunities – what would you do next and why? Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e

LO8 Factors affecting future relationships between trading partners of S.E. Asia region Look at the previous table and think about where partnerships could evolve Issues that will need to be confronted are: –Economic development –Migration –The management of diversity –Climate change –Terrorism Can you think of anything else? Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e 14-19

Conclusion This presentation focused on the similarities and differences that S.E. Asian countries are facing in business. Understanding where opportunities lie, and what risks are likely to arise in carrying out business, is a key first stage in deciding whether to conduct business overseas. Copyright  2011 McGraw-Hill Australia Pty Ltd PowerPoint slides to accompany Bartol et al, Management Foundations 3e 14-20