The Asian Manager, December 1994 Issue by Sherbet Manalili

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r / T t N T a rE

DECEMBTR1994/ IANUARY 1995

I'i

Excellence: Mdnagement C.elebrating

. C()MMNIES A ISOUTSTANDING Al M.bFgt rth An n uaI Manag em ent Awards

. CuttingEdgeHR o KoreanAuto Strategy . Costsof Quality

r MekongTrading r Benchmarking Quality ' r NeuralNetworks

.tssN0116-7?9-D U5A 1lnulEr HONGKOI{G

us$5.00 8$6.50 HKi30.50

INOONESIA INDIA KOhEA

w2,900.00

PHILIPPINES SINGAPOBE

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ss650

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THAILANO OTHEFS

NTSr35.00 895.00 us$5.00

VOL.VII,NO.5

DECEMBER1994/ TANUARY 1995

into usefulscoresfor benchmarking.

COVDR STONY

Companies Asia'sOutstanding Ricardo A. Lim,AIM buProfessor takecenterstage companies Asia'sbest-managed 42winnersfuoman again.Thisyearwe showcase in six counhies. 8,000applications uiprecedented MANAGDMDNT

OPINIONS

MoneyMatters

AIM VictorS.Limlingan, buProfessor Eist Asia-namely,Korea-askswhy ASEANis "circlingthewag6ns"in thisday andageof GATT

UPI}ATDS

Marketing

Kaizen

Francisco Roman,lr.,AIM byProfessor Prof.FrankieRomanquestionsKoreanautomakers' slrategyin theirinvasionof theUSmarket.Will they of theJapanese? commiithesamemistakes

Professor ReneT. Domingo,AIM Th6cosisof quality,externalandinternal,apparent andhidden,explained.

Development HumanResource

Corner EntreDreneur's '75

BUSII\IDSS NDVIDW

CountryUpdates

buAshokK, Nath uP Fivecountries alongtheMekongRiverareSearinB andopeningup theirmarketstdthe world."Asholi eachcountryis settinguP. Nathixplainsthemechanisms

nDsEAnoI

PurbaRao,AIM bvProfessor about the MBM interviewed72companies Iii 199'3 qualityin theirorganization. Prof.PurbaRao usedQA to summlrizethemassof information

AIM br1Profescor lesusC. Callegos.lr., in Is therea simplesetof rulesformakingdecisions ethicalambiguities?

AIM GlorinM. deGuzman, byProfessor Piof.Gine de Guzmantakesus on a tour of human paradigms andgurus,andthenewroleyour resource HR functionmu"sttaketo"implementtheseparadigms.

QAApplication

It ThinkAbout

v . Chandran bu Robeit , MBM processes by ireate a virtual copyof your management usingneuralnetworks,thenretireearly.It's not ascrazy or ascostlyasit sounds. B(X)IT NDVIEU

AIM:Management GlornS.Chcn, Professor in theGlobalEra Comlnunication in Dr. lnmes E. AustiniManaging Developing Countires

428 50

Two book talk abouthow you ight manageandaommunicate Profs.MayoLoPezandSonnyColoma in theAsianenvironment. contributethisissue'sreviews.

Prblbhcr FeliDeB. Allonso f,dlroFh.Chicl RicardoA. Lirn l)|r€ato. & Advertlslnl rk€oclrte Prbll.hcr D€liaC. Gutierrez Millie C lerrer Dlreclo.! O!."rrl.m & Clmddlor

n€co|rch .nd Prodrctlon Arny G. EsPiritu Adyeralslng Asslstrnl VanessaM. Jaballas AiskLrnl GraceA. Casibang Clrarhdor PrbllBhln{ f,o.rd ReneT.Domingo,lesusG.Gallegot Morat6, Ir.,RicardoA.Lim,Victors.LimlinSan,EduardoA AshokK. Nath

THEAsrANMANACER-APublicationofthe AsianInstiluteol Managsenr and the Federatjon ot th€ Asian Inshtute ot MamEementAlumni Assianon9

INTDRNATfONAI, trDPnI-SttraTtYD

copynght @199,1by Tn€ Asian Manager. All nghts re*rved R€productioninanymannqinwholeorin Panin EnAlishor otherlanEuaEep.ohibited.Th€AsianManaSer,isPublished bi-monthly by th€ Asian Instituteoi Management.Ed onal and AdvertisinE Office: Asian lnsliture of Management, EuEenio L6pez Foudatnrn, Jo*Ph R. McMicking CamPus, 123Paseode Roxas,Makati, Metro Manila, PhiliPPines.Tel: (632)89240 1l-25;89204 3t,t3, Far: (632)8179240 PhotoElaphs$urced by lhe AIM Library. Printed by Times Pnnters Pte Ltd., SinSaPore The Asian MamEer MITA (P) 24519/91 KDN PP(s)r07613/93 ISSN0116-7790

lbn8 *ongt PamelaChoy, PacificAsia M€dia,13A,36l363Lekharl Road.Wan.hai,Hong KonE.Fax.(852)$a 5980 SlntrpoFr TeddtTan, Pam M€dia Servics Pte.Ltd.83A EartCoastRoad,TayBuancunShoppingcentre,SingaPole Rama Slanet, Manas€r, 15,12.Fa\. (65),1408760,lndor€|lt Cncb Communications.,tl.Ban8ka Xl A/5, Jal€rta 1220, tl.ltv.Lt C.nnre Ind.nc. n Fd\. Lb22 l ' 742040,7J71784. Ng, Advertising Repr€*ntative, Mcdjaplls (M) Sdn Bhd., 34A, JalanSS20/10Damansra Kim, 47400Petalingiaya, SelaneorMalavsi. Indl. Sub.CorahGnc Mcdia Solth Asia aD Ltd, Apartm€nt rA, Abhi-Anil Asas, KanliPd,'r lamal,Kathmandu,Nepal.Teler 2606MEDREPNP,Fa\' (977 S.l.Salahuddin,Chiet Exeotive, INs 1) 227336.P!kl.a!t

CommunicationsLtd.,6/F, PanoramaCentre,FatimaJinnah Rd., Kara.hi, Pakistan.Fa\. (92 2l) $8 271 l..tr!@ Y.K. CPO Box7919,5ou1, Chun. Fi.st Media 5€rvic6Corootnn, Korea. Telex FMSCORP K 29137,Fax. (02) 738 7970J.P.r: HidoNakavama,Nak vamaM€dialnlermlionalInc.,Fonte Aoyama 705, 2'2214 Minami-Aoyama,Minatcku, Tokyo D. Anthony Ih.llDdt lO7, lapan. Fax. (03) 3479-6130. Shama, Managing Drector, Thai RePresentatileLtd.,867l 58Pomtave SukhumvitSoi I01, Prakanon8Bangtok 10260, f,l.g.lor Bnan Thailand. Fax. (66 2) 331 9303. thh.d Taplin Aseciates,32FisheryRad, Boxn@t Hem€lHemP(0.142) 2,16 034 fru@t sread.H€rts HPI rND, U.K. Fax Staphanede R€frusat, Managing Director, REM Intena_ rional , 24 b's ruc Callieni,95164Monho.en<y Ftanc Fax (33 r) 39 8963 4l Desisnbv, PMF & Associst$

1994/ ]ANUARY1995 THEASIANMANAGER. DECEMBER

MDIIIA of f tcDs

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wentvvearsagoln atAIM's BaguioCitv, Top Management Program,we ran a businesssimulation u'ith an Olivetti Programa,a computer the size of a small cabinet.Its programswere riddled rvith bugs, and AIM prof e s s o r sh a d t o s t e p i n a n d manually continuethe simulation, and literally type out the results. Bv today s standardsit u'ascrude,but for that dav and age it was an impressive feat. Flash forward to the current day: We recently conducted an executivecomputer strategysimulation between P.T. Astra, a Management Award winner this year (cover story),in Jakarta,and ourManagement Development Program (MDP) in Manila,using off-the-shelfPChardware.The competition was friendly but intense. Corporate and na"honor ' were at stake, tional with a team from the MDP eventuallyrvinning a tightbattle. The executivesnever saw each othet but were playing the exactsamegame. The imp l i c a t i o n sa r e t r e m e n d o u s : AIM is no longer a cozy classroomi becduseof technology we can no$' teach acrossborders and time zones,and link heretofore unlinked corporations and academicinstitutions. Wthin a year or two we will be able to run simultaneous simulations between AIM's counterpartinstitutions in North America, such as UCLA, Columbia,and McCill, andAsian and Australiancompaniesand universities. Changlng the u'ay AIM u.orks AIM recentlytried a group decision support system (GDSS)from the University of Calgar,v,Canada. The svstem allows meetingparticipantsto sharetheir opinions and ideas

or fear withoutself-censorship or without of recrimination, unduepressurefrom a strong personality-as is usual in Thisisonlv meetings. business one of the latesttechnologies installedby AIM's computer grouP. "The bestgaugeof lnforeffectivemationTechnology's nessis how muchit hansforms saysCSC the organizatiorl,"

tations, productions as polished as the best ad agencies can do, a far cry from those overheadacetatesof previous years.Thev nolv enter their overnight WACs directly into our nctwork, allowing for standardprocessing,control, and storageof the material. They mav also enter evaluations of their faculty and programs directly into the net-

Fnom'{m Dnrron " Lrv RrcenooA. $Pnorrsson

preparationfor comingtechnologvadditionsto AIM. Alll shifts lanes to the supcrhighu,ay By early1995AIM will bec o m ea n o f f i c i a ln o d e o n PHILNEI the local universities'consortiumfor INTERNET.In the nextvearwe will openup this networkto our our alumni constituencies, and corporatestakeholders. One can browse alumni resumebooksanddircctories, to or relaye-mailmessages INTERNETusersaroundthe AIM's MRIIs world, or access and periodicals,or retrieve f i n a n c i aa l nd value-added at databases, marketresearch a fractionof the originalcost andtimeneeded.

The Tulure Youmav not haveto wait in the for The AsinuMartn.ger mail any more-simply dial into AIM $'ith your laptop and bron'seat your leisure, a n d f o r t h a t m a t t e r ,m a n y materialsin otherreference Youmaynothaaetowaitfor ' our library.Lookingfor a job AIM or for new employees? TheAsianManagelin themail of couldhavecross-postings itnymoreoneday-simplydialin availablepositionsrvithother andbpuse withyourlaptop a l u m n i a r o u n dt h e $ ' o r l d . on information Needfinancial at yourleisure. lt's probindustries? specific ablyon-linein oneof our studentMRRsor industrystudies,on CD-ROM.The possiIndex, the American I/T con- lvork. Facultv and staff use e- bilitiesareunlimited,and we sulting firm. What do they havebarelvbegunto scratch meanby this? Transformation mail as a tool for not only offioccurs when workers change cial communicationsand re- the suface. In the year 2020younger the way they work in funda- search,but aiso for simple, "grapevine" style kibitzing. AIMersrvill readthis article mental rvays. "Hotv AtAIM the transformation We can tolerate our users' a n d s m i l e ,a s w e l l . "misuse" ofthe systemfor fun primitivethey must have has been remarkable. We installed last year a local area a n d g a m e s ; l v e e n c o u r a g e been,"they will sav just as I them to use e-mail, becuase make remarksaboutAIM of network with a full arrav of twenty yearsago. The more we feel it is important that softwareand hardware for office automation and academic t h e v k e e p c o m m u n i c a t i o n thingschange,the morethev work. With the GDSSwe hope lines open, develop a whole stavthesame.

Thansformation at AIM with I/T

to fundamentally change the way meetingsare conducted. Our studentscan now make elegantcomputerized presen-

1995 1994/ JANUARY THEAsrANMA\AGER. DFCEMBER

new setof skills for using computers, and actually depend on technology to get things done. This is invaluable

Praf. Rickv A. Litlt tIches IIT nni Mnnagct,icttICattltlt tli tfut1fLltlhc EDP anLlMBM |rcS tkts.

MaruacruENT UpDATE: MeRrErwc By PnortssorFnarucrsco L. Ror,rax, Jn.

GlobalConsumer Marketing: FromBackHereto OverThere a r k e t i n gc o n s u m epr r o d uctsisatruly globalphenomenon.CokesandBigMacsare only themoreevidentexamplesof theabilitvof products

How developing eountrlcs â&#x201A;Źompele The first lessonis that this strategy k) someextentvalidatesa theory in lnternational Businesscalled the Product Life to crossborders.This borderlessmarket- Cycle in International Trade. The theory ing takesplacedespitedifferencesin tastes $a5 advancedby two Harvard Busine.s and preferencesamong consumemacross Schoolprofessors,Raymond Vernon and the world. Thereis more variety and diffiLouis Wells. To paraphrasethe theory ,romewhat. culty, relatively speaking, in marketing and with due dpologiesto the soap and automobilesto householdsand authors,the theory statesthat, as a counindividuals than in selling office station- try progresses, it shiftsfrom importing the erv and tractors to commercialfirms and product from a developedcountry, to exindustrial buyers. So the phenomenonof porting it to that country,and even evenglobal marketing of consumergoods de- tually manufacturing it there. servesstudy. Corollarystatements to thetheorv.ugThe Koreanmulti-product conglomer- gest that (1) technologVtrdnsfertakes ate, or chaebol,Hyundai, has been in the placebetweenthe developedand the deAmerican market since 1986.In automt_r- veloping country, and also (2) the develbiles, its market sharerangesfrom 1-2%, oping country stafts its own export and small but still respectablefor a company manufacturing drive with the lower-end from a Newly Industrialized Countrv technology,and therefore with lower { N l C )i n a n e \ t r e m e l vc o m p e t i t i vien d u : - priced products, (3) while the developed try. The market share of Japan'sHonda, country becomesuncompetitivein that for example,rangesfrom 8-9%,and it has p ce-product category, it must shift to beenin the US three times longer. higher-value, and higher-technology, Hyundai-pronounced in North products within the industry, in order to Ame ca to rhyme with Sunremarn r ompetitive. Hvundai'sAnnualSales day-brokeinto theAmerican in the United States,1986-94 auto market in the same \,\'ay Lou, prleo t h a t H o n d a a n d t h e o t h e r 300 stralegl Japanesecompaniesbroke in More lessonscan be 250 earlier, by providing lowlearned by observing 2ao priced vehicles.The Japanese, 150 the chart derived from however,during the oil-crisis an articlein the Far East1oo of the 1970s,targeted"entrvern Economic Review I e v e l " c a r s f o r r e l at i v e l y entitled "Qualitt Not young, first-time buyers on Quantity" by Nigel

first-timejobs.

ilhllrt

'rhio!qiA!qN

Sotr.? FEER r0/6/94,

Holloway, dated Octo-

ber6, 1994.Thechartshowsrapidacceptancefrom 1986-1988 of a low-pricedcar, indicatingvalue for money.After 1988, salesrapidlydeclined, whichmightindicateflaggingconsumeracceptance of the product,possiblybecause of poorquality. Poorqualityin turn may be attributable to not listeningsufficientlyto the dealer network,which is often the exporters' proxy to trackconsumerpreferences and problems. When Don Reilly and 24 other Hyundaimotor dealersfrom the United Statesvisitedthe firm'splantin Ulsan, SouthKorea,in June(1994), they were shownthe Accent,a new subcompact car..Thedealersknewtheinteriorupholstery'sshockingpink and bright blue would not pleasematureclientele."lt's too flashy,"saysReilly."lt wasdesigned for youngerpeopleand we aresellingto older folks,somein their 50s."Hy.undai Motor PresidentChon SungWon,t'ho was with them on the factorytout told them the problem would bc corected...The Accentmodeldestinedfor the US marketwould featurea darker, morestaidinte or "Goneare thedayswhenan'incredibly arrogantlheadofficewould iell Hyundai Motor'sAmerican dealers to takeit or ieave it" saysMaryannKeller,a securities analystat FurmanSelzin NewYork. Lorr, prlee lessons . Hyundaiprob.rblv became complacent,but understandablv so,giventhree initial,verysuccessful years,andsoit was late to recognizeand respondto declin-

DECEMBER 1994/ JANUARy 1995. THEAsrA)iMANACER

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ing sales.The experience of the early years probably createdthe impression within the company that it could do no wrong. Hence, the "incredibly anogant" attitude of the headoffice.The company was probably still stuck in the mode of "lf it ain't broke,don't fix it," rather than in the new era of kaizen, continuous improvement,and of "deIighting the customer." . Copycat strategies

ter the higher-margin, but more competitive midsize sedanmarket segment, which was contestedbybothJapanese and American manufactuters. Hyundai launched the Sonatain 1989,and positioned it againstthe Toyota Camrt but the new model was poorly received.Bv 1989,a "reverse halo effect" had taken place. Hyundai carssufferedfrom asso-

consumermarketing from here to there. First, consumer marketing is a never ending task. For example,the Japanese h a v e c o u n t e r d t t d c k erdr i l h a g g r e s s i r e leasingcampaignsto offsetthe risein auto pri(e. due to the rrsrngven. Hl undai.already a low-price leader,respondedwith .rapan +0.6% an advertisingcampaign,for the new version of the Sonata.Still, automakersare us -2.6% turning out more models, new ones or vadations of old ones, in a competitive Percentchange in U.S. car market which alreadyhasabout 600modsales for lirst six months ol 1994vs. first six months of els. Hyundai is actively engagedin this 1993. quest for niches: . TheAccentwill replacetheill-starred Soucefonure22/8/9,1 J D Poweraid Assorates Excelin 1995; . A sports car called the J-2 that was cannotbe copiedtoo lavishly.The low- ciationin the consumers' mindswith the priceentrv-strategy of Hyundaiwasrm- Excel,n'hichbecameknorvnas "the dis- createdby the firm's designcenterinCalitially successful, but the companyalso posable car,"asin disposable diapers.And fornia will debut a year later imitatedthe Japanese, in going afterthe theconsumers wereright,sinceHyundai Hyundai's efforts in the 1990sseem sametargetmarketof first-timebuyers.As did notyetaddress thefundamental prob- successful.As the chart suggests,1994 thepreceding quotesuggests, ftomthelate lem of quality. salesthrough August are already closeto 1980s onwards,low-pricecarssuchasthe Salesstartedto leveloff in the 1990s. annualsalesof 1q93.and the fall buying Excelweremoreattractiveto theeldercli- TheElantramodel,launchedin October seasonis not yet over.And... entele,possiblyassecondcarsfor thefam- 1991,rvasnot only competitivelypriced ...According to a UScustomer-satisfacily,or asaninexpensive modeoftranspor- because of a rising yen,but alsorepre- tion survey published in July by J.D. tationfor retirees. sentedan improvement in quality the Power & Associates,a marketing infor-

. Pdceadvantage by itself is insufficientin this new ageof TotalQuality Management. Hyundai'ssubcompact is still thecheapest carin theAmerican market.But low priceultimatelycouldnot compensate for its sluggishengineand shoddyinteriorfit and finish.The car lookedcheapand apparentlyperformed likewise. . T h eo l d c l i c h ea b o u tn o t l e a r n i n g from historyandbeingcondemned to repeatthesameerrorsalsoappliesto companies.TheJapanese carmaken alsoexperiencedquality problemsduring their entryinto theAmericanmarket;theyalso had little experienceworking with the dealers, andtheysuffered,like manymultinationals, froma "headofficeonly"mentality. History showsthat they learned fromtheire\perience\,rnd raentontocapturea quarteror moreof theUScarmarket,aswell asinitiatingtheglobalquality movement.ltis disappointing to notethat Hyundairepeatedboth the strategyand theerrorsof theJapanese automakers.

Europe +18.4Y0

previousmodels.Furthermore,Hyundai's headofficebeganto respondto the needsof the Americanmarket bv listening more to dealers. Hyundaimaintains itsvalue-for-money approach,butnow targets bothqualityandprice: To counteractnagging doubts about quality,HyundaiMotor offersfree mainte-

[,4ercedes BenzS320 us$65,900 Jaguar XJS 60,530 Lexus1400 51,200 Cadillac Seville 43,143 InfinitiJ30 36,950 FordF'Series 17,383 ToyotaCorolla 13,948 HondaCivic 9,400 ToyotaTercel HyundaiExcel

So Ices BW7/2/94.14/?â&#x201A;Ź{Forlune22l8P4

nancefor the first two yearsas well as the usual 36,000mile waranty. Moreovet the :tandardequrpmentit offerr,suchas air c o n d i t i o n i n gi \. o p t r o n ailn m o s tc a r si n the same class. Hvundai has raised prices over the pasttwo yearsby only2-3% annually,savs Reillv, compared to 7-87cincreasesfor and Americancars...thenew verJapanese sion ofthe Sonatasellsfor US$14,000,US$ 3,000less than the equivalent version of the TovotaCamry.

Qualily slrategy Hyundaimanaged tostaunchthesales Ioss.Thatdid not comeeasily.In 1969,in- Marketing a never ending task steadof correctingthe qualityproblems Two more lessonscan be learned bebesettingtheExcel,Hyundaichoseto en- fore we leave the problems and perils of 8

8,958 7,290

mationfirm, Hyundai wasrankedsecondlast out of 32 car models(Suzuki wasat the bottom). but Hyundai points out that its position has actually improved-from last place. S e c o n dH , yundai and the other Koreanchaebols are engagedin thedifficult and expensive

task of marketing their corporate names to the consumers.Most Asian MNCs (multinationalcorporations)are OEMs (original equipment manufacturers)that sell to North America via other MNCs, with corporatenamesthat are alreadv established and recognized.American consumers are generally aware of Hyundai, Samsung,Coldstar,and Daewoo.Can the samebe said for Tatung,or Salim, or San Miguel, or Sime Darby?

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DECEMBER 1994/ JANUARY 1995. THEAsrA\ MANAGER

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Rispolsl&li rlyuf frameworkin a freesocietyand fn T/riSocra/ is To/rrcrr.'nsr' /ls theacceptable moralminimum. I 8r,.r,rcss nn,fit' Vitton Friedman This is supported by phrases I "so I ['rote: such as long as it stays I"What doesit meant(\sav within the rules of the game" thatthecorporate executivehas a n d w i t h o u t d e c e p t i o n o r a 'socialresponsibility' inhisca- fraud." pacityasbusinessman? If this Thereareseveralcriticalasstatement is not purerhetoric, sumptions to the above-menit mustmeanthatheis to actin tioned phrases.They assume someway thatis not in thein- thatthe legalframeworkis just, terestof hisemployers." that it offema completeformu"Tn : frpp pntprnri<p

hired to excercischis judgment on what is right or wrong for the company,which includes matters lvhere what is wrong for societyis alsowrong for the comPanv Does this imply that good businessethicslead to good businessprofits?Two U.S.studi e s ( o n e c o m m i s s i o n e db y Johnson&Johnsonand another done by Harvard professors) indicate the affirmative, although c tics say that it is the

nrilation towardsthe protectionof vate propertv system,a corpo- individualsin a society,and that rate executiveis an emplovee of the owners of the business. He hasdirect responsibilitl' to his employers.That responsibility is to conduct the business in accordancewith their 3F .^. desires,which generally will be to make as much money as possible while conforming to Pnoressonfrsus G.Cerlrcos,Jn their basicrules of the society, both those embodied in law and thoseembodiedin ethical custom." In the samework, Friedman endedwith the following: "That is why, in my book CaTtifnlistn and Freedorr,I have 'fundamentally calledit a subversivedoctrine'in a free society,and have said that in such society,there is one and only one social responsibility of its processof implementationis other way around, that is, ethbusiness-to use its resources not subjectt0 the numerous ics follow profits. and engagein activities de- Ioopholesthat corporatelawBut does it really matter signedto increaseits profits so yersand accountants havebeen w}retherethicsare the causeof long asit stayswithin the rules paid to spot.They alsoassume increasedprofitabilitv or the of the game, which is to say, that the acceptablemoral miniconsequence of it? engagesin open and freecom- mum is equal to thc Kantian One practical wav of ad"ougl.rt." petition without dcception or Since theseassump- dressingthis questionis to ask fraud." tions do not hold true, then the and answer another question: Although Friedmanwrote legal framervork and moral Will a socially-responsible comthe abovedecadesago (he mav minimum cannotbe used as pany be a more profitableconhavechangedhis slantbynow), basesfor proper corporateeti- cem in the long-run?Let's take a significant number of Asian queire. a look at thevariousstake-holdbusinessmenstill use similar Furthermore, a corporate ers involved. Can a company argumentsto defend e x e c u n v el s n o t a survive without the support of their businessdecislave of the owners its customers,suppliers, emsions.But their argu- Ethical of the business,folployees,owners,and its immementsmay not be aclowing their everv diate community? Definitelv, dilemmas rvhim and desire, no, particularlvin the long run. ceptable. Friedman may andat theirbeckand Therefore, a company havedefinedthe "bacall anvtime.The ex- should seek to be socially resic rules of the sociecutiveis a profes- sponsibleasrvell asto seekprofety" as the legal sional that has been its.It shouldseekprofitsaslong

Tlfi{K Anour Ir

-Dthiesvs. Profits

.:.:" ., Goodmin donotfinishlast. They'rerunningin.a'dffirdt race.

are really unwanted solutions.

as it does not causeavoidable harm or infringe upon human dghts. In short, the company mustmaximizenot only the returns of the stockholdersbut also the interestsof the other stakeholders.[f these are followed by corporateexecutives, the short-termresultsmay appearto showthat goodmen finish last,but that is not reallythe case,for they're actually running in a differentrace. The culprit behind this never-endingargument is the stereotvpeconcept of leadership. Hardly can we find in most leadershipbooks and articlesan emphasison its most important facet:moral. In facl some present-day definitions will considerHitler as a good leaderUnlessmoral leadership is emphasized,the debatebecomesperpetual. In conclusion,and hopefully toputan end to this neverending debate, the following bottomline questionsshould be of help to any executivewith an ethicaldilemma: 1) What is the meaning of our corporateactions?Is there somegoodnessin them? 2) If the economicvalue we crcated is good, arc there costs of human digniW and environmental damageinvolved in its creation? 3) Sincemost of us believe in a SupremeBeing,canwe relate our corporate actions to what the Supreme Being wanted us to do? Maybe there reallv is no such thing as an ethical dilemma. Only unwanted solutions. Pnt. ltsus C. Gd//iSos.I,: rs i/ic Sdll Mi,\tL.lCoryo liait lJrcfesslrit Ijlt$ffi l ) o , l a lF , n t e r l t r i ! D c | t b l n x I t a l t h t As|iti Ittsli!llt of Mntug.tt.]ant thtrc he hnsltttn n full lintt l,rofcssotfor thc I'ast sri,trf.plr vt'nrs. Ht: E lfu Chnin nn nnd Pr.sidi)rt df l/,f Asm,r Cans|/lli ! n d Tniitilg Cnn41nt l is nlsoon lht klita , i n l , 4 J t ' i 5 0v ,B o n r Lo/f , 4 c , i l ' l l 5 i , r r 'A rsi Iltthtdtia,nl lo r al. a Nca. )'ork bascd

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Changi^gParadig*tin HR decisions ran counterto management's preferredactions. pyraAt SEMCO,the organizational thecauseof muchcormid is considered porateevil,"because thetip is toofar hom ' designed anorganithebase.5oSFMCO A flatt ompo}ler.ed zationalcirclewhich reducedorganizaorganization tionallevelsto three:onecorporatelevel Flat organizationswith empowered andtu'o operatinglevelsat themanufacfive people and democratic decision-making turingunit.Thecentralcirclecontains who inpeople.includingthePresident. are coming into their own. They tegratethe company'smovements. SEMCO is Brazil's largestmadne and largercirA second f ood-processingmachinerymanufacfurer. arecalledcounselors. of paftnerswho headthe It introduced features in the workplace cleis composed cuchasfactorv-floor fle\time,self-set sal,r- company'seight divisions.A third huge holdallthe ofassociates, circle,composed ries, and a rotating CEO-ship.Most of its employees. including factorv workers, other 800employees, SEMCOhiresadultsand treatsthem voted on many corpordtedecisions,inConsider the following: like adults.When RicardoSemlertook cluding the acquisitionof a companyand from his fathet he abolishedmanuinstances, over thechoiceofa plant site.ln both u'orkforee An empowered In their place, als, rules, andregulations. management respectedthe decisions of to use common he everyone enjoined Empowered workers become self- themajority ofthe workforce,evenif these put in thedemandsense and employees motivated and more productive: "Emjudgment. position using their own ing of Tom Marshall is described in rules company For example,complex powerment Teams"as deeplv concerned Entpowered workforce, The were scrapped. abouttravelexpenses about a supplier who isn't meetingstand"If people with we trust reasoning: can't ards.With his work team,he pushed for a self-directedteams, our moneyand their judgment,we sure meeting with the supplier to discussofflat structures, as hell shouldn'tbe sendingthem overfering the supplier training in statistical in out name." seasto do business processcontrol. His team also discussed value-driven SEMCOhasalsodoneawaywith sethe hiring of a new person and selected storeroompadlocks,and curity searches, the best applicant. organizations, auditsof petty-cashaccountsof veteran Torn Marshall is a line operator and a workplace, de-jobbed explains: As RicardoSem)er emplovees. member of one of twenty work teams at "We just refuseto humiliate978(o'i the the plant where he works. Tom muses portablecareersworkforceto get our handson the occaabout hot' good he feelsfor being able to sionalthief or two-bit embezzler"This usehisheadnow, insteadofjust his hands. the these are among "[t used to be," he says,"that nothing we will thatSEMCO doesnotmean,however, in managing challenges not prosecute a genuinelycriminalviolasaidordid would changeanvthingaround tion of its trust. here. I'd be u'orking and thinking about the world of work today. At SEMCO,thereis transparency. all the things I could be doing at home,or Everymonth,eachemployeegetsa copy about how bored I was. Now, my mind is The changing workplaee Horv do we effectivelymanagehuman resourcesin the faceof so much discontinuity that we are witnessingbut have not yet gained experiencefor? How do we attract, retain and motivate the new era empoweredworkforce?Clearly,we must revisit the conceptsof career and career m a n a g e m e n tW . o r k - s h a r i n gf.l e r l i m e . temps,part-timers,and contract workers seemto have renderedprevailing poltcies and practiceson hiring, absences,leaves, vacation,and retirementas no lon8er applicable. And rvhat rvould be the appropriate appraisaland reward systemsin the changing workplace?

with me, my co-workersare with me, and we're actuallv having a good time. And the numbers prove our company's healthier for it too."

r Drcrvapn1994/ Jexuenv 1995 Tsr AsrarMe:,racrn

of the company'sbalancesheet,profitandJossanalysis,andcash-flowstatement for his or her division, Evenexecurrve compensation is no secretat SEMCO. Semlerbelievesthatif executives areembarrassed by their salaries, thatprobably meansthat theyarenot doingenoughto earnthem. Valuedrlven

orâ&#x201A;Źlanizallon

Anotherdevelopment in theorganizationallandscape is theascendance of valuesin themanagement of entelprises.Levi Strauss is onesuchcompanywhereina "grandsocialexperiment" in managing by valuesis takingplace. As reportedrn BusinessWeek's cover story Levi'sChairmanand ChiefExecutive RobedD. Haas"believesthe corporationshouldbe an ethicalcreature-an organismcapableof both reapingprofits andmakingtheworld a betterplaceto live ...Haasis out to makeeachof his workers,from the factoryfloor on up, feel asif they are an integralpart of the making andsellingof bluejeans.He wantsto ensurethatall viewson all issues-nomatter how controversial-areheardandrespected. Thechairmanwon't tolerateharassmentof any kind. He won't do businesswith supplierswho violate Levi's strictstandardsregardingwork environmentethics." Haasexplainshis company'svaluesbasedstrategy:"Wearenot doingthisbecauseit makesus feelgood-althoughit does.Wearenot doing this because it is politicallycorrect.We are doing this becausewe believein the interconnection betweenliberatingthetalentsof our people andbusiness success." A deJobbed uorkplaee? A lessapparentbut nonetheless real phenomenon in the workplaceis thedisappearance ofjobs. In Fortune'scover story William Bridgesnotesthat "today'sorganization is rapidly beingtransformedfrom a structure built out of jobsinto a field of work needingto be done" by a "contingent worKorceof temps,part-timers, consultants,and contractworkersthat cangrow and shrinkand reshapeitselfasits sihration demands."Mostorganizations,therefore, who "know only how to hire, pay, 12

communicate with, andmanagejobhold- ployerandemployee;insteadtherelationers...who maintainpolicies,strategies, ship is now betweenadults,eachtaking hainingprograms,and structuresmeant responsibility for actionstaken. to enableemployees to be moresuccessful in their job activities"many needto The neod for a new paradigm rethinktheirassumptions andstrategies. In a de-jobbedwork environment, Gone seemto be the days of the "workersno longerget theircuesfromjob mechanistic modelof organization, with descriptions. Instead,workersleamto fo- its rigid hierarchicalstructure,well-decustheir individualeffortsandcollective finedjob descriptions and unmistakable resources on the work that needsdoing, reportingrelationships. Peoplewerethen changingasthatchanges." consideredas replaceablecomponents whoseattentionwas focusedon executCaneer reslllent workforce ing ordersfrom above-leadingto clockwork precisionin operation.Human reRelatedto a de-jobbedworkplaceis the sourcemanagementwas clear-cut and emergenceof a career-resilientworkforce straightforward:it essentiallyinvolved A career-resilient workforceis a ensuringthat the organizationhas the "group of employees who not only are right people,with the right skills,doing dedicatedto theideaof continuouslearn- the right job, in the right way,at the right ingbutalsostandreadyto reinventthem- time and place.The mandateof the HR selvesto keeppace with change; who take executive wasto ensurethattherewasal-

. Hardcoreforceof themindascendent overphysical things . Workis rewarding-not onlyto thepocketbook butalso thesoul(JackWelch) Concern for vision,transformation, corporate, culture, renewal, ownership, empowerment responsibilityfor their own careermanagemenuand who are committed to the company'ssuccess." By looking out for themselves in termsof acquiringstate-ofthe-art-skills, by thesametoken,employeesalsoensurethe comphny'scompetitiveness. An organizationthat supportscareer resilience mustnecessadly reexamine its long-heldviews on loyalty,careerpath, andemployer-employee relations.Staying on or leavingthe companyis no longera matter of loyalty,but of professional growth of the individual or diminishing contributionto the company. Likewise, careermovementis no longerlimited to an upward progression,but includes cross-functional posting,movementbetweenregulardutiesandspecialproiects, evenmovingout of thecompany.All these meanthat therecould no longerexrsra dependencyrelationshipbetweenem-

waysa job-person matchin all funchons and at all levelsof the organization. Just like otherresources at thedisposalof management, humanresources thenwereperceivedas needingto be "acquired"(re"allocated" (placed), cruitedandselected), "utilized"(made perform) to and"develoPed"(appraised, hained,andpromoted). New strueture and role ol the lI[ functlon For a siart,the humanresource function needsrethinking. Theexistingspecializationof theHRfunctionintorecruitment, selectionand placemenuhuman resourceplanningand development; organizationplanning and development; compensation andbenefits;industrialrelations;employeerelations;andpersonnel servlces management seemsto go agarnst providing a fully integrated,one-stop

DECEMBER 1994/ JANUARY 1995. THEASIANMANACER

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G,IT-LERIASUTTES One Asian Development Bank Avenue P.O.Box 1525OnigasCenter,Paiig,Metro Manila, Philippines-l655 Fax: (632\ 633'2824Telex: 62630GALERIA PN Tel: 633-71.11

shopserviceto a company'sworkforce.An inspiringvisionsof whatis possible. followed.In theemerging paradigm,leademployeemostlikely getsshuffledfrom StephenCove]' enjoinsusto peelaway ersand followersbecomepartners:leadoneshopserviceto anotherwhenunder- layersof programmingand remindsus ershipgivesway to stewardship; andservtakingsomeperson-relatedtransachons. that as humanbeings,we havethe free- iceassumes dominance overself-interesr. Moreover,somepersonnelissuesare dom to chooseandapplyour humanen- No longeris theworkerhelplesslygripped highly interconnected, and the holistic dowmentsof self-awareness, imagination, in a viciouscycleof compliance, loyalry perspectiveis lostwhenthefunctionis cut conscience, and independentwill on all anddependenry ontheleaderwhoissimi up into its component parts.Forinstance, our undertakings. larly hobbledby theresponsibilityof carea turn-overproblemmay be relatedto MichaelRay enthusiasticallywrites takingfor themorale,emotionalwell-behalnin& to compensation,or evento re- abouta new paradigmin business where ing,careerprogression andjobsecurityof "our own cruitment,selection andplacement. creativeimpulsesand inner theworker As partners,both assumereHR practitioners,therefore,must be knowledgewill directtheway the world sponsibilities for themselves and for the multi-skilled themselves,in much the isgoingto lookandthewaywearegoing futurethattheyareco-creating. sameway that workersare becoming to respondto it. " Toinstitutionalize stewardship. Block multi-skilledin their advocates for performancecapaburying performbilities.Thiswill also ance appraisal, pave the way for a havingteamshire multi-skilled HR new members, Short-term Goals practltioner to servCorporate/lndividual Vision ending the career ice all the HR reRightCulture Felible promise,offering Culture quirements of an choices in learning Product Orientation MarketOrientation employeeor an orandtrainingteams ganizationalunit, inIngternal Focus {Company) External Focus i n s t e a do f i n d i stead of farming viduals, and deRegional Emphasis Global Emphasis theseout to separate signinga pay sysManagement Direction individual HR speEmployee Empowerment tem that affirms cialists.On the one Procedural Bias the purposeof the RiskBias hand, the internal o rganization, Analysis Only Creativity: Analysis x Intuition customeris provided shareswealth eqa fully integrated Competition Only Cooperation, co-creation, contribution uitably, and ends service,while on the secrecyabout the Agressive Values Harmony, trust,honesty, compassion other,the HR practipay system. rronel assumesa Are all these moreenrichingand nothing but hot rneaningfuljob. air? Flaky idealTheroleof theHR practitioner, asobMaril],n Fergusonperceivesthe ism?Levi Strauss,SEMCO,standas exservedby PeterBlock,is alsobeing rede- workplaceas being transformedinto a emplarsof what is possible. fined from a policy-selling,policy-imple- values-driven organization: onethatis no Under the emergingparadigm,conmenting,policing and consciencerole to longergovernedby competitionbut by sciousness is causal:Theworld is asyou oneof servingcorework units or teams. cooperahon andco-creation; onethatis not seeit! For "the innerexperiences of indiWhattheHR practitionermustdo, there- absorbedwith a preoccuiationwith ma- viduals, including intuition, emotions, fore, is to help work units redesigntheir terialisticandeconomicconcemsbut with creativiryand spirit arevastlymore imown HR practicessuch as their pay sys- more internal and authenticvaluesof portant than the world of the senses tem, training and developmentsystem, openness, trust integrity,equality,mutual alone." and appraisalsystem.HR practitioners respect,dignity, harmony,and compasbecomeprocessconsultants to the work slon. teamswho provide inputs for the content References:Empowered Teamsby of HR policiesthatareappropriateto their ...and a new eoneept Wellins,ByhamandWilson,HaruardBusijob. respective of leadershlp nessReoiew, Business Week, Fortune, Stewardshipby PeterBIock,andTheNeroParaDmerglng paradl{ms ol IIR.The workers' renewed "senseof digmin Business by MichaelRayandAlan wholeness andconnectedness,...the sense Rinzler This redefinition of the HR role only of awareness of theirprofoundinnerwisbecomes possiblewith a shift in thebasic domandauthorityovertheirownlives,...', Prof.GloriaM. de Guznanis a member of thecoret'acassumptions aboutthe workforce,the is spurring a redefinition,too, of the con- ull! of lheMaslerin Busitless Management Prcgnmof oreasil spiworkplace,andwork relationships. Man- ceptof leadershipin theworkplace..In the Ihe Asianlnstitt,teolManagemmt.-Her cializttliol includeOrga izatiot De|elopmeftt anl Huagement literatureofthe 90saboundwith old paradigm,leadersled and followers tnaftResource Managefienl. 14

DECEMBER 1994/ JANUARY 1995. THEASIANMANAGER

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r.a,ToNDENA I N C . D T S T I L L E R S

CovrnSronv BY PROFESSOR RICARDO A. LIM

TheAsian Management Awards An insider's Viewot'theProceedings his year'sAsian ManagementAwards were the most successfuland the most heavilv subscribedin the last Iour years. More than 3,000companres rvere nomrnated, and together thev submitted over 8,000data forms. Theseforms went through first- and second-tier short-listing by AIM professors.Finallv panels of local boards of judges, each headedby an AIM governor,selectedthe rvinners. The result?42 winners in six countries the culmination of a concertedeffort by the Asian Institute of Management,the Far EasternEconomic Review,and corporatc sponsorssuch as the lndonesian banker's lnstitute, Metro Pacific, Neptune Orient Lines,Siam CommercialBank,YTL, PLDT, Thailand's Board of Investments,Philippine Airlines, and our awards organizer, TEAM Asia. And the u,inncrs u,cre... This vear's winners are a mix of traditional and non-traditional organizations. Some are repeat winncrs from previous years. Others, like Astra and Bank Bali of Indonesia,Sapura Holdings of Malavsia, and SingaporeTelecoms,are triple and double winners in the sameyeat a sign of managementbreadth

HONGKONG

DeanFrancisco_P Bernardo, AIMGovernor Hon.DavidK.PLi, Socrelaryof Treasury DonaldTsang andEditor-in-ChieI L,Gordon Crovitz oltheFarEastern Economic Raview

and depth in their organizations. One name, Motorola, rvon independentlvand separately through its local subsidiariesin Hong Kong and Malaysia,a tribute to its global status. First-timc winners Starlite (HK), Great Ciant Pineappie(lndonesia),and Mount ElizabethHospital (Singapore)are hardly householdnames,but the bigger companies had better watch out for these"small" folks; they are charging, and they meanbusiness.BKKBN,lndonesia'sgovemmentpopuIation agencv,won not onlv for its countrvside efforts,but also for its operationsexcellence,a traditional stronghold of private industn'. Serviceoutfits such as Andersen Consulting won in areasthat $.ere traditional strongholds for manufacturers,and vice versa. The Philippine winner for Development,Tahanang WalangHagdanan,Inc.("HouseWithoutStairs")hasa management team composedof phvsically disabled persons; our winnershavehad to hurdle more than just businessobstaclesto reach thesehonors. Shorl lisling In preparing for this article,theAsian Manager'sstaffershad to sift through documentsthat piled a meter high. The reamsof data forms containedbalanccsheetsand incomestatements,sales

INDONESIA

AIMG_overnor Bachmat Saleh, Dâ&#x201A;ŹanFrancrscoP Beinardo. KarenMullisof the Far EastejnEconomic Review. andMinistarot Wardiman Education Djoionegoro.

DEcE\rBEri 1994/ TANUARy 1995 . THEAsrANMANACER

mission charts,ad copy,customersurveys,ISO9000documents, trainingguidelines-alltiedtogetherwith neatplasstatements, tic hasps,and weighingseveralkilogramseach.It is a wonder and judgesstill have20-20eyesight that few of our professors all of this. afterprocessing Apartfrom thesheervolume,pooreyesightmiShtalsohave of ninetiesmanagement resultedfrom seeinga smorgasbord "power"buzzwordsin thepreliminaryapplications forms:"em" "transformation,a " nd " p o w e r m e n t , " r e e n gi n e e r i n g , "globalization,"Thelikesof Professors ReneDomingo,Frankie Roman,Gloriade Guzman,NoelSoriano,SolHernando,Titong Gavino,Kim Woll TitosOrtigasand othersarenahrrallywellhavingreadhundredsof WrittenAnalyhainedby theirstudents, sisof Cases-yourubiquitousWACs,thescourgeof manyAIM Reports, Research nights-and Management student'ssleepless and MRRs.Theyslicedand choppedthroughtheapplications, Theydid Asia'soutstandingcompanies. in theend short-listed this not by takinginventoryof buzzwordsor sleekpresentations,but by takinghardlooksat realfiSures:rehlm on investment,marketshare,marketreach,newproductsto market,indihoursof traininS,productivityper cesof customersatisfaction, etc. employee, The iudges take over box) Our judgesin thefinal roundwereno lessmerciful(see judgedon currentPedormance, but Not only werecompanies "Whathavetheydone higherstandards. alsoon progressively lately?"or "Did theydo betterthan lastyear?"werecommon localbusiquestions. Thepanelsweremadeup of distinguished from thesix alumni,andacademicians nesswriters,executives, countriescoveredby theawards,Theylookedat bottomlinesas well asindustryreputation.Byusingtheirown localintelligence perhapsunnetworkstheycouldfactorin nomineeintangibles, is management of company Inown to outsiders:How creative A? Whatinnovationsdid companyB introducethisyear?Did companyC getunfairbreaks?

ofthe vigorouscomcut,because wereunforhrnately companies "Enough they would make a decision," let's debate; petition. delibAfter concluding decisions. exhortthepanel,in close-call David Li conChairman Kong's awardees, erationson Hong "l de Coral: the l'inners, Caf6 firmedhis feelingsaboutoneof valuefor themoney." haveeatenat thatplace.It givesexcellent besideyou at a David Li sitting if you see Do not be surprised Kong. fine day in Hong Houseone Spaghetti * AII figuresarein USdollars,unlessotherwiseindicated

"J.:JT1""1;il:l"i;HTfl j"T%[HT; srNGAPoREii,fi , Yoon and SingapotgTolscom,Boon Mini3te.Lim Boon Heng.

THAILAND

Chiang,

AIM Govonor Dr SomchetThinaphong, vhiroiPhutrakul, andFormerPrimsMinis' ter AnandPanyarachun.

Governors at work AIM's judgingGovemors-VicentePaterno, TanSri GehIk Cheong,Hon. David K.P Li, Viroj Phutrakul,Tun Ismail,Dr' Rachmat Saleh,JackTangandBoonYoonChianS-at timeshad skillsto breakdeadlocks.Manygood to usetheirchairmanship

j,isxilii[i8l'"'i*:l MALAYSTA PHrLrPPrNEsS:",11.ff 3:i1fiS;::ff.ii|: 3:j:::'j:'i#"11 lJii';i DeputyPrimeMini3tsrAnwar lbrahim. SYciP. Weshing[on

1994/ ]ANUARY1995 . THEASIANMANAGER DECEMBER

HONC(ONG

Caf6de Coral Caf6de Coralis oneof HongKong'smostsuccessful restaurant chains.Its outletsdominatethe localfastfoodindustrvwith a 20%shareof thetotalmarket.Itsvaried,tastyandreasonably pricedfood is irresistibleto the discriminatingHong Konger'spalate. The companyhas acquiredseveralchainsand developed "foodcourts."The companyinaugurated 22newoutlets,bringing to 180its totalnumberofrestaurants. Whilemostof thecolony's restaurants are concentrated in commercialand business districts,Cafdde Coralhassetup shopin residentialareas.Its newrestaurants canbefoundon thegroundfloorhousingblocks and malls.Caf6de CoralhasanticipatedHong Kong'seat-out ]NDONES]A market,whichgrew12%lastyear HavingalreadycapturedtheHongKongmarket,our winner PTAstraInternational is now makinginroadsin Chinaand Macau.Already,thecomEstablishedin 1957,Astra is the holding companv of someof pany hasopeneda branchof its flagshiprestaurantin Macau I n d o n e s i a ' sl a r g e s t i n d u s t r i a l , a u t o m o t i v e t r a d i n g a n d andShenzen province,to encouraging consumerresponse. agribusiness.

MALAYSIA

SapuraHoldings Sdn.Bhd.

From its beginningsas a small trading firm, Astra has transformed itself into a world classconglomeratewith over 75 companies,and salestotaling over $38, a 30%increaseover the previous year Named the sole distdbutor of Toyota for Indonesiain 1969, Astra has since parlayed into joint ventures with some of the world's leading auto manufacturers:Daihatsu, BMW, Nissan, Peugeot,and Honda. The company controlsover 49% of the local automarket,and continuesto dominatethe heavyequipmenf, electronics,and agro industries. When salesdeclined by 61c/",in 7992,industry watcherspredicted imminent death for the onceall-powerful blue chip company Butaggresqi\ e restruchiring rtrengthened its corebusines:. demonstratingthe company'sstability and its managers'professionalism.

Sapurais a home-growntelecommunications companythat givesworldclasscompanies suchasNEC,Panasonic, andToshiba a run for theirmoney.Throughitssubsidiary, Uniphone,thecompany introducedcoin operatedcard phonesthroughoutthe Malaysianpeninsula. Our winner'sproductsincludesubscriber telephones andothertelecomproducts.Sapuraexportsto a burgeoningmarketthat includesthe US,UK, India, Europe,and Indochina. Sapura'sprimacyover the domesticmarketevolvesfrom productdevelopment basedonhomegrown technology.lts breakthroughexportin 1988wastheS2000B, a self-dialingphonethat helpedSapuraconquermarketsin Indonesia, the middle East, andEurope.

DECEMBER 1994/ IANUARY 1995 . THEAsrANMANACER

PH1LlPP1NE5

SanMiguelCorporation S.rnMigr.relCorporationhasdevelopeda netrvorkoi alliauces m o r e c h . r r a c t e r i s t io cf tnajor multinationalfirms tltan a Tht'st.alliancesinclucleglass homegnrrr'nAsiau conglomcrate. me.1tproccssing$'ith a Spanmanufacturing\\'itlrtheJapancsc, in lndoish manulactureticc creamin Guam,atrdbeerbrt'r,r'ins nesiaand China.SanMiguel tvasrecognizcdlastvearbv the Far Rri,ii'tt'asoneof Asi.l'snlostidmired corPora EdslrflrE(0'l0,/lia tiurs, exporting its products to 2'l countries. SanMiguel is the countrv'ssinglelargcstt,r\Pavetaccounting for 7"i of btal tax revenue.lts orvn devt'lopmentprogram THAILAND has creatctl jobs and clt'vclopeclentcrprise throughout the nition:all but two of 25 plantsbuilt in the lastsix vt'arsarelocatt'd outsideMetroManila. Loxlev'smajorproductlinesincludt'a widerangeof highlvln the last decadc,SanMiguel hasunclertakfll hvo major stralts for- specializedtechnicalecluipment:communicationsubscriber and dcccntralization. internationalization tegicinitiati\,r's: toll collectionand traffic cquipment, railrvav siSnalingsysten.rs; avs into Asia attâ&#x201A;Ź'stto the companl"s)on8-termcommitmcntto lts deccn- control systems;computer antl broadcastsystems;supervisory transformingitselfinto a multinationalcotlgld'neralc. attd hasmade control dat,r accluisitionnetrvorks;colstruction material prodtralizationprogramhasstrengthenedmamage'mt'nt thc organizationmore sensiiiveto Asia's changingconsumer uctsand chemicalproducts. Loxley'ssuccessrestson knorvledgeable,competent,and exexpecrauons. perienccdpersonnel.The companystrivesconstantlvto develoP One indicationof the resultsof Loxley's this baseof its success. cfforts at people devek)pment is the number of employeeswho har,eremainedwith the companyfor decades. S l N G /P O R T Apart frorn being an enlightenedemplover,Loxley has di',c.rsifiedinto rvt'll-timed joint venturesin telecommunications, productstrading The SingaporcTelecomhas i,r'onarvatds for ouistanding Finan- industrialproductstrading,and consumer Network, the Hong joint is B'ith Star Venture latest company's in Managemcnt cial Managementand lnformationTechnologv Kong-basedfirm, to fulfill the needsofa grolr'ing market for post previousvears. in Thailand and SouthSingaporeTelecomprovidesSingaporethe essentialtelecom- production editing of iilms and videos Asra. east n'inOur and postalservicesfor thc nextmjllerrnia nrunications If thereis onc unifving factor in the plcthora of products sold in the rvorld, ner hasonc of the most advaucedinfrastructures by our clients,it is clualitv For over 55 vears,this excellentcomrequireranking iirst amongall countricsfor meetingbusiness of sellingqualityto an expanding pany has beenin the business year mentstvcrv sincc199'1. market. a hr 1983,tht companlvwas the first in lhc rcgioll to launch fullv push-buttonteiephoncnetu'ork;in 19E9,its enginccrsclevcloped celluLrrmobile phonesanclpagersfor usein the underground MRT; and irr 1990,the companv offercd the interactive vidc0tcx svstâ&#x201A;Ź'm photo "Telcvielr,."

LoxleyP.C.L.

Telecom Singapore

Our winner has established severalovcrseasverlturesin Australia,Hong Kong,Norrvay,Thail,rnd,Viehram,thc Philippines,thc ttS,and the UK. The company'sstrategiesfor gro\\,thint0 the nr'xl century.uc threefold. First, kr globalize its to offersuperior busiless;second, cLrstonerserviceiand, third, to be commitied to building a w o r l c l c l a s si n f r a s t r u c i u r e .I t s "Serr,icc first.Alrvavs." rnottois

D r , r v s , n l q q l J . \ \ L\ R \ l q g q . T l l l A * .\ \ M \ \ \ , , ll {

A Traclition Of Quality WINNER

PT. CHAROEN POKPHAND INDONESIA

A TEADINGAGRI - INDUSTRIAT ORGANISATION IN INDONESIA

Head Office : - fakarta Jl. Ancol Barat Vlll/l lakarta - Utara 14430 P O . B O X 1 0 8 3 J K T .T e l p . 6 9 1 2 5 0 1 - 7 F a x . 6 9 0 7 3 2 4 Branch: - Balaraja Jl. Raya Serang KM. 30 Desa Cangkudu Kec. Balarala T a n g e r a n g- J a w a B a r a t T e l . O 8 2 . 1 4 1 4 5 2 F a x . O B 2 . 1 O 1 5 1 7 8 - Surabaya .19 J l . R a y a S u r a b a y a- M o j o k e r t o K M . Desa Beringin Bendo Kec. Taman P O . B O X 2 , S e p a n j a n gS , urabaya Telp.031.782183 Fax. O31.782161 - Medan Jl. Tanjung Morawa KM. 8,5 P O . B O X 3 0 6 M e d a n T e l p . 0 6 1. 7 1 5 6 7 8 F a x . 0 3 1 . 1 7 1 7 2 1 - Lampung Jl. Sutami KM. B Campang Raya Bandar- LampungTelp. 350041 Fax.

THE WORLD

GETS SMALLER

traversethe globe-puttinginforVoice,data and images whoneedit, whenandwhere mationinthe handsof people theyneedit. h makesfor fiercecompetition. techis to applytelecommunications challenge Thegrowing Beterandfaster. advantage. nologyto createrealbusiness with more a reputation Telecom hasestablished Singapore to doiustthat. customers than3,000muhi-national value-added servicesfrom privatenetworksto Providing customised solutions. whereit counts.Next to helping delverinformation All geared door,or onthe othersideof theworld.

THE

CHALLENGES

INGREASE

Singapore Telecom first.Always. Service

3008 8018Fax:65-733 Road, Singapore 0923Tel:65'730 Telecom Comcentre, 31Exeter Singapore l-203-454 6818Fax:1-203-454-1923 Riverside Avenue, Westport, CT06880USATel: Telecom USASuite500,301 Singapore Fax:44-71-404-5533. Tel:44-71-404-8877 London ECIN2JD,UnitedKingdom FifthFloor,20/23 Holborn, Lrd,HaltonHouse, Tefecom Europe Singapore

AMAWrruuEns

Category: Marketing Management

HONC (ONG

Giordano Holdings Ltd. Giordano'sclaim-to-fameis its attractive, colorful line of casualrvear.With quality and sawv marketing,Giordano hascapturedlegionsof satisfiedcustome$. The company establishedan extensive regional network in seven other Asia-Pacific count es: Taiwan, Singapore, Malavsia,iapan, the Philippines, N e l r . Z e a l a n d ,a n d e v e r y r e t a i l e r ' s dream market: China, the site of its manufacturing centers.Salesrevenues have increasedfrom $117M in 1991to $163M in 1993. Giordano's policies of "value for money," high qualitv products, and customerservice have strengthenedthe company's competitiveposition and have I N D O N E S l d earned for itself a sizable chunk of Asia's casualapparel retail m,rrlet.To movestocl quicklyand to tracl con"umeineed.,the companyinvestedin an electronicpoint-of-salesystemto moni PI GreatCiant Pineappleis not aswell knownasits hightor and respondto marketdemandand, togetherwith its in-house profilecompetitors, Doleor DelMonte,but its marketingtactics manufacturingcapability,enablesflexible and efficient stock re- will u'in for itselfasecure placein thetinnedfruitmarketat home plenishment. anqoverseas. Managementplacesgreatemphasison customersatisfaction. Since19E4,the company'svolumeof exportshasincreased All salespersonnel-including thoseworking for franchiseout1,500-fold, from50thousandto 7.5M cartonsa vear Amongthe lets-receive extensivetraining on serviceand product knowl2,1countriesCreatCiantPineapple exportsto areAustralia, edge. Canada,NorrvavSaudiArabia,andtheUS.

PTGreatGiantPineapple Company

CreatCiantis in an industrywhereit is difficultto differentiate its product,but it hasinnovatedon tried and testedmarketingtechniques, andhaschippedawav al thecompetition. It hasdereloped rtrong relationships with retailersand consumers.Equally,the companvrecognizes the importance of developing solidmarketing infuastructure svstems in countdes thatimport its products,pricingits productcompetitivelyand strengthening its strategic positionin a marketfull of big names.

DECEMBER 1994/ JANUARY 1995. THEAsIAN MANACER

MALAYSlA

Bhd. Tan& TanDevelopments Tan & Tan Developments' visionary approach to proPertY developmentrangesfrom the pioneering to the innovative. Tan & TandevelopedMalaysia'sfirst condominiumsand hotel apartments,and has also developedand managedresortsand health carefacilities. Tan & Tan draws strength not only from its creativesPirit, but also from its marketing expertise.It has practicedthorough conceptdevelopmentand thoughtful market positioninS.lts fully-furnishedshow homes,the companv'smost successfulmarketing tool, has won hundreds of satisfiedcustomers. Tan & Tan sells not only properties but also a lifestvle. The company's commercially successful,integrated,and high quality communitiesare among the most widely sought in Malavsia. The company's pioneering work in developing self-contained, securecommunitiesresultedin the proliferationof upmarket condominiums in urban Malaysia.DesaKudalari,one ofits firstjobs, has sincebecomethe benchmark for Malavsia's condominium market. The company lived up to its claim as a lifestvle innovator when it developedMiCasa Hotel Apartments in 1988.

SJNCAPORE

CycleandCarriage Cycle and Carriage has parlayed its 100-yearexperiencein the automobile market into profits and market share.Over the last five years,our company's shareof the local car market has grown significantlv from a 9.6%in 1989to 25.6%in 1993.Sales lastyearexceeded $1.58,against$1.28in 1991. C&C builds brand awarenessthrough innovative marketing. C&C's recentadvertisingand promotionshavemoved awav from the traditional emphasison sound engineeringand reliability attributes. Instead,promotions are moving towards establishing an emotionaland individual appealto the company'sline ofprod-

s'owcAsf, ffi rnanrn,,.o*orr*rY

TH AILAND

GroupPublicCo.Ltd. Modernform Modernformimportsandexportstop-of-thelinefurniturefor theoffice,thehome,and thekitchen. all tvpesof environments: modularfurniture Its popular linesincludelocallv-assembled furnitureto ThaihouseModernformintroducedready-made itself in a highly competitivemarket holds,distinguishing distributionchannel throughcontinuousproductdevelopment, building,andmarketsegmentation. enviablemarketshareclearlvindicatesbrand Modernform's To stay "closeto the customer," from customers. loyalty the suryeysto segment Modernforrnconductsregularconsumer and clear-cut categories, furniture marketinto highlyfragmented to developnew ways of selling.Modernform'sattentiveafter salesservicehasalsohelpedour winnerbuild customerlovalty.

ucts. The company'smarketing by qualprogramsarebolstered ity serviceandproducts.Theefcomfectiveness ofthisexcellent pany'smarketingprogramis gaugednot by salesvolurne,but Our bv customersatisfaction. satwinnethaswovencustomer isfactioninto marketing,staff product training, and fulfillment.Its astutemarketing andpromotionalskillshavenot goneunnoticedby our distinguishedboardof judges.Two y e a r sa g o ,t h e c o m p a n yw a s awardeda trophy in the same category.

1994/ JANUARY THEAshN MANACER. DECEMBER

Yourhmplete GuidetoEffrctive

HRManagement Themostcomprehensive andup-to-date how-to-guide professionals for HR is here!Allthehelpyouneedto create programs excellent humanresource is herein pagemastetwork this1,300 handbook. By far the most comprehensive,authoritative,and up-to-date referenceand how-to-guideavailable,this new edition of the Human ResourcesManagement & Development Handbook is an absolutemust-havefor HR professionalsat all levels.With 18 majortopicsand 102chapters,this compendiumof expert adviseshows how to createan excellentdepartment,as well as excellentprograms.lt coversthe gamut of criticalinformation HR managersneed,including: . managing,staffing,directing . plant and facilities . programelements . employeeservices . organizational and managementdevelopment . training . system design and evaluation . TOM

PUBLISHER'SGUARANTEE . youmayinspect Order withconfidence ! Uponreceipt, yourbookfor10 days. lf youarenot100%satisfied withyourbook,y0umayreturnit foranother (less bookorfora fullrefund delivery expenses). Yourbookisalsoguaranteedt0 bereceived in goodcondition oryoumayaskfora replacement.

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Orderthis valuableresourcehandbooktodayl Aboutthe Editor:William R. Tracey is president of his own human resourcesconsultingfirm. He has over 35 years of experiencein human resources managementdevelopmentand training.He is the authorof severalotherAMACOM books,including LeaderShipSkills.CriticalSkills.and The Human ResourcesGlossarv. I

,#-#W

mmral

Excellentaccommodation Madeto MeasLre.,, executiaes, fo, topleuelcorporate exclusiueb created fo, youat theheartof strategicJalanAmpang. K,talaLumpur's

Excellent,

you can because

locatedon JalanAmpang,on

'Embassy Row',hencecloseto foreign

enloyall the bestof hotel and

andonlya short5 minutesdrivcto the andhighcommissions embassies

condominiumfacilitiesof a truly

centreof thecity.Wearealsoawalkawayfrommaior business commercial

standard,based international

AmpangParkandthe manyvaried shoppingcentressuchasCitySquare,

a r o u n d o u r S u C a s aH o t e l

Poloand fudingClub,the sportsandleisureclubssuchasthe Selangor

There,youwill have Apartments.

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accessto businesssupport

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ccntre, facilities, suchasabusiness

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ting meeting rooms, banque

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andaswell services etc.Excluslve, asrestaurants,

our Corporate because

Apartments aretheonlyonein townto offeryouroomF&B options.This housekeeping aswell asprofessional services meansthatyou canreallytreatyour apartmentasa hotel suite,whenyou want to. Strateglc,

For enquiries, plâ&#x201A;Źe

I fI'I

we are because

SUCASA

APATI[|E|||IS CORPORAII f-i-Tr.

fT'I E ED I A.T

^--T-0-T-T-TF

occ1rPATr(OI\r

ca.ll:

BERHAD TAN& TANDEVELOPMENTS Marketing & Sales Office: Ground Floor, MenaraTan &Tm,207 JalanTun Razak, 50400 Kuala Lumpur' Tel: 03-263 7373 I 264 0080 Frx: 03-263 7346

wrfliEns ||ong long Company Industry

Net profits hdo.rcaia Company Inoustry

Reach No. of employees Net profits

f,.|.Vri. Company

Opcrdlo||t Xaraga|ndf.

D.Icloprrra I.t|.geana|rt

MotorolaSemiconductors Hong Kong Ltd. Manu{acturing

JCGFinance

HongKongTelecom

Stadite Holdin$ Ltd,

No winner

Financial intermediaries

Communication and telecommunications

Asia,Australia, EuroDe andU.S.A. 2,500 $ 1 . 1B8

HongKong

Manufactureof paper and wood producti; pnnhng Asiarnd U.S.A.

16,00 $1B

218 $24.9M

It orm.do.r nanaga|t|dtt

Cat6 de Coral

GiordanoHoldings

Operationsand management, res6urants

Textile,wea ng appareland leather Asia,Australiaand New Zealand 950 $163M

5,500 s187M NA

tcclNElogy

390 18.4M EXIEditurep$ehploy*/y€ar{training) $20,218

Astra International Retailtrade,Indushial products,Banling Institutionand Frirancial intermediades Asia,Australia, Europe,U.S.A.and MiddleEast 75,000 $3.05B

GroatGiant Pineapple Manufactudng of food, products, Consumer Retailtradd and Import/export Asia,Australia, EuropeandU.S.A. 12,000 $5eM

Hra lnlemetionel Retailtrade,lndustrial products,Bank'ng lnsbtubon andFrnancialintermediaries Asia,Australia Europe,U.s.A.and

EankBali BankingInstitution

Asia,Australia,Europe, U.S.A.,Canadaand MiddleEast 3,481 $220M

75,000 $3.05B ExpendituF Permploy@/year (rninind -912000

Ma*et share- 109,

BankBali Bankinglnstitution

CPlndonesia Manufacturing production industries, of livestockand poultry

Asia,Aushalia, Europe,U.S.A..Canada andMiddlpEast 3,481 $220M

Asia,Austmlia,

DankGLaboratori6s Manufacruring of chemrcals,pet-roleum, (oal,rubbeiand plasti( prcoucts Nigeria

2721

482

MotorolaMalavsia Sdn.Bhd ManuJacturing

SapuraHoldings Sdn. Bhd Telecommnunications, IT,Metalbased industry and Research clevelopment Asia,Europe,U.S.A. MiddleEait,South

Net profits Phlllppir.. Company

SanMiguelCo.poration No winner

Petron It Refiningofpetrol eumcruoeoll lntomaJor prooucts Perroreum

No. of employees

Manufacture of food,bever agesandtobacco, Wholesale tr;de andStorage & warehousng Asia,Austialia,Europe and lJ.S.A. 32,832

Net profits

$159M

Singaporc Company

SingaporeTelecom

Cycle& Carriage

GATXTo,minals

Mt. ElizabethHospital

SingaporeTolgcom

lndustry

Communication and telecommunications

Wholesale tradeand Retailtiade

Stomgeand Warehousing

Medical,Dental, Otheihealthand Veterinaryseryices

Communication and Telecommunicationri

Reach

Asia,Australia, Europeand U.S.A. 11,000 M $2.760

Asia,Australiaand NewZealand 984 M $1.08

Asia

Reach No. of employees

Industry

Reach

No. of employees Salesreveiruds Net profits

Tan & Tan Devolopmants Propertydevelopment. l'rojecl management services andinvestment holdings

Loxl.y Public Il andIndustrial productstrading

Rea.h

Asia,Australia, Europe,U.S.A.and

No. of employees

1,206 M $134.42 $7.61M

Netprofits

E$o Mahy3iaBerhad Chemicalmanufacturing,Industrialproducts, Relia lrade ana Consumer products

625 $622M RM 147M

Asia,Australia Europe,U.S-A., Africa, andSouthAmeri.a 12,000 $941M

p€!cnploye/year Expenditur€

DevelopmentBank of tho Philippines(DBPI BankingInstitution

ModernformGroup Manufachre of wood and woodproducts andReiarlirade

155 $23.2M $8M

1560 $90.8M

AsiaFiberPublicCo. Manufacture of Fabric andNylon

OrientalBangkok

1,600

Marketshare- 259'

DECEMBER 1994/ JANUARY 1995 . THEAstANMANAGER

AndersenConsuhing

Eintulu Dev6lopm6nt Authority EnvironmentalManagement,Project deve lopment& management aridlndustrialdvlpmt

Asia,Australia EuropeandU.S.A.

4,300 $176M

30,000

650

SocialSecuritySFtem

PhilippineAppliance Corporation Manufacturingof fabricatedmetal products,Machinery anoequrpmenr Asiaaird-U.S.A.

TahanangWrlrng Hagdan Charity & rclated . servtces/Lommuntry ano otgamzaBon Soiial marketing Australia,UniteA Kingdom& Belgium 300

Sing.pore Broadcasting Media,Printand Bmadcast

N.tiond T.ades UnionCongr$9 Communityorqanization & dev6lopinent, consumeraffain and Education& Training Asia,Australia, EuropeandU.S.A. 236,@0

(sss)

Financial intermediariesand Insurance

Asia,Aushalia, Eunrpe andU.S.A. I I,000 M $2.760

Asia,Australia Europe andU.S.A. 2.752

E.p.n,lrture per emplo\€e/v.ar Itr;rnrnBr (20.18

No winn€a

Service,Hotels

Worldwide 2,016 $54.8M

No winn€r

Business and Professionalservices

Asia,Aushalia, EuropeandCanada

Marketshare 26% th.O.nd !olnpany hdustry

S.pura Holdings Sdn. Bhd Tele{ommunications, IT, Metal basedindustry and Res€arch & Developmenl Asra,Eurape, U.S.A, MiddleEaatand SouthAmerica 4,300 $176M M $12,988

BKKBN FamilyPlanning lnstitution,Medrcal. Dental,and Veterinary senrces Asia

Exp€nditurepq enplq'e/yed

Sapur. Holdings Sdn.Bhd Telecommunications, IT,Metal basedindustry and Research & Development Asia,Europe,U.S.A, MiddleEaatand SouthAmerica 4,300 $175M M s12,988

Industry

!inanciel [r|.gc||td

Ha*.ting f,anaga|nd

Reach No.of employees

Fooplo Dav.lopnFnt .rd [.|rag.|ne|rt

Gcno..l nanagarnant

2,000 $38.9M

SrithaiSuperwar€ PublicCompanyLtd, peholeum, Chemical, coal,rubbe;& plastic prooucrs

Indurtrirl Ed.to Authodty ol Thailand Industrial development infrastructure,Environmentalmanagement

Asia,Aushalia Europe,U.S.A.and MiddleEast 4,000 $88.4M

Asia,Australia EuropeandU.S.A. $9.21M

pei pnplov&/vear(lraining-$8,578 Exp€nditure

THEAsrANMANAGER. DECEMBER 1994/ TANUARY 1995

AMAlVItrtuEns

i Category: Information ibchnol%yManagement .)'.,

HONG(ONC

linled itselfto hundreds throughof its branches MotorolaSemiconductors out the IndonesianarMotorolais oneoftheworld'sleadingprovidersofelectronic chipelago. ln addition,it equipment,systems,componentsand servicesfor worldwide developed andusesone markets.The companybelongsto a globalorganizationwith o f t h e m o s ts o p h i s t i manufacturing facilitiesin 14countriesandemploys30,000 pro- catedsoftwareapplicafessionals. Tosupportsucha large,complexbusiness, Motorola tion secudtyandaccess usesa tieredhierarchyof systemsandcomputercenters, all con- systemsin thecountry. nectedby aglobalnetwork.Thecompany's twomainframes processoveronemilliontransactions perdayandstorelargeamounts of datain a varietyof database technologies. Cornputers servethecompanyfactories andbusiness centers through20 computer MALAYSlA centersoperating27 . l ) a major c o m p u t e r EssoMalaysia Bhd. nodes,with combinat Holdings Sdn.Bhd. tions of minis and Sapura open systemsplatOneof Esso'smosteffectiveIT systemsis its supplyLAN, forms.Manufacturing Iinkingthecompanyto its parentin theUS.TheLAN alsolinks is alsoautomated and vadousdepartments to oneanother,Iendingsynergyto eachof p madly of the company'smajorfunctionsas well as transformingthe orconsists opensystemsservers. ganization's work habits,facilitatingdecisionmakingin whatis The companymain- generallya volatileoperatingenvironment. 27,000 . tains Essohascreated anempowered andefficientworkforce. Rank ' workstationswith a and file emplovees canaccess an online businessinformation f u l l c o m p l e m e not f bulletinboard,a pricedatabase. planningandbudgetingappliappropriate networkmanagement andinformationsecuritytools. cations,and financialreportingmodels.Essoalsousesa mainMotorolahassuccessfully integrated IT intoits work systems frame-based systemto manand asa result,benefitsfrom a myriad of new capabilities for ageits sales,stock,and acimprovingbothproductivitvandcustomerservice. countingneeds.Esso'sPort Dicksonrefineryhasa powerful local controlnetwork personnel thatgivesoperating basicinformationformonitor1NDONt5.t,.{ ing andconhollingindividual * loopsin theplant. PTBankBali BankBaliis oneof Indonesia's best-known commercial banks. It hasaffiliatesin life insurance, generalinsurance, consumerfinance,andsmall-holder creditruralbanks.Since1989,thisworld classbankhascommittedto incorporating IT into its operations. A comprehensive five-yearplan to upgradethe bank'sIT systemshas,in thewordsof anindustryanalyst,"changedtheway theycompete,"andhasresultedin greaterefficiencyandhigher levelsof productivitv BankBali implementeda pervasive,bank-wideledgersystem,andhasput intoplacesoftware tointegrate eachofthebank's 3,500employees with its variousretailandcommercialbanking productsand services. On a largerscale,BankBalisuccessfully ?R

DECEMBER 1994/ JANUARY 1995 . THEAsrANMANACER

SapuraHoldings,our secondwinnet uses[T in manuJachring its majorproductlinesand in sheamliningits work Processes. projectsand makescomproduct-development LAN accelerates municationbetweenits varioussubsidiarycompaniesseamless, Todate,Sapura'sIT networklinks instantaneous, andtransparent. morethan 20companiesand divisions,providing email services to 400usersthroughthreemainhubs.IT recentlyextendedits network to morethan20dealerandpartnercompanies.

thedatarequired to giveeachdepartment ful ORACLEdatabase reports and for better cost conhol. ORAfor frequentfinancial CLEwasalsousedto developthe company'sfully custornized orsystem,whichincludesan electronic inventorymanagement In the CustomerDial-Upsystem. this dei-placingmechanism, its own proway,thecompanyhasmanagednotonly to increase make the customersmoreproductivity,but hasalsomanagedto ductive.

PHILIPPINES

THAILAND

PetronGorporation

AsiaFiber

Petron'srecentlymodernizedBataanRefineryusesstateIts sophisticated, computerarchitechre of-the-arttechnology. providesthe framework for implementingan integratedinUsedby top execuformation,controlandoptimizingstrategy. thesystemintegrates data tivesand rank and file employees, acquisitionwith top levelbusinesscomputingand decisionare directlyconnected makingprocesses. 24 microcomputers A high speedminicomputerlinks all to all plantinstruments. to therecomputers andprovidesoptimizedcontrolshategies finery'svariousunits. Anothermainframe comPutercontalns theunifyingdatabase forsite-wideinformatlon. Petron'suseof IT hastranslatedinto the lowestoperatingcost per barrelamongoil companiesin thePhilippines. In 1992, the o p e r a t i n gc o s t p e r barrel of crude oil to P16.90 andPl9.00from processed average P16.54, compared rival companies. lT hasprovidedtherefinerythiscompetitive advantageover its rivalsdespitethe complexityof the refinery'sset-upcomparedto othercompanies.

poAsiaFiberhasusedIT to its fullestproductivity-raising textential.WhileIT is commonlyusedin Thailand'scompetitive tile industryAsia Fiberhasmadeoptimaluseof IT to enhance its product'soverallqualityandproductiviry In proIT is built in to eachof AsiaFiber'smajoroperations. duction,IT is an integralpart of the company'squalitycontrol. defectsin eachroll andfabricproducedon the LANssummarize factoryfloor Thecompanyhascreateda setof computerprogramsto traceproductbatchesfrom thejoiningof thefabric,printof dyestuff,recordingof dyecycles, ing of job tickets,measuring andprintinglabelson thefinishedrolls. in facilitatinginventoryrecordsandwareIT is indispensable housing,andis alsousedin marketing.Theoverallresultofeach of thesesystemsbeingan interrelatedsystemof quantitativedata which allows for standardizationin every department. With the help of IT, each departrnent works "in the same direction,towardsthe samegoals."

S/NG,4PORE

(Pte)Ltd, GATXTerminals GATXprovidescomprehensive storage and packingfacilitiesfor distributionof petroleum,and chemical,petrochemical, other specializedliquids to destinations throughout theAsiaPacificRegion.In1991, GATXembarkedon its long-termIT plan. wereto develop Its immediateobjectives producaninformationsystemto increase tivitv, enhanceefficiency,andimprovecustomerservlce. lT permeates GATX's majoroperationalunits.GATX revampedits accounting procedures and now usesthe powerTHEASTANMANAGER . DECEMBER 1994 / TANUARY

1995SSSCONTRIBUTIONSCHEDULE 1995themaximumsalarycl€ditwill beP8,000or a P 1,000increase EfectiveJanuary over ofcontibutionsforyourinformation andguidance: 1994.Belowisthe1995schedule FOR EMPLOYEDMEMBERS :siilrnvi

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P 1.55 P t.25 2.20 t.75 2.80 2.25 3.75 3.00 5.35 4.25 7.50 5.00 10.00 8.00 12.50 10.00 15.65 10.00 18.75 10.00 25.00 10.00 3t.25 10.00 37.50 10.00 37.50 10.00 37.50 10.00 37.50 10.00 37.50 10.00 3750 10.00 37.50 10.00 3750 10.00 37.50 10.00 37.50 r0.00 37.50 10.00

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::SOCIALSECT RITY P 125 t75 225 300 425 600 800 1,000 1250 1,500 \W 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7.000 7,500 9,000

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SOCIAL SECUEITY SVSTE'A EastAvenue,Dliman, QuezonGty

MEDICARE..

P3.10 4.40 5.60 7.50 10.70 15.00 20.00 25.00 31.30 37.50 50.00 62.50 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00

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AMA WntuEnS

;Categorl: Pedple Development andManagemeSrt

HONG(ONC

JCGFinance CompanyLtd. JCGFinanceis a majorforcein HongKong'sdynamicfinancialservices industry.It is thelargestdeposit-taking companyin HongKongwith anexpanding networkof morethan30branches throughoutthetelritory. A keyfactorinJCG'sgrowthis thequalityof itsmanagement and staff.JCGhas investedin trainingand developingits workforce.Shouldstaffmemberswish to obtainhighereducation,our winnerprovidesfinancialassistance in additionto iob relatedtraining and the developmentof managerial skills. Each bank employeeattendsanaverageof threetraining c o u r s e sa y e a r ,a n d JCC channels42%of its total operatingexpensesto skills training everyyear JCGfostersespritde corpsby encouraging friendly competitionbetweenbranchesthrough productivity and efficiencyprograms.To further motivateemployees,branch and middle level managersare made part of the company's future direction-settingthrough extensiveinvolvement in the planning and budgeting process.

thepioneering MahsuriProjcct, Thecompanyalsodeveloped a technicalskill trainingprogramin parallelwith Dr.Mahathir's visionof Malaysia2020.Thecompany'sprogramshavebeenso thatits managers andengineers, in turn,arenow exsuccessful portingtheirexpertiseto othercountdes.

INDONESlA

PTAstra PTBankBali PT. Astrahasoneof thebestpaid,besttrainedworkforces in hiring and trainingpolicies. thecountry,a resultof enlightened receivefrom 8 to 80%of thecompany'srankandfile employees general 40 hoursof trainingper year,including managertraining andfunctionalandvocationaltraining.Astraspends$1,800 lts effortshavc for eachemployee's trainingand development. beenrewardedby low turnoverof 3.7%. BankBali,our secondwinnerspent92.1million on upgrading skills for its 3,500 emplovees.About 25% of its rank and file employeesreceivean average of41 hours of training per year,u'hile 82% of its middle managers receivean averageof 41

MALAYSlA

MotorolaMalaysia Bhd. Motorola'scorporatecultureis basedon total quality and respectfor its customers, competitors, In its questfor andemplovees. excellence, the companyhasestablished a "five days of training policy," which demandsthatevervemployee, fromjanrtorto CEO,receive a minimum of five days of traininga year In 1993alone,thecompany cloakedover240,000 hoursin training,at a costof $385per employee. 32

-'--'a

1994/ JANUARY 1995 . THEASIANMANACER DECEMBER

by develto theservicechallenge Our winnerhasresponded paragons the new breed training employees who are of opingand informed, emphathetic, of doctors,nursesand adminishators: highly-skilled, andableto work with minimallevelsof supervithe first of its sidn.It hasbeenawardedISO9000certification, kind in theregionfor a hospital. At onepoint in theirat the hospitalat thehospital,employeesare enrolledin multi-skilltrainingcoursesand continuing programsthat stress conceptssuchas total quality management PHILIPPINES and customerservice. Caringfor thepatientis Development Bankof the Philippines so intertwined with TheDevelopment Bankof thePhilippines(DBP)hasshown qualitythat the hospithatinvestmentin humancapital-whetherthroughvocational tal'sservice philosophy healthcareor thedevelopment of skills-pays hard- has been dubbed, education, increased "Healthcarefrom the to-matchdividendsfinanciallyandsocially.Revenues have Heart." from $109.2Min 1990to $190.5Min 1992,and observers toutedthebi h of a "new rehabilitated" organization-onethat hassuccessfully doneawaywith ossifiedlayersof management andinefficiency,by giving peoplea reasonto careabouttheirwork, THAILAND In 1992,DBP'sproductivity was P85,000 TheOriental HotelBangkok per employee,a327oincreaseover 1990;By and exStafftrainingactivitiesat the Orientalareextensive contrastrival firms' haustive. eachyear Thehotelholds100in-househainingsessions productivitywas only for anestimated fromrankandfile all theway 4,000employees, P39,000 per employee. to top management. live-insemina$to Thehotelalsosponsors Development of encourage spirituteamworkandat times,andevenemployees' sharedvaluesbeganin ality:A recentseminarwasheld in a monasterywhereover 30 wideningtheinfluence hotelstaffcontemplated theteachings of Buddha. of staff through emEachdepartmenthasits own trainerswho conducton-thepowermentandowner- jobskillshainingfor personnel all year.Forhighcaliberpersonship.Next, the organization(DBP)integratedthe metaphorof nel, the hotelhasdevelopeda comprehensive careerdevelopparticipation mentprogramto preparethemfor futuremanagement the family into its corporatecultureto encourage positions. invested and a senseof belonging.Third, DBP'smanagement The Orientalhas broughtits training outsideits grounds heavilyin programsdesignedto upgradeemployeeskills.As a throughits popularapprenticeship program,theonly oneof its DBPhasbeenrankedthe second kind in theregion.Graduates resultof the hansformation, so of thisprogramareconsidered in theworld,andthethird-bestper- well-trainedin theskillsofhostelrythatrivalshavebeenknown soundest developmentbank formingin termsof returnon assets. to lineuDandhirethem. from$2550 hoursof hainingperyearProductivityhasincreased to $8,212per employee. By contrast,its closestcompetitorhasa per employee. Whilethebank productivityindexof only $5,322 demandsthatemployees adhereto themotto"GivingtheBest," attractivebenefits it hassetanexampleby awardingemployees packages. Thebankoffersemployees freehosandcompensation pitalization,company-sponsored subsisports memberships, dizedhousing,andautomobileloans.

51NG.,{PORE

Healthcare HoldingsLtd. MountElizabeth Mount Elizabethownsand operates a premier505-bedpri vatehospital,providinga wide rangeof acutecareand tertiary faciliservicesfor inpatientsand outpatients.Its sophisticated tiesincludea24-houraccident andemergency departmen!mediwards;fertilcal, surgical,pediatric,obstetricandgynecological ity and oncologycenters;a radiologydepartment, and a rehaMountElizabethalsohasoutreach bilitationtherapydepartment. marketsin Malaysia,Indonesia, and otherpartsof Asia,where tertiaryhealthcare is inadequate. . DECEMBER 1994/ TANUARY THEASIANMANAGER

AMAWrruxnns

Financial Management ,Category:

HONC (ONC

lNDONE5lA

HongKongTelecommunications Ltd.

PTDankos Labs PTCharoen Pokphand

Hong Kong Telecomgivesthe colonva full rangeoftelephone, fax, and data setvices.Customers range from thc Hong Kong homeownerto multinational customers,with sophisticatedcommunication and data needsin the region and around the world. Hong Kong Telecom'ssalesrevenueswere closeto $1 billion, up l8% from the previous year,despitean averagereduction of 87oin IDD rates. Our winner funds capitalexpendituresby spinning cashfrom operations,and borrowing short-termto meetcashflow requirements.Its sharesare among the most popular in Hong Kong and are gaining popularity in North America. ROE grerv from 51.6% rn 1991to 57.4ckin 1993. It haspositioneditself as the telecomshub for SoutheastAsia and China,and hasopenedofficesin Taiwan,Koreaand shortly, in Vietnam. Civen the convergenceof the telecoms,entertainment and computer industries,our winner is exploring the possibilities of offering video on demand sen'icesand cable television sen'icesas early as 1996.

PT DankosLaboratoriesis a 20-yearoldmanufacturerofpharmaceuticalproducts. To erpand production capacity and market share,Dankos went public in 1989and acquired two other p h a r m a c e u t i c a cl o m p a n i e s ,P T B i n t a n g T o e d j o ca n d P T HexpharmJaya. It has maintained a healthy balancesheet by lowering the costof funds and raising returns on excesscashflow. As a result, growth has becn steady and sustained.In 1993,Dankos's ROE was 56.7%and ROA was 35.9%.Saleswere 75 billion Rupiah,a 25.3%increasefrom 1992.This allowed the company to finance the constructionof two new factories,which will result in a 50'/. increasein productivitv PT CharoenPokphand,our secondwinner, is affiliated with Thailand'slargestagro-industrialconglomerate.It is a majorproducer of poultrv feed,with an annual capacitvof 750,000metric tons.Tl.dsworld classcompanyhasmanagedits financialgrowth with knowledSe,patience,and expertise.It is alsooneofthe largest,fastest-growingpoultry breedersin Indonesia. PT CharoenPokphandincreasesfinancialflexibility by drawing on funds from severalsources,and implements tight credit controls by watching cash flows with a sophisticatedfinancial information system.Its stockholdershave been rewarded with an increasingROEof 28.6%in 1991to 40.5fl in 1993.

DECEMBER 1994/ TANUARY 1995 . THEAsrANMANAGEn

MALAYSIA

SlNGAPORE

Sapura

Telecom Singapore

SapuraHoldingskeepsa stricteyeon riskby generallyadopting a long-termview towardsgrowth,andmaintaininga realistic assessment of thecompanv'savailableresources. Thecompany'sstrongfinancialshowingis alsodirectlya resultof strategicmeasures decisionto list suchasmanagement's profitable, two of its most wholly-ownedsubsidiaries, Sapura Telecommunications and Uniphone,in the Malaysianstockexchange. Thecompany's ROEclimbedfron 56%in199^lto77%in 7993.

Thisyearthe companywon both the GeneralManagement Management AwardsforSingapore. andFinancial After beingprivatizedin October1993,SingaporeTelecom restrucfuredto becomemoreautonomousandflexible,to respond hai also to rapidchanges in thetelecoms industry.Privatization "nimbleness the greater freedom to purallowed company and suemarketopportunities." Telecomis a primeattractionin stockmarkets. Its Singapore public listing last Octobergot overwhelmingresponsefrom Singaporeans, Almost50%of thepopulationappliedfor thecompany'sshares, transforming theisland'spopulationinto a shareIPOhassince owningvirtuallyovemight.Singapore Telecom's IPOs in the region. beencopiedby other

PHILIPPINES

SocialSecuritySystem TheSocialSecuritySystem(SSS) is a governmentfinancial institutionwith clearbias towardssocialdevelopment. lt has jobsnationwideand generated over6b5,000 educated over40,000 studentsthroughits educational loanprogram.SSShassuccessfully managedto combineits socialrole with building capital markets. TheSSSportfoliohasyielded17%since1986,despite307oof its fundsbeingdivertedinto subsidized loans.SSSstill managed to posta 27%ROIin 1993. Assetstrebledsince1986,fromP1.03B to P3.3B. Its success is largelyresultof sound,but creative,financial management. Since1986,SSShasdiversifiedits portfoliofrom mostlygovernmentsecudtiesto primarily memberloansand privateplacements. Privateinvestments alonegrew from 1.17o in 1986to 12.5% in 1993. The resultof this optimuminvestmentmix hasbeeneven moredirectandsocialbenefitsto thousands of Filipinosthrough emergency loansand loansto small-andmedium-scale enterprises.SSS's investmentandlendingprogramscreatejobs,encourageexportmanufacture, andpromotecountryside development.

THEAsrAN MANAGER . DECEMBER 1994 / TANUARY

BIKE. FRIENDS EVER YOURFIRST WP'VTBEEN SINCE yougotyourdriver's license. You'vecounted on our service longbefore And in service stations all overthecountryyoucanstillcounton usNational Oil thenewPetron. Backed by thestrength of thePhilippine andtheworld'slargest SaudiAramco. More Company oil producer, yougo. wherever thaneverwemakesureyou'llfindfriendlyfaces

ffi Petron

Committed To Power The Nation.

T H t P t tI l t p p t N E lSs O p t t ' tT o I N V E S T o R S supports thegroMhof domestic lherehasneverbeena bettertimeto investinthe DBPlikewise majorconduit markets andisthecountry's hasbeen liberalized; the capital Philippines.lhe economy andbilat fundsfrommultilateral government is investor-friendly. Endlesopportu- of intemational assistance foroffcialdeveloDment eners/, eralinstitutions nitiesabound. In telecommunications, anogran6. manufacturing. programs rransportation, M, tourism, askthebank ToknowmoreaboutthePhilippines, roleinthecountry's march to thatplays a strategic growrn. premiere development bank DBP, thePhilippines' the bankisnot with asset billion. sizeofUS$2.05 andlong-term onlya majorourceof medium Bankof thePfulippines Development enterprisâ&#x201A;Źs financing foragricultural andindustrial Makatl, Metro Manila Philipplnes a catalyst for countr)6ide butmoreimportantly, P. o. Box 1996. MCPO l2oo Telephone, (632) al895l I fAXi (632) alzaoa9 development.

mtD['

WwNrns

Management Categdry: Op'drations HONG(ONG

StarliteHoldingsLtd. manufacture StarliteHolding'ssubsidiaries andprint paperbasedpackaging materialsandpaperproducts,andprovidedesignandcolorseparation services for high-endqualityproducts. Starlitehasbuilt a totalqualitywork ethicin eachof its major functions.IGlzer,or continuousimprovement, is a way of life amongour winner's1,000employees and hashelpedkeepthe companyfocusedon thecustomer.Starlite'scompensation and promotionsystems arebiasedtowardsthequalityof anemplovee'soutput.Rigidinspection systemssuchasthecompany'sinqualitycontrol,andoutgoing comingqualitycontrol,in-process qualitycontrolmakesurethateachproductbeadngthecompany's imprint is flawless.To ensurethat the company'semployeesmovecloserto achievingzerodefects,Starliteholdsquality auditseverythreemonths. Starlitewasoneof the first in HongKongprintingindustry toadoptthelSO9000qualityconholsystem.lthasbeenawarded ISO9001whileits Singapore subsidiarywasgiventheISO9002 It earneda 95out of 100scoreon our operations accreditation. scoresheet, thehighest amongallAsianwinner<.

INDONESlA

BKKBN BadanKoordinasiKeluargaBerencana Nasional(BKKBN)Iast won an Asian Managementaward in 1991.In its 25 years,this outstandingorganizationhasprovided family planning services to an averageof 25 M people a year Through a network of over 250,000family planning clinics and 52 M employeesand health workers, the organizationgives out basicfamily planning information as well as contraceptivesand consultation servicesto millions of Indonesiansin both urban and rural areas. BKKBN's comprehensivemonitoring and data collectionsvstem hasallowed the organizationto achieveits goal of lowering the country's fertility ratesfrom 5.67,in 1971to3o/crn7992.Part

of the organization's success canbe attdbutedto the levelofinvolvementandcommitment it hascultivated in a manycommunities. In fact,its work at the grass rootsIevelis helpedalongby theparticipationof over a millioncommunityorganizations-allsupervised by our winningorganization. Theorganization's success hasbeensoencouraging thatits leadershaveexported its know-howelsewhere. At present,theorganization runsanIntemational TiainingProgramonfamilyplanning in neighboringThirdWorldcountries.

Andersen Consulting Andersen's success is directlyattributable to its adherence to servicequality,embodiedin its QVSformula,a three-pronged modelof servicethatincludesthecomponents of quality,value, Thissuccess is manifested in a 51%increase in revandsuccess. enuesin 1993. Toencourage high productivityandto ensurethattheclient receivesQVS,AndersenhasinitiatedKnowledgeExchange, a frameworkof standardsand toolsthat enableglobalexchange of knowledgecapital;clientqualitymanagement, a clientservicedeliverysvstemdesignedto delivervalueand ensureclient satisfaction; and the "AsianDynasty,"a frameworkto address theregion'sgrowthrequirements and to achievemarketdominance.

1994/ JANUARY 1995 . TrrEAsrANMANAGER DECEMBER

PHILIPPINES

THA]LAND

Philippine Appliance Corporation

PublicCo.Ltd. SrithaiSuperware

Philippine Appliance Corporation,PHILACOR, is one of the country's leading manufacturersand exportersof householdrefrigeratorsand freezers.The company'sGeneralElectric,White Westinghouseand Winner product lines accountfor about 65% of local industry sales.Philacor'ssuccessin refrigeratorshasencouragedthe companyto expandits product line to other household appliances. Consistenthigh market sharecan be traced to quality practicesand environmentally-soundmanufacturing processes.For instance,the company intends to meet l{'orld standardsfor 0% ozonedepletion by 1996in both processesand components. Philacor enhancedqualitv consciousness in its manufacturing processesthrough its Labor and Material Productivity GainSharedProgram.Savingsfrom efficiencygainsare sharedamong all employees.The program hasmadeemployeesaccountableto their colleagueswhile encouragingcontinuous contdbution to higher productivity and quality. Quality indices shows that Philacoris way aheadof its closestcompetitors.Its replacementrate is 1%,versus15%of a leading rival firm. Customercomplaintsareconsiderablylower than their closest rival's.

is a leadingmanufacturer anddishibutor SdthaiSuperware productsin melamineproductsandthermoplastic of thermo-set Thailand.Its principalmelaminetablewarefor the homeand cateringindustryis exportedto over 30 countriesworldwide. success andrapid growthcanbe athibuted SrithaiSuperware's to its marketingshategy,and its qualityof productionand design.Tofurtherexpandproductionandintroducenewproducts to its growingmarket,thecompanyhasmadesignificantinvestmentsin purchasingandlicensingforeigntechnology. Havingopenedshopin 1963with fully paid capitalof Baht 500,000, SrithaiSuperwarehassincegonepublicandis now worth overBaht200M. permeate Our winner'seffortstowardqualityperformance of higheverystepof theproductionprocess-fromthepurchase qualityraw materialto qualitytestson finishedproducts.Toimproveproductivity,thecompanyusesa computerized systemin But althoughthe compaeachstageof the productionprocess. ny's processes are highly automated,quality extendsto its workforceaswell,Employees undergocontinuoustrainingand As a resultof its absorbtheconceptof TQM and zero-defects. efforts,our winnerhasachieved100%on-timedeliveryschedules,an almostnegligiblepercentage of defects,and legionsof satisfiedcustomers.

SINGAPORE

Broadcasting Company Singapore providestelevision 9ngaporeBroadcasting andsoundbroadfor Its locally produced programs castingservices Singapore. continueto receivehigh levelsof audiencesupport and haveperformedbetterin airtimesalesthanin previous vears. Broadcasting hasstate-of{he-art broadcasting faSingapore cilitatesto produceandtransmitradioandTV programsin four languages.ln addition,thegroupactsasthenationalrepresentative of its governmentin all mattersrelatedto broadcasting. It hastwo subsidiaries: Pte producer telSBCEnterprises Ltd.,a of evisionvideo advertisements, and MediaResearch Pte Ltd., a consumerresearch firm. With continuousstafftrainingand86qualitvcontrol teams taskedwith improvingthegroup'sproductivitvandqualityof its services, our winnerhasbegunto reapthebenefitsof its employees'collectivehard work and determination. In 1993,the group'soverallincomewas5$302M, up 11%,As a resultof intensifiedmarketingefforts,TV airtime revenuesaloneincreased 25%.

THEAsrAN MANACER . DECEMBER 1994 / TANUARY

AMA WINurnS

Development Category: Management

MALAYSIA

PHlIlPPINES

Lembaga Kemajuan Bintulu (BintuluDevelopment Authorityl

Tahanang WalangHagdanan, lnc.

TahanangWalangHagdanan's("Houselvithout stairs")p ncipal beneficiariesol'er the last 21 vears are people with orthoLcmbagaKemaju.rnBintulu is a 16-yearold agencvwhose pedic disabilities and out of school vouths. Its programs vary task u,asto deyelop Bintulu, a small rural town in Saralyak,into from skillstrainingand vocationaleducationto job placements one of Malavsia'sleadingindustrialcenters.The agencyoper- and advocacy,to harnessthe potential of disabled individuals ates as a coordinating and advisorv bodv, providing the blue- and equip them with the tools to transition into the mainstream print lor thc Indu'tn.]l ./L,ni. r'conomicprogre.s. ofsociety.The programsalsoprovide a more valuableasset:selfTheagencvpromoteslocaiand foreigninvestmentsin Bintului esteem."When a client comesto us, " this organizationobserves, "he der,elopsand managesbasicsen'icessuch as utilities and inftafrequentlv cannotlook straight into the evesof the personhe structure;managesand clevelopsBintulu's huge natural gasand is talking to. But after a few months, he becomesresponsiblefor oil reservesas rveil as its rich supply of tropical timber, coal and his life." silica sand cleposits;and sourccsfunds necessarvfor developing The NGO refersyoung disabled for rehabilitation or correcindustrial zoncs. tive surgeryand awards loans to cooperativesof disabledentreThe agencvhasdeveJopecl a conduciveclimatefor economic preneurs.The center has also becomean important venue for growth. Bintulu is home to four rapidlv-developing industrial researchactivitiesbenefiting the disabled. estatcs;ihe Bintulu Light hrdustrial Estates,Kidurong IndusManaged bv the disabled themsclves,TahanangWalang trialArea.KidurongLight lndust al Estate,and KemenaIndus- Hagdan teachesby example.Managementand staff are closely trial Estate.The zoneis alreadythe siteof Malaysia'slargestLNC attuned to the needsof their constituents. plant and a middle distillateplant, the first of its kind in the world. Eachlife this organizationhastouched-u'hich of course,inOther major projectsof the agencvinclude a crude oil terminal, a cludeseachfamily to whom the disabled belongs-has become palm oil rcfincrv ancl fractionation plant and a urea formalde- enrichedand empowered. hyde resin plant, the first of its kind in Sararvak.The total roadrvaysmaintaincd bv the agencvincreased600%from 1991 to 1993;thenumberof ratablepropertiesgrew from 7,552in 1980 to more than 13,900in 1993.To date, the agencvis directly responsiblefor incrcasingthe amount of investmentsinto Bintulu from $3 M to $ 7 B ovcr the sameperiod.

199,1 DECEMBER / JA\uARy1995 . THEAsrANMANAGER

SING,{PORE

THAILAND

(NTUCI NationalTradesUnionCongress

IndustrialEstateAuthorityof Thailand

in 1972to TheIndustrialEstateof Thailandwasestablished Awards,NTUC A previouswinnerof theAsianManagement industrialdevelopment in Singa- carryoutgovernment's is a federationof 71tradeunionsandthreeassociations Policyandto prointo by zoningfactories work- motecontrolledindustrialdevelopment of 236,000 hasa totalmembership pore.Theorganization ameniequippedwith sufficientinfrastructure, bargainable industdalestates ers in differentlabor sectors,22%of Singapore's safeguards. ties,utilities,andenvironmental workforce. our winner hasdevelopedsix In its 22 yearsof operations, arefourfold:to improvetheworkingconNTUC'sobiectives ditionsof the Singaporelabor forceand to enhancetheir eco- industrial estateson its own, one with the NationalHousing with thePdnomicand socialstatus;to maintaingood labor-management Authority(NHA),and 14morein joint cooperation relations;to promoteindustdalharmonyand ensurethe well vatesector. thisagencyhaslaunchedinforeigninvestors, Toencourage beingoftheworkers;andtobuilda strongandviablelabormoveinftastructure worldwide.As anintegrated vestmentpromotions ment. s€rvagency, our winneralsofunctionsasone-stop educa- development As a resultof its mediationandits community-based theSin- icecenterfor bothThaiandforeignindustrialoperato$facilitattionalandtrainingskillsprogram,NTUChasdeveloped permitsaswell asproviding gaporeworkforceinto oneof theworld'sbestandmoreproduc- ing theapplicationfor all necessary thenumberof in- otherrelatedservicessuchasbasicinformationon investingin tive.NTUC hasbeencreditedwith lessening Thailand. dustrial strikes. of Thailand'sleadingindustrial The agency'sstewardshiP labormovementis ThroughNTUC'sefforts,the Singapore nowmoreviablethaneverbefore-morefocusedin itsapproach, estateshas transformedThailandfrom an agriculture-based morerespected athomeand economyinto oneof Asia'smostdynamicindustdalizingeconomorevigorous, andmostimportant, mies. abroad.

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Koreanperspectiveon APECwas presentedby Dr. Soogil Young, SeniorAdvisorto the Deputy Pfime Minister at a conferencewe recently attended in Seoul. Dr. Young discussedthe changingpattem of EastAsian Trade,the pattern ofeconomic integrationin East Asia and Iastly,East Asia's strategicalternatives.In discussingthese issues, Dr. Young proceeds from both a factual and a con.ohh

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Moreover,Europehas reducedits dependence on East Asia and North Americaas a tradingmarketto a low 6%to 8%each.

economicbaniers or protectionism. Moreover,regional blocsareunnecessary to prom o t e r e g i o n a li n t e g r a t i o n . WhereasEastAsia,with the notableexceptionof ASEAN, has formedno tradingblocs, therehas nevertheless been growingeconomic integration within EastAsia with intraEastAsian trade,growingfrom 30%in 1970to 40%in 1990.

protectionistpolicy did not work for one country namely, thePhilippines-why should that protectionist policywork for a groupof six countries namely,ASEAN? ButAFTAis working-at least in makingASEANbusinessmanmoreoutwardlooking,in givingASEANa biggerrolein world hadepoliticsandin fostenngmoreeconomrc cooperation in whatwasuntil recently a p o l i t i c a lg r o u p .A n d t h e ASEANI0 couldwell become a formidableblocthat Koreas doesnot want to see. Korea, Taiwan, Hong Kong,and JapanareembarrassedbvAFIAand theEAEC. Theymusttradewith theWest and they want to keep their Asianties. The elementsof an East Asianstrategyfrom the Koreanperspective would thereforebeasfollows: 1.It is in theinterestof Korea that the movementtowardsa multilateraltrading Thusthe systembesupported. CATTagreement mustberatified so that theinwardmovement of Europewill be reversed,if not halted. 2. lt is in theinterestof Korea that NAFIA doesnot follow the Europeanexample and turn inward. Thus the APEC and like-minded groupingsmustbe supported so that trade betweenEast AsiaandNorthAmericais not curtailed. ofKo3.It is in theinterest reathatthetemptationto form anAsiaPacificFreeTradeArea be resistedas such a bloc is neitheradministratively feasiblenor conceptually sound.

ls AFTA necessary? On thebasisofthisconceptualpremise,a Koreanprofessor askedus why we considered AFTA essentialto our If a economicdevelopment.

Prof vi.tar S. Lirtlinga is th. Luila Fa t lltint PrcfasorofBusi,.ssMd,rrsrment. Hr sp(taltzesin fiirkclulg,fi,llnr.r,bfsircssinstil,/tbnflndp blic policits. At prcstnt,Prof$sotLn Lingan isanEtnber oftheDe-'ek)pne tMa nge tn. t |rrog m(DMP) fncultlt.

market,l'ould not EastAsia's trade with America also decline becauseof NAFIA? East Asia, without Europeantrade, survived. Can East Asia survive without European-.and the tiSt American trade? Thecounterstrategy of the The conceptualpremiseof US was twofold.The first re- Dr. Young is that free trade is sponsewas to pressurethe beneficial for everybody and EastAsiancountries,particu- that the key to successfulecolarly Japanand Korea,to lib- nomic development is global eralizetheirdomesticmarkets competitiveness,rather than

nromico

Dast Asia suec.esses-. Thefactualpremiseis that EastAsia(Japan, China,South Korea,Hong Kong,Taiwan a n d A S E A N )h a s b e e nt h e mosteconomically dynamic regionin the world due to its outstandingperformancein intemationaltrade.ln 1970, EastAsiaaccounted for 177a of world trade, with North Amedcaaccounting for nearly twice as much and the EuropeanCommunitynearlyfour timesthat amount.By 1990, however,EastAsiahadalmost d o u b l e di t s s h a r et o 1 9 % , slightly higher than North America,and half that of EurcPe.

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response ..Juropet United Stateswith thesecounNaturallysuchsuccess in- tries.The secondand most reviteda response fromboththe centprong of this strategy was UnitedStatesandEurope.Eu- the formation of the North rope'scounterstrategyhas American Free Trade Area (NAFIA). b e e nt h e m o v e ment towards a more inward but Koreat Europeb self-reliant Eueoneern rope, a fortress counter Theconcernof Europeif youwill. strategy has Korea with reIn 1970,only 53% spectto NAFTA beenthe o f E u r o p e ' se x couldbe stated movement thus:lfEastAsia's ports were lntraregional(within tradewithEurope toward... E u r o p e )b, u t b y declinedas a rea fortres 1990,this had insult of the Euroc r e a s e dt o 6 1 7 o . Europe. Pean common

DECEMBER 1994/ IANUARY1995. THE AsrANMANAGER

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t Carnegie-Mellon, Shewritesthatclarirypersua- growing exponentiallyin this the mostpopular siveness,and logic are the region. This is a "SinceEnglish electivein the threeelementsthat enablea alreadyexpractitioner's "get MBA programis managerto things done istsastheleadinglinguafranca book, not an a courseentitled by communicatingwith oth- in the world market," Dr. Dramain Business. On thefirst ers." academician's Chanobserves,"its adoption day of classes,studentsunAsian managersfor whom asthelanguage of globaltrade theoretical text. dergoa rite of passage: theyare Englishis not a native lan- is inevitable." This implies requiredto do a stand-upcom- guagehave the added chal- that "managers mustnot only edy actthat will elicitsponta- lengeof familiarizing them- know the English language, Ma. TeresaColayco,of Manila neouslaughterfrom the audi- selveswith the nuancesof but mustalsopossess theskills CordageCo.andMr CesarJose of theCoca{ola Exence.A joint offering of the American or British culture that are required for intema- C. Jesena, port Corp. AIM Professor university'sbusiness andper- that define the contextfor the tionalcommunication." Meliton Salaza4 himselfa corforming arts schools,this " porate CEO, describes thelabycourseaimsto developthestutn. rinthine mazedrawn up in indents' communicationand ./i cohercntmanagement reports. presentation skills. Its popular:. Communicating the meanity is a testimonialto the int ing of financial facts and figseasingimportanceplacedby recruitersof Bschoolgraduates ' t urescanbe problematic,even if one'saudienceis relaiively on the ability to communicate. In the contextof today's ,. well informed. Professors ReneT.Domingoand Rodolfo competitiveand changing P Ang of AIM andAteneo,rebusinessworld, Harvard's spectively, provide readers Prof.JohnKotter definesleadwith helpful hints on the ershipin ihreewords:commuknow-howsand know-whys nication,communication,comof financialreporting. munication. The ability to Other highly interesting communicate, sayshe, is estopicscoveredby Dr Chan's sentialin enablingleadersto readerarethoseon advertising inspireandmotivatepeople. -, by JavierJ.Calero;bankcomResponding to theimpera""' munications by Tita D. tive of developingmanagePuangco;information techment communicationskills, nology'simpact on manageAteneode ManilaUniversity ment communication by Presshas published ManagementCommunication in theCIo- use of language. The uninitiTwo articleson cross-cul- RicardoA. Lim; and successbnlErarReadingsfor theAsian atedwho do not,for instance, tual communication by Profes- ful negotiationby CherryLym Manager,a compilationof appreciaietheAmericans'pen- sors Mario Antonio G. Lopez S.Ricafrente. Theproverbialicing on the highly readableand informa- chantfor clarity and brevity, and Emy M. Pascasio of AIM cake is anarticleby DeLa Salle tive essayseditedby Dr. Gloria will continueto communicate andAteneo,respectively, exarnS.Chan,Mobil Oil professorof accordingto their own culhrral ine thenuancesof dealingwith University PresidentBro. humanitiesat theAsianInsti- influencesandinvariablylapse differences in customs,andval- AndrewGonzalez.His topic: tuteof Management. into pitfalls that createmisun- uesihat oftenpo6eproblemsin Using ihe GrapevineCreativelyin Corporate CommuniT h i s i s a p r a c t i t i o n e r ' s derstanding. humaninteraction. "With enoughsincere canon. book,not an academician's distheoreticaltext. Professional The langrage of global cussionover commoninter- ' Yo canolder thisbookthtoughthe managersand consultants tFide est," notesProf. Lopez,"we Ateneode Manila Uniz)ersit! Prcss, "As who havedealtwith therealia result of the global- canbreakdown manycultural MCPOBox154,1099Manila,Philip tiesin management communi- izationphenomenon,"wdtes barriers(and)dealwith thedi- pines. For olterseasolders price is cationhavecontributed usefirl Dr. Chan,"communicationbe- versity that is becomingthe US$12.00plus US$3.00fot posta&e. pointersand insights. tweenand amongthe citizens norm in international busiProf.SonnyB. Colomais lhe Associate of the Asian regiontakeson ness." DeatlfoltheMasteli Busi essMana&eGetalngs things done added significance." She nent (MBM) progrom.He handles by eomnunleating pointsout a paradox:English The two Ct of reports @ursesiftgeeralfii agefienl,huma rcDr.Chan'sleadarticlespro- proficiencyis deterioratingiust Presentingreportsto man- soulcemanagemett,organimtiondtaelvide a broad perspâ&#x201A;Źctiveon asthemagnitudeof hadeand agementcreativelyand confi- opmel, na*eting sl/alegyafld implemenlotioandcorponlepubliccomftumanagement communication. commercialexchangesare dentlyarewriiten aboutby Ms.

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ow on its 20th year,the Master in ManagementProgramcontinuesto be a competitive degreeprogramfor experiencedmanagersand entrepreneursin preparationfor greaterresponsibilitiesand positions The MM Program is an integratedcoursewhich focuseson skills, not on knowledge and information.55%of its studentscomefrom overseasand52% are companysponsored.Participants3Tyearsof agewith 11yearsof work experience, and comefrom theASEAN, China, India, Pakistan,Bangladesh, Nepal, Taiwan,Thailand,Singapore,Hongkong,Korea,U.S.A., Austgralia,Sri Lanka,Israel,United Arab Emiratres,Netherlands,Finland,France,fiji, Germany,Italy, Ireland,Oman, Somalia,and Canada. The learningprocessis divided into threeacademicmodules,eachcarrying a basictheme First Module: The Manageras Decision Maker SecondModule: The Manager as Strategist Third Module: The Manager as Leader,Visionary and Implementor

PnocRRv HrcltucHrs . coversthe corefunctionsof managementwith emphasison the themesof total quality management, empowerment,cross-cultural skillsand understanding,busi nessethics, and information technology . providesfor quality circlediscussionsand computer-based learning o teamsup studentsand faculty in managingthe learningenvironment r includeshands-onindustry and consultanq/projectsand distinct activities "Walkabout" suchas the o featuresAsian casesand perspectives . requiresa completedthesis- ManagementResearchReportor MRR within the academicyear Upon graduation,participantsautomaticallyjoin a network of over21,000fellow AIM alumni holding key positionsin businessand managementin 63 countries.

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n the 1980s thepriceper million instructionson a mainframewas $1M. 11992 In this cost was $ 1 4 3p e r m i p . A d r a -

nored,the systemautomati- and advise marketing to conc a l l y s e n d st h e u n h e e d e d clude the sales to effect the warningto theVicePresident strategy.It could also recomfor Operations. mend postponingpurchases T h e m a i n f r a m e so f t h e without having an impact on matic drop in the cost of com- 1980swere unsophisticated sales and delivery. puting power has ushered in in taking correctiveaction, T e c h n o F e e d b a c k ' sa d the era of ability to manage unlesspromptedby humans. vantagesare enormous.The N e w c o m p u t i n g p o w e r , s y s t e m a l s o b r i n g s h e ad companiesdiff erently. Entrepreneurial corpora- however,makessmallcourse count down, and allows you possible.People to manage with a flatter ortionsare destinedto be effec- corrections tive only up to a certainsize, a r e b u s y a n d s o m e t i m e s g a n i z a t i o n a n d h a v e m o r e andthentheystarthitting the overlookthe obvious.If you people report to you. proverbialwall.Beyonda ceris tain size,the entrepreneur unableto reachthelengthand breadthof the corporation. Developingthe next Ievel of managers is tough,and ready madeonesareharderto find. TechnoFeedback-aneural networksystemin my company,Chemoil- hashelped ushurdlethe "wall." A neural networkis very much like a Bio Feedback system.As all operationsare done through

f,nfrnnpnnffirmtS

"Neural networks continuously upgrade and push the frontiers of efficlency." the computer,the computer providestips, warnings,and aboveall providesa feedback to the managers if the system warningsareignored. I f c u s t o m e r sa r e m o r e than two days late in payment the systemwarnsthe lf the Marketingdepartment. accountis outstandingfor morethanfivedays,it warns the President, CFO,and Legal department. This prompts more aggressive is actionuntil the receivable collected.If the operations department blendsa fuel oil cargoand givesaway quality it warnsthemof thetotal cost. If the warningsareig-

Creating your elone , ilr"a eomputer..., At $tElWrmip,.it'isnot ifiossibte. give them a neural network a n d a s u g g e s t i o nssy s t e m you get closeto having an intelligentcomputersystem. Neuralnetworkshelp in patternrecognizing and solution generatingfor businessproblems. If thecomputer recognizes cashshortages it could suggesta seriesof actionsthat wassuccessfully appliedin the past.It could alsocheckthe impactof the actionson thesystem.If you have receivablediscounting lineswith specificcustomers, it could check the sales bookedandinquiriesat hand

THE AsrANMANAGER. DECEMBER 1994/ TANUARY 1995

How do you implementa neuralnetwork?The idea of "Big Brother" watching everyactionis anuncomfortable feelingfor employees. Most people will ignore warningsbecausethey are unable to implement they s y s t e m ' ss u g g e s t i o n sT.h e managermust therefore w o r k t o w a r d se l i m i n a t i n g t h e s ec o n s t r a i n t sI.f d o n e beproperlythe employees comemotivatedandwantto work towards further improvement.As a President, y o u m u s t u s e n e u r a ln e t worksto manage,not to pun-

ish people.At Chemoil,we a t t a c h e da n i n s t a n tb o n u s p l a n t o t h e s y s t e m .W h e n e m p l o y e e sg o b e y o n dt h e call of duty and add to the profitability of the company, the Presidentissuesa letter o f r e c o m m e n d a t i oann d a check to expressthe gratitudeof Chemoil.Thisinstant Bonusplan hasbeena great get insuccess asemployees stantfeedback and reward, Neuralnetworkscontinuously upgradeand push the frontiers of efficiency.They startby"managing" big issues, and as time goesby, progressively "manage"smallerand smallerissues. Neural networks will evolvewhenyou asan entrepreneurcan download your in identifythoughtprocesses ing opportunities.Perhapsyou couldat last cloneyourself.

...be bold, travel unchartered waters, Iook for solutions in unusual places and get ideas f rom strange sources, That day is not far in the fufure.Youenheprcneursneeda breakandwould like to retire knowing full well that the companyyoubuilt with sweat andtearswill standthetestof time,andwill live up to your dreamsandaspirations. As theysay,bebold,travel unchartedwaters,look for solutionsin unusualplaces,and getideasfromstrangesources. Youmaysiill qualifyto explore the unknowntomorow with a life raft that will makeit all possible. Mr. RobertChandranisagrsrluateof MBM classbatch1974.He is cut rently the lrcsidentof ChemoilCo/poraLion, U.S.A.

hestrategies in quality management can bestbe describedus ing the four categories of qualitycost: externalfailure,internalfailure, inspectionor appraisal, and preventioncosts.Quality cost,or cost of poor quality, which can account for 20%30%of sales,is the costof not doingthedght thingright the first time.

thesupplier'sfactoryEventually, internalfailurecostsare spreadoutovergoodproducts andpushuptheirunit production costs.In the long run, internalfailurecostsaffect customerswhen he is charged higherpricesfor theconforming productstheybuy. l n s p e c t i o nc o s t so r a D praisalcostsare incurred to check,test,confirm,andmeasure the conformance of the

'!u. Iypes of quallly cosi Externalfailure costsare incurredby theproducerwhen -,.ilj t ' . . i thedefectiveor non-conform. , ing productis shippedout of thefactoryandsoldto thecustomet who eventuallydiscovers the defect.Examplesof thesearewaffantyrehrmsand replacement, transportation coststo retrieve the product, legalfeesif thecustomersues the company,and lostsalespresent and future-due to tarnished reputationandcredibility. The latter,usuallythe biggest,are not reflectedin thecostaccountingrecordsof is,lhe ' the company. prwentionis Internal failure costsare incurredwhen the company disposes or handlesnon-conformingproductsbeforethey aresoldto thecustomer Exam- productsto customerspecifiplesarescrapcostsandrework cations.Theseincludethecost costs,whichcanincludeover- of maintaininga qualitycontime,downgradingor regrad- trol or quality assurance deing costsandlosses, andman/ partmentiinstalling,calibratmachinedowntimedueto the ing, and using testingequipprocessing of defectiveor in- ment,thecostof takingor deferiormaterialsand parts.In- stroyingsamples;receiving ternalfailuresareusuallyun- and inspectingincomingraw seenby the customers, unless materials;and line stop or they makesurpdsevisits to downtimeto checktheprocess or product.In general,theless reliabletheprocess or product, thehigher resources, costs, and PIan lor thenumberof peopledevoted

qualitv,.. lf you fail to plan, You ptan to lail.

Preventioncostsare incurredto avoidtheproduction of non-conformingproducts. T h e s ei n c l u d e sd e s i g n i n g productfor manufacturabi-

Iity; foolproofingof process and equipment;clearprocess documentation;employee trainingon qualityandstatistical skills; quality planning; preventivemaintenance; meeting with customers;meeting with suppliersandsubcontractors; and supplierdevelopmentandtraining. Gray areas Whilethesecategories pro-

paysto coverfor contingencies like fire, delayedshipment, and bad weather.Are these preventivecosts(to prevent losses) or internalfailurecosts (highpremiumfor lackof fire and safetyprocedures) or do they really fall under quality costsat all? If gray areasof quality costare to be categorized for computationaland monitoringpurposes, it is wise to havea discussion andcommonunderstanding amongall partiesconcerned. The category agreedupon must be usedconsistently afterwards. Stages of quallay management Table1showshow thefour typesof qualitycostscouldillustratethreequalitymanagehaht

vide a useful frameworkfor identifyingandreducingquality costs,they are imperfect. Somegray areasof quality costsmaybe difficult to force fit into one category.For ininspection stance,when1007o is doneon a lot rejected by the customerto sod thegoodfrom baditems,is thecostincurred dueto externalfailure,internal failure,or inspection?While incominginspection,or QA, may be classifiedunder inspectioncosts,somemay put it under preventioncosts,beraw causeit prevents defective materialsfrom being processedto defectiveproducts. Anothergrayareais insurancepremiumsthe company

ct)oac

^r <hrlpe

Thefirst andmostcommon is the "firefiehtine" stasein whichthecompanyreceives a lot of customer complaints and productretumsfor threereasons:inspectionis lax or inaccurate; processyield is low redueto highinternalrejects, work,andscrap;theseintemal failuresin turn come from minimal or no preventive measures. Companiesin this stageare usuallyshort-lived. They have high turnover of managers,employees,and evenownersand customers, They have a "blaming" culture in which people are blamedfor reportingproblems.Problemsare hidden and allowedto explodeusually beyondcorrection. Thesecondstaee.whichis betterthan the first, is tlc "conventional" tvDeof qualitv management. Customers are happy and satisfiedwith the product'squality,but thecompany'sproductcostsarehigh dueto internalfailuresandinspectioncosts.Eventually,it will passtheseon as higher pdcesto customers, thuseroding pdcecompetitiveness and

DECEMBER 1994/ TANUARY 1995. THE AsrANMANAGER

Stageor Style l. 2.

Prevention

Internal failure

Insoection

External lailure

LOW

HIGH

LOW

HI G H

LOW

HIGH

LOW

HIGH

LOW

" F i r e f i gh t i n g "Conventional"

3 . " T o t a lQ u a l i t y "

market share. Zero defects is achieved in the market place bv empbving thoroughand multiple inspection. The weaknessofstagetwo, especiallvin the manufacturing industry is that often there is no improvementin yield or virgin quality becauseno preventive measuresare taken to prevent intemal rejects.lts ultimaie goal is the perfectionof external qualitv through inspection and conection at all

...the cost of poor quality 20%-30%of sales-is the cost of not doing the right

thing right, the first time. costs;little emphasisis given to prevention.Relvork or recvcling costsmay be significant. Becausesalesand customer satisfactionare high, this conventional qualitv management style mav lull the companv into complacency.It is eventually overtaken bv world-class competitors who practiceTotalQualitv Management (TQM). Conventionalqualitv managementcanyield high qualit,v productsand servicesfrom the customer'spoint ofview Many I multinationalshave successfu grownand expandedusingthis

approach. The third and idealstaeeis "total the oualitv" staeebased on the principle of everybody "doing the right thing right the first time." Through extensive and continuous preventive ancl cluality improvement processesand programs, the companvachievesalmostzero defectsexternallvand internallv,using zeroincoming and outgoing inspection. Prevention leads to lorv internal failure. Low external failure is achievedeven with minimum inspection,which is madepossible bv low internal rejects. The resultsof TQM are happy repeatcustomen,high market share,and high profits due to low production costs(internal failure). The lorv-costTQM company can even profitably cut its price to incrcasemarket "Firefighting" share. and "Conventional" companies cannot afford to adopt this strategy. The maintenanceproced u r e o f J a p a nA i r L i n e s i s somewhat reflective of this preventi\,e qualitv approach, After a Jumbojet crashin 1985, JAL instituteda policv u'hich saysthat after overhauling or repairinâ&#x201A;Źia plane, its maintenance cre\{ sl.rallboard the plane with the passengers, whatever its destination.Sure, the plane still undergoes the standard and rigid tcsts and inspectionbefore take-off,but the maintenanceemplovees would norv focusmore on prevention or 'tloing it right the

1994/ TA\uARy1995. THF AsrANMANAGER DECF\,IBER

first time" r'hile theyarestill on theground,or else... Tofurther dramatizepersonalresponsibility,the namesof the maintenance crew are posted on the plane'sbulkheadfor passengers to seeuponboarding.ContrasttheJALcasewith qualityphilosoLufthansa's "Wr phy,asimplied in its ad: lnte people u:hocluckthepeople nho checkfhepeople u'hocheck yournircraff." Qualily slrateg._Y Companies normallystart at stageonein whichbothexternalandinternalfailuresare high. To preserveimageand keepcustomers, it is betterin theshortrun to goto stagetwo rightawavratherthaniumpto stagethree,which generally requiresmuch more time to implementthan stagetwo. This strategvmeansthat it is betterto spendon inspection and/or rework (internalfailure)thanto letdefectiveprodImuctsreachthe customers. ageandsaleslostdueto external failuremay be extremely hard to recoverespecially if customers switchto competi-

Low-cost TOMI aompaniescancut prieto increase market share; "Firefighting" and "Conventional" companiescannot

tors. But high cost due to increasedinspectionand intemal failuresto prer,entexternalfailures can aln'avs be recovered Iater.Stagetwo, however, is a short-term high-cost strategy, and companies should not stav in this comfort zone too long rvhere qualitv improvement does not really take place. Stage trvo merelv prevents detedoration of market sharethrough lots of rework, sorting, and 1007,inspection. When externalfailure is fin a l l y r e d u c e d ,s t a g e t h r e e should immediately follow to reduceinternal failure and inspection costsbv implementing preventive measures.As "An the saying goes, ounce of prevention is worth a pound of cure." In quality management, prevention is not just worth 16 times that of coffection; one electrical company discoveredthat $1 of prevention could prevent $100,000of external failure. Nerv companies should designsvstemsbasedon stage three or TQM right away,and avoid the costlvstagesoneand h{'o. Existing companieswho are at stageone can jump to stagethreeif they areconfident and fully committed to Total Q u a l i t y . T h i s a p p r o a c ha s sumesthat thev canhold on to their customerswhile preventive measuresare instituted double time. Finallv existing companiesat stagetwo should proceed to stage three immediatelv lest their competitors do so. Plan for qualitv As saving goes "lf you fail to plan, you plan to fail."

P,"l Rt,tu' I Da,iotlo is t1full titne p r o f . s s ( r rn l t l t ( A s i i l n I t l s l i l u l c o l M d n r { . ( D t t ' t t( A I M ) i t d t b l n l d e r a f tfu Sitnc Darhtl Chnir lor Manufac turttry.Lfu l.n(ht s opuaIiLrItstttdttagt' tlttll, fotdl q alitV tnnn,rgen.t,nL, qtnntittitil,c nnalvsis, serticc dtlitt trtt, ntld nm]igcntdlI i'tlot lalio

Busrlnss Rrvrnw EorrroavAsHorK. Nars

TheMekong Region

. TheIMFgrantedCambodia a $120M Ioanfor economic development. Thiswill be relea.edin $20Mtranches everysir m^nrh<

f^r thrap r/par<

Tlf,it[,ANIl . Investmentapplicationsin the six Prlorltles lor cooperation Cambodia(CDC)will serveasa one-stop months toJunemore than doubled to $11.1 idenlilied investment centerto evaluate projects and billion over the same period in 1993. Thecountries of theMekongsubregion processinvestmentapplicationsin less Favored investment areas were plastics or ContinentalSoutheast Asia-{ambothan45days.CDCwill alsoregistercomdia, Laos,Myanmar,Thailand,and Viet- panies,issuevisasandwork permits,ap- and paper,electronics,machinery,and in-

provecustoms dutiesandtaxexemptions, f r : c t n r . h , r p h r ^ i a . t ( r T h a i e r p o r t ' r h o w e ds u r p r i s i n g and provideclearance for factoryand plant use.Specialindustrialzonesin strengthin the first half,risingby 227oto PhnomPenhand SihanoulvilleoIler ad- $20.8B. Leadingexportswereplastics, metalproductsandelectronics. Including ditionalincentives. integratedcircuits,appliancesand computers,theelechonics sectoraccounted for 24%of totalexports. . Firsthalf importswere14%higher 1!SO lrol thantheyearbeforeat $25.4B,with capiCambodia 200 8.7 tal goodsleadingtheway.As a result,the Laos 230 4.3 tradedeficitdroppedto $4.6B,from $5.4 Myanmar 250 44.4 B lastyear. '1,905 58.7 Thailand . The Bankof Thailandreportedthe Vietnam 220 71.9 govemmentpostedabudgetsurplusof $2.6 s o u ( e B u s r n e el i sm e , 1 5n q a p o r e l B for the yearendedSeptember 30,well abovethe$1Bsurplustarget.A 177crisein . Crossdomesticproductfor 1994is taxcollections to $26.2Bhelpedachievethis. e\pected lo hit 7.5'..up from5.7i of the Thesurpluslastyearwas$2.8B. . Thailandaimsto boostits shareof previousyear . Japanapproveda $6M grantto pay the world exportmarketto 1.7%by the OA]ITBODIA for fertilizers,transportvehicles,pump- year 2000,up from 0.97cin 1994.This B in exportrevenues, sothe TheNationalAssemblyof Cambodia ing machines, agriculturalmachineryand means$104.3 passednew investmentlaws in a bid to tools,andhainingcourses for agricultural countrv must maintaina 15.57cannual capturemoreforeigninvestment: workers.To date,Japanhas provided growthratein exports. r TheMinishyof Finance . 9%corporateincometax,oneof the Cambodiawith $92M in aid. hasassigned . Malaysianfirmshaveinvestedmore the WorldBankto comeup with recomlowestin theregion . Taxholidaysof up to eightyears than$300Min Cambodia. Vostof thein- mendationsto pdvatizeseveralstateen. Five-yearlosscarriedforward Thereis strongresistance to the ve5tment5 arein banling.mining.logging. terprises. . Full importduty exemption move, so a public hearing will be held, education,publications,trading,power with pfime minister in r No withholdingtax on dividends the attendance. generation,and telecommu nications. o Freerepatriationof profits T r a d eb e t w e e nt h e t w o c o u n t r i e si m oNo nationalization andpriceconhols provedfrom$21.1Min 1992to $25.5Mlast VIDTNAM . No discrimination Vietnamsaysit expectsto borow up between foreign year. . to B annuallyfrom multilateralagen$1 andlocalinvestors Japanwill build a $2M centerrn . Landleasesof up to 70years. cies in thenextthreeyearsfor infrastrucPhnomPenhfor officesand residential ture projects and furthereconomicreThe Councilfor the Deyelopmentof units. nam-haveidentifiedsixpriorityareasfor closecooperationin effortsto push for higher Ievelsof growth. The areasare transport,energy,environment,human resourcedevelopment, tradeand investment,andtourism. To speedup resultsand maintainthe momentumof economic cooperation, the countriesagreedon approaches to project pdodtization,anddesign,espeselection, cially with respectto transport.A new MekongCommittee,to replacethe one dissolvedin December1992,is expected to beformedsoon. Afterygarsof inabilityto agree,a new pactwas forged.This sets water-sharing the stagefor investmentprotectslongon the backburner and pavesthe way for massivedevelopmentof the Mekong states.

1994/ IANUARY1995. THEAsrANMANAGER DECEMBER

forms. The World Bank extended a $150 M loan to Vietnam to be used mainly in upgrading its infrastructure.Thebank earlier approved$315M in creditsto Vietnam for education,transportationand agdcultural projects. Asian countriesremain the top investors in Vietnam. Taiwan has the top spot withcumulative investmentsof$1.8B.The U.S.has19projectsvaluedat $185M and is twelfth overall. ln the first nine months of 1994,Hong Kong gained the first slot with 39 approved proiectsworth 5441M, followed by Taiwanand Singapore.Japan was fifth, with only 18projectsworth $170 M. China has only 19 projectsin Vietnam worth a totalof $15.3M. . Distdbution of goods is a major hurdle foreign companiesfacein penetrating the Vietnamesemarket. There is no onestop local distributor which can move goods throughout the countr,v On the other hand, foreign distributorsare bannedfromoperating in Vetnam. Retailers,including top-classhotels,have to go to buy goods. directlyto wholesa)ers . Effective October, all foreign currency earned by companies in Vietnam must be depositedin authorizedbank accounts. The rule was introduced to support a governmentdecisionto rest ct the use of U.S.dollars in day-to-day transactionsand enforcethe u:e of thedong.Airlines, insurance,shipping, and telecommunications firms may continue to use dollars. . Vietnam has started to renew relationshipswith ex-communistcountriesof EasternEurope basedon increasedtrade and investments.Shipping,transport,construction, clothing and other light industry, food processing,and oil and gaswere identified as the most promising areas. LAOS . Laoshas introduceda new foreign investment lawr a flat 20% corporatetax, 1%duty on goodsassociatedwith production and varioustax holidays.Investments can be foreign-owned or joint ventures. The Laos government is trying to overcomebottlenecksin the investmentapplication process and targets a 90-day responsetime for applications. . As of end 1993,there were 421 licensedforeign investmentsin Laosworth $494M.The largestsourceoffunds is Thailand, with 167investmentsworth $198M.

The US is now the secondlargestinvestot with 14projectsworth $83M.

The Central Bank has been selling treasurybonds to the public sinceDecember 1993.SomeK79.2M worth of bonds had been'old by Augu\t this year MeanMYANMAN Myanmarplansto pdvatizeits state- while, more than 23 M units of foreign ex"Stateeconomic enter- changecertificate5(FECr)have been jsownedenterprises. for sued. Four p vate domestic banks have p ses,exceptthoseabsolutely essential govenmentcontrol,shouldbeprivatized beenallowed to conductforeignexchange gradually, stepbv step,whilethestatewill transactionsfor the first time. T h e C e n t r r l B a n kh a s b e e n i c s u i n g providefacilitiesforsmoothtransfer," said SeniorGeneralThanShwe,Chairmanof various typesof foreignexchangelicences the StateLaw and Order Restoration to the private sector It had issuedseven authorized dealer licences,three money Council(SLORC).

G o l d e0nu a d r a n g l e North-South/East-West Transpon Corridor

There are achievementsas well as weak points in the state-controlledenterprises,he added.As such,suitablechanges will have to be made after reviewing and reassessingfailures. In Myanmar's monetary sectot 13pdvate domestic banks have been granted licencesby the Central Bank of Myanmar Of these,11 have opened for businessso far. Meanwhile, 13 foreign banks have gained licencesto open representativeofficesin Myanmar

1994/ IANUARY 1995 THEAsrANMANACER. DECEMBER

changerlicences,396acceptorand holder licences,and 66 FEC changerlicencesby August 22,1994. To promotetou sm, a requirementfor visitors to declareforeign exchangeholdings on arrival in Yangonhas been dropped, provided they bring in lessthan

us$2,000. rnrl Editaraf Br6i,rdss Rc' ,4s/r0l(. Nnl/ris Cririrrrirn d Mlrd mnt Btsincss.Thisnrticle !EL!pl!!lt!!tL\!!r pfulicatio\. itnse\cerpted fnm th/'se

BvPnoresson PuneaReo

Benchmarking QAApplication: forTotalQuality The coneepl CM meansclearly manifested,M Many of today'sprogressive compa- manifested,BM barelymanifested,NM nies,in their questfor achievingWorld not manifested, and NA for not applicaClassstandardsof qualityand customer ble.The:edefinitions areof routineusein satisfaction, continuouslytry to maintain manysurveysconducted by lhilippine exemplaryIevelson variousperformance Quality and ProductivityMovement indicators. Theseindicators sometimes are (PQPM). i n t e r n a l l w v i t h i n t h e evolved organizaThe responses could be ratedas foltion.Sometimes theyarealsoconceptual- Iows:5 for CM, 4 for M, 3 for BM, 2 for izedby externalconsultants who look at NM and1 for NA. the companyin relationto othersin the The completedquestionnaire would industry.Whicheverare the methodsby help generatea perceptionratingmatrix whichtheseindicatorsaregenerated, the asshownbelow; factis theyexistandthroughthemwe are ableto evaluateand monitorQualitycom- PerceptionRatingMatrix mitmentsin companies. Theseperform- frespondent No 0uestion 1 anceindicatorscanbe generated statisti5(CM) cally,basedon perceptionratingsof re4(CrVr) who participatein directedrespondents 2(N[,4) searchor focusgroups. Havinggenerated theabovematdxwe The approach would nert determinewhichquestions Tostadwith, let us first look at some werehighly correlatedto eachother In of the typicalquestionswe may include effectwewouldliketo evolvea fewbroad in our survey/questionnaire. categodes, out of all our questions sothat Sample Ouestions Workprocess flowsandrequirements havebeen analyzed foreffectiveness andefficiency. gathered 2 Decisi0ns afebased 0f actuadata/facts 'dther thdnL0nvent 0ndw sdo-1.d1k0rimprpssi0'rs canidentfywhere theycontribute to the 3 Employees achievement ofquaityplans, government 4 The0rganizati0n observes regulations 0r guidelines thatpr0tect c0nsumers.

C M 5

M 4

M 3

M 2

A 1

eachcategorywill comprisea few similar highly correlatedquestionswithin it and lhe questionslhus includedwithin a category would be homogenous.Thus there rvill be minimum variation within each category and maximum variation in between them. Categoriesof questionsthus generated would be called Orthogonal "facton" Factors,or simply for short.The statisticalprocessto be used hereis called the Factor Analysis approach under the broad umbrella of Multivadate Statistical Techniques. The factorswhich emergein this processhave now to be sh.rdiedin detail and the inherent logic or communality \a'ithin each factor be brought out and emphasized. For instance,one factor may compdse questionson perceptionson internal improvement standards,and thereby we could label it asInternal Kaizen.Similarly anotherfactormay comeout comprising questionson issuesofEmpowerment,and so on. The diagram visually demonstrates how factors consolidatesetsof questions and bring out the inherent commonality in them. Implemenlallon In an actual survey we had 95 questions ranging from company commitmenl\ on customerlocus,processorientation,employeeparticipation,leadership, strategicquality planning, etc.Upon completion of the survey we generatedthe perception rating matdx as mentioned above.

DECEMBER 1994 / TANUARY 1995 . THEAsrAN MANAGER

Factor3 p,

\o"

)

raaort

oiffjil"r{-\ o,' /

\ \

the essence of eachfactorthus obtained. Thecompletelistandthenamesaregiven below.

ClusterRank Ave. Co's Score &.

25,34,57,15 veryhighscores on allcategories 51,58,4,3

\'hq1d(d*r

o:o,/

Factol 1 2 3 4

-)/

GivenName Empowerment ExgternalBenchma ing Customer-driven Kaizen Prccess lmprovement or Intemal Kairen lS0standards llmeconsciousness 0wnership andCommitmment Individual Recognition

Theseeightfactorswerenow usedas the performance indicatorson which to measurethe companies'commitmentto quaIry For this,theratingsof eachcomTo-space The organizational pany on these8-performance indicators were obtained.Thesewere the factor scoresfor eachcompany. Toseehow their scoreswereobtained,rememberthat each companyhad its rating on differentquestions.Factor1,say,whichis a linearcombination(with knownweightsestimated by PrincipalComponent Analysis)ofa set Wethen generatedorthogonalfactors of questions, couldtherefore beeasilyob1,2...8, using the PrincipalComponent tained. module of the SPSS-software. Thuswe couldreallyseefor anycomPrincipalComponentAnalysisis a pany which perforrnanceindicatorswere methodfor generatingfactors,which are highly achievedand which are the ones In weightedaverages of setsof questions. which neededimprovement.Wefeel this our researchtheFactor1wasalinearcominformationcan form a vital part in the binationof the questions suchas given assessment of thecompanies'performance below in therealmof TQM andcanreally form a Factor1 comprisedquestions suchas: tool of competitiveedgein relation to all the othercompaniesin the industry Fac{or1 CompanyA is ratedhigh in empowgivento teamsandindividuals Thereis recognition who job-related problems successfu llysofue ermentand low in ExtemalBench-markCl\4 l\4 Blil NM NA ing, whereasCompanyB is ratedlow in for actionplansarecommunicated to facilitate bothof thesefactors. Reasons implementation Theratingsobtainedon our eightfacCiil M Bl\4 NLl NA tors alsohelpedgroup all our 72 compa-

Remarks

3.92 46,37... highincategory 4 ,5 ,1 , 6 , 8 modefate tntest

r0 3

moderately highin 3.64 60,62,55,64 allcategoies 6,65,1 inall 3.46 44,48,69...moderate categories

3.34 66

highincategory4 in others noderate

Factor2

Sincethesequestionsbring out the empowermentaspectof Total Quality lvlanagement we namedour Factor1 as Empowerment. Factor2 comprisedquestionssuchas:

External Benchmarklng

Factor 2 of goodcustomer serviceareunderstood by Standards everyemployee CIT IJ BM NI\4 NA compared to thoseol Information onhowourproducts, areobtained competitorc, CI\4 M BIV NM NA

Thuswe namedour Factor2 External Benchmarking. In thismannerwe wereableto derive 1994 / TANUARY 1995 THEAsrAN MANAGER. DECEMBER

niesinto ten clusters.Companieswithin i.e.have eachclusterwerehomogenous, similarthingson theeightfactorsandthe in differentclusterswerehetcompanies erogeneous in the sense,had dissimilar ratingson the eight factors.Finally,for eachof theseclusters(Tableabove)we obtainedthe meanratingson all eightfactorsand wasthus ableto assignranking to them. A flnal word I wouldlike to shareoneword of caution.Havingdonethebenchmarking and rankingof the companieswe wantedto communicate theresultsto our participating organizations. However,on out atraked temptwe foundthatthecompanies low weregettingdiscouraged andlosing momentum.On the other hand the comapnies rankedhigh weregettingtoo Thuswe agreedthat in the complacent. spiritof Kaizenwewouldonlyemphasize theneedfor improvementfor thecompanies which had low ranked.Again for thosethathad donewell, we would urge themto improveevenfurtheranddo not let complacencyslow themdown. Researchbackground Thisresearch is basedon the IAP-94projectconducted in cooperationwith by l\4Blr4, t h e P h i l i p p i nO e u a l i t ya n d P r o d u c t i v i t yM o v e m e n t . from About300respondents 72 MetroManilacompanies answered a 95'question sur

tfu aru| Prof.PurbaRnoleaches of Qua titatire MhaSenenllot MBM andEDP,ondMarketing Research fot MDM.

e d o n ' t m a n a g e the healthof the population. understandthe policieswell, The book is repletewith businesses in de- And it is perhapsin political k n o w t h e i m p l e m e n t i n g matrices,tablesand diagrams velopingcountries stability(or lackof it) andthe mechanisms intimately,and thatareusefulin helpingreadthe way we man- impactof culturalvaluesand even rvork proactivelywith ercconceptualize therelationagebusinesses in perceptions that majordiffer- govemment towardsmutually shipsof key factorsfor analyindustrializedcountrieswith encesabound,like definitions desirableendsandmeans. sis. And Austin provides stablepoliticaleconomies. The of wealth,theuseof timeand Austindoesnotshirkfrom readerfriendlv readingson reasons for thedifferences are spaceandwhat constituteap- t a l k i n g a b o u t c o r r u p t i o n , suchesoterictopicsas "effeci n t e r r e l a t e dJ.a m e sA u s t i n propriaterelationships among thoughhe doesnot talkabout tive (tadff) protectionrates" showswhy. He tellshow,us- people. it in depthnor strongly.He ac- and socio-economic cost-bening examplesexperienced Austinalsogetsreadersto ceptscorruptionasa forceone efit analysis. from-his and others-and realizejusthow criticallyhost hasto leamto contendwith as from the extensiveresearch g o v e r n m e n td e v e l o p m e n t ethicallyasonecan. lVhat the fulure holds done by Harvard Business In the final chapterof the fthool staff on businesses opbookAustinlaysout hisprog:. eratingin developingcountries. nosisaboutchangesthat are Prof. Austin builds upon likely to happenin many of andgoesbeyondtheimmedit h e s ec o u n t r i e sH. e m a k e s atebusiness environmentand somerecommendation on how industrydynamicsidentified corporations couldcopewith by thepopularMichaelPorter thesechanges andprofit. G. Lonaz ,.f' model,hisnotablecolleague at Austinbelieves politicalinH a r v a r d . T h i s g i v e sm o s t stability will be a reality for readersfamiliarity with the sometime to come.As this './ PorterModela very comfortbookwaswrittenbefore1990, ablepoint of reference. Aushe anticipatedthe increasing MANAGIN(] !N tin's model focusesreaders' use of "leapfrog"strategies DEVELOI'ING attentiononthelargerbusiness COUNTRIES very well. He alsothinksthe environment,lookingat four developingcountrieswill inmajorenvironmental forces creasinglyrely on advanced andseverallevelsof analysis, technologies as a meansof andatthreegeopolitical levels. gainingexportcompetitiveThe four environmental ness. factorsare:thecountries'ecoHe pointsto theincreasing nomics,their demographics, urbanization and consumertheirculturalmilieuand their ismof developingcountrysopoliticalcharacteristics. While strategies,choice of instruBusinessglobalizationis a cietiesandtheirimplications of theindividualcomponents for ments and interventions imgiven for Awtin and so he also developingcountriesas protheseforcesarethesameforall pactupon businessoperations. presentshis rcaden with a frame- ducersandmarkets. countries,Austin showshow He shows how developing work for looking at businessdyAustin'sstyleof presentadifferences in thequalityof the country governments use namicsat sedot counq', .egonal tion is easybut thorough.His components createdifferences monetary and fiscal policies, ard intemational levels. toneis dispassionate but conin the way companies should incomes and hade policies, forHe is cerned. optimisticthat do business. eign investment rules and Dasl and West manydeveloping countries are regulationsand sectoralplans The book is quite strong on well on their way towards Where rnajor to influence the environment the issuesof cros cultural man- fasterdevelopment. His book dlfferences abound towards the hostcountry's deagement.Austin presentsa showshowTNCs-and locals, For example,under eco- sired ends. number of useful chartson how too-can benefitwith a new nomicsone finds labor force He thinks that within these I l\L mana8ersrom wnat we morecomprehensive planning andskillsavailabilities. While sometimesconstraining pa- looselycall "the Wesfl'can effec- framework. certain skills availabilities rameters,a company that opts tively managewith local values maybetakenfor grantedin to work creativelywithin them with an openmind, a feelfor culProf. MaflL) Antanij C. Laliez is lhe advanced economies, theycan- can do admirably well. Which hral parametersand valuediffer- Ptliltn s ShellCorpornlx)t1Plofessoraf not be in developingecono- businessgets what licenses, ences,and ar eye for behavioral P blic Adttinisl/ntion and Assistatlt D&t for tht Extctltir,( De'telopmtnl Ptu)m i e s . I n t h e a r e a o f permits, quotas and tariff ex- imperatives.He shows how difdemographics, therearehuge e m p t i o n s f i r s t , o r a t a l l , ferentmindsetsmight affectmar- gnm. His rurrent itlttrcststlre n? ngr flal det'eljli,1ot , del,elopment mdnay differencesin agestructures, developesa good edge.What keting,finance,operationsand tnt t, cross-ctlt nl ntngefiotl nntl degreesof urbanizationand is required is for a company to organizationalset-ups. praiecttieu.loltntnt nnLlnnmgcnent.

BooriRnvrnw

Managing in lleveloping Countries

DECEMBER 1994/ IANUARY1995. THE ASIANMANACER

MAGFHGSIE"t Gonr.ERENSE

TH WHERETO COMPETE, AND HOWTO MANAGE WHATTO EXPECT, GC O N O M I EOSFA S I A I N A S E A NA N DT H EE M E R G I NE

A COTFENEflCEYOU CAfl'f AFFOND fO M'Ss.! Conference TheAsianInstituteof Management's on Asia (AMCA)bringstogetherthe CEOSfrom andAsianacademicians Asia'sleadingcompanies fromtheWest andacademicians with businessmen as well as with otherexecutivesand government policymakersfrom the regionto discussand explorethe opportunities andchallenges of managing in SoutheastAsia,andto set directionsfor the future. How to managein the ASEAN-10region,an emergingsingleand free marketareacovering Erunei,Cambodia,lndonetia. Laos,Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. prescrlptions can on what managers Alternative compete and howthey can expect,wheretheycan in a new ASEAN environment. managebetter Industryworkshopswhere seniorexecutives aroundthe region who havebeendoingbusiness and anddiscussproblems sharetheirexperiences opportunities. A choiceof attendingone of two specialcountry briefingson Vietnamand Myanmar.

Arnong the Gonference Speakerr are: "l\4anaging professor in andauthorof Dr.JamesE.Austin,Harvard 0eveloping Countries" Industries Ltd.(lndial* AditvaBirla,Chairman, Grasim Advisers(USA) PeterBorre,President, GasVentures (HongKong) BrookeHillierParker C.Nicholas Brooke, SeniorPartner, President, Chemoil Corporation Robert V.Chandran, {USA) andl\4anaging Director, Jardinel\4atheson BoonYoonChiang, Chairman {Singapore} Development LR.Ciputra, President andDi.ectotPTCiputra {lndonesia}* Finance Corporation Antonio David, International {Philippinesl Fesharaki, DirectoL Program on Resources: Dr.Fereidu; East-west Center Energy andMinerals, MarkFuller, CEo,MonitorCompany {USA} Lucky-Goldstar P.H.Khoo,Chariman, {Korea}' [ippoGroup{lndonesial* JamesRiady, Deputy Chairman, Nestl6(Philippinesl* President JuanB.Santos, (Philippines)* AndresSoriano lll, CE0,SanMiguelCorporation (Philippines) SGVGroupof Companies Washington SyCip, Chairman, TheAsianWallStreetJo!rnaliHonqKong) BarryWain,Editor-at-Large,

NAKE YOUB RESENUA''OIIS TOW' Y... Dlease send me fufther details about the ASEAN-?0 Conference Name Company

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HotelManila Venue: Shangri-La Date:March8-9,1$5

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