The Asian Manager, January 1993 Issue by Sherbet Manalili

er S U B S CB q E FS C O P Y

A5ailr LE BYDEFAUH

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\Z PLDT Compny fhe lelecommunications

Th. Ad& llanllFr - A Publietion ol lh€ AsianInstituie ot Manaoemenlsnd the Fed€€lion ot lh€ AsianInstilute ol Mansge;enl AlumniAssociations.

Publlshor Felipe8. Alfonso EdltoFl|tchlst Hamlin l,4ichaelA.

4 Grcwinga SeffOirectedWoillorce By Richard S. Wellins,Phd.andVicN4agdaraog Internauonal Dimensions Development

M.naglng Edltoi lbarraC. Gutierrez

g TheWolkgloup in the Workplace

tudstai* Managlng Edltor Kin Gatbonton

A$oclat€ Edho6 salome Flores-Aldaba FedericoS. Esguerra AletaA. Tabalba BelindaSingson

u Managelsand Leaders Zaleznik ByAbraham HawardBusness School

of Quality:TwoEssays 47 ThePhilippines z3 TheEssence A. [4orat6 ByEduardo in theYear2020 of Development GastonZ. ortgas Professor of Management AslanInsUtute Nlanagement,

lnitiative Regaining zs lhai Alruays: Hamlin ByMichaelA. Editor'in€hief

Edltorlal Board GabinoA. l\4endoza HoracioM. Borromeo,Jr. SonnyB. Coloma

3s HongKongintheYear2020

A$goclato Publlgho. & Adwttblng Dlrector - lntematlonal TrevorA. Roberts

/K HongKong'sBest:Performance UnderPlessule

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A$oclate Publbhoi & Adv.rtlslng Dh€ctor - Phlllpplneg DeliaC. Gutienez Aesoclats PuHlthGr & cltculatlon Dlrectot Monettelturralde-Lim Dhsotor for Opgratlons PinkyL Gallegos

BYDEFAUT

R. Silos ByLeonardo of PLDTProfessor BusinessIManagement

Doslgr Dlroctor AlexanderBowie

Cortdbutlng Edltor3 MilonBikashPaul,Ml\4 Bansladesh: '88.-HongKong:StephenTangWingOn, Khorakiwala, l\4BM'76.India:.Juzar IMBM'75. Indonesia:Leonardo '78; ChristinaF. Tanubrata,MBM '82. Ferreros,Al\41\4P Korea;HongSoo '79. Tan Sri Dat6 lr. l\4alaysia: Lee, Ml, Hashjm,MIM'76 TalhaHj. l\4ohd. Pakistan:lshtiaqAhmadQureshi,BMP '73. '77. Philippines: JesliLapus,MBM'82 Singapore:GanCheongEng,l\4BM Taiwan:HsiehLai Fa,TMP'82. '81, Thailand:SomnukJetjiravat,8MP

TEADINO

By barraC. Gutierrez N4anaging Edtor

ByKinGatbonton Editor Assstant[4anaging

BylbaflaC. Gutierrcz

49 ThePhilipplnes

BestRun Companies ByKinGatbonton

53 Suwimol

Xaewkoon TakesCortrol ByJose A iwaas VicePresdent,AllV Research Scientiflc Foundation

3 Fromthe Editor 58 lT Works

57 Moneylvlanagement 59 A BetterWay

tt3 AsA l\4atter of Fax:Results 55 BookReview

Notes 60 Travel

Cover photo: o Larry Ke6nan Tho lmago gank (HK) qffi cet Int.mstional R.pr.l.nttw. Hong Ko.g: PamslaChoy, PacilicAsia M6dla, l&4, 361-363 LockhartBoad, wanchai, Hong Kong. I€1. 834 6128, Fat. (85-2)834 5980. Sing.po6: Teddy Tan, PAM Modia S€Pic€s Pte Lrd.,83A EastCoastnoad. Tay Bua. Glah Shopplng C€ntr€,Singapore1542. Tsl.348 4495, Fd 165)440 8760. IndL slb-Contlnentr Msdia Soulh Asia lq nd., Apadment 14, AbhiAnil Awas, KantiPath_Jamsl, Krthmandu,N€pal.T6l.221 576,T.lex 2606MEDFEP NP, Fax (977-1)227336. Kore.: Y.K. Chun, Firsl Media S€wices Corporation, CPO Box 7919, S€oul, Koroa. Tel. 738 3591/3592, Tsl€x FMSCORPK 29137,Far (02)738 7s70. Jap.n: Tokuji Niinuma,Co-Bidgo Jspan Co., Ltd-, . sakuragaokavindid 8ldg, 5F, 15-8, sakoragaokatho. Shlboya-k!,Tokyo150,Japan.Tel.(03)54580971,Fax (03)54580972

l\4anagement in HumanResource Excellence 51 Recognizing

bh or other lansuag€spfoh bil€d The.asia. 6iiTnohr r s93 by Tr€ As,anLta.aqe' A nghis re*ryed B€producron rn any man.q in whol€of pan m Eng le O{ c' ds c' nsFJr€or vanage-e't EJs6' o I do€z Ma,;a; ,s -J.i."" oLbr;.€d D, -o1F'y b; tt As a. .sr'ur€ or varaseF d t Ed'6' ar ard Adte4's pr"DDr:es -€l brz 6_40t Fa '632 3 79240 pFotos'aphs r".".:"1." a McM ch,;a ca-oLs.'2J ease d€ Ro'; M€|'l!. vero Vsnla rhe as'an Manaser M rA {P) 245€le1 KDN PP(s) 5/3/e2 i;;iio ov i'i'i" ii ^* prJ ua . s.s"p.. :;;;;;; ,;;;i; i;;

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Mlchael A. Hamlln

Getting outof theway,and...

Management _L_etting Happell "Nowgroupslead andmanagers follow.Or,isitthat managersleadby

allowinggroupsof workerstomanage themselves."

okyo to find a \ing more inconvenient airport than Narita to fly into is tough. Returning Japanese citizens are greeted by a row of immigration agents that rush them through formalities in what seemslike seconds.Greetingseveral hundred non-Japaneseirriving on several wide-body airaaft are three immigration inspecto$. Custons is a whiz. A brief oral declarationand out you go. Once outside, those who cannot afford US$150for a taxi buy tickets for the Limowine Bus service to the City Terminal for about US$20. Orce inside the bus, passengersarc advised to sit at an angle, sincesitting forward - if you are over 5'6" - will result in severely bruised knees. Seventy minutes later - mo6t of theFurney seerns to be obscwed by sourd barriers rcsultingin sensorydisorientation - the passengerarrives at the City Terminal, actua.tlythe third floor ofthe terminal. Afterrchieving your luggageon the fint floor, the weary passengerwheels his baggage cart out the door to a waiting line of taxis for his last lrurney by public conveyanceof the day. Inaeine what it would be like if qualiw and sen ice weren't the waichwords of the nation. Although haveling to Japanis not a '?ass€ngerfriendly' experimce, its private sectorhas set the oualitv a;d servicestandardsthat fiave driven world poduction for over a decade.Japanesemanu{acturers have had to exDeruvmanage limited resouices-while inspiring a nation to prcduce the world's best elecironics,cars and appliances. And they have inspired enterprises around the world to match - and in only rare cases- exceedthosestandads. But Japanis still an inconvenient Dlace to visit. and an even more inconvenient one to live in.

'1993 THEASIANI\4AMGER JANUARY/FEBRUARY

Another friend tells me that one question that guarantees lively debateis, ''vv}lat is the differmce betr,veenmanaging and leading?" You will seefrom the three articles which make up our cover series that this argument is as lively as ever. Now groups lead and managersfollow. Or, is it that managers lead by allowing groups of workers to manage themselves-by getting out of the way? laonardo R. Silos sa)s that depends on management, and whether groups form as selfdefense medunisms or productivity units, as a result of organizational values and work ahnospherc. Hqalding theadventof theglG bally flat oryanization,Ridurd S. i,^y'ellins and \4c Magdaraogass€rt that organizations must become bottoft up-rath€r thantof down - oryanic sbuctur€s. When this happeu, "managerswill takeon a whole new setof resporsibilitie." But do tlrcy still l€ad? We conclude this episode of this long-lasting, classic debate with a classic contributionl Abraham Zaleznik discussesrational management, mystical leadership and great people "wortly of the drama and power of politics." For those of you leaning towards rnystical leadership, you will want to quickly turn to Eduardo Morato's two essa,.son production ddvenwodd the art and cultue of quality management: Leaders "lefl' quality fot ovela decade." happe.. Lestwe be acosed of "forcing a particular view," JosieAliwalas reports on one of the new Asian Managers,SuwirnolKaekwoon,a former rcommate and presendy prcsidentof the RobinsonDepartment Stor€s in Bangkok. Khun Suwimol appea$ to leadby innovatio4 initiative and sheerdeterminahon. Not too long ago, a friend rclated his experiencein a corpolate haining sessionon leadenhip arld management. Students werc divided into groups and given slips of paper describing a company and someof the problemsit faced. later, when the dass reconstihrted itseff, shrdents were asked to describethe kind of leaderthey envisionedfor the comnanv. One group described ari hirnest, hardworking manager who set the exarnple. Another felt that a charismaticleader who could inspire his organization was b€st. Yet others felt that the leader should be someonewho6econtri' butions to his field had been widely acknowledged. It was obvious that eachgrcup had its own distinct ideasof what leadership should be. And for good reason. Although each goup had been given a similar slip of paper describing a company, eachslip describeda differmt organization. For the dass, a fast food dlairr an automobile manufacturer, and a research laboratorv all requircd different tvpes of leaders.

"Japan's pdvate sectolhassetthe qualltyandseruice standardsthat have

Enhancing Employee Involvement

GrowinsaSe

7 I

ByRichardS.Wellins,Ph.D.,&Vlc Magdaraog powered work culture is the world-wide trend Development Dimensions International toward the use of seffdirected teams (SDTS). SDTs are small groups of employees which rganizationsaroundthe world faceun- have dayto-day responsibilityfor managing | | precedentedchallenges.Fiercecompeti- thernselvesand thet work. Members of SDTs I I tion, globalization, deregulation, typically handle job assignments,plan and 17 technologicalchangeand shorter prod- schedule work, make production-related deuct lile ryclesarccreatingnew opportunities cisionsand take action on problem' SDTsreand economicdisasters.Survivors must focus quile minimal direct superuisioryand differ in on total qualiry speedto market and cost con- designfrom quality circlesand cross-functional tainment - together - nther than merely task groups becauseSDTsare formal, permaaddressingjust one or two of these three key nent organizational structures. areas.And if outsidepressureisn'tenough,the Unlike traditional organizationalstruchlres, valuesand attitudes of SoutheastAsia's workSDTs operate with fewer layers of manage. force has also changed. It is, like workforces ment, require team membersto leam multiple around the world, demanding greater partici- iobs,/task and allocatemanv task to the team pation, flexibility and autonomy; employees that oncewere reservedfor supervisors/manwant opporhrnities to work with their headsas agers (e.g., hiring, firing, appraisal scheduling). SDTsarespreadingrapidly

just beginning to take hold in SoutheastAsia. In a re{ent survey we conducted with 300 organizations in four different countries (Singapore,HongKong, Malaysia and the Philippines), empowermentwasmentionedas one of the key strategies organizationswill need to employ to remain competitive. At Du Pont's Lycra plant in Singapore, team membersnot only takecareof their daily job responsibilities, but assume "The firct a-cross^N-orth America andEu- managementtaskssuch step in setting up a tealp as disciplineand leave scheduling. A new Motorola semiconductor plant in the PhiliptheAssociaiion for pineshasestablishedits a team member's pelbrmance xgaz_ineand first self-supeIvising team,and achievedamUS companiesare implement- bitious benchmarked ing SDTssomewhercin their or- goalsin their first yearof well astheir hands. ganizations. Manufacturing companies using opention. Other organizationsin Asia-Pacific Those organizations that have positioned SDIs includeComing ToyotaAutomotive,Texas using, or beginning to use, SDTSinclude themselvesfor successin the comins decade lnstruments, Dgltal Equipment Corporation, HewlettPackard(Austnlia),AdvancedMicrc arethosethat haveleamed to foc'uson empow- Pmcter& Gambleand Colsate-Palmolive.Serv- Devices(Malaysia),Pan-MalaysianCement ering their workforces. BusinessleadeE have icecompanjesarepining therarks aswell indud- (Malaysia)and WestinHotels (Singapore). come to realize (albeit slowly) that imprcved ing organizatiomsuch as: Aid Assrxiation for Institutinga cr. turcthatpla(esapremium on quality and s€rvicewon't solely comefrom the Lutheraru (AAL), Milwaukee Insurarce ard empowermentis no smallfeat.Bhblishing SDfs minds of a few "superleaders," but will be the AMEX.Theresr.rlts havebeenimpressive:Partici- requires major organizationaland cultural product of a culture that fosterscontinuous pating organizationshave retainedor reduced changes to avoid a "managemenFdirected" improvement - small and incremental labor costswhile impraving productivity and nightmare.And becauseSDTSrequireextensive changesmadeby everyworker,everyday. servic€bv 50Dercentor more. emploveeinvolvementand trust,failedimpleOnesuccessful strategyfor creatingan emTheconceptofempowermentand teamsb mentationshave the potentialto set back an

;'fi,iTff'ilT""'U'J*i'H odented setection sptemisio identlfythetargetsagpinstwhich [:fri"##'ffif,"i,]*l?'ft:l

wltbeassessed."

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THEASIANMANAGER

ning a priority. In moving toward self-direction] the organizationand its employeesneed to considerquestionssuch as: . Where do we start? . What trainins do we need? . How will SDTsaffect our work and our jobs? . What role will supPort dePartments Dlav? -What . responsibilitieswill be transferred from leadersto the team? "gettin8 We proposea six-step Processfor started:" 1. Leam about SDTS.lf PeoPlein your organization are familiar with the concept, the odds of successincrease.Resourcesaboutwork teams are abundant in the form of dozens of articlesand book. In addition, severalcompaniessponsorconferencesabout the teamsconcept. AIld, perhapsmost valuable,ar€visits to team-basedorganizations. 2, Conduct a "teadin*s Gsessme[t" to detemine if teams are aight iol your cultule. E\istinginstrumentsand interview8uidescan formsof helDvou decideif teamsoraltemative empowermentstrategresarebound for success or doomedto failuretn your organization 3. Communicate to your emdoye6 tlre olganization's vision and valu€s rclative to organization'semployeeinvolvementeffort for ompowemett andte€ms. Managementmust have a clear picture of where the comPany vears. ' Thereare .'everalmajorareasan organiza- should go and how theconcePtof selfdircction tion must examine in order to make self-di- ties in with the eisting mission and cultural rectedteamswork desiSningteamsforsuccess, values. 4, Takeyouorganizationthrough a plocess .electing team players,training for success, as "wod(dace 1ed6ign." This Process, known rewarding rnihatingleader;hiPtransitionsand "s(riotechnrcaldestgn," require' alsolnown as team performance. anorsanizationtotakeahardlookat thenature of thework (e.g.,work flow,iobdesign,layout) Teamsbr Success Designing tm1mn8, and social systems(comPensation, team The most important stepin successful implementationis a simpie one: make plan- hierarchy,appraisal)and blend them in a man-

1993 JANUARY/FEBBUARY

ner that maximizes organizational productivity and employeesatisfaction.WorkPlaceredesien normallv includes the formation of a co"mmiueethat takesthe organization through the desrgnprocess. It is imPortantthat this workersand committeeincludemanagers,line support staff,asall threegroups havea stakein the successof team imPlementahon 5. lmdsmert. The achral implementation should include the positive feahrresfound in any >oundchangeprocesslopencommunication, leadershipsupport and traininS. 6. Continuallyevaluate the ptogress of SDTS.Becausemost organizahonsconvert on eithera trial basisor int'greenfield"(start-up) locations,constantevaluation is critical Team canalwavsbenefitfrcm (itiimDlementations cafand continual adlustmentand improve ment,

SelectingTeamPlayers

Many organizationsmovin8 to self-dir€cted teams realize thev must seled a worKorce equipped with the comFtencies skills and v;luea reouiredfor succ$.fu1performancein Any Soodsehigh{nvolvemenlorganizahons. lec'tionsystem,includingthoseSearedto\^ard choosinsteam membersand team leaders,has three major objectives.The selection system shouldbe: . Accunte in identilving the candidates most likelv to succeedin the new organization . Perceivedas fair in that candidatesfeel thevaretreatedin a iustmannerand that their potential for performing the tob has been assessedaccuratelv . Efficient. For many new oPerations,DDI more hasdesisnedsvstemsthathaveassessed - noeaqvtack thanq0dll peoplefor L000jobb considerin[thelogisticalProblemsinherentin while mainpMessingthatmanvapplicants,

taining accuracystandards,legal defensibility members (including giving and perceivedfaimess. and receiving feedback,hanThe fust stepin settin8 up a team-oriented dling conflicl, valuing diverselectionsystemis to identify the tarSetssity, working in teams and "dimensions" "iob Odentatlon andA#lcatlon called or competencies" tnining and coachind. QualScrcen againstwhich a team member's or team leadity / Action Skillsinvolve idenTgsthE er's performancewill beassessed.Often this is ti$ing problems and making r Cognitive AbilityTest accomplished through a process known as improvements. Theseinclude "job analysis." analysis t JobFitlnventory a list of statistical process control, Job Benerates r TechnicalTests behaviors,technicalknowledge, skills and training in various types of motivationalareasthatdifferentiatesuccessful quality tools, techniques for &€egementCentetExercbes from unsuccessfulperformers. In more than continuous imprcvement and r Teamwork 100job analysesconductedfor team-oriented troubleshooting. ! ProblemSolving organizationsaround the world, ty?ical team Additional training often is r Production member dimensions identified included required for those in leaderTeamwork, Problem ldentification and ProbScrcen ship positions and might inlem Solving,Ability to Leam,Communicaclude topics such as coaching lntsrvlerg tion, Initiative, Work Standards, Coaching/ for success,reinlorcing effecScrcen Training,Job Motivation,TechnicalAbilityand tive performance, encouragHealthAssessment Work Tempo(the ability to work at a rclatively ing and supporting initiatives Scrcen fast and constant speed). Team leader jobs and team leadership.SuccessJobofier usuallvconsists of additionaldimension:infu I self-directedorganizations cluding Individual Leadership,Group Leadcommonly spendup to 20%of ership, Judgment, Delegation and a team member or a leade/s Encouragingand Supportin8Initiative. like in a new facilitv,and what theexDectations time in thesevarious training activitiesduring One the dimensionshave beenidentified, will be for thosewho come to workln a team- the fust vear of oDeration. a selectionsystem can be designed. Figure 1 orientedenvironment.The realistickrbpm,iew Here aresometips regardingthe haining of shows a Wpical team member svstem. How- servesas a meclunism for discouragingappli- teams.First,asmentionedabove,don't underever,it is iometimes difficult to s€lectp6rticu- cantswho feelthisis "not theplacefor them,"and estimate the amount of time and effolt Ie. lar instruments and assessmenttools that icr en':ouragingapplicantswho seethis as an quired to teach new skills during the accurately reflect the dimensions to be as- excitingnew wo <plac€opportuniry conveGion to SDTS. Second,the training of sessed.The best selection systemsinclude a A ftnal note regardingselection:lfs impor- both managementand stafflsupport departcombinahonof techniques suchasinterviews, tant when implementing a selectionsystemof ment personnelis critical to the successof selfpaper and pencil cognitive ability tests,tech- this sort to rrake sure that people involved in directed teams. Engineers,accountants and nical tests,rcferencecheck, simulatioru and the selettion processare trained to use these training professionalsshould beaswell versed "realisticiob previews." Theselast two assess- variedandhigh-powered 5€lection techniques. and skilled in team and interpeNonal skills as ment toois are particularly interesting. Without suchhainin& the whole selectionsys- the team membersthemselves. tem can be rendered worthless. Third, training works bestwhen provided Shrdieshaveshown that investine in over time rather that in one lumo sum. Some selectionup front eventuallypaysoff organizationsofferedall thet training in fourin terms of increasedproductivitv to six-week "training colleges"which proved and reducedtumover/ ibsenteeism. difficult for all, but especiallyfor the production worker acostomed to rcaming the floor Training br Success rather than sitting in class. In an articleojr teamsin the sirFinally, involve the teams themselves in gapoteStnits Times(27 Augost 192) , selecting developing and delivering the trarnthoseorganizationsmoving toward in8. Make it team-center€d,not management teams all shessed the need to be centeredSimulations provide a unique and higNy proactiveabout training in order to accomme accunte method of measuring job potential. date the new demandsof multi-skillineand Initiatingleade|ship Transltions Candidates encounter a series of stmctured 5elf-management. In our own experiince, At the heartof theconceptofSDTsis the fad activities that closelyresemblethe procedures nothine rems to be underestimatedas much that many of the responsibilities previously required on the job. For example, one large as the need for new types of training in team- reserved.for supervisors and managers arc automobile manufacturer reouiE'd a team of based organizations. gDTs encourage mulh- now in the hands of the team. As a result, people to work togetherassemblingparts ac- skilling and job rotation (which meansa hear,y supervisors and managers often find themcording toa specificsetofjob instructions.This investmentin technicaltraining)and require selvesmired in a "catch-z" sihration regardsingle,three-hoursimulation assessed Ability that workers, who in the past have been rF Ing selfi Irected team implementation5to Leam,Work Tempo,Attention to Detail and warded for individual Derformance,Ieam to bcxsesare asked to serve as coacheswhile at Teamwork/CooDeration. work tosether asa team. the sametime worrying about the security of A realisticiobDreview is another common As shown in Figure2,therearethreecategG their own jobs. feahrrein many selectionsystems.Frcquently, riesof training essentialfor effectiveteam perTypical questionsthat supervisorsand this takes the form of a video depicting the formance:JobSkills,Team/lnteractionSkills managersmight ask themselvesat this point working environment and culfur€ in a team- and Quality/Action Skills. JobSkillsare thc include: . Howwill I be involved in theselfdirected . orientedfaciliry Therealisticjob prcview is not technical skills required for job performance. meant to be a marketingvideo,but rathera Team/lnteraction skills are the interDersonal team design effort? "down-to-earth"previewof what workwill be . Will I losemy Fb? and communication skills needed bv team

"Evenin Japan, whereweheal 'teams,' a lot about selffianaged woil(brcestrat€es ale virtually non€xistent."

.1993 THEA.SIAN MAMGER JANUABY/FEBRUARY

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. Do I have the right skills to make the transition? o Willlbeblamedifthinssdon'tworkout? In rcality, few organizations have totally convertedto SDTs.Managersand supervrsors still serveasvaluabler€sources,although their roleschangeradically.ln a traditionalo€dnization, managerscontrol and schedulework appraise and discipline employees,hire and fire and, in many cases,are solely responsible for the quality of the product or service. The rcverse is true in self-d ected team organizations, wherc the team assumes all thesefunctions. This freesmanaeersand leaders to tdkeon an entirelynew se"tof responsibilitie\. The,e include coachingdnd training team members,serying as a contact point for suppliers and vendors, helping the team access the resourcesand tlaininq needed for success,filling in when team hembers are absent or during peak-demand periods and helping the team coordinate its efforts with other teams and departments within the organization. This is not an easyadiustmentfor many managersto make,and unfortunately it is sometimesfiIst-and middle-levelmanaeers who getin the way ofa quccessful teamtransitlon. It is important that organizationshelp their supervisors and managers make successful hansitions. This can be accomplishedby ensurin8 that supervisors and managers have cleare\pedaiionsabout their new role5,prG viding significant haining and new t1,pesof leadenhipskills,makingsurethe changeoccurs slowly enough to allow leadersand managers to learn their new roles and involving leadersand managersin the changeprocess.

RewardingTbamPeriomance For years,we have focusedon rewarding the lone hero. lay increase,havebeenbased on either individual performanceor senioritJz With a move toward self-directedteams, the view of compensation/reward svstems has changed.Organizationsusing $lf-directed teamscommonly implement various types of "gain-sharing" or "team bonus" schemes, alongwith skill-basedcompnsation plans. Skills-basedplanshold a unique advantage with SDTsbecausethey focus on rewarding the number of skills a team member hasmasteredand applied,thusincreasingproduction flexibility. These types of compensation schemesreward teammemters in threearcas: Jobdepth. Teammembersarepaid increasing amountslor leaminga :pecrfrcprocessin $eater depth. For example, first they might leam how to opemte a piece of equipment then move on to pefform basic or€ventive maintenanceand linallv advancedmaintenanceon that samepieceofequipment. Job baeadth.Teammembersleam all the .iobsor tasksrequiredof an entireteam. For example,in an iutomobile compant the seat assemblvteammight havesixor sevendiffer-

not, implementations in US multinationals. Basedon our experiencewith hundreds ofSoutheastAsian companies, thercaresome Job Skills important social differenceswhich may r Equipment operation make SDTSdifficult to implement. Manager Processcontrol ment (and culturc) tends to be more autor Safeworkpractices craticand patriarchalin natureand practice. r Interpretation andapplication of company Lettinggo of power and authorityhasbeen information extremelydifficultfor North Americanmanr l/aintenance skills agersi it may be even morc difficult for the Asian manager. Closely related is the fact Teamand IneractionSkills that the Asian workforce may tend to accept I Orientation to teamsandteamwork the legltimacy of authority more readily The a Teamdesignconcepts norm for top-down leadership may be r Development anduseof a teammission stronger;perhapsmakingit morcdifficultto andnorms accepttheleadershipresponsibilityrequired r Listening andgivingfeedback in SDTs. r One-to-one communication As one director of human resourcesfrom r Techniques forhandling conflict and a leading SingaporcCorporation phrasedit: reachrng consensus "From a very young age,we are tauftht to r Valuing diversity respectauthority. Hence, there is inertia or r Training andcoaching others rcluctanceto appearsmarter than our supeI Presentation skills riors.Wedonot want to losefaceby making r Meeting skills mistakesor bad decisions,nor do we want r Meeting facilitation our superiorsto losefaceby their potential." r Selection of teammembers The challengein SoutheastAsia therefore r Assessment oftheteam'soerformance is how to define the boundariesof teams' accountabilitieswithout debunking the Skilts QualltyandPrcblem€olving Asian "leadershipculhrre." This js not inr Clarification ofthecustomer's requirements compatiblewith theconceptof high-involve r ldentificaton of of oualitv involvement ment. opponunities SoutheastAsia, for the most part, has a r Quality toolsandtechniques olture that is far lessindividualisticthan r Development andselection of solutions North America.Thercis lessof an emphasis r Quality planning improvement "on what'sin it forme."Oneworkerisfar less r Ongoing quality assurance likely to clamor for crcdit at another'sexr Statistical process control "we" versus"l" fcrus will pense.The6;reater Figurc 2 bea big plusasAsianorganizations move to teams. And if we can use the successof ent prcxluction tasks,eachperformed by one "quality circles,""work improvementteams" team member AII team members would be and othercross-functional teamsin Southeast rcquired to leam all of thesetask. Asian countries as an indicator, Self-Directed Vertical skills. with this third and least Teamslook promising. common method,teammembersleam leaderWhile we can spend a Sreatdeal of time ship skills used in all jobs. .Examplesinclude firusing on differences,the concept of selftroubleshooting techniques, tmining, safety management anddirectioni\ onewilh univerand leadingmeetings- skills that arerequired salappeal.Wemustall becomebottom-up,not for successfulteam performance. toPdown organizations.The fub-rreof our Performanceof teamsalsocanberewarded or8anizationswill dependon tapping thecreavia gain-sharing or team bonus programs. tivity and energyof our entireworKorce. SelfThese programs reward teams for perform- managedworkteams provide a verv powerful anceincreasesin productivitv thatexceedsome systemfor improving quality and service.Permeasureof basiline performance.In many hapsmoreimportant,howevet is theirimpact cases,managementdivides the bonus equally on the workforce itseli As GraceNakar,a team among team members,although occasionally associate from Motorolain thePhilippinesput teams decide how to distribute the bonus it: "Bevondspecific(organizational) we 5;oals, amongthemselves. desireeachindividual to continuallystrivefor his or her highestpotential- and urebelieve SpecialChallengesfor SoutheastAsia this is something worth living for." I Whileexamplesof successfu lSDTsdoexist in SoutheastAsia, the concepthas spread far Richard S. Wellins and Vic Magdaraog are senmore rapidly in Westemculhrres.Evenindusior vice president ofproglams and marketing, and "teams," try in Japan,wherewehearalotabout regional director (Asia Pacific) of Development Diself-managedworKorce strategiesare virtu- mensions lntemati()nal, a leadinlj human resource ally non€xistent.Thosepositiveexampleswe training and development companv based in Pittsdo seein Southeast Asia are,moreoftenthan burgh, PA.

,1993 THEASIANMANAGERJANUARY,fEBRUAFY

CultureShift

By LeonaldoR. Sllos PLDTProfessorot Businessl\4anagement " hereisan analogy- lsip tnkngl'rlor caab that hasbecomea PoPular mentaliv" self-critique among FiliPinos. The folar8kt are a crustaceansPeclesano rn appearancethey look like baby crabs. lt has tdes to to faldt{ki tdes hiin observedthat whenevera fdldrgki been o'ill pull pull rer crab crab o'ill crarll out of a basketful,another it backdown. lt is usedasa SraPhcrcPresentationoftheenviousindividualor SroupPulling down a u'ould-be deviant to the levelof the group. ' A nail that sticls out will be hammered the thate\Pre55es down isaJapaneseproverb samerdea.Thedifferenceis thatthelatteri' the vieh,pointof the grouPlooking at a deviant. tsip f;ldn{kl is the view of the deviant or outriderloofunSat theSrouPOnetdI'e5a P)sitive ,ind theothera criticalview ot thegrouP. had alreadybeen tsipfaiarrgka Furthermore, observedin the workplace by one of the earli"scientists," FrcderickTaylor estmanagement not It lt'asobserved amongAsian but among Americanworkers.Taylorcalledthephenom"soldiering" or deliberateunderworking enon

...thebreic uolkgloupis a

ofthe cons€quence that rccogniton ls superior coopeEtion to competitlon... ,

efficienttfutnuhen his petsonolambitionis , their iiimulated;tt'atwhenmenuorkin gangs inditidual elficiencylalls almostinutinblv nutt in tlv dou,ntoor beknt,theletglol theu,rwrst Rnn!:atdlhnl lh 0r(allWII4I doa'ninsfcld tqetlPr' .tlb.iug,lnttd ry bcinFherdPd wastobreakuPtheSroup laylor'ssolution andleteachman'sambitionandinitiativetake "indiover. The idea was, as Taylor Put it, to Wo*glrouP of the TwoViews is a q?ical ln "soldiering."lhe workgruuPinformdlly vidualize each worknan." This "investiSation when solution: Taylorian Indivrdual level. perlormance Jetcrminr'.its ed thatthegirls5penla congiderable Part membersare then pressurednot to exceedthe shor,r talkng partial idlenes., in time either their of for those sanctions establishedlevel.Thereare doing noth\\ho isnore the group norms and there are and half working or in actually "seatedso far aPart had them, Taylor ing," the to net effect rewaris for the f;ithful. The (ompanvls the lossol producttviWlrom ind i- thit they could not convenientlytalk while viJu;l r;orler- utherwrsecapableof erceed- at work .": Theconceptof theindividualasthebasisof ing the performancestandardimPos€dby the 'laylor's managementPhilosoPhvhas been sroup. " man A carelul annlvsishntl dononstratedtl:.ll characterizrdas the rational-e(onoml( in other management, Scientific concept. it togethet lr)tilttot nrehertleci fict that iL,hen that the fat l.ss words, restsits caseon the Proposition .gnit.g,cnclrman in flte gatrgbecornes

1993 THEASIANMANAGERJANUARY/FEBRUARY

individual worker is not only rational but, moreover, that this rationalitv is bome from self-interest. The rational individual will follow work techniques which assure himself maximum economicbenefit (rewards and into nuke cenhves).lt i5theroleof management surethat the work systemthat maximizesthe individual'srewardsalsomaximizesthecomrewards. oanv's ' Ii is the same instrumental rationality by which the factory system is rationalized to maximize profits through maximum efficienc\.Wem.ly noteherethdt thecontinuous searchfor betier and better Productiondnd manaqementtechniquesis not a lapaneseinventioin,as it is somitimes said lt ha: been Dursuedin svstematicfashionsincethe advent bf Tavlor'sicientific management.The trulv Japanesecontribution to managementtheory must be soueht elsewhereThe e\istenceol grouP Pressureagainst "rate busters" (individuals who exceedthe standard rate of production) was more extensivelv and svstematicallystudied and doc'u-e.r[ed uftei lovlot's time The most famous and most influential were Probably the Hawthorne exPerimentsconducted in an ' American company in the 1930s. The Hawthome experiments started with ''scientrfic assumptionstuf lhe stimulu5-re' 'ponsetvpe)similir to thoseolTaylor.Butthc actr]a .6iutts of the exPeriments forced the researchercto changeboth their assumPtions and the directionof their research.The new diredion led lo new' conclu5ionsand inspired,t movementthat opposedTavlor'sasthehumdnreldtion5 sumptionsand solutionsl movement. ln contrastto Td\ lor's rational-economi( man,thehuman relationsmovementproposed man' TheorP'ani7athe"soci.rl theconceptof tion wasnot a collectionol monads The new

unit ol investigation $.as "the dyad and the tdad; ot relations between pe6ons," as Roethlisbergerput it. Besideswork, therewere interpersonal relationshipswhich the organization could ignore only at the risk of worker maladiustment, and thirefore of worker dissatisfadion. And theseinterDersonalrelationship'swere not necessarilywbrk-related, a fact that was emphasizedin contrastto the taskoriented scientific manasement. The worker is neversuchan individualist that he will always seekto maxirnize his own economic benefits. Besideseconomic needs and wants driven by s€lf-interest,he hassocial needsand wants to look after. His desireto be in good standingwith his fellowscan easily outweigh merely individual interests

phy such as Taylor's.For chancesare, and pmcticehasbornethisout,thecompanytends to increasestandardprcduction rateswhen they arc regularly exceededby the workforce. Besidesincreasingproductivity,the companv acquiresa stifferstandardbv which it canrid itself of slower workers.Thescare labelled "deadwood,""freeloaders;" "fat," the which thecompanymust rid itsclfof if it wantsto be, "leanand mean." In these cicumstances,the goup understandably bc'comesdeferuive. The individual worker alonehasalrnostno cloutagainstuniLitenl power-movesofmanagement. Butthegoup hasbetterdunces in a power play Thisexplains whythe individual work€'roftenmustrespectthe group, for oftenhe needsits protection. But that is merclvonesideof the grcup pheTheTwoEdgedSword nomenon.Civentherightorganiiationalclimate, Thereis an important conclusionthat we it is not uJlcommonto find workgroups that do wish to draw from this. The fact that the same not wait to tE told what to do.Thevcollaborateto phenomenon - the workgroup - produces improve work qualiq, and productivity on their two opposint interpretationsaheadysuggests own. Their very cohesivene'ss asa group work its ambivalentchamcter.It is a two edqedsword. The polemic againstthe "grcup" typically 5 highlights its negative and charactedstic weaknesseswhich can range from soldiering to higher generalizations such as ethnocentrism, tribalism, pahonage, nepotism and so on. This is this side that Tavlor saw. And the polemic, belittles or ignores the positive and characteristicstrengths of the group, such as harmony,we-feeling cooperation,team work and so on. It is this positive side of the group that the human r€lationsmovement saw. Butclearlv,thesecontrastinginterprctations merelyrepresenttwo sidesof the .ame coin. The remedy to lhe talanskamentalitv in the t) workgroup, then, is not'necessarily i{estern individualism. Even the falargka mentality should haveits positive side. What is s€enasa for the companv pulling down from oneperspectiveis a pulling Furthermore, contrary to popular theory. up ftom another.But if thereshould beany real the individual can thrive as an individual in a rising to speakof the grcup must risetogether. motivated group. For one, he does not feel he The point is not for membersto trv to outshine is betraying his co-workers by being produceachother but to work together.The theme rs tive. For another, he feels fulfilled as an indicoopeation rather than competition. vidual by the achievements of the group. And true enough,side by side with the Note that in both the talnl&kt (defensive) polemic of the isip talangk!, therc is the cel- and bayanihan (productive) posture of the ebration of bayanihanor community spirit. group, the basicorientation is thesame: group Perhapsthe samepeople who nouth the pcr solidarity.In the one.thegrouppull<dou n the lemicalsomouththe prarse.In an o€aniza- deviant; in the other, it collaborates to help a tional context, isip tulangkt is the Gylorian member. In other words, the human group's critiqueand bavanihon is the Hawthomeper- orientation is communal which can workfor or spectiveof the group. From the viewpoint of against a company, dependinpl on how it is individual self-interest,group norms ("the nail handled. We can makea 6;roup defensive and that stick out will be hammereddown" ) will it will work against us or we can make it b e s e e n a s i s i p t a l a n g k a . F r o m t h e cooperativeand it will work forus. Thegroup communitarian viewpoint, they arc seen as can become a rival or it can become a partner. MVAnWtn. Management can al\r'ays exerciseits "manIn any case,it is now rccognied that its agement prerogative," as lavlor did. But the positive facet is no less "natural" to the group can also form a laborunion and counter workgroupasisitsnegativeside."Soldiering" management's power with the power of the is often merely a spontaneousdefense union,as labor in fact has. Continuing conflict mechanismagainit a managementphiloso- can then be averted only through negotiate'd

Giventhe dglrt orglanizational climate, it is notunootnmon to findwo* gtronpo thatdo notwaitto betold whatto do. .

peaceat thebargainingtable.Thenameof the gamebecomescoexistence. Or rnanlgementcanbenefitfrom thegroup's cohesiveness thrcugh partnenhip (which need not neces&idlymeansharingownership of the compary). One might tr,v to do this through "manipulatiory" which must be covertif it is to succeed.Here,managementtriesto be "nice" in onler to manipulatethe group for its own purposes.This G what I have calledelsewhqe the "humanrelatiorss1,ndrome." Butmanipulation is not partne\shipand ary realand lastingpartneFhip must be mutually transparcntand muhrally understood.

TheCommunity Pespective luay, the idea that the group rather than the individual is the basicwork unit of the companyisemergingasamajorcomponentof the post-modemorganization.It is a consequenceof the recognition that cooperation is \upen(rr to competitionas dn intra-organizationalforcefor productiviry Obviouslv, this positive stance of the workgroup towards the company pr€sup posesa coresponding positive stancetowards the group bv the company.This reversalfrom negdtiveto po5itive assesrmeni of thegroupis a constitutiveelementofthe"new paradigm." Thispamdigmrnaybenew(andproblematic)for Westemindividualism. But it is neithernew nor problematicto "corrununitarian"cultures- exceptpeciselyto theextentthattheyhavebecome "individualstic." SiSnificantly enough,it tookanAsiancountry with a communitarian culture to hamess the strengthsof the workgroup in the business firm. Westem management theory had already recognized a non-individualishc conceptofman (the"socialman"). Japanapplied theirconceptsuccessfully in thebusinessfirm as an explicit ideology. Indeed, the "social man" hasmetsubstantial resistancein Westem managementtheory For there is apparcntly some difficulty reconciling it with Westem instrumentalrationality and individualism. Henceall the talk about "new" paradigms. TheJapanese acknowledgetheirindebtednessto Ameacan managementconsultants (suchas W EdwardsDeming and JosephM. Juran)for introducingthem to techniquesof statisticalquality control. But the Japanese havealwaysopenly soughtto leam Westem technologvOneMeiji-erasloganwas,"Westem technologyand AnexamJapanesespirit." pleof how thesloganhasbeentnnslatedin the businessorganizationis the so-called"quality controlcircles." The' quality circle in its degree of worker participationand ceoperationwasa contribution of the 'Japanese spirit." MnnVoftlu stepsin tlrccooperntiott ofsmall g\tqt n.fir)itis arcsiniLtt k) tlloseoriginll\ ptttcribedW Dr. Denringandofhersrycinlists it sfntisficnl cotltrol.One$ themajotdtffer .nc.s, hd|L'u L nlwars to bt thela,elof u.o/ktr

THEASIANMANAGER JANUARY,fEBRUARY 1993

i tfusc lctifities. l tliudunl of Japaneseolture itself can be traced to Chimfticiputiott ''ttorkis cianphilosoluot the rcsfxittsibilitunnd tali'etllc neseinfluence,specifically,Confu pny. u\t|1 iitinfi'ei st)lutittl ofthdr ...arlprobletns, But most important of all, solidarity or comor tcchnical thr lssistnnd]of nmxdnogemtttt is, aswe havesaid,an inherentorien'c<Poustbilrtu muniw prrr'rrrrr/ f/ri- d' qrrt ' I drt,k''r humanSrouPitselfandtherefore ofthe tation lri' r: hc lht tt1lq|@ t o t nlileo iot n coolcrat peculiar to Japaneseor Chineseculture lt not atd uorkersto manfigetnent butit) oflarynese a t'traditional" value, neither is considered theprocess.neitherJewnor Gennor barbarian, Whatareusuallyconsideredand taughtas Chinese "human " only tile, almostautG individual skillsaretransformed Theieal lapanesecontnbuhonlo organizamaticallvinto sroup {Ulls rn the I'rpane'c theory is to have shown quite decisively tion the i: r" orlptjce. And thai l >uggc't Pc(-uliar 'ttFditional" value can work effeccont;bution of the lapaneseto management that this "modem" rational businessfirm the in As a tivelv work theory Work is essâ&#x201A;Źntiallygroup rationalitythat consequentdevelopment, for example',qual- It ch;llengesthe enliShtened and tradition, places rcason between wedge a function ity control becomesnot a sPecialist betweenthe modin effect, cultom; nature and group the operahng of responsibility the but em and the traditional. itself. It is merely Westem conceit that equates has work of idea the In short, lapanese and demtxracy with Westem mmodemity asc()m.munit,rrian r.rtherthanindividualistic individualisrn.lndeed,the con;nd tionatity wh), although pnrbablv ir That iumpttons. and communitarian orâ&#x201A;Źianlzatlon sensual were dt_ manv cooperativework technique' is more i n o b s e r v e d J a P a n e s ef i r m s "modem" their aPPlication States, United veloped in the than participative and democratic techfouni more fertile soil in Japan For the basedon Lusineis firms which aresupposedly hasculturalassumptions. nique "communitaian" 'Here Theconcepts Westemideas. we should point out an imPortant (baditional) and "democratic" (modem) do difference between this concept of the workgroup and that of the Hawthome renot canceleachotherout. The oreanizational issue can be reduced ,"orci"rs. The tatler tended to focuson organization stit-les nonwork-related human relations. Work and simplv to tlhis:whether the group. the or8aniTation Doe, the or supports disd5 vie\^ed lo be humdn relahonstended and therefore tinct, often separ.rte,variable'. They high- make workgroJps defenstve so the oBanizdt'on does Or dv<function;ll t h e c a l l e d l a t e r lishted what was "riiaintenance"asPectof theorganization(The irispire the workgroup that it functions not but for the comPany? " term reminds us of the machine analogy: the agtinst Where organizational theory has moved machinery maintenancesection). act' towards a more positive assessrnentof the In the'quality circle,work is a strcial "human group, one notices a certain shift away from Work is not seen as distinct from the individualismtowardsamorecommunitarian relations" or vice versabut both constitute "Westem view, away from meresystemsand techniques \^dm dnd wool ol thel,rbricof \\ orL' the towards meaningsand values,away fuomthe technology'empowersthe grouP with "laPa- mere economic view of the market to a worl bv the n.ied dima "kilh nec.r.an broader view of its envircnment and context, nesespirit" makeswork teamwork awav from merely what the stockholder or evenwhat the customerneedsand wants to TheCultureShift wh.rtthe communrtyneedsand wants avoid' we must two therc are Here, Pitfalls Indeed, the shift in or8anizationtheory the The first is to put undue emphasis on is taking place calls for a culture shift' that may ciR h thequali$ lechnique t.rhnique. A. "travel well " But it: <-ulturalba'e Thi: strong[ \uP,ge5ts that the.emerSing be.aid to ' ne* management i5 not onlyculturebased traveller fellow prove difficult morc a mav "old" Butonlybecausethe butculturebound Since'the qualitv circle as technique is intithe by managementhas been dominated matelv tied up with the communitarian culit a5 insofar culture We'tem trf oarticilan.m ture, ;learlv the technique will be difficult to ,rnd rationdlity to Enlightenment on irold. is ideologicallv that impiemeni in a Qlture po\ses\iveindividuali.m From the viewindividualistic. the SrouP point of individual self-interect, folto is encouraged who The individual force ls "self-interest," in the belief dominant lts is/p talnnika nreans loi{ his instinctivc viewcommunitdrian (ompetitton. l_rom the strength is the that individual comPetitiveness lls domiqroup i'dynall.r' i mean. uftheorganLalion.willhardll thrive in sucha ooini.th. l pe(cive circle*as unqualified ianl iorceis cooperatton . ircle. H1w:ll -quare.. Suchindividuahslicideologvwould "P,rradigmshift" to ''qu,rre with requirea the circle. Thc secrrndpitfall i- to behcvelhat thc (-ulturalba\ethatsupport. the circlei.*Pecificall\ qualitv Japanese.Indett, the communitarian

t I-redcriclT.rvlor l\i lh41lt,,,t' rtt.\tltl, \'lnnnPent -2r\er \,,r|. W \\. \orrun&!ompdn! ln(,luolPp -\. lbid p o2.: :ee F I Rcrthlslirgcr,M,']lntn,ttt n'rl r r r , l ^ , r ' r . ; ' ( . r m l - n d g ( .V . r * ^ h u . e r t ' : H , r n r r , j t l n F versitv l)r$s, 1961).;r Nox' it1lrrytt: Pn'tltL!.ht\tvi i1 (JFTRO,no 301981),p 1{l Qrnlii, a'rfnn

1993 THEASIANIVANAGERJANUARY/FEBRUARY

.\ (;R11.\1'l)lt.\I. FOR llL'sl,\..llss l R'\\' llll.liRs

ilji.j;l::':i. " ;:',' a,::'

,\t Ko\\loo[ l'an(la llolel. $'e r( all\ (i()gi\ti I)lisilrcss lravellers a greirl (l( al \k)ra r(xnDs lhall an) olneI hr)lel in l long Kong Tw() cxet Lrllve ll.x)rs $ilh .rn exclLlsi\'( kJ(lnge Prr \'(itc r(n)n)s lor Irreelings illld ( el)lre l)usllless ,\ 1 L l l r {l i ( ) n s eqLlppe(l \\'ilh lh.' l l.sl l.rcililies ( l l x ) i . e s ( ) l I : r r f t ) p e a n ./ \ s l a n \ \ ' e s l e r D an(1 (lhrrx'sc (.Lrlsine llelaxing bars ancl knrnges \\'illl live enlenalnfilenl F()rl! r\\() pnvalc Karaoke r(xnns I () kcep iil a lx.allh club. saLrna Lrn'l s$ innning txxrl con)ltrmelllar) l:(n aacessibilil\ s h r r t l l el n r s , a t l a e l( t \ o l v o e s l a l e c a r s d i ( ) o l l b u s d r t ( j I l r e r l c a r l ) \ N lI R l i n k \(nr tc) evcr\'\\'hcre ilrxl iln!\\'nare lherc s Ihe An(i lor sholjl)ing \nohan Depitrlmenl S()re and ulr shoppnrg .r( ade sla) al For a rcally greal deil K()wlr)(mt'anda lk)lel llong Kong s largesll

:r Isuen \tah slrecl lsuen\\an Kokldrn. I l(nrg Kong t e l : 1 a 5 2 ) , r o 9 l l l r l i a x 1 4 5 2 1 i r o { )l a l a 'relex 47ai KF HHK lix (:i''e PA|{DAHTL- IIK

Managed by MEGA HOTELS 55o7-lo Hopewell cenlr.. la3 Queiir s Road F.sr. Tel la52r s27 ti39a, ljax: 1lr52r 5:17 3tiltt Membei of lhe HOPEWELL CROUP

AreJheyDifferent? By AbrahamZaleznik KonusukelvatsushitaProfessorof LeadershipEmeritus HarvardBusinessSchool

eaders

prctectingus flom theencoachmentsand controls ofbureauoraryin govemmentand education.

vs. Leadel I I f hat is the ideal way to develop lead- Manager ership?Every societyprovidesits Pe6onality lllt own answer to this question,and A managerial culII f I each,in groping for answers,de- hrreemphasizesrationfinesits deepestconcemsaboutthe purposes, a l i t y a n d c o n t r o l . distributionsand usesof power. Businesshas Whetherhisorherenercontributedit5an.t{er to the leddershipoues- giesaredirectedtoward tiun bv evoh ing .r new brctd calledthe m.rn- goals,rcsources, organiager.Simultan<rusly, businesshasestablished zationstructurcsor peoa new power ethic that favors collective over ple, a manager is a individual leadership,the cult of the group problem solver. The over that of personality.While ensuringthe managerasks: "What competence, controland thebalanceof power problems have to be amongthegroupswith thepotential for rivalry, solved,and whatarethe managerialleadershipunfofunately doesnot bestways to achieverenecessarilvensureimagination,creativity,or sultsso that peoplewill ethical behavior in guiding the destinicsof continueto contributeto corporate enrelpnses. this organization?" Leadershipinevitablyrequiresusingpower From this peFpective,leadership is simply to influencethe thoughtsand actionsof other apracticaleffort to direct affairsjand to fulfill his pmple. Power in the handsof an individual or her task, a manager r€quires that many manageFmayinhibit entailshumanrisk: finit, the risk of equating people operateefficiently at different levels of powerwith theabilityto tet immediateresults; statu5andresponsibilitv. It tdLe,ncrthergenius developingleades." second,the risk of i€inoringthe many different nor hercismto bea manager,but rather,persistways people can legitimatelyaccumulate ence,tough-mindedness, hard work, intellipowet and third, the risk of losingself-control gence,analytical ability and perhaps most in the desirefor por.er. Theneedto hedgethese important, toleranceand goodwill. risksaccountsin part for the de-,'elopment of Anotherconceptionof leadership,howevel, collectiveleadershipand themanagerialethic. attachesalmostmysticalbeliefsto what a leader limitations in visualizing purposesand generConsequentl)', an inherentconserva tismdomi- is and assumesthat only great peopleare wor- ating value in work? Driven by narrow purnatesthe culturc of largeorganizations. [n The thv of thedramdof puner and politics.Here poses,withoutanimaginativecapacityand the Second American Revolution, John D. JcaJershiprs I psvchodramain which a bril- ability to communicate,do managersthen perRockefelle'r III describesthe conservausnor liant,loneiypersonmustgaincontrolof himself petuate troup conflicts instead of reforming orgamzahons: or herselfasa precondition for conholling oth- them into brodderdesire,and eoalsl "An organizationis a svstem, with a logicof en'.5uLh dn e\ pectationof leadershipcontrasts If indeed problemsdemand"greatness, then its o$'n, and all thc weight of tladition and sharplvwith the mundane,practicil, and yet judging by pastperformance,the selectionand inertia.Thedeckis stackedin favorofthe tried important conceptionthat leadershipis rcally development of leaders leave a great deal to andprovenwavU[doingthrng5and against the managingwork that otherpeopledo. chance. There are no known ways to train hrLingofrisk>and >trilinB()ut rnnewdire(ts. Two questionscometomind. Is thisleader- "great" leaders.Further,beyondwhat we leave Outoft hiscor6erv.ltism andinertia,organiza- ship mvstique merely a holdover from our to chance,thereis a deeperissuein the relationtions provide succ:ssionb pow'erthrough the childhood- from a senseof dependencyand ship betweenthe needfor competentmanagers developmentof ftxugers ratherthanindividual a longingfor goodand heroicpircnts? Or is it and the longrng for grcat leaders. leaders.Ironicallv thisethicfostersabureaucratic true that no matterhow competentmanagers What it takesto ensurea supply of people o"dhuein business,suppcedlv the List tEstion are,their leadershipstagnates because of their who will assumepractical responsibility may

"Whatit takesto develop

THEASIANMANAGER

of greatleaders.On the i nhibitthedevelopment other hdnd,lhe presenceof greatleadersmay undermine the develoPmentof manaSerswho tr.Dicallv become verv anxious in the relative diiordei that leadersseemto generate. It is easvenoushto dismisi thedilemmaof training rnanage;, though we may need new leadersor leadersat the exPenseof manageF, bv sayingthdttheneedi: for peoplewhocanbe both.-Buiiust as a managerialculture ditfer" from the entrepreneurial.llture that develoPs when leadersappear in organizations,manaSen and leadersare very different kinds of people.They differ in motivation, Personalhistory, and in how theYthink and act.

AttitudesTowad Goals

Managerstend to adoPtimpersonal,if not passive,attihrdes toward 8oals. Managerial eoalsariseout of necessitiesrather than desires and, therefore,are deePlyemMded in their organization's -Frederick history and culture. G. Donnet chairmanand chief exeortiveofficerofGeneralMotorsfrom 1958to 1967.expressedthis kind of attitude towards goalsin dehnrngCM'5 Poqitionon f'mducl

1993 JANUARY/FEBRUARY

when conhoversialissuesshouldsurfaceand development. "Ib meet the challengeof the marketPlace, reducing tensions.In this enabling Prxess, chdnge5in customerneeds manageis'tacticsaPPearflexible:ononehand, wc must recogniTe and desiresfaienoughdheadto havethe riSht thev ncgotiatyand bart.lin: on the other'they goducts in the right placesat the right time and u.e rew;rds.puni.hmcnt.dndt)therlormt of ccrnion. in the right quantity. "We must balance trends in Alfred P Sloan'sactionsat GenemlMotors Preference thatarenece5- illustrateholt' this Prcess works in situations againstthe many compromises sa"rvto makea fi naI prod ucl ihat is bolh reliable of conflict.Thetime wasthe earlv1920swhen and good looking, that pe orms well and that FordMotorCompanvstilldominatedtheautG sells at a competitive price in the necessary mobileindustrvusing,asdid GeneralMotors, en€iineWiththe volume- We must design not iust the cars we theconventionalwater-cooled Kettering Pont, Charles Pierre du backing of full the would like to build but. morc important, dedicatedhimselftothedesignofanair-cooled cars that our customerswant to buy."l would bea which,if successful, Nowhere in this statementis therea nohon copperengrne, arisein greit technicaland marketingcouP for CM. that consumertaste.and preferences part as a result of what manufacturcrsdo ln kettering believed in his Product. but the rcaliry through product desiEn, advertising, manufacluring division heads opposed the and oromotion, consumersleam to like what new designon two grounds:first,it wastechtheythensaytheyneed. Fewwquld arguethat nicallyunreliable,and second,thecorPoration by jnve*tp<iple *hti enloy taUng.ndPshots n€d a wd: putting.rllitsegg:in nnebasl..et h ' the ingrna newproductin.teadot attending iamera that alrc develop5Dictures.But In re market situation. sponseto a need for novelw, convenienceand current ln the summerof 1923,afteraseriq;of false a;horter interval betweenalting (snaPPingthe t.eeinStheho't), startsand after its de'cisionto recall the coPPer picture)and gainingpleasure in the m,rrlet- engineChe\,roletsfrom dealersand customers, ihe Polaroidiamerl succeeded pla(e.lt i. in(on(eivable that Edwin lnnd re GM managementscraPpedthe Proiect.When ioonded to lmpreq\ionsof con.umer need. it dawnedon Ketterint that the comPanyhad Instead, he translated a technology (Polariza- reiectedtheengine,hew a. deePlld i.couraged 'or8,rniTed tion oflight) into a Prcduct,which Proliferated dndwrotetosloan thdt.without the have it would resistance"againstthe Proiect, and stimulated consumers'desires were the unless that, and succeeded land suggests Polaroid and Project Theexampleof how leadersthink about goals. Thev areactive saved,he would leavethe comPanv Alfred Sloan h'as all too aware that instead of reactive, shaPing ideas instead of responding to them. LeadenddoPta Perconal Ketteringwas unhapPyand indeedintend€d andachveittihrdetowardeoalq.TheinJluen(e toleaveGeneralMotors.Sloanwasalsoaware a leaderexertsin alteringmoods,evokingim- t h a t .w h i l e l h c m , l n u i a . t u r i nJt r v i ' i o n 5 fierre du and in estdblishing .tronglv oppocedthe new cnSineqloan agesand e\pectatrons, h,ld toecificdesirerand obiectivesdetermineqthc font 'upported Kettering.I-urther' Ketterin8 in letter b record a gone on himself directiona businesstakes.Thenetresultofthis full coninJluencechangesthe way PeoPIethink about lessthan two yearsearlierexPressing was had Sloan The in him. fidence what is desirable,possibleand necessary Problem how to makehis decisionstick,kc'ePKetterin€i in theorganization(he'u'asmuch too valuable of Wolk Gonceptions Managerc tend to view workas an enabling to lose),avoiclalienatingdu Pont,and encourprocessinvolving 5ome combindtion ol Pet)PIe agethe divisionheadsto continuedevelopin8 lvater-cooled \trdtegiesanJ pioductlinesusingconventional ind ideasintera.irngtoect.rblish makedecisions. Thev helP the Processalon€ib]' engines. -Sloan's actionsin the faceof this conflict calculating the interest in oPPosition,Planning

revealmuch about how managerswork. First, hetriedto redssure Ketteringbtpresentingthe prcblemin a veryambiguousfashion,\uggesting that he and the executivecommittee;ided with Kettering, but that it would not be practical to torcethedivisionstodo what thevwere opposedto.Hepresented theproblema; being d questionof thepeople,not theprodud. Second, he proposedto reorgamzearound the problem by consolidatingall functionsin a new division that would te responsiblefor the design,production and marketing of the new engine.Thissolutionappearedasambiguous dshiseffortsto placateKettering.Sloan;rote: "My plan was to createan indipendent pilot operation under the sole iurisdiction of Mr. sion. Mr. Kettering would designate his own chiefengrneerard hisproductionstaft to solvethe technicalpn:blemsof manufacfure."l Sloandid notd kcussthepracticalvalue of this \olution, which included saddline an inventorwith management responsibility, but in effect,heusedtfusplan to limit his conJlictwith Pierredu Poni. Essentially,the managerialsolution that Sloan arranged limited the options available to others.The struchtral solution narrowed choices, even limiting emotional reactionsto the point where the key people could do nothint but go dlong.lt dilowed Sloan to say in his memorandumto du Pont, "We have discl.rssedthe matter with Mr. Ketteringat somelenglhthis momin& ard he agreeswith us absolutely on every point we made. He appearsto fueive the suggestionenthusias[i&ly and has every confidence that it can be put acrossalong theselines."a Sloanplacatedpeoplew hoopposedhis viewsby developinga structuralsolution that appeared to glve something but in rcality only limited options. He could then authorize the car division's general managel with whom he basica\ agreed, to move quickly in designing water-cooledcars for the immediate market demand. Yeals later, Sloan wrote, evidently with tonguein cheek,"The copper<ooled carnever cameup againin a big way.lt just died out; I don't know whv"' - To Bet people to acceptsolutions to problelrrs,managerscontinually needto coondinate and balanceopposing views. lnterestingly enough, this type of work has much in common with what diplomats and mediators do, with Henry Kissingerapparently an outstanding practitioner. Managers aim to shift balancesot power toward solutionsacceptableas compromisesamong conflicting values. Leaders work in the oppo;ite direction. Where managersact to limifchoices, leaders .develop fresh approachesto long-standing problems and open issuesto new options. T5 be effective, leaders must proiect their ideas

ontoimagesthat e\cite peopleand only then developchoicesthat grve thoseimages<ubstance. John F Kennedy's brief presidencvshows both the strengths;nd weainessesconnected with the excitament leadersqeneratein their work. In his inauguraladdGs he said, ,,Let every nation know, whether it wishes us well or ill, that we shall pay any price. bear an; burden,meet any hardship,iupport any fnend,opposeany [oe,In order to assurethe survival and the successof libertg" This much-quotedstatementforcedpeople to react beyond irnmediate concems lnd to idenh4/ with Kennedy and with imponant sharedideals.On cl<xerscn_rtiny, however,the

"Managets preftl to work wtthpeofle;theyavoidsolitary activitybecause it rhakes themanxious."

statementis absurdbecauseit promisesa position, which if adopted,as in the Vietnam War, could produce disashous results. yet unless expectahonsare arousedand mobilized, with all the dangers of frustration inherent in heighteneddesire, new thinking and new choicecannevercometo lieht. leadersworl hom tugh-risl posiboD;mdeed,theydreoftmtempemmenta[ aispo..a:ro seekout risk and danger,especiallywhere thc chanceot opportunity and reward appean pomising. Frcm my observations,the rea-son one individual seeksrisk while another aoproaches problenucorr:erva tivelydepends mon on his or her per:onality and lss on con:ciou5 choice.For thoeewho trecomemanagen,a survival irutinct dominatesthe need foi risk, and with tlEt instinct comesan abilitv to tolerate muldanq practical work. l,eaderssometimes rcactto mrmdanework asto an afflictiorl

Relations Withfthen

Managen,prefertowork with people;they avoidsolit.rry acti\rty because it ma(esthem anxious. Severalyears ago, I directed studies on the psycholoFi(ald5pect5ol careers.The needto seekout othen,with whom to work and collaborateseemedto stand out as an important characteristicof managers.When asked,for example, to write imaginative st(} nesin responsi,to a pictureshowinga single hgure(a boy contemplatinga violin or a man silhouetted in a state of reflection), manaqers populdtedtheir .tones with people.The folIowingis an erampleot a manlgei s imaginative story about the young boy contemplating a \,rolrn: "Mom and Dad insistedthdt their son take music lessonsso that somedavhe can becomea concertmusician.His insirument was ordered and had just arrived. The boy isweighint thealtemdtivesof plavingfootbdllwlthtdeotherlidr or playinswith the >queakbor. He can't undirsland how hi, parentscould think a violin is befter than a touchdown"After four months of practicingthe violin,the boy hashad morethdnenough, Dad is going out of his mind and Mom is willing to glve in rcluctantly to their wishes. Football seasonis now over, but a good third basemanwill t,rke the field ne\t spring." This story illustrates h^/o themes that clarify managerialattitudestoward human relations.The fint, asI havesuggested,is to seekout activity with other people (that is, the football team), and the second is to maintain a low level of emotional involvement in thoserelationships.Low emotional involvementappearsin thewriter,suseof conventionalmetaphors,even clich6s,and in thedepiction of thereadybansformation ol potential conflict into harmonious decisions.In this case,the boy,Mom and Dad agreeto glve up the violin for sports. The'setwo themesmay seemparadoxical-but theircoexistencesupportswhata manager does,including reconcilingdifferences, seelirngcompromisesand establishinga balanceof power.The story further demonstrates that managersmav lackempathy,or the capacity to senseintuitively the thoughtsand feelingsof others.Consideranotherstory written to the same stimulus picture by someone thoughtofas a leaderby his peers: 'This little boy hastheappearance ofbeing a sincereartist, one who is deeply affectedby the violin, and hasan intensedesireto master the instrument. "He seemsto havejustcompletedhis normal pradiceseisionand appearsto be some. what crâ&#x201A;Ź"stfallen at his inabilitvkr prcducethe soundsthat he is surelie u'ithin the violin. "He appears to be in the processof making a vo$, to himself to expend the necessarytime and effort to play this instrument until he

THEASIANMANAGER JANUAFY/FEBRUARY 1993

iii

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That's right. In faa, if our steelkeepsgoing into shipping,this industry will be kept afloat by steel. This meansmore ships can be repaired. More bargescan be built. And mbre container vans - and more business- can travel the high seas.

You see,shipping can do so much for the country. That's why we're preparing to put so much steel behind it.Ve want lo help it grow - and our nation along with it. So we can all expect smooth sailing from here on.

\TE'RE BUILDING A COUNTRY. f)

x"tion"t steel cornoration

satisfieshimself that heis ableto brine forth the heightens emotional responseand makes ized. Such an atmosphereintensifiesindiqualities of music that he feelswithin himseff. managersan).ious.With signdls,the question vidual motivation and often produces unan"Vvith this type of determination and carryr of who wins and who losesotten bRomes ticipated outcomes. thrcugh, this boy became one of the great obscured. violinistsof hi5day" Thtud,the managerplays for time. Manag- Sensesof Self Fmpathyis not simply a matterof pa)^ng ersseemto recognizethat with thepdssage of ln Thc Vnrirttc<of ReltgtuusLrperh cc, attention to other people.It is alsothe capacity hmeandthedelJyof maiordecisioni,,ompro- William Jamesdescribestwo basicpelsanalto take in emotional sisnals and make them mis€semergethat takethe stingout of winlose ity types, "once-born" and "twice-born." meaningful in a relationship. Peoplewho de- situations,and the origlnal "game" will be People of the former personality type are scribe another person as "deeply affected," superseded by additionalsitudhon5. Comprc those for whom adtustmentsto life have "intense 'trestfallen" with desire," and asone misesmeanthatonemay winand losesimul- beenstraightforwardand whose lives have who can"vow to himself" would seemto have taneously,depending on which of the games beenmoreorlessapeacefulflow sincebirth. an inner perceptiveness that they cdn use in one evaluates. Twice-borns,on theotherhand,havenot had their relationshipswith others. Thercareundoubtedly many other tactical an easytime of it. Their lives are markedby MdnageDrelateto peopleaccording to the moves managersus€ to changehurnan sifua- a continual struggleto attain somesenseof . role tney pray ln a sequenceot eventsor in a tions from win-lose to win-win. Butthe point is order. Unlike once-borns,they cannot take decision-making process, while leaders, thingsfor granted.Accordingto James, who arc concemedwith ideas,relatein thesepersonalitieshaveequallyd ifferent morc inhritive and empathetic wavs. The world views. For a once-bornpersonaldistinctionis simply be-iween a manager's ity, the senseofselfas a guide to conduct attenhonto how things get done and a and attitude derives from a feeling of leader's to what the events and decisions bein8at homeand in harmonywith one's mean to particiDants. environment.Fora twice-born,the sense In recint years,managershaveadopted ofself derivesfrom a feelingof profound from gametheorythenotionthatdecjsionseparateness. mdkingeventscanbeoneol two tlpes: the A senseof belongrngor ot beingsepa'I rdtehasapracticalrign winlo+ situationtor zero-.um gime) or ificancefor thelind. the win-win situation in which everybody ofinvestmentsmanaqersand leadersmake in the action comesout ahead.Manaeers in the careers.Manaqersseethemselves strivetoconvertwin-losei nto win-win ;ihras conservato$ and rezulators of an existahons as part of the processof reconciling ingorderof affairs with whichtheypersond ifferencesamong peopleand maintaining ally identify and from which they gain balancesof power. rewards.A manager'\senseofself-worth As an illustration, take the decision ol is enhancedby perpehratingand strcngthhow to allocate capital resourcesamong ening existing institutions: heor sheis peroperating di visionsi n a large,decentralized forming in a role that harmonizes with or8anization. On the sudace, the dollars ideals of dutv and responsibilitv.William availablefor distribution are limited at any Jameshad ttiis harmony in mind - this grventime.Presumably, therefore, themore s€nseof self as flowins easilv to and liom one division gets, the less is available for the outer world - in defining a once.btrm other divisions. Dersonalitv. Managerstend to view this situation (as l€aders tend to be twice-bom personit dffectshunun relations)as a conversion alities,people who feelsepante from their issue:how to makewhat seemslike a wineneironment.Theymay worl in organizaloseproblemintoa win-win problem.From tions; but they neverbelong to them. Their that perspective,severalsolutioru come to senseof who thev are d<xs not depend on mind. First,the managerfocusesothers' atten- that such tacticsfocuson the decision-makins memberships,workroles or other so;ial indition on procedureand not on substance.Here processitself, and that prccessinterestsman- catorsofidentiry And thatperceptionofidenthe players become engrossedin the bigger aters rather than leadels.Tacticalinterestsin- tity may form the theoretical basis for problem of how to make decisions,not what volve costs as well as benefits; thev make explaining why certain individuals seek op decisions to make. Once committed to the organizationsfafter in bureaucraticarrdpoliti- portunitiesfor change.The methodsto bring bigger problem, thesepeople have to support cal intrigue and leanerin direct, hard activity aboutchange maybetechnologica l,politicdlor the outcome since they were involved in for- andwarm humanrelationships.Conrquently, ideologcal,but the oblectis th'esari,e:to promulatingthe decision-makingrules.Because one often hears subordinaies characteriie foundly alter human, economicand political theybelievein the rulestheyformulated,they managers as inscrutable, detached and rna- relationships. will acceptpresentlosses, believingthat next nipulative. Theseadiectivesarisefrom the subIn consideringthe developmentof leadertime thet u;ll win. ordinates' perception that they are linked ship,we haveto e\.tminetwo d itferent .ou rse\ Second,themanagercommunicatesro suG. together in a process whose purpose is to of life history: l) development through ordinatesindirectly, using "signals" insteadof maintain a controlled as well as rational and socialization,which preparesthe individual to "messages." A signal holds a number of im- equitablestruchrre. guideinstitutionsand tomaintaintheexisting plicit positions,while a messageclearly states In contmst,oneoften hearsleadersrcferred balanceof socialrelations:,lnd,2) develoF a position.Signalsareinconclusiveand sublect to with adjectives rich in emotional content. ment through personalmastery,which impels to reinterpretation should people becomeuIF Leadersattract strong feelingsof identity and anindividualtostruggleforpsychologrcal and set and angry; messagesinvolve the direct differenceorofloveandhate.Humanrelations socialchange.S{lcietyproducesits managerial consequencethat somepeoplewill indeed not in leaderdominated structures often appear talent thrcugh the first line of developmentj Iike what they hear. The nahrre of messages turbulent,intense,andat timesevendisore,rn- leadersemergethrough the second.

"A sensed belo€llg or belng sepa!"tehasa prastlcal slglf,cancefurthe klhdsof Investnenbmangercandleaden makeInthell caleen."

THEASIANMANAGERJANUARY/FEBRUARY 1993

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Trendsin management in aninqeasinglyborderless, open-market worldhaveclearlydemonsnated that thepracticeof totalqualitymanagement andtheattainment of competitive advantage arepeople{ependent. Humanresource development, it is said,is today'scenftaltechnology. Ihe Borderless Wodd...DanlopingWodd,r,brket...GlobolAsioin 2020... Tronsitions in leodenhip... Toioleuolirytrlonogem€nt .. BuildingA Highrnvol*mcntcultu]€,.. Creotivity & lnnwofionin Troining...leodership& rheAionogemenr d Chonge... lrlonogemenr& Societyin the Asio of Tomonow Dirtinguishcdrpokeo irrludc: nt't Amnd PonF ldut . Fomr Pine Minish.,I'oihnd D?.lvo'lI l(|ni' . Prckror, U v!6it ol Sodtl.n Gti6.nio, USA Tmtt' Ior ti Do|6r'ri Abmd YotrF ' Gdp chisfL€cdi*, $i! Do,b 8.dEd,l'lolqtlo r4.. Do/idGd&n . Chie{ExlcuriE,Il. tcooonii Gurp, UnibdXiogdo.i Dr.RllPhz. sdsBoi ' DEn, coll€geof 88. adnin., utriv.riit of c.lo&do d s.!l&r, usA ^t.Hd!.$xro'iid.PG&choirrEio{fe^^o.os€.i€' 8dd,nGh.,Pocifr|nddj6io l,+. ldnt Woin. Edib{d-l,o€E,AsionWoll9rer joulml, HongKong Dr.Am',oy Vklnn' . D.putyPimeMinii€r,fioilond Itlr. vin'i Pl*u*d . clninmn, LeverBrotl'enllfioilondtlrd. li{r. lhldt lt. lodFlo . ProlidedDi6ror, P.T.SmpotiAn, tnddrclio f&. Yothiht! tlotrE . PrBid6t, Morsuilit,El€.niccoP., PhilippiE yA! ron 9i Don Hi.li,,hib,od fin Hi,t{*.d,Ed

tit s.|( d|on . tt .utiveDiGbr, rbig tcq plodu<rriyCoukil, Hoig Kqg ,. G€.!. tr.. . CIi.t Ec!fiw Of,ice.,D|et^io.b pfiitr.,In ., phi[ppin.. o?.D.vid litdbh . A.linsD.on,co/lcgeof Blr aimin., uni\6riy ol HqvoiiorMom, usa ,|. UmHow|'* . Chic{OpddtingOft.er, N.pnrn c|'ist tir!, :insoporc t,,. s.fab p. sodoeo. ftxidont Dicb. & cEo, tr Tsl*o.,ronit6iIndsElio,Indoi€'io ..s.o|twod.Pob.!orlorl.i.ll!ti'lg,Moli!tls.l'odo|hu .. riF,o }hno.i. . Cl,oimon,HothriS€ikoco., |]i., JoFr Har t*r. rrud| O. ClEr, J.p... S..crffy, Eco-k S.rvicli HongXoiE,riongKo.S pi@€.rov€n oscop., pHippi..! l{.. r.6;b A,Ectdo. n sidrot Di,eh( 6,,A6io-pocific, .. $lt S*{Eb . he3ids{ DiEh{, n &@ cold.i Mjriiiiippi, tidd,€sio Dr.Woltoi.richr.ftFfr. Dircdv,pocificlgioir&nr.Inr, U.v. ofHo$iaotMonoo,US,A raib . ChielMini3h.,S€to.sorSrrb G@ehn6l

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Forinquii€sancvor€6€waliompl€asecontact Ms. Lengds M€€r,Tel.(632)873341i874011 sxt. 151,or Ms. D.,Jayme,T€t.(634864595i874011 ext. 125. o writeto: Ms.Pinkvrtunarde-Gar€gos, ArM1994Marbg€menr i:orie.once,i\sianrnsr,t,rr"orua1ig"ln"r,l, i*+n n. McMickingcampus, MCCP.O.8ox 2095,1200MajGi, M6trcManih.FaxNo.(632)StZgZlO td", a:rZeitMpN,,Cabr"AM NTLA

-J

lTeeda reason to eome home? The Asian Managem€nt Awards Febtwry18,1993

Homecoming Dinner Silver fubilee '1993 19, Febntorv

TheAsianManagementAwardsis conducted annuallyto recognize,honorand Promoteoutstanding achievementin sevenareasot manapemen'l:General Management.Information Tichnoloev, People Development, Finance, Marletrn[,'operaiions,andDiveloPme The awardt, which are given in \lr countnesHong long, lndonesia,Malaysia,Srngaporefhailandand thethiliPPines- beginwith the Manila awards dinner' 00 DinnetFee:PI,500.001U5$60

lnternationalSymposiumof Pacific AsianBusiness fisFAB) '14-15,199j Februqry

A hdlfdav conJe-renesponsoredby the Asian Llstitute ot'Manaqement;the LniveEity of Haof lntemational waii at Manoa.and the Academv 'litemational Busi Business,this yeals themeis nessand the Formation of New E.onoruc and will focus GeoDoliticatRealitiesin Asia." Sessions on ni* a"d" aliao"o and will featurekey Public officials and political anal'vsts. Fee:USJ.'l5A00 Resistration

Pacific Asian Consortium fol Int€mational BusinessEducationand Research (PACIBER) 15-16,1993 Febluaru Orqanizedby AIM alumni, thehomecoming dinnir oromijes to live up to its name Over 1,000alirmni from all overAsia areexPectedto attend the cocktailsand formal dinner to be held at the Shansri-l^a'sEDSA Plaza Hotel Crand Ballroom.First classentertainmentwill be Drovidedbv Monique Wilson, star of Miss sriio, andoneolthefhilippinec moste\citing t.]l;nt5.thecastofthe multl-awardedMon*olran Balbecrcand a host of othel stars. D innerFee:P500.00 I U S$20.00

The 193 ainual PACEER conJerencefocuses on the( hangineenvironmentof e\ecutiveeducation in Asii ai1d North Ametica Amonq the conJerence'peakers are Dean Edwin lt{iller of Michiean Univer,iw; Norman Marr of Vassey L nive'rsrwjI.A. Patagol the Asian Instjtuteof Manaeementdnd retresenl,ativesfrom Korea's Yonsd UnivetslV dna SeoulNational University and Canada'sMiCill University. Fee:US$90 00 Reeistrution 25th Anniversary Exhibit/Hall February14-19,1993

of Fame

Th? Holl ol faw, a perpetual e\hibit, hono6 {oundhe facitv membe6, presidmt!, governors andoustaridine alumni.The 25th Anhversarv exhibit provid* a vGual history of AIM, hiehliehtine 3Deciateventsand thepeoplecentral toihe'lrutifi ti's founding and developmeni OW to thePublic

Asian Nisht 18,1993 Febtuory classof lqq3, Oreanizedbv the P,raduating Asia; Nieht ri a shdw.aseofnsia s best:an evenine5f $ng dnd dancecelebratingthe uniqueiulture and heritage. regionr"s Oien to rhePiblic BENNIS

ooDortunitylo speal to a pdnelof internation_ aili'renowiredtpeakerswio under\tdndwhat it takesto manaee(omPle\and ever-changinB work relationshipscrucial to a comPany'scongrowth. The 1993 Anniversary Conferencefeatures tinued Fee:P7,000.0A Resist/ation IUS$1'100 erpertsand acddemic :urh manaqement Surus EailuRelistntionFee(Reseroatio made on andpayment A n a n d M i n i g t e r P l i m e T h a i at lormei : P6,000.00lUS$30a.04 25, 199 ot 6fot4anuary er_ dynamics and or8anizaltonal Panyarachun pert Warren Bennis. _ Management Conference Cocktails/LaunchTheformerprime minister,awidely-respected of the l.mes F. Donelan, S.J.Chair in and popularboliti(alfigurein theregion,rsal5o ing Ethics busrne!<manAs Business'17,1993 an j*ite, hiehy-rep,aided chairmanof Saha-UnionCorporatlon.I td , Februqry "Managem;ntand Society Anand willspeak on February17, 1993marks the launching of the i in the Asia of Tomorrow." a TamesF. Donelan,S.l.Chair in BusinessEthics The author of the besl selllng On BecnmiftS formergcl\ernoroftheCenbad{, whv I eadehCan t Lead;ndTheUnrcalily Jo<eL Fernandez, ( I,rdrJry.WarrenBennlswill .peal on thetoPi(". lral B,rnland I hechalrmdnof theSteering om'Leadei'hipand the Management mrtteewlll dcl as ho5t for the cocktails of ChanEe (Jpet1to Grcsts a d SPeciaI ParLicipanLs Confercnce Pdrticrpa;t.to the (onle;encewrll have the ) 1993 AIM Managem€nt Conference: The Asian Manager: ShaPing the Futur€ 17-18,1993 Febluary

AIM-SRF Board of Trustees Meeting February1,7, 1993 By lt11ritatfit1 Federation of Alumni Heads Meeting February1E-20 , 1993 BVlnritdtion Golf Tournament February19,7993 what betterwav to revive old friendshipsthan a of livelv sameot iolll frpenmce l}e chalJenge fast Lr'eens,wide fairwiv) or a bunler alno5l at bie ;s a lakeat the cowitry'\ newelt chamP'onstip goUiourse - The M;nila Southwoods Opbrtlottu Pubfu

Ilere are severfll... F o r c o n f e r m c € d e t a ipl sl e, a s e . a l l o r f a xM: s P i n k y t C a l l e S o s / f e l : E 7 4 0 l l - 1 9 E r1t 4 4 / 3 l b / F a \ : ( 6 3 2 ) 8 1 7 9 2 4 0 ' F o r ' 25th -.* i"i"rr.",Li- .. itt'er act')v-lgE*.2a7 /254/ Fa\: 632) 817 9240 or write to The s€cr€tanat'AIM of ManaS€ment, iocePh R McMicking CarnPus, MCPO Box 20es' 123PaFo de Roxas' r,""i""'."',", l"r".i"J,ute 1200Makah, Metro Manila,?hiuPPrnes

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the availability of teachen, possibly parental son very much upon him. In a ielationshipwith the kind of fatherhe surogates, whose shengths lie in cultivating Every person's develoPment begins with rcfamily. Eachperson experiencesthe traumas talent.Fortunately,when gmerationsmeetand would have wanted to be, Eis€nhower in this lost. And he had being the son verted to leam more about occut we *rociatea -ittt separating ftpm his or her the self-s€lections parents,aswell asthe pain that follows such a how to develop leadersand how talentedP€o- hiehlv chars& situation,he beganto leam and *'rench. ln the samevbrn,all individuals face ple of difierent generations inJluence each fnim ks teac-her.CeneralConnor offer€d, qladly took, a magnificenttutorial Eisenhower othe!. and achieving self-regulation iculties of the diff While apparendy detined for medioqe on the militail. The effectsof this rclationshiP self-control. But for some,PerhaF a mailriry people who form imPortant oneto- on Eisenhowercannotbe measuredquantitacareers, provide adequate the fortunes of childhood from gratification and sufficient oPPortunities to one apprenticeship relationships ar€ able to tively, but in examining his careerpath point, its si8nifiovercstirnate one cannot that develoPment. intensify their and accelente longer availrewards no find substitutes for "onceborns,"make The psvchologicalreadinessot an individual cance. able.Suchindividuals, the As Eisenhowerwrote later about Connot with moderateidentifications Parcntsand find to beijfit frorn'sucha relationsltip dependson "Life with GeneralComor wasa sortof gradua harmony between what they exPect and someexperiencein life that forcesthat penon in military affairs and the humaniate s(hool inward. to tul:n life from what they are able to realize ConsiderDwight Eisenhowel,whoaeearly ties,Ieavenedby a man who was exPerienced But suDDosethe pains of separation are in his knowledse of men and their condud. amplified by a combirntion of paimtal deI can never adequately exPressmy Srahmands and individual needsto the degree hrde to this onesendeman...ln a lifetime of or that a s€ns€of isolation,of being special, associationwjtligreat and good men, he is of wariness disrupts the bonds that attach the one more or lessinvisible figure to who childrcn to par€nts and other authority I owe an incalculabledettt."7 fisur€s? Given a special aptitude under Some time after his tour of dutY with srichconditions,theirrson becomesdeeply General Connor, Eisehower's breakinvolved in his or her inner world at the thnrueh occured. He rcceived orders to exDenseof intercst in the outer world. For atbend the Command and General Staff suih a person, self-esteemno longer deSchool at Fort Leavenworth, one of the pends solely on positive attachmmts and most mmpetitive schoolsin the army [t ieal rewardi. A fbrm of selJ-reliancetales was a coveted aPPointment, and Eisenhold along wjth exPectationsof Performhower took advantageof the oPPortuniry perhaps even and achievement, ance and Unlike his performancein high xhool and the desle to do seat works.West Point, his work at the Command nothto can come Suchself-perceptions Schoolwas excellenb he Sraduatedfirst in ing if the individdl's talentsarenegli8rble his class. no there are talents, Ev;n with strong Psychologicalbiographies of gifted guaranteesthat acfuevemmt wil f ollow let people repeatedlydemonstratetheimPorgood will be for result atone that the md pdrt a teacherptaysIn oeveloPurgan tant rather than evil. Other facto6 enter into individual. Andrew Camegieowed much are well. For one,leader develoDmentas ThomasA. Scoft. As head of to his seniol like artlss ahd other gifted people who of the Pennsylvania Westem Dvision the to neuroGes; their ability often strugglewith Railroad, Scott recognized the talent and function variesconsiderablveven over the the desireto leam in the yourg telegrapher short run, and some poteniial leaderslose assignedio him. By gjving Camegieintheir shuggle all together. Also, beyond creasins opportu nity to leam throu gh close patherns earlv childhood, thedevelopment o..sonil observation,Scott added to that'affectmanaqe$ and leaders-involve s self-confidence and sense of ilameeie people. the selectiveinfluenceof particular achieviment. Becauseof his own personal Managerial personalities form moderate fear and rnidelv distributed attachments. L€adeF, career in the army foreshadowed very ).ittle str€nsth and achievement,Scott did not Rather,he Saveit on the oth6r hand,establish,and alsoheat off, about his fuhrre development. During World Camfuie'saggressiven*s. War I, while someof his WestPoint classmates full play in encouragingCdmegie'sinitiahve intensive one-toone relationshim. Creatteacherstakerisks.Theybetinitial)y werealreadyexperiencingthewar fi$thand in It is a commonobservationthat PeoPIewith "emHded inthe mo- on talentthey perceivein youngerPeoPle.And fett France, Eisenhower sreat talentsareoften indifferent students. No involvement in working one, tor erample, could have prcdicted Ein- notonv and ursought safetyof the Zone of the they risk emotiorul The risks do not punishment."' with their closelv iuniors. Interi6r.. that was"intolera6le stein's ercat d;hievements on the basisof his Shortly afterworld War l, Eisenhower,then alway! pay off, but the willingnessto tale them mediocie recondin school.The r€asonfor meleader d iocrity is obviously not the absenceof abiliry a young officer somewhat Pessimisticabout appean to be cmcialin developinB I t mav result,i nstead,from self-absorptionand his career chances,asked for a transfer to LeadeB? tne itraUitltvto pay attentionto the ordinary Panamato work under GeneralFoxConnot a CanOrganizatiorcD,evelop peopleleam and de how about A mvth The army he admire<i. whom senior officer individual re wav an The 6nlv su hand. tasksat hold in American intemrpt reverielike prcoccupation and tumed down his rcquest. This setback was veloDthatseemsto havetaken d o m i n a t e st h i n k i n g i n , r l s o lke, c a n ' . u l t u r " when mind on Eisenhower's very much to attachment is to form a deep s€lI-absorption is that The myth business. to influenza PeoPleleam best a great teicher or other personwho under- his-fiIst bom son, succumbed thr€at of standsandhastheabilitvto communicatewith Through some senseof rcsPonsibility for its from their peers. SuPPosedly,the in recedes hurniliation even and evaluation to Eisenhower transferred owa, the armv then the sifted individual. for o[ the tendency peer because relations under his duties where he took up Panama, find what they individuals Whether sifted restraints need in one.io-one relationshiPsdePendson C€neral Connor with the ahadow of his lost muhralidentificationand the 5ocial

I}sveloFilet* of badenhip

"Leadenarcllkeartists andothergiftedpeoPle whooftenstruggle wlthneurcses..."

1993 THEASIANMAMGER JANUARY/FEBRUI.RY

on authoritarian behavior among equals.Peer nngements, prcbably accountsfor the reluctraining in organizations occurs in various tanceof many executivesto becomeinvolved forms. The use, for example, of task forces in such relationships.Folf4rrecairied an intermade up of peers,ftom serieralinterestedoc- esting story on the depaftue of a key execuopational groups (6ale, production"research tive,JohnW Hanley.frorn thetop management andfinance)suppoaedlvrcmovestherestraints of Procter & Ganible to the ;hief execuhve of authority on the individual's wi[ingness to officer position at Monsanto.sAccoding to this assertand exchangeideas. As a rcsult, so the account, the chief exec.utiveand chairman of th€ory goes,people interact more ft€ely,listen P&G passedover Hanley for appointment to morc obiedively to criticism and other points the presidency,insteadnaming anotherexecuof view and finally, leam ftom this healthy tive vice president to this po6t. rNercrumSe. The chairnan evidently felt he could not Another application of peer training exists work well with Hanley who, by his own acin some large corporations, such as Philips knowledgment, was aggressive,eager to exN.V in Holland, where oreanizational stru-c- periment and changepracticesand constantly tur€ isbuilt on the principle of loint r€sponsibit- challengedby his superior. A chief executive lty ot two peers, one representingthe naturally has the right to selectpeople with commercialend of the bwiness and the other whom he feels congenial. But I wonder the technical. Formally, both hold equal re- whether a gr€atercapacityon the part ofsenior sponsibility for geogaphic o_perationsor office$ to tolerate the competitive impulses Proouct grcups as the casemay be.As a prac- and behavior of their suborainatesmiiht not "greater tica.lmatter,itmaytumoutthatoneortheother be healthy for corporations.At least a ofthe peersdominatesthe management.Nev- tolerancefor interchanqewould not favor the ertheless,the main interaction is betweenrwo managerial team player at the expenseof the or more muals. individual who mieht becomea leader. The principal question I Iaise about such I am constantly;urprised at the fiequency arrangementsis whether they peryetuate the with which chief executivesfeelthreatenedbv managerial orientation and preclude the for- open challengesto their ideas,as though thi mation of one-toone rclationships between soure of their authority, rather than thef spesenior people and potential leaders. cific ideas, was at issue,ln one case,a chiel Awarcof the possiblestifling effuctsof peer executive officer, who was tn:ubbd bv the relationshipson iggressivenessindind ividual aggressivmessand sometimesoutright iudeinitiative, anothercompany,muchsmallerthan nessofone of his talentedvicepr€sidenq used Philips, utilizes joint Gponsibility of peersfor various indirect methodssuch asgroup meetoperatingu nits,with oneimportant d iffercnce. ings and hints from outside directols to avoid POStTtON Tle chief executive of this tompanv encour- dealing with his subordinate. I advised the ages competition and rivalry irroig peers, executiveto deal head-on with what irritated ulti.rnatelf rewarding the one who comesout him. I suggestedthat by dircct, iace-to-face COMPANY on top with increasedrcsponsibfiry These conftontatiort both he and hjs subodinate hybrid arrangements produce some unin- would leam to validate the distinction betended consequencesthat can be disastrcus. tween the authoriw to be preserved and the There is no easyway to limit rivalry Instead,it issuesto be debateil. ADDRESS permeatesall levelsof theoperation and opens The ability to confrcnt is also ihe ability to the way for the formation of cliquesin an tolenteaggrcssiveinterchange.And that skill atmospiere of intrigue. notonlyhasthenetefu of strippintawaythe One large,htegated oil companyhasac- veils of ambiguity and signaling so charactercepted the importance of develoDins leaders istic of managerialc1 turcs, but also it encourTEL,NO, thiough thed ii€ct inn uenceof rn'ior6n iunior agesthe emotional rclationships leadeGneed executives.The chairman and chief executive if they arc to sureive. I FAXNO. officerregularly selectsonetalenteduniversity graduatewhom heappoints his specialassistant, and with who he will work dosely for a ' New York: Harrcl-Row, 1973,p. 72. year.At the endofthe yeal theiuniorexecutive 2 Affred P, Sloan,lr., My Yearswith GaleralMotors CORPORATE PUBTIC COMMUNICATIONSbecomes availablefor assisnmentto oneof the (New York Doubleday, 1%4), p. 440. AsianInstitute of Vlanagement operating divisions, where he or she will be ' Ibid, p.91. Eugenio L6pez Foundation asstned to a responsiblepo6t rather than a . Ibid. Joseph R.tulcMicking Campus training position.Thisapprenticeshipac- t Ibid, p. 93. P0Box2095 quaints the iunior executivefiNthand with the 6 Dwight D. Eisenhower,Af Ease:StotiesI Tell To 123Paseo deRoxas useof power and with the imDortantantidot€s (New York Doubleday, l%D, p. 1%. F,'r'ends Makati,4etrol\4anita to the power diseasecalled&irbris- perform- ? Ibid, p. 187. 3 "JackHa leyCot Thae SellingHader," Foftlne, anceand integnty PhiliDDines W Working in one-to-onerelationships,wher€ November 1976. OR FAXTO: there is a formal and recomized differencein the power of the players,iakes a great deal of (This article origitlilly appearedin ancl uns re tolerancefor emotional interchange. This in- prinLedTttilhpermissionrtorfi flp Harvard Business teKhange, inevitable in close working ar- Review)

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THEASIANMAI'IAGERJANUARY/FEBRUARY 1993

perfection... Mastering

ofQuality: fie Essence TwoEssays By Eduatdo Morato GastonZ. Ortigas Professorof DevelopmentlManagem€nt I n "Zen in theArt ! of Archery," a I true account ot I an archery student in JaPan, the master puts his students in a gruelling, selfdiscovery marathon of learning archerv The frustrated students strain throughlongyearsof constantPracticein the art. Therc are no prescrbed trarmn8 orocedutes or preferred methods and iechniques. In fact, when one student decideil to employ his trigger-retating techniques(leamedfrom his rine-shootine davs)on thebow and arrow,themastei got extremely mad and almost aum-pednim. One was not suPPosedto follow a technique.One was supposedto and the be one with th; bow and arrow "let it hif' target. One was suPpo6€dto "male it hit'' the taryet. rather than The conce;t of perfection or ultimate quality is premisedon being a true master ihir -ea* eoinq through a processof detachingon"e'siU and-lettingthe ego drop. It means slowly with the environmeirt throu sh intemalization of that envircnment within the selJ,where the s€lfand the environment becomeone and the same. Perfectionor quality is thusa transformationof the self. To sei ther€, one does not look for techniqueso;ubidethe sef but attainsquality by awakeninethe di\/ine within the self. Suchis

"Business schools qualitymanagement pursuing it, are the'science'of through thepoint." missing

ous technique-o ented Ple'soiPhonsor quaF ity circles, iust-in-time deliveries and other Jjpanesecrazes.To hightiEhtthe folly of this ar]proach,Fortun?recently pubtished an arhcie tlut while the e.merjcansarc busy asPiring havealreadymovedon forTQM, theJapanese "flexibilitv." This will probably usher in a to LC "mastery'' in the art of new round oi bookson "fle)dbility'' techniques To illustrate his Management schoolslike the Asian Instiarchery,the master darkened the rcom and of Managementarethusproperly wamed. tute anow' another shot He then shot an arow. businessschootsar€ pursuing quality If these When the lishts were tumed on, the firstaro\T "science"ofit, then throughthe managernent the while target on the center was sitting dead point. Perfectionor qualthe missing ire the first. ln thev secondanrow pierced the shaft of'1et "arf' *ut Uegins*itt't riSorous seUiw is an it shoof' master the shootins the a-row, through like a ripened fruit that iust falls naturally ftom dinial ana completeibandonment Therc is practice. practice, practice more and no no efforb no strain, the tree. There was of self-perfection prccess for the no substiiute concoctedschemes. "lo6irg of the self' to Sainmastery ot The foolishnessof thoseseekingPerfection . whichis or quality through the trainedacquisitionof even'tnrng. Ii th" i"pul"* ut" to be emutated at aU, techniquesis manifest in the mana8ement 'Ihe businessfad of the day is (or was) managementschoolsmust rcalize that Perfecfield. is the searchfor total quality management(IQM) with iis van- tion is a quality of the sPirit. It

1993 THEASIANMANAGERJANUARY/FEBRUAFY

the "divine" in atl human beings. In the context of management schools, there fore,the Foponent of quality must be a master.He must havereachedthat spuitual perfection himseu. So when inePt itl-preparcd and poor examplesof perfection are strutting around preaching total wholeeffortbe quality management,the comd a taughing rnatter. When instart seminars,f-orcedtechnique-learning schemesand mumbo-iumbo aPings of Iapan ar€substitutedfor honest-to-8oodn& hard work and daily grinds of selfperfection,something'samiss. When the tleaders" or "masters" show no mastery, when standards of performance of both teachersand studenls are allowed to slip, when convenient short{uts are taken, then there cannot be anYqualiry Corporations are similarly wamed. Many of the most successfirlbusinesses started with workaholic entrepreneurs relendesslY who showed by examPle, "let the compuFued their visionsand "madeif' grcw bany'' grow ratherthan Many 6f Lne- didn't even Possessthe l y'hywere specifictoolsof management. thev very successful?Becausethey embra'ced,ibsorbed and internalized the art of perfection, of not ever giving up, of wolking til they droPPed Quality is thus a function of PeoPle expressingthemselvesin the fu llest way Posslbl;. It besinswith d og work Demeanintone's selfat thJstart stri psvanity and Prideaway,the very enemiesof ieaming. Humiliation and huiriliw are thereforeeicellent teachers lt thm proceedsthrcugh rpetitive functioning rrntil ihe action becoires secondnahrc to the actor. One has to be consciousof the irmer processeshappening within the self while the it'petitiuetattGa.eU"ingdone.Tum inwards, brlath in and out, eo inside the mind and explore every facet of your body, your conscibusnessand your sub<onscious. iniide, shedall hang-uPs,PretenAs you qo -illusions. Be a sponge. Absorb, sions ind absorb,absorb. This can only be done if you dmv deny, dmy. L€t things' haPPen "loosened. it beginsto idenAs the self is tifu with othe$ on a more meaningful plane This is wherc sPiritual.ity comesin. The filst stageof deniat is iust Plepalatory to the s€cond "othemess." As the selfbecomesmore stageof

selflessand more other<entered,there develops a fusing of spirits, a onenesswith everything. When this happens, there is '?wakening." Suddenly the archer.the bow and arrow and the targetarc one. Therecanbe no error in shooting becauseit is no longer a technique, shooting iust is. Takenftom the spiritual context, the Japanesetargetof"zero" assumesnewmeaning.In plusuing zero inventory zerc lead time, zero defectsand evenzeroco6ts,the vision is one of perfection. ln absolutezerc,oneaftainsinfinit'4 Itisiustlikethemathfiuticalformulaof oneovs zero.If thenumbq one(oroneperson)is applied overzero(or nothingness,which is the negation of theselo,thearuwerisinfinity(ortheatlairynmt of perfection which is werything). On the physicalplane,this may soundridiculor..rs. How canone evs have or attain zqo co6ts?It is like qeatingsomethingoutofnothingand according tioorjr religiousteachings,only God cando that But thatis pr€ciselythepoinL Manaresuppoeed to be qead in the irnaseand likenessof God. Men thereforehavetheathibutes of the divine. Men must therefore find the divine in themselves, which is Zen. They must seek "zeroness"to gain "infinity." The TtueMastet of Qua.lity Mqnqgerneflt . ThcTruermstetof qwlity managemmr is selfless andothercenterei. . He mustfu ;piitually anchord on thzrealmeaningol Wiection. o He must not twch W "shadng how" but byallowingluming to hapryn throughsheuhardunrk,pernwl doial andxlf4iscooery. . Thetaster guidesthroughdisciplineand ngof. He encourages W tnnifesting Mection in actafl. He fods, gMds,andcajoleshis dr*tples into ouwtf.rnning thernselaes at eaery singleorynunity. He must not compromise, flust flot louer his standards, Must not settlefw somethinglessthan Wction. . Thztrue flaster seesqlalw asit is acted beuu.seEtelity is not a torget,it just is.

ing of top performeE? What constitutestotal quality management?Thete have beenmany attenpts to isolatefactoE that producequality in organizationssuchasbusinessfirms, sports teams,ar-miesand religious sects. There is a .common themethat cub aqossquality organizations. First and forcmost,quality is a stateof mind. Better stil, it is a state of being. In the

oqganizationalsettin& quality is a pervasrve culture that deeply affectsthe psyche of each and every member of the organization. The proper questionto asl therefore,is 'trow does oneoeate aculhue ofquattv?" ratherthanask "trow does one achievi qu;[w?" There are three indisiensible ingiedients to the creationof oualitv cultures. The first one is leadership. fhe secondis a common yision. The third is a sharedvalue svstem. f€adeEhlp sets fh€ tod. It provides th€

is sure of what everyoneelsedesires. Fororganizationsin searchofquality, therefore, choosethe right leadeE. You can spot them by the way they are able to motivate people, inspir€ their initiativ€ and elicit their maximumperforrnance.Developacleal,wellarticulated,deeply-intemalized vision. Make it compeling. Finally, inculcatecommon valuesof what is important and what is not, what is good and what is bad,what is a yesand what is a no, what is laudable artd what is urpardonable, what is pleasing and what is reiolF ing what is fus" and what is "not us." When does one know that quality is hap pening in an organization? Therc are thrce manifestationsof a culture of qualiry Filst aU the actions of the orsanizations memb€rs proceed in a svnchronized fashion. Each hember is always supportive of the othet,asif everyoneknewwhateverybodywanted. Very liftle second guessing happens, very litde waiting for inskuctions; very little stalling and complaining. Everybody fits smoothly in a giant dock of buzzing burrin& busy parts. Second,in a culture of quality, therc is an electrifying hyperdoingnGs in the organization. The result of oreanizationai efforts is always greater than its pafts. There is tlut certainmergy field that brings the whole team to a higher level of achievement like a person who suddenly leaps a high fence or lifts a heavycarinonernommtof qisis, onemoment of do-ordie. Thld, culUl€s of quality can do m w|otE, They alwaysfind the conect formula, the right answer to the right questio4 even be{orethe question is asked. It is an intuitive, qea[ve organization primarily premised on the resowcefulnessof its people. It is an olganization that finds the elusive 17oof Edison,onlv becauseit has undergone the 9990perspir;tion. It is Einstein'so€anization that getsthe environment that is conducive for stretching answer on the 100thattempl ordy becauseit the potential of eachand everyone in the or- hasaLeady attempted 99 times. like the Pra ganization. It perpetually."allows" things to verbial hundredth monkey, it is an oryanizahappenrather than "forces ' things to happen. tion that has fi y imbibed knowledge and It values people above all becausepeople are gained wisdom becauseits individual memthe foundation of excellentperformance. Fur- bers have done the basic work of probing thermore,leadershippe$onifies the other two experimentin& doing and rcdoing. ingrediene of vision and value. From the three ingredients of quality culVblon s€ts a cbar dlEctlon. It uniJiesin- ture to its three manifestations there is the dividual efforts towards a common goal and organization "petri dish" that must be cultiaspintion. It rallies team membersto-thebeat vated. One "bacterium" must infect all the of a single drum. It provides milestonesand other "bacteria." Cultivating quality is a perperformance indicators. It measuresaccom- sonto pe6on approach.The medium is peoplishments not in terms of inputs but in terms ple, the messageis pefection. No one must of rcsults. be allowed to fall behind while others are A sharedvalue systemweavesthe organi- deliberately encouraged to lead the way. zation into a taDestrv 'Itof what it standsfor and Extracting the most and the bestfrom everywhat it work for. deepensconviction by one is the game pLan. The strategy is team, rcinforcingthatconviction throughevery office team,team.That meanse1pritd' corps,That order,incentivescheme,personnelpromotion, means patient and painstaking pursuit of action program, feedbackmechanismand or- total victory That meansall-out war against ganizational expnditue. It bonds everyone mediocritydivisivenessandself-centercdnes6. and sealstheir commitrnent. Itur eashesthe h the end, the petri dish must be fully conenergies of collective action becauseevery- taminated by qualiry T Hy

"Leadership setsthetone. proMdes It theenvironment conduclve fu stetching the potentials of each andeveryone in the olganization."

IHE A.SIAN MANAGERJANUARY/FEBRUARY 1993

Pastglory...

Regaining ThaiAirways: T

O , I

r a

IruilATWE

By Mlcha€l A. Hamlln Editor-inChief "suPer exhat are the world's nine Asian;the Four are cellenf' airlines? remainderareEuroPea&according to INrRAMAR WorMAirline Mont for,an industry referencefor almost 30 years. Thee of the Asian airlines have won Asian Maragement Award sin thePasttlvo yeaE;the fourth-Japan Airtines0AL) - wasa Pdrtner in the awards program in l9ol Along with JAL, Singapore Iniemational Airtines {SLA), 'Catluy Facific and Thai Airways toPPed the INTMMAR ranking for the regron. Si8nificantlvThaiis theonly airlinebasedina newly induitrializing econdmyto attain this toPclassification. Despite newly appointed chairman ChahaaBi BunvalAninu's admission "Thai's involvement asa key that, Player in the aviation industry has dirninished inthelastcoupleof yea$," theairlinedoes have a history of innovation - which for the most part haspaid off- in overcoming development hurdles "colonial pasf' and Beciuse it'had no theleforcnoaccesstoWestemai inemanageLtd menttechnology,ThaiAirwaysComPany invited Scandin;via n Aftines System(SAS)to takeaminority position in the firm in 1959.SAS was a loeical I and complementary- Padner,writiesVictor 5. Lirnlingan, becaus€it had no accessto SoutheastAsian marketsdue to its "non-imperial past.Accessto Jakartawas denied bv theDutih; toSingaporc,Kuala LumPur and H'oneKong bv the British;to Phnom Pen-h and Saie6nbv r"heFr€nchand to Taipeidue to Scandniaviarirecognition of Mao TbeTung's (then) new Peking regime." I-imlingan,a professorat theAsian lnstitute of Manager:nenfand long time consultant to the Orient Airlines Associahon,relatesa second hurdle Thai managementfacedearly on: "One of the difficulties of Thai's early years was the rcsistanceamong wealthier Asians to flying on local airlines. The westem-oriented el.iteiorsidered it saJetfashiomble and more aseeable to havel on older, more established airLineslil(eAir France,BOAC and PanAmerican. Re-educatingthe regional market about the merits of an Asian airline thereforebecame a qucial obiective' To this end, Thai aircraft were configured to carry passengersin geady

comPe imProved first and economy dasses.Morco- was to develop in Thai, a distinctive jn gene;ating high yields out of low tence conscious cuLinary by the vei, Thai, inspired volume (developing) d estinations. (ManageScandinavia*, inhoauced a level of drbome ment has)however,ilways pitted Thai against inflight the for elesancewhich was a match national sia;dardsof establishedWestemairlines.Thus relativelv weak and inexperienced for comPetitors usilal were its airlines.'These of shengttrs was forged oneof the competitive theseexotic destinations.Thw was ingrained Thai. Thai's aversion to headto-head marketing confrontation,an ave6ion, fortunately rooted UniqueMad(etingSttategy 'tsv 1%7,Thaihadcarriedis onemillionth in the Thai personalitv." But by 1'975the ailine was ready to sever and had beenconsistendyprofits passenger "smooth as Thal Alrflays' stylbh Sllk" campalgn tvs relaunched thls year.

its equity relationshiPwith SAS, and went on to Post averagegaDs m ^l6.7Va anltually over the next load factor ol a b l e . . . decade. ' Thai combined Chatrachai feels tllat Thai's present probin the best features of the lems-net plofit fell almostUS$100million " q92despite achieving rcvenue tatgets - are I airlines Westem Asian and the in dealing 60s re' due to thi airline's lackbi irurovation lnqeasing competition in the late"unique "Our Asia: within competition with Pastsuca young to devis€ quLed the afline rirark*ing itrategy in an airline world awash cessand glory have not beenrepeated, Partly becausetiere hasbeenno rcal imaginative or with marketing sbategies 'Thai's maikehns -rnaraqersdecided that innovative concept iniected into our s)stem past few asa new airline, the*hould"strive to develoP during the fast gr6r,r'thperiod of the a reputation for introducing regular,efficient, years." scheduledrrvices to the new and exoticdestinations thrcuqhout Asia. This would serve FomerGlory And Thai's new President has moved two purpoaes:createa distinct identity for Thai to r€store a spirit of innovahon ouickly expense. very little at io so and 'tsali was choeenas the initial site and on tilrnpeied bv thai ualues- to rcgain the comoetihve iniiiative that has characterized the Decernber1967,the first rheduled all jet serv- 'ailine in the pastdecade(Theairline rcceived iceto thefabledisle wasinaugurated.Oneyear awardsfor its advertising and 49 international inauguThai 1968, December on afterward, over this period.). Rights to printed materials rated its filst scheduledfli8ht to Katknandu, 1q80,have been restorcd in ilali. suspended by to NePal service regular first Nepal, the Ft Phnom Penh.Serviceto to with fughts along any airline. "The end result of this markethg thrust Fukuoka was inaugurated last year.

1993 THEASIANMANAGERJANUARY/FEBRUAFY

Nares Hovatanakul, senior vice president, pr€dicts that annual gowth will average107a over the next five years."Comparcd to 1990,a good year for aviation services,this February's load facto$ show rcal qowth of 15% while March traffic was up by20% ,romparedto the samemonth a vear earlier." Net profit is expected to exceed US$200 milJ.ionin tie fiscalyeariustended,and US$300 millionthisyear. However,theailinerecorded Drofit of US$291rnillion in 1989.Return on 3ales,although about three times the worldwide indush'y average,hasconsistentlyhailed that of SIA and Cathay Pacfic Airlines. Over the threeyearshom 1988to 19%,ROSactually dectined ftom 18.01to 13.89. Wh.ilesigns of recovery arc apparcnt, full recoverv hrrm lackluster leadership. the imDactof ihe Middle East War and ihailand's bwn intemat problerns- the May I 99I uprising and public controversy over military meddling in the airline's privatization pr} gram - will not take place over night Chacachai, who is credited with fostering the marketin8 and operational innovations which made the airline "super excellent" was prcmoted to the top position in Septemberlast year.A civilian police lieutenantbeforcirining the airline in 191, ChatradEi is its fi6t non-

Thai Airways believesin people and their confibution to competitive advantage.And sothe airline has, "recognizedthat the investment of time, monev and effort in staff trahing is a solid invesbnentwith proven results." .Ninety-eight percentof the rank and file receivetraining direcdy relatedto theirjobseveryyear;over52%receivetraining intended to conhibute to their development and skills. .Middle managementis also expectedto continue learning: every yea\ 45Eatake coursesdesigned to enhancetheir manage ment ski-tls,but only two percentreceiveany further trainin8 directly related to thef specrncpos. .But less than three percent of top managementreceivestFining of any kind - urlessit is "on the job." Specializedprograms contributing to intemal careerdevelopment are offered by the technical, marketing and ground and flight ooerations departments.Cabincrew train in a

military chiefexecutive His appointment comesat a time when the US$65 billion world airline industry has high hopes for Asia, the world's fastestgowing-and larff st-market. '[tessrll€ to dercgulate the industry ur Asia and privatize carrie$ is expectedto intensify competitive pressures. Becausethe

Asian industry is characterized by obvious overcapaciry further iNoads by Westem carriers will rcsult in fierce competihon. These competitive Fessur€s will be felt primarily in six key areas: image, price, in-flight and ground services, safety and scheduling. Whether Thai will again choos€a non-confrontational shategy to meet thesechallengesremains tobeseen,butChahachai has moved quickly to preparehis organization Chdman Chat.achalBunyaAnantaand s€nlor vlce p]€sldent and its 18,000employees. Nare3Hovatanakul. Unificatlon ln an apparcnt referenceto the infighting that accomDaniedthe militarv factionalism which sapped much of the carrier's vigor rr recent years, Chatrachai says, "The media hasreported extensively on our fragmented organization with different interest groups, and while these reports are not completely

specially constructedclassncom:a complete airqaft cabinincludinggalley.Their training later continueson actual fuehts. "General" courses are provided by the persormeldevelopment and haining department to all staffworldwide. Thesecourvri are concemedwith knowledge attitudes,values and perceptions of self and the social environment and behavior Dattems.Thev are intmded to enhancegroup productivity and harmonlz New hires all attend a fiveday orientation which servesasan induction to .^ffrr+a

^rlh!6

Another concemofgeneralcoursesis cross cultural urderstanding. Tof acilitatelanguage acquisitio4 fuly equipped languagelaboratories are availableat the hainine centerand the airport. In 191, over 100 specialized, five-day courseswereoffered,rcprcsentingover 12J00 man days devoted to enhancemmt of iob skills and Droductivitv.

unfounded I think they are be ing inflated through the media. "I have already effected the Rak Khun Taul Fa ("Love You

7 7

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High") campaiSninter-

nally as a rauyrng pomt In oroer to create a more unified concept among the staff... (which is) now very enthusiasuc

and they are tust waiting to see in what

directionI will lead." Indeed, one sensesan atmosDhereof within the airachievementand DreDaredness line s Bangkok headquarters. AndRak Khun T'rzoFa posters-a two-tone pink heartbearing the slogan and the Thai logo - adom hallwavs, office and cubides. Chahachai hasrevived his annual Marketing Activity Plan (MAP) conference,now calledthe CorporatePlarudngConfercnce."I us€d (the conJerences) to revitalize $e spirit of Thai. We always had an exciting story to tell our customels and our own people grcwth every year,new routes,new aircraft added to the fleet. 'tsut thenew meetingwill beanexpanded version of MAP becauseit will include not iust marketing but all aspectsof our business," Chahachai said rccently.The conference, held last November, involved 800 participants ftom the staff, media and tourism industry stationedaround the world. His concemwith motivatins and involving peoplein the airlinds developmentdemonstratesChahachai's concem with service - povided by both grormd and flight personnel - as a key competitive advantage. There-laurch ofthe intemationally awarded "Smooth as Silk" advertisingcampaign maniJestshis concemwith imase. The re.launch was preceded bv an old s€ries titled, "Airiine Value," int;nded to signal the reemergenceof one of Asia's best airlines. According to Thai, the series was intended "to draw attention to key airline pillars: fl eet,technology,geographiclocation and its hadition of impeccableservice." The third prioritv irea for Chatrachaicon-economy and scheduling: "We cems safety, must sear ouGelves to maximize all arcasof operaiion and one of the kev factorsherc is to uie the .ight aircraft on the right route in accordancewith the haffic demands to inqeasetheutilization of the fleetto beeconomicaUy effectiveand feasible.This naturally leads

THEASIAI\MANAGER JAIIUARY/FEBRUARY 1S'3

T H E R E W R R D SO F P L A N T I N G S E E D SO N C T - O U D YD E Y S G T - O WB R I L L I A N T L Y W T T E N T T T NS U N S H I N E S .

A V A L A C o R P o R A T I oN ?thFlooaMa]<atiStockExchangeBldg'AvalaAve.,Makati'MerruManrla PO. Box 259 MCPO, Makati, Metro Manila' Philippines o Fax. No. 815-2541Cable: A}ala Manrla Tel. No gt020ll . Telq Noa. RCA 22066 AYC PH a ITT 45213 AYATA PM

Although Thai's partnership in AMADEUS - a European-basedcomputer information network positioned against entrenched North American networks hasbeenhody debatedby indusEy observersand IT exDerts,the airline's concemwith information technology is well-placed. Every employee in the airline usesc\cmputers - every level and every deparhnent depends on them to do his or her iob, IT executivessay- enharcescompetitivme6s, efficiency,poductivity and synergy within the airline. ComFtltlve ftlvantagg. Passengerand havel related serviceshave been enlanced by connecting other airlines, key suppliers and serviceconhactoE-hotels, travelagencies ard transportation conc€rns- to the airline's comDuternetwork. Efficlencyl Redundmcy has been substantially reducedasa result of data integ'ration and information sharins between passengerard cargo salesand iervices, finance and accounting, flight operations,

gmund operations, maintenance and engineerin& caterin& and procuremmt and personnel managementsystems. Poduedvlty. T:rmeM as a r€sult of the decleasein redundancyis devoted to examining and pufting inJormation to work. More work is done in lesstime, with fewer people. Synet$f. Becausemore information is shared, feedback is facilitated. As a rcsult, somedeparhnentshavelearnedthat they can do morc than iust shar€information: they can shareitspocesing and rnoreeffectivelycoordinate interdeparknental actionbasedon the data and the n;dts of its ploc€ssing. But while IT mhances competitivmess, constant efforts to match gaiu by industry competitorsmeanspr€ssureto constandyimprove systemsand other advarcesin communications.And the capacityto rapidly change multi-tiered fare stsuchueshascontsibutedto the fiercefare warssparkedby deregulation in the West.Farc wars that could easily expand to Asiaasderegulationand privatization gain mommturn.

to the trimming down of our total number of Hudlosto Contemplato ainraft, and alsothe number of different types A numb€rof hudles must becoruideredof aircraft will be reduced." and dealtwith - for Tlui to adrievethis obi:c'"Ibday's averagefleet ageis 5.64yea$ per tive. Ilivatizingtheairlineforoneisonlythefirst airqaft," Nar€snotes, "one of the youtgest in hurdle in a npidly deegulating slviomr€nt the indusay... (and) a total of 32 new atrraft AJready,both Asian aswell asWesternairline will beaddedover the nert five vea$, are €stablishingstrategicalliancesdesignedto Chatrachaiis confident that he can restore lower costs,inqeasee{dci€nciesand er*rance Thai's slightly tamished lushe: "I do not think service. Thai must quiddv deterrninehow it we have lost so much of our position in the plal|sto campeb againstsridr tandentsasJALaviation world, and I am confidentthat with all Lufthansaand Northw€stAirlines-KlM Roval our combined efforts and the support of the DutchA ines. Dresentboard of dir€ctoE and the shareholdThai's early allialtce with SAS mav offer ers,we can regain our position very soon. the basisfor i viable counter offensivi. Thai "We have good people, a good product, grew by developing largely uncontestedmarand I am confident that given a little time Thai kels while building a r€putation for consistwill once again be among the best, if not the endy excellentservic€.Now tlut the airline is best,airline in the world." consideredworlddass, it should be capable of devising and implementing a strategywhidr will mable the airlineto competeheadonwith its pee6. An alliance with an Asian Pase8ngo€ airline in adevelopingeconomy Oulers 76% may be one answer. Malaysia, Lrdonesia and the Philippines have airLinesthat will faceenorL% mous competitive prcssuresin their home markets for the first Ca1go time ever. An alliance with Garuda, for example,is worth lJZ% conternplating for a number of rcasons.Fi$t, Indonesiahasenjoyed the highest level of foreiSninveshnent- particdarly 'Total Rovenue€- t !i S 19 Blllbn Japaneseinveshnent - of any of its Asean (Association of

SoutheastAsiar Nations) neighbors over the past two yea6. Govemment hasbeen widely praised for its moves to iiberalize the local ;urket, fostering competition, inqeasing expo-rts of manufactued goodsand creatingnew loDs. Second,Indonesia has the largest population in Asean-alno6t 200million - yet itsper capita gross domestic product is expected to soon surpassthat of the Philippines with ap proximately one third the population. Indonesia may very well be fheAsian market in dre regional market wery major international airline covets. Third, Garuda needsthe managementand operationstechnologyThai haspulto sucn good use, JAL'Sageement with Lufthansacomesat a time when it does not have the aircraft to incr€aseflights within Asia and poor financial prospectsof being able to meet demand in the short to medium term. Asian airlines complain that Japan has been slow in approving additional flights to and from Narita due to JAIJs shortage of aircraft. While the alliance with Lulthansa may appear to prcserve r€sources which canbemore profitably utilized in Asia, it is more Likelythat the allianceis filling another void JAL simply cannot fill on its own. Whateverthe answel JALwill behard pressedin any attempt to dominate Asian markets and it has shown litde interestin the Asian airlines which would value - and benefit from - its technology II fact, the still stodgy - and iust privatiz€d - JAL bueauqacy might benefit more ftom an alliance with some of Asia's top airlines which are nore customeroriented. An alliance between Thai and Garuda would give the two airlines effectivecontrol of more than two thirds of the As€an market it population - and thereforestntegic - terms. A secondkev hurdle will involve price and quality of service. At presen! Thai^offers a standardof servicedearlv suDeriorto that of its major rivals. Whether ii can continue to offer that standard at competitive rates may be largely determinedby the manner in which the airljne addressesthe question of strategicalliances.DominanceintwothLds ofAseanmisht lessen pressure to meet competitoE' potentially lower fares,and provide the opportunity to consolidate market share on the basis of customer loyalty rather than the pocketbook. The effect of the continuing rccessionin th€ United Stat€smay soontestthe value,however, of that loyalty as iegional exports to the West declineand revenuesgeneratedby that market subsequmtly spiral, dosely followed by Asian incomes. However Thai determinesit will deal with thes€questions,theairline dearly doesnot have the capacity to aggressivelycompete outside Asiawith world-widealliancesbetweenmaior ptayeE. lts capacity to retum - if it ever truly left - the ranks of the world's bestairlines will be determined by its capacity to operateprofitably in Asia. T

]HEASIANMAMGER JANUARY/FEBRUARY 1993

ExcTLLENcE RrcocNlztNc IN HUMNN RTSOURCE

ffi5AGEMENT Bv BienvenidoM. Perez

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fhe AsianMat]rlgetlale, a closerlool at someof the 1992 HRM penonnel o*"J""t, p,.anp riembers with innovdliveand flexible that rankamongthe world'sbest' .an-agementapproaches

OFTHEYEAR EMPTOYER National SteelCorporation countrvslatus'lhe questfor newly-industrialized rn i-f.r"-Fftifippin"t growthin the rapid The role vital performs a n"rc""isi".itbrpotation necessarytor it has made industries requirementso{various steel ironand enlerprisein the t ountry to dra\^ the N!i. irr" f"rdr steel-based operation' steelmdnufacturing Uirepriniior.lstoUtishingdn integrated Asia' "nuiiionudto be.o.e the biggestand mostmodernin Southeast program 1983 in three-phased 1 5-vear. thii implement ro ti beedn ot : + NSC,by 1e99,will havean annualcapacrty Undertheprogram, lhe magnilude of such volume production a With -illion .etric'tons. self-sufficiencv to finallyachieve loro"nv *oufa ,tt"* theihilippines dependo "enterprises -i:--Iin n $steeland e e l a n o s pspur u r t r rlhe e r drapid p r u p r progress v E ' c r r v " I of ' q i manufacturinS rqi"''_ * 1 suchasautomobileproductionandtheconstruc' enton steelinventories -h* tion ''" industry pMAp winners s" r '!!'ra! IPaterno SenatorVicente wrur -r.ru' wrnnt'rs with r - -_-^^-.. rl.-l i" rM'Ar i5 proiections are indicative of a company that. l.Uiti"ut itri. growing very big and very fast Accordingto N:C Pftid"!lll9-tl:.:

Monte DerMonte Dei ^-i^-+^r .^.r R,,Li.ln^n rwo in Mindanao' provinces in Mindanao, twonrnvin.es Bukidnon' and orientar fi;'":55:"flj'ffi:,fft#1:;ffi:i;';;:ilL-"fffi;;il;;;"-;;; t*::*?;: tecnrro:?5;#i;# otnewandsopnr$rcateo the infusion {1i;nqry; theinrusionornewandsopnisticateatechri8i;J;;;;iJffi;"r"+ 1T,:.:::cl:*"":.:,::, :: thecompanv l:?jl?t*Tl'; 41st is ranked revenues, r","iruif sross i"l"!i,i"l ri|.rnr. ii#;;ilt

.-po.t'niiJi' o""orthebiesest ".;;;;;;;;",,]r tois"oo ,'*,." ;i.'l',[ff8"#"'#3[o"i'flo",il'"1, involvement,and ui;loYee 'i$."f,i";.i'jJ':fi;T* ou,,t'","g,""* rhus,hepointed Der :fi"fllll*fPf *"^?:*'.T'f:ii}?:?ffi.1[:LE;*'#.'35 66vears, For thepast onice ' t'"ua ffiil;'h"; -."*i,i;li,flJli!iJ:; I ih."fiili,;.t!" i"L raii"' the orderofthe daY" become '"'io NSCembarkedin 1986on anorganizat"q" irements, .*i,f'"t"

and overseas PhilioDines

ilTt.ol1!:-"ll-*iy5;l*^J?i""i*:?i5ffli.:tffiTfiX prosram thatitisstirr;u;'i";bd;v. self+enewal tional ''TJ,f*i"J|ffljJ:"*#:lll3i:l'jiilHi:i"l$illa'e*ac" -o i'p"i""i"*""oJ.r,ingeinti,ecompanv,as;HttJ

il;H:ijl: |,ooo*iu"ott"'n.&sorisemprovees.r-rie;"fn:;X*ffi i:i""|''"*#Xixiil#'";ttt"t':"infirmary serviceand medical clinic to p r- loao .Ir-. n h".da.t ih,r vp:r,s Fmnlover oftheyear award, the

ffi;iiJq I - :l]-':f,l9li:,"s*:l*',",*;*:ffiftiil"",;"xffif :]l':]il;ffil'::iil.iTil'#fi:;;:xil"J'ffiilel'! byatraining i tggZpUlp lWAnOggS andaresupportd allemployees,

.ent"i rtiffed by +s full-timepersonnel. ofPlPOL of PIPOL(Produc- | Corporate itsorganization organization Throughits Awal& .. lwarOs I tor Uperatlng Program ol th€Year Employel lmprovement tivitv rmp-rovement,ffsj:,T_E.?pAlijilg tiviry iTf':LflojjlE,YFj""^"^,6" CoRPORATIoN i:-*r Nsc r,lc,r isimptry1t]:8-.1.^:jsy:ly ;< imnlementineTotal Oualitv I NAitoNAL STEEL unioNrsreercoRpoRAloN Lines),

ltnow I init5orsanization ManagementffQM) lTr].".1'^r-",::Jffi I qullitvr:alT': has^I23

t^"ootnrl.f9glil.,^ ,.,^ ourundrng pRoDucrs rNG. MANUFACTURING. AvoN

in the cannedor packagedfruis and fruit product (especiallypineapple)industry worldwide. *"'p""'i""vl.u"r,.atr,arteepin8aheadatso

I ."j"iHJil;"ffiir,i'.JiipJ/;;:11"a rantananb,

iiiiiiiii *riiifi" r*tings;itie meanI a"""rrpi"spoli.i", ""ndproSrams

whomeet emplovees, of 884rank-and-file ft;;t",5ii?#ffi".oi"Ii"iitv *r'"'. tt" I Achlevemen-t.Atr:ds ^^_^..-**^*,". regularlytoensurecontinuousimprovementin"'t!Fr,.'j's.Alhnctttalwerottlpvez'

fi:i-gy;"r"[T*:]1'rr|uuu5'r'Prvvs"'s"'" I ADR!\NC. PABAYO ^ rlL^..^h ir n , Fitinind-n,n .orrnraiion

"*,1':1::.1,i'^o*

ln pursuit of this objective' he said--'Del

,n",t*;:f#:rii,lH'[i*.',11"il',Tiiii"":l id!'"liillbandcommunitvReration" 6"iruionr"pniri"ppinornc i*::-*^"::"'lJ1"l''i"iq""'*i"t "sd;;i countries, i."'",i"..,"la"""cJ

implementedinnovative HRM and corpolate

#[ff:J",;ffl1;,1l|*.:'AfiJ:ifl:l]which actuallybeganasasimple formation),

Awardsol Dlstinction

mana8ement,proBrams.ffl.l,:::1,::,:n:l %'lq99f'.":l_".

bym",]:l::I?11 thos;nstitured b"tt"itnon ofthe ' F.,..qifll,., fortheEmplover orrfisalsono.inated yearaward.

aclingin Narciso.said,,' All theseprograms,

"liirllii";,fiii" '5ll'n"iJ!i.t

.a-ytnc lyg1.1a BM mifippirqs

responsible of the Nsc ot tomoF I will ensurethe success

healthand liuelif,i-pro-;e.s-being imple-

in OOa'ff"rentcommunities ,T"iJi"."", HEART ffn;;uojnlaanion,o f,'rautiesas ;'" i, p"U'.v.i", "f* f"pt ctosetabsonthe

ryWryry:fle c5qqqa1 ., ^*^^. liiii.e pkia"rt a cnielExecutive Officet

t"tl"aro """:p,"i,t.o,p"i"tion lll'":J#i. 1'lYl:ll::: 'I!l-t:-"l:

ol rnnoo#Ji'o"oo" ol Directoi Board

row"

ffi;';:';;"i;;;;;;;iii"ii"#:'"ffi'""

I E r( I nt YEAR lji THE MANACEROF MANAATK PERSONNEL PERSONNET

CortnunitY ComnunitYDevelorynent B. MAr{zA\ ts. MARZAN FEFREDESWINUA FREDESWINDA

""f3:'ili'i,ffi"',J.R:H?',1"itr"'fl'ff \ W*-, ' "' o'nxrlluliin"aion"top.ration ba,"dinMisami, ! ]': 1993 . THEASIANMANAGER JANUARY/FEBRUARY SPECIALSUPPLEMENT

pabayo said tf'loprogram,

ilJnd& inioeducation,

HEAii;;;;;;

hmftt.r,ational Relattoos

( on8ruencewith othero€anizalionalfunclions riidtrlii e uvr"re marketing -._ including. a customer-driven qrccw. ^__, Tecuti:e Bank :!^l11tl,:: Asian &vetopnent an it"rt ,11".rn1191115 agenda,

informa:i"1.T"",?:8"t* piogram,rntesrated \ facililres in mod€Jn anJinuest.ens -are for creatingthe NSCof todayand

r.,"lrtr,l"J-rives..l

#il;;;;il;,

-^_. u*"0",

:':: t:jit"t

ilffi:::J:

barangay assistance

dndnorthern bo'heastern

"*ft'J*1f;#il"*#'ig,*,,." oursrllotNc

pERsoNNEtPROGRAM

product linesatanv itsvarious people sellinS

given time. lts famoushome direct PASTPMAPAWARDEES sellingapproachrequiresdirect personal contactwith all customers,a E|nployerol the YaarAug.do€s Arvardsot Dldlncllon systemthat requiresa high qualityof 1991 Developmern Bankof th€Phijippines Avardoe Fbtd 1990 B€nkof thePhiliDDine 1991 Edinda HRtl at all times. lslands T.Vlllanueva Communily Developrnent 1989 FFMCoQoration Jos€P.DeJesus Govemmenl S€wic€ David D. cutierrez,Avon Prod1988 D€lMont6 Inc. Eenildo c. Homandez, DPM Intemational Relations '1987 Proct€r Philippin€s, uctsManufacturing Inc.president and & Gambl€Phils.,Inc Francis C. Laurel Managemenl general manager,noted that at the 1986 IBMPhiliooin€ lnc. 1990 CherryLynnS. Ricafterte Business Manag€ment 1985 Philippine Commorcial heart of Avon throbs a quality Int6mationat AgustinR.Bengzon Bank PivaleIndustdes "that 1984 Colgate-PaimolivePhilippinss,lnc.1989 Franklin M.Dnbn Govemment Sarvice workforce brings both manage1983 P ipinasShellP€trolgum Co|p. CadosC.Tofies Managem6nl mentandlaborina partnership marked 1982 Citibank, N.A. Estefania AldabaLim Community S€rvice by harmony,trustand cooperation." 1981 Philippjne PackingCo.rr. 1988 BignvenidoMagnaye Personnel Manag€ment and 1980 ManilaEloctricCompany He saidwhat is pivotalin thiscaseis LRConsultancy '1979 t,nil6dLaboratod€s, Inc. Pablode Gracia PdvaieIndustries open communicationlines in all ef1978 PaperIndustries Colp.ol thePhilipdnes 1986 GaslonZ. Orligas Education forts concerningemployees."Dia1977 AyalaCorpoElion Augusio L De L6on Manageoenl logue and communicationare two 1985 ouintin S. Doromal Education Peflonnallidnsg€r ol tha Ycrr integralaspectsof quality manageLilia Q. Ramos Community 0evelopm6nt 1991 FolicitoM.Oorningo, FPM R6neZ. Adad Business Managemeni menl" he stressed. 1990 Mafquoz O.Go Educaiion with the weight of competition 1989 Motodio N.canuotas, FPM Comelio Perdlla Managemenl in Privat€Industry alreadyburdeningmanagement and 1988 Hemindac. Asuncion. FPM SamonT. Jimenoz HRMPraclic€ pressuring 1987 RanulfoP.Pavos.FPM Edgado B. Espiritu employeesto continually ftivate lndustri€s 1986 OscarL.Coritrelas. Jr, FPM OdandoP. Pena PelsonnolManagemenlPractice improveproductiviryCutierrezsaid 1985 JacobC.Ktiatchko, FPM MelitonV. Salazar Education Avon organizeda labor-management 19eP EmilianoJ. Amas.FPM Arturc B. Tanco GovemmentService cooperation steeringcommittee that providesa forum for joint consultation,peacefuldiscussion andopenexchangeofideasthateventually lead Cutierrezsaidqualityeducationworkshopsare run by the company,s to the reachingof consensus on issues. HRM staff.Avont HRlvlstaffinstillsin everyemployeethe needto Explainingthis setup,he said,"Employees haveasmuchstakejn the measureand managequality in theirindividualworkplaces, focusingon companyasmanagementand, therefore, theyshouldbe madeto matter, qualitythmughdefectprevention. to feelthattheycountandthattheirinputsarevaluable.,, ButotherthanhandlinSthistrainingfunction,Avon'sHRM staffalso In supportof theseefforts,Avonalsohass€tup qualityand producmirrorsthecorporatequalityobjectivesandtheso-called,,sociological processes tivity improvement thatemphasizeAvon's qualityphilosophy. software"of thequalityprocess.

PHILIPPINE ELECTRtC.a ptonasrin IranstormortechnotogyIn tho ph ipptn6!. hlr o€cnm tho Dusrnesitor lho pasl l8 years.That is why w6 havo rn uncomprigino comm|rmenllo produclqualhyend roliability.Throuohlechntcalti6-upswith tc.dlng wortdctaSatochnotogycorporaliontsuch ss GenaralEloctric.lnd W6a nghoula ol USAand Hlt.chi ol Japan,PHILEC,ov.r tho yEar6,has d.velopod the necia*ry comp€isncrosloasslmilalath€s6technologi€sand uniqus oxporii36to,6tin6, Innovtlo, andaalapllhosstechnologiesto ths nesdsol the variousmarkalslt lorvst" PHIL€Cmlnutrcture! ringls and thr€q-phts6distrlbutionand gow., l.rnsfonnoru (rn.bo/outdoo..lyp5)€izerangingtrom 1OKVA to 15,000KVA,bflmary votteg€:4.16KV lo 69 KV,€ocondary vottago: 120V to .t3.9KV.

PhilipplneElectricCorporation r.d.rbr Olld S..od flod, srn. No. 216, Ch.dcr. So{&|e, Id.tco A{nu. @rn.r t.l t. lod. P..io. ra.ro u.nih i.l.. atl{1-55 ro 16 D., tzt-9?-n t@t r71urr3,

L.nur.dsn.a a&t Bo.ootor., t.yt.t. T.rr. 066.a3.1tto 15.ra 0{r5{a3t r! 3a

ANDBOARDOFDIRECTORS THEPMAPOFFICERS CaiitoS.Villanueva Inc Philippines, Me6dJohn6on P€siderl

AriuroBemardo SmithKineBo€cham Dioctol

Frcd T. Pizzaro,JI. Avon Producb ttffg., Inc. Arcdor

FPM S.Ventura, Ro6ario tntelPhilhpine61419.

SalvaciooT. Est€da, FPM Menilahnkets Life A6cbr

Roy P. Toldtino, AFPM Jact to /ron & St€eiSho€t D ector

O. I'l€ry,FPM Eonifacio RFMGroupof Compani€s heorate Secreary

P Burgos'Jr'' FPM 8i6nv€nido Dir€ctor

SolitaV. DelantEr HondaV. Delantaf Treesuer

MarqEzO.Go TexasInstrum€nF D.€ctor

OriandoS. Zorilla,AFPM SGV& Company Director EdgardoR. Soriano,FPM lnic'betk Diretot

BelirizC.Alo Aqtunk,N.A. Drcctor

FPM Rafa€lZ. Ped6cto, HRD MeSnitude

FglicitoM. Do.ningo,FPM Kinhdy-Cla* Pttils Dhectol

Al€clol

ReneY. Soriano Ex-Ofltu kt b9't Henande& Sycip,Salazar, Fellbayan-Palibo LawOffrc$ DevL Gatnaitan fuh,eManpowqRes.'Jrces lnnediatePsAjPt€f,ident Sectgt€4y-Gene.€.l

Wenco€laoL. Malabanan,FPM w.D. S.ott Philiwhes, lnc. Clgitnwt, Cooncilof P€dfultid

DedicatedServlce to the FlllPino is the secret of our success PNB b€lievesthai Paft depends of its succ€ss on communitYandnational development. For 76 yea$,the Bank hasfulfilled its commiunent to providelhe FiliPino he needs tlle r€sourc€s to build a beter tutue. Liberalizedlerding faciliti€s. CountrysidedeveloPrnent Pmjects. CommunityPograms effods. andrclief assistance You cancounton us. . . . Bccausctocvalacour partnershv vtth the FiUPino

PhlliDDlneNational Bank Bircro rc Brvrn

...............'--.............'................'hzs laseg ol ovq Pg bilr,n, zfi brargho nelicrttrito' 12.orelsoes

ffich*;ialli*,

o,,* 7w corelryderlt lp,ttrswotAffi *leno€':PAA,,thgdnk

1993 ' THEASIANMANAGERJANUARY/FEBRUARY SUPPLEMENT SPECIAL

COMMUNITYDTVEI.OPMENT OUTSTANDTNG PROCRAM Mctorias Milling ComPanYInc. MctoriasMillirig Companylnc., a NegrosOriental-citedby the 1992boardof basedsugarmillin{firm, was "mostvaluablecontributions to its of in;ecognition iudses lneeconomic,social,health,educational itr""uoliftrnent-of of the various andecologicalconditionsandrequirements " communitieswherethe companyoperates The company, through its affiliate corporation, of VictoriasFoundationInc.,extendscommuKauswagan to VMCemployassistance nitvrelaiionsanddevelopment in themillinBdistrict' eesandtheneighboringcommunities includesa nutritionand healtheducation The assistance oro*ram for malnourishedchildren and their molhersi projects; dndmicro-enterprise livelihoodfarming,livestock marketingand triding servicesfor agriculturaland nonin the area;managricultuialproducsof thecooperatives 6wer developmentand placementservicesto provide employment;andothersocialserviceprograms. AWARDOF DISITNCTIONtN MANACEMENT Virgilio t. Pefra- Presidentand General Manager,IBM Phils.lnc. F;lBM Phils.Inc.,1991wasa recordyear. It was the year when it postedits best revenue and orofitstotalsaswell asitshiShestcustomer satisfactionrating.Thesea(hievementswere of MrgilioL' largelyanribubbGtotheleadership Peffa,the company'spresidentand general manager. Pe;a ioinedIBM in 1965.He rosefromthe ranksto hispresentpositionthroughhardwork, dedicationind continuoustraininS,both in the he develandabroad.As president, Philippines ooed the visionslatementof IBM Phils.,more 'popularly known as the "Top 40," and was in introducinginto the corporate instrumental DrivenQuality(MDQ)awareMarket a culture ness.Thisqualityprogramis widely acknowledgedasbeingoneofthe moslcomprehensive scenetoday.lt covers in the Philippinebusiness to courses from awareness ranging a widefield, and incentivebonuses' processmanagement AWARD OF DISTINCTION IN INTERNATIONALREIATIONS McenteR.layme- ExecutiveD iredor,Asian DevelopmentBank Mcente R. layme, a former secretaryof finance of the Philippine Sovernment,was "distinguished achievementin the citedfor his andSoodareaof internationalunderstandinB will." He is the founder and chairmanof the of DevelopmentFinancinglnstituAssociation an organizationthat tions in Asia-Pacific, groupstogether3l developmentfinancing in' (DFls)in theregion.As rtscnalrman, stitutioBs he has initiatedactivitiesthat promotd cooperationamongthe DFlsin the Asia-Pacific He hasalsoset into motion programstor cooDeration,both in the regionaland internadevelopment' tionallevels,forsocio-economic lavmeiscurrently theexecutived ireclorof the Manila- basedRsianDevelopmentBank' AWARDOF DISTINCTIONIN ENTRTPRENEURSHIP ReneE. Cristobal- Presidentand Chief ExecutiveOfficet OverseasContractorslnc'

ReneE.Cristobalisthequintessentia, entreAWARDOFDISTINCTIONINCOMMUNIW preneur.He is the president,CEO and board DEVETOPMENT directoroffourcompaniesinvolvedinoverseas Fe Fredeswinda B. Marzan - Board employment.He is alsothe founderand oresiMemberand SecretaryEducationalResearch dent of four companieswith businesses overand Development fusistanceFoundationlnc. seas. Fe Fredeswjnda B. Marzan,a lawyer,was Inchoosing himastherecipientofthe 1992 cited for her "outstanding contributionsto the Awardof Distinctionin Entrepreneurship, the upliftmentof the country'ssocjal and morar boardof judgescitedCristobalfor successfully valuesthroughher active involvementin the initiating"lhe establishment of an enterprise Educational Research and Development Assistand directedits continuinggroMh and profitanceFoundation lnc.(ERDA) since1929.,, ability,th!s providingemploymentandopporSheiscurrentlythesecretary andboaromemtunities for Filipinos abroad, now a mator ber of ERDA,an or8anizationthat providesedusourceof foreignexchange." catpn to rnorc than 45,000studenbin diflbrent Cristobalwas also credited for helping gradelercls,throughthesupportofvariousforeign elevateand improve the image of overseas and localdonon. employmentby advocatingprofessionalism Whilepursuing a highlysuccessful careerrn and adherenceto strictethical standardsfor HRM,Marzanisalsoinvolvedin communitvdeforeignemployersand Filipinoworkersalike. veloprnentworkdtrcught RDA,soiJrcing locdIand Through his tirelessefforb, he has assured NationalSteel: aBuildinga Country.,, toreignfundingford|eorBanization's prc various maximum protectionfor Filipino overseas grams,zuch as $e settingup of an academic/ workers,optimizedforeignexchangejncomefrom overseasemplov_ vocationalhigh Manilaandprovidingincome.generating fhool in Pandacan, ment,and createda highlypositiveimageof the Filipinoworkei projects andskillstrainingfordepressed communrles.

s/.,' In 1851, seningthepublic. bl yeanlater,

i..'

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wart r. i

riai !i

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w. oILEl rh. ouq hdi - km Le BIt

rh. (osr!

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Vr roir are ol rhee*. We rale o,e ofror 1urur.

;

f, s6

. IHE ASIANMANAGER JANUARY/FEBRUARY SPECIAL SUPPLEMENI 1993

An tnterviewwith Outgoing CarlitoS.Mllanueva President PIMAP sa d iscipline,humanresourcemanagemen!hassteadi ly evolved to becomea vitalinstrumentin runningcorporateor8anizations. in experienced in personnel administration Followingthechanges H RM hasprogressed anddevelopingcountries, bothindustrialized from the days when the job la€ely meant hiring people, keeping employeerecords,and payingpeoplefor jobsdone. of the PersonnelManagement Human resourceptactitioner-rnembers asagentsofchange ha\€erne€edinrecentyears of$e Philippines Association Theyare now in thefrontlinesof business, organizations. in theirrespective pro8ramr*ratcancreahanenvircnrnent conducive helpingdevelopsfrategic and Poductivity commitrnen!cooperadon, to competence, on a broadfieldof skills,local Withcontinuousandconsistenttraining human resourcemanagers,accordingto PMAP presidentCarlito S to the many \4llanueva,can be more responsive in the confrontingPhilippinecorporations challenges '90s. In an interview with fhe Asian Managv Mllanueva shareshis views on currentpersonnel issuesas well as on PMAP'Srole in administration developingHRM skills in the Philippines.Excerpts follow: QU ESTION:In line with the steadymaturalion of Frsonnel administrationpractices,what is PMAFs maior concern at pr€sent?

and laborto effectiwlyrun HRM rnatbrsin anyo€anization. Q: What arc the influmces which havednped the developmentof HRM pnctices in the country? A: Initially,AmericanHRM conceptswere widely adopted.Ap byobiecproaches, in thisregard,includethewell-knownmanagemenl HRM Slowly,however,certainrapanese appraisal. tiveand performance styleshaveemer8edto be incorporatedin current corporatiepractices allianceto meet Thereis now unquestionedlabor and management companytargets.Discipline,lifutimeemployment,and solidcompany HRlvlinfluences. loyaltyareotherhallmarlaof Japanese havemadean odd mix of all Throughtheyears,manyorganizations thatwefind theseHRMstyleswith our own peculiar,nativeapproaches itedforour needs.Thus,we nowhavea uniquelyFil ipinoH RM arebest-su stylethatcannotbe mistakenfor eitherAmericanor Japanese I in adoptingpurelyAmerican Yousee,we haven'tbeenthatsuccessfu concept theAmerican Forinstance, or Japanesestyles. evaluationcan not be appliedin its of performance strictestform sincewe Filipinosconductcompany matterson vervinter-Dersonalbars.Thiselementin makesitdifficultfora our HRMaooroachsometimes personneladministrator to Sivenegativeevaluations in liShtof the friendly outrightto his subordinates based companies Multinational relationshipsexistinB. in the country however,are the exceptionsto this evaluationis sinceformalperformance observation culture. part an integraf ofexistingmanagemenl At present,manycompaniesaredirectingmanagementto capitalizeon existingpositivecultural These normsfor the efficientrunningof businesses. Filioinovalueslinkedwith HRM practicesinclude "oakikisama"and "malasakit,"both conceptsof seemlike which makeworking in an orBanization operatinga familyenterprise.

ANSWER:We are specificallyconcernedwith developingmore effectiveand competenthuman Fromhandlingmerelystaffsupresourcemanagers. practitioners portfunctions,personnel administration to handle are now beingcalledby top management criticalissuesin the operationof business To meetthischallenge,we haveto learna wider Q: Sofu, how hasHRM progressedin fhe Philip Butthistaskhasturned varietyof HRM approaches. Villanueva;HRMpractitionersmust pines? out to be a complex one consideringthe many practices haveagenuineresolveto lookafter administration changesin humanresource the wilfare of fellow workers. A: We haveimprovedthe pastseveralyears,but it that haveemergedin recentyears. Statistics thatcan has beena painfuI learningprocess. we are now veeringawayfrom theoreticaltools Employmentshowthatthe of Labor and Department pace from the with be obtained HRM to keep pragmatic in approaches more are adopting and numberof laborunrestsituationsand workers'strikeshavedecreased world.Our 28th thecorporate currentlysweeping the dynamicchanges havebeenenthusiin recentyears.Laborandmanagement significantly in lloilofocusedon the heldlastSeptember PMAPNationalConference "hands-on attitudethat creatingawork understandinS, mutual in forging better aitic HRM,"which involvesthe useof adoptionof what we call Priortothis,however,instabilityin andproductivity. practicalsolutionsfor critical issues.Previousnationalconferences inspirescooperation laborhasledplentyofcompanies betweenmanagementand therelations on purelytheoreticalHRM atr trainingand discussions concentrated of workerswithoutjobsandeconomito clor shop,leavingthousands proaches. callydislocated. ' Thus,a bi8gernumberofcompanies nationwidearenow cognizant an efiective hunun resourcemamger Q: How would you describe '90s? of HRM5 importanlrole in enhancingoperationsand advancing in the corporale world of lhe bv many CEOsand uppeFecheion corporatetar8ets.This awareness hashelpedelevatethe statusof the personnelmanagement executives A: Firstof all, an efuive HRlvlpractitionermustha\€ a sharpfocuson as orBanizations iunctionsin their respective and humandevelopment Althoughtherearemany prdctical administration hesto personnel approa( of more group.The resultis the proliferation partof top management theorieson HRM, toddys penonneladminisnatorshouldbe both btoadpeople- orientedmanagement systemsIn companles institutionalized of hiswork will not be mindedand pragmaticenoughthatthe performance not only in MelroManila,but alsoin the provinces. limitedby histextbookknowledgeon variousHRlvltheories. andchangingemployeevalues,local Despiterisingsocialpressures Experiencecountsa lot. Competencein dealingwith a vast rangeof roughlytwodecadesagohadbeenslow in developingthe corporations problemsin HRtl canonly be acquiredby a practitionerwith yearso[ management modernHRM practiceswe are now awareof. Personnel exrrience in HRlvl.Plentvof new problemsin HRNI havecroppedup in in hiring keepingrecords,paying previouslymeantonlyresponsibilities recentyearsf|atdresecannotbefoundinthebooks.Hands-onexperiencein developtheunion.Wide-rangetrainingand giresa practitionertheflexibilityof applyin€adequate wages,andbargainingwith manyHRvl situations includingthe adoptionat work of a peopleme;t of HRM practitioners, solutions,which can be efficientlyand harmoniouslyadoptedby laboror philo6ophy, were unheardof backthen. orientedmanagement or bolh,in linewilh avo\^€dcorporale mdnaSement, 8oals. must haveis thatan HRM practitioner One importantcharacteristic Q: Has lhe widespread awarcn€66of HRM'S imPortance in the a senuineresolveto lookafterthewelfareof hisfellowworkerswhile,at ttelp"d nfuethe levelof PhiliPPinePersonneladministration or the o.s;ir"tion the company interests of with the being concerned same time, thi co-mparedr."ith ihe URJvIpracticesin other Asian€ountri€sl Are there who is identifiedbyworkersas manager A humanresource organization. :omeoneonly mindful of the company'sinterestshas no credibility nitl iroblems ltlat hinder the cominued prcgrcssof local HRM? to dealwi6 problernsin theo€anization An HRlvlpraditioner whatsoe\r'er A: Basedon feedbackwe obtainedfroma regionalHRM conference alwals strikea sensitivebalan<e betweenlheconcemsof managernent must

. THEASIANMANAGERJANUAFY/FEBRUAFY 1993 SUPPLEMENT 9PECIAL

held lastyearin Manila,we comparefavorablywith thecurrentleveloi HRM developmentof our Asianneighbors. We haveaken the leadin makinginnovations thatarealreadythe subjectof variousinquiriesand sruote5. _ However,lack of adequatefindncinBto trainanddevelopHRMskills ot personnelddministraloAremains a maior stumblingblock to the continuedadvancement of local HRM practices. Withoutadequate fundsto sustaina substantial traininganddevelopment programin l-iRM. a compdny( annotreallvgoall-outin improvingitsHRMo6jectives. This situationholdstrueforanumberoffirmsoperating in andoubideofMetro Manila. ln thisliBht,cooperdtion amongpMAp'sover 1,000membershave made it possiblelo crealed solid baseon whlch to jaunch service improvement proBrams. Thisthrustmajnlyinvolvesa betterorovisionof serviceto membersin theformofcontinuingeducdtjon andregularinter_ actionwith fellow practitioners from variousindustries.W; hope to maintaina positiveimpression amongmembers sothattheywillseizethe manyopportunuties availableousideof theirown companyprograms to widentheirknowledgebeyondbasicHRM skills. . . 9_l Shor.f{ govemment intervene moie in initiatives of the private sector?

HRM developrnent

A:Actually,we preferlessgovernment intervention. Theorivatesector isalreadyproceeding very well in enhancingHRM practices acrossthe countryCovernmentneednot movein the samedirectionor elsetheir effo(smdynotproveto be helpfulafterall. Idkefor instancethepassape ol the minimumwaBelaw,theprovisjons of which is vervdifficultfoi.r numberofcompanies to complywith.Webelievethat theseningof wage s<alesis bestleit to freecollectivebargaining Q: What impact hasthe annualpMAp awardsprosram madein sour ring higher motivation for companiesto imprcvi H-nU pnctices?'

A:As a humanresource development effort,it hasbeeninstrumental in makingbusinesses realizethatpeople-oriented management and the promotionof workers'welfareare valuableassetsconirjbutinsto lhe andinmentof corpordtegoals. Winnershonoredfor theirachievements in HRM and other related fields servea\ inspirationfor professional groMh. The awards,as hallmarksoi recognitionin thefieldof HRM,6ave actedascatalvstsfor HRM practitioners to comeup with innovativepe6onnelmanagement approachesthat now enable corporations to pursuedevelopment obiectivesmoreefficientlv MetroManila-basedcompaniescompanies havebeeninthewinners, circle more times than firms from the provincesbecause of their sophistication in organizingHRM programs.A well- developedHRM depadmentis a primeconsiderdtion for being nominatedfor anyofthe PMAPawdrds. However, companiesbasedin the provinces,even modest-sized ones,are steadilycatching upwith theircounterparts in Manila,reflectingthe kindof motivationtheawardsinspire.Inthisregard, innovationsand developments in HRM arebeingspreadeffeaivelyto businesses outsideManila. Nationwide,the roleof corporateHRlvl,asembodiedin the pMAp awardshasemergedasa drivingforcethatboostscompetence, commitmenl, betterlaborand management cooperation,and productivity.A laâ&#x201A;Źe cross-section of HRM practitioners are now requiredto function wilh moreskillsthanwhatwas requiredin previousyears.With pMAp winners'profilesas guideposts, HRM practitioners must now activelv participate in thecor@rateplanningprocess, armedwith widerknowledgeof production,marketingandfinance. The high standardsset by pMAp winners has also made it necessaryfor organizationsto regularlyreview their training and development needs.Specialization in HRM hasalsoledtoemohasis on morefamilywelfareand communitvdevelopment programs not justmanpowerplanning.The PMApawardsdemandthistotalHRM packageconcept.

A new vision.A new world. This is how San Miguel Properties Philippines, hc. sees the future. A new world order where new home environments, workplaces, industrial cities dse wiflout harming fte bormties of naturc.

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SPECIAL SUPPLEMENT. THEASIANMAMGER JANUARY/FEBRUARY 1993

anaccidentl isnever ualiW theresultof it isilways effort." inteilifent lohnRuskin ancritic Eislish

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TTIERIGIITPEOPLE TO DOTIIE JOBRIGHIII Conslrucllon grro$ oae oxponsive' the righi Conslructionerrorscon be ovolded bY choosing poopleto do lho job flght fullYinl€€roied Englrsh'speokng AG&Phos o 'ts.OOOmon *Jtiorca atp"tr"na"o in dlflersnl iypes ot conslrudion ".nslruci'on cNil elecko-mechonicol friJt'iriii'ii,i,"liv he righl inJiriioriono, o moinlenonce iob AG&Phos lo 6GR tp .ouo"' proleci monose's l;;;l;;t weldors. of AG&PS €xpetienc€ includ6s successrulcomplelion Ii'J"L iniu-.ttiorprontsond ottshor€tocrlitlesin Aloerio' Angolo i.". i"t"tr, ooo" sudiArohio, s{don Yem€rt' Guom' &unei' Republic' Dominlcon c""s.. iiiii'',il. singo

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AG&Pon the iobl OF MANILA,INC' COMPANY GULF& PACIFIC ATLANTIC.

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'1993 . THEASIANMANAGERJANUMY/FEBRUARY SUPPLEMENI SPECIAL

MuloNs Srnvlruc SM MEANs withshoes. It allstarted why,lhirtyyea6a8o,S^4 That's stoodforShoeman. somany Today, SN{ stafd5lor o t h et rh r n g s. . Where malls. Llkeshopprng you can havefun and iind you'lleverneedl SM everything money, for saving alsostands and highqualityproducts through you atprices webrin8you, services money, means smart like.And5N4 installment credit withthebiggest concardfor your shopping for bank venience. Anda savings yourpersonal needs. 5M banking the momenh, means savoring youshare with moments spâ&#x201A;Źcial thatwe have familyandfriends, cometo bea partof. forallthese. 5Mtodaystands ThattwhywesaySMreally millions . , . andthat means serving youl means serving

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. THEASIANMANAGEB JANUABY,fEBRUARY SPECIAL 1993 SUPPLEMENT

conuol... control... undersocialist enclave A caoitalist

HonsKonginthe Year2020market and and ufiequited transfers.Toudsmis an imPortrv, bankine s€ctot real prcperty -l^Jitl the Profits it de- tant sourie of for€ign excharge incr:me ior trirsportai'on ind ustry. further bolster- China. Hons Kons r€sidmts accounttor ov€r inveshnenb these rives'from 'visiiors" t; the mainland. China eams China 607"of Ithoueh the People'sRepublicof China ing its foreign exchange earnings, Kong invest- considerablesums ftom forcign towists who resuri'espoliticil control over the terri- coitinues to ixpand its Hong and diver- proceedthereafter mioying a holiday in Hong tory in li7, Hong Kong will rernain a ment Dorffolio,6oth in termsof size s€ek Kons. naturaly wil this, Beiiing maior intemational businessand finan- siw. In view of 'ihere is everv reasonto beleve that Hong dinate' invesbnent Kong's Hong a to iustain to year According 2020' cial center in the will continue Honq Konq also serves as an imPodant Konds economiivalue to China "The scenarioprepared in connectionwith a ProFct indussaid. W son David Sir to 6w,' rource oi c"edii fot China's dwelopmmt. Forof the eiian tnstitute of fuIanagemmt,Hont province Chiru'scoastal of ormation cii tarsf and ftom trade Profits Kone will be a highly autonomous sPecial eign currency eamed will insease the demand for Hong Kon(s udnrlnisuatiue .eg6n (Senl of China whidt capital,servicesand enuePreneurialskills The will be allowed to retain its caPitalistic economicmomenhrm d€ated by cmPeration economv between businessmen in Hong Kong ard The icenario, commissionedby the Hong southem China will go a long way to carry us " chapter of the AIM alumni association, Konq "prepdred tfuaush the kansfer of sovercignty in 197 the DePadnent Fan of Itim by was Th-w,the Hong Kong economy,by theyear of S;iless Shriies, Hong Kong Polytechnic is expected-tor*ain its Presentoverall 2020, under the suDervisionof Edward KY Chen, and to gmerally conform in its cluracted;tics director of the Cmter ofAsian Studies,Univermode of operation to the provisions of the siw'ltof Hong Kong. "Asia Sino-Britisli loint Dleclaration.The territory is was d;igned to be part of a paper, envisioned io be an entity targely free of ex2020:A Scena;o of EastAsia in the Year2020," ternal and intemd barri€rs to the moblity of AIM professorVictor which was presentedby"lnSearch such faclors as production and the flow of oftheAsian A. Lim in th!conference eoods and sewf€s. The market will continue Mlrager, APnl/ ll{{.ay/ Marueel' (seeTft".45ian io exert the dominant influe-ncein rcsourf,e Iune 1"92issde).However, due to the difficul'ties allocation decisions. of forecastingHong Kong's future beyond to time some 192 the scenariotook PrePare lntetnatbmlllanulHudn8lConte? and was, thus, not included in the paper preHone Kong will continue bobe an int'emain the territory sented in the confercnce.Held in Manila, the seneratedftom its inveshnmts riGnufa-cturine cster after l97 The tional gawing meet China's to conferencewas sponsorcd by AIM and the ire not sufficient of the service industries in importanc€ rishe The country shll Asia Pacific Economic Cooperation Human develoDmentalrequiements. in no way lead to the demise will tirrit6rv ttre HongKon8 to externalbonawinS. ResourcesDeveloPment-BusinessManage- hasto rbort sector'Although the secmanufachrring of the has plaved a kev role in providing bank loans mmt Network. in relativeterrns,it to decline rnav continue tor qedit the Thus, m Chiru. of and bther forrni of emPloyment' soulre principal a reinain win Beiiingqovemment sbandstogainby allowing Ben€fitsfiotBeitlng Economlc manufacturing Kong's Hong However,' intermediades to financial Hons Kong today Fovides rnary tangible r,rfiiciiit freedom transformaa stsuctural ulderso will sector perform their numerous benefisior Clina. TIG siuation is exPecd tio in Hons Konq to high techtowads move u,{l tion. Induskies ve edge' competiti their continuewell into the 21stcentury.Thus,it is in functioiand riaintiin c r a f t s m a n s h i p intensive a n d n o l o q v : ln addition, Hong Kong is a vital sourceof the Chineseqovemmenys intercstto Pr€serve rising prodriition. face of In the Prohectionist ie smau Despite for China. theeconomi;statusquo in theterritory Should investrnentfunds more than 507o iressures and intense competition ftorn lowthe Hong Kong ecbnomy be undermined, size,the territory hassuppLied i*t o-do..t", -"lttty in Asia, the territory's in china invested capitil China w;uld UEamiea sigUicant Potential of the total fonisr by moving upmarand nearlyall the"foreigncapitalinvestedin the manirfacturen wil adap met with success have "eains.if not incur massivelosses. they wherc in areas (SEZ9). ket The territony's HongKong providesChirn with morethan sDecialeconomiczones on oPPortuniby caPitalizing and past funds assumes in the 30%of its foreign curency rncome.Lhrna, as role as a sourceof investrnent Chira. ties in in proiecs whm the territon/s largest trading Partner,can use even sreater importance Thefactorsrdowrnents ofchina and Hong haveplayed an its tradesurplus witi Hong Kong to financeits whichllong Kon!middlemen aresaidto belalgely comPlemenlary:the Kong part ar€ taken into account. active trade with other countries. nahral rcsoutes, Finillv China receivesa substantialfinan- former hasabundant land, At pr€sent,China hasalreadyinveted over a large induslabor, unskilled naterials, raw of form in the HK$8bb ion in Hong Kong. China now hasa cial lnflow from Hong Kong and rclainduskies, heavy and 'research travel and touist expenditue and rcmittance tria.l svstem stake in virtually every sectorof tineterritoly's in elechonics, basic tvelvidvanced incash) than (someof which is in kind rafter economy,induding the manulacturing indus-

By lbar6 C. Gutlerrsz Editor Managing

"TheHor€Kongeconomy to retainib ls expected F€€entovenllchalactedstlcs confoimin its andto generallY to the modeof operation prcvbions of the SinoAdtish loint declaration."

1993 IHE ASIANMANAGERJANUARY/FEBRUAFY

An invitationtoAsia'smost prestigio usmanagement awards

&r 'qY:--

Asmn IwsrmurxoFMANAcEMENT P N ES E N T S

rf.tIrAsr.{NrNsrrrurEoFNIANAGE'\'ENr the Asian Institute

_ _ThgASian

of Manasement will r e c o g n i z ef o r t h e t h i r d c o n s 6 c u t i v ey e a r deservingcompaniesthat havedistinguiihed themselvesin sevenmanagementcategories.

I il:fiiJft::,.:'l';|i,:::rchrorAsias

Management

Nominate acompanyyou betieve deserves

AWafdS IN COO}EBATION 1UTH

PLDT llclellr;omrrlwkaknc (wqwy

ffiEE insrHoDtNGs BERHAD

@ (D

LEMBAGA PENGEMBAI{GAN PERBANKAN INOONESIA

recognition for excellentbusinessperforTherewill be sevenwinners in eachof the mance. You can also nominate a not-for- following countries: Hong Kong, Indonesia, profit organization that has demonstrated M a l a y s i a , P h i l i p p i n e s , S i n g a p o r e a n d mana-gementexcellencein serving its target Thailand. beneficiaries.You may nominate as many companlesasyou wrsh. T h e s e w i n n i n g o r g a n i z a t i o n sw i l l b e recognized in formal awards ceremonies Through The Asian ManagementAwards, conductedin all six countries.

Categoriesand their Criteria

TRADA MANAEEMENT DSVETOPMONT INSTITUTE

$ m*x'"*rdnr* OFFICIAL NRLINE Thai Airways International Limited OFFlCIAL CREDITCARD

Diners Club International OFFICIALHoTELs nong Kong Hong Kong Hilton Indonesia JakartaHilton Interlational Malaysia The Crown PrincessKuala Lumpur Philippina Shangri-La's EDSAPlazaHotel Singapore . Hyatt RegencySingapore Thailand The Dusit Thani AFFrcML EXHIBIT ORGAN IzER PicoGroup OFFICIALFILM ANDF?NISHER Kodak PhilippinesLtd. OFFIC]ALAUDIT}RSoF THE RCHANDSEIECTION SE,4 PROCESS SGV/Arthur Andersen OFFTCIALPUSLICATIONS Honf Kong SingTio Daily SingTao EveningPost The Standard Indonesia Tempo SWA Sembada Malaysia BusinessTimes Philippines The PhilippineStar The Business Star Thailand Nation PublishingGroup

Gp,NERetMANAGEMENT.For successin strategicallypositioning the company within the industry and transforming it into an outstandingcompany.

INFORMATIONTECHNOLOGY MANAGEMENT. For the creativeuse of information technology to enhancethe competitive position of the company.

MARKETINGMANAGEMENT.For outstandinq and successfi,rl innovationin the use of thi elements and tools of marketing, leading to customersatisfaction.

FINANCIAI MANAGEMENT.For outstanding managementof the company'sassets,liabilitiei and equities,in keeping with the owners' best long-term interests.

OPERATIONS MANAGEMENT. For outstanding productivity in production and delivery oT quaiitygoodsand/or seruices.

DEVELOPMENT MANAGEMENT.FoT cTeatins substantial positive impact on its targei beneficiariesthrough innovative, sustainable and effective management. This award is PEOPLEDEVELOPMENT AND MANAGEMENT. given to a developmentorganization which is F o r e x c e l l e n c ei n t h e m a n a g e m e n t a n d primarily not-for-profit (such as a governdevelopmentof the peoplein the organization, ment, non-government or people's organizageared towards productivity, professional tion) and which has as its main objective developmentand enhancementof the quality the improvement of the quality of life of life. peopre.

BoardofIudges HoNG KONG David K. P. Li Director and Chief Executive The Bank ofEast Asia, Limited The Hon. Mrs. Anson Chan, J.P. Secretary of Economic Services I)r. Robert I. Tricker Professor Univeritv of Hong Kong Ittlslness5ch()ol lan Perkin Chief Uconomist Hong Kong General Chamber or Lommerce Francis G. Estrada Prcsident Pacific Capital Partners Ltd. INDoNIjSIA Drs. Rachmat Saleh Economic Advisor to the Government for Trade and Banking Dcpartment ofTrade Surasa President Director Bank Bumi f)ava Cacuk Sudarijanto Ilxecutive l)irector Indonesian Managentcnt

Proi Djuenadi Hadisumarto Lembaga Management John A. Prasetio Managing Partner l)rs. Utomo & Company MALAYSIA Tan.Sri Geh lk Cheong Lnalrman Perlis Plantations Berhad Ahmad Relal Arbee Editor, BusinessTimes Dr. Tarcisius Chin Chairman, Malaysian Institute of Management Dato'Dr. Johari bin Hassan Government Affairs and Human Resources Manager BP Malaysia Sdn. Ehd. Sieh Lee Mei Ling Prof-essor & (lhaiiman BusinessAdministration Division Faculty of Economics and Administration University of Malaya PHILIPPINTs Vicente T. Paterno C h a r r m r n r n d M a n a g i n AD i r e c t o r P h i l i p p r n eS e v e nC o r p o r u t i o n

Arsenio Bartolome III ChiefExecutive Officer Urban Development Bank Enrique P. Esteban President Center for Research and Communication Gabriel Manalac Publisher and Editor The Business Star Renato Valencia Administrator Social SecuritySystem STNGAPoRF. Herman Ronald Hochstadt Chairman Export Credit lnsurance Corporation of Singapore Ltd Dr. Wec Chow Hou Associate Professor and Dean Faculty of BusinessAdministration National University of Singapore Mr. Lim Hock San Chairman Institute of Certified Public Accountants of Singapore 'l'eck Prof. Tan Meng Dean, School of Accountancy and Business Nanyang Technological University

Mr. D. R. Murray (,nalrman Singapore International Chamber ofCommerce THAILAND Viroj Phutrakul (,nalrman t-ever Brothers (Thailand)

Ltd

Toemsakdi Krishnamra Director Sasin Graduate School of Business Administration Chulalongkorn University Chote Sophonpanich President Thailand Management Association Tarrin Nimmanahaeminda Minister of Finance Thailand Suthichai Yoon Editor and Publisher The Nation Publishine croup Co. Ltd. Teeerachai Chemnasiri Managing l)irector Rachada Property Management

The GoverningBoard processand confirmsthefinal winners' Thegoverningboardapproyesthe criteriaand thesearchand selection WASHINGTON SYCIP Chairman The SGV GrouP Philippines

DR. JAGDISH PARIKH Managing Director Lee & Muirhead (India Prt Ltd) lndia

DR. BRIAN W. SCOTT Chairman ManagementFrontiers Pty Ltd Australia

ADITYA BIRLA Chairman Grasim lndustriesLtd. India

DAVID K. P. LI Director & Chief Executive The Bank of EastAsia,Ltd Hong Kong

DRS. RACHMAT SALEH EconomicAdvisor to the Gov't for Trade & Banking l)epartment ofTrade Indonesia

IACK TANG President Tri-StateHoldings, Ltd Hong Kong FMNCIS ESTRADA President Pacific Capital Partners Ltd. Hong Kong

ROBBY D]OHAN President/Director P.T. Bank Niaga Indonesia OMAR ABDALLA PresidentCommissioner P.T.l.B.l.Duta Bank Indonesia

REIJIROHATTORI Chairman Hattori SeikoCo., Ltd Japan YOTARO KOIJ}AYASHI President Fuji-Xerox Co., Ltd fapan TUN ISMAIL BIN MOHAMED ALI Chairman National Equity CorPoratron Malaysia TAN SRI GEH IK CHEONG Chairman PerlisPlantationsBerhad Malaysia VICENTE'T. PATERNO Chairman and ManagingDirector Philippine SevenCorPoration Philippines

DR. DUK-CHOONG KIM Executive Counselor Daewoo Industrial Co , Ltd South Korea

ANDRES SORIANO III Chairman ofthe Board and Chief ExecutiveOfficer San Miguel CorPoration Philippines

PYONG HWOI KOO Chairman I u c k y - G o l d ' t r rl n t e r n a t i o n aCl o r p South Korea

STAN SHIH Chairman and Chief Executive Officer Acer Incorporated RepublicofChina

DR. AMNUAY VIRAVAN Deputy Prime Minister Thailand

HON. WANG CHIEN-SHIEN Minister Ministry of Finance Republicof China HERMAN RONALD HOCHSTADT Chairman Export Credit Insurance Corp. of SingaporeLtd. Singapore ALAN C.Y. YEO t . h a i r m a na n d M a n a g i n gD i r e c t o r Yeo Hiap SengLimited Singapore

VIRO.JPHUTRAKUL Chairman Lever Brothers (Thailand) Ltd. I hallano DAVID K. NEWBIGGING Chairman Rentokil Group PLC United Kingdom WILLIAM ANDERSON RetiredChairman ofthe Board NCR Corporation United States

Malaysr Deadlinefor Hong Kong,lndonesia,MaIaysia, qanire 1 .sin ore -" Thailind: -----Ianuarv 5, 1993 '-' Thailand: and JanuatY Singap ""'6-'r"'-

The Searchand SelectionProcess 3-

The searchprocessstartswith the solicitation I Sendto:The ProgramDirector of nominationsin eachcountry' using a variety The Asian Management Awards c/o Asian Institute of Management o f m e t h o d s :f o c u s g r o u p d i s c u s s i o n sp, r i n t 123Paseode Roxas di rectmailanddirectedresearch' advertisements, P.O.Box 2095 MCC than more program, year of the second ln the Makati, Metro Manila 3,500nominationswere received.

I I

Ir{omination Form

Philippines

Once nominated, a comPanyis sent a 244-1696 o Malaysia(603.) 570-2306 or fax:,HongKong(l5z)877-5021) Indonesia(6221) dataform which requires substantial data 374-0860 ) Thailand(662) 293-2557 philippind ) Singapore(65) 632) 817-9240 disclosure,both quantitative and qualitative' resardinqthe companyand its performancein I nominatethefollowingorganization: thE cate[ory in which it is nominated. Data Name of Organization submittA is treatedwith utmost confidentiality' Address Data is encoded into a databasewhich is analyzedbya team of AIM faculty members for The the candidates' the purposeof shortlistingCountry l l v eto t o n o m l n e e s o l u n i v e r s e t h e t e a mt r i m s Fax Telephone sevencompaniesper categoryper corlntry'The Name of President/CEO/MD information provided by the shortlisted Position companiesis thin validatedfor veracity-priorto iudeine bv countrv-specificboards of judges' I ti.k bo* or boxes below to indicate the categoriesof awards' r h J d " e c i i i o n so f t h ; b o a r d s o f , j u d g e s a r e fl Information Technology Management I GeneralManagement submitted to the Governing Board, compos-ed D People Development and Management tr Marketing Management primarily of the AIM Board of Governors,tor D DevelopmentManagement E OperationsManagement hnal approval. Thewinnerswill beinformedof theirselection and announcements in writing by the Secretariat, will be niade subsequentlyin local and regional newspapersand magazines.TheAsian Manager will featurea specialcoverstoryabouttheaward.s and the winners.Country mediasponsorswill provide specialeditorial coverage.

fl FinancialManagement Your own name Position Company Address

Award ceremonieswill take place in each Country country during a formal dinner. The dinner will Telephone be attendedby the winners,judges,organ.izers, Signature l o c a l a n d i n t e r n a t i o n abl u s i n e s sa n d p o l i t i c a l of media' leadersaswell as representatives

Fax 1AMo13

whereasthe latter excelsin management particularly rrurketin&and productd=esign,a-rid is blessed with an educated and disciptined worlforce, a flerible economic environment, and an efficient physical and institutionat infrastmctue. Hong Kong industriafsts will continue to move labor-intensiveoperationsto China and concentrateon skill-intensive venturcs. Thev will also continue estabtishingve*ically integrated business€swith land- and natural rcsource-intensiveprocessesin the mainland, evenasthey put up managemmt- and technology-intensiveones in the territory Manufachring will be strengthenedby a rcbust service sector.There will be a particularly bright future for financiai services;import and export (includingree),port)trade,trinsport s€rvices,communications,businessservices and tourism. Activities of the territorl/s seryice sector will not be confined to Hong Kong and China, but will extend to the rest of Asia and other key regionssuchasEurope,the Middle East North and tatin America. The growth of the manufacturing and servicesec-

tors will ensure balanceddevelopment, with the two sectoE reinforcing eachother.

R€ona nnanchfConter Hong Kong is now considered the third mo6t imlrortant financial center in the world after New York and london (It is the world's thfudlargestfinancial centerin terrns of financial institutions, otherwise it is bestedbv Tokyo.). It is expected to remain a regional financial centerthrough the year 2020. The banking sectoris where Hong Kong,s claim to top ranking among the world"'sfiruncial centersis mo6tcredible.The ereat€stinflux of foreign banks took place in the 1970swhm the previously reshictive rules werc substantially rclaxed via the ceation of a three-tier banking system composedof Licmsedban_ks, licenseddeposit-taking companiesand rcgistered depdit-taldng c6mpanie. Today,th--ere are more than 500 foreisn-owned banks ard deposit- taking companies in the ternrory, rcpresenting,16countries.Someof thesehave bieenin Hong Kong for many yearsand have extensiveietail operations.

THENEWCOMPAQLTELITE PERSONAL COMPUTERS. OPEN. ( A P P R E C I AH TO E W M U C HW E P U TI N T O T H E M . ) STANOARO FIATURES

STANOARO MOOETS

:t:l; rIi

l" l'

' f r r r ' 1 " ' ;' l '

Hong Kong-basedbankswill be theinstitutions to which China will tum for commercial boqowing and the territory as a r€sult, will becomethe mainiand's principal lmder. Hong Kong's athaction to China lies in iis proximity (both geographically and ethnicali) and its sophisticatedand fle)(iblefinancial infrastruc-

tuie.

Beiiing is expectedto inqease its fund activities in Hong Kong by issuing more bonds there. This will help the teritory develop its capital rnarket and strengthen its edge over Tokyo dsan intemational financial center. ihe territory is seenasa gateway to China by foreign banks which hope to Fovide retall servicesin the mainland. Therefore, should Tokyo experience rapid expansion, its rise wonld, in all probabiliry hurtsingaporcwfuch, unlikeHong Kong cannotcounton the "China factol' to cushion the adverse effects of re6onal economichansformation. Hong Kong also sewesas a global market placewher€ capital-hurgry China and the intemational investing community can meet. The sad experiencesof manv multinational companieswhich went straight into the manland during the first wave of Chiru mthwiasm for investment, have highlighted and strenSthenedHong Kong's nrle. Few businessmenwould now considerinvesting in China without first seeking to absorb some of the wisdom on this subiect availablein Hong Kong.The developmentof direct economiclinks betweenChina and the rcst of the world has,thus, enhancedthe importanceof the territorv.

Exchange Rate System The present linked eychangerate system will be retained well bevond 19q7in order to maximize political stabilitv and deter economic speculation.In the absenceof a central banl this system serves a useful monetary conhol function. The Hong Kong dollar will not lose its s€paratestatus. It wi.[ not be rcplaced by the 1uan, renminbi or some other extemally conholled medium of exchange. Theterritorywillpr€s€rve itshigh de$eeof autonomv at leastin the economicsphere.Its relationsliip with the Beijing govemrnent will be characterizedby mutual accommodation and tolerancebasedon an aDDr€ciationof the legitimate differencesbetlveen the capitalist enclave ahd the mainland. Hong Kong wi.ll enjoy considerablefreedom to pursue its economic intercstsin the intemational as well as the domestic aena. However,thelocaleconomywill inevitably becomemore dosely integrated with tllat of Chiru and business opanizations from the mainland will grow in number, size and inIluence. One indication that this is the direction the territory is heading is the common assertion that the Bank of China will be allowed, in coniunctionwith th€ Hong Kong Bankand the

myyyyyyy**Mx**:i.i::",,',,.,ffi |T-nprr worxs cErnR -

THEASIANMAMGER JANUAFY/FEBRUAFY 1993

ofFax AMatten Standard Chartercd Bank, to issue notes and will, in dl likelihood, edipse the Hong Kong Bank as the leading local financial institution (lt i5 also suggestedthat the two note-issuing '1ocal" banks will assurne ?rn increasingly character.). Optimists non€thelessmaintain that Hong Kong will be gopelled primarily by international economicforcesand that China-related businessactivities,although hightysignifi cant will be deemedlessimportant, both quantitatively and qualitatively They argue,moreover, that China{ontlolled organizations in Hong Kong will, like other players,abideby the rules of the ftee market and will not undermine them by s€ekingunfan advantages. A NerY Role In recent years, there has been a perceptible shift in Hong Kong's functions as a regional financial center. Increasintl, the territory is servingasthe provider of capital, advanced managemmt services,and as the shipping and telecommunications centerfor a continental economy, rather than as an intemational crossroadswhich just happens to be athacted to China's southem coastline. Hong Kong will continue to play this role in the coming years. Hong Kong will be the catalyst that will make China an economic force in the world commensurate with its political and demographic weight. This processwill take time, but it js a processthat is as significant as the shift of indushial and financial power frcm the United States to Japan and East Asia which the world has wihessed over the last 30 years. Hong Kong is China's focal Point. A booming mhepot trade, a rapid expansion in Chind-retated financial and business servicesand a thriving touist industry will propel the terdtory's economy along a gowth path. Sinceits economic system will be characterized by a fairly high degree of flexibi[ty and openness, Hong Kong will continue to show signs of vitality in areas where it has traditionally performed well. These include bullion dealing, local corPoIate finance and retail financial sergices to hish-net worth Southeast Asian overseas Ciinese. Hong Kong will remain a buoyant sub-regional service center. It will continue to exhibit a strong intemational orimtation and will not tum inwards to becomemerely a "Chinese" city. Its external role will not be confined to a narrow range of economic activities nor to a limited geogaphical area.Rather,it will develop into an even more sophisticatedinternational manufacturing, coinmercial and communications center and will remain Asia's de facto economic capital. Hong Kong's Westem-tyPe adminishative infrastructure, legal system and lifestyle will not be affectedby the exit of the United Kingdom of Grcat Britain and I Northern lreland.

1993 THEASIANMANAGERJANUARY/FEBRUARY

RrsuHsrr r 0n Leadership 1. Are ManagoE difierent fiom t€adeF? 83%of our respondentssay yes

2. Which of the iollowinE characterlstlca should a leadel erh|blr? 3370 Trust subordinates 1007oDevelop a vision 33% Keephis/hercool 33% Encouragerisk

337o Invite dissent 40% SimPlify sihutions 25% Deal honestlywith the stakeholdersof the comPany

3. whlch ot theee charactedstlcs apply to yout boss? 20% 50% 33% 10%

Trusts subordinates Develops a vision Keepshis/her cool Encouragesrisk

20% Invites dissent 20% SimPlifies situations 10% Deals honestly with the stakeholdersof the comPany

4. whlch chalacteristlca apply to you? 337o Trust subordinates 877o Develop a vision 337, Deal honestly with the stakeholdersof the company 5. Do you corcldq yourse'lfprlmarlly 87%of respondentsconsider themselvesboth a manager or a leader 20% consider themselvesleaders

6. ls youl company able to Ecognlze, d€velop and uso loade6hlp tal6ot prope y? 67%of our respondentssaid no.

7. Which of the followlng statements do you agl€o wlth? $qo

Manag€rs act to limit choices.Leaders develop fresher apploaches to long standing problems - AbrahnmZnleznik

7O7o

Leadership is often equated with autocratic demand

TOE,

Leadership should have been seenas a processrather than as particular paftern of personality haits

1070

A managerial culture emphasizes rationality and conhol.

33E"

What it takes to develop managersmay inhibit develoPing leaders - AbrahnmZaleznk

fi%o

Companies as a whole are over-managed'

Thelureof money...

Kpng's BestPerformance Ho4S LnderPressure By Kin Gatbonton AssistantManagingEditor

Kong Chineseis very worried about 197. I,m yet - by Chineseofficials that the British had not too botheredand my family will probably enteredinto a secretagreementconceming stayon beyond'97. Buti havein advintage,'l Hong l..ong'sfuturewith Chinatwo yearsago he Englsh translahonfor Hong Kong, carry a foreign passpoft." hdvetamishedfatten'simageandhaveplaced theworld'smostprofitableport,is "Fr;Immediatelyafter Ttanamenand when it Britain's avowed commitment to defend the grant Harbor"For the averagebusi- becameincreasinglyclear that the British had colony's interestsin serious doubt among r nessman, and certainlyfor anyonewho no intention of admitting vast numbers of Hong Kongers. likesthesmellofmoney,Hong Kongisparticu- Hong Kong Chines€,no matterhow dire the Still somelocalsareoptimistic. Gordon Wu, larly fragrant. Forasoneobse-rverput i[ several sihration, a large number of Hong Kongers managrngd irector Hopewell of Holdingsand 'Money, decade.,ago, dcquiring it, trdnsfer- voted with their feetand took up residenci in a high-profilelocalbusine,sman,claimsthat ring it andinve.ting iiis what Ho"ngKongisall Australiaand Canada. there is nothing to worry about, 'China has about. The colony's heart is esentially ecr> The exodushassinceeasedand thosewho everyincentiveto maintain the statusquo.The nomic." Certainly for the foreign investot haveno recoursebut to stay are hoping that chdngeoveris a politicaiand not an economic Hong Kong is a dream come true. ond' (wThe AsianMawgeL As in the rest of Asia, overs€ascapital has JardineFleming: At the forefrontof investments. N o v e m b e r/ D e c e m b e r playedan importantroiein Hong Kong'stran192). srtrontromanentrepotloa manufacturingand The following compacommerfialcenterWhilemuchof neighboring nies - all winners of the '60s '70s SoutheastAsia in the and earlv wal 1991ManagementAwards hemming and hawing about the ideological Pro5;ram- may or may soundness of foreigninvestment,Hong Kong not shareWu's public s€n- one of the last authentic bastions of lar-ssez timents. But for the winfaire- did not facethe samenationalistinhibirung seven* from Jardine tions about the naturc and worth of overseas FlemingtotheHong Kong capital.Veryearlvon, thecolonywasqurcl ro ProductivityCouncil- it's dls(overthal loreignin\estmentswere e\businessasusualuntil furtremely profitable and a convenient meansof ther notice. hamessing the private sector to further ece nomicdevelopment. GEI{ERA!MANAGEMENT None ofthe ff)litical s€nsitivitiesprcsentin JardlneFlemlngHoldlngs other Asian countriesexistedin Hong Kong in ttd. the 1970s,and settingup a businessthere was For more than 20 years, easierthan an)'wherein the rcgion. glid one Kglg s pre.ent and future urility ro the Hong Kong-based l-ong JardineFlemingHold"There businessman at the time, is a beautiful Chinawill pruvidethe ultimatedeterrcnrro ingshasbeena nameto reckonwith in Asia's simplicityin investingin Hong Kong.Excise Peking'stamperingwith the statusquo. financialmarkets.Geogmphically,the comduties are levied on only five catesoriesof HongKong'sdynamicnewgovemor,Chris pany hasconsistentlybeenat the forefrontof goodsandthereisnodistinctionbetwLn over- Patten,is seenasgenuinely keento ensurethat new Asian investmentmarkets,"achieving," seasand local firms." the underlying conceptof the Joint Declara- saysmanaSingdircctor,Alan Smith,"signifiWith Hong Kong facinga changeof gov- tion,"onecountrytwosystems"is followedto cantfirstsin almostev!'ry EastAsian country emmentin 197, jittersabound-and riscancl theletter [n recentmonths,Pattenhasworked H ng 11nn*.I,rpan.the l)hilippinesand fail in greatwavesof arl\iety - amonglocals assiduouslytowardsincreasingfranchiseand Malaysia." and investors who worrv that the liberal Iayingthe groundworkfor a gove'rnment anIn maiy instances,JardineFleming has treedoms they havc long enioyed may no swerabieto,r populdrlvelectedlt.gr:larure. beencloselyinvolvedin formulatingindustry longerbe forthcomingoncelhc colonyrcverts Patten'saationshjtt placedhrm at fhe relat.{ policiesthroughoutthe region. "Ratherthan to China. receivingend of considerableire frcm the overextendin5; our resources, Alihoughthetensron immediately follow- powers-that-be in Peking.During hisOctober our expansion," continues Smith, "has ingeventsat Tiandmen tn Junela8aha>dis:i- visit to the mainland,the governor was \trengthenedour regionalcdpabilitic..Alpated somewhat,thereis still a generalunease snubb€dby the Chineseleadelshipand was thoughcomf'etrtt(rn ha. intenrifiedrn recent - not unwarranted - that the promisesem- "in effecttold to d rop his reforms oiface retali- yerr:. our e\tensivelnowledge and etperibodiedin the 1984Sino-Britishioinr Declara- ation that could make Hong Kong virtuallv encewill continueto provideus thenecessarv tion (whichin effectwould allow Hong Kong ungovemablcin the five remainingyeaniof competitive advdnt,rgc. "Our basein Hong toconhnueitscapitalistsvstemunderPeking's British rule," (F Eist Econon|,]t Ra,ftrr1N(F Kongis well positioned watchful eye\) may go unhrtded. Sayi a vember1992). to takeadvantageofthe intra-regional flowsof long-timeFi[ipinoreident,"Theaverage - unverifiedasof capital which are increasin6;lyshaping the Hbng Subsequent disclosures

,1993 THEASIANMANAGERJANUARY/FEBRUARY

Asian financial industry," Smith says. While a number of comPaniesoffering reqional financialserviceshaverun aground asa iesult of i -planned efforts to exPandinto unfamiliar serhcesand territory,JardineFleming hasmaintained its focuson two key furctional ar e a s , i n v e s t m e n tm a n a t e m e n t a n d stockbroking. Jardine has also continued to develop the;llied functions of s€curitiestrading, corporatefinanceand wholesalebanking in various EastAsian countnes. "This focus hasenabledus to Smith notes, grow Gpidly without shaining our r€sources or balancesheet." With over 1,300 emPloyees throughout Asia, JardineFleming devotesthe largestPart of its resourcesto fostering the skills of its worKrorce. "HurEn resourcesarc the key to our busi nessand we believe that our cr€ativeworking environment, dedication to Asia and Progressiveremunerationpackageshaveattractedand maintained a hiqh calibre staff, thus allowing us to provide o-urcustomerswith Premium and crbativeservices,"saysSmith

ing and public relations emPhasizethese ou;[ties, but thesevirtues must be seenand felt in the market constantlyto Prcduceresults. '"fhe effectof good marketing," continues "in EricSolberg,a miruger at Peregnne, this sens€is exDonenhal: successbreeossuccess and reputahon follows performalce."

warded Harbour Ringa hundredfold In 1990, total grossrevenuesros€to $166173,up from $17,7& iust two yearsearlier

ffi

MaeEk Hong Kong Ltd. No stranger to the Management Awards PIogIam - in 1990,the comPanywon in the categorv for Operations Management FEdEEDflE-oPM-ENIANDMAI{AGEMENT Maeiskilong KongLtd.,is the lcgl winnerof Ha6ourRlngIntematlonal Hons Kong's tov industry is one of the the awad for InformationTechnologymantastestgfowinf in ttre world At presentthere aqement. A generalagent lor servicesconnecting arc more than two d ozen toy manuta(turcrs In Maiau and thePeople'sRePublic Hongkong, of one Colony the 1,060squaremile Crown which is the 191 winner of the award for of C[ina, Maerskis one of the bestshipping - to excellencein people develoPment and man- lines in the reqion. Its avowed motto cue that satisfy aqement.HarbourRing Intemahonalmanu- Drovide defect-ft€e services "the first time and every requirements iomer doodads playthings and all the latest fa"ctules helped along by welJ- from stuffed TeenageNinja Mutant Tirrtles time" - is greatly -creative innovationsin IT manolanned and to sway-to-the-musicCoke cans Altlrough the companyemPloysonly 389 isement. The company'sstridesin [T and its workersin Hong Kon& thecomPanyhasover d'ecentralizationpbli.v hau" amounted to moreefficient service.'Theend-rcsultis," sa}s 7,200employeesin JaPanand China "swifter decision makone companv insider, fiSavsirwis Luk, Harbour tunt's chief 'The core of our management ine- and 6etter staff motivation." nancial officer, Recently,the comPany entered a shateglc PartnerHKPC:Constantly reinventing hselt. ship alliance with two other Percgrlne dominant transPortation The Hong Kong winner of the award for companies,the British Hong the is Percgrine, marketine eicetleice PdTOCGLand the American Kong-bard investmentbank sPecializingin SealandServices. The PaftAsia. in East banking brokerageand merchant nerships have resulted in Apaft ftom thesetwo functions,Peregrinealso substantial operational save\foreiSn piovidessecurities, commodities, ings and more imPortantly, ihange and derivahvesbrokerageas well as have enabled the comPany institutional inves-imentresearch servicesto to offer its customersan even and individual clientsin Asia,North America greater number of weeklY and Europe. departures with faster and With afficesthroushout East Asia, Ausmore regular transit hmes. Pertralasia,Europeand the United States, The alliances - Purely oF egrine was f6unded by merchant bankers erational in nature, the comP"hilip Toseand Francis Leung in 1988with panies remain indePendent start-up capital of HK$300million. Four years of one another - have and severalsmart moves latet, Peregrinehas lines consolidateand MAERSK helped gained control over a number of Hong Kong- practicesis to provide ou remployeestheSreaF along its chosentrade its stre;gthen bestidvancement and possiutesjtisfaction Position Lt iisted companies with total assetsof HK$ 5 route. billion. Involved in several lucrative, high ooDortu ' "As nities in their work. muchaspossible,we try to staytrueto profiles deals with Li Ka-shing's Hutchirson 'promotioni?om within' our Holdings Hopewell PrinciPle This Wu's idhampoa, Gordon ttd. of SunHungl(al Plopertles and mainland{ontrolled China International requiresmorc supervisionand guidance Hung Kai Prope*ies Ltd, is one of Sun our efforts well worth it is we feei but course, atPeregrine CorP., Trust and lnvestment "our best On the whole, I'm confident that our employ- Hong Kong'imost veficatly integratedProP tributes its successto its employees, for its expertisein says eesenjoy their work and have good relation- ertv ievelopers. l(nown tools," rMrketing Droductsand our best iarge residential develogiing Projedsaswell as suPerioIs." shios with their one otnoal. residential large "As an investment bank, Peregrine does Proiedsaswell Harbour Rindi employeetumover rate in deveioping snoPPrng manaSrng and developing as in of the commaprity A not have a manufacturcd Product that can be seemsto confirm"thk. blue-chip property company the centers, at Harbour have been managers senior Danv's a we have advertised. Neither do Particular of complements its real estatebusinesswith fiservice that can be market€d in a traditional idng for over 20 years;the averate tenure nancial services. A leader in the use of comis 10Years." sense.For us, marketingis d comPrehensive middle managers "We puters for markehng,Sun Hung Kai has an employreward our like to SavsLuk, one that is inseparablefrom any asexercLse, ve innovahveon-linesalessystemthat facilitates we years, well. For some as materially ees leregnne pect of our businos Thus, every the sale of its many estateunits in multiple ento scheme employeemarketsthe firm every sinSleddy' established; bonus incentive locations. sPirited more a courate its comProductive, What distinguishes Peregnne from The companv recentlv raised HKi3.3 bilDetitorsis the soundnessof our advice,our laborforce." in a priiate placementof sharesin what nancial lion ngby thecomPany's well as our Tudgi Presentfi and efficiency,as iesponsiveness was the Crown Colony's biggestcashcall this rehave generous incentives reputationfor integriry Traditionaladvertis- stdfus, such

ffi

1993 THEASIANMAMGER JANUARY/FEBBUARY

year. The sum will be used to expand Sun Hung Kai's mainland{hines€ intefots.

dously. By 190, sales revenues increased morc than ten fold since 1980,and three-fold since1986. DEVELOPMENT MANAGEMENT According to companyinside6, Motorcla's HongXongProductlvtty Council successis directly attributable to several facAn autonomous organization supported tors, among them: the setting up of distribuby the Hong Kong govemment, the Hong tion centers in major markets; heavy Kong productivitycouncilwasestablishedin mvestment in innovative information auto1967to promote prcductivity in the Crown mation; and the developmentof a total quality Colony's industrial sector.In the last two dec- and responsivenesscuttur thrcughout the ades, HKI]C has constantlv had to reinvent or8aruzanon. itseu.to keep up with Hong Kong's freneti( At present, the company strives for q).9q96% perfectionthrough what is known oevetoDment. SaysExecutiveDr€ctor, S.K.Chary 'When asthe SixSigrnaPrccessand Roadmap. These theHong Kongeconomywdsin theprccessof in turn are integrated with such processesas changingfroman import badecenterto a light Quality Systems Review Total Productive manufacturing center,we provided haining Maintenanceand JIT manufacturinq. and coruultancy serrricesto upgrade the manMotorola's_quatity programsaF applied . agement and productivity of various small ngorcusly and permeateevery asDectof corindustries. poratetlfi'. ntt ehptoyeeso.e ieqdirea to utr"As Hong Kong began manufacturing deBoa minim um of40 tra ining hoursper year. 'The drive more sophisticated, hi-tech products in the towardsperfection,"saysC.D. '80s, we evolved into an a&ve technoloqv Tdm, vice presidentand general manager, "was trarlsferagenry" initiatedby our CEO,EobCalvin,inihe HKKs clients are small- medium-sized early 1980s. "SixSigma firms. Between 199G91,some 1,050consulQuality is our way to changethe tancyproiectsinvolvingtotdlqualitymanagement, technicdl assistdnceDroiectsand hdustrial desrgnwete contracted.HKrc abo held more than 570 training courses,which e$sentiallyeconofliic,"says were attendedby some 13183participants. "Eachdecade,"says Chan,"posesa new set of challenges toourorganizatioi.Thisreguirs a high degreeofsensitivityto thechangngneeds of Hong Kong industry We have to be able to rco:gnizethesedunges earlyon to beableto plot out a path to the futurc and recommmd to gov€rnmentthe nec€ssarv steD6to take "Being committed to'laissezJairc , t|itegovemment doesnot dircctlv financeanv particular industrial sector. TiLis forces ui to be pragmatic: to have the foresight and persua- company's corporate culture. It helps us sive power to influence government to rccog- optimize efficiency and focus on Total Cusnize the need to change,and help individual tomer Satisfaction." companiesin the changeprocess." Roadmapsareestablishedin variow funcHKft's worKorce itself has reflected the tional areas. In managenient for instance, colony's dynamism and its own much-en- growth markers focus on leadership, educahancedrole in Hong Kong's development. ln tionand trainin& visibleand effectivacommu1979,HKPC had only 140staff members;by nicationandostomerinteraction. Anotherset 191, this number had grown to 500. Hong of markers apply to delivery & service: onKong'sentiremanufacturinglaborforceis cur- time delivery cycletime, lead time, docrrmenrently 700,000.In addition, howevet their two tation and data. million workeG in South China who deDend Toimprove quality furthel Motorola introon HKft's services. duced its "Speed of Execution and Responsiveness" haining in all areasof production OPERATIONS MANAGEME-Nano servlce. "Every employee MotorolaSemlconduetors, HongKongLtd. shares in one or more Eshblished in 1967asa testand saleriopera- quality and speed goals that are measured tion for pncduclsto the Hong Kongtoy indus- weekJyandmonthly. The5egoalsrangefrom try Motorola Semiconductorsis now oneof the speedot settlingcustomerscomplaints toqualtopthreesemiconductorsuppliersinAsia. The ity indices and design-to-market cycle time company operatestwo state-of-the-artmanu- improvements." facturingplanbsin Hong Kong5ervingnotlust Since introducing these innovations, the Asid-Paci6c, but the American,European Motorola's saleshavegrown tremendously.In and Japanese marketsas well. 1988, salestotalledsomegSOmillion. By 1990. Salesrevenueshave increasedtremen- grosssalesrevenuestopped$497.5million.l

"HongKong'sheartis

"Money, onepollticalobseruet, acquidng it, tmnshringit andinvesting it is what HongKongls all about."

Standup and be courted. Get vourAIM'edition Studen[ Association limited of coqunemontive car Dlatessouvenif and be part of the 25th Anniversary celebrations.Proceedswill eo to the various charitableproiectsof th"eSA. YES,I wantto od€r: OOne(1)r€gular plate comm€moratlve D€sign 1-4random digiis Price:Pl,000.00 platePdce:Pl,500.00 D One(l) customi2ed Oesign(Anycomtinetionof 14 dpharumeflbc/reracte|s. STPIC7LY ONA FIRSTCOME FIRSTSERWD BASISuponrecaiptof paynqt). O One(1)SoovenirPlate(optbnlor intef'adond a/umn, Pice LJSi'l00.00 All pricesirrclusive of d€liv€rycharges.Umit€dcar dates available.Pleas€serd in yourordersASqp. O My Check€ankD€ft is encto6€d.@yebrero tle Askl/l'h1sttul€ot ttawqbnt). D Pleasecharge my cr€dit card. (Al nejot credit cards acceoted. Cad Co.npany

CardNo. ExpiralionDal6 Signature O lwill payin cash. (S€ndp€yrn€,?t lo tte 94 Sto,e,AIM Ca,'r/pus, i4*en. &sh Wn E by nailwil not be ForPhilippinealumnienclosea xerox@py of your latestc€r regishationwhenyou retumthis compiet€dform.

Prograny'Batch

Company Position

F6x No. ' Comm€moaativeplates aulhoriz€d for use lor one year in th€ Philipflines by th€ tand Trans{rortation Offic6 and the Office of the President. Stud€nt Association (SA) Asian lnstitute of Mamgement Joc€ph R. McMicking Campus 123 Paseo de Roxas, MCPO Elox2095 'f200 Makati, M€ko Manila. Fax. il6.32) 817 9240 For inquid€s, pieas€ contact: Student Volunt€€fs, 874011- 1g Ert. 229, 357

THEASIANMAMGER JAIIUARY/FEBRUARY 1993

Power"... with'Countryside fromtheshadows Eme€ing

inthe ThePhilippines Year202[ By lbana C. Cutb?r€z ManagingEditor

athacted two waves of investors. The ftst wave will etablish labor-intensivesurset mdustries inherited frorn the more industrialized countries. The second will Put uP apdbusinessventur€s that tale advantageof tfie rurd location of t]rcseindwtrial pa*s and EPZ9. ln the fi$t decadeof theseindusuial parks and EPZS,the choice of site was governed principallv bv accesshosupplies and markets. in ti-i, foiu i"a agnarttural proc€ssingPlants

he Philippines, the economiclaggard of SouthenstAsia,wil finally catchup with I its neighbors by the year 2020.AcrordI I ing to a country renano drawn uP ul cormecti"onwith a proiectof the Asian l$titute of Manasement, the iDhilippinesby this time wil havE ernereed from-the doud of manmade and natuial disastersof the 1980sand l99Osandwillalreadybemfoyingtheprogress and stability that have made East Asia the fastestgrowing region in the world. This renario, prepated by a group of se lected experts in various fields, was incorpo"Asia 2020 A Sc€narioof East rated in a paper, Asia in th; Y;ar 2020,"which waspresentedby AIM plalessor VictolA. Lim in the conference "h Saarchof the Asian Manager for the Year X2V' (seThe Asiar Marcger,Apri / May / June 192 issue).The conference,which was held in Manila, was sporsored by AIM and the Asia Pacific Economic Coopemtionjs Human Re sorir€€sDeveloPment-BusinessManagement Network. Bv the year2020,the Philippinesis exPected to have ichieved a sustai.riablerate of econoric sowth. Although it wi.tl still trail its colleae;es in the Association of Southeast Asian Nations (Asean),the country wi begin to slowly r€assertthe rcgional leadershiPit lost locatedin theseindustrial comPlexesencourduring its years of crisis. aqed and even organized famers in the adladnt fields to proJuce the crops they needed. St]o|€orCountryrlde The main engine of grorath, according to Throueh this ar-rangement,the farmels imptoued thei. incomi, while the processing the scerurio, will be an economically active -plants cut their hansportation costs. will outPace development whose e countrysid ' Soon the processrwened ibetf: ago-inthat of the cities. Bv the viar 202Oindustial communities that tiace tfreir Ueglnningsirom dustries begeinto locate in agriqrltural areas "pole growth" industries will dot the PhiliP where the growing of certain crops was rec"Pole growth" in- ommended, regadles of whether they were tanascape. pine ptovincial dustries arc maior manuJactunngcomParues aleadv behe planted or not. The suremarket that qenerate tinkages with other manufac- represented-Iiy these agro-ind ustries Perturin; and servicesenterpris€s.They stimulate suaded the r€sidentfarmels to gow the aoF th€ gror4'thof Poductive activities in their ar- the comDanie6needed.As added incmtive, thesecdnpanies took careof the handling of easand createemDlovment. to the the agricuitual Poduce and Povided Postgo back in tum, These indusnies, industrial parks and exPod Processrngzones harvest facilities. (EPZ) which the government and Private inDldlotomY vestorsopenedupin variousPrcvincial sitesin A8fl .rlltunllndugt&l .the 190s-190s. By the year 2020, these develoPments According to the renario, by the year202Q witt have rcsurca in frigtrer farm Foductivity Philippine industrial Parksand EPZswill have and the mechaJrizationof agriqJtur€. Wtth

"Byilte year2020,the countryslde Phlllppine wlllteemwith of gnall cooperatlves prodrctiveenterylsesin the moldof the EurcPean craftgulldsof the MiddleAges."

1993 THEASIANMANAGERJANUARY/FEBRUAFY

mechanizatio&however,famingwi c€aseto becomea maior employer. Accoding to the lin-kedto agriscenario,nrrai-Uased-industries ctrlture,suchasthosein food Proc€ssin&Postharvest servicesand packagrnp will ptovide 'iobs to what werc formerlv farm familie. Thee provinciat indusirie, in fact,will not onlv stop the tsaditional exodus of farm woiken to the cou.ntry'surban centeF, tltey willattractunemployed ftomthecities,Sready contributing to urban decongestion. tncreasd [nkaees - both forward and backwad - between agricultuE and industsv will resolve the nahlra.tconflicts of these two sectors in the country's new growth cent€rs,the sc€nariosa)'s. Toservicethe requirementsof both agricultue and industrv, ;mall- and medium+cale suDport enterpri;€s will proliferate, offering lnirirstrial, corirmerclaland pnrfessionalservices.The presenceof thesesripport enterprises will becomea maior atbaction to forcign invetors fromboth the EastAsiarr€Sionand the West.Thesecompanies'growing capability,on the other hand, will lead to specializationand rray give rise to comPlexesaedicated to Partic-ular industries such as machinery, Pehq chemical, a8lo-industries and exPort specialties. Bv the year 2020,the Philippine countryside'will ieem with cooperabves of small, uoductive enterprisesin ihe mold of the Euiopean craft guilils of the Middle Ages.These co,operatives-willfuel the gortth of the c!untty"id" *ottott y by encowaging entepre neurship and by serving as conduits for financiai, nnrkedng and technical assistance ftom local and international institutions. Ihe local Govemment Go<le The Local Goverunent Code also plays a vital role tn the developmentof the PhiliPPine countryside.By giving autonomy to local gov"mment unls, the Code - after the initial, tumulhrous years,according to the scenariowill bring about govemance that is morc responsive"tocountrrside needsand lessintirnidated by urban concerns. This'will translateintohterinfrasbuch[e: serviceable and adequate roads, ports and airports; reliable etecfricpower that is distribut& nationwide; fast ana efficient cornmunication facilities. Irfrastructue building and maintenancewill see the Srowing ParticiPa-

AsIAN INsrrr'r-rrEoF Mlxlcnmrvr tion of the private sector through build-operate-transfei (B0T) an-anqemm6. Selectedprivate industie wi also help financeeducation,erubting local governmmt units to offur ftee education up bothe secondary level. _The-gmeral improvement of the counFyside will have the dual effect of attracting the morc progressive groups of citizens td the prolinces on one hand, and chatlmging local pol.iticiansto becomebetter executive on the other. TheindusFial parks and EPZswill athacta new middle dass to the couhyside. It will indude highly educatedand rcsrilc. orimted executive who will setdein rural conrmuruties.Somewill eventually tum to politics, thus, iniecting their worlddass standards and sophistication into the local political environment. Others may influence the political mvionment by slrving as rob m&eb for younger politicians. Overa[ an educatedand progessive middle dass will donand and get better s€rvicefrom its government officials. Thesedevelopmmts will trigger the spiral of better ft€istics, leading to ridre busrneas, leading bo greater prosperity, leading uJtirnately,to increasedgovernment rcsourt€s.

FoElgnhr€strents With local governrnent units able to offer suchinc€ntivesastax holidays, advantageous land arrangementsand inaiseial peaci, ttre sceMrio forcse€sa rcsugence of foreign inv€stsnentsin th€ Philippines. Athacted by the counq/s stabilty and glolr'th pot€ntial, multinationals will return. Thesemultinatioruls will be characterized by two distinctive featu€s. First the base companieshdl be more Asian than Western. Severalconglomerates,similar to SimeDarby, will come from lndonesia Thailand and Malalsia. The Japanese,Thiwarese and Koreans will still be pr€s€nt, but more funding will originate ftom Singapor€. Second,thesemultinationals will pay more than iust lip serviceto ecologyand tlie pruection of thi env onmmt. diobalizati6n and protection of theplanet Earthwi rankhighin most corporatemission statements. 9lobalization will have another, entirely different resu.lt.World headquarten officiatl willbegin to appreciatethe wi;dom ofdelegating decisionsto executiveson site. This uend, hand in hand with elechonicand comrnurucation brealthroughs, will produce a new managementstyle. Modem computersoperadngat exbemely high speedsand .unirig on tighly r€finea computer programs gather, classify and analyzebusinessdata. lr addition, thev aIe so user-friendly that the data becomeaccessible and,moreimportant, urderstandabletou,cores of executives,wen to line supervisors.As a rcsult, superuisory deparUnents with then amtysts will becomethings of the past

O€anization charts will become flatter, with t9p ard line executivescommudcating djrectly A-nd with corporate plans comprehersively recordedin compueiprograns, the "superEtar mamged' will be rcplaced by a rnana8ementteam. Eadr member of tftis malrasemmt team will be assipgreda number of cnrintrv or functional nranagen, grou@ accondinj to obtchves and geography. The team member performs as a chief executiveofficer for those rmits within his contsol.The systemfacilitates decisions,limits diruesions t6 issue thar cannot be handled by the computer, and maintains a one-on-oner€lationship between line managersand their CEOs. This p'ractice of entsustine autonomous authority and responsibi.lityto"tine rnanat€rs witl flouish in tft Philipdrnesbecauseof-the availablity of a large pi6l of Filipino exrutiveswho arelnowledleable, flumtin fngUstr and familiar with the ways of Wetern Susiness. lrcal political autononry will further

"Ihe general imprcvemert of thecontryslCe will lnve thedud efftst dattractil€Un rnorc

progrcssh,e gioupsd ciUzemto the povlnces. lt will aboencocree localpoliticians to become betterexecutives."

POStTTON

COMPANY

ADDRESS

TEL.NO. FAXNO.

sEl{Dt(} underscoretheneedfora CEOwhocan ouicklv analyze clrrent situations in depth and dei with the local officialsconcemedwithout inhibition. To rcmain competitive, Philippine companieswill haveto foilow the lead6f'themultiirationals. Local firms with nationwide operationswill give their branchor subsidiary executivessimijar authority and s€ope.Thus, the Filipino executive,fornierly more appleciatedoverseas,will finatlv comeillto his ow, ut home, his mettle recognized, at last, by his courtrymenandforcignersalike. I

CORPORATE PUBLIC COMMUNICATIONS AsianInstituteof Management Eugenio L6pezFoundation Joseph R.l\4cMicking Campus P0Box2095 123Paseo deRoxas Makati, MetroManila PhilioDines

oR FfrxT(} L-

(Gf2) 8A7 Ei2tn

THEAShNMANAGERJAI\UARY/FEBRUAFY 1993

Nolongerarthritic?

Best-run ThePhilippines' CompaniCS glow by a modest I 89othis year instead of (Elsewherc m foistering negative growth reion, er6",th-nsutesareunifornrly higher: in '70s,a 16 rnf, a.oz";f' sit gaPor€,b.07oand lndc ver sinceclolvth dissipatedin the neia, 6.49i. The Center for Researchand ereat nu;ber of artides focusing on the (CRC)rcPortsthat whjle PrcCommunication "moving at a snail's pace" real inFhibppines have started carrying such is duction 'aVhat went wrong?" or the titler is comeand consumdrsPendinghave indeased "Will it Ever Catch UP?' l,ong acerbic morc drarnaticallv And altiough nationwide inflabeforethe plunder and mi$nanagementofthe tion creot uo slowly to 92q. n May 19ry2 Marcos viars - which is not to say that the previbus month - ihis was, by from 8.0q" FedinanlC Marcos was single-handedly reaU accourts, manageable compared to the sporsible for the Philippines long slide the 20.17oinflation rate regrsteredln early | 991' nation wasAsia'sbrigirfest star,secondonlyto Forcign investrnent, the driving force beJapanand consisten[ly Pnised as one of the hind fldwth in countries such as Malaysia, mbre successftrlmodelsof post-war econonuc Thailiird and Indonesi4 hasbeentepid in the develoDmmt. Phi-tippines.Although there wasa brief surge From i947-50,the economy is said to have in inveshnents in 1989,investor intercst was expanded by a phenomenal2070Per annum' mafurlyconfined to morc sPecutrativeinvestsabtv ttrepiitipbnes haslong sincestagMted mend like ProPerty or finanrial markets' - t'ulwhiie the marliadriven economies of Asia Needtes to say,inv*tor confidence have taken-off in spectacularfashion' Prctecnerablein the liest of times hasbeen sorely tionism hascharurelledresouces hto unPrG tested given the r€centsPateof kidnaPPings ductive s€ctols and insulated the domestic the-generaltack of peaceand order' and economv ftom for€ign competition. It is eshutpsno singleeventin thelast two years Pe' mated tirat per capita income in 1986stood the futire of the nation so much as will shape aLnosteractiv whereit had beenin l96 Whjle the witlidnwat of US forceslrom Clark and the NlCs and tiAershavebuilt uP raPidSrowth Subic,peviously America's biggest oveFeas on fasFrisingeiports, the PhiliPPineshaschG bas€s. sento shield"ineificientlocal firnsbehind hiSh A few months after Mt. Pinatubo rudely hade barrie6. the Americans from Clark Airbase in evicted Bv the time the Marcosesned in 1986,for191, the 2'member PhiliPPine Senate Tune eien'debt amounted to S2bbillion. With no refirsed to renew its leas€on Subic.With the re"venuebar to repayforeignbanks,debt rrvbas€sqone, the country standsto losedose to icine ateup,l09oof the econom/s total meager $550riillion annually in badly-neededincome "rd.t eatt ines. As a result, the 1980swas - Clark and Subichavjng beenthe countrys larielv a lost decadefor a maprity of FiliPinos' secondlargestemployer,next to the PltiliPPine McBeth of the Sais ionetime Asia-hand lohn'There sovemment. Altliough thercare Plansto conwill alFai Fast;rn LconomicRniew, iert Subicinto a shipping and ind ustriaI comwavs be the perf,€ptionthat the Aquino PrcslDlex and Clark into an intemational airPort, " deicy was one of missed oPPortunities ihee are plans that lie in the futue' ln the Tfie Filpinos like to think that their counshort-term, the PhiliPPineswill be that much tn/s fate itsimilar to South Korca's but in PL"Dt: In s league all lt3 otYn. D@rer. ' ti" re,rerse.While South Korca's traie€tory Still, a qrowing number feelthat only good other and tariffs lowering by world the to re' experience Philippine the upward, rints can come6ut of tFeexpulsion of the basesFor largely have firsi 100daysin office hectsa siiraline decline.With no rclief in sight bariers. His finally develop a by theLidnappingof wealthy one, they say,Filipino3 may and verv little indication that the old, Protec- beendominated will no America nitionhood. of ,rseful s6md childten Chinese businessmenand their boy tionist ;[cies witl everbeabandoned,Fowth whiPPing favorite countn/s form of encowagemmt foreign in- loneer be the have comparableto the rcst of Southeast'dsia has hardly the they often go'wrong,as things welrtime many so vestois seek Sti[ in a country wherc beenaeonisinglYlong in coming f lbPmosmay survive on oPtimism therc are encouraging Wthout theAmerican Pr€sence, as Maros rcPlaced Aquino wh"enCoriz6n uP io the-consequenresof to wake forced be "Althoueh . pr€sidentin 1986,the-initial hope was that the srlFs. becomelessselfforeign debt has grown to $29 their own complacencyand iountry would make uP for lost ground and on their firll share take ier to r6ad obsessed and ofgross servicinghasfalen to 207, for theii$t time in more than 20years,become blllion, de& resDonsibilities. of to (GDP). qoduct is exPected GDP trulv competitive - a nation fully integrated domestic By l(|n Gatbontotr AssistantManagng Editor

hto the economiclife of the rcgion. Halfway thoush her six-year term, it becameevident that tf,e Aquino adminisbation had lost its enerw for reform. Living slandards achully deteil'orated. Tfu Ecotamlstrcpofis *nt Per capita income in 1991was only $720,down him$870in 1986.ThercveFal h the countrl/s long-tasting misfortunes s€emed to lie with some future rcaoer. While it is too earlv to tell whether Fidel V Ramos willl propel the country forward, it is hoped OtatP.ambswil finally make long overdui structural changesand oPen the country

1993 I'TAMGERJANUAFY/FEBRUARY flg AsrAt,r

Eachof the lollowing olganizations in our survey on the Philippinm' best and brightest have managedto stay on coursedespiiethe meanderingsot the largerlrral economy.A number are wholly-Filipino, a few arc joint ventur€s. All are world-class.

of RIAL, it now takes half the number of peopleto prcduce a batch of washing rnachines than it did prerriously. Punzalan has also recorded an 11.87oreduction in mate. rial costs.Productivity hasincreased significantly. Prior to RIAL, the facOPERATIOI{S MANAGEMENT tory manufactured 6.11 washing Preclslon Electrcnlcs Corporatlon machinesa day as opposed to 12.2 The winner of the award for Operations s€ts per day after the system was Management,PrecisionElectronicsCorpora- implemented.ln1990,PEC'S market tion (PEC)was recognizedfor outstanding sharein washing machinesros€to a achievementin manufacturingquality con- hefty g%, outperforming the comsumerelectronicpncduclsand appliances. pany's closestcompetitoF, Sharp Startingsmallwith a workforceofonly lt2 and SolidCorporation. Ilel Mode: The recipe iol success is in the tin. in 1962 PEC has sincegrown into a regional leaderin the manufactureof electricalcomotr FIIIA]{CIALMANAGEMENT investmentsin technoloeywill continue to be nents and home aDDliances. Phlllpplne LongUstanceTelephone (Tlucal to l'Lt l s exoanslon Thecompanycurrently employsover I ,600 Company (PLDT) people. Gross revenues - which included Among the 51 telephonecompaniesoper- PEOP1E DEVETOPMENTAND MANAGEMENT export salesof electroniccomponents,bafter- ating in the Philippines, the Philippine Long Texas (Phlls.)Inc. Instruments ies and washing machine parts - for l9O Dstance TelephoneCompanyis ina leagueall Widely recognized as one of the Philip reached$89.7million, nearly double that of its own. ln its 65yearsin the industrv - PLDT pine's best employers,Texas Instruments 1989. was establishedin 1928- it has consistentlv (Phils.) Inc. spends a sizable amount of its PECseemsto have imbibed the work ethic beenamong the most proftable,most liquii revenueson human resourcedevelopment. of its mothercompanyin lapan.Saysmanag- and most solvent Philippine companies. Training e\pend itu resperyedr haveincr€ased "Quality ing direclorAntonio Punzalan, conFrom a few million dollars worth of assets phenomenally from $1,450per employee in trol is not iust a target to be achieved, it is in the '20s, PLDT has grown into a mega- lq88 ro $2,b52in laa0.Everysinglerank and considereda way of Iife in our company and franchise company with assetsof over 91.3 file employeereceivesregularhaining,asdo permeatesthe work of both our top level ex- billion and emploveesnumberine I o,700.Run 927cof middle managementand 907oof top ecutivesand our rank and file. by the Coiuangcoiamily, the com"panysin fl u- management.Average hours of training per "Our company's policy is to have nothing encehassinceextendedinto the bantine and year hasrisen from 20 rn1989to 27 :tr:.'lE)1. to do with anything defective. Our inJormal airline indushies. Mark Go, director of Hurnan Resources motto is'quality productsbv qualitv people.' PLDTs stock is among the most attractive says"our approachto peopledevelopment is Tostay trub to this and remaincbmpetilive, we in the local market with retum on stockhold- holistic. We'renot merely after increasedeffiintroduced the RIAL conceptin 1t86." er's equity consistently falling between 2! ciencyand prcductivity - although this is of An acron)'rn for Redesign and Improve- 247o.Tlteaveragemarketprice of PLDT shares course a welcome bv-Droduct of our HRD ment throughAnalysisof Line, RIAL is an increasedfrom $6.72in 1988to $10.72in 1990. efforts- we'rc more ioircemed with cultivatamalgamof valueanalysis,valueengineering, Similarly, book value per sharehas increased ing a sense of personal autonomy in the industrial and production engineering. To from $5.57in 1988to $9.13in 190. workplace. As any HRD specialistwill tell maintain quality and increaseprcductivity, the The company's curent financial policy you, ownership of a proiect, whether it be in system has been applied to both production complementsPLDT'5overallcorpoEtestmF the production processor delivery of servrces, design and the prcduction process.zuALs egy which largely involve meeting demand contributesenormouslv to qualitv" underlfng conceptis the thorough analysisof and financingan ambitious expansionproSaysGo,"W'etry loo'kaftei our-employees' existing systemsto determine and subse- gram that will help PlDT.maintain its position peFonal and carcergrowth by implementing quently eliminate non value added materials as the counhl/s prceminenttelecommunica- what wdve dubH our Total Quality Culand operations. hons companv fuI€.,, "Rapici At present,RIAL is being implemented in expansiorq"saysonePLDT official, An obviow takeoffofTobl Quality contlol 13 projetls, the most successfulof which in- "should be supported by sound financial fun- GoclainsTotalQ'ualitvCulturc "makeseachof volvesPEC'Swashing machineline.As a result damentalsrprofitability,adequateequityand ow lf00 employe€saglobal citizen,providurg long-termdebtdndsufficjentliquid- thern a more expansiveoutlook as well as a Meralco: Addressing customer needs. ity to meetobligationsand palanents stronelocalcommitment." on contracls. TexasInstrumentshasorganizedemploy"Unless PLDT is financially eesinto different types of quality work teams healthy,we will not beableto get the such as EffectivenessTeams,Corrective Acfunding support we need to meet tion Teamsand Quality Improvement Teams the everincreasingrequirementsfor to "instill a work ethiccharacterizedby a deep telecommunications." senseof pride and confidenceaswell as team PLDT's funding requirements work. '"We look after are enonnous - historically, over our employeesextrenely 907oof the company's net earnings well," saysGo.TI has24hour employeeservare plowed back into fund expan- ices which include subsidized meals and sion projects leaving a nominal transportation to and from the workite. The amount for cash dividends. Given company also sponsors a plant-wide emcurrent trendstoward liberalization ployeeassociationthat look afterrecreational in the Philippine economy,efficient and welfareactivitiesand educationassist-

.IHE A6IANMANAGERJANUARY/FEBRUARY 1993

hasbeenat the forefront of the country'sinsuranceindustry for mole than 40 years.Among life insuran& comPanie" in the PhiliPPines, Philamlife is the largest in aLnost every re specl assets,Prcmium income, investments and benefitspaid. For 1990,Srossrevenuewas $70million, i^rith a net gofit of $15.9milion. Philamtife's closest iompetitor, Sunlife Canada,recorded$31million in total rcvenues and $3.18million in net Profits. PhilamMe has also carved up a sizable shareof the market. It's market sharehas rcmained a steady35%over the last thrce yea6 Bv contrast, Sirnlife Canada claimed only 15.77oof the market in 190, while lnsular Life had an 18.13%marketshare Among the company'smany str€ngths, savs Phila"mlifepresident and CEO, Rodrigo Having d; los Reyes,is ihat it is established. been around since the postwar Period, Philamlife has a high toP of mind recal. Althoup,hforeign companiessuch as Sunlife Cana"daor Minufacturers Life are being marketedasupscale,premiumbrands,a maiority of Filipinos seemto have placed their tmst in PhilarirMe.The company also has the advantaseof a national aqencynetwork w hich it has p,it to t rll use b/recdntly diversifying into and merchant banking. commercial MAI{AGEIIIENT TECHNOLOGY INFORMATION "Recentbusinesshends indicate a consoliComPanY ManllaElectdc dation of the financial servicesindustry," says Civen the daily six-hourbtackoutsduring "and in r€actionto this, we have de los Reves, the lastthreesummers,MERALCOhasn'te'rredefined our businessas financial servicesof actlybeenon toPof theaverageFiliPino s list of which life insuranceis iust one - albeit major favorite companies.At the management - comDonent. awards ceremonieslast February a Sreatdeal "Foi instance,we have introduced prodof titterins went on when MERALCO was ucts complementing life insuranceas well as announcd winner of the award for Informad irectlv tarqetedat ou r cufient insurancemartion Technologv.The contempt to which us the kets.dur elistlng *les force provides " MERALCOis fr;ld by someis lirgely unfair area in this leverage needed the much and undesewed. The comPany has actually collection data ftom the mainframe; and Recentlv Phitamlife establisheda Health lists very ljttle to do with natiorul power supply automaticgenemtionofvarious consumer MaintenariceOrganization (HMO) which (th; Drovinceofthe NationalPowerCorPora- bv' specified parameters. BO5, markets comprcheruive healthcarepackages tiydecentralizingoperahonsthrough tionf and has for the most Paft kePt uP with for groupsand individuals,a pre-needcomunits glves its servicing each of MEI{ALCO consumerdemand. pan"y.hi.h offers memorial, pension and needs. in addressin8customer MERALCO is also a recognizedleader in morc flexibility 'This pnrducts,as well asa r€constituted Lduiation arc customers way, our Patemo. Savs its services information technology.To deliver "recapitalized"corsumerfinancecompany if our even to its over 2 million customers,MERALCO has asiured ofunhampered oPerations The.o-punvs ne\t move?SaYsde los hamessedthe latestcomPutertechnologyand mainframe or data communicationsnetwork "We'd like to move into trust oPeraReves. claims one of the most techrologically ad- fail."Our lT program meansadded conven- tions. Trust companiesenioy certaintax advancedcommercialcomputing hardware and of vantageswhenhandtingretirementfundsand because Forinstance, software svstems in Asia. ln addition, iencetoourcusto'mers. we w6uld like to look into opportunities inre customeF' our to accept we are able If. MERr{LCO;ot ontv makesuseofoff-the-shelf volved inJhe growing tax qualified retirement We Teller. technology,but haj synthesizedvarious tech- mittances throush rcl Bank s Fast and Ensions market. billing Our in billing cycles. the rccord have set nologiesto developits own informationsys"ihe potential combined prcducts and fastest the MERALCO makes 2 davs cvcle of tems. servicestiat canbe offercd thrujughthesedifregard." In termsof mainframesystems,MERALCO company in Asia in this"The Philar ife that desir€d outcome ferent services will provide ClontinuesPatemo, " de los Reyessays. was the first in the PhilipPinesto oPeratethe edge comPetitive cmcial our be to would IT efforts our Prcvide IBM 3090and IBM 3083.Since1984,the com- of all panyhaspioneered theus€of oPticaI character customerswith reliableefficient,and accessii'romiti6n, US aatabase/datacommunica- ble seruice." Del Molrte Phlllpdn€sInc. tioniand computeroutput microfilrning. Havine hebled its salesover the last five IEI{T GEI{ERAI MAT{AGE At ue6ent,I\,fFRAL-O hastraromainFames vearsandlaving passedthebillionPesomark supportedby 5o Drect Access9omge Devices Ite PhlllpplneAmedcanLlb lmulance in 1q88- a goil-the companysetout to ac(D'ASDS).li cattridge and tape drives, 1 line Co.,Inc. The PhilippineAmericanLife Insurance complishiusta few yearsearlier DelMonie printer,2 laserPfinte6, 331terminalsand 2 data its impressive attributes lnc. j:opularly PhilipDines Peras Philamlife, known Co.,Inc.,more encadingminicomPuters

ance programs. Employeesalso run a sedit crnodrati"vewith anisset baseof P20million. Apart from providing emPloyeeswith generous benefitslnd services,Tl has also introduced a careerdevelopment Plan desiSnedto prepare employeesfor further promotion. Tn lddition, euth i-ployee's performanceis reviewed reguiarly Employe€salso r€ceivecareer counselling and follow a training "roadmap" which provideseach individual with the skills necessarvto advancewithin the comr,anv Annual attitude surveysconductedamong TI's labor forceindicatethat aSrowing number of rank and file employeesarc satisfied with oftotal theiremployment.In lq8c,only 52.6qo emploveesweresatisfiedwith carceroPPortunities fresented them;by 1991,this Percentage had q;own to 85%. Similarly, only 75 6% of emplrveeswere happy with the amount of superirsiongiven the* in tS88;in tgql, th" aorroval rate jumped to 917oThe accolades a[ pouring in not lust ftom within Tl. The ".nnoanv lias won various awards such as Outs'tandingPenonnel Manager for 1990and the 1990Ortstanding Community Relations Procmm Award.

Untike other comPanieswhich have centralized computing in costly mainframes Irreclv ina..essible to the end-user and cuslar8ely inaccessible torie,s, Vtn ALCQ saysseniorvicepresident "has ftont-€nded comPunnS compuhnq R.'t|ertoPaterno. Paterno, Roberto in a maioritv of its branch offices under a systemkiownas theBranchOperationSystem (BOS)." 806 literallv placesinformation at the enduser's fingertiii. As a rcsult, branch offices now control and have dfuectaccessto crucial customerinformation. The systemalsocove6 the branch's operatin& monitorinS, conhol and report prcparation functions Among its specialfeatircsareon-lineupdateof accountS riceivables; electronic file transfer of bill and

"Whilethe NlGsandthe tiges havetakenoff in a fashion,the spectaculal ha slnce Philippines

stagnated."

ilnxmre mmeemnn

1993 THEASIANMANAGERJANUARY/FEBRUARY

A networhof over 2O,(XIOAian Man4lers receive lhe Asian Manager Hmon$ly.

Gdl or FAXyour nearect fhe Asian Managel leplegentative about oul reEFonaladvertbing opportrnlties today. Hon6 Xong: PamelaChoy PacificAs a Nledia 13A, 361-163 LockhanRoad Wanchai,HongKong Tel: 834 6128 Fax:(852) 834 5980 Indla SubContln6nt: lvedia SouthAsia (P) Ltd. Apartment14, AbhiAnil Awas KantipathJamal,Kathmandu,Nepai Iet: 227 576 FAti 1977.1) 227 336 lndon03le: AllVRepresentative off ice-lndonesia Suite 254, Hotel SahrdJaya JalanJendralSudirman86 Jakana10220. Indonesia ret 57o 23O5/57O 4444 FAX|16227]'57O 2306 Japen: TokujiN inuma Co'Bridge.Japan Co., Ltd. SakuraCaoko ViridianBldg. 5F, 1t8, Sakuragaoka{ho Shibuy+ku,Tokyo150,.Japan Tel: 5458 0971 FA(:(03) 5480 0972 Xorca: Y . K .C h u n FirstMedia ServicesCorcoration CPOBox 7919, Seoul,Korea Tel::738 3591/3592 Fl0(:IOZ 73a 7970 lllalayrl6: AIM RepresentativeofficeMalaysia Suitâ&#x201A;Ź E, 20lF. EangunanAngkasaRaya JalanAmpang,50450 KualaLumpur Malaysia Iet 241 4277 M: (603) 244 7696 Slngbpo16: TeddyTan PAMNlediaServicesPte. Ltd. 83A East Coast Road,Tay BuanGuanShoppingCenve Singapore1542 Telr344 4495 FAr (65)440 8760 Th.ll.ndl AllvlReprcsentative office-Thailand c/o Allv Managementco., Ltd. 2/F, Qualig Building,262 264 Latdpfto 732 Bangkapi10240, Thailand Iel: 3740 868/9 FAX:(662)374 Oa6O/7

usA:

AIM Foundation(IJSA) 6/F, 750 BatteryStreet San Francisco,CA 94111, IJSA Tel: 956 3834 FAX:(415) 956 4a77

formanceto its 92oGstrong workforce aswell uged with letters from homemakersthanking as an innovative marketing program built Del Monte for the recipes and offerint their around four basicelements:new Droductand own budget saving tips. Regular use of packagingdevelopment, distrih;tion, adver- kitchenomic recipes- and by inference,Del tising and trade and consumerpromotions. Monte products - has grown to 3l% from Apart from a brief dip in 1989when retum on 23% 1\ 1987,proving that Del Monte does safesregisteredonly 7.3Ea,salesof its main indeed hold the recipe for success. product lines - fruit juices, tinned fruits, catsuDs,beansand sauces- have beenin- rAEulPilg$T NATAGilETI crcdiblybrisk. In 1990,ROsclimbedto 11.67" Vbayas Cooperatlve Deyelopment Center and revenuesjumped by more than $20milOf all countries in the Southeast Asian rron. region, the Philippines boasts the largest "lnthelastdecadeorso," savsaDelMonte number of non-govemment organizations official, "it's not been enough'to rely on the (NGOS).In 191, it was estimatedthat there Del Monte name. Like all other producers of were 18,000NGOSin the Philippines, 2,000of consumer goods, we're facing a much which were engagedin developmentwork. toughet more discriminating market. Be- Among the best-organizedin the world, the causeofthis,we'vehadtobe moreaggressive "N@s," reported lhe Far EastemEconomic about marketing our product lines. Reoieu,"have taken over from govemmenr "We realized early on that new marketing the work of improving the lot;f the p(x)r and salestools had to be created. We had to majority through political,cultural and ecodevelop new products capable of meeting nomic programs." genuine customer needs.Weneededcreative One such organization which has proand persuasiveadvertising; better selling vided assistanceto the underprivileged for techniquesand a ostomer oriented attitude. " the last 22 years is the Visayas Cooperative This, says Del Monte president George DevelopmentCenter(VICTO). Error, formed the company's blueprint for A non-stock,non-profit cooperative, the '80s. VICTO hasover 280coop affiliates and aggreDel Monte Philippineslaunchedseveral gate assetsof approximately P200million. A products "not found anvwhere in Del Mon- full-time staff of 125 serve its over half a ie'sworld map." DelMontesurvevedhouse- million members largely comprised of farmwives all ovei the Philippinesand, saysone ers, fishermen, teachers,students and marketing manager,"listened well to what housewives. she wanted." As a result,products such as Originally conceived as a training center spaghettisauce,pork and beansandthemore forcooperatives, VICTO s serviceshavesince recent meat sauceswere soon trundled out expandedto includeauditingandbookkeeg onto suDermarketshelvesasearlv as 1986. ing assistance,consultancy services,elecApart from introducing ne# products, tronic data processing and the management DelMontehasalsosignificantlyexpanded its of coop tunds. VICTO hasalso helped estabdistribution network. In 1987,a new policy lish links between the various coops and geared towards reaching smaller rctail out- lalger government institutions. lets was developed. Known as the CashVan Among its curent projects are an inteproiect,distributo$ were encouragedto carqr grated coop development protect for Panay Del Monte brands to neiehborhood stores Island known asK@Panav, a water resource and Broceriesthrough a series of incentives developmentprogram,and a farmer'scoop which included a cost-free acquisition plan erative development program. VICTO works for the vans. Overall results have been ex- activelywith both localand foreignfunding tremely encouraging. At present,there are 11 asencies.It hascultivatedtieswith theAusdistributor-run cash vans; by next year, Del trilian and Dutch governments as well as Monte hopes to double this number The with the Canadian lntemational Develop numeric distribution percentage of Del ment Agenry (CIDA). Monte pineapple tuice, to cite one example, SaysEdgar Comeros,exeotive director "1987 increasedfrom 43% in to 78Von 1990. of VICTo, "In the last decadeor so,we have Dstribution for tomato saucehasgrown even managed to make people more aware of the more spectaolarly.In 1987,the numericdis- valueof cooperativesasa vehiclefor change. tribution percentage for tomato sauce was We'vealsoincreased thecapacityofthecoop only 13Vo. Post-cashvan suweys revealed erative to respond to the needs of its memthis percentagehad grown to 89% in 190. DEIS. "At VICTO,it takesa little lonser to come One of Del Monte'smost innovativeprograms by far is "Kitchenomics," a series of up with a plan or with results,but this is recipes designed for the budget conscious becausewe like takea participatory approach h o u s e w i f e . D e l M o n t e c l a i m s t h a t in everythingwe do. We feela little delay is Kitchenomics provides consumers fiom 25- well worth it in terms of encouraging staff 40% on savings. Housewives apparently morale. When our staff feel they 'own' a swear by it. Shortly after the program was project,they are much more motivatedand launched,Del Monte testkitchenswere del- involved." I

THEIâ&#x201A;ŹIAN MANAGERJANUARY/FEBRUARY 1993

TheNewAsianManagers...

Kaewkoon Suwimol Control Takes By Jo3leAllwalas VicePresidentfor Development ScientificResearchFoundation Asian lnstituteof Management hen Suwimol Kaewkoon was hired bv Robinson Departmmt Store Company -in Ltd. of the Thailand in Robinson group 1982,the companv was poised to open its secondstore- with a saleiareatriple thesize of its first department storc. Initially aP pointed systems and plaming rnanager, Sumiwol was tasked with setting up comDanvsvstemsand procedwes including oF !.utions researchattd document forms and workflow desiqn -l was involved in a lot of Planning Processesat the company urtil it becameinevitable for me to assumeoperathg functions as well advertisin6 storc disPlay and sales Dromotion." An accountant by Professionwho took mostly corporate financial management electives to obtain her Master in Business Managementdegreeat the Asian Institute of Manaiement, Suwimol soon found herself "l was imme*ed in the marketing filrction. of hours puttinq of twelve ily average in a da 'work 6ut I rebshedthaleamhg process ln suDervisinq,the store merchandisedisplay ani windo"wdecoration- which canonly be done at nisht when the storeis closed- I had to sleepin the store'slobby a good number of times.' The innovative strategies she inhod ucedin advertising stored isplay and decoration and salespromotion rcsulted in Sreatly Robinsons'scwenhancedsoodwill among -by the company's tomen, a ieat recognized foundefs. In 1984,Robirson opened its thtd branch on Silom Road - Bangkok's Wall Streetwith Suwimol as the storc's generalmanager. Cognizant of the raPid e\Pansion in the local retail businessandtheshongcompetition from two competing rclail giants,Suwimol was determined to uiher Robinsoninto a new era of Ltd., shopping.TheRobinsonSilomCompany as the third branch is now known, becamethe ftst storcto keePits suPermarkets€ctionupon for businessuntil midnight. At theonset,sherealizedtheneedto €stablish and enhancethe manag€rialaclounting system managernentatt}eSilom andcorporatednancial

order for us to continue to inqease new branches,we have to be finarcially stable whilestrivingtomaintainow Pesentgm\'!th mte." V\tth verv professional strides, she has prcvided thd fdrmidable underpinnings that have sustainedthe gowth of the Robinson group. ln I 92, ten yearsafter filst joining the rerult gta"t, Suwimol, at age 37, became presidentof ad Ltinzuished chainof sixstorcs "l with a worKorceof 3,700. havebeenworkwith the founder of together had ing very thEconipanysin&thevery beginning Being theonly womanand theyoungestamongthe executives,I was heated like the youngest sister in the family." I do not perceiveany disadvantap,esto being a woman manager, oresident aitha t, but my age,considering the Asian management cultue which largely str€ssesseniodty, can be a drawback sometirnes. Notwithstandin& an ana\tical mind coupledwith an integratedunderstandingof a wide ranqe of rnanagementaspects- no doubt dev"elopedthr"oughthe AIM cas€ method svstem- enablesme to s€ll most of my ideas to the senior board and executive committeemembels." ln retrospect,she recognizesthat her a9 cent up thd corporateladder was largely ptopefea Uy the successftrlaPPlication of manv of the lIIaMgement systernssheinhc duced. She developed the centrdlized Pwbnndu which servedasa showcaseamongthe chasing of imporied goods which Put threesiol€sin pofe6sionalizingfimncial open- Robinsin's merc'handisein d classat Par with tions. As the business grew and cor?orate Thai.land'spremier€ retail store. Along with finance took on new and greaberimportance, the deign of a corPoratebud8eting system Suwimol was promoted 6 vice pr€;ident, fi- was the iormulation of a managementinformation systemwhich kept theBoardabeast of nance.AlthoughRobinsonSilomwasthethird deparhnent store,its capital structur€ was the the chain's rapid erpansion. Overall, implemost conducive for future expansionwith an menl,ationof ihe svsiem achievedhigher effiannual srowth rateof 207o.It was dessibed as ciencv in use of-space, purchasing,sales, the core business location for the Robinson lnventorv and profis for the chain asa whole. The new prisident hasher work cut out for Group when the chain sought listing on the To bu a the image of Robinsonand be a her. the lead and Thailand, SecuritiesExchanseof storc in determinins the policy of the entire steDaheadof competition in terrnsof customer has mgaged the sew$oup. As Suwimoi-qaft6d thi launch of the rnrice excellmce, she Robinson Store Companv in Thailand's icesof leadinq American,Japaneseand Frmch emerging capital markit in January 1992,it consultans t6 desigr corporatelogos and debecamethe ftst and onlv department stor€to Dartment stores. An inveshnent of Baht 25O inillion has been set aside to comPlete the be baded on the StockExchinge. On the corporate decision to go public, renovahon of e\isting branches by 1993. "We want to malntarn our sta- Stronelv supporting her bid for rMrket leadSuwimol savs, tus asoneofthe top threeretailersin Thailand, .oniJis toi faewk--oon,architectof the chain withafirmfoundationforfutuJeexPansion ln andduwimol'shusband. Thisformidableteam

1993 THEASIANMAMGER JANUARY/FEBRUAFY

"\lUowantto malntaln ow statE asoneof $e top thrceretallenIn Thalland." -Suwlmol ltrmwkoott

works hand-in-hand in maneuverins the physical expansionard modemization;f the stor€s. Thev rccendv baveled to Canada to broadm th& horizoirs throush an ocular inspectionand farniliarization tour of West Fdmonton Mall in Alberta, listed in the Guiness Book of.Recordsas the world's largest shoF Pmg ma!. The company is also investing heavily in computer technology to improve serviceefficimcy whether haruactions be cash sale6or sedit, and to develoD a databankfor account-will ing purpoeeswhich link all the branches. Still on customer service satisfaction, Suwimol's curent thrust is to shengthm the RobinsonTiaining lnstihrte to achievetop ratings in service quality in the highly competi-

'To hrlldthe lmage of Roblnson andbea stepaheadof competition in tems of customelservioe exqellence, has Sunrhnol eng*ed theserylcesof leadhgJapanese, Frcnchand Amedcan eongultants."

And what does he need to meet the challengesofthe Year 2020?How does he ready hirnself, what does he have to know - not onlv to survive. but to masterhis environment

The Asion Monoger brings together the best minds of Asia, North America and Euope to give you a steady flow of new ideas and development shategies and always with a contemporaryAsian perspective.The latest in global manag€m€nt thinking of success? ald hends These are - tempered the concems with an of The Asion intimate Monager. underWritten by standiag of pmcUcing the way of managers with life, traditions significant and cultures of experiencein Asians, as well t}le management I as the intraof Asian and regional, ethnic multinational and enterprises and govemmeat and non- geographical contrasts - are presentod government organizations, Tfte Asiqr each issue in our lively and inforrnauve, Morroger focuses on today's authoritative - yet no-noDsenaemanagement trends and their analysis, editorial. Subscribe today and keep up-toreal-life management issues and the date with the latest maragement thinling opinions of key decision-makers. and tr€nds.

The Asian Managt b publislud U-tftonthly by the Asian Insfitute ol Managmt&L Asi's yemin gaduaie ianagemmt schol.

tive retail bwiness. Beyond1992,Suwirnol'svision dictatesthat hypermarketsand convmimce storcsarc the way to go. The new presidenfs short-term goalswithin the next threeyearsarc to expand ftom sixto 11branches(a[ locatedin Bangkokt ftom a total salesspaceof 145!00 squarenetels to 345,0msquarcmeters;ftom 3,m €rnployeesto ov€r 7rm in shfisuppor! andfron a tunov€r of Baht8Jm m lion to well ovs Baht 20,ffirnillion Thenerddecadewill definitelybe citical for grwimol as sheernbarkson thesedrallenghg new prrsrib and a larger scaleof operations. Already, she is expanding pr€sent operahons into other rctailing businesses:franchising forcign poducts to support the depaftrnent store operation, and the branching out of Robinsonintiothe povinces lt is not suprising that the transforrnationof the RobinsonDepartm€nt stqe frorr a singlestoreinkr one of ilniIand'sgiant r€tail dlains canbe attribud to the nr€tamoryhGisofasy5tennsandplanningexpert intoa gmaalisttyperranager.Thatthismanager - who epitomizestoday's ernergingbteed of worl€n corporatemh€pt€neuls - odsb, is a shor€ t€stfuronyto the vision of the Robinson founders and the character and talent of Suwimol lGewkoon. T

D YES eive me. t*o-ysar su*€riotion (12issue6)to THEASIANMANAGEnandrush my r€€ copi€6ot aan 20@:a REctoxal lrcEMAlO N THEYE R 2l)20andI SEARCHOF THE A|AX UAITAGERFOF IHE YEARAPO

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Fot bstet delvety o, Nw Itee book, pqrnent nust *:cnnpany oder.

John D, Woodward

Clubbers... andChrysanthemum Bashers Japan

Thel\eedfor Revisionism

"Asiannationshave longsewedas of Japan's'hewer woodanddrawer ofwater'- an impofiantsource of raw materialsand basiccommodities to feedJapan's industrialheartland."

wiss iJumalist, Frie&nann Baftu, abandonsaI daims to neuhality with the Publication of his book, ?h? Ugly lapanex: Niypons Ecorcmk Empirein Asia. After rcading this scathing attack on JaPan'sAsian economic presence,Charter Memben of ihe Chrysanthemum Club will vehernmdy voice their displeasure; the world's Japan Basherswill dutifully praise the work; while rcasonable,Prudent readen will find ihebookinterestin& entertaining and inlomntive - if a bit excessive. While he breaks little new gound in tracing the far-reachhg tentaclesof Japan, Inc., Bartu wdtes skilfully ashe examinesJaactionsandactivitiesinAsia. Don's The author's central atgumentswillbe iamiliar to observ€rs of the Asian scene.Asian nations have lons servedthe subodinate role as Jipan's 'tewer of wood and drawer of watel' - an irnDortant soluE€ of raw materials ;nd basiccornmoditiesto feedJapan's industrial heartland aswell asa convenientexport market for JapanesemanufactueF. In the ni!d-lg8fb, endakoshoku ( or t\e shock of the high ym) helPed bring about therapid rclocationof toSoutheastAsia. lapan'sfactories ' This new economiconslaught has not been without its casualties.As the author explains,Japanese economic interesis might have a dominant physical Pr€sence in SoutheastAsia, but the conbolling philosoPhy of the corporate samurai rernains firn Y iootd in what is bestfor the JaPanese industdal daimyo. JaPan wants its Asiar neighboF to rF main as hewers and drawers not to eme€e as Potential competi[ors and challmgerc. The author's case historv of Malavsia's rutional autom6b e undeitating illustrates Japan's mindset. The Roton SagaProj.<t

1993 lHE ASIANMANAGEBJANUARY/FEBRUABY

received the extensive suPPort ant high yen, Japan'sPrivate secand participationof the Mitsubishi tor madea rational businessmove Motbr Coinpany along with the basedon market r€alities. corPoIn rnanycas€s,Japan€se personal 'tr,ahvsianencouragement ot the orime minister. Initial rate decision-makinswas abetted succfu was fo[owed bya dedine bvAsian compliciw. All too ofterr in demand with the enierPrise ,dsian politiciins ind executives losine $15,m0on eachautomobile responded to thei own narrow sold.-Wlrcn Malaysians consid- seli inter€sts by s€lling out the ered exporting the car to the West public trust and otting lucrative to recoup losses,thev discover€d dealswith theiriapanesePartne6. At times, Bartu s€riouslymi9 to thei dismay thai the Proton "a Saeawasin rcaliw, dejiberately readsthe political tea leaves. His analysisofnenationalist Evisiondo:wn-s'aded uicuuisn rattcti Fiore,good mough for Malaysia, tst Thelapn tlut Confu Noshiniarc a casein Pqint. Barh.r but certainly not Soodenoughfor Ishihara is'tle 0shihara)is thesort exDort" Mitsubislu-s technicians insisb tll'itt and engineers designed a car of petsonwho cplrld easilybecorne which could not meet Euopean th6 6rstJapaneeI'rime lr,linisterto make a laiting mark on world hisand American quality and sifety standards without extensive tory. He qualfies well for the Poot Erit ne hls drarisma. S€ctmd,he modfications. The author beliwes that Japan hasa sharptonqueand rcady wiL has firntly establishediis Asian And tl'id:, rc Jpeals fluent engeconomicernpirewhidt it rnanages lish..." "dErisrna,"'? The fact is that for ib o#n auin Oipto-utic, [u"fluent English" manitariar:randrnoralPinciPlesare sharptongue"and arepreciselythequalitiesan-asPtdng botto the economic subodinad Iapan€seprime millrsbr do€s not bm-tine. TheJaponesecpnductlf"*d. Irhihara tends to be a selfhinintheirownuniquewaywitha aqgandizing Ioner who is widelY calousdisegardfqtiefeeligeand diiiiked noi only by ltts gaijin neiglbors ooiniors of their Asian citics but by the foolir (the Liberal with grouptfrinf-*e TheJapanese, Democratic Party stalwarts) as to assimilab rigidity, arc unwiling and reluctantto slure thet technc well. While this rwiewq would Pre logical expe*ise and industrial "The ASSressive fer a tide like lnow-how. Bartu'swellFriedman in Asia Despitehis many years Japonese," as a distinguished ioumalist, writt€n account ot JaPanese@ Bartu, at times, seemsto fall for nomic activitiesin Asia des€rvesto Tapan'sown propaganda, espe be read. He conectly focusesow attmtion on what is a Paramout .l'utty ttt" mytli df ;apanise unioueness. Iapanes€ business- conc€rnin the PGt C-oldWar Era: merimav be persistent,uruelent- CanIapanernergeasa bue ultsnaing, &iv::nand tal€ntedeconomic tircnalieader?ldanswq this quesanimals. Doesthis behaviorreally tiors fairly and honetly we rirust make them sounique in the inter- neithera JapanBashe nor a CfuYsanthernumClubber be. I national busin€ss;rcna? Similarly, Japan's r€cent economic exDansiqnin Asia did not The Ugly larynese:Niryn3 Eco' come about becauseof divine in- notni Erflpire irr ,4s,;4.Friedemann tervention or mandaiin-like ma- Bartu, Longman SingaPorePublisher nipulations. Followinq the Plaza (Pte)Ltd., Singapore,I 9E2,ISBN9971page. ,ql,eemmt of 1985and the resu.lt- 894cc-^3,287

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Prol. Vlctor S. Llmllngan

thepeso... Freeing

AttheCitytrust Forum "Exportersshould not demanda retum to the old systemofforex controls.Thekey is to learnhowto operatein thisnew enYironment."

FfiDino Businesqnan." in providing a backgound on the toiic, we no"tedthaGs earlYas i990 we had advocatedthat June we "free thepeso." Thismeantthe lifting_of ail- foreign exchange contsojsand the leFtrm.Erngor ax existing black rnarket dollar oP erations.Citine PeterDrucket,we ttrm argued tliit *ris actof freeing the pesowould be the utw cos thebne thing - that could radicallv alterthePhilippine economic situahon. We alE ed fuars that sudramovewouldbetantamount to devaluation. Citing the caseof Thaitrand,where freeing the currency did not r€sdt in devaluation, we argued tlut if the Peso doesdevalue then it would r€sult inan overvaluedcurency and not the freeingof the peso.Weshould notblamethemirlorfortheimage we seebefore us. Now that Forex liberalization hasallowed us to view our image undistorted by Sovernmentinterfurence,we suddenly find thePeso appeclating rather than dePr€ciatine. This, in our view ls another dramatic example of how the market can confound the exPOne$.

As one of those very exPerts, we acknowledged our mistake and, undeterred, we then Proceededto analyze whY the Peso sttensthened and how we foresawtFeexchangeratedweloPrn_g. In hindsight the Peso shengthened as a r6u.lt of two mair factols: the incease in rcmittances from our Overseas Contract Workersand the enEy of the Interest RateArbitnsers. The Remittances from the OCWs increasedfor several reasons.The rehabilitation of Kuwait increased worker demand bY

19Sg JANUARY/FEBRUARY IHE !€lAN MAI'IAGER

about307o.Inaddition theliberalization of the peso encouraged OCWS to rcmit their earnings through the localbanking sYstem This insease in official remittance - 609o-maY still grow as the exDectedoIfi cialrcEritianceof $2'0 billion for 1992is waY below than the ILO estimate of actual oCW eamines of $'+$6billion. Thdfteeinq o{ the pesohasinexorablv lnkid the Pirilippine financiai system to the global economv dne aspectof this linkaeeisth6swift movementof funds f6m one currencY to another. Civen the difier€nc€in the PhiIiP DineTr€asurYBill late of 16?oor a illfferential 6f tzzo p.a., there has beenasubstantialinflowof dollan which has contributed signficantly to the aPPrcciationof the peso. We then tackled the Possible future excl-Engerate. wti argued that the peso wottld continue to aDDreciate.For one, rcmittances fnrin ttte OCWs ate exPecd to inqease as morc arc sent abroad and asthe formal banking sYstem startsedging out the informal network of iouriers. For another,dre domesticinterestmtes in the Philippines are expected to rcmain tiii:tr Uecausetne aomesticPhilip

"Thefreelngof the pesohasInexorably llnkedthe Phillppine systemto financial the$obaleconomY."

pine public s€ctordeb,tis exPecd io ri; ftom f312 billion in 191 to P446billion as a r€sult of a Prciected National Government deficit of Ir9.0billion for 192 we thm sketchedthe various implications of this scenario.For the importers, we foresaw lower costs of importation given the movernent tbwards imPort liberalization. The challengefor them is to passon savingsto customers and in so doing initiate a consumer-led recovery As for the exDorters,we advis€dthem not to refy on devaluation windfalls as they havein thepast. The key is to be competitive desPite a shong oeso.Onewavof remaining com'oetitive is to shift to doila! financing. ff the peso dePreciates, expofiers realize a foreign exchangewindfal. ff the Pesocontinu* to be strong they benefit ftom lower interest costs. In the open forum, Mr' JoseR. Facundo, the President of Citytrust, urged exPortersnot to demanda rctum to theold system of for€x contlols. The key is to leam how to opemte in this new environmmt. Fbr examPle,he indicated the plans of Cit''lrust to develop the-future forex market. Under this svstem, the exportels - instead cif t ying to PtuY tie forex market - sell fot€x cover' With his assuranceof an exchange rate lor their forex Proceeds,theY could now concenhate on their exoortbusiness.Weconduded bY notine that Forex Uberalization wodd forcecomrnercialbanks to be more comPetitive, as they woutd be losine their most lucrative prcduct : L/C imPort financins. That the managernmt ot CitvtrGt is endolsing- the Proer;n in the national iirteres[ de;piteitsadverceeffectsonthebank should encourage exporters to acreDt the prodam desPite the aaiuitment iiffi'cutties tirit it imI nosesonthem.

@ Rlcan o A. Lln

good... Looking

Thel\otebook Tlaveller "Remember, it's nothowsood you a_re, it's how goodyoulook."

otebook computers are the power look of the'90s. I've seenmany executives tapping away at their rcs inairlinewaitinglounges.Yousee, ifs not important whether these executivesknow what they'rc doinSor not - it's important to look good, and that's what these gizrnosdo for you-like anicetan or suspendeE. So, in addition to your decisionsonwhatt)?e suitsor make-upkitstopadtl would liketo Ploposean etiquettefor h"aveting with notebookconput€(s. How dm one d€6ne a notebook?They'a tlpically tull-blown Apple or IBM I{-compatible machine thatweigh threekilos cr less, and canfit into ilre slirrunestbri€{case (Theyopenwithqinchdiagc nalscr€€ns,todistinguishthffihom the equally ubiquitous compact electonicrheduler-calendars). Notebooks evolved from laptops, which you suppocdly could park on vour knees and workhippilyawiyat. Theweight of laptops, however, at ten pounds, could tum the shudiest legsblue - thus adversely afiecting the golf swing. So the note. book was born. The engineersat Toshib4 IBM and Cornpaqalsoall rcalized that the size of the briefcasewas inverselyprcportional to the executive's rank. You see,peons carry bookbags;CEOs carry portrolici and their tennis rackets. How then do vou buv the wanna-be look? N6tebook tlrrica.tly cost between US$1,000io US$3,000, depending on the ss€en and proc€ssorand generally indude a 40 megabyte hard disk,a31/2" flopry disk"battery and portabletransformer,Now, to rnakeit more sexy,you canplunk down another US$300for a faxmodem card and yet another US$00 for an externalvideo card. These iterns are invisible, thus uselessto make a fashion state-

ment but arc extemely usefiri for comrnunicationswith HQ and to make datashow presentations. ButoneexEa com;nent is essential for tsavellers:in extra battery. Notebooks use nickel-cadmium packs which run out after four hous ofuse.Thesethingsarecritical for extra long flights. l,ly'hatsoftwarenustyouhave? OIti let's get serioushere.You do need one word processing,one spreadsheet and one graphics software package.These are the big three "why I must have a rc" rationale. Thevareindisoersable for those memos, negotiations, and prcsentations for travelling execuuves. But what are the reallv imoor^You tant games you must hive? "block" game.These must have a

You see,all executiveshave a geneticurge to live simpler lives...as bricklavers.Thev are tremendow forshess rclief (For you intellectual types,a chessor bridge game comesin mighty handy, but let's not fool ourselves.Youdon't want to play chessafter a tough negotiating session.). What to bring on a trip? Bring tkee exha 3 1/2" disks:onewith a bootable system file with disk utilities (DOSCOMMAND.COM for [rCg System Disk for Apple Powerbooks...you will thank the heavensfor thesewhen you crash your had disk), one containing critical software and one extra for data,Don't bring a printer and/or printer cable. Theyt only cause bulge in your 'r,iritton bag. Be sides,most hotel businesscenters are the Tenis-type game, whare and officeshave printe$ to hook by shategic placemmt of falling uP ro anyway. blocks,you "eradicatre''the rcws. Do brint a uriversal plug adaptor - circular, three-prcn& hiangular - for all the different sockets aqoss Asia. Mo6t note books will come with a no-mistaketsansformer,but askthe hoiel which plugs yield what voltage alrryrarayArd, before you leave your home cormtry,registeryour machinewith customs.That way you'rereallytellingthetruth when you come back, that the machine was "for a business kip! Honesdy!" Finallt care and feeding. Never,neverdean vour notebook with alcohol. It s;eus nic€, yes, but it erodesthe toughest plastic. Use a sponge and water instead. Pick up a botde of compressedair from a camera storc to blast out dust on the sqeen and between the keyboard keys. Theseare especially usefin for niruries that leavefingerprints on your sqeen. Follow thesetips and vou will achieve that rracical, new-frontier look. Rernember,it's not how good you arc, it's how good you look. I

"Howdoesonedefine anotebook? They're tyfcallytullilown AppleorIBMFG compatiHemachlnes thatrveighthreekllos or less.andcanft intotheslimmest Mefcases."

THEASIANMANAGERJANUAFY/FEBRUARY 1993

Prof. Rene li llomlngo

down... Trimming

(Excuses) Causes forHighInventory

"Atiaininglow

inventorylevels doesnot start with the physical reductionofinventory justasweightloss doesnotbesinwith thesursicalremoval of fat."

mong the requisites for lean manufacturing which include zerodefects, short set-up times and short lead times - the mo6t visible alrd probablv the most difficult to achieveis lean inventory levels at all stases:raw materials, work-in-proc6ss and finished eoods. Ai in quality, the ultimate iarget is zeroinventory To benchmark,ToyotainJaPan- theiustin-time UIT) pioneer and the worlds leanest manuJach{er carries two hours of Parts inventory in conhastto two weeksfor a comparableAmerican company. Ironically,attaining low inventorv levels does not start with the physical reduction of inventory irrsi as weight lossdoesnot begin with the surgicalremoval of fat. It requires raJical change in systems; e.g.,JII, and management systems DhilosoDhvThesuccesses, ana prutejrpi iesot Iea" t*inufactureri ininvintory marugementall over the world are well-docummted. So what Prcvents most companiesfrom ernulatingthem? ftere is in fact an hventory of excus€swhich a typical rranager usesto maintain the statusquo of high inventory Using the outPutproces*input ftamework, we can ilassify these into the following elements. 1. OutNt ilErab[hY .Unreliable demand .Unsteady demand .Poor forecasting .lack of market informahon 2. Prfie3s InetaHlity .Iong Production lead time .LonB set-uPhmes . ftequent rnachinebieakdo\^n oHigh defect rate . labor uNest .High ab6enteeism/ employeehrmover .EquibmentcaPaciiyimbalance

1993 IHE P6IANMANAGEFJANUARY/FEBRUARY

3. Inpui l]|staullty .Unreliable suppliers .Long lead time .Unstable prices We could add a fourth, very fashionablegroup of excuses: 4. Envlronmentlnstaultty . Bad rcads . Bad traffic .Bad Sovemment ln short, a typical manater who makes use of theseexcuses admits and recognizes his own and incompetencein helplessness dea^lingdir€ctly with theseproblems. He usesinventory to cover up, hide and offset the effectsof .t-r,age-ent problems, without actually solving or eliminating their roots. l rhat is management for if it refuses to deal with the instability inhercnt in most oPerations?What is managementfor if its solutibn to practically all problems is to build up inventory? To incompetent managers,inwaYto PaPer ventoryistheeasiest over oroblems,especiallyif the compinv has adequate6nancial resources at its disfosal.High inventory is often a s)'mPtom of mismanagement or no management at all.

"FlexiHe Foduction plocesses relymuch lessonfuiecasts andthehaccuEcy; all it assumes furecmtsateand willbewrong"

The apprcach of a lean manufachreris totallydiffer€nt. TocoPe with output instability,it involves the customer in its planning and designing activities, and sets!P flexible pncductionPrccessesthat can"opi -ith changesin market demaridand variery It therefore relies much les on forecastsand their accuracy;it assumesa-llforecastsare and will be wrong anyio deal with processirutabilities without resorting to inventG ries, the lean manufacturer continuously reduces all lead times and set-uP times through I&izcn. Machinesand equiPment are made rcliable through Total Prcductive Maintenance (TPM). Employees and workers are formed into self-managrngteams empowered to solve their own problems. Employeesaretlained with multiple skills sothat caPacity and prcductivitY ar€ not adversely affected by absenteeism and hrmover. A lean manufachler trains its suppliers to r€duceinstabilitiesin iniutquality anddelivery EstaF lishingpartnershipawith foreiSn suppliersoftenleadsto morercliabie lead times and deliveries of imported raw materialsand suF plies. To make them more manigeable, the number of suPPliers is alsoreduced.l€an rnanufacturersdo not r€sortto sPecdationand htwding when Pricesof raw materials fluchrateithesesolutionsusuqeatemorePoblerns. ally -What aboui environmental "things beyond constraints or one scontrol?" The Point is not to us€themasexcusesto deferaction on the outPut-pmcess-inPut instabilities.Lean manufacturers have demonstratedthat substantial reduction in inventory can be achieved through imProvement in intemal systemefficiency even within the most halsh environI mentalconditions.

@ Xin Gatbor*on

Goodfoodaplenty...

Favorite Haunts 'Yourchances of catchinsa waitress'

attentionat SanMis improveif you're male,Caucasian or a Soriano."

I fs comrnon knowledge that I Filipinos love to eat and so it I shonJdcomeas no surprise I that Metro Manila boastsan embarrassingnumber of restaunnts - Chinese,Indiar, Italian, Mongolian, l-rench MonSoliaD Frenchand Japanese food. Onlâ&#x201A;ŹgaspistreetinMakati Onlâ&#x201A;ŹeasDistreetinMakati (Meho Manila's corrmercial and financial center)alone,there is an entirerowofexcellentrcstaurants. As I don't claim to be an authority on good food and fine dinin& the reviews that follow are necessarily subjec'tiveand should be taken (asit were) with a pinch of salt.

for this place. Owner larry Cruz is a family friend and I met my currentboyfriendhere. No surprisesatlarry'sBaLbut that'snot acriticism. It'sa likable,easygoing placewitha quietly attentive stalf who make it a point to know the individual tastesofall larry's larrv's Bar habitues.The menu is varied and the portions offer excellentvalue for money Appehzers like Squid Tacticsand Shrimp Binondo are particularly tastyi omelettes are eslxcially filling. Drink are reasonable,particularly ifyou havea Five Thirstv Card. Steerclear of theteathough, it tastesdodgyand is a bit watereddown. Dinn'er Dinnerfor two, P300400.

mavera, and the more informal Boccalino,offer quality food in a pleasant setting. Their Amatricianais mouthwateringas is their carpaccio and eggplant provolone.Servingsaregenerous. I normally judge restaurants by the bread they thev seNe, seNe. and La Primavera'sis first class. If vou'd like seconds,just ask. The waiters are very obliging. Dnner (without wine) P500.

Luk Yuen Legaspl Sl cor. Garden Dive The favorite lunch time haunt of TheAsianMnnager'sdirector of San Mig oDerations. Lui operations, Luk Yuen offers Legaspist., Makati haarty dim sum fare. The food is With its warm inviting interitastyand in potions largeenough "tavern-ish" La ors and ors run-down "tavern-ish" and run-down La PnmaVefa./EOCCalinO Primavera/Boccalino to satis4/ satisfy the the very very hungry hungry Its Its alallook, it's difficult not to like this Legaspi Street wayscrowded soyou'll dobest to placeand judging by the crowds One of Manila'smoreauthen- orderyourtakeout.Thehalo-halo gathered here during lunch and tically Italian restaurants. La Pri- congeeis somethingspecial,with

il:iinrTi!!":ditffiil W dffiry f ll{jli'diff:"$:ffi,# e"fiFffil6r il:i::':nfr.:HJ-:x,i'iT[ mn:mi:j:ffiiHffi,:it mobile voung couDlesand stock-

'rR

tlocktosanVig whercthevcanbe I ff_rl'ffF 5eenor iust - aiter a hard day's -F/ work - Fet quietlv ratled.The li{ffitlJ *-Sffii' food is reliable rather than exotic. r,\f$ San Mig servesstaplepub food $l_ I!.r-' .I(r,

'\dfl

'. lS .

ffiill$J:XJ;:1i5J'r[il['$,46i;rro," toes).grilledcali liver,'pari ribs l--.":Y

andmlidcurrie..ThesandwichesI

ili"T.l1ifilili;lli,ilXH5: ll Try theirhamand cheese orsteak -

their radish cakeand buchi. For two. P120. For a slightlv more er,pensiveand upmarket meal, try the excellentJadeGarden two doorsdown the road.

Fravou.andspices

Legaspl -As St cor.GardenDrive its namesuesests, he

""fiJ::,":ff"#5'iil;l:i',i here,but with subtleryOneof the

Theymakeup for the sandwiches.

fi6t Thai restaurantsin Manila, "lrtrv's il3i1ffl'"'i,il::if.?ilili?'i: Barisalikable*l:J:l1f"?S?ln:\ilii: appalling(oneeveningit tookall gasygoing place Wlth a noodle.s iPhadThai)..the voung quiety attentive star i:r,:l1;ijl?ffil;xll#l: :lji#Tj:'"if$,"'il:f"xx"; who make it apoint to il*".i-#Titr#::$,"rrT:.1: i:::jftfftr"',*;::,1:f,ilj.',i male,CaucasianoraSoriano(asin waiters hurry

Andresand Eduardo). - - Dnnerfor

il; "b;;ip4'50.

tastes of all Bar

Larry'sBar

habitues."

Legaspi cor. de /a Bosa Sts. I mustadmit,l haveasoftspot

knOW thg indiVidUal

asthe areaptto you l^ngby overtumingchailsand

.i"iing t1.,"cutteryicombine to

-lj il*1:,",1i$*":Jillf morethan four,makereservations earlv. P5O0for two.

.THE ASIANMANAGERJANUARY/FEBRUARY 1993

Manila's - Resort otel. Business Excellent meeting f acilities. Unrivaled opportunities for sports and recreation. It all comes together at Manila's only business- resort hotel

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