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ASTAN INSTITUTEoF N4{NAGEMET\T
lh6 a.i.n ilanat.r - A Pub icalronoi the Asian Inslrluteot Managemenl and the Federat on of rhe asian nsrillte ol rva.agement AllmnrAs@iai ons.
Publbh6r FelipeB. Alfonso
7 CelebratingManagement Excellence
Edltoi-l+Chlet lvtichael A. Hamlin
Announcing TheAsian[,4anagernent Awards 8y barraC. Gutlerrez [ranagingEditor
Managlng Edlto. lbara C. Gutienez Asslstant Managlng Edlto. Kin Gatbonton Ait Dlrector Alexander Eowie AE6oclateEdltors JosieAliwalas FedericoS. Esguerra 56lomeFlores-Aldaba EelindaSingson AletaA. Tabalba Contrlb0tlng EdltoB Bangladesh: l\4ilonEikashpaut,tVM.88. HongKong:StephenTangWinpOn. MB|V '76. India: luzarKhorakN;ta, MBM 75. IndonesiatLeonardoTanubrata,l\4BtV'78; ChristinaF. Ferreros, Atr4Mp82. Korea: HongSoo Lee,MM '79. tvalaysia:TanSri Dat6lr. TalhaHj. [.tohd.Hashim,tVM.76. Pakistant IshtiaqAhmadQu.eshi, BMp'77 Philippines: JesliLapus,l\48[4'73. Singapore: GanCheongEng,t\48M82. Taiwan:HsiehLai Fa,T[4p'82. Thaitand: Somn{rkletjiravat,8t P '81.
10 AsianManagement Awards: TheRegon'sWinnen A sLrvevor Asias opstmarageocor.partes. 8Ythe Editors
41 TowadsManagement Excellence ByProfessor TommyKoh,ThaiDeoutvpr r e [,4inister AmnlayViravan andDat6Ser Rafidahtuiz
61 Envircnmental Standards: A NewTradeBarder ByGlenTrebitcock Vce President, C.A.p., S.A. Ji: -
l
Edltorlal Bo.rd GabinoA. Mendoza Horaciol\,1.Borromeo, .Jr. SonnyB. Coloma
49 Peopleon the Move 55 Technowalch 8i! BookReview 84 Tlavel Notes
A3sociate publbhoi & Advortblng Dlrcctor - Intoaratlonal TrevorA. Robeis Agsoclaie Publbhor & Advo.tblng Dlrector- Phlllpplnog DeliaC. Gutierrez
1 t ,
Assoclato Publbh6r & Clrcut!{on DlEctor Monettelturrald6Lim
49 Megalink Pr€parcsfof the paclf,c Century
Dl|gctor br Oporatlorg Pinkyl. Gallegos |nlorn.tionol
8.pr6!.ntative
3 Frcmthe Editor 75 Entrepr€neurs Comel 77 NaEen 79 ThinkAboutlt 81 MoneyMatteE
69 AsianAldinesFlyHigh Otf i6.
Hong Kong: Pan6,a Choy. pac,t,c Asra M6dr€ .JA. 361 363 LockhartFoad, Wan.ha, Hono Kono T e . & 3 46 1 2 8 .F u t 8 5 - 2 r 8 3 4s g a n Singepore: T€ddy Tan. PAM M€dia Servtces fte. Lrd. S3AEaslCostR@d IayAJancG.ShopprrOC€ntre, Singapo,e1s{2 Tet.348 4,t95,Fa r6sr4;b Bt6o. Indlr Sub-Contin.nr Media Solth Asia (p) Ltd., Apanment 1,A,Abhi-AnitAwas,Kantipath_Jamat, Xathmandu, Nopal.Tsl.221 576, Tel6x2606 M EDREPNp, Fax{927 1) 22| 336. Korra: Y K CnLn, F.rst Meda Seryc€€ Corporsror, C P O8 o r 7 9 1 9 S , e o u ,\ o r s , I e . 7 3 8 3 5 9 - , 3 5 9 2 , I 6 t s ^ FMSCOAPK 29137. Fax {02)738 7970. J.pan: Hide Nakayama, Nakayama Media Inrorna_ tiona'lnc..Font6royaha 705,2-22-14 Mhan Aoyama, MFato-kL.rokyo 107 Jepar 'er. t03l3479.613 i . Fe rO3)
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Unn.d Kingdom: Brian TaptinAssociates,32 Fishery Foad, Boxm@f, HemetHompslead, tterls Hp1 jND, U.K. Tsl. (0442)2ls 635, Fd (0442t246 A34
nwhoreo'pad,n Ensisho,o,heJ,ans!6e6spohib,red ifl{:::ii,:lilJi""T'i;ff#T'i*iiil'J:"i#T;:*r*''ioninanvmann* ",";,:":f::lx:l Manas€me.,. Man€qeme., E!se.,oL6p€z Euqe.,o L6p6z Fou.da,@n, Founaar,on. Jos€ph rlein R a M.Mi"k ,",i:-l$[:xfl"i"trB:H:"i1]lT'^fll,f"J:l::'}.:i a;;pit" r;iF;;; ;"il;";:: i M;;"ffi;l;;i;,";;5.r#;ll,if .* i:]:d"!; 3740rr tb, a1792.0 oFoloq.JDh,
. AUcUSf1993 THEASIANI\,IANAGER
Pn.red by rm4
so/.{ Pinre6 A€. Lrd.gngap.'e
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ft€ Aean Manager MTA(p)245,9/91
KuN pp(st1o76/3/93
1
Michael A. Hamlin
TheAsianManagement Awards...
TheRightPlace "Asia'sdraqons cannotiustsit on their positionseither. Therearepolitical realitiesevolvins from economic success."
ong Kong - Andrew won't noticeany differenceuntil Grcve is the Hungarian- rcality drops like a ton of bricks bom CEO of American on this economvthe samewav it I I microprocessor giant did in the West and has iust Intel. Recmdy,Grove was asked happened in Japan. And ar for toexplainwhyhtelandMicrosoft Japan's vaunted productivity, - the world's most succ€s9hrl Fortune has just rcported that, "Japanese productivity softwaredeveloperandretailernow have becomestch hugely domi- ranks in the bottom half of innant enterpris€sin their segments dustrialized nations, far below of a brutally competitive - and that of the US and many EC unforgiving - industr'4 countries." "With all due resDect to Perhaps even mor€ imporMicrosoft and Intel," he said, tantly, Patten wamed that "eco"therE'sno substitute for beine at nomic progress has political the right placeat the righi timE " consequences.I think that there There is something both are lesions which Asia has to comforting and refreshing in leam and doubtlessly will leam hearing a wildly successfulen- with the intelligence and wit and trepreneur tumed hugely suc- enthusiasm with which it has cessful corporate executive learned to play the economic ascribehis successsubstantially game and out-perform Europe to sheergood fortune. and North America at it." Hong Kong governor ln Har?ard BusinessReaieu, Christopher Patten - speaking JamesF. Moore asks, "How is it at The Asian Management that a company can qtate an Awards Dinner on the sriccessof entirely new business comrnuAsia - derribed his reaction to nitv - like IBM in personalcom"Reading Drucker again and puiers - and then lo6e conhol reading one or two other futu- and Drofitabilitv in that same rclogisb... I am not suj€ that I business?" Miciosoft's Wiliam discovered anything morc so- Gatescould have beenrespondphisticatedthanthis:thatthefutur€ ing b that question whenhesaid is going to lie not with thosewith of the computer industry,'You'll themostnahrralrcsourrcsbutwith never have anybody in a very those who work hajdest and arc dominant position for very long the besteducated. because thev have to Drove 'Now vou can Dut that into themselvesconstantly. 120,000 words and makea fortune out of it but I thirLk ifs a truth whichEurofandNorthAmerica arcgoing to haveto faceup to,iust as we in Hong Kong and in Asia have facedup to it." There is, in fact, much gloating about Asian success.But much ofthat successclearh came wolk." from precipitous hard work and absolute good fortune. Europe and North America weren't working as hard, or as smart. That's probably changing now, but times are so good we h Asia
"Muchof Asia's successcleady
camefrom
precipitous had
AUGUST 1993. lHE ASIANMANAGER
,lfou can't iust sit on a narket positiory the fact you haveaToVo to 80% sharc means nothing in the next round." Asia's dEgons cannotiust sit on their Dositions either, Ther€ are political realities evolving from economic successthat arc and will continue to affect the region's comFtitiveness. And those realities are both na5onal and regional h scope.National in that a comfortable work forf,e is generally much more demanding and restless than a hungryworkforcr.And regional becausepressure to der€gulate Asian markets will mean that Asian Managers must compete for the filst time on a level playing field in their own markets. This su8gests that Asia's geatest challeqges - and op portunities - lie before us. To realize their potential, Asian enterprises and their managers must be both vigilant and humble in the practice of quality management and continuous improvement of both prcducts and practices. The Asian Management Awards identfied ,12organizations inASEAN and Hong Kong in its thid year of lrcognizing excellence in Asian enterpri5e, government and non-govemment organizations. In our last issue, we prcsented the Philip pine recipients of Asia's most rigorous and respected management awards. This issue prcsents the recipients of the Awards in Hong Kong, Singapore, Malaysia, Indonesia and Thailand. And while it is also true that these organizations benefited substantially ftom being in the right place at the ri8ht time, it is equaly hle that they were in the rightplacebecausethatwaswhere they were determinedto be. I
(ommunicotions systemtin qdion. RenqloondAlrotel.Worldwide lgnocio, Throughout the Philippines, Alcotel is dedicoted to odvoncing the country's
the Comiguin Rurol Telecom System ln oddition we ore involved in o proiect for
workingin closeportnership with our customers.
systems. communicotions For exomple, in the islond province of
OutsidePlontinvolving3O exchongelocolions coble. ond 6000 KM of fibre-optic
quiredor, os for Comiguin,o turn-keysolution.
, ur p o r to f M i n d o n o o C o m i g u i ni n t h e n o r t h e r n
As port of AlcotelAlsthom,we believethot these solulionscon only be provided by
helpingto bring people together.Both within
engineerslgnocio ond Renoto,ore instolling
Whether on-goingproiect monogementis reAnd through these portnerships, we ore the Philippines ond with the restof the world.
Number
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systems,
A colel Phiipp nes Inc.,G & A Bulldng Ground F oor, 2 3 0 3 P o s o n gT o m oE x i , M o k o i r ,M e k o M o n l o , P hl i p p i n e s
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High-eneryy ian mplantet uses clampless disk technology to handle sem iconductor waters.
Mission Possible! is the lifeblood Sayingyesto challenge Theattitudeof neveraccepting of Motorola.
Management. for Operations It's a qualitythat has beenimpressing
withthe beliefthatthe customer Together
for years. our clientsand customers Afterall, whenyou believein your-
alwayscomesfirst.
self and what you'redoing,everything
secondbestis instilledin eachof our staff.
mindsethas affirmative Thisrefreshingly
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just earnedus the 1992AsianManagement and People Awardsin GeneralManagement thisfollowsour 1991Award Develooment,
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Tel (8s2) 666 8333 Fax (852) 666 6123 Motorcla Semicondudors Hong Kong Ltd Sitcon HaboLrr Cenlre, 2 Dai Krnq Streel. Taipo l.duslria Eslale. Tar Po N. T Hong Kong
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t:992 Asian ManaElemeiltAwards Winners
Celebrating Nlanagement Excellence
management in the rcgion Recognition by the programsubstantiallybo6tstheteputationof both the winning organizationsand their rnanagen.
S€lectlrg Asla'i B€€t
By lbana C. Gutlonoz ManagingEditor
W).N. AwrAMm
he applause at the end of the Hong Kong AwadsNightheldattheHongKongflilton on June 28 formally brought to a do€e the thirdyearof theAsianManagemmtAlvards prqJram. At the sametirne, it signalled the start of the fourth seasonof this continuing search for excellmce. launched in 1990, the Asian Management Awards program seeksout, r€cognizsand honors outstanding compani€sand or8anizations in. the rcgion. It focuseson sevenareasof management: genera.l management, information technology, people development, 6nanc€, marl€tin& operations and development management.Amually, whners in aI seven categoriesale chcen in six Asiancountri€s: HonBKong, Indonesia,Malaysia, the Philippines, Singaporeand Thailand. The rcsult of a friendly drat held along one of the hallways of the Asian Institute of lv{anagenmt, The Asian Managemmt Awads program has become the ad<nowledged seal of excellent
The annual searh startswith the solicitation of nominations in each of the six countries, using a vadety of methods,induding focus group dirussions,printadvertisements,directrnailanddirected r€search. Indicative of the program's gr,owing pt€stige, nominationsoverthelastthrceyeatshaveincreased at a dizrying pace.For the 190 search,over 1,00 nominations werc rcceive4 covering 534 companies.The noct yeal the totaliumped by a phmome\\al257Eo to 3589 nominations, covering l,ru olganizadons. For 1992, nominations t€adEd a r€cord 3,ru covering over 1500 organizations. Anominatedcompanyissentadataformwhich cells for substantialdata disdosure, both quantitative and qua.litative,r€garding its p€rformancein thecategoryinwhichitisnoninad. Her€iswhere TheAsian ManagemmtAwards diffen with other awards prograrns.It goesb€yond such haditional benchmarls as sustainedgrowth recordsand arr nual stockholders'rctums. Irstead, it evaftratesan ol8anization's commiknent to excellencethrcugh a qualitative €rcmination of its manag€rnentfiurctions, orltur€ and mvipn nent and dedication to total quality. The data !€c€ived - which are h]ead widr utm6t confidentiality - are encod€dinto a databaseand analyzedby a team of AIM facr ty mfiF bersfor the purpose of shortlisting the candidates. The team tsi[ls the univeFe of nomineesto five to sevm companies per'category per country Data submitted by the companies tttat ruke it to $e short lists are validated for veracitla Country4pecificboadsofjudges,allcompced ofleading rnanagers,both in the public and private s€ctors,then eealuate the shortlisted companies andchooeethewinners.Thedecisiorsoftheboards of iudges ar€ submitH to the Goveming Board, madeup primarily of theAIMBoard ofGovemors, for final approval. The winnes areiniormed of theirselectionand
At GUST19S0. THEASIANITAMGER
are feted in formal awards ceremoniesconducted in the six countries The awalds dinners arc attended by CEOs of the winning organizations, their Suests,enterPris€ and industry leadeE, members of the government and diPlomatic corPs and rePresentative of the sponsorsand organizen. To recognize their outstanding actuevements,the winning comPaniesareeachSiven an Asian ManagementAward trophy, which "There is more with its motto Plrc Lllta beyond" - slmbolizes the continuing search for etcelmcl. Formerly made ftom highgnde fossilized stone, the troPhy, now executed in glass,has been given a futuristic look to illustrate the ne€d for a new breed of nvtnagers.
Asla's N€wEllte This year,40nameswerc added to the list of Asia's outstanding olganizations.Making up the biggest winning batch sinc€ the Program's launching (ther€ were 32 winners in i990 and 39 in 19t), the 1992winneE, howevet arenot all newcomeEtoAsia's elitedub. Sixcompanieshavewon Asian Management Awards before. Indonesia'sPT Bank Bali, the 1992financial management awardee, was the 1991 winner in the information technolqgy managementcategory Sime Darby Bhd., Malaysia's biggest and most successful conglomerate,won the generalmanagement u*i.d fo. both 192 and 191. Another Malaysian comPany,Sarawak Shell Bhd. is the urdisputed chamPion in the PeoPledevelopment and managementcate8ory,wrnnin8 this much{oveted awandin 1990,1991 ar].d"1992. The Philippine American Life Insurance Co.,afinancialmanagementaward winnerin 1992,was the generalrnanagernentawardee the pevious year.SingaPoFbased NePtune OrientLinesLtd., a 192 genemlmanagement awardee,is anotherPermnial winnet caPturing the operations runagement award in 1990and I9l, and the peoPledeveloPment and mana8emmt award in 191. Thai Farmels Bank Ltd., winner of the 192 peoPle development and managementaward, won the information technology management hoDhv in 1990. Over the last thr€e yea$, certain interesting patternshave emer8ed.For instance,the financial industry has prcvided the most number of winne$, with banks, financing housesand insurancecompaniestaking 19of the 117Asian ManagementAwards boPhies ' given out so far. The transPortationindustry is another much-awarded sectorwith 15 he 6
AlM Boardof Gov€mo|l Chaimal Sycip Mr.Washington Chairman TheSGVGroup Philippines llemiars W.Scott Dr.Brian Chairman PtY., Frontiers Management Limited K.P.Li Mr.David andChielEx€cutive Director TheBankol Asia,Ltd. HongKong Mr.JackTano andCEo Chairman Ltd. Holdings Tristate HongKong Parikh 0r.Jagdish Director Manaoino (lndiahn. Ltd.) Lee& Muirhead lndia Birla Mr.Adityla Chairman Ltd. Industri€s Grasim India Sal€h Drs.Rachmat tothe Advisor Economic forTrade and Gov€rnment ol Trade Department Bankino, lndonesia
Mr.omarAbdalla Commissioner President PTIBJDutaBank lndonesia Mr.YotaroKobayashi President Co.Ltd. Fuii-Xerox Fpan
Hochstadt Ronald Mr.flerman Chairman Insurance Exporl Cr€dit Ltd. ot Sinoapore Corporation Singapore Kim Dr.Duk-Choono Executive Counselor Co.Ltd. Industrial Daewoo South(orea
AIi Mohamed Tunlsmailbin Chairman €quity CorPoration I'lational Malaysia lk Chsong TanSriGeh Chairman Bsthad PerlisPlantations Malaysia
Koo Mr.ryono-Hwoi Chairman International Lucky-Goldstar Corporation SouthKorea Mr.VkoiPhutrakul Chairman ltd. Brothec(Thailand) Lever
T.Paterno Mr.Vicenle Viravan olrsctor Dr.Amnuay andManaoing Chairman PrimeMinister Corporation Deputy Seven Philippine Kingdom ol Thailand Philippines Thailand lll Soriano Mr.Andres I'lewbiooing Mr.David and ofthsBoard Chairman Chairman officer ChiefExedutivs PLC Rentokil Group Corporation SanMiouel Kinodom United Philippines Wan0Chien-Shi€n Minister of Finance Ministry ol China Republic
S.Anderson Mr.William oitheBoard Chairman Betired NCRcorporation
u.s.A.
Mr.StanShih andChiefExecutive Chairman oilicer,AcsrIncorponted of China Republic
awards. Agriculture-related phies.Airlines accountedforeiSht "1{oset companies, including such comPashipping of these,while mnagiefltqtt multinationals as Del Monte nies took six. Philippines Inc.and Dole (ThaiThe manufacturc and hading rulesor fumulg elg|l. of consumer products has also haw beenfr0nd land) Ltd., have caPtued meanawards, Twenty-one winners: oroduced a number of -10 tfiat sooH while,have goneto subsidiarie over the last three years. This of Western multinational corfisule still does not indude con- gl|arartee Porahons. gl--omerateswhich engage in succ€sbt a But desPite the eme4gence manufactuing and trading in adcompny." hends, no set maragesuch of activities. business to other dition or formulas have mles ment Other multi-awatded induswould guaranthat found been tsie6include telecorununications le6sits elevamuch for a comPany, tee success elecwinners, and relatedserviceswith eight The quest dub. elite corPorate to Asia's tion manufacturautomobile tronics with seven, everdynamic, a ing and hading with seve& food with six, oil for excellence remains less nothing rcquires that chaltenge and allied iines with six, and ProPertydevel- clungng for Even cornmitment. total than; comDany's oDmentand consbuction with five. elusive an remains winneF, excellence reDeat with divenified Bwiness conglomerates Awards' businessinterests,such as Sime Darby and goal. tn rs, nte asian Management t San Miguel CorPoration, have won six sealchmustSoon. THEASIANMANAGER' AUGUST1900
at
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That Grows from Confidence
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4^$ BANKBAT-r Giving You The Best
TheAsian ManagfementAwards:TheRe€lior's Finest
ow in its thirdyenr,TheAsionMonagenent Auards xek fo recogniaAsia'stnostouthasmsna$d stnndingcamqnie' TheWgam's seuen to Secoll a ategorieslxus on thelundammtalarus of piooomeml tanagementandemdusizecompetitfueness and.in o54%d fts lvtQn, mdl(.t thmugh The 1993AsianMnnagemmtfunrds uns organcaptlvatl1g iztd by theAsianInstituteof Mtnagement(AIM and W 3pot8to yesentedbysernal Asiancorryations- outstanding unlque, in themselws uho slarc the Institute's pride in irI|oYativE recognizingthe rcgion'stttcft excellentoryanizttions, p|omotlom." TheWgram's cwntry spon*rs includethePhilippine Ii g DistanceTel@roneCompany; MBf Holdings Berhad;Izmhga Pmwfungan Perbankan Indowit (I,PPI);theTradeMtnagetnmt D@elofnentInstitute; and,BanglakBa*.
"McDould's
(CSIT) to inculcate a corporate mindset towards achieving excellence. Efficient service is enhanc€dby a Fully Auto mated Cargo Tiacking System - an intemctive shipment hacking and planning system - that prcvides customers with round the dock, dircct accessto inJornation on their shipmmts. To further enharce its competitive edge and maintain its leadeEhip in ASEAN, NOL hashtroduced innovative, new shipping routesand faster transit times. For instance,the company's 22day hansit timeH!1/een SoutheastAsiaandtheUnited Staieshasyet to be matched. NOI-is successsecretsare high-value operations and a committed, disciplined workforce that appreciates working for a company that encourages- and celebrates- excellenceand rewards initiative.
prcduct offers for a specific period - increased salesby 10%. Their "combo meals" - a drinl, fries and a burger- increasedsalesper customer, while enhancing value. AI televisioncampaignsarelocallyproduced.'A Day in Singaporc"and "IGls Glking" ior television and the ficMorning" ndio spothavewon industry awardsand 97o top-of-mindawar€ness.
Cvcln& Crnnncn
9lirreercne McDonrlo'sRrsrrunerrs
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Sinceits estabtshment in 1968,Neptune Orient Lines (NOL) has becomeone of the top shipping firms in the world. In fact,it ir the foufth la€est in terms of tumover - some US$900millior l4itha fleetof 51vesels,NOlprovidescompre hensive container liner and chartering services worldwide through its 60subsidiariesand 26associated companies.Hard to believe that this company,which nowemploys 4,000people,startedout with a modest staff of five. NOUs corporate credo is excellence and this company distinguishes itself in a higlrly competitive field by providing high levels of serviceandvalue for money. The company createda Customer Service Inprcvement Team
t0
Through an array of marketing t€chniquesthatrangeftom capti\ atin8 television spots to unique, irmovative pnmotions that demonstrate a deep and sinc€reappr€ciation for the custome!, McDonald's Restaurants has managedtosecureaphenomenal54% share of its market. The company's successlies in its capacity to "localize" its image and product advertising. Its product line also refli:cts local tastes. Where elsecan fast food connoisseursfind a l(dya McMuffin, Pineapple Pie or Durian and Mango Shake? "Localizing" McDonald's also involv€s interaction with the community by local store managers. Managers are expected to take a leade$hip role in community eve$ts, and to contribute to community efforts to enhance and maintain a clean, healthy environment. McDonald's 4th flavor prcmotions - new
THEASIANMANAGEB AUGUST.1993
th|€ d Cycb & Canlago'Emary 9/rcrvftxtra.
Mcltontd'a gotabt arctp9 aE k rrwn wotldwrd..
Cycle & Carriage, Singaporc s lalgest car distributor, is an increasingly diversified company. It has interests in food and dairy prpducts manufacturing, distribution and retail as well as financial services. The firm has ,1[}subsidiaries and nine associatedcompaniesand last year acquired Malaysian Credit Limited (MCL) - a much coveted, long-sought takeover target. Of the total US$238million rcquircd for the acquisition of MCL, more than a quarter of that amountwas funded internally. No cashcallswere made on shareholders and the company inhoduced for the first time in Singapore,the "top up clause,"allowing investo$ and fund managersto sharc in the benefit of an increasedbid. Since 190, the company has expanded its oDerations to Aushalia, New Zealand and Vietnam. And it is one of only five Singaporecompanies haded over-thecounter in the United States though the American Depository Receipt progmm. Like many outstanding companies, Cycle & Carriage has experienced the pressureto sustain its success,and has consistently met that chal-
lenge. Shareholder funds increased 758 trcm 1988 to 191 and another 51% last year. Total group assetsdoubled ftom 1988to 1991.
SnceponrGrnrnel-HosPn L In a survey of excellent Asian corporations, Asian Businessrepotts that, "As well as 'empowerinSl managers by giving them greater re sponsibitty, the most admired companies... are investing heavily in Singapore General Hospital (SGH), Singapore's oldest and largest tertiary acutecar€hospital and national referral center,hashansformed a once staid bureaucracy into a skilled, praactive service elite through the development of extensive in-house and external training curricula. This elite force now rcfers to the patient, his famity, rclatives and visitors as its "external customer." Hospita.lstaff ar€ "intemal customers," reflecting the concern of this cohesive,commifted team for quality service and the total welfare of those in its care. As a result of a nationwide shortageof nurses, SGH developed in-house programs to hain a "nery'' category of health careworkers: operating theatre technicians, dialysis technicians and physiotherapy assistants. Wholly-owned by the SingaporcGovernment,
AUGUST 1900. THEASIAI MANAGER
1t
Cdper,l{earch b orE o, SGH'' key are'€ d igg6aach.
the hospital employs over 4300 pelsons - making it one ofsingapore's top ten employers- who serve over 84,000admissions and 500,000outPatients per year. SGH is renowned throughout the region for its comprehensive range of clinical specialities and support services.lt is a rcspectedteaching hosPital for medical practitioners and specialists.
Trlrcous SrNcl.ponr
Slngapore fol6.o''r',3' ct,gfutro,s enloy serylc.a wt ch afi anong|'he '''p6t dvaiced ln Up rcEIona t d Ap W['€EI qlrdlty.
Singaporcs winner in the categoryof In-formation Technology Management is no stranger to The Asian Management Awards. Last yeat Singapore Telecomsreceived the awand for outstanding Financial Management. The Award for Information Technology Management is for creative use of information technology to enhancethe competitive position of the company. But our wimer has enhanced the competitive advantageof a nation in the racefor foreign investment, industrial development and international trade. SingaporeTelecomsis the tiny island-nation's lartest telecommunications firm, dedicated to buildint world-class inftastructure and the provision of superior serviceand products for the lowest possible cosl subscribersgave the comPany a "fou/' out of "five" serviceperformance rating of in a 1990survey The Intemational Management Development lnstitute and World Economic Fe rum gave the company performance ratings surpassingthoseof the industrialized nations in 1991. The use of IT permeates the entire company. Extensive utilization has allowed SingaPore Telecomsto decentralize to 73 departments and devolve administration functions while rctaining efficient centml control to ensure uniform and consistent implementation of company policies and guidelines. In all, there are more than 2,600rcs connected to the comorate local area network. Each rc accessescorPoratewide E-mait, calendaring functions and bulletin boards. The company's IT systemprovides a critical role in the develoPment of corporate strategy through scenariomodelling and forecasting.
12
Excrl MecurnrTools
r.sffi:.- _..'strsqw At ExcelMachineTools the day begins quality extolling with the company song and corporateobjectives. Sinceit was establishednearly seven yearsago, ExcelMachine Tools has managed to boost salesftom a modest US$0.9 million in 1986to dose to US$12million m 1991. Thecompany'sprimarybusiness is the manufachfe and sale of industrial machinery to pr€cision engineering industries, the aerospace and automobile industry, and the electonic and computer Elc,.l's N&rcts industry. Although its princiPal markets tra td ln arc the United Statesand Japan, the company's Neclrlon products ar€ exported to morc than 22 countries otBh'€otttg lnd|lafi€tr, worldwide - from Myannar to Finland. Quality is a way of life at Excel,and rnanage ment demonstratesits concemwith the quality of design,quality of performanceand quality of customer seruicesthrough application of new technologies to increaseefficiency,reduce downtime and enhancecompetitivmess. Excelinvestsheavily in hunan resourcedevel'13% of its PaFoll is commift€d to opment. Fully staff haining and development. ComPany executives believe their successis dire primarily to continuous investment in product and process development.Threepercentofarulual salesis committed to Researchand DeveloPmentto assue that aI products satisfythe needsof customersand that thev are prcduced at the lowest cost.
Neuonll Tnmr UNIoNCoNGREss o*atOlMo, Prcildana, Nfllc. The National Trade Union Congress (NTUC), Singaporc'swinnerin Development Maragement, was bom ftom needard struggle.Thesuccess that has evolved from that struggle is both exciting ard inspiti.g A Heration of 73 Singaporchadeunions,NTUC hasa membershipof 212000worke$lsrepr€senting aner 22Voof the island-states bargainable workforce. Established in 1961 amid great political and industrial strife, theorganizatiofs objec-
THEASIANI'ANAGER . AUGUST1993
tives since its inc€ption have beento imppve the working conditions of Singapoc workers, to promote good labor-managemmt relations and to build a stmng labor movemmt. Unlike unions that limit themselvesto protecting worke6' rights in wage negotiations and the settlementofdisputes, NTUC is a rccognizedpadner in Singapords €conomic and social develop ment, promoting and contibutint to skills upgrading and poductivity enhanc€ment.NTUC initiated BESI, or Basic Educationa.land Skills Trainin&toraiseworkeE' literacylevelsandenable them to take up cours€sfor skills u;6rading. The pr%ram dirccrty benefits over 300,000workers with a primary lwel education. Other projects indude retail and health carc cooperativesaswell asquality recreationalfacilities that help shetchmembeF had-eamed paychecks and prcvide exc€Uentvalue for mone;r Its geatestcontsibution to SingaporcworkeEis alsoperhapsthe leasttangible.Membe6 claim that ihrrough the union they have derived a greater serueof collective identity and solidarity ri'ith the labor movement.
Inoonrete PT Bruncnsronr Indonesia'swinnerinGeneralManagementhas adapted swiftly to emerging consumerneeds,developed efficient production methods, embarked on a long-term export strategy and disseminated critical technology as the key to attaining global comDetitiveness. Apintventure tircmanufacturinSand distribution company, Pf. Bridge6toneis a market leader with a 3570shareof the localmarket for autornobile, tuckandbustir€s. hthetircrcplacsn€ntmarket,the company has secued a hefty 51.6%slnre. Grc6 revenueshaveincreasedftomUS$t/millioninl9BSb US$103milion in 191. Bridgestoneis a pioneer in the development of dealer relationships,The company pmvides sales trainin& big-truck maintenance technotogy and responsiveafter salesservic€to its retail network To fuldll its strategic vision, the company has rccendy begun exporting its praducts.At pesent, over 207oof total pnoductionis exported. Bridg$tone sbasicobtstives areto assurehigh quality and imgove poductivity through a motivated, highly+killed work forre. To meet these obtectives,Bridgestonehasestablishedan effuive training and education system for its morc than 1100 employees,who enpy salariessubstantially higher than the indusFy averate. Recendy,the company introduced a compre hensive program called its High-Efficiency Shat-
egy.The program incorporatesTotal Quatity and "rfl,c'3 Just-in-Timemanagemmt practicesto focus company-wide efforts on rcducing waste to enhanc€ Slcrtosi productivity. Management calls this strategy the contlhttlon company's "central pillar" and iudging by to Shgapore m*srs b .bo Bridg€stonds succss, ifs a solid pillar indeed. porhapotl|g bat tngiu6 - a gEater scme ol collcc'tlvo idd ltt and FT MusrueRm; solldadtywtth Indonesia'swinner in Marketing Managemmt tlte labol is a hot grovlth company that has outperformed movomert," global corporationsbasedin North America,Japan and Europe. Originally a hobby,thena smallfanily business, PL Mustika Ratu hastransformed itsellinto oneof Indonesia's leading consumer produc{s companies in less than two decades. The company boastsdiversfied interestsin the manufactue and dishibution of co$netics, toiletries, herbal medicines, health drinks and mineral water - over 600poducts in a . With a country as sprawling as Indonesia, great cultual diversity and 13,000islands,it is no small accomplishment-particuladyforalocalfirmmtering the fiercely competitive cosmetics industsy - to gain acceptanceamongskeptical and increasingly sophisticated consume$. Distribution of the companys producrs ard servicesis more than a logistical feat. Cultural diversity reOtr€d Mtttdka quir€s that colununication Raht't naty and salesefforts rcflect the heritage,traditions and tt'dnbtrd p(9d/cf,' rcligious belieh of eachisland. Forinstanc€,PL Mustika Ratuproducesarange of shanpoos - green pea, banana ba* and rice straw - r€flecting widely diver8ent tastes.Similarly, the company's soap line indudes root soaP and rlan8ir soap alongside the morc conventional sandalwood soap and herbal body soap. An important conhibution to pl€s€rving the cultural heritageof its societyis a by-poduct of tT. Mustika Rahr's sucreas.Its slimming tea and medicinal herbs have bridged the gap betweenmodern ard traditional values. Yet the r€5uryencein popularity of traditional cpometicsand herbal medicines- irspired by the
AUGUST 1993. ]HE r€lAN MAMGER
'lndonegia's cultural divoBity oqui]€c that communlcrtior andsale6 eft|ts rsn€ct fhe hstita€B, traditioG dd lgligiou3belleb d lts mary lslands.'
successof the company'sprcducts - doesn't seem to have hurt sales,which increasedftom US$9.3 million in 1989to US$16milion in 191.
PT. Bll{K Blr,r Indonesia'swinner f or Information Technology the previous year was cited for outstanding Financial Management for 19L Banl Bali is one of Indonesia'sbestknown bankswith affiliatecompaniesin life insurance,generalinsurance,consumer financeand insurancebrokerage. Total assetshave grown steadily over the last five years from US$328milion in 1987 to over US$1.5billircn in 1991,repr€s€ritingan ino€ase in retumonassets ftom 1.57%to2.39%.frn d€ntfinancial rnanatemmt haspovided a sormdloan tiodqosit ratioof lessthan 1007"- substantiallylower thanthe industry average. Paid-in capibt inqeased ftom million in 191. US$10milion in 1%7to US$1,10 Thebank hasdevelopedan information system that rnaintainsa centralized,bank-wide database, pn:viding employees ard customeE immediat€ accessto qitical financial data. Torc\dardinvestorcandenhanceservice,thebank mb';d.u.d hli *Ilwm - an all-ircne card service availableto stoclholdeis who purrluse 50 or more shares.BaliAccessis availableto non-sbockholders. Despitethe downtum in the economylast year, Bali Bank posteda net income of US$42million. Its .92Voreturn on eamings overshadows the industry averageof 15.94%.And its dividend pay-out ratio varies ftom 30ooto b0"oof total earninss.
dorsedthe companyasa shong buy recommendation for the long term on the basisof its shong earningsFowth artd lndorama's rcalistic appraisal of its prospects.Having won the respectof intemational investors, the company has continued to do well on the local stock exchange.In 7992,it was amongthe top thee bestperformerson the JakartaStockExchange,with a I 3q%gain in shareprice over a l2-month period.
PT Bmnn Ppr Inousrnlrs Establishedin 1981inWestJava,Pf. BakriePipe IndustriesFoduces AmericanPetroleumlnstitute certilied line pipe for the oil and gasextractiveand distributionsectors.It is theonly lndonesiancompany in its industry that holds a covetedISO 9002 standard for qua.tity standards - a distinction Balrie Pipe hasworked hard for Over US$5rnillion hasbeeninvested in testing equipment to develop PL Bakrie PiPe Industries' capacity to design leading-edgePrcducts for increasinglyspecificcustomerr€quircments.To helP meet thes€demands the company hasinhoduced motivation workhops to encourageparticiPative manasementat the worker level. ft fakrie eipe naustries was also among the filst in Indonesia to introduce Japanesemarage ment conceptssuchasTotalQuality Mana8ement, &r'zer, arid Just-in-Tuneinventory managementto fu rtherenhanceboth quality and customerservice. ln an industry that frequentlycomPeteson Price, Bakrie Pipe relies on quality to be comPetitive.So far, the company's strategy has been successful. Salesincreasedfrom US$20million in 1989to nearly US$29million in 191.
PT.Ixoo-ReueSvnrsrncs Theflagship ofthe Indo-RamaGroup, PL IndoRamaSynthehcs,won lndonesia'ssecondaward in FinancialManagemmt. IndcRama Synthethicsis the countrl/s lal8est exporter of blmded yarns - a market leader in the local textile s€ctol currently Indonesia's leading non-oil export eamer. IndoRama'smain activities are the spinning of blended and unblended yarns, accounting for appro\imately 49% of total revenues and pol)'rner prcduction, which accountsfor the remainhg 517o. The company's successcan been attributed to solid management and careful aftention to cash flow sinceits inception over 18yearsato. Over the years, Indo-Rama has demonstrated its financial probity thrcugh a consistentrecordof prcfitabiliry Fulrd managersand analysts have rcPeadly en14
PT Sruni Paoenc Indonesia'swinner in PeopleDevelopment inspircs trust though a clear corporatevision and a shont commitment to its nearly 2J00 emPloyees. Like many excellentcompanies,this outstanding corDorationdevotessubstantialtime and financial r€souces to maintaining a skilled and commifted work force through training, Prcductivity incentivesand inseased rcsponsibility.Oneof the country's leading c€ment produc€rs, its sincerity has won employees'hust and enthusiasm. Productiviiy has increased frcm 752 tons of cementper employeeper year in 1989to mor€ than
THEASIANi/ANAGER . AUGUST1993
Pt, Bd.rle Hp It tl'€ oti! ,nt',''66lart com!6 ! awat&d the l9l, !Xn2 atdlad,
IN INDONESIA YARNEXPORTER THELARGEST
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Polyestet Fiber & Yarns:
Polyester/CombedCotton 100%AcrylicNon-Bulk 100%CombedCotton 100%Spun Polyester Polyester/Viscose Dyed/Fancy Yarn 100% Viscose
PolyesterFilamentYarn PolyesterStaPleFibre DrawTexluredYarn Intermingled Yarn PolyesterChiPs Flai Yatn P.O.Y
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E
I\-DORA}IA
Board 0lJudges: Ito Asian ltanagsmenl Awatds HUV rta' lh€ Honourabh DavidX.P.Li DireclorandChislExecutiv€ TheSanl oi EaslAsia,Limited TheHon.M6. AnsonChan, C.8.E.,J.P. Sec.elary lor the CivilSewic€ HonO KonoGovsnment Dr.RobodL Triclor
Prot.DimnadiHadisumarto L6mbaoa Manaoomeot JohnA. Pr,setio Manaoino Partner Prasetio,Utomo& Company t lrltla TanSdGehtk Cheono Chairman Dovolopmontand Commercaal Irnl Bid.
ljniversily ol HongKongEusiness School lanPerlin ChiefEconomhl HongXonoGeneral Chamber ol Commerc€ FrancisEstrada Presideol WilliamE.SimonandSons(Asia)ttd. t tottatl, D6. Rachmat Salsh Prosidlol Commissioner EankMuamalai Surasa President 0ircctor EankSumiDaya Cacuk Sudeiajanto Executiv€ oireclor Indonesian Management Assoaialion
m Dplia Vacente T, Patemo Chairman andManaoino oirSctor Philippine Seven Corpontion
Prcl.TanTockM3n0 D6an, School ol Accounhncy andEusiness ilanyanoTechnolo0ical ljniversity Mr.D.R.Murray Chaiman Sin0apore International Ciamber ol Commefce
Als6nioSaiolomelll Presidenl Philippine Nalional Eank En queP. Esleban President Center lof Reseamh andCommunication
AhmadRejalAdee Grouptditor EerilaPublishing Sdn.Bid.
GabrielMaialac PublisierandEditor,116Suslrass5Al
Dr.Tarcasius Chin Chaiman Malaysian Inslituleoi Managemonl
RenatoValancia Adminislralor Social SecuilySyslem
0al6Dr.JohariBin Hassan Govemment Affui6and Human Resoorces Managor BPMalaysia Sdn.86rhad
Shuaton Herman Ronald Hochstadt Chairman ICICSHoldioos tld.
SiehLeeMeitino Prolessor andChairman Eusiness Adminislralion Division Facully o, Economics and Mminisilalion llnivelsityot Malaya
0r WeeChowHou AssociateProlessorandDean Fecully Adminislralion ol Susiness National lJniversity of Singapore Mr.LimHockSan Chairman, Institute ol Certilied Public Accounlants ol Singaporc
ndl.N vlmjPhutlakul Chaiman kvor Erolhers(Thailand) Ltd. To€msakdi Krishnamra Dieclor,SasinGraduale SchoololEusiness Adminislration, Chulalon0korn Uniwrsily CholeSoplDnpanici Presidenl, ThailardManaoemenl Associalion Tarrinl{immanaha€minda Minister ol Finance Thailand SulhichaiYoon EditofandPublisher TheNationPublishino GrcupCo.,lld. Teelachai Ch€mnasii Mana0in0 Director Rachada Property Manaoemenl
. AUGUST THEASIANMANAGER 1993
ment has not sought to Pre sewe; but rathet to transform, diveFify andglobalize It is oneof Mala'sia's Penuet b€stknown comPonies;Pmbably the la€est indigenous multinationalin ASEAN. Originaly a Plantationbased business,our winner has transformed itself into a widely diversified conglomerate of more than 200comSlne Darby13 panies. lt is caPitalizedat Atla's laE36t US$Z.SUiltiott - roughlY ,,td !!'t*nown equalto annualsales.Today,the Plantationdivision tltl@alond' US$j00 Darby's Sime of contributeslessthan 107" million annualProfit The scope of its business is rmmense' flom to EuoPe; NorthAmerica toAsia, this grouP Aliica l,{.rKusu'rHrrnllr PnMsrN hasdive6e interestsin agriculhrral Pruducts,mnKrlurncl ing and quarrying,hea\y equiPmentdistribution' themanufactureof paperProducts,chemicalsand lndonesia's winner in DeveloPment Managemetals.And the comPany'sholdin8s extend to is mentisa volunteeror8anizationwhoseoblettive trading, construction,real estateand insurance' to provide a vision and a meansto a more secure, Sime Darby's demonstrated capacity to stay more prosperousfuture ahead of its competition reflects its sensitMty to P(K serves families in nearly b7.000villages' rapidlychangrngconsumer needsand its caPacity and its prcgrams emphasizeself-relianceand muto'creihvelv respondto thesechanses The aults tuai trelp for tne purposeof s€lf-improvement tonomy with which its divisions oPerdtehas grouP is the family unit. target -trese spawnedchampionsof new ideasand innovation; activities rcvolve an:und what has bea'nd.relentlessinhancement of production meththe comewrdelvknownastheTenBasicPrograms: ods and new market develoPment' aPPlicationof the Pan'a<ihideol comprchensive Stratesicallianceswith the world's leading corColotJg or Sell-HelP lvlutual oev i.tto fodly lile; porations have provided technology transfer in Nutritiou Clothing;HousinS;Education R"ovorp; iroduction methodsand marketingpracticesSime ani Ciaft Skill; Health; Promotionof CooPeratives; barby's emphasis on integrated teams has prc Protectionand Cons€rvationof the Environment; .'idd a qualw conscious,dedicatedworkJorce' and, sound DomesticPlanning. Amonq PKK's proiectsare community-based dctivihessuch as the once-d-monthIntegrated Community Services which Fesently Provides basic health services: immunization, diarrhoea control, pregnancycareand family plaming' The SonBso. Hot-otrlcs Sepun,l Srpura [43 movement also provides non-formal educahon elnge ha',d€dlY though leaming and income generating SrouP's' if an organizationcanstaysuccess- Narr@a asked When known asKEJAR. or lrretercful forever,ProfessorGeorgeTaucherrecentlysaid con nuficadons PKK hasalsohelPedsPawnlocal industry, Pi0. "Creain Singapore, nap. ducing a variety of PrcductsPrimarily for the Indotion is the essential nesianmarket,but themovementhasalsosPawneo step for eternalLife." fumiture exPortsfr0m Bali. A state-of-the art digital telePhone,the world's first handsfree, voice-activated telephone, the intrt} duction of cardSIllnDensrBuo' phones, telePhones for the handicaPPed, The 16th century JaPanesePoetMatsuo Basho "Do not s€ekto follow in fully automated wrote of vision and goals, manufacturin& virtuthey what seek of old; the footsteps of the men ally intercePFProof Managefor General winner Malaysia's sought." 17 1993' THEASIANMANAGER AUGUST
900tonsin 1991,dvalling its two largercomPetrtoF' Through intensivetraining, PT SemenPadanghas been siuccessfulin diversifying its main Product line from iust one gade of cementto six relfng solelv on its own intemal resources. Employeesundergoconstanttrainin8 gearcdto skills upgradingand enhancedtechnicalcomPetence- io-" ofemployeesworLinBtimeisd evoted to haining - and they enjoy salariesthat ar€ well aboveth;industry average.Over the last decade, rank and file salarieshave incrcas€dmore than ten tirnes.ln addition, employeesare provided home ownershiP and health carePrograms'
Mn-evge
transceivers, and exports to the United States: Theseare the creations- and achievements- of me ol tl|e mo6t Malaysia's winner in Marketing Management. chrll6nglng Establishedin 1975,SapuraHoldings Berhadis a]aasof one of Malaysia's leading telecommunications ma|egFn€nt companies and manufactuers. Up against such fu comp ies industry giants as NEC, Panasonicand Toshiba, ooentingin tl|e this outstanding companyhasclaimed a 22%share l€glon.' of the domesticmarket - up from 187oin i989 for its main product lines: subEcribers€ts,mobile phonesand keyphones.Totalsalesvolume in 191 was $212million, double the volume in 1989. Its primacy over the market evolvesfrom prcduct development basedon home-grawn technology. In 1988,Sapura Holdings developed an internationa.tlyacclaimedtelqrhone - the S2000B -whichwasselfdialing storedupto200numbers in memory and featurcd security functions to prevent unauthorized calls aswell asto record details of calls.And it was all Malaysian. Sapurahasrecmdy madeforaysinto Indochina, South Asia, and the Middle East,fuither demonstratin8 the quality and applicability of Malaysian technologyto global telecommurrications,and the sustainabilitv of Sapura'ssuccess. 'HRDrcfidns
AMMB Hor,orncs Brnnlo
ArtNB:LN tuttW@ rfltdt At0l a/}p'/lfu', ptellt'/,/llt!.
AMMB Holdings Berhad is one of Malaysia's mostoutstandingand comprehensivebanking and financial institutions. The range of servicesit prq vides includes merchant bankin& consumer financingi leasint and hir€-purhas€; stockbrokin& insunnce; investmentandfund management;and, unit hust management. The bank's retum on shareholder equitv averaging3670- is consistentlyamongthe highest in Malaysia. BusinessWeekmagazinerec€ntly reported that maragement gurus Michael Hammer and James Champy, in iustilying the rcengineering of organizations,sugg€stthat, "V{ork is b€st organized aroundr€sr.rlts, not taskssuchassalesor production." Just last year, the company reengineeredand r€structurcd, qeating a new holding company for the group smerchantbanking servicesand maFr subsidiaries.As a rcsult thebank imPloved its dividend strcamto sharcholden while increasingits flenb ity in nising capital for operating compaIUeS.
IntqJration evolving ftom the reorganization has rcmoved Estraints to development while providing a mechanismfor generatingthe financial
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rcsourcesrcquired for that development.And the troup s investmentpolicy rcflectsits concemwith the welfare of the group, contribution to long-term viability and long-term obi<tives - rather than short-term pofitability.
Senewar Suru Brnuen Everybody, the old cliche goes, needs to feel like some body, and at Sarawak Shell Berhad- Malaysia'swinner in PeopleDevelopmentand Management - everybody is somebody. Sinc€190, this outstanding company has implemented a Human ResourceStrategy that has gamered accoladesfrom respected,international awards bodies;but mor€ importantly, from its employees- acknowledgedby managementas its most important public and ass€t. SarawakShellbelievesthat its capacityto learn faster than the competition may be its only sustainablecompetitiveadvantage.And sothe heartof this company's human resource strategy is the development of a l€aming Organization culturc, characterized by opportunity for constant imprcvement and continuous leamhg. It is a culture that rclies on employeesfor its direction, and rclevance. Forinstance,amongits improvement programs arc QISS- the Quality IrnFovement Suggestion Scheme- and the Quality Improvement Proiect. Under these two programs, employees ate encouragedtogenente, identily and implement ideas thatwillimprovetheovenllqualityandpncductiviy of the company. Alrnost 900 ideas arc received by employees everyyearard ovell0% oftheserecommendations result in rccognition for their authors.Quality improvementcontributions a-refeaturcd in company publications. Sarawak Shell is also recognized rcgion-wide for its generouscompensationpackages,its unique training and self-imprcvementopportunities, and its innovative, enlightened systernsof incentives and awards.As a result,tumover wasonly 1.0570in 192. Only .58% of the workforce went on sick leave. A maprity of the company's rank-and-file are s€condor third generationemployees. Ask the averageemployeewhy hestays,and he will most likely tell you that althouth an above averagepay structurc is onefactot more important is his sharedinvolvement in decision makins and therccognitionthatgoeswith it. How do we know
. AUGUST'1993 IHE ASIANIVIANAGER
E'rdoyeeare encouagod to gena''to,lturt,ty ed lnplen€/,t ,daa3,t Srrerr.
TOLISTENIS TOLEARN
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At Sapura,we believein the powerof listening.Becausethroughlisteningcomes a world of understandingand a wealth of information. By listening,we learnaboutyou and your needs.And as such,we are ableto answer to thoseneedsin a highly effective way. to listen. Our businesspartnerswhetherlocal or internationalfind a virtue in our readiness Thus it is often that our businessDartnersbecomeour friends.
@W@@S,Mw@'BF To commu nicate is to explore
THERE AREEGGS AND THERE ISFABERGE.
THERE ARE HOTETS fusTAs ANDTHERE IS THEPENINSULA.
THE PENINSULA M A N I L A
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T h eP e n i n s uMl aa n i l aC, o r n eot i A y a l a n dM a k a lAi v e n u eM s ,a k a t M i , e t r oM a n i l T a e l .N o . 8 1 9 - 1 4t5a6x,N o . 8 l 5 - 4 8 2 5 .
"leammtk ad unltyot F|DGe b€st charactodzeg the Bafi of Ayudhya's wofibrce.'
animal breeds.In addihon, clo6eto 200mabr technologies and experimental breakthr,oughshave beenintroducedinto theagrioltural s€ctorAmong them are the intrcduction of 2l new high-yielding varietiesof rice, all of which are largely rcsistantto pestilenceand arc suitable for dted seededplanting As a result,the countly'snationalaveragerice yield hasincreasedfrom 1.5to 3.5ton / hectarc.The iistitute has also developed clonesof durian, papaya and star fruit; vegetablesuch as cauliflower and cabbageresulting in an increasein yields from 537oto a phenomenal5007oin the caseof star fruit. Havint encouraged crop diversification, the institute has also considerably broadened and strengthenedthe country's agncLdturalcommodity export base. Malaysia's export corrunodities now include not only rubber,palrn and cocoa,but fresh and Focess€dtropical fruit. Theinstitute hasalsoadvocatedtheprudent use of fertilizers and chernicalsas well as indirectly generatedgrowth and employment in other complementary sectorssuch as servicesand manufacturine.
Tunt-eno
Du Pom (THerr-euo) This year's winner in Marketing Managementbelongsto a group that hasboth sustainedits excellencein the production of chemicalsand speciality prcducts and its rclevanceto the contemporarymarket place:Du Ponfs secretis "multidisciplinary team selling." These marketing teamsale composedof specialistsin de velopment, production, sales and after service. Team selling has been particularly effective in Thailand as a r€sult of s€riousshortsupply of scientificand technical Dersonnel. Strong technicalsupport is critical in overcoming customer rcluctanceto try new materials and products because the technology may be too demanding. "Excellentfirms don't believein excellence,only in constantimprovement and constant change," according to Tom Pete$. The effectivenessof team selling at Du Pont hasbeenenhanced by the introduction of Continuous Imprcvement, a system intended to reinforce teamwork and empowerment and to sustaincompetitivenessby continually improving pioducts and services.
fhh,€hel ongndutnoogkol, Prcslde'.t,Du Pont fhall',td.
AsreFrsrnCo,Lro,
AsIeFlfu,s Ah fexhtrcd Ydn ha fun welk*efued ln the htefiEfloael na*et.
It wasa wise managerwhoonce said, "lf there were no difficulties, therewould be no triumphs." o|rr winner for Ceneral Management secured a 40% share of the highly competitive, traditionally Indian and Japanese-dominated local textile market by demonstratingconsistentinnovationand creativityin the development of new products; advanced, state.of-the.art production methods and rapid responses to changesin consumerpreferences. Asian Quality Management guru Rene DomingotellsusthatthefiIstandmostimportant step in practiqng kaiz.rl (conhnuousimprovement) is to eliminate unnecessary production steps.This company was the first to employ the pre.oriented yam and draw-textured yarn combination, simplifying a complex process and incrcasingproductivity by rcducing manufachrring stePs. It wasalsothe first to pnnJucefully-drawn yam in a single step. lnnovations such as these have placedthe companywell aheadof its formidable competitors.Since1989,this companyhas been the largestand most integated nylon textile producer in Thailand. Revenuesincreasedfrom B44 billion in 1989to alrnost 868 billion in 1992.
B,tnropAr.uourl I€an, conservative,aggressive;d)'namic: the Bank of Ayrrdhya, the winner for Financial Management- known locally assomethingof a maverick in the banking industry - is a bank on the 80. Profits increased607. in 1992,and it was the fifth most profitable bank that year The bank's assetmanagementhasbeenessentiallyconservative; the bank wiote off non-performing loans, and provided its clients a level of service the industry marvels at. As a result, the bank has expanded ostomer services,developed a nationwide, online teller netlvork and expandedits operationsin rural areas. Teamworkand unity of pulpose bestcharacterizeits work force,and managementensurcsefficiencyand effectivenessof operationsthrough a policy of openr:ommunicationand honesry One story that rccently circulated in businesscircle5concerns its chairman paying cash for the privilete of copying personaldocrments on a bank copfng machine.
IHE ASIANMANAGER. AUGUST 1993
fh. BarI( d A tdhya lB t navedck ht tlt€ fhd b klng ,Nustty,
Promoting Professional Banking Through Competence o Educationand Training IntegratedProfessional Development Programs . SpecialistDevelopment Programs (Classical,and DistanceLearning) .
o Researchin Banking and Finance o ConsultancyServicesto Banks
INDONESIAN BANKER'SINSTITUTE Jl. KemangRayaNo.35, Kebayoran Baru Jakarta12730,INDONESIA KotakPosNo.6708/JKSRB, Jakarta12067 -799091 Telephone: 62-21 I , 7992012 -7 Facsimile:62-21 990927 Telex:66080BANKMGlA
lionin 191 doubled to morethanUS$176milionin 1992.
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A r€cent reDort on I-ee Kun Hee, chairmarr of Samsun&in comparing the imPerial mamgement style of his contemporaries,said the chatman PIg fers,"to act like a cheerleader,at leastto his 200,000 employees." Pe6onnel develoPmmt is the Primary concemofThai FarmersBank,the winner for People Development and Management and ha$ beenfor decades.Its cheerleadershave made employeesthe prirnary and mapr beneficiariesof this excellentcompany'senliShtened,Patemalisticattitude towards its people. Thebankmaintainsa US$9milliorl state-of-theart training c€nter managed by in-house conrs€ dir€ctors.In 193, it is estimatedthat &000employees- more than half of the bank's work force will be enrolled in its various programs.More than 84% of rank and file receivetaining every year. And arurual training expenditures per employee inqeased 42% ftom 1989to 191. The company is no strangerto The Asian Management Awards. ln 190, the first year of the Awards, this bank's leadership in the area of information technologywas rccognized. With this year's award for People Development and Management Thai Farmers Bank is a winner twice over.
Ar,pHrrrcEncrnoNlcs Co. LrD. Although barely a year old, AlPhatec Elechonics, a rnedium-sized manufacturer of elechonic devices, primarily inteSrated cimrits, is on the cutting edge of information technology. All the company's intemal systemsare on-line, providing its 1,400staff rcal-time, interactive infornation on inventory manufacturhg uPdatesand yield data rcPOnS. It is also on-line with its lar8est ostomers via high+peed data communication tinesand E-Mail; ploviding quicker responsetime, iust-in-time inventory managementfor customersand the company; and, vastly rcduced levels of paperwork. Whateverexemplaryefficiencylwels havebeen achiwed by conducting businessin hue hiSh-tech fashion have been hanslated into solid Profits. AtphatecElectonics grossrevenue of US$88mil-
Dolr (THrneru) Lro. IGr'zenis important in agriculture becauseit is difficult to raise prices according to AIM Prof. Fnncisco Roman. "Thercfore, inqeasing profitability r€quir€s rcducing costs." The r /inner in Operations Management is a memberof a world<lass multinational network known for its PIemium brand of pineapple and |)ol9't ,4o b tyn tyno.'a b other agricultural Pladucts. Dole's products arc bestsellen the world over Wn{{tdr.r - ftom the Middle East to South America; ftom 4.b tual FAntc. Europe to Japanand the rcst of Asia. GeograPhic distant markets relative to Production cente$ has also made iust-in-time delivery ard quality maragementcritical successfacto$ for decades- long beforemodem managersassociatedthesepractices with the conceptof Japanesernanagement.Known for its iNpvation in meeting Productivity targeq "guava the local companydeveloFd in-housethe halJcutter." This devicehasreducedthe number of man hours requircd for PrccessingtroPicalfruit by nearly 30,000hours. Quality levelsarcdiscuss€ddaily in production meetingi and Dole hasinstituted in its oPerationsa continuous improvement program. Irtoductivity and go$'th targetsarc resetevery yeal and have beenmet without fail.
Lastyur ourjudgeshaddifficulty Mning a wintw in Deoelapnet t Managenat in ThQiland.As a result,rc atnr d unsghmr.ThisWr, thoeunsnoshorta8e of desroing oryanizltions.h fact, tun organizations shaft the'\ued for DeuelowvntManagement
SurHorHetTrnlo.tATHInrr OPIN
Unnrnsnv "is to The purpose of educatio4" we are told, tEnsmit the cultwe of a society to its youn8. In accomplishint this, it is hoPedthat the individual will be armed with knowledge, shength of iudgement and moral virtues, as well as the ability to make a livin& and in the Proc€6s,Preserve the heritase of the nation and the achievementsof
AUGUST 1993. IHE ASIANMANAGER
6
PrcVrorlsgeneranons. 'Altbough the Our filst winner in this categoryin Thailand is opcnlrnlveBity an institute of higher leaming that for 14yearshas DONOF
toaching ehmg|lE ttom vadous uniYsrsities abrcad,it 13 6366otldlylhd in cultureand curlculum."
made a critical contribution to basmitting the cultur ofThailand to its youngand opportunity to the not-so-youJrg.The filst distanc€teaching univeEity or open univeDity in SoutheastAsia, the univerity was conceivedand developed by Thai educators. Since1980,over 805,000studentshave eruolled in the univeEity, the majority without ever setting foot on carnpus. The unive6iys ladio and television programs reachalmost five million Thais all over the country every week And it hasgraduated almost 2mr00 studmts from all walk of life who rcceived their educationvia rnail, radio and televi"I-aw for the sion - induding the multi-awarded GeneralPublic." Over 90%of studentse olled in the university obtain work; rnany enter graduate schoolsin Thailand or abroad.
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Michael Porter's Competitioe Adaantageo/ Nafrbrs was perhaps the first formal acknowledgement that the capacity of a country to attract foreign dtect investment is a critical determinant of its capacity to create iobs, generate national wealth and enhance the quality of life of its people. Thailand's economy grew at double digit ratesin the late'80s. Its remarkablesuccessthroughout that decade and its capacity to sustarn high gowth levels - it recorded the second highest growth rate among the newly industrialized eonornies and Asean in 1992- is attributable in large measureto ou! next winner Last yeat Thailand's exports gew by an estimated U.87o, and accordingto theAsian Development Banks 192 annual report, its "competitivenessin international trade remainedshong despite shortages of skilled labor and higher wages." Its capacity to attract foreign inveshnent has also remained strong: the agency ol8anized US$.7 bilion in infrastructure poiects frcm 199G 9, and recently annourced incmtives for educational institutions to addrcssmanpower shortages. The agmcy currendy handles over 80% of all ioreign investment which accountsfor 90,000new bbs eachvear.
6
HorwKorre HoNc Moronou SrMrcor{nucrons Konc Lm, Softwarewizard Bfll Gates- when asked to comment on the injormation revolution-said, "If your businesshas an''thing to do with informatioo you're indeeptrouble." Hisintersiewernoted, "ff he-sright that meansalrnost everyone.Get ready for tou8her competition than you've ever imagined." Founded in 1967, our wimer for G€neral Management and People Development and Mana8ement is rcad), A wholly-owned subsidiary of the world's fourth largest semiconductor Lenhlp,n company, quality is a way of life at .echr'o/d8,tf Motorola SemiconductorsHong Kong Ltd. Em- Motoda ployees carry cads dut rcad, Our Fundnmmtal Son|bondrcto,!, OWctiTx:TotalCustonw&trbfacritn.On the rcvere it prcvides Key B€liefs,Key Goals and Key Initiatives. And the company believes in two things: First,constantrcspectior people;and two, uncompnmising integriry WithinAsia, say soulf,esftom the EconomistGrcup's Busines International, the companyhasbeenparticularly innovative in creating new operational Plocedur€sand rnanufacturing standardsto ensue total customersatisfaction. Its cross functional teams work direcdy with supplien in the development of new poducts. Theseteams have made a critical contribution to attaining and sustainingworld classprcduct quality, enhancingdelivery schedulesand building alliances.They do this by capitalizing on the gowing demand for total system solutions among their customels' softwarc, system design arld application support. Motorcla's commitment is to deliver the best service and poducts in the industry; to continuously out-perform its competition and to exceedostomer needsby giving customerswhat they want when they want it. There are three Key Goals: to be b€st in class, increaseglobal market sharcand achievesuperior financial results. The company'sSixSigmaQuality - a Program to mcouragequality imprcvement and Limitdefect levels to no more than 3.4defectsper million - is the filst of five Key lnitiatives. Together,they pervade the company'sentirc operations,ftom manufacturing to administration. Peter Liu of the Hong Kong BusinessSchool notesthat, "Thesedays,many employeesdorltiust carc about the money they make but also whether they arc head with rcspect." Motorcla hasa stlon8 tradition of participative
THEASIANi/AT{AGER. AUGUST1993
CU$TOMER SATISFAGTIO[I
rsTHE 0il1r REWARD WE ABOUT. CARE At Cafede Coral,we'vealwaysbeenstrictaboutquality- the qualityof our food,servicesand management. Simplyput, we alwaysinsiston the best. $ For ultimately, no matterhow hardwe pushourselves, it is the totalcustomersatisfaction thatis our mainconcern.We knowthatwhatcountsis not howwe rateourselves, but how our customers rateus. Andfor that,we'rehappyto keepworkingfor 100marks.Notjustthistime- butalways.
A MISSION
TO BE WORLD
CLASS
To be at the forefront of technology... Provide our customers with a rangeof services that meetthe highestinternational standards... prices. Allatcompetitive Theessence of ourmission. Singapore Telecom servesmorethan 3,000international companies thathavechosen Singapore astheirAsianhome. 0 u r t e l e c o m m u n i c a t isoenrsv i c eas n d i.n f r a s t r u c t uar e re consistently ratedamong the bestintheworld.* We'returning oursightsto international markets. AndSingapore Telecom willcontinue to beguided bya single determination to offerworldclasscommunications to ourcustomers. wnerever theymaybeandwhenever theymayneedthem. It'sa promise we'vebeenkeeping foryearsinAsia.Nowwe're readyto makeit to therestof theworld.
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SingaporeTelecomComcentre, 31 ExeterRoad,Singapore 0923Tel:65,g3g33ggFax:65_733 1350 Singapore TefecomUSA Suite 500,301Riverside Avenue, Westporr,CT06880USA Tel: 1-203-4546818 Fax:1 -203-4541923
managementand enlightened HRD Policies that recognizepeopleasappeciating assetsand thekey contributor to competitive advantage.EmPloyees undergo a minimurn of ,t0 hou$ Per year of training and nanagement constantlyevaluatesmarket compensation tlends. The integrated emPloyee teams devise their own PrcSrans to imPrcve the generalwork envtonment. For iutance, employeeshave inhoduced flexible work hours into their rcgimen and play an active role in identifying haining needs.Every emPloyeecomPletesan annual PerformanceAppraisal and CareerPlanning exercise,induding the formulation or rcvision of their careerDlans. Gverybody hasa careo at this comPany,not iust ai:b,"andMotorola scomPrehersivecareerdeveloP rnentptqgramsflswetl|ateachofits1,941ernPloyees areptovided the oPPortunityto develoPthen Pote(F nzl-h192,72L ol tlreworkforcewaspromoted,and thr€epecent ben€fid fiom pb rciatlon designedto acquaintfuhre leaderswith all asPecbof the company'sope!.'atons.
Con,rlHolnnrcsLro' 'The idea," Wal-Mart's executives say about "is operationsin a rccentFortarc rePort, to run each storeasifi(s the only oneyou have." Caf6de Coral, winner in the cateSoryof Marketing Maragement, operatesthe lalgest fast food chain h Hong Kong. Its 20%market sharein the local fastfood industry generatedrcvmues exc€€dingUS$118million in 191. By comparisoa the dos€st comPetitor re ported US$76million in salesfor that same year. Atd the srrccessof this excellent organization evolves ftom running each store as if it werc the only one it had. the indushy Return on salesis a healthy 12.867o: averagesbetween !107". Cai6 de Coral manages restaurantsin Macau and China; in Augusi 192, it opened its 100th oudet in Hong Kong.Soabundant arcits branches and so broad is its rcach that the $oup boastsof beinS the onlY fast food chain to out-sell McDonald's. Besides providing value for rlton€y and stayingdce to the customer, management athibutes its sLrc(€ssto fumovationsin Foduct line, eftctive and original advertising andsalespromotions.The chain inucduced long-boiled Chinese desserts,printadvertisementswith thelook and feelof regularnewspaper columns and convenience fu&ging for tate-home orders.
"A tnte hit
Ploduct establishesan entircly new the marketPlace.You car desiSnthese in ftanchise products, and they not only win awards, but sell like crazy,too," oneinnovato! noteswho soundsas if he works for CaJ6de Coml. Initation is not only a sincercform of flattery; it is a keysucc€ssindicator. Judgrng by the attemPts at emulation this company hasspawned,the chain setsthe standard for qualitv and s€rvice in the local market. Tech"otogy lii" that incorPonted in the cornpany's Spring Chicken Set packaging - it is both convenient and attractive - is quickly bonowed.
JCGHolotttcsLm. Although technology is a key component of competitive advantage leaders irl corPoratiolu of successf agree on one thinS: staY do6e to the customer, JCG Holdings Ltd., winner in the category of FinancialManagementisa deposit-taking comPany focusing on retail consumer financing services. Since 192 JCG Holdings has built a network of 32 branches- the largest network in Hong Kong - which keePit doser to the customerthan any other dePo6it-takinginstitution in the market. The company's financial servic€sinclude personalloans,overdnfts, mortgages, hire purchase facilities, tax loans and cedit cad serviies. And it offers stockbroking services through its subsidiary,JCGSecr.uitiesLimited. A key measure of this comPany's exemPlar financial managementis its high levels of caPitalization and liquidity as well as rcbust Profits and exceptionaly hiSh rctums on equiry JCGHoldings reported a caPitaladequacyrauo of57%- the minimurn requirementof the BanI of International Settlement is 16%. Equally impessive is the company's liqLridity ratio: 67", wdl abovethercquir€dminimum25%.Profitsinoeased 41v"n1991 a d52E"i\l92,andeamingspershare increased297oin 191 a^d24.2E" lr:.79/2. Its solid Performancerccod rcflecb Prudent esentially consewative financial Policiesand the strong financial conhols which are a pillar of the company'sunderlyingstrcngths. Its Pusuitof cus' tomer serviceexcellenceis manifest in its haining programs which encornpassaI staff levels. And it is develoPingan inlormation technology inJrastmctuJeto maintain the integrity of the company's financialpolicieswhile enhancingcustomer
IITAMGER AUGUST.IgS. ]HE ASI,CN
rcA r'tr/.hgt 4ob iE 'd bt,ttdM opailE !,'9'''n.'|d cr'dt co',t'rl rr|dE,h''ltr''aa,
seruic€staff support, and potential for continued "Dordt6 gmwth. Pka Hut's 1r|atlvsly Bhph poducf llne,tl|6 comp yru|B lb nmdouy cm|d€r oeoratons llkc Fottutre maguinehasonrcuncederpnded cmryI dghdyrun ageoftheunrw's nt,6tdwmic ondimportantbusinas: 3hlp.' infonation technology.Ne.tvthzl6s, theHong IAng ptwl S judgesdtw not to tak an aunrd in thb categorythi6yqr in Hong Kong.Thecriteriastirylate that thz Aund is for tle castioe ue of inlomation tedvwlogyto enhancethe omptittur gtsition S the cotflWly. bton ution tedrnologyis a f*ute of Hong K:ongbusiess and therearc nany insturcc ol tlu apflrcationof lading<dge technology.Huueuer,the leoelof inrwrntion and cr@tipityin thearytitntion ot' tulornntion tedmologyurri& is wnnaqy asxriated with organizations rcefuing thisaund uns not clafly denatg ratcd.
point-of-salessysteminstalled in eachoutlet which tracks and storcs everything from orde$ to table number, number of guestsand server.Computer work stationsarc strategicaly locad throughout the r€staurant. The system has dramatically mhancedorder processingand minimized enors. Data is elecironically transfe[ed to head offic€ systemsdaily, and gmeratesstocking rcports,contributes to firuncial and inventory conhols and provide marketing feedback Critical information is communicatedvia electsonic mail ftom the head office to each stor€.A delivery servicedatabaseprovides the store manager and the delivery person qitical inlormation about a customer's order: how many time and how ftequendy the customer has ordered a takehomepizzainthepastevm,whetherthec,ustomer hasa fierce guard dog at the gate, Two other dEracteristics demonstrate the organization's senseof oisis h a highly competitive envftonmmt Fi$t, the company will provide any cornbinationof cnrsts,condimentsand ingr€dimts the custorner deires. AIld it will do this within specified rcgufady monitored time paramete$. Second,the duin invests heavily in market researh to enhance its capacity to saHsfyrapidly changing consumerpreferences.
Pzz,rHur Jenonvr Plcmc 'Corporations
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onc€ built to last like pyramids arc now mor€ like tents,"' PeterDrucker said in a recent interview. Pepsi4ola president Craig Weatkemp- det€rrninedthat hjs organization last like a plramid - got his managersthinking seriously about the fuhrre despite the good times his corporation was enirying by creating a senseof aisis. This highly irurovativernartagergavehis top 11 managers toy hains complete with 11 tiny, frightened figtr€s standing on the track in fumt of the locomotive. DespitePizzaHu(s relativelysimplepoduct line -pizzasof almostanyandeverycombimtion-the cornpanyruruitsrurwkablyaomplc(op€!:ationslike a tighdy nm ship,in part because of that same ss$€ of cisis. Thecompany is a mecca for Pizza lovers worldwide. Fast food connoi66eurslove it for the tangy, cheesy pizzas and the restaurant chain's wholesome family ambiance alrrd dean interiors. ln its drive to stay ahead of the competitio& Pizza Hut Jadine Pacifichasdevelopeda
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IHE ASIANMAMGEF
HolrcKowcMmlcrurvr Assocnnon I^ ThePost4.EpitolbtSocfu{' Drucker also sug. g€ststhat social neds ar€ growing in two areas: "haditional darity; and...evm fastet in rcspectto servic€sthat aim at changing the comrnunity and d|anging people." Now in its thirty-third year changing its community and dweloping people, qur next winner was founded origina y with iust five employeesto imprcve the effectivenes and efficiencyof managemmt in Hong Kong. The Hong Kong Management Association (HKMA) is a self-financing non-profit association - the largest Plovider of managemmt training and education in Hong Kong - and offers over 1500 Eaining prcgrams to mor€ than 42,0m participants every year.And HKMA also olganiz€s a serie offorumsand regionalconfernces and publishesthe colony's only bi-nonthly, bilingual managem€ntpurrlal. Theassociationhasgrown with Hong Kong, In the early'60s,when the colony'snascentindustries were taking off, the associationbegar with a simple, but welcome, trainint program for zuperviso6. Over the next tfuee decades, its baining programs becameinoeasingly sophisticatedand multidisciplinary, rcgesenting a wide spectmm AUGUST1993
ProtoQ
Mary thingscan when be achieved
3,652peryle
a[ sharea shglevision. o
s ls one. It's amazingwhat can be achievedwhen we pool ourminds and efforts together. Consider this: Last year our production of Proton cars exceeded 100,000units, representinga I97o increaseover the previous yeat. From 1989 to 1992, we reduced the number of m a n h o u r st o p r o d u c e e a c h c a r b y 2 5 7 o . S i g n i f i c a n t i n c r e a s e si n a u t o m a t i o n a n d roboticshas reduced waste and enhanced our productivitY. And despite the state of the world economy,our exports increasedby a spectacular22Vo.
' The reason for such amazing growth lies in our "total quality" concept that permeatesour entire operations, from administration to manufacturing, from corporateoffices to the shop floor. And that's why the Asian Institute of Management (AIM) recently awarded PROTON t h e p r e s t i g i o u sM a n a g e m e n t a w a r d f o r OperationsManagement. It's one more thing that we have achieved together and which
cananbeproud,{." PPOtO7Z All
3,652 of us.
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NationalCar. of theMalaysian Manufacturer HICOMIndustrialEsrate,Batu3,P.O.BoxTl00,40gl8ShahAlam,SelmgorDmlEhsm,Malaysia.
Tel:603-5111055.Telex:PROTONMA38545' TELEFAX:603-5111252'
Twoinarow.
Winner, 1991AsiaoMaaagenelt Arards GenenlMmagementCategory Awardedto PhilamliieFebrury 13,1992 by theAsim Ins[tute of Management
Wuoer,1992 AsianManagenert Amrds Fnancial Management Category Awarded February 18,1993 toPhilamliie Institurc ofManagement byfie Asian
Oneforthebooks. Lastyear,the fuian Instituteof Manage mentgave usourfrst ManagementAward "for in theGeneral Management Category positioning success in strategically thecompanyin the industryand transformingit intoanoutstanding company."
buildingasa majorproviderof longterm funds.Oftentimes in takingharddecisions the interestof greaterefficiencyandcost whento expand competitiveness. Knowing andwhento holdthe line.Thusassuring thefnancialsecurityof ourpolicyholders.
Thisyear,wereceivedoursecondawardh " the FinancialManagement Category for outstanding management ofthecompany's assets,liabilitiesandequities."
Thesetwin Awardsin GeneralManage mentandFinancialManagement hspireus to do evenbetter.
Foryearswehavekeptourpromisesto our policyholders. Ensuringthejudicioususe of our resources. Hewingcloselyto our mission.Participating corporate in nation-
AndsoPhilunlifehasearnedthe raredistinctionof belongingto the selectgroupof intlewhole ofAsia back-tcbackwinners A featthatis indeedonefor thebooks.
The PhilippineAmerican lEl,,rFIl UlIe/ Life Insuiince Company -V*ilfWr;vsf?t. 4f!)
A Msmbâ&#x201A;Źr compily otrheAmerican Internationat Group
'B6h is knom br its b6|dy actlYbm."
made civic consciousnessthe norm of local adverusers. Basic is also known for its foxholes - selfmaraged business teams comprised of accourt managers,qeative, media and accourting personnel. Employeesclairn that foxholes empower staff and make ownership ofa project real.
PHrr,Ipprxo BusNrss FoRSoclAL (rnsr) Pnocnrss Since its inception 22 years ago, PBSP has worked to imprcve the quality of life for the Phi.tip pines' poor thJoughempowering localcommunities, providing technology arld credil identifying new markets,and supplying nual enterpriseswith the capital resourcesrcquired to develop dynanic enterprises.The organization is perhapsunique in that it not pnly assiststhe benighted,but alsoseeks to influence the affluent businesscommunity, encouragingmajorcorporationsand businessleaders to adopt community development pograms and
integrate social development policies into their largbr busines agenda.
Thzorganizers unuWliketoocknqtledgethesupportandcontributionsofThai Ain/nys Intenatiorul Ltd.,theprogan's olficialailine; Dinus CIublnternational, ofticial cretit urd of the Auwds; SGVI Arthw Andersen,theofficialauditorsof the searchand selectionprocess;Pico Group,theofficialexhibitorganizer;and, KodakPhilippina Ltd, olficialfilm and finisher. Sinilarly, specialthank gcesto the tawgetnmt andstaffol tfu ofiicialhotels: ft,a Atlan Hong KongHilton; IakartaHilton InterM,,rlgj6nont Mtioral;The Crqutt PincessKrula Lumpur;Shangri- Awatdstroplry. Ia's EDSAPb0 Hotel;Hyatt RegeflcySingapore; and, TheDusit Thani. Theknrd's officialpublicationsinclude:in Hong (on g,SingTaoDaily, SingTaoEveningPostandThe Sta datd; Indonesio,Swa Sembada and.Tempo; Malr3rsra,BusinessTimes; thePhiliryines,The PW ippine Sta/ard The BusinessStaDard, The Nation, thekLwrd's officialwblication in Thailand.
E VE N N EW H OR Iz 0N S A RE w t T H IN RE A CH , Conquertng
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PlusUltra: ThereisMore Beyond power and prestigeof the eptember 9, 1517. At Spanish Empire inlone la6t the awaited creasedat an extraordi. Charles of aa/a"*"s. nary pace. KingCharles I Bugundy seb sail for ruled the Empire for ,() his inheritance. to claim SDain yeaF, conquering lands Fb1,while he hasnwer left the bothintheOldWorldand now is Charles Neiherlands, the New, extending the rightfir.l king of Spain, the Spain's dominion and vathrone left legal heir to the power anrund the globe. cant by his late grandJather, Charles I, the Under who Catholic, Ferdinand the Spanisharmie were unprevious year. passed awav the ^ conquerable. And the But the Spinish pebple Spaniards' earlier fore drmd the coming of Charles. Ming gave way to a He is, after all, a foreigner,ard conviction that - under they regad foreigners with this foreigner - it was contempt. For while the Spanswbot tor exc?.nnce. their destiny to n e the ialds arc prcud of the geat world. conouests of Charles' PredCharles I's emblem ".euior - among them the conquestof tlrc New World - they continue woutd later be used in the design of SPanish to tldnkin nationatrathetthan imPerialterms. coins minted frcm the abundant Prcciotrs metals mined in the Americas. The AmeriCharle will drange all that. would start using the coins - call€d Nearly five hundred mm accomPanY cans "piecesof eiehf' - in the I 8th century. And '10 Kins Chirtes on his vovaqe. More than shii esco* the young mdrutch to his new hto th" A-6".i-o dollar would b6ar the kinedom. His fl;sship, the largestand most emblemof King Charlesl - a scrollentwined hrs oftrlerc'ules. Still later codrfirlvessel intiefl6t a,fl,aunsamainsail amund the twjp "$"- symbol - the two vertical adomed with the pillars of Herc1rles.V\tiften evolved the "S" rcp ona scrollthattwrhesaroundthePia6isthe tinesrepresentingthe pillars and the countsies, the scroll. Many other resenting kinds mofto, Plrc l)lha. Flerculeswas the most veneratedof Greek unaware of the symbolism used in the dollar herces. Hi5 strength and prowess wele un- sign,wou.ld placethe two Pillars in a horizonmatched, and his many exPloits the most tal Dositionin the svmbols for their own currencies,suchasthejapaneseyenand the peso. rwered in Westemmytholo65r.It was during pumeys The Asian Management Awards revives hero that the Greek many of his one erecd two pillars: one on Gilbratar in Eu- the orieinal emblemised by King Charlest of e t*o pitta"sandthemottoPfiisLlrn rope and the-otheron Ceuta in Africa. These Spainltt ' 'fillan of Hercules" were thoutht to mark Therearethees''mbolismsinvolved. First the edee of the civilized world. And thus, is the dotlar asa symbol of prcfitabilty, siSnifying achievement.Secondis the motto Pltls irucidd onthepillanwerethewordsNePlrc 'Nothiirg l]ltra - thereis more to be achieved.Third is BeYond." Ues Ullra globei.llushatingthe new breedof managBut CharlesI had removed the word Nein the"n"eaea i" ttre tbq0s and beyond: globa.l that ers quitetheoPPosite: Ne PIuslll trato siENJy there werc vast and wondrcus lands that lay manaqerc. Thi elegant gtass Asian Manatement beyond, and that he intended to carry the Awards hophy was desiSnedby noted Filiworld. of the comers oillars to the farthest pino ImPy P aPil. the sculptoa his leadechip, And hewould. Under THEASIANMANAGER. AUGUST19S3
ASIAN INSNTUTf, OF MANAGEMENT PBESENTS
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Managemenl lnlomationManagement General Managemenl Marketins Management0peralions Managemenl Financial I | ilr.T.';.?|.J;,loorrn,..o
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620 milljon US$978
89 million US$1.3
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Education and and trilerpdse tninano Industdaloevelopmett, Rural 0e!€lopment Worldwide Worldwide 1,970
ilolorola S6miconducto6
CalodcCoralHoldings Ltd.
lilotorola Somicondldols Hl(lld.
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Asia,Australia, Eumpr,U.S.A. 1,941
llongKong
A9a 1,950
US$126.6 millaon t||*.i rlntt - 20.2%
us$590,000 Etp.rdltll| plr an ot!.t!rr u$tl6,650
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38
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370
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. AUGUST THEASIANMANAGER 1993
.THE 1993 ASIANMAMGER. AUGUST
Nowinner
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ToruardsMalragJelrentExcellence Koh' ttalland'sdoputyprlm€ Tonrmy Ptotessor tuhn leat|et3,SlngrPore's Ihrooro396c:ted tradoandInd6try Dat6S€d ot Intemadonal mlnkior t alaysla's Vlnyanand mlnlsier,ii Amnuay to staycoltlPotldtve. need and th€ dewlopmont tho reglon's RddahAzts,oftsrthdr vbw ot
The Singapore: N-extQuarter Century By Prof$3or TommyT.B. Koh and Ambassador€t-Large Director, Institute of Policy Studies
fuo/lee9or 'ionmryXoll
hite leafing through the Pagesof Tlr Asian liowger's (k Tht Asion Manager,Nov / Dec'92)recentissueon GlobalAsia, I carneacrosssomeintercsting passagesthat de6siH the dramatic transformation of the ASEAN region: "When it was forcibty expelled from the 'State' of lvlataysian Federation26 yeals ago, the Singaporewas a seedyenh€Pot town sunounded by swampland.Is alreadybleakprospectsdeteriorated furiher when, shortlv afterwards, its main client - the British Navy - announcedthat it was pulling out ofAsia altogether.The rcstis, of course, history and the clear€st Possible demonstration that poverty and underdeveloPmentaIPnot incurable congenital curs€s io be Passed from one generationto the next, in the absenceof natural resources. "Vvhat has taten PIac€ in SinSapore is likely to haPW , nutetis mutnndb- ar'd,on a much grander scale- inASEAN asawhole...Within Asia, Singapore offurs its 2.5 million citizens the best standard of living in Asia, aheadof Japan,as measued bY the co6tweighd availability ofa basket of ammities. The averagesalaryof SingaporeanCEOS,at $100,000a Yeat is the highest in the region; the same
holds true for the s€condmarngerial level. Singapor€ is in some ways a microcosm of what the ASEAN natioru: Indoneia, Malaysia, the Pltilip pines, SingaPorc and Thailand - that singuiar rcsion within Asia Pacfic - hasbeen,is prcsendy *d ^ight b".o^"." While we ate all gratefirl for the rave review of our counbys quantum leaPinto the front mnks of the ASEAN rntioru in iust over a quarter century, the nextquestionthat arisesis:What will Singaporc be like inthe next quarter century? Thking off as we are now doing ftom a higher Deak - in sharp contrast to the metaPhorical iwampland ftom which our fledgling city-state emeryedin 1965-we arefacedwith the dilemma of all excellentorganizationsand nations:How to meet the challengeof continuing rcnewal and imDrQvement. In a very rcal sense,this challengehas already beenmet head-onby our leaderswhen they articuNextI'ap. lated ourcollective vision inSingapote:The Our vision is that by the year 2020,SingaPorcwill have becomea develoPedcountrY. That vision is asclear as the duonological year onwhichitisfocused. We,SingaPoleans,arcsefting our sights on attaining global, not i.tst reglonal, excellencewith clarity of purPoseand determinaI!on.
I neednot discussthe sPecincfeatur€sof SingaDores next lap. I only wish hoshaF with you some iho..ghs on ho* *i might avoid the Pifallls into which many oncegreat comPanie - and cou.nhies, evenemPir€s- have fallen after reachingthe sunmit of achievement.Thesethoughs are by no meansorigina.t.They do not flow ftom a scholar's erudition or ftom a businessman's stseet€mart acumen. Thesear€ iust my random ideas culled ftom travels,readings and talks with frimds ftom manv Dartsof the world. Firsi we must rernain oPenand rcsPonsiveto change.Even aswe have setour sightson strategic goals, we must be flexible in adaPting to dynamically changrng conditiors. More changehas been wrought on the faceof the earth in the last decade thutr i ttt" L"t cet tuty. Only 6ve years ago the Berlin Wall seemedimPregnable;the SovietUnion
I\iIANAGER 1993. THEP.9IAN AUGUST
41
AFTA: Its Reliance on Management Excellence
was a super power; and China was still nesiaarerapidly developinginto industrialperceived asa backward economy.With the ized economies producing world-class quickeningpaceof change,on a global and Drpclucts, regionalscale,we must bepreparedtoadapt The West - our worthy competrtor, to revolutionary changesiir thi comlng decfriend and fiequent mentor -i hasodserved aqes. the elementsoi our competitive advantage; Second,in a world that has become ma productive and affordable work force, qeasingly borderless,we must look beyond lower energy costs, supportive governtraditional bourdaries of geography,cutments, new manufacturing facilities turc, and even traditional-bGness- tinls. equipped with the latest technology;and This meansopemess to the idea of building incr€asingly,the capacityto develoi-indigstrategicallianceswith countries and orenous technologies in ve4r innovative and ganizations that offer distinct advantaqes very creative wavs. that will make our country and busines"ses And the Westhas taken stepsto enhance more globally competitive.SinsaDoreAirits own competitiveness. It has acknowltines is already shoriing the way"th'roughits edged its weaknessesand begun to focus on atlianceswith DeltaAiilines and Swissarr. By Dr, Amnuay Vllayan quality management practices honed in JaThe main focus of alliances within our DeputyPrimeMinister pan,Koreaand Taiwan.lt hasrecognizedits region today is, of course, the nascent KingdomofThailand - and the peopleaskey elementsof success ASEAN FreeTradeArea (AFIA) which was basic building blocks of laurched right herein Singapore.Other ercompetitive advantageamples are-the Growth iriingle berween and empowered them. Singapore,Indonesia and Malaysia and the Now, it is seeking to level proposal to establishone betweenMalaysia, the playing field thnrugh lndonesiaand Thailand. thedevelopmentof unified, ThM, we must continue to encourage that you've got.to keep on multiple-state geographical ' achieversand championssuch as the wiiDernga success. matKets_ ners of The Asian Management Awards. To the winners of The The European CommuThesecompanies serve as outstanding role A s i a n M a n a g e m e n t nity and the North Atlantic models for other organizationsto emutate. Awards, we salute your Free Trade Area may now Formany yearstheyhavepainstakinglylaid success, and at the same rcpresent unified markets the founiitions foi sustainedgrowtf,, prof- time, challenge you to susmorc in name than in fact, itability and market dominanci. Their pace. tain this success- to conbut factsincrcasinglyindisetting efforts in their rcspective induatries tinually refine and enhance cate that these regional Dewty PrfuneMlnlster have,without doubt, upgradedthe quality, your product or service, trade centers represent a c o m p e t i t i v e n e s s a n d p r e s t i g e o f improve your efficiencv AmnuayVlrayd, potentia.Uyenhanced level Singaporeanprcducts a-ndse'rvices. and stri ve ior corporate ani of competitiveness that Fourth, we must continue respecting the organizational excellence. -The Asia, Asian govemments, sovereignty of the citizen-custbmer For you are meant to be an example to and Asian businessesthemselves must, in ostomer of the business or developmenr emulate- to setthe standardbywhiih our hrrn, acknowledgeand respond to h an organizahoriis alsothe primary consiituent nation'sbusinesses and manasersset their effective, meaninghrl way. And one of the o f y o u r g o v e r n m e n t . T h e s o v e r e i g n obiectivesand measuretheir aihievements. maior responseswe inASEAN havedecided Singaporean citizen-voter is also the cusConsistent successought - to b€ a compo- to launch is the formationoftheASEAN Frce tomer-consumer of the profit-seekhg cor- nent of that standard. TradeArea or AFIA. poration or th€ s€rvice beneficiary of the Not too long ago, the editors of a higNy A rccent study by kofessor Mari Kondo non-profit olganization. Like youi organi- respectedmdgazine wrcte- "The peoplesof of the Asian Institute of Manasement idenzatrons, your government is commifted to Asia never had it sogood," in referenci to the tified thre€ major obiectives td ensure sucrendering quaLityservicesto its citizens.For phenomenal growth in many of our Asian cessfuI implementation of AFTA- rejection us to be able to continue doing this, we must economiesover the last thrce decades.The of protectionism, increased direct ioreign rcmain close to the citizen-consumer, en- editors seemed stunned that we Asians investmentand rapid development of ingagehim in continuousdialogueand seek could do so well, and implied that we joUy digenouscompani& into inte;Etional ouF feedbackon how we canimproveour prod- well ought to be gratefui for our good foi- wardlooking enterprises. ucts and services. tune. And of courseall good things must The first obiective is a prerequisite for an Lastly,and most importantly, we must cometo an enct,so tustvou wait. increasein intra-ASEAN trade. AFIA will trust in our people and empower them. Two weekslatetihe ;me editoE warned achieve this by minimizing intra-regional Trusting ou r pbopie meansbelievins in their that, "An ageof broader,fierceglobal com- tariff rates ani eliminatin! non-taiff basic se-nseof duty and patriotisri as citi- petitioD petition, with with all its its risks risks a and uncertainty, mostly bureaucratic - barriers to trade.And zens, their innate intelligence and rational- hasi begun." And they were risht. in this way AFIA- it is hoped - will have ity as ostomers and consurners and their Of course,one might argue iha t the ageof a substantial impact on efforts to brins about shared commitment to our goals for the broad, fierceglobal competition beeanal- an open ASEAN economvNext Lap. Trust brceds resp6nsibility; re- most yearsago. most thirty thirty years aeo. [t It'is is becoming becomini even even _ Thesecondobiective-jincreased foreign sponsibility brings about involvemeng in- morcfierceasnewplayersenterthe"game.', dfuect investment - will createiobs,transier volvement engenders commitment. The veterans in this competition comoetition ire rhe technology and generate expo* rcvenues. irc the Steadfastcommitmentto Singapore'svision West and Japan; Hong Kong, Singapore, And it is important for ASEAN to underforthe future is the bond thatmust unify our Thiwan and Korea are coming into iheir stand wherc foreign dircct investnent can nahon. prime; and Malaysia, Thailand and Indo- be rcasonably expected to come fron, and
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THEASIANMANAGER. AUGUST1993
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what will attract it. The third and final obiective- increased efficiencv and competitiveness of ASEAN cornpaniesin the context of the global market - is the most imPortant to all ASEAN businessleaders. Competition will invariably force firms to stav iir shape;good companies will have to coritinue gdttnig better aid better at what they do. Cettins befter will probably mean ertbracing tlie practicesof t'otalquility management and constant imprcvement. And this will foster the dweblmmt of indigenous technologiesas well as the acquisition of foreirrr technology in a never-ending neverre-lenting raci for increased efficiency, quality and customerservice. Droductiviw, ' Manv 6cai conioanie wiU be forced to acquire :partners fr6m within and outside AS'EANin order to accessthe teclurologyand capital rcquired to develop new hechnologies ani expaira capacity. And while many of thesefiirru mav modm the lo6sof their independence,the impentive of competitive pbs ind prosxrity of the maFrity of our PoPulation iar outweishs the intercstof vestedownersrup. 56a successhrlAFIA, onecansav is rcliant on thequality of mamgementand leadeEhiP in ASEi\N eirterprises-andorganizatiorrs.So far,we ve saidthatAFIA- ifit is successfully - will have severaleffects: implemented '. tt will open our rcgronaleconomyand lower eachnation'scapacityto conbol lts own economicaffairs. We iravealready acknowledgedthat sover€i8ntyover economicaffairs is illusorv in anv event. . E,pansi; wil be fuelled by foreign dircct invatment, which we must rcgionally and rntionally comFte fo[, like any other critical - but finite - resoute. . Companies will cooPerateto Prcduce highernuality, higher value-addedProducts with much shorter development and manuhcturins Deriods in respbnse bo new economic bilities and @uently changing consumerexpeciations. Theseetr&ts wiU - and ProbablYare dunging the way we rnranageand interact with people in Asiar enterPris€s Fiirallv and perhaps more importantly, ttrere witi ue geiter concem with doing the rieht thing, aithe right time, in the riSht wala nia that is what we are celebradng.Not iust doins theright thing, but constantattemPtsto do tie risi-t thins. Constant attempts that evmtualli and in&itably reap dividends. Companie like these recirgnizedby the Awads are critical componentsof develoP ment.WeaF grateful to havesuchfine otganizations as these sPeeding our pumey to mhanced prosperity.And we arcgrateful that the Asian Manigenieni Awads Povides the opportunity to observetheir examPle,sothat we may follow it AUGUST1993 . ]HE ASIANITANAGEB
Managers: for Catalvsts hogress
mmtsandthenewlyemergingmarketeconomies of China and \tets|am are attractint Fot€itn Dr€ct Inv€stment GDD to take advantaile of the cheaPercosts of Production and the potmtialy huge rrarket. So once again a new cyde begins,rcPeathg thecyde-that countrieslike Malaysiaand v hei eSf,AN partners have gone through. ThreedecadeigoMalaysiaeitered thesame initial phasein that cyde whm investments carneto take advantageof the then exisdng cheaplabor,and the ready market for imPort substitutes. As countries like Malaysia wean themDat6 Sorl Rafrd* Azh selvesftomthat cycleandenter anewcydeon Ministerof InternationalTrade a higher plane of industrial and technological and Industry develoPment,their Positions are taken over bY the newlY nce again the Asian fl emerging econonriesin the of Manage' Instituie 1 I I legion. The question is, ale : l I I ment is giving there any lessons to be tU recoqftion for manI leamedfn]m theexPerienc€s agsn€lrt oalklce to th6e 1 of countries like Malaysia who have brought their that may benefittheir succesteamandtheirrcspectiveorsols? ganizations to th; foreftont Certainly such exPeriof successand who have encescanservetheemelging achieveddistinction in thei nations well in the formulaareasof specialization. tion and irnplementation of Connrahrlations to the Dolicieson indushialization winnersiAlways remember ind foreien investment. that whatever success Dat6SedRatuN, AzE Thevarcinlpooitiontolearn achievedis rcally the Esult fto; the miitakes and shortand teamwork of effective colective input by all involved in meeting cornings of policies adoPted in the Past,and caninstitute the nec€ssarychangesand innod€simated iaryets. ,aGin any siirilar situatiorr it is alwa's the vations that can oDtimize the benefits to be leader, the manager,who stands out most derived ftom FDI inflows. Very often,countriesin their early yearsof visible ftom the rest of the team and usually iend to welcome foreign inindustiialization recogniand acceptsthetoken ofappreciatiori vetors with minimal conditions. Whafs of uon. But this doesnot detractftom the fact that impodanc€, is the cleation of emPloyment that the investnents senerate. while an exc€llmt manager/leader excelsh Nothing is mentio-nedregarding technolan individual capacity,his or her excellenceis also measuredby how effectively the leader ogy uarsFr or the develoPment of indiSmanagesto mobilize all resourcesavailable ei6us technotogy nor ar€ the Programs for optin;ly to achievepresettargetsand objec- inter-indushy or inFa-industry linkages set out. uves. In the rnain,the hootcountry rcmainssimcounhies Todav,manv of the developed -the ply the vanue for nunufacturing oPerations, of effects are besiiinine io suffer from with iitde or no contsol over inPut sourcln& several"yean6fsluggishand minirnal growtl' and mar-has and corporate leadersarc finding it inq€as- orocessand technologyacquisition happened in inslv diificult bokeep their companiesafloat, i<*ing of goduc{s. What some-caseiis simply wXiie othershavegoneunder and still other - the relocationof existing industries frcm the develhave succumbed to oDedcountry to thedeveltakeoveG and buyouts. "Compsttdon wlll o'pins country with Coupled with demands triroiany spinin to ttre for litter compensation hrce flnns Invadably rccipient economy. by the workfoice, rising 'Ibday, to stayInshape;good such countsie6 costsoften forc€ managto r€alize the have beBm for to to look ofthore have ers wlll companles shortcomings of these future and long-term contlnuegettlngbettot earlier policie. Suddenly, su '!var. the sul5tct of technolog5r Inceasingly Asia, in andbetterat what transfer has sudaced and Asia, has Darticular East theydo." with it questions as to becomea focus of attenwhether tiere hasindeed hvesttion for olfthore
'lirdayMalaysia
"Malaysia hasbeen who have accumulated hc come able to createa large pool of enoughexperiene in industo thestagewherc Malaysian managers and try, in the employ of others, c o r p o r a t e e x e c ut i v e s to venfure out as entreprF it is lmportart to th.rough a policy of deterneurs themselves.Such minint quotas for local rcflace emphasis managers are good candicruitment. Our policy on dates for enbepreneurialde upontechnological local content utilization has velopment; and their development," begun to result in the emerworking experience in ingence of corc domestic industry should hold them in dustries capable of good steadto start industrial supporting the requireventur€sin areaswith which ments of large multinationthey are familiar. als, and even selling to the export ma*et. Malaysia needsenheprcneurswith expePrescribed equitv conditions have also rience in managing industry to rnake up a enabled Malavsian iirms to form ioint ven- nudeus thatwillsDawr a newbrced ofindustures with foreign investors, where the trialists to take th; country into the 21stcenprojectsserve the domestic market. In short, tury the govemment incorporates the intercst of On the question of t€chnok€y hansfet Iocalenbepreneursin formu lating poticieson many host countries have found this to be a inveshnent and industrial develoomenr. disappointing situation.Technologytransfer, Ur'hat is important is for the Mabysranr if it occrus, is often at minimal levels, and themselvesto avail themselvesof the oppor- bearsno semblanceto the technol(€y of the tunities open to them. Thereare Malaysians state of the art nahfe found in the oarenr company. Few foreign investors incorpoEte meaningful technology transfer with their investment packagesand backward integation rarcly leadsto rcsearchand development THE NEW COMPAQ LTELITE efforts and innovation. PERSONAL COMPUTERS. OPEN. Thus the depth of forcign investmentsdo (APPRECIATE HOW MUCH WE PUT INTO THEII.i not often reach the corc of industrial and STANDAADFEATUR$ STANDARDMOOELS technological development, and remain spreadthi y over a divene array ofprcducts and large scaleoperations. Malaysia hascometo the stagewhere it is important to place emphasis upon technological development, as a natural conse quenceof industrial development. Thus, the questionof technology transfer hasto be addressed,and in this context,the government welcomeseffortsby foreigninvestorsto input that technologicalcomponent. The govemmmt is looking at measuresto facilitate the effofts of the Drivates€ctorto set up Research and Deveiopment facilities within Malaysia, particularly in ar€as that piovide Malaysiansthe opportunity to interface with forcign technology and resea.rch, and inqease their caDacitvto absorbtechnology Fansfer and innovation. It is hoped that Malaysian marugers will be the catalysts in the technology transfer processby helping to identify strategicarcas of technology that Malaysia can beneficially adopt and adapt, and assistinglarge foreign companies to work out technology transfer programs over the long-term. In additior! they cangalvanizethe MalaysiaworkforEeundertheircharte to shengthen the latter's capacity to absorb technology transfer at all possible levels. Indeed, the agerda of the 190s for Malaysian managen should be to contribute to strengtheningthe nation's technolqg5/base while assuming a cata\.tic role in the countn/s - acceleratedindustrialization drive. t
been effectedthe necessarvdevelopment in technology, and the creation of indigen<.rus capabilities. Sirnilarly, local enhepreneurs begin to question their rcles in the indwtrial development of the country, having witne6s€dthe booming of for€ign investment enclavesthat do not have linkaqeswith them or to them. It cannot be denied that during the initial years of industrial development the host counEy is striving had to achievethe necessary critical rnassof investmentsto generate the momenhrm for grcwth. There is hardly time to pauseand take stock of the situation, or to rcview policies to take into accountthe economicspin-off to the localentrepreneurial collunuruqa Courtries like Malaysia have begun to do that stocktakin& rcalizing the fact that while forcign investmentswill continue to be mo6t welcome and encouraged,policy reviews needto be undertaken to ensue that over the long term, therc will be balancedlocal input into the industrial developmentof the nahon.
nisitqf,&!t 46
@nina
]HE ASIANMANAGER. AI.TGUST 1993
U$ONBNruG
IORAMODERN PHITIPPINES
countrysidesuch as the acquisitbnof modern lt is medicalequipmentfor provincialhospitals. n r ' u l u s : i l ' l ef , ' r p a t t e n r :i n . r ' m c p r ( ) v i n c e 5 in CentralVisavas to betreatedat the oarticularlv MorlernAgrlculture The Role of DBP iloilo Dociors'Hospitalwithout needof costly of bank,the DBP is deeplyinvolvedin the development As the country'sleadingdevelopment tripsto Manila. technology suchasirrigation, DevelopmentBank of the Philippinesprovides modernagricultural meat, waste recycling, smoke-curing for fish and Other Modemlzatlon Efforts and mediumand long termfundsto agricultural to improvethe livesofour DBP is likewiseengagedin providingfinancial Keysectors of theeconomy andcottageindustries industrialenterprises. farmers supportfor the successful DBPalsoassists oil explorationin \ilest aretransportation, telecommunications,oeoolein thecouritrvside. identified in shiftinsfrom the traditionalrice and com tcr Linapacanin Palawan,and in the upgradingof power,agriculture, educationandhealthcare. highervaluecashcropslike asparagus andcotton, port facilitiesaroundthe country. ModernTransportatlon ofrice. aswellasthedevelopment ofnewvarieties Partners ln Progress A modern,growing economyneedsefficient Educatlon premierdevelopment bank,DBP As thecountry's transportationto move people.andgoodsto with other activities.DBP is fundingthe The competitiveedgeof a newlyindustrializing hascultivateda workingpartnership stimulatebusiness modernizationof transportassets:new buses, countryishonedbythefamiliarityof itsworkfrrrce financialinstitutionswhichserveasretailoutlets with rnoderneducational facilities.Because of its of its wholesale fundsaswell iiswith variouslocal aircraft,oil tankers,shippingfacilities,etc. assistance to highereducation,DBP hashelped governments andNGO s whichserveascatalysts Modern Telecommunlcatlons work- for changein theirregions. computer-literate develop ahighlyqualified, A modernsocietyand an expandingeconomy forceequalto the challengeof modernbusiness. ln the meantime,DBP continuesto build up adequate andefficient resources in orderto ensureitscontinuedviability ::ffi:jil1:*.without Hedth Care strength rcfulfillitsdevelopmental healthy workforce is reflection of a healthy A a of telecomfacilities DBPfinancesthe exoansion ilXllXl."t packagcJ economv has n, rddres pBl Fruqrams and the installationof a satellite network neoolein the Our success is yoursuccess. nationwide.When fully operational,even the themcJicalanJhealthnssl51rf1,ur The Philippinesis abundantwith human and requiredfor a countryto become naturalresources economy. a newlyindustrialized
remotestprovincesand the mostdistant industrial estateswill be just one electronic pulseawayfrom Metro Manila and the slobal market.
HDBP
,bp PHILIPPTNES
DevelopmentBankof the Philippines
=EIEIEI
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SOUTHERNLUZON:Calapan,Daet,Legazpi,Lucena,Masbate,Naga, PuerloPrincesa,SanJose(Occ.lvlindoro), Sorsogon RegionalOffice:LucenaCity, Tels.3765/2591
lligan,lpil, Butuan,Cagayan de Oro,Dipolog, NORTHERN MINDANAO: Suligao Malaybalay, Ozamiz,Pagadian, SanFrancisco, BegionalOffice:Cagayande Orc City, Tel.3319
Catbalogan, Cebu, VISAYAS: Antique,Bacolod, Bogo,Borongan, Catarman, Dumaguete, Kabankalan, Kalibo,lloilo,Maasin,Ormoc,Roxas,Tacloban, Tagbilaran a9gbnaLQflEs Cebu City, TeL94243
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Heights needdeep foundations. Soundadvice,asany engineerwill attest. So before we set off for the heights, we've made sure we're anchored on rock-solid foundations: A baseof banking serviceswhich continuously improve in an increasinglycompetitivebanking environment. A wider reach in more and more business centers around the country, and more importantly, a deepergrasp of local business climates A growing roster of satisfied clientele: from smallcompanies to corporategiants Enhancedtechnology that serves to make systems more accurate and customer service more responsive People dedicatedto improving themselvesas they build business -- clients'andour own. All these done with a passion. A Passionfor Action, we call it. It has seen us build a strons foundation. Now watch it take us to new heights.
Toword,s Neu: Heights
MUH***"!aNK
Philippinebanking Revoh-rtionizing
Megalink PrepaFesfor the PacfficGentury
tium. The nstur€ of a cooperative arY€ngement demandsthat managerslook at things differEntly' becauseit has its own problemsas wellas opporul winnerof the 1992 Megalink Inc,,the PhilipPine nities.Thefactthatthe diffur€ntATMSar€ ownedand Asian Management Award for InformatjonTechnoF maintainedbydiffer€ntb€nks,for examPle,presents is a true Asianoriginsl ogy, -'wtrite qualitycontml pmblems.obstaclesmayansewnen it was not the fir'st to link the sutomated the networ* wishes to offer a ne\n/networt servlce' teller machinestATMsl of difturent banks in the that The managershaveto considerthe possibility Megalinkput upthe countrysfir€toPer& Philippines, implement to unable be m8y membenbanks some C. lbor8; Tlo&ro tional sharedATM network White it did not inventthe Pr€lklnti' the service. Thus, network-wideimplementationwill it hasmadeto continuously Bodongan, business,the innovations Mlfalhlc 8.,0trl c8rcl haveto wait until everyoneis r€adyto psrDclpste' imorole hs interbankATM network and strengthen Ca[ro.r.Grorrdl On the other hand, a consortium can shar€ its oositionas industrylesderthr€ughsuchadvanced tlanag!.,t ogalhlc as wellasexpenses,makingit possiblefor resources as ManagementW CEosand managementconcepts to offer services that they would banks smallen ' allpioneeringefforts Servici LevelAgreementswere ontheirown' '13 of implementing otherwisebeincapable With 17 membenbanks, of whichare already lsrgestATM online,MegaLinkis notn,the PhilipPines' Msnagement by CEOS all overthe 46 ATMs mor€ than mnning netwonk, dispaTocoordinateandmanagetheconsortium's countryandboastingof a cardholderbaseof orrer1 1 innovaup with come has MegaLink rate r€sourtes, not is million. But even the innovatoi MegaLink Uve managementconcepts and smudur€s tf,|at content with beingthe nation's largest; it intendsto addressthe highlytechnicalproblems8nd the high remainthe nation'sbest. Onits third anniversarylsst deqree of corporats involvementand organizatjonal Marth, the companyannouncedplansfor mor€ and coordination[and evenrestructuring)inherentin a better automatedbankingservices. shar€d ATM networ'k. Thefuturelooksbright,andMegaLinkis poisedto bI Amongthe managementst|.uctur€semPloyed gneater enthusF even with beginthe 21st century 'the first and foremost is the board of MegaUn[, asm. dire-cmrswhich we feh should be composedof the said Camd Carr€on' CEOsof ttre member-banks," A Shar€d ATM Nehivol* genenal managen Megaunk that come with maintaining While the Dncblems This highlevelstructur€ ensur€sthat decisions are dauntjng network banking 8n ATM andmanaging the MegaLinknetworkar€ cemiedout at concerning enough,they are furtier exacerbatedwhen such a tne higheststrategic level.The on networkhas to be imPlemented8nd oanizationsinvofuedfelt that it needed maintainedacrossm8nybankswhich ihe CEos'involvement'Carreonsaid. ha\€ their own sJst€ms, servlces' as First, because a lot of re 1/hf wellasfinancialandbusinessproblems willhaveto be put in Second, sources Bndgoals.In such a case, mansging we willbe decidingon a lot of businBss ATM networkservlces and upgnading strategies which will invotuehow we is no longer mer€ly a technical or look at things as a bank and as a internalbusinessmatter;ft becomesa consortium.Andthird,the technology stnategic,highlevelcoordinationand involvedis quite comPlex.Ther€ is managementPrcblemthat can make nobodyinthe banks,the organizations or breakthe automationefforts of the makeuPthe consortium,whohas that participatingbanks. to go into all of these authorify the Thingswork differenuyin a consorBy EmmamrelF. Amador
. AUGUST 19S THEASIANMANAGER
SUPruMENI SPECIAL
exceptthe CEO." lowerlevel committees who can work that whateverstrategic actions are reThe Managementby CEOsconcept, with the assurance that they are ad- quiredwill be backedby the appropriate accordingtoTeodorn pr€sident dressingreal,crrticalstrategicproblems technicalsolutions:andthe internalaudit Bor{ongan, of Megalinkand UnbanBank,facilitates withthe backingof the highestcompany commitEee so that the standardsthat we "quicker and, if necessarymore drastic authorities.The conceptdoesawaywith haveset up for ourselvesare audited[to decision-making." bureaucraticdelaysand allowsfor quick ensurethat theyaneJbeingfollowed." Suchdecisions, he said,"wouldimm+ implementation of strategicdecisions. "The diately have the concunrenceof the board cneatedseveralcommiL- SeruiceLevelAgreements member-banks considening that youhave tees,"Carreonsaid."Theseare the busiMegalink's shared ATM network, the involvement of the CEOsin the board ness coordinatingcommittee, the Carreonexplained, useswhat is calleda of Megalink. Essentially, it means the technologycoordinatingcommitteeand back-endswitch.The company's compubuckstops here." the internalauditcommittee." ter switching system is connected to the "Sinceyou "ln havethe CEOsinvolvedin a collaboration effort,"she contin- banks'frontend switchingcomputersto the boardof Megalink,"Borlongancon- ued, "you can't escapethe committee which, in turn, the banks' ATMs are tinued, "the directionsand the policies structure. Many peoplesay that MegaLinktakes areconstantlyformed that if you form committees, ilEcltlf,l( t[frBER llt{$ eo||hctPofson Tot80ioni by the CEOsand [thisJmakesus more youwon'taccomplish anything. AsianBank Ferdinand LaChica 8i9-m11 cunrentin terms of the responsesre. But thene is no other way of AsiaTfust Bank AllanTumbaga 922-9018 quired." structuring Megalink that Bankotoommerce 0avidNye 817-4906 Capitrol 06v€topment Eank DitasMagno 633-4265 Theparticipation of CEOsalsoensures wouldelicitthecooperation of Development Bank0tthe Phils. Romeo Rodaros 818,9511 the highqualrtyof the board'sdecisions. all the entities involvedb+ Equitable Bailking Coruoration Mauresn Abelardo 40.70-11 "They bring a centainkind of decision- causethis is a consortium." FarEastBank& TrustCompany Ma.Celita$Jacob 40-60-1 1 "So makingandjudgmentthat's beenhoned PoCPSarlk we set up three differE{twinUy 810-0231 Philippino National Bank FelydetRosario $0-20-51 through the years. And faced with any ent committees,"she said. Pitipina$ Bank Mariano Honrado 819-1331 shuation,they almost alwaysrespond "The businesscoordinating Prudential Bank Hora0ioA.G. Santos 812-1026 with the same levelof competenceand commitLeeso we will have Premiere DevelopmentBank TedOnigas 833-3526 thesamelevelofunderstanding," JoyAguilar 831-2821 Carreon onlyonevoiceas far as busi- TradersRoyal&nk UniM CoconutPlanters Bank LanyPerez 818-8461 pointedout. ness strategies are conUniongank LuisitoR.Rollan 85-00-11 lmplementingthe board's decisions c e r n e d ; t h e t e c h n o l o g y UrbrnBank Dennis D€cena 8ff)8031 thenbecomesthe problemof Megalink's coordinatingcommitbeeso
TWOOFOURMOST PRECIOUS BANK DOCUMENTS ... CORPORATE MISSION PHITOSOPHY STATEMENT coMMrmED 6 6 *r ARE
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pRoMpr EXeANSToN 0FopERArroNs AND
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Bobbyneeded F50,000 to gohome. He gotit.
When Bobby was born, he needed F50,000to leave the hospital for home. No problem - with his Dad's Far East ATM Card. A Far East ATM allows you to withdraw Pt000 per transactiory up to P50,000a day. That's why when you need a big amount fast,like in an emergency, nothing beats a Far East ATM'
Nothing works like a Far EastATM. BankandTrustComPanY FarEast Srnorexol.D
lN A Gxancrrlc
Hced Officc Fer East B:nk 8td9, tntruuru, Tck: 4ll-1G21 to 40 . 40-50-11 to ||l '
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MiliL" PhitiPPine $-Il-31 to 50
Menber of fre Philippine Deposil Insurdce Corporalion (Maximum Deposit Insurance For Each DePosibr- nm'000)
justkeeps ButMantrade ongetting betterandbettereveryyear. antradehas been selling and servicing
only the besr-trainedtechnicians,carry one of
automobilesfor ?5 yearsnow. Longer than
the country'slargestinventoriesof car spare
anyone in the business.And in automohiles,
parts, and have the widest array of state-of-
as in life, experiencecounts for a lot.
t h e - r r t c o m f , u t c r i z . Jt r o u h t . . h o o t r n g equipment.
Our experiencetells us thar even rvith 75 yearsof leaclershipin automobile sales,parts and servicetucked under our belts, we can't
A n J , r l c r e s r r l lr r p i J l y i m p r o v i n g . At 75, the Mantrade drive is very much alive.
afford to rest.
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Norv, rve'regearingup for the future. Today, Mantrade, the oldestautomobile dcaler and servicecenter in the country is also its most modern. That's becauserve employ
52
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directlyconnected.With a shared ATM network,interbanktransactions first pass from the originating bank'sATMthrough itsfrontendswitching computerandthen go to the shared network's computer switchingsystem, calledthe backcnd switch.The back-endswitchthen routes the transactionsto the computersof the proper member-banks.The back-end switchthus functionsas the link and a cleaninghouseof sorts for the network's interbanktransactions. InMegalink'scase,thefi'ontendswitch hostcomputersas wellas the ATMsare maintainedby the member-banks, while the back€nd switch host comouter is maintained byMegalink.sucha system, howevendependsnotonlyon MegaLink's pnopenmanagementof the back-end switch. but also on the effonts of the member-banks to keep their ATM sy+ tems onlineat all times. "Eventhough theseresourcesare not underour control," Carreonsaid,"as a consortiumwe are concernedwith what happenswith them." Howthendoesoneensurethe proper management of a back-end swrtch-based "The ATM network? onlyway we can do " that isthroughSenvice LevelAgreements, "We Carneonexplained. come to an agreementwith a bankwhenit joinsthe consortiumthat it willfinstand foremost keepcertainperformanceindicatorsat certaintarget levelswhichwe believeare the servicelevelsnecessaryto ensure " customersatisfaction. 'This is an agreementamong the banks,"she continued."As a matberof fact, right now there are sanctionsimposedon banksthat do not achievethe t€rgets we have set for ourselves.And yearafter ountargetscontinueto impnove year as we move forward to achieve world-classstandards,standardsthat have been set by worldwidenetworksthat havebeenaroundfor 1O or 20 years." Megalink'sServiceLevelAgneements set performancetangets for important indicatorssuch as availability of the network's ATMs, approvalrate of transactions,systemresponsetime, reportorial ratio, requirements,cardholder-tcATM and customerserviceturnaround. Challengesof the Future In line wrth its continuingefforts to improveits ATM network and increase Megalinkis addcustomersatisfaction, ing newservices.Oneof these,Paylink, was actually soft launchedduring celebration. MegaLink s thirdanniversary "Paylinkis of two parts," explained 1993 THEASIAN MAMGER. AUGUST
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Canreon."Oneis what we call debitbills payments.Debitbillspaymentsare made whenyouusethe ATMto payyourbillsby debitingyour accountand creditingan institutionaccount." Duringtheanniversany nites,shenoted that Megalinksignedup nineinstitutions to participatein the Paylinksystem. "The secondpart,"Carreoncontinued, "is EFT,zPOS on the ElectronicFunds Tnansfer,/Point of Sale.Forthis service,
Megalink will install terminals at the countersof supermarketsand department storeswhereyoushopfor services andgoods.Yousimplyinsertyourcardat theterminalunit,andwhatyouboughtwill be debitedfnomyour accountand creditedto the merchant'saccount." OnekeyatFactionof Megalinkis that, as a consortium,it continuesto openup opportunitiesfor its smaller memberbanks. Borlonganpointedout that by
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As $une As Tne Courruc Qr D*x, Tne N*rrqu WrLr Rt$ETo TnE QccestoN. On our 77th year, Philippine National Bank reaffirms our faith in the Filipino and explessesconfidencein our new leadership.
for entrepreneursand small br.rsir,â&#x201A;Źssmen. And making our seruicesavailable to as many Filipinos everywhere by opening more offices hereand abroad.
As our commitment, we will continue to provide products and seruicesthat meet the needsof the peopleand contributeto the country'sdevelopment.
Tlese arc our modest coniibutions to help tum our common visioninto reality: that by the r,ert century, the Philippines willbeoneof tlrceconomictigersof Asia.
Such as upgrading overseasremittance seryices.Otfering libenl creditp rograms
No doubt,attheend of theday,wewillbe wayabovewherc we stafted.
PhilippineNauonalBank Ar.rcBrulcxoNc Baym PNB has assetsot P103billion,246 domesticbranchesnationwide,TSororseas bnnches and and over 760 corrcspondent banksworldwide. Member:Megalink Memberof the PhilippinsDepositInsurance corporation.Deposltlnsuredup topl oo,ooo.oo
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actingin concert,the memberiankscan implement newservicesthatwouldbetoo costlyandcomplexfor all butthe biggest banks. Phonebanking,for example,is now available in manyFirstWorldnations,but presentsproblemsfor smallThirdWorld banks."Fewbanksoffer phonebanking services,"Borlongansaid."Sincethis is not a real moneymakingventure- | considerit an 'extra' to offer to clients who want it - there would be better economiesof scaleif it were adoptedby a groupof banksratherthanbyindividual banks.Alongthat line,I think MegaLink wouldbe a venyappropniateinstitutionto installphone bankingservicesonbehalfof its member-banks." "Another servicewe aneconsidering is frontlineconnections,"Bonlongansaid. "Basically the computerthat we haveat Megalink is a switch.This meansthat each member-bank has to haveiLsown computenwhere itsATMsareconnected. That'sfinefor biggerbanksbutforsmaller banksor for banksthat arejustbeginning to automate,gettingtheir owncomputer to run their ATMsis rather expensive." Frontlineconnections can reducethe "Our cost for smallbanks,he explained. presentcomputerhas sufficientcapaciEy to allowATMs of small banksor banks that are experimentingwith automation to buytheir own ATMs and directlyconnect it to the Megalinkbox,"he said. Borlonganaddedthatthere are plans to installoffsiteATMsto senvicemultiple member-banks at a singlesite.He noted that this will be much more economical and efficientthan havingseveralATMs, onefor eachmember-bank, at the same location.
Enteringthe PacificCentury ATMs revolutionized Philippinebanking in the 198Os. Now ATMs ane a service that banks must offer just to retaintheir clients.The future, howeven belongsto the innovators.The 199Os, and indeedthe 21st centurywillcallfor more imaginative, evenradicalideasfor managing the evergrowingandcompetitiveAsianbankingindusFy.Theriseofthe Asianecbnomicpowerhouse willbe ledby those corporationsand individuals with the capacityto generate,implementand nurture such new ideas. MegaLinkis certainlyqualifiedto be at the fonefrontof the comingPacificCentury [EmmanuelR. Amador regularly conFibu@sarticles to variousManilahased publications.He wriAs for the PCDigest, a Philippinecompu@rmagazine.J THEASIANMANAGERo AUGUST1993
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serve as the input to another. This important feature allows modules to be sequencedin any order or combination when creating application-specific routures. The ideal basis for both "what if" and custom applications, DAfS Plus intuitive windows oPeration minimises learning time and prcduces le sults fast. So much so
ProolgsDATSPIUS Deigned by signal Proces'sine eroerts with Practical engin;rini experiend, DATS PLUS isa sofivatepackage which Proceses data from multiple soures in a highly visual manner.While oDeration of the software is siaielt$orward eaough for the occaiona user, the Pact<agels sufficiently powerful to satisfY the most d€manding oPerator DAIS PLU$ contairs a wide raneeof analvsismoduleswhose uniIue dataia structure enable the output from anY module to
and that useful data acquisition -can be Persienal prccessing t imea *ittrin miutes of in;tallation. Pulldown ajrd PoPuP menusgive rapid ac(€ssto storcd datard wnicf, then instantlYaP pear in nominated windows. bAIS Plus application indudes noise. vibration and har:shness studies, acowtics, speech,envircrunfl tal testin&radarimaging, medical and biolosical t€s€ardl. DAIS Plus is ivailable as a base package with several oP tions io enableusersto selectthe mo6t co6t effuive combination for their needs.
lhe Aft of Buslnosg Ihe Sclenceof Pdnungl' Youdonit haveto wait around !o seetlrc HP lrs€rJet 'lM Printer's imprcssive Print qualitla It otrers an eight-Page-Per-minute ensine, along with featur€sttEt Proces.senfiance peiorcunce. -job6 on other PrinteF ing print tatei time, the t{P Laser]et 'tM printer offers a new tyPe of techiroloey lnown asRISC(rcduced insti-ction set computind that sneedsup printing. The Printer's
rir"c"r*i is" ruse.nin,at gt lY Specializcd mis,oprccessor de "ign"d "p€cifi-ily io i"letPt t tI." oint files from vour Mac. Ifs the
ouicketwavtohandledatacomii,s fio^ vit* computer. Desiired witir authmtli fosSciP Livet2 softwareftom Adobe, LIP lrserlet4Mprinteroffe$technological improvemens such as datacompr€ssionbettermernory management,and formsand Pattern aatchins that increased Pos6cript printing sPeed. The printer stor€s la€e Portions of Pos6qipt in mernory/so it can handle files with thousand of graphic elem€nts and t)?e treatments. You can atso download extra Pos6qiPt fonts
to printer memory,to keep a wide assortment of tJ.pefac€6instandy available. The HP laser]et ,lM pnirter standard model comes with two PaPer trays, which can be expanded to a total of four paper inPuts. For thosewho have a lot of lette$ to s€nd out, an optional power mve[ope feed and an oP ilonat SOO-slieetlower casette
prcvide a total caPacitYof uP to Et50pagesand 75 enveloPes.
DlJRElilEectolumlnesc€nt Dur€l 3 elecboluminescent tedrnology hasbeenselectedfor usein aniw tineof T'rmexwatches wittr tiglted.lials. The new dial teclrnology,tradernarked as the Indiclo iiight light slstern by Timex, iniorpoiates Durel 3 aecmtuminesient (EL) lamPs, alonq $'ith miniatudzed invedets.iiside the watdr case. Durel 3 has an exceptiona.llYlong-Me, low power consumPhon, tlunn$s,-and high tEsistanceto hu-
midity. Trmex engineers have been working for over a decadeto adapt and perfuct a watlh tecirnology fornightorlow-light applications. ' -The lighted, lndiglo dial appears fust in six styles of the Trmex honman watdrline, incuding
' AUGUST 1993 THEA$/qNMA|{iAGER
America's bestselling watch, th6 digital Timex Ironmalr Tfiathlon and five styles of analo6 watchesEL dial has been tagted by Timex officials as the "Most important innovation" in w a t c h es s i n c e quaiz.
F/Jata - P@pbon the NbtE. AmbassadorYuchengcowas the Philippine qovermr€nf s lepresentitilveto [heneople'sRepiblic of China from 19E&88and not lgS68g.TheeditonaPologizefor tlle oveEight.TlE illustrations on pp. +5 aid 1,1-15in the May/ irineiszue should beathibuted to 'lormietazo.Theillusbationthat appearson p. 20 is bY Ruben de Jesu6.
55
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f,iv#r, YourofficialPIDT1993-1994 MetroManiladirectoriesfeature theseinnovations: r New look, better format I Clearer,sharper-lookingads I Separatesections for government, business and residentialsubscribers
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orREeToRrEs PHtLtpprnEs eoRpoRATton r,pfiBr.rE q!! ycilowcaees. '-Head Officq: Cebu Oltlcs:
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2322 Pasong Tomo Ext., Makati, Metro Manila Ter. Nos. 819.3826. 8t8-0242 Far No. (63) (2) 810-4343 cattardo Btdg., câ&#x201A;Źn. Maxilom Avonu6, Cobu City Tel. No.7-31-41 Far No.032-224943
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PEOPTE oo/'e?/ln/e develosne(t As dir€cbr of company nuy vary, basicallY INEM;Davies seesto it t|at ernployees- whether they are €drviorunentalcpncemsarc in the inanufactuing ind"strY busirEd bPPdority. Healso or serviceindustsy - have the worls towardsrecorrciling sameconcems,and are in the bushessawJindustY inEests samepredicameril." with the qoEction of Moth€r Mihludin is an advocaeof Earth IIrinM" Daviessays,dnws moreinfursile taining for nnk on the experienceof its rnsnber ard file enrployee. PeoPle, "area comPa6rrns,spreading the word on Mahludin sa1s, how to imDlsnst ny's m6t important llllsts. €nviorun€ntal manageIt is asseL Lin's mind was however set policiesthat are men(s responsrbility on something other than a ivmpatible to market theit develop governb flourishing car€erin zucccs.Theoryanitalmts duough ment. Hislig break camealong zationprcnaEs a as t) h"aining so when the ChineseManagemert holistic-appoachto inqeasepoductivity Associationinvid Lin to mvfuonmqtal levels." produce a management efficiency and pobl€ms through Headmib bY biften magazine.-once I "that inEgnting elwiloF howev€r, thepublishingbu& Lin matal mamgsnat marnging peopleis steeredhis company intl ca,rporabcrllhu€. Tlse no easytask towards other ventues A convenor at whst time, are At publications. and 1992lnternathe dash workqs'needs pr€sent,Lin hoPesto tln H4l Mahyudln Industry tional the conPanYs; with his slew of expand Omat for Confetnce tr evm wolse,are publications by aqutring DevelSustainable diarnehically quauty more severar are INEM and Davies opmmt, masazines.His drearr he oppcite to what managernent retatea fntemaa sponsoring is right" ftels Henry smjies,is to be the tional EccManageme-nt Askilled n€gptiab4 Luce of Taiwan. Mahyudin assisd dte€omPany Conlerence in lapan later this Septemb€r€ntitGd,'lizokudo: in neqotiatingits 8lst colective H4l Mdryu.ln bh the Way of Sustainability." Since Chft un aplesn€nt bareJnins of Omi senior manager The Harv-ard<ducated intoducd producer he h; tld, Edaran Quality car Malavsian manY articulate and refined, is also an activenernber Davies EON a into Cirdes Contsol s Otoniobil Nasional Berhad assumethatlin comesfmm a of a nunber of mvironmental $"ith prcgram met has been that (EON) has deParfftent, HRD wealthy, affluent background. manasementorganizations, truo decadesofsolid fuea-tmthusiasm bY eON's But the faclEare entiFly the He such i lrstitut foo{onril. people staff. Prior to managemmt. in opposite.The child of working the lectwer at qthusiast, a is cuflendy A soorts piirinf roN, na;ltvtatry"ain c[a;s migants, Lin was bom in University of Csreva and an Uafryrian is cu.renttypornoting China and for the ftst few Years worked in the HRD deDarteditorial lioard mernberof Gren EON among smriine activities ments of the National frroducof his life he sleP on a factory Inteanatiafl^I. Mira?efrcnt *ort<ers teeps rirort<eri.'sports Nesd6 and tivitv C€nter, 'Much work floor. Lh sedits his father,a Davies, Says physically aid mentaily alat bottr Keiangan UsahaBersatu laborer,for instilling in him the done to convince r€mains to be fit ltuough sPofis,a €omPany Berhad. work ethic that has made him that busine6s and sov€rnments Eamwo 9 clrx elrcounlge An economirsgraduateofthe so successfirl, is not &rvironmental loyaltY ard Potection cooperation Mahyrdin of Malaya Univesity Unlike his hther who had a burden, b r€mainingcomPetiess€nfrals ior waslargelvrcsponsdble little formal education,Lin but a erlionbusiness in today's tive and Neuitvialavilanization attmded universitY ard " saysMahyudin. nec€ssary ment qr"lty CitU. C*,u"t to do went on P-g.-t" evmtually investment, stong he is a Not fl[Drisinslv, eraduatework in fiaanceand not only to oftfio lu€front At tho Malaysian todt't lmt l"ti*s'i" working iccounting. Af ter allow us and envionnmta.l lte says, woders, Pptection angineelsard briefly with Asia Chemical,Lin our childm is noY days these movement world in the the bet arc-among to States left 60rthe United to live a of the diEctor executive Da?rles, studies' indushiousand quid( studv further. He again ioined materially for qoss-industrY Network International had tlaving to return the iompany upon-his decentand Managemmt Environmental exoerimce in various HRD Taiwan and worked his waY uP healthy life, (NEM), federaa worldwide finds Mahyudin deiartnents, ftom iunior staffer to execltive but also to busines non-profit tion of liftle differencein the basic vice president. be at peace to the devod peoDle orsanizations development work of Lh Sometirnein between, "Tliough the isiues of mvircnmental with our ana mariagdnent. met former financ€ministe! "archiconscimce," T]oy D d€3 sustainable and management of each cldtut€ corDorate K.T. ti, often called the br ton yod! worl(l|g for firms such asAsia Chemical Corporation, ald Asia Metal, Taiwan r€sident Clns f,itt decided to be his own boss.The one-tine univerEity lecturer established his own publishing comPany ur 1983.Now a decadeold, Exc€lencePublishing Publishes severalof Taiwan's leading monthly nugazine, among tt:cfr., ExcellenqBusinds Mottrllu Excellenceis t Lin's on$ cohpany. His other companiespmvide manage ment and brckerage services. Becausehe is puPerous,
tect of Taiwan's economic minde," who he imPessed with his ideason the emerging Thiwanesefinancial market Li encouragedLin to put forward his ideas to Taiwar's Economic Plarudns Council. Alnost overnigfit, Lin found himsef in the companv of someof Taiwan'i moot brilliant econe
' AUGUST 19€S IHE ASIANMANAGER
57
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By G|onT?eulcock s.A, PaciucSteelCompany, VicePresident, he envionment and forcign hade arc strongly linked by the effectsthe p!oduction of goods and their hade have on the use of natural resource. For yearsthis relationshipwasnot takenseriously. However, more information and the global ecoloeicalcrisis have raised thes€issuesto a hieh levetof discussion.The rcsultantconflict hasled many timesto thecreationofnon-tariff bariers to forcign hade on grourds ecological in nafurc.. Economicdevelopment and Dreservation of the mvircrunent^are, in reaiity, comple mmtarv obiectives.Without economicdevelopmml it is difficult for nations to rcverse damage to tie mvironment and invest in morc tecoefficienfl' technologie. One of the key factorsto economicdevelopmmt is foreign hade. If economiesdo not trade, they cannot exploit thet comParative advantage,increaseproductivity or dwelop. And to pr€serve a healthy ecological environmmt, r€sot[Eesmust be allocatedto such economieswhich will not be availablewithout an mhanced level of development. The propooal I am making mears that economicgrowth is, among other things, an instrument drat Drovide for more harmonic human habitation with the envimnment It is a controvenial theory although I believeit is inoeasingly lessso.Thealtemative would be to relinquish the material goods enFyed by developedsocieties,goods for whidu in facl, the populations of poor countriesaspirc.And itwould be to chooseimpoverishmentforthe sakeof rcdis€overingna-tue. Suchan altemative doesnot contsibuteto THEASIANMAAIAGER AUGUST199S
"Toomanyrcsfrlcdomto tade canlnveUE mdesircd efbcts d dl exoessh,e rcgdd(ns.' lont-tern envtorunmtal obFctives, espe cially in poor cormtries. It is a utopian prcpoeal with negative effectson the ecological issue,becauseif the rernedvis soextr,emethat itbecomesimpossibleto reillze by pacificand consensualmeans, the issue is sinply left
asideor po6tDoned. forninatily, there have been several instanceswhich demonsbate that new technologies evolving ftom the developmmt of iuddical vehides for the conbol of emissions and definition of rights, aUoweconomicchallmge to be facedwith common senseand a rcalistic sDirit. and pst as fortr.rnately,the idealsof both developers and ecologists with lespect to sustainabledevelopmentarc similar because thev arc based primarilv on mediurn and long-term obiectives. Sustainable develoF ment basicallv statesthat it is both Dossible and desirableto achievesocialcotimic development by maraging natural r€sources prudmdy Another way of undeFtanding it frorn the businessman'spoint of view is that sustainabledevelopmenl is attahed by using natural resouces in a rnanner that they can sahsfuthe needsof the Dresentwithout decreasing the chance of futr:re generations satisfying their own needs. And a prcject properly bard on sustainabledevelopment iririapies must Ueimplemented at a o&t that rcfleclsthe tme comparativeadvantageof its location. AJrd the only way to implement the concept of sGtainable development is through frce hade, since on.ly open and competitive markets provide a stableframework for this new coniept. It is convenientfor the price of goods to ireflectthe ecologicatcosiof their poduction. And hereinis the task of govemmmts. Eachgovemmmtmustbe concernedwith efuins the internalization of environmental coss arid apptying economicinstruments to encourate those responsible for environmental dqJradation to assumethe principal 61
rcle in rcstoring the integrity of the environment. It is verv important that environmental regulation 5e boin frcm a consensusarnong the parties involved and not be influenced merily by the decisionsof the groups which wield the most power. The differencesin the costsof conservinqr€sour€esshould be automatically reflectedin the comparativeadvantageof eachcourtry. Theenvironmenta-lissuesthat areof world concern,suchasthedeteriontion in theozone layer, global warming and loss of biok6ical diversity, r€quirc the cooperationof all countriesand must begovernedby globalenvtonment accords,alwavs with the intent not to thrcaten the basisof forgign trade. Neverthelest not all envionrnental poblems have such a clear propensity for globalization, and it js thereforevery important that work be done in rcgard to the idmtification of the points of contactklveen the environment and hade and the proper classification of the problemsO|atcro6sthe borders of differcnt coimtries. On the other han4 it is also important to take into accountthat what is done in industrialized nationsin relation to hade Benerally indirecdy affecs the degreeof damageto the
By Thomas D, Bcll VlceChairman,COO/Worldwide BursorrMarsteller Envionm€ntalism was dearlv one of the fastestgrowing "isms" of the i9S0s. It grew in monbership, with tens of million now describing themselves as mvironmmtalists. It gr€w in political pow€r, with an inqeasing number of electionsand public policy decisionsbeing heavily influmced by mvironnantal issu€s,theats and atsocities glowing in colurm ind€s and network minutes thrcughout the decade of the '80s. This phmomenal gro*'th rervrote the mvironmental rule book for most maior corporations throughout the world. What will the 1990s bring in t€rms of mvimnmental laws, expectations
and corDoraterisk? The short answer is that tlrc earli '9OswiU look a lot [ke the '80s in terms of mvirDnmental activism direcd at corporate organizations throughout the world. Every part ofdle manulacturing process, for instance, whetlrcr i(s research,development, design, manufacturing, distributionordisposal"willrec€iveinqeased scrutinlaIn addition, acceptablecorporate€rF vironmental performance standards wili continue rc ratdlet upward. If vou ac€€Dtthe fact that envir6nmetrtalism is herc to stay, $owing in power and therefore importance to your business,your no<t question would naturallybe how do we deal with it? First and mo3t importani get out in front ofthece iseue* Decide what kind of mvironmental company you want to be. We suggest setting high standards for your company
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envtonment of dweloping rutions. Excesive protectionism by the former, together with such problems as the balanceof paymmt and mcouragesgood fu- ments of the latler, have contribud to the and your people and making tule behavior, indiscriminate useof resourceswhich ar,enot zuretlresestandardsarcitdlwF Makeyourmvimnmental indefinitelv swtainable. ReDorts from the delsbodbothintsmllyando<commitment global, Either World Bank indicate that theiereeulation of bflal}f Besule kr let yotn key you have an envhlnmental trade has footercd technology transfur irom constitumts outside your or ganizationhow what try can commihnent oryou donjt In industrialized counhies; and, that reduction the '80s,many maFr business of protectionist policies in industrialized elgect ftom you. let everyenr ploveekpw that glirorune(ror8anizations thoughout the countriesis qitical to incease poductivity in world waited for the environ- developing countsies. ial fuokdon ad pr€servadon The use of ecologicalargummts is oftm mental movement to fade is palt of his or h6 Fb. Build thesehigh stardads away They thought it was a worrisome because,in rcaliry drcy typicaily fad. Now, of course,we seeit is perpetuatepotectionist inter€sts.The capacard thb awarmessinb every no! ifs a h€nd, ajd igs hereto ity of certain busin€ssand union s€ctorsto Frt cf youl businessp4ocess, stay.Somedayenvircnmental- inlibit competition by mcouraging rcgulaIhis will not onlv enharEevour isrn will be such ar integral tion - allegedly to PIo6 the envircnmmt image, but it witl atso inipact p€rt of everything we do, the - is of concemwhm, in tmth, &ese rcgulapcitively the morale ard pro"ism" will fadeaway and high tions servesolelv to Drotectthe market. This ductn/ity af your people.ntat ultimaely will saveyou tLne and monsy in environmental consciousnesswill be the is where task arisethat perhapsconespond totheGene!:alAgr€ementonTiuifftandTi.ade dealing with an ev€rchanging arrahrrlre of nonn. So,for the foreE€eable futue, theffrart gonsrun€nt+npcedqlircnmmtallawsarrl businessorganization will lespect it and rc- (GATD. spond to it with vigor. CAITmustadherctoits original objeclive Egulatiotls (This article and the suceedinganicle W of promoting freetrade and safeguardingthe Constanuypushfor improvementJust reaeof your vour busines& KnthrynFullo uxre reprirtad/zoz Communi- existenc€of fair market conditions. But beae you do in other areae made;it lets peo- eec.tonrdorldpublisM W thcIntomtinul As- causediffercntenvironmentalstandardsmay Celebmtewhen progess Drorr,essis rnade; lead to trade rcstrictions, GAIT also has a plelnowyouareseriousaboutyourcommitsciation 6 Business Communicator). stale in environmental conservation.
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Total harmonization of standards is .impossible, but countries with sirnilar envrionmental problems can come close to harrnonization. Mor€over, standards cannot be implemmted aq,oesthe board in all countries,since the appraisalof standardsvariesaccordingto the degee of development, and total and immediate standardizationwould be exkemelycosdyfordevelopingcountries.There appears bo be a consensusthat a period of adiptahon should be iranted to countries reflectingtheir level of develoPment;but, the term, assistanceand motivation they may !€ceive to effect apprcved stardards must alsobe etablished. It do€6not seemfair that the cost of mvironmental imprcvement or orotection valued by morc developed sociehes fall principany bn the population of the least develooed which Dlace less value on ecological Gues becauie they have basic needs for employrnent, nutrition. housing and educationthat arc unsatisfied. It is alsoimDortantto bearin mind that too many reshicti6ru to trade canhave the rndesiredeffectof all excessiveregu.lation;suchas, for example, the qeation of a black market and an iniorma.leconomy,example of which abound in Latin America. An informal
GAII, though the Group on Envlonmentsand lnternational Trade,could, within the contextof sustainabledeveloPment,arbihate and define the Drcblemsrclated to the mvironment on the-basis of the following DrinciDles: enviDnmental rcsulation with on hade mGt not be ambt*frd i-*.t biguous and-shouldbe tlansparcnt; mvitonmental measur€sthat imDos€t€strictions on trademustbebasedon scientilicevidence;the meazurestaken mwt not exceedthe desired rcsul! and 6nally, trade rcstrictions must be the lasttool to beusedto achievean ecological ideal. This Grcup, qeated in l9l by the Committee on Trade and Developmmt, has not bem particularlv active. A proposal should be mide for it - or another qeated for this economv is particularlv danqerousenviron- DurDose- to DarticipateactivelYurder the -etrtully, si.riceit is viduaXt imPossible to lusirices of G,qTTani not ody t6 help in the establishment of stardards but to also de conhol. Developing economiesneedtime to inte!- velop the cipacity to evaluate scientific evinalize the inaeasing mvironmental regula- den;e that iupp6rts the implementation of tion in the industrializ€d world. lf this tirne is soecfic obstadesto international hade. This by definition, must be formed by not given ard an attempt is rEde boimPose n-ewg,oup, -y qua[hed individuals indePendmt ree;lation tfuough punitive or non-iariff-bar- nig ri;, it is tikely th;t ;{ological damagewill be from pressureand other intetest grouPs ingeater than tlEt which the develoPedecono- volved. And this group should also contribute to mies seekto avoid.
"Wemustddlcate ilr besteffortstcvads crcatlveandpractical that cnaueus solndons to dermlbhbaniesto fiee tradeandadtktve " development. sustainaHe
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By l(rthtyn Full€'r WorldWildliieFund I doubt therearemary challengesmore complex or pewasive than that of reconciling human econornicactivity with the natural environment. As a first steD, though, we need to acknowledge that ttie two poles car and indeed must be r€conciled for the good of both. Sustainingeconomic well being over futule generations requiresthe samecareajd stewardshipas maintaining our biological well being. Ib many, the idea of Fexamining our use of natural rEsormesDo6€$a aisis be causeit calls hto quetion basic assump tions about the relationshiD between humans and their world. Overtumine the acceptd way of doing things can le a daunting, evenparalyzing prcspecl.But no group is betterequippedto accomplishthat than theintemationalbusinesscommrmity which has the resoures to exDlore and develop the paths leading to a morc sustainable futue. There arc a mrmber of sFcific actions busines leaderscantaketo ensue thewise useof our planefs resources,induding: . EnlromEntd l|!k n 4b|mr .Indwtry hasaduty to ensurethatitspoducts are safelv manufactured, handled, tsalsported, rised and disposed of without unacceptablerisks for the environment. t "Truoaat" accou n€|.Therc is a growingsensethattoday'smethodsof eco nomic analvsis arc incomDlete.What ale now called J'extemal cosG' - the c*o impoeed by envimnmental damage, for example-need to beinternalized.Natue, of course,doesnot havea price, but we can developfiscalincentivetoencouragemorc efficientuseofscarcercsourcesand increase long-term economic performancearound the globe. . "tl{b cyde" a3c63m6ni. Manufacturcrs should accountfor the envionrnental impactsof then praducts over the entire the development of vehides defining prop erty rights and permitting theidentification of those who incur liability for ecologicaldamaee. ln many cases,it may bethat the welfareof acornmurJty incrcasesevenwhen someenvironmental damage is produced. It is p€rtinent in decision-making to evaluatethe pros and cons of a specific action affecting the environment and trade and to make a final iudgement which reflectsthe end welfarc of the communiry Trade restrictions generally decreaseor eliminate the capacity for growth of developing countries; therefore, THEASIANMAMGER AUGUST19SO
lifu cvdesofthoseDroducts- ftom extraction of reburces and riranufactuteto useand disDo6al. . Em,lloflnentd adlthg: Tobeaccourtable to the public and to the govemment, indwhiesshou.ldhaveaccrrateandavail,able information on the mvironmental performanceof their constsuctioncontractois,products,distribution systems,wholly owned and pardy owled bwinessesand overseasagerr oes. . Sourrr roductlon. Ideally, products manufactured bv industrv should either require no disposil at all oi be completely recyclable. Barring that, industry should find wa'r io reduceboth the quantity and toxicity of mvironmentallv hazardousDroduL-tsand wastegmerated by manulactuiing. . Dbclo.|'|ro of hfo|madon. Successftrl comDaniesin the 21stcenturv will be those b€st-able to securepublic confidence.That means in part a proglessive policy on the public releaseand scrutinv of mvironmental information. All too often, "cpmmercial crcnfidmtialif is used as a blanket excuseto aftiFarily limit releaseof inJormation which belongsin the public domain. Open accss to information should be the rule with rcstrictions iustified - not vic€ versa. . TtaHn& Companies must train their emDlove€s to becomethe environmental audit6n risk managers and source reducen who convertpolicy inboongoing daily action. It is im'portant to keep in mind that many of theseactionsare necessarilylong-term efforls whidr involve issue that are currendy unresolved.Butpednpsmorcimportantthan any single one of theseactionsis a changein the very philosophy of business.Tiaditionally, industrialists, in their pu$uit of human capital, have regarded the consumption of natural capital asa one.time,one way proposition. Ournersand managgs must rcmember that they,too, arc citizensof the world, as dependenton rcnewablenatural r€soures as the rcst of us. So far I have concrntsatedalmost exdu-
sively on what the busines sectorcan do. But it is equally dear that errvtonment groupo have an imporiant rcle !o play in buildingbridges of undentandingwiththe corDoratewodd-arDlethanerl:ironmental activistshavenot beencomfortableplaying. h the past,more oftsr than not, they halc dwotedtheireneryiestoimpeding@rpot-ab ProFrls.Whilestill notabandoningtheirvital roleaserrvironmentala&ocab, groupslike the\ /orld Wldlifr Fund areexploringways to work with corcoratioruto makesule t|at venturesresporxlto €nviorun€ntal b,usiness Inpart, we rcalizethat halting €conomic Fowth is not only impractical,but alsois a disservice to the millions of poor people who deperately need stsonger financial mderpi fngs intheir dailylives. Butmore importandy, enviDnmental manatement of the planet will require a variety of solutioru that are far beyond the capacity of either gov€rrunmb or mvircnmental organizationsto devise. Thisshift infocusbringsnewdilemmas. How do we go about €rlgaginga corporate communitywhichhascometoregardenvircrunentalists as naive at best and anticaEitalist at wolst? One of the most important ways is to give them the practical tools that allow them to b€comeenviorunental nvuurgers. World Wildlife Fund is currendy develop ing model guideline to heh corporations integrate cons€rvationof biological diversity into their land managementdecisions. Environmental purists, alarmed by thesekinds of alliances,durge groups like the World Wildlife Fund with being inap pmpriately caopdby corporateintercsts. ButI would arguethatweare all necessarily cGopted in a much greater struggle: the struggletopeserveandrcnewourpr€cious nahral rcsource base. The busines and conservation movements each have a uique, irtplaceable and inoeasingly mter€onnecd role in that struggle.
restrictions on trade must be properly and carefully evaluated. It is important that concemed sectors dedicatetheir besteffortstoward conceptualizing creativeand practical solutions that enable us to demolish barrierc to ftee tsadeand achieve sustainable develoDment from an ecological point of view. We ale oftm in agreement,in mattersof freehade,with these goals, but it is difficult for us to advance toward them in rcal terms. This is due to the fact that short-term considerations end up with priority over medium and long-term considerations.
The two central ideas that I have intended to propose to you - frce hade as a collaborating factor in the achievement of ecq efficient develoDment and the need for GAIT to examine non-tariff barriers concealed under the guise oI environmental Drotection - are invitations to conceive of business with a long-term view. I am convinced that this is the onlv wav that business activities will tale on their true dimension and dignity. Weale in a time of chanqe. As a businessman,I be[eve in the futureiff the Be.ltr wall cor.:Idfall, whv not barriers to frce trade? I
CDNCEIIL
67
AsGlobalAviationIndustryFlounders
AsianAirlines FlyHi Asia provided the only bright spot for the intemational airlines industry last year.Members of the OrientAirlinesAssociation(OM) posted a combinedUS$2.2billionoperatingprofit in the 199l-1992fiscal year.This marked a245% growth from the previous year'sprofit.
ore important,it wasthe only good newsfrom the intemational aviationcommunitywhich continuedto reelfrom the worldwide rece$sion. "ln the light of the proiected S4-billionlossfor IAIAs (lntemational Air lYansportAssociation ) scheduledinternationalservices and the sl.7-billion lossby ATA (AirTransportAssociation)for 1991,the OAASachievements can be consideredremarkable," IbrahimM. Taib,OAAsecretarygeneral,said. "lt is not surprising,"he added, "that nine out of the l4 OAA membeB(Taiwan's EVAAir the association's latestand l Sth membetwasnot yet includedin the l99l - 1992figures)belongto the world's25 mostprofitable " airlines. Theoperatingprofit ofthese nine OAAmemberstotaledover Sl00 million.Theywereled by
SingaporeAirlinesand Cathay PacificAirlines,the two most profitablein the region,with eamingsof S4El.5millionand S453.5million, respectively. ' Forfiscalyear l99l - 1992,OAA members'operatingrevenuealso wentup to S34.5billion,an increaseof 8.8%.Operating expenses, meanwhile,rose7.8% to s32.3billion. Likethe restofthe global. aviationcommunity,Asia is also hurtingfrom excesscapacity.The OAAsload factorfell from 70.5% to66.l%between1989and l99l. However, despitethe drop,Asian airlinesstill managedto achieve higheryieldsand increasedload factorswhichenabledthem to continuegeneratingprofitswhile lAfA andATAmembersincufied massivelosses. The slow recoveryof the world economywill continueto posea challengeto the airlineindustry the OAAsaid in a statement."But despiteshort-termproblems,the
lHE ASIANMAMGERr AUGUSI1993
SPECTAL SUPPT EMENI
long-term groMh prospectsfor the Asia-Pacific regionrcmain favorable," an officialsaid. A ioint OAA-DiIAforecasthas put annualgrowthratesat between7%and 8.6%for the next passen. 20years.TheAsia-Pacific ger traffic,on the otherhand,has bâ&#x201A;Źenproiectedto risemorethan four-foldto 375million by the year 2010.Thisrepresentsmorethan a 50%shareofthe globalscheduled intemationaltraffic.
Theslow lecovery 0f lheworld ec0n0my will c0nlinue t0 posea challenge tolhe ahline induslry.
@
RoyalOrchid Plusiseverythingyou wouldexpect from
details you'll enioy special attention to any seatinS
a frequent lverprogramme, andmore. Createdby the
and meal preferenceswhenever you fly with Thai.
aidine that turnedseNice intoan art form, Thai's Royal
On the ground, you'll receive regular starements
g/* SPECIAL STATUSFORHICH FLYERS.
showinS th€ growth in your mil€age account and regularupdateson bonus offen.
V'th full mernb€uhip, you'll receiveeven more prrvr Ieaes, like priority waitlisting and baggage handling
ROYAL
plus an additional tokg baggageallowance on That flights. And, as you reach nfw heiShts and atrain Roval Orchid Plus Cold and finally Diamond membership, you'll be rewarded with addirional privil€g€s including separatr check,in facilities and speciallounge access.
Orchid Plusoffersyouanunpr€cedentedcombination of free travel, privileges and other awards to rempt
ENROLNO\/, MEMBERSHIP ISFREE.
the most frequent flyer.
For an enrolmentform, completethecoupon andmailor
No matrer vhich class of travel you cnoose,
fax it to Thai. Or you can pick oneup at your nearestThai
you'll be rewardedwhen you fly with Thai.
office. Vith yourform, you'llalsoget a TemporaryMem.
On ; full Economy ticket you'll earn the actual
benhip Card and yourunique mcmbcrshipnumber. Just
miles you fly or a minimum of s00 miles. Travel
quote thh number when€veryou book with Thai and
Busin€ssor Fitst Class and your discerning tast€ will
your miles \rill b€ automatically record€d whcn you fly.
earn you a bonus of 25% and 50% respectively Even an excursion or pr:blished discount fare ticket earns you 70% of actual mileage flown.
qI* SPECIALLY SELECTED EXPERIENCE AT/ARDS, As an alternative to free travel, you can also make a selectionfrom our RoyalOrchid Plusexperienceawards. These exclusivt leisure, challeng€ and cultural awardswill tempt even the mostjaded traveller.
Pleaseretain your ti€lcts and boarding passesin cascvalid.tion is required.
ENROLNOV AND TRIPLETHE PLUS. Cet your mileageoff to a flying strrt in morc
Enrol now. The sooner you do, thc moner you could b€ cn route to your own dreamdestination. Royal Orchid Plus hom Thai. The frequent flycr programmethat'ssmoothassilk.
ways than on€. t
Fint, we'll rcward your early enrol-
ment by doubling your firi
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fl ights absolutely f ree. 2. \ve'll make it as casy as possibl€for you to get there, with a bonus 2,500 miles the first time you fly Thai after enrolling. 3. Plus, you'll literally see double on lmagine yourself, for example,tounna the wilds
certain Thai rout€suntilS€pt€mber 30, t993.
of the Burrneseborder atop an €lephant or smoothin8
You'll eam double miles on Businessor Fint
the rough spotsout ofyourgame u,ith speciall€ssonsat
Class flighrs in either dirc€tion betw€en
SPECIAL FREQUENT FLYER PRMLECES. Even beforeyou attain tull Royal Orchid Plusmembership at 12,500miles, your privileaes begin. For instance, onc€ we receive vour enrolment
cdntry
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T------------l r ENROLNOV lN ROYALORCHIDPLUS Enrol in Royal Orchid Plusbctore Sept€mb€r30, 1993and we'll rcward you with doublc your fiFt Thai ah travel award Pict up cnrolm€nt fom from your ocarcstThai office or simply complctc this coupon a.d €ither mailattoThai AiMays Intemational,CouotrySpace I 81d8.,S€n. CilJ Puyat Avcnue,Makati, Mctro M.nila,_Philippines or fax it on 8 t06tt7. Allow 3
Bangkokand Europe orAustralasia,includinS an international connectinS flight sector
Pl€as€completcin Enslish
between Bangkok and any city in Asia. Plus
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any flight betw€€n Eangkok or Scour or Tokyo and los Angeles.
On the ground, you'll receive reSular statements showing the growth in your mileage account and regularupdateson bonus offers.
7
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a prestigiousgolf school.
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r-----s---'-Y-J THAI AIRVAYSINTIRNATIONALLTD Cdnry SpaccI8lds., S.n citJ. puyn Arcnu.,M:k ri,M M T.t. sr5.sa3r ro.O for t*ff:t'oft, c.llT.l 815.3,{21 ro 27 . Airpon Offi.., cEnd Fler, Dtpa'tuc t€vcl, Ninoy Aqu'not.r.rn.tion.t Airpon, prny, M M. t,l. st eag 3I r -6713/33 r -6719. M.nih Oili.., G@nd Fl@r, EkohaTwin Tov.6, 233Ecoth Sr, Binondo,M.nib T;l .7 rx.87las.5o.o3. csA c.b! T.l 7101.. CSA ClrsoT.l. 331.17rd1
;
Ianuary,the Europeanmarket Airportand airspacecongesbecamefully liberalized. to is expected tion, meanwhile, "l think the OAAcarriersmust the most become worsenand seriousthreatto the groMh of the forgeclosercooperationwithin their own group,and not be aviationindustryin the Asiaswayedby the argumentthat Pacific unlimitedopenskiesare necesreport, IATA Accordingto an saryfor the economicand social congestion airportand airspace developmentof the regionwhile industry the is iunently costing anyformof restraintis labelled yearly. This, it some$5billion protectionist, negative and billion to sl0 said,will increase said. Chatrachai outdated," year airlines, 2000.For by the Thenumberof American airportand airspacecongestion asa in Asiais decreasing travellers in resultin higherinvestments and percentage of total travellers loss aircraft,lowerrevenuesand us airlinescannotexpectto of goodwilldue to delayed flights'developtheirfifthfreedomtrafficMe to supporttheir primary traffic,the OAAchairman Dointedout. he In likemanner, airlines added,European cannotexpectunlimited "pointsbeyond"in their plansto developAsian hubs. "lt is timeforthe US to carriers andEuropean that Asian fact facethe arewellableto carriers servethe needsof the Asianmarket,evenwith Airporl and all its potentialfor huge ' ailspace openskies'Policy said. expansion,chatrachai "Twenty congeslion, Anothermaiorchallenge years He continued: facing meanwhile, air ago,therewasa minimal is deregulation is expected Ol!\ members networkin this transportation leadto an to which is expected lo worsen ,,open region.we acceptthat USand region, for the skies,.policy and Europeancarriersdid provideair the which,in turn, would mean become serviceswhichservedthe maior toughercompetition m0sl ,,iheORAregionpromisesto portionof the trafficneedsinto selt0us lhrealto be the big groMh areafor the next this region.But times have andin fact,we have thegfowth l0 years,,, changed, Bunyachatrachai ollhe donea tremendous andThai iob in the last ananta,OAAchairman avialion 20 years.we havebuilt up an AirwaysInternationalpresident, in said in a recentinterview."lt is industry extensiveair transportnetwork lheAsiaandthroughthe leapfrogeffectsof from other airlines attracting Pacilic. we now havemore technology, regionsto moveinto the OAA thanmostof modernequipment area,andthis newentryof nonoutsidethe from our competitors fifth exercising carriers OAA area. freedomrightsis goingto mean intensecompetition." Theregion,sairlines,in fact,are RoyalorchidPlus' In additionto beefingup their alreadyfeelingthe effectsof air transportnetwork,oAA Last heightenedcompetition. SPECIAL SUPPIEMENI
membersarealso improvingtheir Thai serviceofferings.Chatrachai's Airways,for instance'launched "RoyalOrchid effectiveIuly I the Plus,"an awardsprogramfor frequenttravellers scheme, A mileage'based Royalorchid Pluswill allow travellers,agedI 2 yearsand "miles"basedon above,to accrue takenaswellas flightsegments servicespurchasedfromThai "partners"linkedwith the Airways program. Thesepartnersinclude hotels,creditcarcompaniesand carrentaloutfits. mbersoftheprogramwill be entitledto a rangeof benefits and privileges,suchas freeair tickets,hotel staysand car rentals Thesearein additionto the prioritywaitlisting' special baggagetagsandthe extra lo-kilo luggageallowancegivento full members.As the programunfolds,it will alsoofferunique "experience likeelephant awards" trekkingin the lushiunglesof northernThailandand enrollment in golfschools. Unlikeotherawardsprograms,RoyalOrchidPlusallows frequenttravellersto accrue of the classof milesregardless travelchosen.Economyclass travelearnsfor membersthe actualnumberof milesflown. Memberstravellingbusinessor first classearn 25"/"and 50"/" extra miles respectively. Evenexcursionor published discountfaresearn707.of the actualmileageflown lnallcases, memberswill earna minimumof 500milesif the travellingdistance is lessthan 500miles "LaunchingRoyalorchid Plus for both our domesticand internationalroutesat thistime is particularlyappropriateas frequenttravellerscompriseour mostvaluedmarketgroup"' "offeringthese chatrachaisaid. benefitsis our wayof saying 'Thankyou' to thesepassengers." THEASIANMANAGER. AUGUST1993
Our Prestige Class Is Modelled On Everybody Else's First Class. So What Could Our First Class Be Like? Come aboard our Prestige Class, andyou'll wonder ifyou've stepped into the wrong cabin. Because every seat is at a window or an aisle, and aranged with room to spare. Roorn to let you sink into the 2l-inch wide cushions, adjust the back to tilt a full 38 degrees, and stretch out in the full three and a halffeet of legroon. Space others set aside only for their first class passengers.As your hostess gently looks after you, you may have just one unfulfilled wish - to seewhat our First Class could be like. We ve worked hard to take our Prestige Class a class above the rest. Fly with us, and experience a dedication that could only be Korean.
I(OREANAIR Fly the Spirit of Dedication. For reservations, please cdl (02) 815 891 I .
Dynasty FlysrClub Forits frequenttravellerc, ChinaAirlineshasthe Dynasty FlyerClub.Tobecomea membet a traveller;imply hasto senda completedapplicationform to the localChinaAirlinesoffice.Membersenjoyspecialratesat selectedhotels,carrental companiesand DutyFreeshops worldwide. Regularmemberswho fly 45,000milesare upgradedto Gold membership.Goldmemberscan checkin fastat DynaswClass counters.Theyarealsoentitledto freebaggageallowancesand can
Twenty years ag0, stayat the ChinaAirlinesVIP was Loungebeforeor aftera flight. lhere a minimal A Gold memberautomatically ail
tsaNpo|btionbecomesan Emeraldmemberby accumulatingmorethan 120,000 nalwork miles.Emeraldmembersare inthis guaranteedseatson mostChina regi0n. Airlinesflightsand are entitledto substantialdiscountsat Aviscar rentaloutlets.Theyalso enjoy unrestricteduseof ChinaAirlines' VIPLoungewith two guests.
PALBelleelin0 Pro0ram As part of its plansto improve Airlinesis seNices, Philippine undertakinga majorrefleetingand modernizationprogram.PALsnew management, headedby CarlosG. Dominguezas chairmanand president,recentlyleaseda Boeing747-200 from Singapore 74
Airlinesto increaseits international fleetcomplementto 2l widebodyjets,madeup of I I Boeing747s,eightAirbusA300s andtwo McDonnellDouglasDCl0s. In addition,two Boeing747400and otherAirbus modelsare beinglookedinto to eventually modernizePALSintemational fleet.Thisaccordingto Dominguez, shouldresultin operationalefficiencyand reduction in costsby eliminating intermediatestopsand simplifyino mAintanrn.c
On the domesticfront,PAL, Dominguezsaid,aimsto havean all iet fleetin five years. Aircraftutilization I will be maximized throughmorenight serviceoperationsas soonas airportfacilities are upgraded. "Wehaveinitiated discussionswith other canierson prospective trunk-feederservice complementation schemes,"Dominguez "ThigmeansPAL said, when will be undertaking, feasible,linkageswith local passenger and cargocompanies to complementits existingroute " network. He added:"Wehaveoffered otherairlinesthe useof our seven Sunrisers, evenon a subsidized basis.In short,PALwill be helping whereverit can in boostingthe operationsof carriersthe complementour system." Alliances,or "interconnections,"with foreignairlinesare Talk with alsobeingconsidered. All NipponAirways,Lufthansa, KoreanAir andAmericanAirlines havebeenopenedalongthis line. Anotherpossiblearrangementis a partnershipwith a foreignairline whichcouldusePALslanding rightsabroad.A third option is for PALto sub-leasecargospaceon a SPECIAL SUPPI..EMENT
wholesalebasisto a foreign airline. Already,PALhasioint flight serviceswith CathayPacificand GarudaInternationalas well as a two-yeartechnicaland consul' tancyagreementwith KoreanAir.
Korea's Sclenllllc 0lympiad KoreanAir, meanwhile,is preparingfor anothermaior intemationaleventthat will be held in Korea.Thistime, instead of the OlympicGames,Koreawill hostExpo'93. officiallysanctionedby the Paris-based lnternationalBureau of Expositions,Expo'93will be a worldexhibition specialized focusedon scienceandtechnology.It will be heldat Taeion,some 100milessouthof Seoul,wherea lbedok ScienceTownis now being constructed. Thiswill be the first exhibition of its kind to be held by a developingcountry, andsomel0 million visitorsareanticipatedduringthe Expo'srun fromAugust7 to November7. It is expectedto attract60 participatingnationsand more than 20 internationalorganizations. Numerousindividual corporations,includingall the maiorKoreancompanies,will put up pavilions. Thelatesttechnologieswill be featuredduringthe exhibits.For example,IBM'sKoreansubsidiary 'virtual Reality is preparinga Theater"wherevisitorscan interactwith three-dimensional lmages. ButExpo'93will be morethan iusta showcasefor scienceand technology. Accordingto Oh Myung, chairman of theTbejonintemational @osition organizingcommittee, "Epo '93will offervisitorsa unique peFpectiveon the relationships betweeneconomicandtechnologicaldevelopment,andbetweenthe preservationof the environmentand traditionalculture." . At GUsr 19s3 IHEASIANMANAGER
RobcrtV,Chandran
Dream merchants...
AreEntrepreneurs BornorMade? "Theright sideof oul brainsis the seatof oul dreams, creatiYiwand innovation."
re mtrepreneurs bom or made? Deamsinspleusand infuse us with passion, qeativity and aboveall, the couragetobelievethattheword"no" is inthedictionaryoffaihlles.Deams areourdeepest€rgressionof what wewanttobe. ThemoreDowerfii the dreamer,the better i:nteueneur they will become. How do vor.rdevelop the ent€prcneuriai sptuit?The l€ft side of our brain is the analvtical; the right sideis theseatofodrarearns, creativity and imovation. This dtildlike nahle is totally overpow€redaswe€nteraheworldsof educationand business.But there aremanywaystoawakentheright side of our brain They are the starting points of a vision that becom€sthe cenFal Dart of a businessplan for a new mterprise. What arc dreams made ofl Well, entr€pr€neurs arc drcam rneFchantsandtheirenthusiasmis contagious.As ma*eters of their dreams they leam what inspir€s people.And it G not making billions of dollars, Monev is the bvproduct of successful drcams convertedto realit]4 No successful venfure was purelystatedformakingmoney. It is very hard to motivate employees,with the idea of making a million dollars for the company There needsto be a higher vision. Avis, a company owned by its employees,wanted to provide a better seryicein the rcntal car company This was embodied in their slogan "We try harder." FederalExpress,a success in the ovemigit delivery business,had a vision exDressd h their slogar! 'lrVhen it absolutely, positively has to be therc ovemight." Sincethesecorporations werc built arcund drears they have some unique qualities.They arevery long-term ori-
: AUGUST 1993. IIIE ASIANI,|AMGER
ented, their employee feel they sharein a purpce and above all they becamedominant in niche markeb. Successful entrepreneurs dream bigger dreamsthan otlrcr people. A dream, when conceived,lookstotally impcsible to t€adl But the time it takesto staft a small businessand a business thathasabllion dollar Dotentialis the same. Asurvryconductedinourclass at Flarvard among a grroupof enftpr€neus asked:What is your rcgetz' The malrrity answered, '"Ihey did not &eam bigger." Why don't we dr€am bigg€r? Mosdy fear of hilure. Our d€sire to succ€edis so 8t€atwe will take a smallguaranteedsuc€ess rather than a 10%dunce at a big p-j.-t Thereis a differencebetweena dreamer for pleazureand an action-oriented-dreamer. This is the diffelencebetweena poet and ar mteprenzur. Thesfunpteconcep of getting up every day and conriously doing one thing to imprcve your chancesto achieve yourgoaland every night beforc going to H, review for fifteen minutes how far you have moied toward your goal. This practice, if developed in high school davs, becomes habit
"Ouldesircto suoceed b sogtreat rvewllltakea stmll guararteed suosess ratherthana ten percetttdnnce at a Hg pqiect."
forming. If started after collegea person will have undertaken at ieast 3,000 tasks to aclieve toward his goal by the time he tums 30 and he or she would have spent 750hours in review. Henry Ford was born on a farm and becamea rnachinist at 16. As a young man, Ford was intercsd in automobiles,which were then a new invention. He built his firct gasoline engine when he was thirty and his first automobile when he was 33. .Frcm 1908 to 1927, more than hall of the carssold in the United State were Fotds. The drcamer must also develop an abilitv to understand risks-.Risk coniires up the image ofa gambler and of recklessness. It hasbecomea taboo word. Risk is the least ulrdersd conc€Dt in the management lexicoir. Many tirnesyou know very liftle about the business you start. If you rercad your first business plan after being h bushess for ten years, you get a gr€at l€sson on how to manage your businessthrough crisis periods. You also rccognize that your bus! nessprobably grew in many directions which you never imagined in your original plan. John D. Rockefeller, the son of a peddler, also started work at the age of 16 as a clerk, but in a prcduct firm. He formed a partirership in a grain comrniision house and later used his profits 'to enter the oil industry. His compant the Standard Oil Company, was formed whm he was 31 and in ten yeals it had rcfineriesinClwelard,NewYork, Pittsburghard Philadelphia. So mv advice for all vou would-be entrepreneurs? "Dream well, Iive hippily, and prcsper enormously." The more powerful the dreamer,the better entrepreneur he will become.l
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Going theextramile...
TheArtofDelighting Customers "Customelsalways judgethe quality of their total experiencewith a company-m termsof both prcductsand services.'
I n the context of Total QualI ity, serving ostomers does ! not sirnply mean satisfying f customers. Satisfied customers ar€ not necessari-lvloval crlstomersnor reDeatcustomrirs. l,Vhy is this so? CustomersatisfactionimDlies satisfying need+ rcquitements and specifications. Needs, e. quirements and specifications have to be stated explicitly by customers to be satisfied. What can go wrong \ .ith this seemintly logical prccess? Filst, you may not be asking customers the right questions, or even worse, you may be expecting customeE to volunte€r inJormation. Second,evm after vou have asked customers all ihe right questions,they may not tell you everything they need. Third, wen if they tell -anvou everlthing they need and swer all your questions, your competitors can do the same thing to your customersand satisfy them in a sinilar manner.In short, your customers could switch to your competitor without wamin& remorseor second thought - and they have all the right to do so. lryal customersarc delighted - nd iust safisfied- customeF. To deli8ht meansto catereven to unstad custom€rneeds,by anticipating them, by taking a Plq activeratherthan reactiveposture and by thinking like a customer Delighting also means defning quali3 from the ostomer's point ol l'!ew:
The highet form of cus-tomer s€rvicE is what I (all surprising custom€!'s.It neans goint out of your way to exceedcus'tom€rexpectations and needs, stated or unstad, at no o(ha cst or delay. Surprised custorneGare not iust loyal customers,theryalsobecome
AUGUST 1993. lHE ASIANMANqGER
your mo6tdedicad and effective and advertisers. It wou.ld be exhemely difficult for your competitoDto stealyour delighted and suprised custom€rs. If you €ntera first classr€staumnt, and ask the waiter for a cigarette,and he gives you one, you would be satisfied.But if he wanted to delight you, he would lightyourcigaEtte.Notethatther€ are needsyou do not stateexplicidy to the provider - like a light when you ask for a cigarette.You leavethat to the imaginatiorf re sourcefulness and common senseof the service provider If the waiter wints to surprise you, then with the light, he would give you an ashhay, ard askifvou need- or better vet provide other items for vour iomfort and convenience. lf you dropped your cashfi[ed wallet in an airline seat your natuial expectation is that it is gone forever You would be satisfied if the ground staff handled your report prumptly with a promise, even without guarantees,that they would try their best to rctrieve the wallet. You would be amoved and extremelv dissatisfied if vou encounterei red tape and itaff indiI{erence when you filed the report. You would be delighted if the airline in no time found your walletand notified you that
"Satisfiedcust(mers atenotnecessadly loyalostomels lrorrcpeat ctlstomeF."
you might retrieve your wallet with all the cash intact at the airline airport counter at vour next destination. You would be sumrised if an airline staffmemberhandcaried your wallet to your home. As a delighted and surprised customer,youwould write an unsolicited letter complimenting the airline manasement.You would also becomd a loval freouent flyet telling the whote ;orld about your wonderful exoeri' encewith the airline. l y'hen a customer ordeE a product, written documentation - purchaseordex,contractsand blueprints - containsnothins but s'pecificatjons, delivery datd termsoflnymmtandprices.Custome6 wiU not put in lvriting the servicetheyexpectbefore,dwing and after the sale; but, these unstad needsarciust asrcal and important to then as those indicatedin the purduse order. For instairce,tlrev eroect immediatercsponseto inquirie and complainb,they€rpectconectalrl timely billing and invoic€s,th€y e(Pectcouteous and efficienttel€phoneoperatorsand rcoeFionistswhen they cQntactyou. Thee undtt€lr exFctations havetobe satisfiedtog*her with the written specfications.Sincethev ate unfutte[thesell€rmustttiinttitea customerand think aheadof the customer in oder to deterrnine them. l,ousy serviceacrompanying an excellmt produd r€sulb in a bad salethe clstomer will never fol8et, ln shoft, he may not come back,and that was vour last sale. Customersarealwaysfudgingthe quality of their total experimce with the companv - in t€rms of both Droductand'service. In summary, Total Quality ostomer service means to satisfy,delight and thelr surprise all customers. T
n
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1993
,o3u3 G, Galbgoo
Useful metaohor...
ABaby-Boomer's Growing Pains "Ifleadershipdoes not moflYateits
people,pedormance suffers.tt
pected, the conclusion we arrived at was that parcnting is not only differcnt now but isalso a muchmore diff icult task than it once was. My conversations with friends in Malaysia, Thailand and Singaporeover the past s€veral years mded with the same conclusion. It is in this lisht that this apicle is being writien, not only to commiserate with mv fellow baby-boomersbut also t6 provide some advice packaged in businessjargon familiar to executives.Furthermore,Iestimate that over half of all Asian managers are baby-boomers, and a$und 90 percent of them have probably experiencedor are experiencing the samedilemma, A baby-boomer is someone bom from 1946 through 1964, years when the population growth rate in most corurtries was quite high. So what's the beef regarding the parenting s(Enano now, Well, when vou babyboomersweresti.llschmlin*y6u remember how obedimi j,ou werc to your parents.When you were asked to do your home. worlg brush your teeth, take a bath or go to sJeep,you did not reqriestanextensionnor did vou fro-wnor question why. To y'our dismay,you now find yourselves continually on the defensive to the never-ending, 'nVhy?" oI your childrcn. Well, baby-boomer, times have indeed changed.Your futuday night parties have been rcplacedbyhigh+echdiscroe,live concerts, shopping malls and food chain oudets. But keep h mind that vou provided them
AI,JGUST'I9$. THEASIANI,IAI,.IAGER
the money to go to theseplaces, Your innocmt games of hideand-s€ekandtaghavenow been replacedby Nintendo, and your children have been wooed and won over by several loves that go by the initials TV, CD, VCR and IrC. You rea.lize,of course, that it wasyou whobought these in the first place. You now blame both the Westernand local media foryour par€nting wo€s. With satellite dishes sprouting all over the region and the enEy of cable television, additional scapegoats arc easy to find. You thm dig deep into your corporate bag of hicks but realize thete are no standards, guidelines or policies around. Is there a oroven how-to manual vou cai buv? None.Cantheplairningstaff help you out? No. Can you hire a consultant?Yes,but he does not know anj more than you do. Still, do not despair, for you deserve some frce advice for having had the patience to read my artide up to this point. Her€ arc some tips from one babvboomer to another, couched in businessjargon we both readily unde$tard. 1. Sc.nrrlo Eulldlng. Both Drucker and Churchill said something that supports this concept.Druder: 'The qeatest danger in times of turbulence is
'AG{r€ ndtl
yesteflhy'sloglc ls a synduneof bb!/{oomel
lmperiallsm."
not the turbulence; it is to act with yesterday'slogic." Churchill "Ifweopena quanel between the pastand the present,we shall find that we have lost the future." Scenariobuilding doesnot rely on the past nor does it predict. What it does is to pnvide an understanding of the driving forces that shaoe the futur,e. Acting with yesterday'slogic is a syndrome of baby-boomer imperialism, Justasyou r€sented themoralistic superiority of youl parents' generation Clhey fust don-t understard us.), you are now Irustmted with the younger generation (Why can't they be like us?). For instance, tale rock and roll, which is thepride and py of your nostalda trips, You hr.rly believe that it is the best sou-nd ever heard on earth. But the Seneration that pteceded yows and that which followed do not agree with you. So it is time to stop preaching your nostalgia values to your children, but rather try to adjust tio and understand what uesent and futur€ realities coirlront them. If there is something to impose it would be the tirne-teted values of your generation and those of your fathers and forefathers, 2, Stlt glc Ho.lth v3 Flna|} dal Hcalth. Citicorp is havine problerrs prinarily because ii enphasized financial health (short-term) rather than strate' gic health (long-term). Johnson & Johnsor; on the other hand, is one of the best-rnanagedcorporations in the world becauseit continues to focus on strategic health. The gmd news is that financial health becomesa consequmce of this focus, Ir rcarin8 childrcn, quantity timeisqualitytime.Themoretirre you sFnd with th€(& the better fortherninthelongnrnHowweq,
79
it isrcallv morccanvenientforvou to simpiy rcspondbothequestioa "Why?" with a, 'tsecauseI said so." But if thereis no pain, thereis nogairlAswithcompanies,biting the bullet now ensur€snot only a good future for your children but a.lsominimizesthebulebthathave to be btten in the short t€rrn. 3, fYdk tF T{G ff the senior executiv€sdo not havea dircction for the company, the business flounders. If the leadershipdoes not motivate its people,periormancesu.ffes.lf the top marragers do no translate into action their ftetoric rcgarding the primary impoiance of the custorner,neiOrerwill the ft,onFlinepersonnel. Monkey s€e,monkey do. If vour ddldJ€nseevou smokin& drinkin& cusin& dtsobeyhg the law or lying (Yes,wen the seeminglyinnocenL"Iil[thecal€r fm not home."),you will haveno moral authority to tell th€rn not to do these things. Iousy p€l€trtts, lousy children. a Bdtchflfdg; Compades
aspidng for or trying to maintain world-class status Dractice bendunarking. What are we do ing? What arc the e"\c€ll€rtcompanie doing?How do th€y do it? Howcanitbeemulated?Howcan it be done ht€r? Right now things may be in harmony in your home, lr4aybe vour rcactions to Droblemsthat &op up have a higi successrate. But, as some of vou have found out, the ernotional and psyclrological make-up of drildren can change wernight as they grow up. Fortunately, you will have somefriends who aredoing quite well in parenting. li k to ther! observe them, and apply benchmarking.Developa po-active starce rather thar a rcactive one. 5" tlfuL Knittn is not a fad. Continuous imDrovement has beenaround for iecade but rmder different narne. Companies right now are jumping 6n the bandwa8onto hput this philosc phyintheioperations. Theyhave
realizedthatthercisnob€stwayof doing things. The same holds true in partnting. You may think your wav is best becausevour eldest chiid is the higih school valedicio an.Butthesessuevou may have applied t6 your ch d may have haftorcd r€sentn€nt and ill will or worse, may have rcsulted in an unbearable psvchologicalstrainwhichmayciub Neverbesrnug direconsequances. about your paEnting style for it may be the wrcng one. 6,nrltanhgqfiLdm.As oneof the most r€c€ntconceDhral frameworks for organizatiors, it espousethat leamingis c€ntralto zuccess.Being a leaming organization enablesa 6rm to avoid micro-management and linear thinkins. Eachrmifs concembecome ihe concern of the entire company. Inter-relationships, subdeastheymaybe,arcc0mp(F hendedbettex,rcsultingincompanies readv for zurprisesand not afraid of iurprises.
Everybodyh the family must haveacorunitrrcnttoktowledge, Regular family meetings or discursions €nableeveryoneto understand the why's and wherefore's of life. The hmily must also have a mechanisrnfor rnewal withinitelf .Whm a family mernberhasa poblem, it is the mtire family's problera thereby !€sultingin everyonetdlectingon how he hascontibuted to another's pmblem or what he cando to minimize or resolvethe qoblern Therc exists a multitude of reasonsthat canbe concoctedas to why these management tips on parcnting are not applicable or deservea lower prioritv. After all, you are very busy wiih your work and vour scheduleis ouite tight. Someofyou may bacli off, but the onesmadeofsterner stuff will tackle theser€sDonsibilities head-on. If you presson, baby-booma executive,then you havearrive4 as a modern, pr€s€ntdav (rcIevant)Darent. I
Innovatlve Solutlons to Help Feed the World
Amtng Tugon , Laban sa Gutom
7vt
By the year 2OOO,there r'rdll be 8l million Filipinos to feed. While populatlon grows, farm lands continue to shrlnk due to the demands for housing and industria.l expansion, RIIONE'POULENC meets this challenge by not only incrcaslng farm yield but doing thls wlth full respect for man and hls environment. conventional products today gradually lose their effectiveness as parasites bulld up inrmunities to repeated beatments. Increasing dosages may work, but with dlsastrous results to the ecosystem. Combining conventional with ne\r' technologles, RHONE-POULENC protects crops with new formulations, more effective at lower dosages in an entirely new packaging concept. For lnstarrce, most croP Protection
Nagmamalasokit.
prcducts today use spreader systems like broadcasting or spraying. RHONE-POULENC formulatlons {'ill be direcdy applted to the seed, and are transmitted through the sap like a vaccine, protectlng the plant for its entire seasonal llfe-span. No further treatment ls needed. For other speciflc applications, RHONE-POULENC formulations will also be ln water soluble and bio_ degradable pouches whlch ar:e simply placed at the foot of the plant. These are effective agarnst a wide spectrum of parasites, including rust and mildew arrd are completely bio' degradable without leaving unwanted trace elements, Perfectly safe, they eliminate dtrcct handllng and the need for cqntarninated container disposal, Then a dream. now a reality. AbanaarL
Sa ingong kaiusLLgoa sa inaorq ko,ligtosa'n
il' nuOnte-PouLENc PHILIPPINES,INC. RHONE.POULENC AGROCHEMICALS J. P. Rizal Sl., Bo. Namayan,Mandaluyong,Mevo Manila
MANAGER 19SS. THEASIAN AUGUST
Vlctor S. lJmllnE n
TheDuPontmodelwitha difference...
TheLimlingan Financial Model t"Wewere dissatisfiedwith
crankinsout a host of financialratios which couldnot berelatedto oneanother,"
p€ople have asked for further elaboration. We developed the financial model when we werc teachinq financial management in AIM'! MBM program almost 15 years ago, Basically we were dissatisfied with cranking out a host of financial ratios which could not be relat€d to eachother. Mor€over, we wanted to devise a system such that computational erorscould be immediately dis. cover€d,asin a balancesheet0n a balance sheet, computational errors arE indicated when the balancesheetrefusestobalance.). After some thought, we decided to improve on the sacalled Du Pont model which showed the relationship between the return on investment, the oDetating margin (net income/-sales) and the oPerating turnover (sales/assets);i.e., ROI (Return on lrvestnent) = M (Net Income)/S (Sales) x S (Sales/InvesEnent). Our model can best be illustrated by an example. [,e/s say you have a 9100,000proiect which gives a retum of 307o. Naturaly, if this proi'ct is financed completely by equity, thm the rctum on eouitu is the sameas the potct niurn, 30%. If, however, you decide to financehalfof the prciect thouqh deLrt,then vour ietum on vo-* r€vised eqirity of [50,000' depends on the interest vou will iay on your debt. If say,the inter€stbecomes$22J00 ($30,000$7500), your retum on equity increasesto ,15%. Note that the drange in the mode of financing ftom 1007. equity to 5070equity / 50Vodebt
AUGUST 1993. lHE ASIANI,IAI'IAGEB
f||. UmlhE
Flnarclal Modcl
has no operational effect on the prciect. As lt/ith a proFct, 60 too with a company where the proF€t cost becomes the company assets,the proiert debt the company liabilities and the proF€t equity the company eqOn the basis of this examnle and somebasicmathematics,we then derived the Umlingan Financial Model: ROE = ROA + D/E (ROA - CD) wher€ ROE = Return on Equitv ROA = Return on Asset D/E = Debt/EquiW CD = Cost of Debi
"Anslel \ryhatlf
questions Interrs of the lmpacton ROE."
Note that under this forrnula, when D (Debo = 0, ROE = ROA. Note further that if ROA>CD, then ROE>ROA, indicating positive financial leverage; and,thatifROA<CD, then ROE<ROAVindicating negative financial leverage. Wththisformula, we can determine wherc a company's ROEis derived, asset managemmt (ROA) or debt management (D/E tROA{Dl). Moreover, we can now rclate all the financial ratios in terms of their impact on or contribution to the ROE. And lastly, by computing for ROE direcdy and then computing for ROE through the formula ROA + D/E (ROA{D), we have the computational check we have been looking for. Using the Lirnlingan Financial Model, we have beenable to undertake the followine financial analyses: 1) Pinpoint arcasof weak and shong f inancial managemmt. 2) A$wer "what if " qu€6tions in terms of the impait on the ROE. As an example, we can determine by how much ROE will increase if we lower our cost of debt by 10%. . 3) Prepare financial plans whichstartwithROEta€etsand end with sDecific financial targets, such ai maintaining operating expens€sat 25% of sales. 4) Assrgn specific areasof re sponsibilitiesto f inancial off icers such asmaking one responsible for lowerhg the cost of deb,t. 5) Create "equity centers" where general nianigers have both assetand debt management responsibilities. t
8l
ARE YOU AN EMPLOYER? Then,here'showto makesuretha are contributions vouremplovees' properly'reforted to theSSS.
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Prepareyour quarterlycollectionlist (SSSForm R3) eatly.
rogularcopissof R3,you maysubmitthemin disketteor tapoform.Thiswill enablea speedierpostingof your repon.
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Fordetailsaboutthis proiect,pleasggot in touchwith at 921-0619locals AccountDepartment the Employees' 2106or2109. or received areposlmarked Thedateths docurnâ&#x201A;Źnls asthe bythe PostOfficEor by ths SSSwill bo considered datsof submission.
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Submityour accomplishedSSS FormR3 alongwiih ths lo oach monthof lhree SSS Form RSs(corresponding ths quarter),within the first 15 days aftereveryquartsr. lf th6 1sthday fallson a weskendor holiday,lhe precadingworkdayis considoredthe last day of remittance.
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Submitdocumentsto the nearestSSSotficeor mail lhem at any post otfico. No stampsare required. SSSwill pay ths cost of postage.
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lf you aro a computerusor,you may join tho R3 Tapâ&#x201A;Źr' DisketteProjsct,whereininsteadof submittingto us lhe
a
for Januaryto December Belowarethoschedules 1993: MOI{THLY @IITRIBUTIO A R^N(,E OF cdaaENS txf,
Pt - t&.99 t50- 199.99 200- 2&.9!) 2fi - X).9) 3s0 - 499.99 500 - 6c4.99 7@- 899.99 900 - t,@9.99 1,100- 1,&E.g) 1,400- t,7$.9) 1,750- 2,219.W 2,250- 2,719.99 zlg - a,u9.99 3,250- 3,719.9) 3,7s0- 1,2$.99 1,250- 1,719.!N 1,7s0- 5,219.9!) 5,250- 5,7$.9!) 5,750 oWR
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Edllbcrtorlo Josus
Reviving ossified bureaucracies...
ThePublicOfficial's I\ewBible "Developing counbiesshould find thisbooka sorllceof conifott Thehorror stories theyfind in their own bureaucracies aneno more scandalous than thosedocumented in theU.S."
n a couple of occasions during a recent twoweek visit to policy think-tanks and academic research institutions in Canada,our hosts rcfer€d us to a pubLication which had allegedlv becomethe new bible in the Washingon D.C. Beltway. True enough, the U. S.paperback edition of the book carried at the top of the cover page the enthusiasticendorsementof Bill Clinton: "shouldbereadbveverv elected official in Ameri&. Tde book eives us the blueprint." Clhtoi-watchers ^"v iirde"d pick up a few clues ori the new ptesidenfs thinking on govemance fn:m David Osborne and 'lbd Gaebler's book, Reinoalinr Gowmment: How the Entrepineurial Spirit b Tronsfurmingthe Public Sector. The authors are peaching to Ameriens. Their example, both abFct failues and asiounding zuccesses, conrefiom their shldv of Amedcanbureaucracv,somedf theur drawn ftom their own experienceas con$ tants to public sectorofficialsandorganizations. The book argues that the emergmce of a post-industrial, knowledgebased e€onomy ne. quires the reinvention of government and prcvides a setof l0 prcscriptions boguide this process. The basic approach is the application of principles that have proven usefu.lin revitalizing private sectororganizatioru. Thus, the authors urge that government play the role of catalyst, rather than implementor; that it empower, rather than sirnply serve, the community; that it foster comDetition in service delivery They recommend that the Bovemment focuson mission rather thal rules; on rBults and outcomes rather than inputs; on the needsof the
At,GUSr1993. lHE ASIANttilAMGER
customer rather than spending; on prevention rather than cue; on participation and teamwork rather than hierarchy. Finally, they encouragea btoader useof market mechanisms,rather than comrnand and control. In the discussionof theseDrescriptions, the authors' aclnowledge theil indebtednessto the ideas of Peter Drucker on management/corporateshategy and entrepreneurship and to recent fiteratur€ on Total Quality Management. The easy acceptance of busin€ssconceDts,tools and techniouesunderlie themain premise oi the author's argument "the centsal problem of government today is one of means,not of ends." The authors believe that Arnericar society has reacheda fair degree of consensuson the values and objectives govemment should Dramote and thev accept as well the integrity ani the comDetenceof the bureaucracy. Thiy blame the failure of good people to achievelaudable obi€ltives to inadequate and inappropriate systems. Radical redesign or re-invmtion is required for the government to cope with the managementand coordination of complex, diverse, changing situations. Perhaps, the most critical prescription for the redesign process is the one many Thid World Sovemmmts would fhd difficult to implement r€defin-
"Theauttorswant str@el, more efftctve Elovemments.n
ing its role so that it steers,rather than rows, the Ehip of state. Third World bureaucratswill certainly shess the importance of the steering function and rcadily claim it astheir own. But the emphasis on conhol, especially apparent in Third World bureaucracie, inclines them to rctain even the rowing function. Surrendering this function, mor€over,rcduces the power of patonage they enpy in hning and firing oarsmen. But developing countries should find this book a sourceof comfort. The horor stories they find h theirburcaucraciesareno more scandalous than those documented in the U.S.Defense Deparhnent.And, asit turns out, the United States can benefit ftom studying someof the irulovative approaches to address these problems tested bv Thid World govemrnent. The authoE do not advocate the witherine of the state. The authors wanistronge4, more effective govemments. They accept the logic of Fansferring many government functions to the private s€ctot but seeprivatization as onlv one Dossiblesolution. If entrepreieurship is possiblein large businesscorporations which breed their own bureaucracies,it is also po66ible rn govelfnent. The book thus ultimately of.fers a message of hope. If reinvmted govemment systems can rcvive massive,ossified burcaucraciesin the Unid States, if they can make a difference in the Third World pockets of poveriy in First Wodd Americ4 they should be equally effective for the countries of the South. I Osbome, David and Ted caebler. l,inoenting C,twmmt H6t) tlg Enbrprc wuritl fuifl is Tntafonnhg tht Publi.S6tor. PenSuinEooks:N€wYorkc. 1992.rin.46pp.
83
A GREATDEAL FOR TRAVELLERS BUSINESS
l(|n Gatbonton
Firstimoressions...
Images of Hon[Kong
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o the fLst-time visitor, whafs irtglediatelystriking about Hong Kong is the gelrreralliveliness and spirit oI the ptace. Ifs difficr t not to notice the toweringoffice and rcsidentialblocks,strees choked with tra{fic, which along with bamboo scaffolding and hastily er€ctedwoodm sidewalks, constitute the @lony EleirnotifNothhg here stays the same.Old buildings ar€ tom do$anand new oneserccted at an unr€mmittingpace. Economicprogressis evidmt in the way the skylhe haschanged. Fmm the midlevels in the'60s, one could seeftom his balcony, a pleasant view of the harbour. Today, this view is largely obsEucted; the panorama of the waterfront fragmmted by suchbastionsof commercialism as the Bank of China. Probablv one of the most imDr€ssive mekopotdns centers,Hong KongG the last of the gr€at ftee ports. Its miniscule size (roughlyabout4&squarekilometers)makes shopping so much less of a drudgery although it could never completely be that not with all the beautifullv done-up show windows and bits and peoesio grab alnost evervone-sfancv. lie travel wiitel, JanMorris, once wrote that in Hong Kong "considerable mergy goes towards the making of money." Nothing could be doaer to the tsuth. Posh shop ping centersstand pillar to lean-to with tiny shop fronts - most of them observing a 12hour dav and sevendav week. Afrimd and I wafted down Nathanioad one wming in search of an affordable dinner and by the time we made our way back to the hotel feeling rather rundowr at 10:30,the shop6 werestillverymuchopen,attendanbhawking thekwares from the latest in _ eleclxonics to leather goods bothlcu.r and genuine. Therc's something at once incr,edi-blyexhilarating and exhawting about Hong Kong. I was wandering down Queen's Rd. arpund noon, and mv friend - who had been to viiit ot ce before when still a boy and who didn'tremernbertheolacemuch - gabbed my arm ind pushed me into a cornei When I asked him what was wron& he mut-
tered,'"Ibo many people, too marypeople." And ifs true. If vou catch voursell in Central at lunchtime, you ll seepiople pouring onto Queenls Rd. from every direction. Considering that Queen's Rd. lies at the bottom of a hill, watching dozms upon dozensofpeopledescendingftornnearbystreets, all walking hurriedly to some inner rhythm (I've never seenso many people talking on the cellular phone while in a half-nm, halfwalk) can ba nightmadsh - especially for the uninitiated. Having leamed our lesson, the next day we made it a point to duck into lane Crawford - a pricey, ther€fot€,noticeably lessoowded deparfmentstorc -atthe appointed hour. AnotherthingthatstrilesmeaboutHong Kong is its renurkable drawing power not only for the tourist - but for those who come to the territory seekingeither rcfugeor new opportrmity and who, like tlrc average Filipino domestic helper, have grasped it withboth hands. What is perhapsencouraging for the colony's 5 1/2 million people is thebelief that through sheerhard work their lives will be that much better. Scrakh the surface of many a local millionaire, and chancesare you ve found someone with a rags-to-riches story to tell. ln Hong Kong, economic miracles do happen. This b the incredible lure of the place. Iys easy to Betcaught up in the frenetic pace of Hong Kong. I don't think l've ever fult as alive as when I visit. I sleep less and have tons of €ner8y, but ils of the rcstless sort that one feelsafter you've had too rnuch coffee to drinlc At the end of the day, iYs the rcminder of a rnore langorous period (when was it ever?) that I cherish most. While an ultra-modem mass transit system zips commuters back and lorth in relative speed and comfort, I still pre. fer a ride on the ferry. In the leisurely ride aooss the harbor on one of the Star Ferr),'s venerable fleet,I can contemplate Hong Kong's everchanging face* which for the duration of the ride at least, will rcmain iust the wav' I choose to re. member it. a
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