The Asian Manager, September 1988 Issue

A PUBUCATION OF THEALUMNIREI.ATIONS ANDPI.ACEMENTOFFICES AI.IDOFTHEFEDERATION OF THEASIAI.T INSTITI'TE OF MA,I.IAGEMENT ALUMNIASSOqANONS

SEPTEMBER1988

:&-ifi"d bns

WeGanLearnFromFishermen bout fifteen yeius ago and long before that, therewasa fishing village along RoxasBoulevard. near Baclaran,a district of Manils vfuichbordersManila Bay.It waspeculiar, sincethe village looked much like any fishing village one could find in the countryside.Yet the villagev3s vilhin the cityin an areaaboutfour mins[esflom the internationalairport. It was also a charming sight. The village prospered.

After all, it wasin the middle of a large city.

When the former gwernment decidedto reclaimland from the bay,the villagewasforced to morr'e.The familiestogetherwith their huts,outriggersand netswere relcated further southbeyondwhatwasthen the end of the boulevard.They continuedto work their trade but with muchless vigorand ease.

With time, a discontinuedreclamationproject,and a certainamountof boldnessand initiative on their part, someof the villagersreturnedto the oldvillagesite.Togetherwiththemaretheir huts,their outriggenandnets.

Their homesare built on the breakerwalls.Fishingnetsare hungand repairedalongwhat is meant to be a walkwaywith their boatsalongside.

Goneis the quaint fishingvillage.

While somemaybenostalgicfor theold villageandothersmayevenpush for anotherrelocation,it is very likely the villagersseethingsfrom quite a different perspective.The location givesthem an advantageover rnany othersin the trade as theyarc lessthan a kilometer awayfrom one ofthe busiestmarketsin the city. Further, the relocationareahas no practical meansofpublic transportationto or from the Baclaranpublicmarket.The relative prosperity of some of the huts would attest to the value of the old site.Theywould surelyresista relocation.

For thoseof us interestedin de',relopmentand in lesseningpoverty,while we maynot necessarilycondone the nesurrectionofthe village,their point ofview is casily appreciatedand an old lessoncanbe relearned: Adam Smith in 1776finishedwhat maybe considercdthe most ranolutionary book for tlrc poor ever written. In this book, he askedthe mrrect question:what is the natur€and the sourceof wealth?In a rather simplistic but dovm-to€arth way,the villagersaskedthe samequestionand found the answerthat their fatheN had found morc than a decadeago.

Today, for someof us interestedin removingpwerty, we do quite the op pociteofwhat thevillagersdid. Our researchusuallybeginswithan inquiry into what is wrong and we try to find the sourcesof poverty- an approach far lcsssuperior.Ifwe think about it, ifwe are unableto find thc sourceof w€alth but are able to find the sourceof poverty,the only thing we are real ly capableof doing is creatingmore poverty.It is quite a different thing if we are to ask ourselveswhat the sourceof wealthis.The former sourceis the more exciting the more difficult but, certainly,the moreproductiveto find.

Until the time povertyis significantlyreducedin the world, we maybe sure that the questionposedby Adam Smithwill continuallybe askedand a searchfor the ansvu or answerswill continue.In the end, however,we may simply find what the villagers, in a way, already know: 'The moral causesof prosperityare well known throughout history.They residein a constellationof virtues:diligence,competence,order, honesty,initiative, frugality, thrift, a spirit of service,keepingone'sword, courage...Without thesevirtues,no socialsystemor structurecanmagicallysolvethe problem of poverty; in the long run, the pattern and the performanceof instituthe habitsof the humansubjects[that comprisethem]."(Pope tions...reflect John PaulII, in a speechdeliveredto the EconomicCommissionfor l-atin America and the Caribbean)-Gary Santos

Lettersto the Editors AIM graduatethroughoutSoutheast Institute, the faculty membersand my Asiais theideaof settingup a network colleagueswho studiedalongwith me.

Suggestion:Can an AIM student, ofcontacts.I havefoundthatthereare In short,it mademe homesick.

IL Srinivas (India, MBM Y4) faculty member,or researcherwrite manyCanadiancompaniesinterested part in know that of the world don't but on how to most effectivelyeliminate I suggestthat you maintain the graft and corruption in the Philippine how to go about meetingthe right coverageespeciallyon the human system/government/bureaucracyor people.Shouldanyonereadingthisbe resourcedevelopmentfor the various wherevergraft and corruption lurk, interestedin pursuingsuchan idea, sectors.There hasbeenemphasisin they can contact me through the somecountriesin theregionfor a conwithin the contemporaryconte*?

Alurnni RelationsOffrce.

B. Tablante(Phil., MBM "73) certedeffort to be madeto develop G.A.Franco (Phil., MBM Y7) tourism.An exmaination,especially Other Matters with regard to managementrequirementsin thissectorinyourpublication I'mgladyoufoundme!Theotherday A New Breed couldprovideinterestingreading.

I receivedTHE ASIAN MANAGER From for managing rural eight a bank A. Karim (Malaysia,I0/IM'77) for thesecondtime andreadall thear(8) years,I've beenelectedasMayor great with interest I look forand .ticles of a Municipality of L5,000.A lot of ward to the nextissue.

The Magazine As agraduateof theMBM 77 Clasg challengesand opportunitiesconfront public newbreed I the of servants and I enjoyedvery much the June 1988 I found it unusualthat there are five of on my AIM training to editionof THE ASIAN MANAGER. us from the sameclassin Canada.J.J. still bank a lot job.

The most outstandingarticle was Chen,Peter Tong, and Louie Men- confrontthe E.B. Orodio (Phit.,BMP '78) "Searchingfor the Asian Manager"by dietaare in Toronto;ThehnaSiglosis gave great It me Prof.

Mendoza It is a mustto all Asian receive the to in Vancouver;and I'm in Calgary. ioy S o m e d a yw e ' l l h a v e a C a n a d i a n maidenissueof the Asian Manager Managersand undergraduatesof andmymemoriesimmediatelyflashed b u s i n e s sm a n a g e m e n tV. e r y e n reunion.

An areaofpotentialbusinessoppor- back to 1974and I could mentally lighteningand thought provoking Y.R Rashdi (Malaysia,BMP t0) of the tunity that I'd like to exporewith any recalltheexellent surroundings Graft and Conuption

2

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CONTENTS Asia begins to flex its musclesin the world marketplace.

-II T I Financial Management and Runl Development W W.Romulo L. Neri Concerned that the Philippines Central Bank is rsing rurd liquidity to nake urbaa lmng Romy suggeststhat countrpide developmentcan be hastened by keeping these funds where theybelong With the farmers.

CoverStorv

Managingin Family-Owned Corporations byAssoc.DeanFelipeB.Alfonso The proverbidhot seat,the agentof change,the mnnin charge:The professional manager must often demonstratemg'e than managpment expertise to survive and prosper in Asia's emergent family-owned and gro$rncorporations.

From the Publisher -

Fromthe Publisher Feafures

From A Studyof Entrepreneuro: Geniusto Greed byProf. E&tub A. Morato, lr.

Edmo pondersthe good, the bad, and the ugly What are the motivatims, the rewards and the regrets of the naverage" Asian entrepreneur?

The labor Subcontracting Industry: A Gloser Look

by Prof. Herminio Coloma Is subcontractingan opportunity for workers to ohain temporary employment or an opportunity for employers to avail of cheap, no-attachments labor?Sonnytakesa look at an increasingly accepted manpower industry which is drawing closer scrutiny as

te rtg

lmproving Financial lntermediation in the Philipplnes

by Frorcis G. Estrada (MBM 73) The COO of Asian OceanicHoldings Ltd. proposes a two-phasedstrategt for the developmentof capital markes in the Philippines. tlr\ -Y In Search of Better Harvesils byProf. Mario A.G. Lopez Malo urges a developmentperspectirrc which reflects the importance of environmental conservation for this and future generations.

cl.t

fund raising program in ten years.Intended beneficiariesare studentsand faanlty region-wide.

--, a --Entrepreneurhl Strategieg W PtofGdinoA. Mendoza Monuments and legacies: How an entrepreneur dera.lopgprmpers and, if he's lucky, createssomethinglasting for thce ufro follow.

Alunni and Institute News

^t cl .rct The NewAcademlcYearBegins

by WelcomingNewProgram Faculty

-ar\

tyv The NewAcademicYear:MM and MBMGommence E' rlT ryI Class '72: WhereAre They Nou/? f b,h. lltl-

Top ManagementProgram: AlumniUpdates

za] Zen and Management Training byProf.ReneT. Dominp Inner secretsto outward success:It's all in the wayyou prepare. t|ls

-0

Yenny lbrahim-Betrieb bylesusa T.Arroyo The secondin a seriesof Wmen In BusinessOrganizationcasehistoriesto be presented in THE ASIAN MAl.|AGER.

THEASIANMANAGER OfA Publlcdlon ol th. Aumnl Bdclonr and Plsmnl frc6 rnd ih. Fod.rdlon ofth.Aden InC[tL ofManagcmant Alumni Ascocidionr.

Publisher EdoarSantos

Editor-in-Chiet Michael Flamlin

Editors Emvde Vcwa. SusieArrovo

t||-

U.}

Solicitudo Rei Socialis: The Path to Authentic Development Dean GastonZ. Ottigas,Sr. Gastyis in'ited to sharehis thoughtson the post-EDSAETaonthe occasionof CorazonAquino's visit to the Vatican"

ea

tuty 20th Annivertary: TwentyYear3 of EducatingAsh't Managen byBenjoninC.Batmnn TheInstituteannounoes its first najc

EditorialBoard GastonOtigas, FelipeAfonso Gabinoltlendoza,HoracioBorromoo TomasLopez,SonnyColoma

AssociateEditors Etfic Goh (Malayeia,MBM78) bhtiaq Qureshi(Pakistan,BMP7ll MM'86) $ephen lce (Siingapore, Teorachai Chemnasiri(thailand,MBM'73) BtraskarBosc (lndia,MM 7/) Copydgirt1$8 by Th. AdJr frln{.r. Al dghb lâ‚Ź.ftrd.

In.rry m.rurr Inwhob or p.n h Englbhoa Wuctbn oth.r hngu.g.. prohlbli.d. Th. Arhn Menegrr b qrr.d.rfy by th. Alumnl R.ldlom rnd PlsFubh.d m.d Ofic.. of lh. Adm |rdltui. of M.riagrn rd.

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Iufairgvderadcil?

Managing in FamilyOwnedGorporations family. Decisionsregardingmost policies are centralizedin one man, byAssoc.Dean FelipeB. Alfonso usuallythe founder or his successor.

Don fose Yulo Professorof Business Due to the relativelysmallsizeof the Management enterprise,communicationsbetween the top levels of the organization and the lower levelsis tairly direct. A chain It hasbecomefashionablefor family fcorporations thesedaysto hire of commandrarely exists.The boss professionalmanagersand expect directsday-today operationshimself thesemanagersto work miraclesfor and he alsois approacheddirectly for their growin g organizations.The exmost of the needsof his employees. perience,however,hasbeenmixedfor Formal control systemsin the initid both ownersand managers. stagesof a familyenterprisearevirtudIn somecasesthesemanagershave ly non-existent.Control is exercisedby facilitatedchangesand growth; in recruifirg peoplewho are either memothercasestheyharc themselves been bers of the family or non-familymemthe victimsof change.The outcomeis berswho are recommendedby relaoften determined by the level of tirrcsand friends. preparednessand the skills that the Creating a businessventure is full of parties involved havein working with risks.Somestabilityis thoughtto occux oneanotherandtheir awareness ofthe if one canreducethe uncertaintiesof extent of the demandsthat sucha flinging innewmembersinto the famirelationshippotentially has.What folly firm by giving the family somesay lowsis an attempt to identify someof regarding this matter. It seemsto be thetensionsoccasionedbytheentryof lessrisky for the family to hire relatives a professionalmanager,whetherhe is or friends of relativeswho can be "trusted."It is expectedthat workers a family memberor a non-familymember, into a family ownedenterprise. who are hired on the basisof a close Theseobservationsare basedon a relationshipwith somefriend or memstudydone on ten family corporations ber of the familyfirm, will berestrained in the five countriesof Asean and on from doinglwong.Such"trust"is often the author'sown personalexperience extendedbeyondindividualsandis ap in working asa consultantwith family plied to a clan or tribe or an ethnic corporations. group to which the family $slsngs.In the familyfirm, the founderor the chief Family Corporations executiveoften seeshimself asbeing more than a mlrn.^ger.His relationship pamily corporationsand profes- with his people is personalistic,paterI sional managersrepresentconnalisticand informal.IIe seeshis role trastingvalues.This studyfound that as a disciplinarian, teacher and most family enterprises began caretaker.He reservesthe absolute primarily asbusinessventureswith right to determinethe employees' two major goals,namely,to create an salaries;he decideswhenandwhomto enterpriseto become a sourceof inpromote or hire. He initiates mancomefor the family, and to maintain power developmentin the sametvay the businessso it can continuesupthat a father takesresponsibilityfor porting the family. Becauseof this sendinghis children to school.Oftenorientation,1trsfnmily enterprisehas timeg this role is characterizedby an evolvedcertain maior characteristics. ascribedrather than an earnedstatus.

Its structure follows rather closelythe That is, authority to make decisionsis passedon from father to sonby virtue structureof most Asian families.It is highlycentralizedandin almsstall the of family relatisnship.In fact, in all the casesobserved,responsibility and familyfirmsstudied"in the initial stage, authority are the prerogativeof the the top position is reservedsolelyfor

4

membersof the family.

Reciprocally, an employeevienr his relationshipwith top 6snagementas one ufro is dependentm the leaderto makeall the decisionsqfiichgovernhis welfare.Sinceemfloyeesare expected to obeythe leader'sorderg they maintain a "follow-the-leader"attitude and will not take the initiative unlesstbe order hasbeengiven.Accordingly,the amount of effort and resources deroted1ellaining is minimal.

The degree of pervasivenessof this

parent-child, leader-followertype of relationship existsto such an extent that it dominates other behavioral aspectsof the organization,especially the performance criteria for the staff and the reward and punishmentsystems.

cited is the value that both the employeeandthe employerputson the closepersonalrelationshipwith the n like family lrm organization the boss.

One who is perceivedasloyal is /l Flin its initial stagesof growth tends alsoone who is closeto the boss. to look for employeebehaviorthat Performanceis measuredinformally. coincideswith maintainingthe interThere are no formal and standardized estsof the family. Good performance systemsof measurementasevidenced is, therefore, defined in terms of the by the lack of performance-on-the-job employee'sloyalty to the family. records.Thesecriteria are in the head Qualitiessuchastrust and harmony ofthe manager.They are not reduced are also soughtas valuable.Operato writing theyarenot clear;not visible tionally, loyalty manifestsitself in to othersin the company.Likewise,the termsof obedienceto the boss.The choice of thesecriteria is often whimunderlyingnss,umption is that no one sical,arbitraryand intuitive.The tenother than the bosscan define better dencynot to reduceto writing such qfiat is good for the family. Loyalty is p e r f o r m a n c ec r i t e r i a a n d o t h e r also associatedwith the employee's policiesin general"emanatesfrom the longevity- that is, the length of his need to maintaintotal and absolute stayin the company.What is the control over the affairs of the family firm. Indeed oncepoliciesare reduced to writing and made known to everyone,they serveto limit the manager'sdiscretion.

Sincepower is usuallycompressedin one man in a family enterprise,the rewards and punishments also emanatefrom this singlesource.

When employeesare expectedto be loyal, obedientand trustnorthy, which saidwasmeasuredin termsof the The professionalmanager we employee'sobedienceand longevityin whojoins a family the company,whateverrewardsare enterprisewill discover givento suchan employeealsotend to perpetuatehis lack of initiative. In that he has entereda general,rewards are viewed as favors minefield strewnwith and gifts which havelittle to do with competence.Salariesare determined explosivesthat can be arbitrarily and on a case-to-casebasis triggered by any careless through personalbargaining.There move. are no hard and fast rules on salaryincreasesand promotions.Much of the employer'sintuition is utilized rather thansomestandardizedformal sptem" , , Being a highly subjectivematter, salariesare usuallyinconsistentwith iob levels.

PersonalRelationship

33

rs2s6ningbehindthis?The longerthe employeestayson the job, the more skills he acquiresregardingthe family business.A systemwhich valueslongevityasa criterion for performanceis also associatedwith the notion of seniority amorg employees.

Another criterion for good performancewhich is a by-product of the reciprocal relationship that we earlier

One characteristicof family firns is the presence of swift justice.

Employeeswho are considered dishonest,disloyalor not trustworthy are summarilydismissed.However,a lot more toleranceis shownfor infractions that are consideredlessserious.

In general,family corporations included in the studyhesitatedto fire employeesfor incompetencebecause it would seemdifficult to fire smeone whom one hasregardedasa member of the family. Cmpassion replacesobiectivity.

Close personalrelationshipsare central to a family ownedenterprise.

Employeesfeel that to insure their securitywithin the firm, they needto developclosepersonalrelationships with the managerofthe firm, who happensto representthe familyinterests.

Suchrelationships, however,tendto be feudal in nature. The manager generatesdependencerather than independenceon the part of his subordinates.He is the provider who gives the employeesfree housing living allowancegbonusesbasedon company performanceand at his discretion.

Although the characteristics describedaboveare more representativeof tamilyfirms in their earlier stagesof developnent,manyof these characteristicscontinueto persist in one form or another evenat a later stage.One conceptthat canhelp usunderstandrelationshipswithin a firm is the psychdogicalcontract.It is like any other contract that specifiesthe reciprocal obligationsof contracting parties, in this case,the firm and its employees.However, unlike many formal contracts,the psychological contractis unwritten.H u'nanbehavior writers emphasizethat althoughit is unwritten it is very real. The elements ofthe contractareestablished throuoh practice.They are slow to evolveand slowto change.It is for this reasonthat practicesestablished earlyin thelife of a family enterprise continue to persist evenafter the need for suchpractices ceaseto exist.

The professionalmanageiwhojoins a family enterprisewill discoverthat he hasentereda minefield strewnwith explosivesthat can be triggeredby any carelessmove.What the professional managerneedsto successfullytread this ground is a keen sensitivityto the potential conllicts betweenthe set of valuesthat he brings and thoseofthe fanilyfirm. Although he is brougbt in preciselyto rationalizeand to formalize systemsand policies within the oreanizationto insureits continuityeven after the founder is gone,the professional manzigershould be careful not to assumea total commitmentto this concept:not evenfron the persons who brought him into the family. A word about how the needto change comesaboutin thesefirmswillbe instructive.

In social systemsas in individuals there are counterrailing forceg name-

5

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ly, the need to grow and the tendency to resist nsrv things particularly those that disturb existing relationships.

Thus before changecan take place, it is necessaryto unfreeze a systemto makeit more susceptibleto newinputs.

The casesin our studyindicatethat a powerful unfreezingmechanismin family firms is the perceivedand felt need for more financial resources.

This is broughtaboutby the desireto capitalus on opportunities in the environment either by going into new venturesor by expandingthe existing linesof business.In most casesthe additional fundsneededare beyondthe capabilityof a singleindividual or famiof the busi$. This forces the founder nessto turn tomore npublic"souf@sof capital suchasfinancinginstitutions, other investorswithin the samecommunity or foreign partners.This infusion of new capital often servesto dilute the ownershipof the founding family and inducesit to open its doors to the prerequisitesand conditionsaccompanyingthe investmentby other entities.

The expa"sionof the financialbase of the familyfirmis often accompanied by a parallel expansionin the manpower resources.This tendsto induce a revision of formal relationships amongthe membersof the enterprise and the evolution of new control 6ssfianisms,new patternsof information and communicationand new modesof recruiting,evaluatingand rewardingemployees.As the founder of one bf the companieswe studiqd very aptlyput it: "Sofor a smallbusiness,the family canrun it well because youknowyour ownpeopleandyou can rely on them. Of course,it you want to be great,there is more risk. In a big companyyoucan't know all the people workingforyouandyouneedto setthe proper sptem andobjectivesto gettbe peopleinterestedin working for you.n As the membersof the organization grow in number they also tend to developspecific functions.As the differentiation in skills intensifies,conflids betweengroupsmultiply and the taskof coordi'natingthe different functionsbecomesmore difficult. The firm, therefore,needs"newtechniquesfor establishingnew relationships,nas another executivestated.It is at this point that the assistarceof the professionalmanageris sought.

6

There is one other factor that contributes considerablyto the unfreezing processthat the family firm undergoes.

In the companiesthat haveundergone or thatwereaboutto undergoa period sghensitio& a cornmoncharacteristic of all the top men who were the wastheir foundersor their successors, exposureto developmentsin other parts of the world Their visig to other companiesand their â&#x201A;Źttp<xureto other systemsof managementbeing usedin thesecompaniesserrtd to broadenthe alternativesopento them for effectively managingtheir own organizations.

Suchawarenesson the part of the top manwascritical in creatinga needto "professionalize"their organizations and systems.

It is quite conceivablethat those responsiblefor bringing in professionalmanagersinto family firms are not themselvesawareof the potential of sucha move.Very consequences often only the positive aspectsof the movearedescribedwithlittle or no discussionof the potential sourcesof tensionandresistance.The professionalis left to explorethesem his ovm.The experienceof the companiesin the study can provide him with an initial list of possiblesouroesofresistanceand tensions.

One major souroeof resistanceis the professionalmanagerhimself.As a changeagent,he must be perceivedas wielding legitimatepowersin terms of the valuesand frarneworkof the members of the organization.For this reasona memberof the familywho by birth earnsthe right of successioninto a position of power with the company tendsto experiencesmoothslsailingas a changeagent.In the initial stagesof the growth of the family firm, ownership rather than 6s6pellen@sgwesas a valid basisfor succession.On the other hand family membershipdoes not guaranteesuccessfor the professional manager.He will need to denonstratethat he satisfiesthe requirementsof the newvaluesthat he is introducing into the organizdtion.Fu example,he will find it difficult to dema"d that promotionsbe basedon proven skills when he himself is perceivedto be lacking in the atilities required of his position.

In the caseof a non-familymember, legitimaliel lequiresthemanifestation of full support by the t.opman within the organization.In one company,the

influence and power of a General Managerappointedby the ownerwere undermined bythe owner's own behavior becausehe continued to deal directly with lower level managers.

This signaledthe absenceof fullbadring by the owner,intentionallys1snintentionally.

One potential soure of tensionis the type of changesbeing introduced by the professionalmanager.The degree of acceptanceor resistanceto such changesrrariesaccordingto the extent to which they disturb existingrelationshipsand valuesheld bythe orguniztion. Thus nfi"11f,e shangeenvisioned consistsmerelyin reducingto writing current practices,hardly any resistance is encountered.This is understandableas the statusquo is virtually

33

nWhenI am by myself,I know exactlywhatI need to do. I marshalall my argumentsagainstwhat he (the owner) is demanding.

But the momentI am infront of him, I forget all theseargumentsand I end up agreeingwith him.n , ,

maintained.Howwer, the nere reduction of practicesinto nniting servesa very distinct purpose during this period of transition. It makesthe rules more visible and makesit easyto evaluatethem. Very imperceptiblybut in a real sensewritten rulgs,proceduresandjobdescriptions erodesome of the powersof the top man and key

officialsby reducingthe areasfor their discretion.It also beginsto build a measureofindependenceon the part of the lower level managersand employees.Thesepeopleno longer haveto continuallygo to their bosses seekingfor directionsasoften asthey usedto whenpoliciesand procedures weremerelyio 1[e mind of the owner.

When the innovationsintroduced by theprofessionalmanagerdisturbexisting relationships,statusand power relations, more resistance is manifested.Qhangesthat requirenew behaviorevenon the part ofthe owner and chief executiveare especiallydifficult to implement.Thoughthe owner and founder mayintellectuallybelieve that changeis needed,emotionallyhe mayfind it difficult to accept.In one to enterprise,the founderaccustomed

Although the owner wasintellectually convincedabouthis move,behaviorally he found it difficult to adiust.He says:"It is difficult to changeone's ways,to give up power and glory or iump out of the current I havebeen swimmingin for so long.SometimesI get so bored and feel not wanted,so unintentionallylgobackto sometimes my old ways.I still like the employees to feel I'm around.It is reallydifiicult to adiust."

It is clear that when a professional manageris broughtinto the family firm, there is an attempt to shift the companyphilosophyand values.The traditional concept of loyalty as measuredby longevityand obedience are replacedby the valuesof competence,initiative and creativity.The mechanismsusedfor enforcingthese

givingordersdirectly to his operating managersfelt a senseof lossof power after he appointed a professional managerfrom a multinationalfrm to coordinatethe activitiesof these The older managerson the managers. other hand sawthe move as a loss of statuson their part. They could no longerdeal directly with the owner.

new valuesappearin new patternsof recruitment,performanceevaluation and reward and punishment.

This change in organizational philosophy and valueshas two effects on the membersof the organization.

For thosewho measureup to the new expectationsof management,the transition is smooth.Resistancereally

builds up from thosewho have not developedthe skills now being required. From their point of view,they are not solelyaccountablefor their own inadequacies.They are the productsof a sptem that management perpetuatedin the earlierstageof the of the firm. derrclopment The mannerinwhich the professional is another 6anegerintroduceschanges point to consider.As we indicated above,changeinvolvesthe destruction of old structuresto givewaytothenew.

From this it follows that the more radical the changein termsof time and extent, the more painful it becomes.In onecompany,thenewmanagersought to introducechangesthat were perceivedaspervadingthe entire s]6tem, disturbing all relationshipsfrom top to bottom. In the end he wasaskedto leaveand himselfbecamea victim of the change.One employeeaptlyput it nThenew in the following manner: everything managerwanted1sgfuenge and everybody- eventhe department heads.And the wayhe talked,he made us feel as though we were inferior beings.He lmked downon everlone."

Managingshangoinvolvesbalancing old wayswith the new.An organization will changeonly to a certain point at anygiventime.As part of its instinctfor self preservationand maintenance, there will alwaysbe forces that will tend to drag down the organization from the new directionsthat it decides to take. What the professional managerwho isoneof the agentsof this changewill need to developis the abilityto be sensitiveto signalsand to anticipatethe sourcesofsuch resistance sohe canmanagethem.

A final caution to the professional manager.He maybe temptedto Picture himself as a knight in shining armor poised to rescuethe family firm from ultimate destructionwith his modern tools and techniques,a little humilitywill go a longwayin seeinghim through this minefield of intricate relationshipsand values.Successwill require adaptationon hispart to create synergiesfor a new pattern of growth for the family firm. But in this prosess of adaptation,he mustexercisecaution sothat hedoesnot totallygetco-opted by the systemthat he is mandatedto change.

I wishto endthispiecebyrelatingthe experienceof a colleaguedmine. The story showsthat the task and process

of transformiag organizationsis very human. I havefound the experience rcry instructive becauseit reminds us that the professionalmanageris also veryhuman,assubjectto emotionsand to other inlluenc€sasthe other nenbersofthe firm whosebehaviorhe is trying to affed.

My colleaguewas a \rcry successful executive in a multinational firm when he wasinvited to join a family firm that wastrying to professionalize its managementand staff in order to copewith the rapid expansionof its business.The owner and founder of the companyexpressedhis strong desireto leavethe day to day operations to a profcssionalmanagerso he could spendmore tine looking at new \€ntures.

The owner and the nanager worked togethervery closelyfrom the start.

The owner provided an orientation into the variousaspectsand intricacies of the businesswhile the manager bemn to applyhis skills in dealingwith the problems of the company.They worked smoothly together and a very personalrelationshipdevelopedbetween the two. Benevolent as he was, the owner begal to treat the manager as a son.In no uncertainterms the ownertold the managerthat he (the owner) consideredhim as a son and that he would considerany failure of the managerhis own. Very quickly it

third parties intervened.Thc owner became widely known that the agreedtobad offfrm the manager0o managerwasthe crown prince desallow the latter to do his tast in the way tined to succeedthe foundcr.The he sawfit. The desiredoutcomcwas managerwasoverwhelnedby the coagreed upon and the managerwasto frdencebestowedon him by the orrner. use his own style in achievingthe Hebeganto look upon the onmerashis results Interestingly,this evokedcoown father. flicting reactionsfrom the rnanager.

Tte relationshipdevelopedacrtteinThe professionalmanagerin him ternal conflict within both the ownsr rejoiced,but the sonin him griewd beand the manager.While the owner, causehe no longer felt wanted and consciouslyor unconsciously,atloved by the owner. It took a while tempted to mold the managerinto his own imageasa son,he wasalsoaware before the owner and the manager were able to establisha new equithat he wanted the managerto be a professional After all, tbat is what he librium in their relationship.

The experiencehad a happy ending washired for. The managerfor his part for both. It could haw endedin a disbeganto feel an emersingconflid beasteru€r€ it not fG the sensitivitythat tween two asp€ctsof his own personality. As a son he soughtto please both partiesexhibitedfor eacLothert concernsa:rd feelingsand their openthe bcs asmuchashe couldby follownessto exploringnew waysof estabing what the bosswaated,ufiile on the tctwe€nth€m. other hand the professionalmanager lishingsynergies in him did not quite agree.The professionalmanageralsofelt the needto be his own man and unconsciously resentedthe owner'sattemptto mold him to his (owner's)own image.What the managersaid in an interviewis quite revealing:Vhen I am by mpel( I know exactlywhatI needto do. I marshal all my argumentsagainstwhat he (the owner) is denanding.But the minute I am in front of him, I forgel all theseargumentsandI endup agreeing ryifthim.r' As thesetensionscameto a head, DeaaFelipeB. Alfonso

Alumni FederationofAsianInstihte of lManagement (fbll\l[) Associations tvtanaggrentC-onference Dates Sept.15 - l7,tstc - Marina Mandarin Hotel, Singapore & venue: Theme:Small- and Mediun SizedEnterprisesin Dercloping Countries(SMEs) 15 Sept 1!188- Homecomingand Delegates'Conference(AIM Alunni Only) 16Sept 1!)88- BusinessSeninar & Dinner 17Sept 1988- Visits to Succ€ssfulSMESin Singapore Fee for AIM Gradrates (Per head) 3 day Conference,Seminarand Dinner: St160ruS$80 Feefor non-AIM Graduates(pet head) BusinessSeminarand Vrsits(inclusiveof lunch and 2 teas): S$f20lUS$0

a

Protectinglabor resources...

TheLaborSubcontracting lndustry: AGloserLook byProf.SonnyColoma(MBM'78) (Sonnyis presidentof thePenonnel ManagementAssociationof the Philippines(PMAP) - Edi. ) Overview f n a s p e e c ha t t h e A I M a l u m n i Ihomecominglastyear,SenatorOrly Mercado noted that the country's economicreooveryprogram is being hobbled by the apparent inability of the governmentto accelerateemploymentgeneration.He observedan ob viousparadox governmentitself was layingoffpeople by the thousands.

A few months later, the Supreme Court of the Philippines promulgated two decisionswhich somequarters viewedashavingthrown the proverbial monkeywrencharound the neck of a substantialemploynent generator:tb labor subcontractingindustry.

Meanwhile, contract workers employedin some of the country's largestcorporationshavebecomeincreasinglyrestive.At a large dairy plant ldcated in a Manila suburb, violenceeruptedlast summerat the picket lines where striking workers demandedthat theybe recosnizedas regular employees.At one of the largestpharmaceuticalfirms, the company'svauntednon-unionstatus wasnearly endedby the determined bid of a militant trade union to organaethe contract workers.

Evidently,thereis needto grapple with the horns of the dilemrnacreated by provisionsof the I-abor Codewhich appearto militate againstthe employment generatingactivitiesof labor subcontractors.

Extent of Lebor Subcontracting I atestestimatesindicate that there Lare some2.5millionunemployed

Fitpinos with anadditionalS.5million underemployed.Yearly, some8(X),0(X) newentrants to the labor force competefor scarcejobopportunities.

Suchis the scenariothat breedsthat growth and proliferation of the labor contracting industry. Copizant of the need for self- regulation, about 30 Metro Manila basedagencieswith nationwideoperationsorganizedthe Philippine Associationof Local Service Contractors (PAISCON) three yearsago.PALSCON estimatesthat its member-agencies employ approximatelyhalf a million temporary workers mostly office personnel, promotional employeesand industrial workers.

Office personnel are mostly secretaries,clerk-typist,messengers andianitors. Promotionalemployees arehired by cons'- er product firms a their advertisingagenciesfor point-ofsalepromotionsor product launch activities. Industrial workers fall under three categories:skilled,semi-skilled and unskilledand mayincludeplumbersand electricians.

The Departmentof Trade and Industry, through its subconex(subcontractors export) desk is also monitoring the activitiesof.exportoriented firms hiring temporary workers.

As of 1985,subconexfigures show that some900 garment export firms employed only 215;000in-plant

laborerswhile engagingthesewicesof some450,000home-basedsewers mostlyin the provinces.

According to subconexmembersof other export-orientedindustries employingsubstantialcontract labor are the following electronics,leather, top, handicraft,food processrngplastics, rubber products, metal working andwood working.

Asian Prolile f n the newlyindustializnd countries I (NICS) of Asi4 1u6orsoallscdngis a well-acceptedmode of industrial manpowercomplementation.

SouthKorea's more than 300stuffed toy exporters,for instance,rely on some700labor contractors.In TaiwarU subcontractingis practicedmostlyby local branchesof US multinational firms. In Singapore,computer firms are known to dependextensivelyon contractlabor.

In the advancedindustrial ountrieg labor contractingis considereda tool for industrial growth.

The US aircraft industry employs some 1,000subcontractors.In the European Economic Community (EEC), inter-countrysubc6ft13sringis practiced widely particularly in the automotiveindustry. In Japan,operations of supplier firms are so closely tied up with their principals suchthat eventheir workersare expectedto toe the line being followed by their counterpartsin the main companies.

Legal Dilemma 16q 6ra6 controversy,worker un9rest and someamountof violence havebebn generatedby the unique legal framework for labor subcontractingin the Philippines.

The Labor Code of the Philippines provides that if a labor subcontractor failstopayjus wagesforits employees or otherwisefails to respectand p r o t e c t t h e w o r k e r s ' r i g h t s ,t h e

9

Catch-22in the employer-enployee relationship.

Notewothy is the fact that in contrast to labor subcontracting in othcr cormtricswbich is predicatedprinarily on considerationsof production efficiency,the prevailingimpetusfor the engagementof labor subcootractorsin the Philippinesappearsto be chiefly labor costsavingsand,in sme efreme cases,avoidance of social responsibility.

Some large companies- including the top rercnuc grcscrs and the leadingprofit qainers- persistin engaging the servicesof subcontractedlabor evenfor pernanent job6 that oqht to be given to regular employees.The eysld.ling gonsideration:avoidanceof unionism.

:kTtTt' subcontractor'sprincipal - who, it is to be pointed out, is not at all privy to the contract with the subcontractor's employees- becones jointly and scveraf,yliable to those employeesfor the lawful paynent oftheir wages,as vcll asthe protedion oftheir rights as workers.

In other words. noteslabor relatioos consultant Ismael G. Khan Jr.. the subcontractor'sprincipal "becones the indirect employersof those same employeesregardlessof the fact that he hasnothing to do at all with tbeir hiing.'

This is preciselythe situation sought to be avoidedby manybusinesses that harc resortedto labc subcontractinc; the bringing about of an employeiemployeerelationship. Supreme Court Justice Hugo Gutienez observesthat, "juridical relation spawns obfigationsconnectedwith workmgn's compensation, social security, medicine,minimumwage,termination Payand uaionism."

10

Philippine labor laws make other detailed distinctions - between "job contracting' and "labor-onlycontracting'; between'regular" and "casual" gmployment- in order to.Iine-tune the various rights and obligations immanentin aDemployer-enployee rilationship and in order to curb pcsible abusasagains workers.

But evidently,the stark realities of massiveunemploymentpoitrt to the need to liberalize what PALSCON describesasthe "restrictirrcprovisions" of the Labor Codewhich havealready been upheld by the SupremeCourt in seraraldecisions.TheEmployersCofederation of the Philipphes @COP) has thrown its support behind the PALSCON's initiatives in bringing about reforms to the existinglegal franewqk.

During periods of severeeconomic recessionwhentremetrdouscst pressures threaten the viability ofmany enterprises,the hiring of temporary workersnay be viewedasa pragmatig cost-beneficialmeasure.

But if sucharrangementpersistslong a f t e r p r o d u c t i o n a n d s a l e sh a v e climbedback to pre-recessionlevelsand evenif record profit levelsare already being posted- it standsto reasonthat evenunskilledworkerswill seethrough the veneerof unfair labor practiceandseâ&#x201A;Źkredressofgricmnccs through extsa-legalmeas.

To be sure, the legal framework ought to be reformed in light of existing realities. Employment generation and sustenancein a battered ecoaonv still poisedfc a long-delayedrecoverj, is, indee4 a fimordial cdcern.

Balancing the imperative of econonic neccssitywith the demands of socialjusticr is the challetrgeto our national policy makers.

Social Rerponslbllily n closer analysishowever, thâ&#x201A;Ź issue is not limited to a legal

fuessor SonnyColoma

WhathaveI learned?

Financial Management andRural Elevelopment projects with commercialorientation.

Theseenterpriseswill necessarilyhare

by Prof. Romulo L. Nei to be cost-efficientto be competitive and profitable to be assuredof longpast the six offerings AIM's of term survival and growth. Developln l P r o g r a m f o r D e v e l o p m e n t ment managersneed skills to deterManagers(PDM), a one- month mine the marketing,production and c o u r s e d e s i g n e dt o t r a i n A s i a n financial viability of project proposals managersinvolvedin rural developandto identifythe factorscrucial to the ment,we incorporateda module on project's financial success.Once the financialmanagementhopingto inculenterpriseis operationat theywill hare catein our program participantswhat to put up the financial control systems we considerednecessaryskills in a to help ensurethat the resourcesare subjectrelatively alien to them. This put to the most efficient useand that processhasbeenrichinmentalandattheseresourcesare not dissipated. titudinal cross-fertilizations.

We have They will haveto managethe project's ended up convincingrecalcitrant liquidity and solvencyto make sure developmentmanagersthat profit was that working eapitalis availablefor not a dirty word and that financial operations,andthat suppliergbankers ratiosandnet presentvalueshad their and other creditors are paid on time. redeemingfeatures.On the other Second,developmentmanagersharrc hand, we ended up becoming conto acquire expertisein rural credit verted to our students'developmental management,mimic the skills of the attitudes,confirming the adage"by villageor town usurer,beathim in his your pupils you'll be taught." game and show the commercial I personallyhad been steepedin the bankersthat theystill havea lot to learn corporatefi nansediscipline,datbling about the lendingbusiness.Develop in theapplicationsoftheCapitalAsset ment managerswill haveto shedtheir Pricing Model (CAPM), Monte Carlo emotional baggageon high interest Simulationfor cashmanagement,Inrates and apply a systemof capital terestRate Parity Theoremand the build-up to ensurethe successof the like. Consequently,the prospectof credit cooperativesthey will establisll teaching finance to development guide or manage.The comnunity ormanagersand makingthem absorbit ganizingwork of the development wasrather daunting,and I wassure managersthroughtheir NGOs (nonthat my studentswould havethe same governmentoreanizations)havemade feeling of dread for the topic. Formanyrural villagerssociallyand frnantunatelyour mutualworries proved cially responsible,particularly in loan groundless,and teachingthesehard repayments.Theseorganizingefforts working andhighlydedicateddevelop- havelaid the groundwork for a viable ment managerswasa profoundlysatiscredit extensionsptem for theserural are:Ni. fuingexperience.

What haveI learnedin the process?

Unfortunately, the government,parFirst, that thereis a needfor develop- ticularly our financial and monetary ment managersto acquirefinancial authoritieg havenot caughtupwith the managementskills,particularly to be developmentneedsofthe rural areas. comfortablewith numbersandto think The Contral Bank, throughits virtud in terms of bottom-lineresults.More laissez-fairemonetarypolicieshasonly and more, developmentmanagersare succeededin keepingthe rural areas becominginvolved in enterprise poor and wanting for money. Its acdevelopmentastle communitiesthey tivities seemto be gearedto keeping havesucceededin organizinginitial conmercial banks and investment

houseshapythrough its T-bill operations and debt-equity swaps.Our fi nancialauthoritiesmoreoverhave giventheimpressionthat theyareoverly engrossedwith the need to satisff our foreign.creditors.In comparison the financial agendafor ruraldevelopment seemsto be utterlyneglected.

Commercial bankersfor their part seemindifferent to the financial nee& of the rural areas.They have considered theseareasas risky and unprofitable, an irnpressionjustified by the disastrousrural lendingprograms of the governmentin the past.

From a macroeconomicstandpoint the financial challengeis how to keep

11

moEtary resourceswithin the prmncesand make them serverural credit needs.The high interest ratescharged by rural usurers is indicative of the desperatedemald for credit which is not being met by conventional credit sources.Commercial bank branches operating in the provincial areastend to be mere deposittakerg remitting their largee:rcessfundsto Manila. This in effect drains the rural sectcs of tbe liquidity neededfor trade and production credit, keepingthem in a permanentlydepresed state.

Well-meaningprogramsthat try to pour moneyintothe rural credit seem to missthe point. Mmey is availablein the provincesas shownbythe large savingsdepositsin the commercial bankbranches.Thereis no neâ&#x201A;Źdto add more. All that is needed is a mechanismto recycle provincial savingsto produdive rual loans.

To keep thesemonetaryresources and use them where they are badly needed,the credit risk andintermediation gapswill haveto be bridged. The credit risk gapresultsfrm variousfactors, both real and imagined.The bank perceircrural borrowersasrisky not only becauseof tbâ&#x201A;Źir poor repayment experiencebut alsobecauseof the lac&of slills on the part ofbanken in lending to this sector.Banken have developedsophisticatedskills in lending to urban and largeco-mercial and hdustrial clients.They are however pocly lackingin skillsin lendingto tbe rural sectors.It will take somesâ&#x201A;Źrious determinationon the part of commercial bankers to develop these new skills. Tte intermediation gap on the other hand results from the fact that rural lending requirements are too small and therefore uneconomicalfor conmercial banks,and evensome rural banls to senice. There is a need for a systenof intermediatio, a credit retailgr, so to speal, to lend to small borrwers.

A rural credit guararteesystemcould be created that will havebamnpy or village-basedcredit cmperativesasits baseand a nationalcredit guarantee fund asits apexand the commercial banks,rural banksand PVOs (Private Volunteer Organizations)comprising the credit deliverynetwork,The village-basedcredit cooperativesrvould motilize rural savingsto guaranteeindividual villager borrowings.A one pesosavingcould be leveragedto firre

12

to ten pesosnodh of credit under rhi< system,these savingsbeing further complementedby the nationalguarantee fuad in backing up the loan. High interest ratesshouldbe chargedat the village level to allow for capital buildup of the villageftmd.

T h e c o m m e r c i a l b an k s , b e i n g g u a r a n t e e db y b o t h t h e n a t i o n a l guaranteefund and thevillageguarantee fund and a pssible insurancepod of nunicipal and provincialguarantee funds. could be induced to release funds for rural oedit. Rural bank and the PVOs and larger credit cooperatirrs would serrr ascredit middlensn with the village cmperative servingas the final funds retailer. To further reduce the risk gap, the PVOq before endorsing a village cooperative'sloan application, should ensurethat the loan beneficiariesare consciousofthe responsibilites such a loan would entail. Commercialbankson the othcr hand should lend rnaterial support to the communityorganizingefforts of the PVOs asthey serveto makethe villagersnore creditworthyand therefore better banft customen.

Bankersfor their part shouldmake the efrort to improvetheir skillsin rural lending It would be good for financial managersin the developingcountries to apply their skills in the area of development.Challengeslie not only in rural credit but other areasaswell suchassavingsrnobilization,Iinancing schemesfor low-cost horsing, makiDg the agrarian reform program work, resolvingthe countr/s foreign debt problem, and making the country's monetarypolicy more responsiveto rural development. Financial managersin the developingcountries should use their expertisenot only fm their own compan/s benefit but also for the econonic improvementof the un&rpriveleged sectorsaswell

Messor Romulo L. Neri

TheAIM Placement Office Let us Help

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The PlacementOffice Offers: o Career ResourceInformation r Mid-Career Placement o Counsellingand Career Patterning o BusinessPartnership Development We have a regional network of prospective employersandjoint-venture partnerswho would be pleasedto receiveyour updatedresume.

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Ranrirg thePhilippine's cimndarysyfisll..

lmproving Intermediation in the Financial PhilippinEs byFrancis G. Estada (MBM'73) President Asian OceanicGroup In a speechbeforeeconomicmanagers of Philippine development,Francis Estradadiscussedthe conceptoffinancial intermediationand proposedconcrete step to achieveftnancial and economicgoals.

Introduction in my fhere wasno ambivalence I mind when CommissionerJacob told me about this Conferenceand invitedmeto speakto youtoday.First of all, I am honored to havethis opportunityto presentmythoughtson asubiect which I believeis crucial to the successfulreconstructionof the Philippine economy.Secondly,one cannotchoosea better forum than sucha distinguishedassemblyof regulators and practitioners.

However,I confessto feeling a little like I waspreachingnaturalchildbirth to a motherof four.

ConceptualFramework Financial Intermediation, a Delinition p i n a n c i a l i n t e r m e d i a t i o ni s t h e I processthroughwhichthe surplus units of the economytransfer these surplusesto the deficit units that would maximizetheir use.In a free market,savingsare mobilizedand capitalis allocatedwith financialintermediariesreconcilingthe differing needsof ultimatesaversandinvestors.

Direct intermediationoccurswhena financialintermediaryis interposed betweenthe ultimateinvestorand the ultimateuserof funds- asin the case of a bankloan.Indirectintermediation on the other hand occurswhen the

financialrequirementsare transformed into a financial assetwhich is placeddirectlywith theultimalsinv..tor. Indirect intermediationon the otherhandoccurswhenan investment bankeroriginatesand placesa bond issuefor a corporationentirelywith ultimate investors(without retaining anythtngon its own balancesheet).

The difference betweenthe cost of capitalto the ultimateuserand the yield to the ultimate saverrepresents the inte.rmediation costsof a financial transaction.This consistsofthe costs and profits of the financial intermediariesinvolved"taxesandotherimposts.

A financialsystemis said to be efficientwhen: o It mobilizessavingsand allocatestheseto the mostproduc-

13

For all their reputed benefits,evenefficient financial marketshave their limitations. , ,

tive investmentsat the lowest possiblecosts;and r It is able to servicemost of the investmentrequirementsof an economy.

The FinancialSystem fhe financialsystemis to the real I economvwhat the circulatorvsrntem is to thl humanbody.It consiits of trvoprincipal elements- the banki n g s u b s y s t e ma n d t h e f i n a n c i a l market. o The Banking System The key participantsin the banking s u b s y s t e ma r e t h e s a v e r s ( o r depositors),the banks(the "direct intermediaries")and the borrowers.Becausebanksgenerallykeep loansto their customersin their balance.sheets until maturity,let us call these"carr5/" institutions.

Apart from their own capitaf carry institutionsfund their leanspnrtfolios primarily from direct borrowingsfrom theii depositorsand secondarilyfrom the finaacial markets(as in the caseof Certificateof Deposits.)The carryinstitution fundamentallymakesits moneyon the basisof the spreadbetweenthe interestincomeearnedfrom its loan portfolio and the cost of its depositliabilities.While the critical massis important, carry institutions are by nature, margin rather than volumeoriented.

Takenasawhole thebankingsystem providesthe paymentmechanismfor the economy. o The FinancialMarkets The Financial Markets consistof the Money Market and the Capital Market.The formeris the stagingarea for trading short-termfinancialdssets while the latter is the medium through which longer term debt and equity claimsare traded.

13

The principal playersin the Financial Marketsare the issuersof the financial assets,the investorsand the "indirect intermediaries,ni.e. investment bankers, securities dealers and brokers.Theseintermediariesare sometimescalled "turnover" institutions becausethey are in the business of originating, selling, and making marketsin financial assets.In the nmmalcourseofbusiness,theygeneratea turnover spreadwhich correspondsto the differencebetweenthe acquisition cost(or issuingprice) 3nd sslling pricâ&#x201A;Ź ofthe financial assetsthey deal in.

Turnover operationsare, alnost by definition,volu'nerather than margin businesses.

Balanceis an essentialfeature of a healthyfinancial system. o The Interrelationship The bankingsystemand the financial marketsare interactive.The banking systemand its carry institutions mobilize savingsand createloan assets.The financial markets and its turnover institutions should,in turn, assistthe bankingsystemby: j gesurilizing and making marketsfor sone of their loan assets(like nortgage-backed securities);and o Arranging longer term funding via NegotiableCertificates of Deposits,etc.

Becausethey are so closely related effectivemonetary policy requires coordinated managementof both the banking systemand the financial markets.

The Financial Sy$em lnd the

RealEconomy

ff eturning to our analogr,onemight flview financial intermediaries and assetsas the blood vesselsand lifeblood of the real economy.

The processof modern economic growth is closelyassociatedwith the expansisnand increasi'g diversification of financial intermediation.The relationship is obviously complex.

However, let me try to summarize someof the literature addressingthese relatimshipa: First, tle financial superstructureof an economyexpandsat a rate faster than that of the real economy.

14

Goldsmithobservedanddevelopedhis "financial interrelation ration to measurethis phenomenonThis is the ratio of the aggregatemarket value of all outstandingfinancial assetsto the value of tangible net national net worth.

While curre,ntdataontotal outstanding financialassetsare not available,la us look at a number illustrative economiesand observethe relations h i p b e t w e e nt h e t o t a l m a r k e t capitelizationof their equitymarketsin relation to the sizeof eacl economyas measuredby GNP. As at the end of 1987(i.e. post crash),the applicable ratios for the U.S.,Japan,and West Germanystood at 46.5Vo,Ll4 8% and 64.tVo,respectively.Developing countries like Thailand and Korea showedratios of.L3.9Voand24.2Vo respectively,while Singaporeshoweda ratto of.2L8.9Vol Second,financial intermediariesbecome more important to the real ecmomy asit grows.This is evidentin the increasingproportion of financial assetsissued:ind ownedby financial intermediariesover time.

Third, growth in the real economyis accompaniedby an increasingdiversityin typesof intermediaryandfinancial instruments. During the early stages of development, banks doninate the financial structure.As the real economydevelopshowever,

33

The moneymarket crises of 1,981,1983,and 1984, and the subsequent banking crisis have engenderedinvestor mistrust on the integrity of the financial system. ,,

one observesa decline in the shareof total financid assetsheld by the banking system.This declineis accompaniedb; an increasein the holdings of the newerinstitutions,more particularly the turnover institutions.

In summary,the financial system provides the vehicles(in the form of financial assets)throughwhichthe real assetsof an economyare financed.

Hence, a healthyeconomyrequires marketswhere financial assetscompatible with the nature of its real assets are efficiently originated and distnlbuted.

The Market Mechanism fhe market mechanismestablishes I a price level for different financial assets.Price is determinedby the interplay of supplyand demandaswell as the specific financial assetsrisk, return and liquidity characteristics.

Surplusesare allocatedto the deficit units that maximizetheir use - this maximizationis reflectedin the pricing of the financial assetstheseunits issue.

For markets to operate efficiently, the following conditionsnetst exist: I |;finimnl distortions to market pricing. o Good arid timelyinformation availableto market participants. o Competition. o Knowledge/opertise of the market participants (i.e. issuerg investorsand intermediaries).

As a financial systemdevelops,the cost of intermediation are reduced with the ultimde sarcrsbrought clcer to the ultinate users of capital. The price of a financial assetas a function of its maturity is expressedin a yield cuve. This is important as: o It allovn saversand investors to selectthe financial asset best suited to the nature of th6ir surpluses. o It permits the capital user to establishan incentive for investors to acceptfinancial assets with longer maturities. o It provides a good basisfor monitoring liquidity in the financial s),stem.

For all their reputedbenefits,evenefficient financial markets have their linitations. For one, the financial narkets of developingcountriesshort of capital do not necessarilyaddress critical socio-political needs.Neither do they provide a solution to the problem of wealth disribution. They are not a substitutefor an efrectivefiscal andan incomepolicy!

33

Rather than looking at eachelementin isolation, The Philipohre we should seekto manage Circumstahces The Antecedents the financial systemas a whole. lI ot unlike the experienceof many , ,

o Provided this is not unduly distorted by efrraneousfactors, it providesa snapshotofthe market's interest rate expectations.

Governnent debt securitiesin turn, play an important role in the financial system.

The pricing of "bell weathernissues establishthe risk-free price of capital and, as such, the base rate against which all other financial assetsare pricâ&#x201A;Źd. . Changesin float outstanding affect the system'sliquidity, and therefore, interest rates in general. j 6[ thingsbeing equal, pricing of governmentsecuritiesestablishesthe yield curve for all other financial assets.

However,lile isnot quitesosimpleas the pricing offinancial assetsis often distortedby the existenceofspecial incentircs associatedwith certain financial assets. o The existenceof specialincentives for certain issues(e.g. eligibility for uss 3s$enk reservesor for preferential rediscountrates,etc.). o Taxbenefitsaccordedto special governmentissues.

I I developingeconomiesin Asia and Latin America, the Philippines has historically focused much of its developmentefforts on the banking system.Added to this wasthe unfortunate legacyof the previous regime, in particular: o Crony capitalismand the accompanyingmiss-allocationof national credit resources. o The country's onerouse)cernal debt burden. o A lopsided domesticdebt structure. o Aloss of confidencein the domesticfinancial narkets. o A greatlyweakenedfinancial system. o Aweakened private corporate sector.

Problems ome of the chronic problemsof the Philippine financial systen

S

are:

o Themarkel psgfoanismdoes not work.

The donestic financialmarketsare not capableof effectivelymobilizing meaningfulamountsof capital tomeet domesticinveshent requirements. o Virtual non-existenceof a narket for long-term financial assets.

There is no market to speakof for long term financial assets.Consequently,the long tern financingneeds ofborronershavetendedto be met by equity or bank borrowings. The leverap ratios of the 10CIlargestcorporatims suggestthe latter.

o Standingof the Philippine Capital Market.

With the exceptim of a few blue chip issues,the Philippine capital narket (inprtiarlar, its equitymarket) is seen to be speculative,extrenely thin and, and in generaf aninappropriate outlet for long-term.investmentfunds. o Substantialliquiditybut inadequate absorpaivecapacity.

While liqui4 the Philippine fi'anoal systemsâ&#x201A;Źemsto havediffictltyin effectively re-chaalleling domestic savings and foreign capital In 1987,the Philippineswasreported tohave rsed only$929million out of a total of $3.5billion in donor commitments.In 1986only $70 million out of $32 billion wasutilized. o Inability of tf,s [anking systen to meet the corporate sector's long term financing needs.

Despite indications that economic recoveryis in progress,the banking systemhas remained cautious in its lendingactivity.Her Excellency,President CorazonAquino spokeyesterday of a systen vfrereT3Voof fmancial assetsheld were short term. This natural cautionhasfurther beencompounded by the existenceof riskfree alternatines offering good after-taxyields.At the end of 1987,4lVo oftotalgovernment securitiesoutstanding*rre heldby the bankingsystem-

Causes

Wffi""Jf,'r:i##ffHfi:

that have previously studied the Philippine financial markets,let me focuson a fewwhich I believeto be the .os1 lslling: o The absenceof a marketgeneratedyield curve for financial assets.

Longer term securitieshad previously been priced with little or no considerationto a maturity premiumConsequently,market interest has focrsed on the short term sector.

It should be noted horilever,that this hadbegu to change.In anenrsrelease carried by Mondafs AsianWall Street Journal, assistantnational treasurer Anado Cruzwas said to havespoken ofthe governmenfs decisionto scaledown issuatrceof short-termTreasury

15

Bills infavor of longer-datednote and bond issues. o Instability in the monetarysector.

Becausematuring-government paper mustbe re-funded a bunching of maturities affectsoverall liquidity interestrate an4 as a consequence, levels. o Inadequateinvestor protection.

The moneymarket crisesof 1981, 1983and 1984,and the subsequent ba"ktng crisis haveengenderedinvestor mistrust on the integrity of the financialsystem.Quite apart fromthe predictableeffect on maturity andrisk preferences,this exacerbatesthe problem of long-termfinancing.Complianceby public issuerswith established disclosurerequirementsmust be enforcedand up-to-dateinformation disseminated. o Dispersedfinancial market developmentmandate.

The orderly developmentof financial marketsinvolves,extremelyclose coordination betweenthe private and public sectorsaswell as amongthe relevantregulatoryauthorities.I think it is tair to saythat heretofore,government hadnot accordedoverwhehniryly high priority to the developmentof the domesticfinancial markets.As a consequence,no singleindividual or entityis specificallychargedwith this vital responsibility.

The Present ith new hope spawnedby the country'suniquerevolution,the economyfinally beganto show life in 1987,with GNP growing at about S.!Vo.Bar ng unforseenreversals,we shouldbe seeingthe economygrow at somewhereb etween4.7Voand6.5Von 1988.This is the good news.The cloud in the horizon is that this growth is consumptionJed"with lessthan overwfislmingnewinvestmentto sustainit.

In the context of the Third World debt crisisand wherethe international bankingcomnunity isat best,cautious, it is evidentthat the economycan no longer rely on foreign borrowingsto financeits donestic investmentrequirements.We must developviable alternatives.

16

On the domesticfront, enormous political capitalhas bcen investedin the government'sComprehensive Agrarian Development Program (CARP). While there hasbeensome thought ofraising this financingfrom overseas,I suspectthat this has received less than enthusiastic response from our traditional providers of aid and concessionary financing.And yet,the Programnust be financed. Once more, financial resourcesmustbe mbilized!

For all the reasonsSecretaryConcepcionmentionedpsterday, inrcstment levelsmustbe raised We simply mustprovidegainful employmentfor a population that continuesto grow at a mte of.2.8Vop.a.

Efficient financial marketsfacilitate the investmentprocess.Further, if domesticsavingsareto financeCARP, the existenceof suchnarkets is essentid.

sophisticatedin Asia (and in the developing world), have not fully recoveredfrom the ravagesof the early eighties.But what must be done to rebuild thesevital insitutions?

First of all, we must look at both markets,and indeedthe bankingsysten, as essentialinter-relatedcomponentsof a healthyfinancialsptem.

To illustrate: The banking systemis uniquely qualified to mobilize savingsfrom the householdsector.Its extensivebranch infrastructure, staff composition and general credit orientation makethese carry institutionsthe desiredintermediariesin allocatingand dispensing credits to small and medium-sized enterprises.Moreover, their domestic and international payments capabilities make them favored providers of trade finance.

PolicyPrescriptions been done by I luch research.has lUlmanyon the subjectof stimulating the developmentof the financial markets.Most recently,at the last Capital Markets Development Workshop held on April L8, 1-988at the Asian Institute of Management, various concernsand ideaswere expressedon a whole range of Capital Market issues.I havetaken the liberty of drawingfrom this body of wisdom in developingpolicy prescriptions which I hope are both releyantand realisds.

Underlyingtheserecomme4dations howeveris a convictionthat markets cannotbe legislatedinto existence.AccordinglS the taskof gorarnmentis to establishthe conditionsunder which efficient marketscan e;ist and thrive.

In this context I was encouragedto hear PresidentAquino maketwo critical points in her speechyesterday.

Firstly, shehasaccordedthe develop ment of the Money and Capital Markets the high priority it deservesin the country'seconomicdevelopment agenda.Secondln shereiteratedher commitmentto get governmentout of business.Both havegreat bearingon Yourmission While we havethe oldest stock exchangein the region, our Capital Markets remaininefticient and underdeveloped.Even our Money Marketg once consideredamongthe most

IC ....Thefirst hurdle has beencleared.The challengeof implementationmust be met. , ,

Turnover institutions, on the other hand, specialize in originating, distributing and making markets (primarily for high -grade marketable securities).Lower than investment gradeseanritiesmaybeorigrnatedand distributed to sophisticatedinvestors via morerestrictedprivateplacements.

The ability of theseturnover institutions to unbundle and securitize wholesalecommercialrisks shouldbe usedto more preciselymatchinvestors with usersof capntalFinally,the ability of turnover institutions to make

markets,given an adequateprofit incentive,givesthem the capabilityto dischargean important "maturity transformation"function in the financial qntem.

The lack of demandfor long term financialassets(or for thatmatter,high real interestrate levels)doesnot mean the Money Market is fundamentally flawed.To parapbrasean old mentoryou do not fault the thermometer for the high temperatureit registers.

As the doctor nust addressthe causesof the feveq so too mustlve addressthe factors that inlluence supply and demandfor financial assets- il we wishto impove the demandfor longer term financial assets.

Hence, if the single most importatrt issuerof marketablesecudtiesis not prepared to pay a premium for the longerterm fimdsit borroun, no incentirreis givento the inrcstor to buy these insrunents Theyieldssetby seasoned governmentissues(i.e. Treasury Bonds, Notes and Bills) establishthe system'sbaselevel ofinterest rates.

Hence, sucha pricing policy invariabiy affecs the pricing of all lhancial assets.

Now for somerecomncndations.I proposea two-phas€dstrates/: Phase l: Estrblbhing the Foundatlons tor Growlh o Managethe financial system asa whole.

Rather than looking at eachelement in isolation,we should seekto manage thefinancial systemasa u/hole.Henc€, institrtions are encouraggdto develop in their areasof comparative advantage,system-wideliquidity abenations are better controlled, and a nechanism is set in place to ensure policy consistency. o ReviseFiscal Policy Ground Rules Reviewexising hscallreatmentof incomegeneratedfrom all linalcial assets(from bank savingsaccountsto marketablesecwities)with a view to eliminatingbiases.If at all, consider temporaryfiscalencouragementfor longerterm investments. o Liberalize Interest Rate Policy Develop a program to progressively liberalizeinterestrates.Determitrethe resourcerequirementsof projects

whosefina:acingrequirementsare not met throughthe financialnarkers. Arrange to finance these in ways that result in the leastpossibledisortion to the market mechanism. . Pitrpoint Responsibilityfor the Developmentof the Financial Markets.

Designatean appropriatesenior governmentofficial to assumeoverall operational responsibilityfor promoting andregulati"g the fmancialsptem" Give this official the authorityhe requres. r Establisha rnarket driven yield curve for bell weather governmentissues. a Continue to improve the managementof domesticdebt rssues.

33

Mandgethe financial systemas a whole... , , Where possible,avoidbunchingof maturities.

L€ngthenmaturitiesofdebt issues(if necessary,considerinitially prodding liquidity suppot to this process). o Reviewand enforc€ suitable bvestor prolectionmeasures, Stricdy enforce disclosurerequirementsfor all prblic issudrs Establishuniform credit rating standards for investmentgrade issues; provide incentivesfor institutional inv€storsto in€st itr long term financial itss€ts.

C o n s i d e r e s t a b l i s h i n gi n v e s t o r qualification requirementsfor nrisl# in\€stEnts. o Arrange for suitn$ls lveining programsfor the operating staff of the regulatory authorities.

amongthe market participants. Take the lead coordinating developmentpolicy with the regulatory authodties. a Encouragemarket-naking of inv€stmentgrade instruments. a Encouragethe establishment of specializedinstitutions (with appropriate technical support) to address:venture capital, investmentpooling structures(e.g. mutual funds, unit trusts,etc.);and non-investmentgrade securities. a Encourageselectivesecuritization of risk as a mechanism for "maturity transformation" (e.g. mortgage-backed securities,etc.). a Encouragethe corporate sector to strengthenits balance sheet(e.g.reduchg leverage leve\ lengtheningdebt matudties, etc.). a Encouragethe development of researchcapabilitieson market issueseither on an individual or a pooled basis. . Establishsystemsaimed at disseminatingmarket and credit information to all market participa.nts.Avail of the ap propriate tecbnologl to accomplishthe same. a Encourageovers€asportfolio investmentby liberalizing investorground-rulesin nonstraisgic sectorsand establishing mechanismsto shorten turnaround tines for overs€as purchasesof local securities.

In closilg allow me to note that the first hurdle hasbeendeared.The challengeof inplementation mustbe met.

Thank you and good luck!

Phale ll: Market Development a Encouragethe development of turnover institutions. o Develop credible Self-Regulating Organizations(SRO's)

FraneisG. Esaada

17

l I

Theycomein all shapes,colors,and sizes...

A S^tudy of Entrepreneurc: FromGenius to Gredd byProf.EduardoA.Moratu,fr.

(MBM'72) Don AndresSoiano Professorof BusinessMattagment !ntrepreneurs are not like generic l-d1ugs which can be stripped of their labelsand sold under one formulation.Thereare at leastsixbrands of entrepreneurswhosecharacter traits differ dramatically from one another.And I'm sure mv classification code is far from exhaustive.

The Struggleris by far the most heraldedentrepreneur.He is the ragsto-richesstory of the man who started with almostno educationandno capital but made it big anyway.He is the entrepreneurborn out ofadversity.He is the immigrant. He is the poor boy from Tondo. Or the survivorof warg calamities,family setbacksand personaldefeats.Countlessstorieson successfulChineseentrepreneursin SoutheastAsia attestto this.

PersonallyI rememberour neighborhood crier of "Kendeya,Tsampoya" (the itinerant vendor of candy and preservedfruits) who grew into a grocerybwner.Or the more familiar ndiario,botenshouter(old newspaper and bottle collector) who metamorphosedinto a hardwaredealer.This entrepreneur'swinning strateg5lis one

Struggler 18

of flexibility. He seizesopportunities and profits everywhere,no matter what, no matter where.His defensive postureis oneof frugality andhumility.

He is the proverbial ant who stocksup for the rainy daybut refusesto spend evenufien the day comes.His humble stancealloux him to sdicit everybody's patronage.Clearlyhis entrepreneurial processtakesthe inch-by-inchapproach of strugglingto the top. In the end he overcomes.

The methodicalOpportunity Seeker has the analytical mind that pieces things together and copiesfrom severalideastogeneratea newone.He is customer-orientedbecausehe looks for the customers'needswhich have not yet been filled. His offensive

strateg5l is to bring resourcestogether and convinceone or two sponsorsto helphim ds 6is if he doesnothavethe capital himself.One interestingexampleof this is the originatorof the Burger Machine idea.This is a kiosk chain (located in gasolinestations) selling hamburgers,roast beef, sandwichegsoft drinkq juices and the like. From wbatI gatherhegot the idea from the Stateswhile g'nysllingthere.

He linked this idea to the mini-buses he used to run. He transformedthese mini-busesinto kiosksand situated them in gasolinestations,circumventing the rulesagainsterectingother per-

manentstructuresin thesestationsby putting his kiosk on wheels.One plus one plus one equalsthree and bingo, a suocessfulchain of Burger Machinssis born. This entrepreneurandmanylike him find a "nichenin the market as a Theydon't fight the defensivestrateg5r.

McDonald's and the Jollibee's.They fill a need nobodyis satisfying.Clearly the processis one of marketexploitation when no one elseis looking.As a result the entrepreneurprovesthat his well-thougbt-upidea canactuallywork and evenperpetuateitself.

The third type of entrepreneuris the Dreamer.He has a romanticizedidea which he pursueswith a purple passion. This entrepreneurdreamsof the perfect product like the car that will run twice asfast and rwice asfar with half of the gasolineintake. He is like the Indian scientistRamaswanyvfio, becauseof his lifelong attachmentto aninals, decidedin the eveningof his life to do somethingfor the bullocks who draggedheavycartsandploughed fields for the farmers. He dreamt of literally lightening their loads and lengtheningtheir lives by inventing cartsthat would pull asmuchweightat a fraction of the strain. These entrepreneursare the Edisonslooking for the light and the Bells trying to transport sound.The Dreamer is the picture of the mad scientistisolating himselfprotectivelyin a laboratoryto

Dreamer

-

l

arnid eady ridiorle, but nmning out to the street stark nakedshouting "Eureka, I've found it!" This entrepreneur's processis clearly a hig yinnovativeandinventiraone.He builds and develops almost fron scratch.He is willing to spend his whole life tramforming his drean into reality and showingthe world that it canbe done.

The Mlsslonary is a different sort of edtrepreneur.He has an abstract vision rather than a perfect product in mhd He hasa messianiccomplexthat propels him to go all out. In fact, he goesfor broke to bring his nessage across, He visualizes a country catapulted from poverty to economic prosperity. He promises to build a kingdom of saints out of a den of thieves.He imagines Utopia and preachesthat it can be attained.Hi6

of the time. Defensively,to protect limself from the imagehe hascreat€d and the acconplishments he has manifested,he tends to becomea recluse.a one-mancrusader or the Lone Ranger who lives and dies by hinself.

The Geniusis a one-manshw. There is no needfor anyme else.His people look up to him in awe.He is feared, respected and loved and put up on a pedestal.The enterprisehe createsis himself.The enterprisesucceedsbecauseof the Genius.And usually it endsthere.

Last, and definitely the least, is thc Greedy Onc. His motivating

nechanisn is the desire to acquire at the bast co6tandthe leag effort but at the maximumcain.Avarice is hisgane.

His offensive strategy is to prey on other people'swealnesses,poverty, vulnerability,lack of power,ignorance a n d p l a i ns t u p i d i t y .H i s d e f e n s i v e strategyis simple- avoid getting caught. His modus operandi is one of premeditated,well-calculatedcommihent of a crimeto amassEraltl. He t a k e s a d v a n t a g ew h e n e v e r a n d Win at whereverhe can"His obje.ctive? dl costs.

Ingerestingto note, the Grte{y One often mendshis waysat th€ twilight of his lifo. He suddenlybecomesthe philanthropist.Perhapshis mnsciene startsbothering him ashe nearsthe judgnent of the Lord. A greatmany corporal works of nercy are done to atone for his sins. After all everyone wantsto die with a virtuoustomhone.

Messor E&urdo A. MoraloJr.

rssronary brand of entrepreneurshiprequires the cmmitmeat of a great number of people.Ifhe doesn't,he getslabelleda T.aving Lunatic." This entreprcneur accomplisheshis 'ni*sid bryevangelizing. He changes'nin& and hearts.He wins adherents.His end goal is for p€ople to transcendthenselvesand live in a "newworld" or 'new order."

One can often find this type of entrepreneurin government,political particg churcheg civic organizationg senice enterprisesand esotericclubs. ltc Gcnlur is the entreprcneurwith thc Midas touch, Everything he touchcs turns into gold becauscbe is good In fac! rcrygmd. He is the conpletc sclf, thc nan with boundless talents.His enterprisesare living testimnbs that be is right nost, if not a[

)

GreedyOne

19

FEATURE Thework of vandalsand developen...

InSearchof BetterHaruests byProfessorMaio Antonio G. Lopez (MBM 70) (Mcyo recent$tdclivercdthis paper at an alumni gatheingin Kota Kinabah+ Malaysia.-Eds.)

f h e t o p i c f o r t h i s a f t e r n o o ni s I deceptivelysimple.I will re-state my understandingof it in a way that, I think, will let us break it into easierto - addresssub-topics.

Our stateleadershavesuggested an indigenousdevelopmentplan spelling out broadlywhere Sabahshouldbe going.

We want a Sabah with many enterprisesand industriesthat are not dependeirton limile6 prodgctssold in raw or semi-processedforms in very volatile, highly competitive markets that are very open to the influenceof a few big buyers.

We want Sabahanenterprisesthat produce manyproductsthat fetch higher prices and makebigger profits in outside marketsbecausethey have undergonefinal processingat very competitiverates.

Thesesameenterpriseswill turn Sabahinto a largelyself-suffrcientstate in mct of its basicrequirementswhile making availablemost of life's finer amenitiesthat make living in the land below the wind much more pleasurableand fulfilling.

It is only a plan, a nice dream,but a dream that I think we can make real with perseveranceand intelligent work We will not discussthewholeplan but onlythese parts that deal with the two of the most critical growth sourcesagriculture and the agriculture-based businesses whichwe williointly call tbe agribusinesssector.Before I go to tbe mnin{spis, lst meclari$ someassumptionsI madein composingmythoughts this afternoon.

20

o Sabahhasmuch unexploited and under-utilized resource endowments. o Most Sabahansare not yet victims of the kind of poverty that hasbrutalized manyin developingcountries.We cannot, however,saythat most of our people already enjoy the best levelsof material living.

There is much room for improvement.

I am embarrassedto admit that many Thais quickly point to the Philippinesas the placewherethey learnedhow to grow crops and how to market them

o Given Sabah'snatural endowmentsand potential population growth it will be prudent to stimulate industrial growth that oPtimizesthe Potentialof agribusinessdevelopmentasa life support systemsbdseand as a major technologytransfbr area.Basicinnovation and learning theory would dictate lslhing less. o Onlytheblind or unappreciative of nature will missthe obvious fact that Sabahhas retained much of God's gifts.

It hasnot been infected with the diseasesthat cone with ndevelopmentand progressnas we havedefined these.

JosephWood Krutch, the essayi5t, said: "If peopledestroysomethingreplaceable madeby mankind they are called vandals;if they destroysomethingirreplaceablemade by God, they are called developers."

I know none of us here wish to be called "developernin that pejorative way.

I think we all wish to be associated with the "first Sabahdevelopment team"that brought progressto Sabah while assuringthat the best of both world's co-existedin our state- the prmfs of the hightech civilizationman hascreatedwith the sptematig. creative useof his brain with its 10P cells, in the midst of nature'sstill intact primeval beauty,teemingwith God's living gifts he wantsus to steward,not destroy. o In raising the standardsof living of the least privileged Sabahans,we will do so balancingthe need to progress in all aspectsef ftrrmx1lifs, material and otherwise,while protecting the natural beauty we havebeen sojustifiably proud of all these years.It is notjust for aestheticsthat we will strike the balance.If we destroythis balancewe shall havedestroyedthe ecological habitatthat not onlymakes Sabaha naturalist'sjoy-one of nature's richest repositories of life's great variety;if we destroyit, we shall be degrading the environment of Sabd and ultimately, the world" moving it closer, irreversibly, to the kind ofbarren earth where we may not be able to enjoy all that we haveworked for. o Only if we cooperateas one people,agreeingon common goals,and put together a plan that is the result of intensive consultationswith our people who will be, after all, both implementorsand ultimate beneficiariesofthe plan, can we achieveour goals. o By involving as manyof our people in determining a common future do we give them reasonto work with us as a

l

united people with a com-on stakein the state.

Next, let me outline what I think we can begin to do to get us from the Sabahas of today to the Sabahof tomorrow we dream of.

The framework I will sharewith you is the result of the experienceand formal studyof manypeoplefrom many oreanizationsin manycountries.

You may alreadyknow of it because you yourselveshavearriwd at the same insights either through your experienceor your observations The frameworkhasbeenput together in many forms- generalsystems modelgeconometricmodelgaswell as being forwarded as a list of "off-thecuff' questionsin televisiontalk shows.

In the last form they soundcommon sensical.

I thinkit wasAlbertEinsteinwhosaid or that "Scienceis not a special'1hing', weird men in white gownsbussing aroundin a laboratory.It rs a way of thinking, of systematically understandingour world.It is commonsense appliedwell!" or wordsto that effect.

Irt us start with layingout what we knowanddo not knowaboutoursiruation in Sabah.Or as a management guru PeterDrucker put it asthe frst of his five managerialquestions,".Where a r e w e ? " W e c a n n o tm a k e g o o d decisionswithout solid data.And the first thing we haveto do is to establish certain facts about the state.With I thinkthere are regardto agribusiness, severalbasic questionswe neeci answersto.

What agribusiness products are we now producing in Sabah? . o In what quantities? o Using what resources? o At what costs? o. Sold to whom? o In what forms? o At what prices?

(We do not limit ourselvesto traditional agricultural produce when we We include speakof agribusiness. aqua-andmariculture productsaswell asprawnE fish, alga,etc.)

21

l

the possibility of large losscsbeing incurred.

I-ooking at the srrcessesof Thailand in corn and cassava,it is obrviousthat o In what quantities? not only did they pay attentionto the policies, systemsand institutions that o At what costs? related to the growing of the crop. o For which sectorsor markets?

They assuredthe successes of the whole effort by making sure of the Thesedata willgive us a pretty good marketsand the marketingsystems picture of howwe in Sabahorrrently. and infrastructurefor marketing from support our food and agribusiness assuringtransport, storage,first level products needs.The next set of data processingand international shipmay already exist but may not yet be ments. well disseminated.Or evenif well disI am embarrassedto admit that many 56min4fsdmaynot be in a form that is Thais quickly point to the Philippnes useful to a non-technicalperson or asthe placewheretheylearnedhon,to entrepreneur. grow crops and how to market them Mct geographicdata are collected properly. I en evenmore embarrassed bygovern-snt agenciesor academic to look at howoftenwe, in the Philie andresearchinstitutions.The data are pineshavenot practicedwhat we harc often gatheredusing the terms of beenteachingasevidenced$ the perreferenceor area techniciansor exformance of our own crop and pertswho designthedatagatheringinagribasedproduction and livelihood struments.Theseterms of reference programs.The thing about the Thai often havea code that wi[ yield infasuccessstory, and may I add the mation to the trained mind, but not to Korean successwith the agricultural ordinarypeople. componentof theSaemul program, is For exanple, a phrase like "Claythat they all im'olved substantialoomloan soil with a lSVo slop'will not prehensiveplanning efforts that feameanmuch to me. But to an agricultured much education and consultturalist,it will b,ringto nind the kind of atbn with peofle in the viflagp. cropsthat canbe gronnqdepen.lingon Given the appropriate information, climaticpatternsandother soil characincludingwhat actiom peoplein other teristics. villages had taken and are taking, The next set of data that must be decisionmakersdid make rational made available to people are the decisims thatwould harm theheartsof geographiccharacteristicsof the microeconomists. vfiole state,including the other set of The successstoriesof Thailand, environmentaldata characteristicof Koreq Taiwaa Japaq end Israel uneachsectorin the state. derscoreone thing.The expertssucIrt me repeat that the data nust not cesswas assuredbecausethb people relate only to traditional agricultural who were producing for export had areas.With the growingimportane of first producedenoughto feedthemselaqua-and-mariculture, littoral, ves.Food securityassurd th* people ripariaq snamp and marshlan& nust could addresshigher level needalso be surveyed.And I think that in Basic Maslovian theoiy, but one that disseminatingthis newdatabase,addidoes not feed in too well in nany tional information can be made availrnacro-econdnetricfmmulations able to people who would need it to Sofar wehaveestablishedthreeclear makeinportant inrcstment decisions, points that guru Drucker advisedthat suchaswhat cropsmight $s profitably webereryclearon: planted in which areas using what o Wherearewenow? kinds of technologr. o Where do we wish to go?

Ttis will reanthat thesare sourcos ofdata had best provide nc only data o How do we bestget there? on potential markets locally and outside the state, but also stipulate what other inwstments in support services The data basewe outlined earlier andinfrastructuremustbemadeto not would begin to show the areaswhere ontymaxinize probabilitbs of positive we could makeprofitable inrrcstrentg returns on investment,but to prevent not only in production andgrowingbut

Whelrgribullno$ produst!ffe currentlylmporledInto Sabrh?

22

in the provision of needed support, processingand marketingindustries In fact, we have begun addressing Drucke/s fourth question.

How do wig ensure we get there? f\ s I mentionedearlier, the planwill Ffody becomea realityif enough Sabahansdecide that they will persevereand,work hard for its realization.

Enlisting people, enthusingthem to work with avery large and complex plan for goalsthat mayseemgood but for which they mayhaveno immediate gut senseof and feel for, will be the most critical task of all.

A fact of life in many developing statesis that a great number of our people are poor, and that their perspectivesin life are fairlylinitedin terns of geographicand social scope,and in terms of time horizons and linkagesto otler aspectsof living What they can invariably relate with and to are thoseactivitiesthat provide ,nswsrs to their own immediatequestions,activitiesthat will satisfytheir felt needs. And for many of our less privileged brothers xad sislsls sking out a living whathasmeaningareplans that they know will produce work and rncDme. Here is wherelxme hard choiceswill havetobe made.Thoseofusnfiohara been fortunate to study political econmicmodels derrloped inthe industrialWestandmayharcin factlived thereare not at all awedbytheinplicationsof prqgramsandmodelsdesigled to replicate the qntems and structures that non,operatein the West.

They arepart of our world modeland we have encoded the socio-cultural systemsthat jrstify them in our minds.

But not with so our lessprivileged brothers. While they have been expced to the prsdu6s dthis particular sub-culture in our own stores and media; and while we have built the physicalnanifestations of that culture right here in our state, it is still one thing toexist alog sidetheseelements and quite anotherthi.g to lirrcproductirclywiththem.

I would much rather we discussthis critical point during the open forum but let me just saythat all over the world nowthe emergingconsensusis that we cannot force our people to make a qurntum leap from their still

largely tradition-bound life stylesinto ours without somehowscaringtheir minds and their spirits.

The United Nations Development decadesare a sadlyeloqrcnt evidence of the failure of thesequantun leap programs.There are thingsin life that will not be rushed into a different realig.

Schumacherwas right. Srnall is beautiful. Thailand's food self-sufficiency and agricultural export prograns I a:n told were built mainly on the efforts of snall farmers who worked with programsthey could identify with; the direct benefits to then they could quanti& that alowed them to tie their more selfishgoalsup with the more absbactand distant national targets.

The Thais. it seens,built on what waspresentrather than do a whole social redesign.Most Thai farmers wantedtheir independence in their ownlittle cornerofthe world Let thsm k e e p i l . B u t t h e y m u s t d e s i g ni n tegratedintensivecroppingpatterns they can work with easyenoughto learn irnproved technologies,technologiesthat can be scaled up to operatein larger farn sizesin caseyou can stimulatecooperativeblocks or ewn corporatefarnrs.

I an surema:ryofyou havedrivenup to the 'rose gardens'north west of Bangkokin the pastfir'e ],ears.Onecan only gaze with envy at the very profitable s-ell farmg someno latger than a five to six thousandsquare meters whereoneseesintensiveand integrated farning - rice, corn, papay4 mangq rambutan,jack-fruit, bananas,string beans,eggplant, tomatoes,fish, goats,chickensand manyother varietiesin variouscombinations- farmsthat producemost of the famil/s food requirementswith marketablesurplusesto get cashfor other ne€ds.A marketing cooperative collectsthe surpluses,sellsthesefor a feein Bangkoks severalfreshproduce aucuoncenteni, There is an increasingnumberof suchfarms in other parts of Asia. The c o n c e p t su s e d a r c n o t n e w . T h e J a p a n e s eb a c k y a r d p e r s i m m o n growershavebeenat it for yean.

And the pilot project on stimulating milk production yielded not only more nilk; but lessorqadc garbagefor tle authorities to dispose;more less privilegedBuddhistswho now proudly

saythey havesharedin the upkeep of the tenples; and lesswastedfood that nowendup in hungrystomacbsinstead of a river.

The snall projectsthat build up on what people alreadyknow necessarily meanslessfinancingrequirementsin manywap. The capital investmentsin appropriatetechtrologyproiectsare smalland the poor will not feel that the valueof their labor isinsignificantmmpared to all the importedexpensive equipment.The kindsofhunan investmentswill not be big either, Pleasedo not misunderstand.I am not using "small"in an absolutesense.

I am usingit in termsofwhat rnight be loosely termed nstate-of-tle-industry" sizeversuswhatwe cansuccessfullyhtroduceinto tbe statefor our peopleto work with at a givenpoint in time.

If the conditionsare right, by all meanswe should procur€nstate-ofthe-industr/ facilities.

Further, I am not adr,ocatingthat un cut up all the cooperativeand corporate plantationsand farms.Some cropslend themselves lo largesize operations.What I am advocatingis judicioususeofthe scaleeconomies conc€pt There is also another reasonwhy investmentsin agribusinesseswill be mosthelpfrrlto Sabah.Onereasonwhy people move out of the rural areasto cities,quite apart from the fad that we haveglamorized urban life, is that we havenot doneenoughto makelife in thehinterlandsmoreprofilable andexciting. Most of our investmentshave been in urban areas.Just look at Kota Kinabalu relativeto TuaraiIf we do not wish Kota Kinabalu or the otber major populationc€ntersin the state to begin to look like other primate centers in the world with its legionof povertystricken,unemployed and societallystrainingpeople,then we oweit to oursehesto help them see a good future in the areaswhere they now lire.

There will alsobe misgivingabout why prodwe food wh€nthere is sucha small internal market.Well. Israeli agriculture is largely €rport oriented.

Israel is oneofthe four majorfruits exporting countries. Australian apples, Koreanpears,Chinesepomelogand Philippine strawberries stock Japanesefruit stalls.

The world is slowly returoing to natural foodsandq€ know that the old

world haslimited lands on which to grow thenr"And at somepoht, maintaining the high-technon-soilbased gardensfor their artificial condition fish tankswill proveveryexpensiveversusour naturebasedproductionsystems.

And the real bonus is that we can design our production systemshaving the benefit of all the lessonslearned from all the e;perimentationandpiloting andbunglingthat stanedin the 50s.

One of the biggestmisgivingsof peqle in industryald trade is the fear that an emphasison agribusinessand the rural areaswill lead to a negled of industry. That is a distinct possibility, and one in which we have a chanceto avoid .

No major agribusinessmodernization and diversification effort caa succeedwithout the useof more advanced technologiesand greater anounts of capital equipment.

A nodernizing, diversiling agribusinesssedorrrill stimuhtetbemetalwortiry sedor dnedly - becauseof the ne€d for tools and equipment, as well as transpa! handlingandstmagefcifties The increaseddenandsfa thesewilt in their ovmrrray,indiredly stinulatethe self samesectorsplus othen they are closelylinked to - merahorking activity stimulatesthe chemicalindugry, for examde.

The spreadefrectsare easyenougbto see.

And a rural population, alreadythe largests€pent of the populatio, tbat earnsmorewill initially buy nce of the serneproducts.But afteralag;xfiichnay pro\,€shorterwith appropriatestimulatioq will demand a greater variety of prodrrts of evenbetter quality.And the growthin coreumsim in srch a markg willbe muchbiggerthanwhattle c'urrent marketscanposlbly offer.

The ripples, I thinb you haveno diffictlty envisioning

Messor Maio Antonio G.IiW

23

Learningbydoin&..

ZenandManagement Training byffiessorReneT. Dominp atudents eagerto learn about Zen t are usually told the following anecdotebeforethey start training.

In the olden days,an agingburglar decidedto teachhis son the tricks of the trade sothat whenhe passedaway, the son might becomethe bread winner.One night, theyboth went to the village and broke into a house.The father sawa huge"tr"$ slglothing and ornamentsand instructed his son to get insideto collect the items it contained.As soonashe got in, the father clsed the lid and padlockedthe chest.

Then he madeall sort of noisegbangmg the doa of everyhouseand shouting'Thief! Thief!" The whole neighborhood was awakened,and tried to pursle the burglar who quickly rlanishedinto the nighL

Howmustwetrainour managenr to manage?

When he reachedhome,the son angrily askedhis father why he cruelly abandonedhim andplayeda dirty trick on his oumson.The father told him to calm down and explain how he was ableto escape.The sonrelatedhow he got out of the chestand nanaged to deceivehis pursuers.The father exclaimed:"Ihere you are,now you harc learnedthe tradeln This short anecdoteshowsthat learning an art or trade goesbeyondverbal and written rules and instructionsof do's and don'ts.An action-oriented approachis much more direct and effeclive.A situationof helplessness arising from a crisis environmenttendsto bring out the best out of any neophyte- in muchthe .a-e waythat

Education...shouldbe endless- and exciting.

Learning to deal with a mess. , ,

a mousetrapped in a corner can scare awaya cat.A crisiscan teachcreativity A ogty and cursing his father, the Fkon, trappedinsidethe chesttried and confidencewhich no amount of to think of howhe could get out.Sud- coursescan teach.Irssons and prindenly,abrilliant idea flashedin his cipleslearnedin thisygyare easilyinmind. He would scratch the sidesof ternalizedand remembered. the chestand makegnawingnoises This bringsusto tb questions:nHow like those of a moirse, aid this must we train managershow to motivatethe residentto openthe chest manage?Howcan we teachnanage6 and free him. The masterof house. the art of management?Howeffectirc upon hearing the strangenoises,orare managementcourses,in-house dered his naid to indeed open the serninhrsand training or eventhe sochestand free what he thoughtwasa called on-the-job training?nTheseextrappedmouse.Thereupon,theyouttg ercisesare usuallyconductedin a thief jumped out, blewout the candle secureand comfortableatmosphere. the maid was holding and pushedher And things-tohappenhavea large deout of the way. The entire neighborgreeofpredictability.They are setup hood ran after him. While fleeing he in suchawaythatthestudenthasnothquickly spotted a well and went inlhat ing substantialto lome by makingmisdirection. Upon reachinghis destinatakes- he cannotharm the company tion, he took a large rock, dropped it nor himself.In the military on-the-iob into the well, and continued his estra-ining;i.e.,war gamesor exercises, cape._The pursuers,upon hearingthe real bullets and bombsare usedto imsplas\ gatheredaround the well-and presson the soldier that he hassomeplis-he{ the thought of the thief helpthing to loseifhe doesnot learn fast, lesslydrovming. becausethere is no secondchance.

24

Predictably,soldierslearn their jobs much faster than managers.

The following anecdote demonstrates a modern-dayapplication of the aboveprinciples.

An outstanding fresh college graduatewas planning his career. He wassmart enoughto realize that what he learned and masteredin management in schoolwouldnot enablehim to managea company.An option was open to him: He could join a large multinational firm, start from the bottom as a managementtrainee,learn bits and piecesof managementknowhow along the slow-but-sureway, and hopefully,becomevice-presidentafter a decade or two of grinding and politicking. Worse,he fearedthat everydayfor years,he would be parking his car together with his brain before gorngup to the office - like so many other bored but highly-paid managershe knew.

fl e thought that this careerpath not I lonly required a a long wait but also a doubtful way of learning the tricks and trade of management.He dismissedthe option and decidedto look for a more challengingand less comfortablecareer.He would look for a distressedcompanyand negotiate with the owner to nanagerrun and rehabilitateit. He found one andwas able to convinceits board to appoint him as CEO with full powers.His salary was not only low but unsure sincethe companywasonthevergeof foreclosure by 4 creditor-banks anytime.He knewthat the oddswere sgainsthim and the company.His future, his reputatioq and maybeeven his life, were at stakein casehe failed to turn it around- but that wasthe situation he actuallywanted.This companywasgoingto be his school-of hard-knocks.He being the masterof his oqmself - the teacherand the student, conbined.

The companywasin a mess.Without the knowledge of the outoers,

$s-:

w{

menagelssnd gsplsyses weremilking the companyof preciouscashand o t h e r a s s e t sT. o s t o p t h e i n t e r n a l bleeding,he had to get information from the very samepeoplehe would prosecute.At the sametime, he knew he could not fire everybody.This case washis first problem in personnel management and industrialrelations which his schoolteacherdid not take up. He interviewedall employees,tried to negotiatefor information,andcrosscheckedtleL stories.After a seriesof tearful engagementsin which several employeesbroke up and spilled the beans,he wasable to tracethe mastermindswhm heimmediatelydismissed andsued.Minor casesweremadeto sign promissorynotesamountingto what they had embezzled.

He learnedthe other functionsof managementin much the samepersonalizedway.

Operations mamgement He had to learn how to negotiate and to renegotiatefor the roll- overof overdue loansand to get new lodns,tho"gh more expensive,to pay off the old defaultedloansand angrysuppliers.

He successfullyconvinced the banks that if theyforeclosednow, theywould get nothing; if they hllow him to improve things,they could get part or maybeall of their moneyback.

MarketingmanagemcnlHe had to talk to lost customersto convincethem of the company'sfuture and askthem to support his rehabilitation plan which he presentedto the banls and other financiers.

Businâ&#x201A;ŹssStratâ&#x201A;ŹS/:He decidedthat theonlywaythe companycouldsurvir,e and operateprofitability in the long run wasto sellit to a buyerwith huge finaacialresources.He wasableto fi-nd a willing buyer and convince the ownersto sell out.

The companywas back on its feet only a year after he joined it; he knew there wasnothing elseto do aad learn He resigned,feeling that duringthat shortstint,he earneda doctorateiD management.But he startedlooking for bigger challenges- biggercompades in trouble to manageand learn from. Education for him should be endless- and excitins.

PmfessorReneDomingo

25

CaseHistory

Yennylbrahim-Betrieb byJesusaT.Arroyo Yennylbrahim-Betriebis the president-director of P.T. Exccutive Adviserc. fluring the first quarter of 1986, l/Ysrrt Ibrahim-Betriebopened her own managementconsultancyoffice in Jakarta.It wasa 10-manaffair, includingherselfas President-Director. The company,P.T. ExecutiveAdvisers,wasregisteredasan implementation and managementconsultancy firm, which offer two basic services: financial consultingfor foreig! companiesthat wishedto do businessin Indonesia,and assistancein the implementationof technology,particularly within the banking system.

Putting up her own corporationwas a culmination of Yenny's previous work experience.For sewnteenyears, Yennyworked for large multinational banks,moving from one banking institution to anotheras shesawbetter opportunities.Shespenttheinitial nine yearsof her careerlife in New York, where she first "stumbled"into the bankingindustry "without evenknowingwhht it wasall about."From then on,Yennydevelopeda keeninterestin the field, eventuallydecidingto build her future around it.

During the last eight yearsof her sreer asan employee,Yennywas still with multinational banla, bu1assigned in her orrmcountry.It wasin late 1981 whensheaffordedherselfa period of 'Torcedretirement."The Hong Kongbasedbank sherepresentedin Jakarta wasboughtout, andin the courseof the takeover,Yenny took the opportunity to think her future careerthrough.

Consequently,assheturned 40years old Yennysetasideher corporatepast andopenedawide newworld with her-

self asher ownboss.In addition to nEw challengesshefaced in her professional life, and life with her German husband with whom she had exchangedweddingvowsbarely ayear before also presentedchallenges.

Family background llorn on April 15,1945,Yenny lJlbrahim was the secondof five children, two boysand three girls. At that time they lived in Surabaya, EasternJava,where theyenjoyedthe relativelycomfortablelife of a middleincome family.

As a child, Yenny felt closeto both her parentg for "verydistinct reasons."

Shelearnedto discusspolitics with her father. He wasappointedgovernment official,servingasAdviserto thePresident a position he earnedasa pioneer nationalistadvocateduring the underground movementprior to Indonesia's declarationof indepen&nce. It washe whoinspiredYennyto pusue a lawdegree at the university.

For all other matters,Yenny approachedher mother. Yennt's mother was a housewife,althoughshemaintaineda part-timeiobaseditor of Wanita, one of the first women's magazinesin Indonesiaand established during the 1950s.Prior to her marriage,Yenny'smotherwmkedasa piano and elementaryteacher.It was from her mother that Yenny learned the valueof being a careerwoman.In her youngerdayg Mrs. Ibrahim took on work asa necessityrather than an avocation.

Among her siblings, Yenny was closestto her youngestsister,Winny.

Shesawin Winny a youngerversionof herself,Together,theysharedthejoys and pains of growing up, going to school and beinggirls.

Yenny had a relatively carefree childhood.Shewasnot burdenedwith responsibilitiesin the house,otherthan

those for herself.Amid this rather lax environment,however,her parents taught Yennyand her siblingsto think for themsehes.They were given a free hand to maketheir oumdecisions,but with the understandingthat they should stand by their decisions.From this,Yennylearnedto be independentminded Education I ike most children of their social l-class, Yennyspenther schooldays in Jakarta.As a student,Yennymade friends easilybecauseof her vibrant personality. She recalled being considered"naughty,"a trait sheshared with a bestfriendwhohadthesameinterests.They were a restless,freespirited pair who went into activities that were traditionally unacceptable for youttg IndonesianMoslem girls.

We both liked mountaineeringgorng on picnics,andbop.

On the seriousside, Yenny wasinfluenced by her history teacher. o This teacherencourogd rne to acpness my idcasin witing and to be more vocal. Throughthis, I got to be aheadin class..

Becauseof this teacher,Yenny aspiredto be a writer - shewasnot very seriousabout it.

After high school, at the ageof 18, Yenny enrolledin the Facultyof Law at the Universityof Indonesia(UI). At that time, her foremost dreamwasto becomeapolitician and a diplomat,an influenceof her father.Shewaslured to the status and glamour of traveling and meeting foreigners. "I had ahnays been curiousabout what wasoutside my environmentnsherecalled.

T o m a k e h e r d r e a m c o m et r u e , Yennywasawareshehad to work for it. Sheearnedher degreein law at UI and took further coursesto completea graduateprogram specializingin In-

The nanes of personsand organizationsin this casehistory havebeen disguised.Thiscasewasdevelopedaspart of a researchproject on Women Managersin BusinessOrganizations(WMBO) of SoutheastAsia. The researchwas made possibleby a grant from the CanadianInternational DevelopmentAgency (CIDA).

26

ternationalLaw. That year, Yenny's father was assignedto NewYork asan Indonesian diplonat. Yennymorcd with her family to the Big Apple. Oncetheywereseltled in their official overseasresidence, Yenn/s father askedher if shewanted to enroll at ColumbiaUnirrcrsityfor an Americanmaster'sdegree.Fascinated by the new environment,Yenny declined. c I wastircd of studying.I wonted to frywo*ingfor a change.

CareerDevelopment fluring the late l-960s,several l/American bankswere startingto developtheir SoutheastAsian market.

Four of them had identified Indonesia asa good potentialto openbranchor representativeoffices.Of the four, Anerican Com-ercial BankingCorporation (ACBC), the secondoffered a training program for new recruits andfresh graduates.Yenny learnedof thiq opportunity from Indonesianembassyofficials in New York. o I sawthe oppoftunityand gabbedit. I mustsayitwas all purelycoincidentalthat I got into banking.It wasthe only thing available,but it wasa goldenopportunitybecausethe bonlcswerebeginningtoestablish branches in lakatta. o I couldn't practiceLaut in New Yo*An4 asI sawit eventualty,I realiztd wo*ing as a , lowyerisboing. Itwasn't boringwhenI wasstuQing

only afterI gadtated did I realize it is aboingprofession.

Yennyconsideredit "sheerluck" that she was acceptedinto the training programwith ACBC. At the aged?A, inexperienced,a foreigner and a fsmals,5heullasan naliennin moreways than one. Shehad no idea of what banking is all about, neither did she know what nworknreally neant in the Western context. To compound the situation shewas not very fluent in English granmar. o Everythingwasforeigt to me then:the langtage,the environmeni theinA$try, thework Everythingwasnewl Shedid, however,takea crashcourse in typingbeforesheappliedforaiob in the bank. c I thoughtthat if I joined a banlqI'd just be a secretaty,becauseI didn't lotow what elseI coulddo in abank.I couldn't be a teller.I couldn't even countmoney!

As a Trainee,Yennywasintroduced to the businessofbanking andfinance.

Shelearnedaboutthe operationsas she was assignedto the different departmentsof ACBC. In additionto her technical indoctrination of the

27

business,her supervisorencouraged herto takeanFndish gramnar course, sponsoredby the Bank. o I washwing a dificult time communicating.Sure,I lovw how to speakEnglislt"but I couldtt't undcntand their English.

Yenny did well in her training program.Shelearnedto like the bankinginidustry b,utasshemovedfromher apprenticeshipstatusto becomea regular employee,she noted that womenwere not being given equal employmentopportunities in the Americanbankingsector.At onetime, shefelt shewasready for the Bank's training progrem on credit, but was discouraged"giventhe reasonthat slots werenot usuallyoffered to women.She likewiseattemptedto get a chanceto train for an overseasassignment.

Again, shewas met with the same reply.

During her third year at ACBC, Yenny had by then noved to the position of areaadministrator.Atthistime, the American governmentmovedto legislateequal employmentopportunities.The pressurecarireon shong especiallyin the banking industry.

Eventually,Americanbanla andfinancial companiesopenedtheir doors to wonrenapplicants.

One bank, the ContinentalBank of NorthAmerica (CBNA), wassaid to allot US$1 million for educational facilities for its female employees.

Yennyhad friends at CBNA who encouragedher to apply at the bank.For her it vfasanother "goldenopportunity." With CBNA's new liberal outlook on its womenemployees,it wasa chanceshedid not want to passup. lnL973, Yenny left ACBC to join CBNA. She applied for a position similsl to her previousjob, and got it.

Shewas,however,givena wider range of responsibilitieswith a correspondingly larger salarythan what shehad at AC'BC.BecauseshewasOriental, Yenny was area administratorassignedto the Asia Division.Sheiustified her transfer. o It would havetakenme fieo yean longerto getto this equivalentlevelof responsibilitiesif I had stayedback at ACBC.

28

Her first year at CBNAwas smoot\ and a far cry from her initial traumatic experiencewhen she first joined ACBC. By then, she alreadyknew the "tricks ofthe trade,nand all shehad to do was learn the corporate culture of CBNA. It was CBNA where Yenny experiencedthebenefit of a mentor.Her immediateboss,an American, treated her almostasif shewashis daughter.

He taught her more than what her job entailed: o He tught me to becomeless sensitiveand emotional.

Yennyrecalledwhenat onetime, she was so angry she walked out and bangedthe door behindher. Her fatherlyboss calmly called her back and told her to refrain from doing this again.He advisedher: o Vl/henyou're maQ try to calm yourcelfbeforeyou fry to fo onything.If you must cry,p to thepowdcrroom and cryyour heaft out inside.Or p out and takea drink Thenyou come back with a refreshedmind Yenny alwaysrememberedthis advice and followed it. It hashelped me all through theseyeargnshesmiled.

It was also at CBNA where Yenny first encounteredworking with foreignersother than Americans.Among her four subordinates,one wasan Egyptianwho wasolder than shewas.

Hewould saytoher,"You,youngkid.n o Wewereboth Moslems,but becausehe wasoldcr and he was a tnan, I had to do the !be* ging."I would alwaysaskthinp from him politely and respect-

futty.

Another subordinatewasa German who "simplyrefusedto report to me.n Again, with him, Yennyusedher "subservientntone in delegatingwork.

Despite her supervisoryproblems due to cultural differences,Yenny enioyed heriob at CBNA. It providedher exposureto internationalbanking The prmped of becomingan international bankerintriguedher,remindingher of her almostforgoften dreamof wanting to becomea diplomat. Shethought: c I could integate it into my bankingcoreerby beingan intemational banking qeft .

To attain her ncombined-old-withneu/ aspirations,Yenny believedthat the bestway to start wasby getting an overseasassignmeff.In May !n8, aLthough shehad receivedjob promotionsthat erentuallyledherto hold the position of assistanttreasurer, Yenny was still nursing her drerm of becomitrg ao internationalbanker.By then, shewas on her fifth year with CBNA, and her eighthyear in the States.She wasalsogetttngtired of New York.

Sheapproachedher superiorabout her career plan. Her bosswelcomed the thoughtbut ould not give ber any definite answerto her requestfor a foreign as,signmsaf.

Perhapslater that year,he said.

This, however,waspre-emsedrvhen a "headhunternapproachedYennyand informed her that anotherAmerican bank was looking for US-trained officers for its Bangkok branch. The bank, Globe Commercial Bank (GCB), wasthen pioneeringits servicesin Thailand.Yennyjumpedat the chanceand immediatelyagreedto an interviewappointment.

During her meetingwith the GCB officer, Yenny had a greatersurprise.

Whenthe officer found out shewasIndonesian,he offered her a job in her own country. For somereason,the Bangkok branch never pushed through.

Negotiationsfor the job offer were easilycarried through. It wasagreed shewouldjoin GCB on the following terms: she would be marketing managerat GCB-Jakarta as an expatriate. With this move, Yenny achievedan advancementin pay,position and prestige.Shewould havea managerialposition in a multinational companyin her homeland,but be paid as a foreigner. For Yenny, it was a dreamcometrue. o I adrnit it had somethingto fu with luck and pod timing.

GCB bodly needcdsomeonein Indonesia.. preferablysomeoneIndonesianandwho had trainingand qerience in the Statesand I wontedan overseasossigtmentIrom New York So it becune muually pufectl Yennyjoined GCB in the secondhalf of 198. Sherepctedto the NewYork office for a month, getting oriented with her new company and her new

position.At the sametime, shewas packing and sorting her clothesand possessions- all shehad collected over the yearsshespentin NewYork In four weeks,shewason her way to Indonesia.

When she flew into Jakarta,shehad decided shewould not live with relatires. As anexpatriate,shewasentitled to a house.Her predecessorhad, by then, movedto Hong Kong but becausehis childrenwerestill in the middle of school year in Jakarta, they stayedbehind,occupyingthe houseallotted for Yenny. Becauseshe was singlg,shsagrsedtowaituntil afterthe school year and insteadstayedin a hotel suitefor eigbt months. o Somefriends thoughtI wastoo kind or crazyto do that (stayin a hotel). But for me, it hefud. I hadpeoplearcundmeall the time, or at leastwhenI needed sotneoneto talk to. If I had pushed.togetrne a house,I would havebeenalonea lot.

As a marketingmanagerat GCBJakarta,Yennywasthe secondhighest in the branch, next only to the general managerwho wasan American. Becauseshe wasIndonesian,Yenny would usually representmanagement in the union negotiations,an experienceshedescribedas exciting.

On the other hand,Yennysupervised fifteen employeesin the Marketing Group. Shehad foreignersaswell as Indonesiansamongher staff,most of whom were men.It washer first time to work closely with fellow Indonesians.There was asmany advantagesasthere were disadvantagss. o Vllhenever I could I took thinp in sfridc ond handledthem with humor. Sornetimes,I used my'woman trick,n What she called her nwomantrickn wasputting in a touch of softnessand subserviencein a confrontation. To easilytake on a face-to-facetalk was atpical amongIndonesians,specially with the Javanese.But Yenny consideredherselfnot typical.Shewasone Indonesian woman who took on confrontations easily, speciallywhen it care to the work place.Her tactic was to seta ndaten totalk to thepers(mcmcerned outsidethe office. Shewould ask them out to dinner or lunch in a

very casuat non-authoritativemanner.

Shetermedit a nysmenfigk"n becausg "if tbe partyconcernedis anan, oftentimes, he ended up paying for the meal,"shelaughinglyexplained Sherecalledhavingsuccessfullyused it on a subordinate, Heinz, another German,wbo aswith her Aryan subordinate at CBNA, refusedto acknowledge her ashis boss.The first time he showedher his real sentimentabout havingto report to her, Yenny told him: "Loolg either you pa& or I pack Ch:ncesare,yur'llbe askedtopackup first.n To this, he replied: nI don't want to tallc I'm busy.n That sameafternoon, after office hours, Yenny sat in front of his desk and read a magannewhile uaiting for him to give her time. After fifteen minuteg he looked up. Yenny said: o Let's havedinner tonight.I Iotowyou aremanie4 but I could talk to yourwife if you Iike. Wecould osk her to join us later, afierwe\e had a heattto-heafttak together.

Over dinner, Yenny sharedher sentiments, explainingfirst that sheperfectly understmd his side: o I lotowyou think I'm no good for aboss. Fint becauseI'm a woman,md secon4 because I'm Indanesian.But I'myour boss.I lotow it's veryhardfor you to swallow,speciallyin a countrylike Indonesiawhere the womenalwaysreportto the men.Believeme, I can understandthot. But what con we do? Thebestwayis not to considcr any mce or sqin the ball gone.

After that incident, Yenny gained anotherfriend in Heinz- a friendship that lastedevenufien Heinz movedout of GCB and Indonesia,to join a Swiss oompany.On occasionshe would be in Jakarta,Heinz would pay a ncourtesy call" mYenny.

On the other han4 with Indonesian subordinates,Yennywould moreoft en usewhatwasculturally acoeptedin the local socbty. Becauseher countrlmen were so sensitirc,and adheredto the policy of avoiding loss of face, Yenny took to humor instead.It washer way of getting througb to then, what she would have said pointblank had they

29

committeda mistake.ilfs lfilonssians it's taboo to discussthe negativer"she erplained.

As shemovedaround the local banking circle as Marketing Manager of noPen GCB-Jakarta,Yenny sawthe marketnthat Indonesia,and Asia for that matter, had for bankingexperts.

So shedecided to get involvedin the Asian financingbusiness.

However,Yenny knew shecould not yet work in an indigenousIndonesian corporation.Shecould not easilyshake off her American way of living and ftinking. And from u/hatshegathered about how Indonesian corporations were being run, she knew shewasnot yet ready to get herself immersedin one. It was at that point, after three yearswithGCB when sheappreciated her work as a happy compromise of American managementin a local environment.It servedas her stepping stone.

In 1982,after atnost three and a half yearswith Globe CommercialBank, a Hong Kong-basedbank approached her regardingtheir plan to establisha representativeoffice in Jakarta.The bank, Crom Trust and Banking Corporation (CTBC) was the fourth largestbank in Hong Kong.Yennyhad dealins with them nfren shewaswith GCB. CronmTnrs ofrered her thejob of starting up their Indonesianrepresentativeoffice. Yenny thought: o Okay,I've beenin bmnch banking.lilhat is theotheroptionI hou if I stoywih GCB?Either I'll be sqntbock to New Yo* or I will be in a differentbranchin anotherca utfry. Now,CTBC is sta,xingfmmnothing.I will opena new offrceand I will be its repesentative.Well I just wont to see...I do worrtto p into Asiott bankhg. Acnally, that'snow my prime consideration... to be a bonkingqeft in Asia Takinghold of the chance,Yermyaccepted the offer. She resignedfrom GCB and immediatelystartedher spadeworkto establishthe rep-office for CronmTrust. Ironically, shelet go the expatriatebenefitsshe enjoyed with GCB and negotiatedher employment with Crown Trust on a contractual basis, renewable annually. She decidedthis wasthe bestwayshecould makeherselfflexiHe.At that point, sbe

30

was still weaning from her American corporate environment.Her enployment contract assherequeste4 stipulated that both sheand the bank could pre-terminate the agreement, provided a three-month advance notice wasgiran.

As senior representative,Yenny reported to the generalmanagerin Hong Kong. Yenny set up the rep-office in a posh building in the business district in Jakarta central. Shehad tlree subordinates.

In the fourth year of operation,it was reported that Crown Trust wasbeing bought out by an evenlarger bank in Hong Kog. The takeoverwould afrect Yenny's repoffice becausethe tigger bank had its own branch in Jakarta.

Upon confirmation from her Hong Kong-basedgeneralmtnager,Yenny movedto place her subordinatesin Shelikewisearother establishments. rangedthat the clcure of the repoffie would coincidewith the expiration of her fourth contractrenewal.Her GM agreed.Yenny'slast dayas senia representativeof Crowu Trust was in October 1985.

Looking back, it seemedas if her decisionto requesta contractualap pointmentwasbasedon the proverbial woman'sinstinctinYenny. Otherswho knew her better perceivedit to be one of her mostcalculatedrisks,ToYenny, it was a combination of both. She valued her career too much to take such high risla. And admittedly, it all paid off.

Lategt Position and Aepintlonr fhree monthsbefore sheofficially I closeddownCroumTrust in Jatarta, Yenny and her Germen boyfrien4 Karl got married. They had met each other three yearsbefore. He was a bank management consultant employed by an international firm temporarily assignedto Jakarta on a project.

Withthe closureof the CroumTrust rep-office, Yenny took it upon herself to slow down and assessher career plans. With her new life as a wife, she had a new outlook in her career.She had beenso usedto putting her career 6s[s1 mrin, if not her only, priority in the past.As a working wife of an expatriate, she started to think in terms of twos: two jobs, two careers,two

nationalities, and trro people in the family.

Shewas not, however,"o idsling a complete%0 de'greeturn to becomea full-tine housewife.Instead,shejust looked for meansto balance her aspirationg 1selign thernwith her new role. Shedeclinedoffers from local indigenousbanks becauseshewas still "unprepared for them. o Most arc stillfamilyrun... if I haveto adjust l00percent wherethepolicy is differcnl the mentalityis differcnta.nd managementstyleis differcngI donl thit* I can survive.Either that or herc will be a big clash.

She likewise declined multinational offers, as shefeh a strongneedto be with her hu$and Shecalculatedthat if shejoined another multinational bank at this point, she could run the risk of being assignedoutsideJakarta at anytime soon after.

For thefirstfewmonth of her'retirement,nYenny took on part-time work Shetaughtat the University,*rote for a local banking magazine, and accepted consultancies.Sheenjoyedthe freedom shehad.

In mid-1986,she opened her own consultancyoompany,P.T.Executive Advisen. With her multinationaltraining and local exposure,Yennypoobd her resourcestogether,ofrering servicesto foreign companieswishing to inrest or do businessin Jakart4 aswell as to local companies,specifically those in the banking and finance indusries.

At ExecutiveAdvisers, Yenny had nine employees. In less than six mont\ the companyhadserrcrallarge forergn clients from Europe, America and Indonesia. To name a few: Bankstadt, the sixth largest bank in West Germany;Pacific-AsiaBankand Clark Bech, the foremost Anerican softwarehorse in banking.

Yenny's decision to becomean entrepreneur was a turning point in severalways.In keepingher own time, she nanaged to do things she had alwayswanted to, but never found a chance.She was able to look in her other potentials and pursue other interests.For instancewith her part-time work with the banking magazine,she fulfilled her highschooldreamofbeing a writer. Her teaching stint at the Universitykept bcr ab'reastof the legal

profession.But foremost,her work at ExecutiveAdvisersdrew her closerto nfteiningher ambitionef lgcoming an Asian bankingexperqalbeit throush a different vehicle.Insteadof working in a bank, she servedas a conduit for banks.This would perhapsevenbe a faster,more direct wayof fulfilling her dream.

Yenny,the Person

systemsand operations. o l(orl is the 'real banker"betweenthe two of us.He's into accountingand audit systemsthenitty-grittyof the business.I wason themarkctingside.

Shejoked"Thenwethoughtbetween the two of us, we could open a bank together!"

It wasafter three yearsand a lot of thought and discussionwhen they finally decided to marry. The prime considerationstaken were their careers.Karl's assignmentin Jakarta wasnot for a long time and definite; and shedid not want to leaveher job then. They arrived at a settlementwith the help of esernal circumstances.

Karl wasgivennotice for a new assignment in Jakarta,and Yenny had by then a flexibleiob at CrownTrust.

In late L985,the new coupleresided in Yenny's residence.It waslocated a few housesawayfrom the houseshe originally occupiedwhen shewaswith GCB. o I insistedwestayin my place, and he giveup hishouse.I had morestuff,so it waseasierfor himtomovein.

Keepinghousewasnot a difficult feat for Yenny. Shehad trusted and efficient househelp and a driver who assisted her in running the house.

Moreover, becauseher husbandwas Germanand,therefore,usedto doing things for himself, he was neither 6"p31ding nor meticulous.He understmd and appreciatedYenny'sc:treer orientation. o llhen he wantsme to do sornething,like mcndhis soclcs, I tum to themaid He teasesme about this, but I would always rernindhimlRememberI'm a mailapr. I delegate.'

What if Karl is called back to Germany? Yenny said it would be a problem for her, but shewasnot worried. She was confident she would manage,onceshegot into thesituation.

Shefigured shecould still continue with her career,one way or another.

Themovemightslowherpacea bit, but nonetheless, sheforesawit would not be amajorhindrance.ShehadGerman clientsfor ufiom shesenedasaliaison and advisor. Yenny could possibly develop the working relationship to her ultimate advantap shouldshefind

w+ffi'-:?JilX'"llli3,i,l,ill

shewent. In New York, she maintained closerelations with people, both in and out of her office circle. o NewYorkwasabigcity, with so rnanypeoplefrom all wallcs of life. But it could be verylonely, speciallyon Saurday nights.

Yennyandher friendsmadeit apoint to go out on weekends.Theywould be agroupof boysandgirlsof 5imil6 xge, similil s6sialclassbut of different race and nationality. They would watch moviesor eatout. Theyenioyedtrying new and different restaurantqsharing the expensesequallyamongall of them.Shegiggledassherecalled: o A girlfiend and I usedto feel so bad about the eqaalshaing.

Wewereboth petite,and so we di"dn'treally eatmuch. The boyswould eat what we couldn'tfinish, and theystill expectus to payjust as much.

When shereturned to Indonesia, aften almost a decade, Yenny rekindled friendshipsand developed n e w o n e s .B e c a u s eo f h e r i o b a s Marketing Managerfor GCB, shewon newfriendsand acquaintances within the local and expatriatebanking circles.

Shehad a very closegirlfriend, who like Yenny, wasin the banking sector.

This friend, Christine,was Yenny's "alter-ego"in terms of interestsand attitudes.Both were singlethen and enjoyedtheir work andtheir careers.Betweenthetwo of them,theywouldshare their elationaswell asfrustrationsin their professionaland personallives.

Yennywas37 when shefirst met her husband-to-be,Karl Betrieb. At that time, Karl wason a temporary assgnment in Jakarta.After a while, he was given a longer contract with a private indigenousbank asa consultantfor its

herselfmigrating to Europe.

The idea of raising a familywas not somethingYenny did not disregard.

She would like to have her own children, andshedid not think it would greatly affect her profession.

Although marriage had affected her career,Yenny perceivedit to be more beneficial than detrimental. o Themain benSt I gotfrom gettingmanied is that I ma.detime formyself to think things through...speciallyrny careen lAhenI wasstill a singleprofes-

31

l I

sional I put my careerover everythin&ond used financial rewordasmy ptp.As amar ried careetwoman, I realizt d thereis morcto it ihonthaL Thercis whatI call self-satisfaction.

Appraisal fl s a manager,Yenny sawherself as Fla professionalin "the American senseof the world.nShe emphasized this to distinguishher from the local both men andwomeqwho managers, had gotten their positions through blood or interpersonal relations.

From her foreign banking experienceg shelearnedto dealwith different typesof people at different levelsand in different situations. She had reported to superiors,supervisedsubordinates,dealt with colleagues,and handledclientsofvaried culture and race.Shelearned to appreciateher ninternationalexposure"in makingher awareof how to interact with Western and Asian culture and personalities.

Yenny thrived on the feeling of competitioq ascribing f,s1 high standards sf menagementto her expsure to tbe $iff, competitiveatmosphereshewent through while shewas in New York.

When she first returned to Indonesia to assumeher assignmcntat GCBJakarta, Yenny as she expectedwas regarded highly by her Indonesian peers.But sheherselfdid not think of herself ashighlysuccessfuLTo her, to be truly accomplished,one nust go beyondthe national realm and be an internationalfigute. Her idea of successfulwomen would be the likes of Margaret Thatcher and Indira Gandhi.Shedescribedher careerpa{h nmercurial as taking the form of a developmenf. o Peoplewho arc in onefteld in business,at a certainpoint want a switch.In my case,I thoughtI'd likc some&peience in the otherfields.

What were her trade-offs in the oourseof her career?Yenny refrained from calling her erolving toughnessas a lossor lack of femininity. Sbedid not think of it asa trade-offeither: c Maybe,a'cover-up.'WhenI waswo*ingmyself up, I shocked peopleby beingtough.TheY

32

thoufitt I hadlost all senseof femininig. To me, I hdttl lost it. Theau$tness catneut 4 meansfor sunival. At thot time,withwhatI hadto encounter,compaing with PeoPle of a differentraee,rcligioqlangrageandtraditioryitwas not easy.

Corollarily, she distinguishedbetween being tough and acting like a man. Sheadvised: amanwhen o Nevertrytobe you're handlingmeq becanse that is thethingthemenhate most.If yau wo* at it with the and charmof a sweetness woman,you cangeteven.

Beforeyoulotow it, whatyou hadwantedfune, hewould havedone it ... withoutfeeling that, 'Gee,shemademe do it.'

She ascribedthis adviceto an Innif donesianadagethat one cannotget it through to the braiq getit throughto tle heart."

Other people have describedher as ndemanding."Yenny agreedbut observedthat sometimesone hasto be. o At times,I've seenmyselfto be skeptical,sueastic and sometimesbitter.But thercwercalwaysrleasons forit. ThenI wtd comebacktomy senses tell myself:'Hey,1nu'vebecome ovehonb itious.You took too muything toohsd' Yenn/s perceivedkeyfactors to her careersuccesslay in the initial identification of opportunities.To someit could be called luck, but to Yenny, having opportunities to widen one's horizonscould not be luck ifone did notidenti$ and utilize them asopportunities.

Shefwther advisedyoungercareerorientedwomen: o In any career,look ot wherc you go.As awomon,one's coneercoven about twentYsevenyean of one'slife (assumingone startsa 23 and qects to wo* until age 50.)With a careerplaq one musthcve flaibility, androomfor fallb ack and imprcvement. o Alwayslookfor opportunities for advancement.If one c(nnot gqtitfrom herprcsentcompmJ, p to another.Iob-hoV

p@is not necessailybd Whenyou shift companies,alwaysrcmemberwhatlnt leamedftorn thepast andute i4 andty to learn morcftom yournd job.

For Yenny, loyalty did not mean havingto work in one companyfor life. nI am loyal to anyonewho treats me well...and I do not feel anymoreloyal to one bank than to another.n nnetFinally, Yenny had a word on working.n a Useit to your advantage.It con be an $ective woYof gttingto the top. In establishingYour own networJgyou tendto leant morcfrom yourfriends, associates,etc. Yougetto lotow your options.

However, sheemphasizedthat networking is not the only key to su@ess. "sell It could be an effectivevehicle to jut for inoneself," asit could be a tml was networking To Yenny, novation. beneficial but not the only strategt to the top.

Reactionsto the Case History !t etrieb leavesmewith the following 9nasgingthoughts: One, women like Yennf IbrahimBetrieb are a rare breed becausealthough blessedin many waYs,i.e. education, the rigbt kind of orposure, opportunitiesstriking at the right time, they have used these to their advantage.Much asthesenomen maybe admired,I can't help but think of the many, many more Asianwomen vtto could havemade it if they havebeen equallyblessed.For the former, half tbe battle to a sucessful career( in the form of their blessings)is fought with little difficulties; they certainlyhad a head start. Therefore, while I'm impressedwith the achievementsof Yenny IbrahipBetrieb, I would be more impressedif Yenny had been someonefrom a less-a&antagedba&ground.

Two,women in the West demand equal treatment from their men which meansamongmanythingg differences in sexshouldnot be rsed to either set's men in the advantage/disadvantage; West grab this opportunity to fieat women as men (as oftentimes one "oneofthe hearsthe expressionshe's

i

'

boys").In the caseof Yenny IbrahimYenny,wasto look for an ormnization Betrieb,sheusedher sexto an adwhichwaslessdiscri'"in6gjry.{ survantage,and shewasextremelyconvey ol womenmanagersconductedin sciousof it asa tool to makeher subuJapan showeda similar result. The dinates come around to her way of majority of them star0edtheir careerin thinking.Behavingcoy and submissive foreign companiesoperatingin Japan, in dealing with males,she is able to wheretheyweregiventrainingaod aclieve her objective.One wonders:if respoDsibilitieswhichwould haw been Yennywasa Germa.o,would her Gerdeniedin local orgnizations. ma! subordinatesuccumbedto her I hope the casehistory of Yennywill point ofview? On an international help our malemanagersbecomemore planeof relatiooships,doesan Asian sensitiveto the hidden talentsof their woman haveto behavelike the tradiwomensubordinategd the sametine. tional wonan to get noticed? h e l p e n c o u r a g ew o m e nm a D a g e r Whateveranswersone getsto these aspiraDtsto seek(or create)opporquestioDs, YeDny'stactic in handlinq tunities fm furtber advancemeot.even t h e G e r m a nw o u t dd e f i n i t e l vh a v e if theseare not givento then on a silbeen frowned upon by her Western ver platter. counterpart.

- ProfessorEsu Inaba Finally, Yenny attributesher success in Indonesiato her cultural seDsitivitvb e i n gc a r e f u ln o t t o m a k eh e r I n donesiansubordinateslosefaceaDd stayingawayfrom a discussionof the n e g a t i v e .T h i s s e n s i t i v i t y i s a u Asianlndonesian trait which is the norm rather than tbe exception;it, therefore,doesnot makeYemv anv more extraordinarythan other In'doresianwomen.I cenainlywould like to seehow Yenny,throughher undergxading 6fher onmculture,couldhelp shapemoredesirablevaluesamoncthe Indonesiansworking with ber.

- hofessor Gloia Chaa 'first \1/enny is probablyone of the I generation"wonen manaqers in the businesssector in Indonesla.Her careerstarted in the US alld its adva} cementwashelped by the equal opportunity law in that country. And by the time shereturnedto Indonesia. shehad ac4uired enoughtreining and experienceandwasconfortable in the ban-king business.

Even thoushshe hadto subtlyadjust to Indonesiin customsin haldling her subordinates,her knowledgeand capabilitiesin international bankingdid not seemto have beendisputed.

The first hurdle woman manaqeraspirantsusuallybaveto overco;e is thelack of training opportuaities.Everr though they are well educated at school,very seldomare theygiven a cbanceto recei\â&#x201A;Ź trainiDsat work Tbe fearofwomen resicningafter marriagc or bearing childrcn rnay haveaggravatedthe situation.The solution soughtby many women including

\/ou askedme for my quict reacI tions lo the Yeonv IbrabimBetrieb case:perhapsifybu had asked me someyearsagq I might havefelt a bit more attuned to her, though not quite. She is certainly adnirable in that shcset out to do what shewanted a_nddid whar she haC to do to get there.And succeeded.Certain! her priorities were clear: a successful careerfirst, and everythingelseseconaary.

I guesswhat bothersme about the stcy is her efireme American-nessq "New Yorkness,n and extremecompetitireness I do not know if we could havebeen friends, perhapsnot. But then perhapsthe casedoesnot telt rc enoughabout what the person is like, beyondthe careervonan.

I wonder if now that she is ,10.and starting out on a ncw life of marriagc and relating intimatelywith another human being nc 'night find her going

nore inwards and getting to discover, deep inside, her Indonesian-nas. and her woman-ness,and acceptin&not rejectingit, as part ofher being.Perhap in her late niddle yearg shewill "unfreeze" and view thingsin a context beyond her seemingcircumscribed world ofinternational finance.and thus discoverother dirnsnsions16he1 being.

Otherwise,u/hatdoesshedo at the ageof 50?Wonen tend to live loncer tha.nmen, accordingto the slatistics, and one must certainly plal an interestingald actuafinng fife beyondthat age(Of course,sinceI an now 49.and starting out on a new caree( I havea bias againstretirement at 50.).

She strikes me as a bit hard; nore 'New York" than Asial But theA perhapsthe environmentand the c'ulture ofthe businessworld required her to becomeso, if shewas to achievev/hat sheset out to accmplish for herself.

I amlookitrgfor tracesofthe woman,s beautyin her: the nurturing and caring that makesusunique.Perhapserantle gestureof darning socksdidnt haveto be a political issue,or matragement issue,but a pure and sinple, gencrous gestureof caring.

Perhaps,whenthe world hasgrown wiser,it wi[ be possiblefor a wman ro becomea leader,without bavingto be as hard losed asThatcher or Indira Gandhi. Heavenknows.the world could certainb do better if nore of the crucial decisionswere madefrom the fenale principle (Less destructive, more conserving,gentlerwith our resourcesrand lesscompetitive?).I arn not sayingeitler, that someofthe nel around us do not havethe capacityto viewthingsfrom this'female"principle. Or are thirgs now really coming to a turning point? Or shouldthere, even,be a dichotomy?

But then, is this taling us out of the contextof WMBO?

JesusaT.Anoln

33

ffilfuidtdoPeiSeinlis

ThePathto AuthenticDevelopment byDean GastonZ. Ortigas,Sr. Bengtet CorporationProfessorof BusinessMonagement (On the occasionof PresidentCorozon Aquino's visit to the Vatican in fune, Foreign Affairs Secretary Raul MonglapusrequestedDean GastonZ. Ortigas and other prorninent leafors and educaton to contributeto a short volumeof writingsbasedon Sollicitudo Rei Socialisissuedby the Holy Father in 1987.The elevenessayscollectively titled Philippine Reflections and Responsewas convE)ed to the Holy Father by the Presidcnt during their meeting,.It is our pleasure to repint Gasg's contributionhere. - Eds.)

nation of Asia, the symbolsof this solidarity were the Cross,Our Lady and the Rosary.Young and old, rich and poor, landownerand peasant, businessmanand worker, professional and slum dweller, men and women made known that they would have freedom. They offered prayersand flowers, and extendedthe hand of peace.The soldierswith their gunsand armor turned asideand democracy was restoredto the Philippinesin February,1986. .-

.-

L L

I I

A time whenthe heady elixir of the triumphant and bloodlessEDSA reYolution is giving way to

It waswithgreatpridethatl accepted Ithe invitationto write my reflections and reactionsto His HolinessPope John Paul II's Encyclical Letter Sollliciailo Rei Socialis.Andit iswith muchhumility that I join mythoughts with those of my distinguished countqmen. I pray that togetherour reflectionsand responsesabout the socialconcernsof the Philippines and the Filipino peoplewill be worthy of the EricyclicalIrtter's fingrngdeclarations for socialjustice and the preferential option for the poor and will inspire reneweddetermination to pursue "our duties as responsible builders of an earthly society''in the Philippines.

SolliciudoRei Socialiscomesto usin the Philippinesat a particularly opputunetime.A time whenthe headyelixir of the triumphantand bloodlessEDSA revolution is givingway to the realization that meaningful reform of the Philippine situation will require far more than origrnallysupposed.

We are justifiably proud that in one magnificent manifestation of solidarity, non-violent "people powern causedthe overthrow of a lzl-year old dictatorship, a triumph achieved before the eyesof a cheeringworld.

Appropriately, in the only Christian

34

the realizationthat meaningfulreform of the Philippinesituationwill require far more than originally supposed.

With new found hope and enthusiasmwe beganto return the structures and processesof a democracY that wasoncecalled the showcaseof democracyin Asia. We wrote a new constitution to guard againstthe repetition of one-manrule and to proclaim the primacy of human rights,socialjusticeand the duty and right of everycitizento participatein a sovereigFgovernment.

The Presidencyof a martyr'swidow held forth the promiseof integity and caring in governmentand the people supportedit againstchallengesfrom its ownmilitary establishment.And in this atmosphereof political stability, ecmomic reovery beganandbusiness confideircerose.

As 1986cameto an end, we were presentedwith yet anotherglimpseof our drea- ofpeace. For a short while therewould be a ceasefire. For arvhilg

the representativesof government would sit with the representatirrcsof a communist insurgencyand with the representativesof a separatistmovement to find thebasisfor ajust andlasting peace.And the peoplewondered "Food and il peacewould be found in Freedom,Jobsand Justice."

But 1987 opened with a stark reminder that the obstaclesto peace, justice and freedon were not easily removed.The euphoria that was EDSA was fading. The guns of war would not remain quiet and the Peac talks collapsed.The structuresthat abettedwidespreadpovertyand,sustained corruption were stubbornly defended. And the cheersfrom our friendsacrossthe seafor tle miracleof EDSA would not translateinto relief from the crushingburden of an enor'r?ousnationaldebt. Before this reality' the confidenceand optimism that made EDSA possiblefaltered.In its place,a hesitationand the fear that peace,justice and developmentwere to prove beyondour reach.

It is in this state of hesitation and of slackeningresolvethat we receivedthe messageof Sollicitudo Rei Socialisis' sued on the twentieth anniversaryof the publication ofthat great encyclical Populorumhoryssio - TheDueloPment of Peoples.

Present Reality aregratefulto the HolYFather llfe U U for the reminder that nOnecan find in the teachingsofthe Fathersan optimisticvision of history and work, that is to sayof the perennial value of authentic human achievements,inasmuch asthey are redeemedbY Christ and destinedfor the promised Kingdom." Reflecting upon the miracle of EDSA and what has llenspired sincethen,we canseethat our recent experienceis very much one with the nstoryof the human race describedby SacredScripture' a story of constantachievementevenafter the fall into siq repeated increasedand extendedin responseto the divine

vocation given from the beeitrning to m a n a n d t o w o m a n , "W e a r e e u couragedto proceed in this "difricult yet noble task of improving the lot of manin his totality and of all the people"withthe faith that "onedaythis corruptible bodywill put on incorruptibility, this nortal body, innortality when the Lord delivers the Kingdom of God the Father and all the works andactionsthat areworthv of manwill be redqpned.'

With renewedconfidence,therefore, wewho havebeenblessedwith the rare opportunityto sharein the development of the people of the Philippines "commit owselves nore resolutely to the duty that is more urgent for everyonetoday to work togetherfor the full developmentof others.n Solliciatb Rei Socialisspeaksdiredly to the concretea.Ddpresâ&#x201A;Źntreality of tbe Philippines.It validatesthe faith and optimism of February, 1S6 and it urgesusto onceagaitrsharein mobilizing the political will of the people,rhis time behiad a reform of Philippine societysufficiently decisiveto bring aboutjustice, pâ&#x201A;Źaceand develqment for our people.

Our first taskasFilipino Christiansis to convincr ourselrts and to convince other men and women of good will

about the seriousness of the present Philippine situation.To be persuaded andpersuadei.oturn that is therespmsibility of eachindividual to changethis situation.To be a witnessandagentftr peaceald justice f the wayurclive as individualsandfamilieg by the wayne useour time, talent and treasure.bv our civic activily and by our activi engagement in the processof making politic:l decisions A Great Revi\ral I n the Philippines,long rerm,deep I andwidespreadpovertyin the midst of plentytruly representsa "condition of life unworthy of human beings."

Suchcondition is painfully manifegled by the malnutrition of our children, the living conditions of our slums,the sell;nginto prostitution of our women and children and the powerlessness of onr ptx)r - a scandalto the title ofthe 'only Christian nation in Asia.'The Pbilippine condition is alsoof an ecology badly damagedf indisoiminate loggingand the pollution of our rivers a n d s e a sa n d o f a l o w r e g a r d f o r bumanrights as dislocations,disappearances,torture and murder continue in the narneof peaceand cder,

national security ald sadlyat times in the nane ofjustice.

We nust bearwitnessand speakwith franknessthat, one of the greatestinjusices in our country is precisely"that the oneswho possessnuch are relatively few and thosewho possessalmost nothing are many."And tlat this unchrisian inequity in the disributim ofwealth andponu hasbeenandcontinuesto be an affrotrt tojustice, the major obstacleto developmentand a barrier to peaceand true democracy.

Tbe Catholic Church in the Philippines has stmd on the side ofjustice.

Its callsto actioncontributedtoemboldeningthe citizensdthe Philippinesto throw ofr an unwanteddic{alorship.It hasspokenoften and clearlyabout the urgencyof agrarian reform and of the primacy of human rights. It has continually urged perseverancein the sâ&#x201A;Źarchfor just and lasing peace.

It is vital that the Church continueto insiston its competenceto speal m the "D evelopment Peoples," "interof to pret the signsof the tines in the light of the gospel"and to stand with the poor in their quest for justice and peace.And it is equallyimportant that the voice of the Church be heard forcefully not only thro'!4h the pastoral letters of her bishopcbut alsothrough

35

the words and deedsofher ordained ministersandbythe actionsof her lay organizationsand that of individual Catholicsand their professionaland civic organizations- all speakingas membersof one Mystical Body of Christ.

All over the land is a great revival of religious piety, but the tendencyto separatethe businessof daily life from thelife of the spirit into different compartmentsis exceedinglystrong.In the phenomenonthat hasbeen called "Split Level Christianity",the gospel message acceptedasstirringto thesoul and edifyingto the spirit is set asideas impractical and thereforeirrelevant to the presentreality.

In the contextof a Philippinesafter EDSA, this meansthat restoringbusinessconfidence and maintaining peaceand order takesprecedence over sweepingreform of our social institutions. It means a focus on economicdevelopmentfirst and for equityandiusticeat somefuture time.

But the socialdoctrine of the Church calls not only for meditativereflection but for critical,informediudementand decisiveaction aswell. What is sought isiustice,theauthenticdevelopmentof peoplewhich meanstheir liberation from the conditionsthat preventthem from living in dignity and freedomand from fulfilling their full potential as humanbeings- i.e. the development of the totality of all men and women.

To commitourselvesresolutelyto the developmentof othersis to face the reality that the main obstacleto the authehticderalopmentof peopleis the "unequaldistribution of wealth and power" - a structural condition broughtabout,consolidatedand made difficult to removebythe concreteacts of specificindividualsand groups- a socialsiq a moral evit the fruit of many personalsinsemanatingfrom the "all consumingdesirefor profit on the one hand and on the other, the thirst for power,with the intention of imposing one'swill on others.n Thus,poverty,its cause,the unequal distribution of wealth and power and its solution,the authenticdevelopment of people is not only a questionof economics,of politics,or of social sciencealone.It is a moralquestionA moral questionthat requiresclearly formulatedattitudesthat leadto moral decisionsand concreteactionsbv responsiblepeople.

36

Development of Peoples /l s Filipino Christians,it is our duty lato searchfor, developand articulate thoseattitudesand mentalconstructsthat areconsistentwithauthentic humandevelopmentandhavingset theseout, to designand implement thoseconcreteactionsthat will make what is morally right operationally feasibleand effective.Sollicitudo Rei Socialisaffirms that the obiective of authenticdevelopmentis to realiz.ethe fullnessof the dignity of the human being as a creationof God. It is the right of allmenandwomenwithoutexception.Individuals,peoplesand nations havea right to define their own developmentwhichincludesconcepts

J3

....poverty,its cause,the unequaldistribution of wealth and powerand its solution,the authentic developmentof people,is not only a questionof economics, of politics,or of socialsciencealone.It is a moral question.

I

I

J ' of culturalidentityaswell asthoseof economics,social relationships, spirituality, and self determination.

Thus there is no excuseevenin the nameof developmentfor imposingon others one'sown way of life or religiousbelief. Nor would imposing a did not untypeof developmentwhich qualifiedly respectand promote humanrightsbe reallyworthyof man.

The EncyclicalLetter recallsthe themesof theDevelopmentofPeqles publishedtwentyyearsago.Reviewing thesethemesb.iogs home the chilling realizationsthat todaythereare many more poor in the Philippinesthan there were twentyyearsagoand the conditions of their poverty are grimpracticalmismer. "Shortsightedness, calculations,imprudent economic decisionsand selfishness" havemade the "distributionof the meansof subsistenceoriginally intended for

everyonenevenmore unequaf have deepenedthe division within Philip pine society and have seriously weakenedthe belief in peacefulmeans of redressinggrierances.

Our experienceshouldmakeit very clear that the policy and formulas of the pastare not adequatefor authentic development.Merely restoring the structtnesof democracyandeconomic planning of the pre-martial law period will not lead usto the promisedland of development,iustice and peace.For corruption was an already pervasive cancerin the pre-martial law period.

Rural and urban poverty alreadydifficult to mask.The inequitiesin the ownershipof land and accessto the ordinary mea',. of sustenancealreadyan unchdstianscandalandrich fuel for inslsnsingsocialunrest.Peaceandorder conditionswere so badlydeteriorated that it madethe resort of authoritarian rule an attractivealternative.It is clear that "businessasusual"is not an adequate responseto the call for justice and peace.Economic recoveryis not an adequateresponseto poverty.The separationof powersis not adequate frotection againstcorruption. Nor is a more efficient military the answerto a iust and lastingpeace.For all ofthese policies havebeen tried before and they havefailed.

Sollicitudo ReiSocialiscalbus firstto solidarity and love or preferencefor the poor. This solidaritywithtlre poor mustbe seenin orir willingnessto live simpler lives.Our identification with the demandsfor socialiusticemust showin our willingnessto sharewith them all that we possess.Our concrete responseto the call of Sollicitudo Rei Socialismust be measurablein the visible support &at we giveto agrarian reform,theprotectionof humanrighq urban land reform, progressivelabor legislationand to the protection and promotionof minorityrights.

The Philippine Condition fiur reflectionsof the pastfewyears Vhave madeusverv awarethat the Philippine condition has been and continuesto be affectedby powerful external forces.Forcesthat make claimsover the productiveresources of the country as well as over our sovereignty.However,we must avoid the convenienttemptation of blaming all our ills ontheseforcesfrom theout-

sidelestwesuccessfullypostponeconfronting our own strengths.But itr the sameway that we acceptthe responsibility to act injustice for the sakeof the developmentof our people,so too shouldwecontinueto work for andexpectiustice in our relationswith the more developedworld and with the rest of th€ developingcountriesas well.

The path of der,elopmentis a difncult one.Yet tle painful experiencesofthe yearsof dictatorship haveprecisely b r o u g h t a b o u t g r e a t e rs o l i d a r i t y amongthe poor. The yearsof repression were also yearsof growth for people'sorganizations.Basedin the sectorsof labor, farmers,fishermen, women,teachersor basedon political or ecclessialconmunities, theseassociationsborn out of the needfor mutual protection and assistancebecamethe foundationnot only for the developmentof solidarityamongthe poor but alsofor the formulationand c r e a t i o t ro f t h e i r o w n v i s i o n a n d strategiesfor their developmentand autonomyaswoll.

Parallelto this hasbeenthe developmentofsupportgroupsandothernongovernmentalorganizations.Organizationsa:rimatedby ideasof service, of religious belief or political activism. Sometimesthey emergedto h e l p t h e g o v e r n m e n ti m p l e m e n t development prograns or deliverbasic servicesbut as often, particularly during the martial law years,ascenters of resistanceto the dictatorship,creating islandswherethe call to freedom andjustice could be nurtured, central authoriiy challengedandassistanceextendedto the powerless.

Sollicitudo Rei Socralrsaffirms the ralidity ofthis r*ork. For thesepeople's organizationstogether with their support groupsar€the creativeforce in tbe Philippine environment:organizations built with great dedication and qeativity chantrelsthro"gh which the aspirationsof the peopleare formulated and articulated; mechanismsby whichthe activitiesofdevelopmentwill be execute4 andelementsofnetworks bywhich to forge a powerful solidarity.

A solidarityforjustice. A solidarityfor developmentA solidarity for peace.

The path to authenticdeveloprnentis not yet a well travelled one and the book on developnentof the Third World is still being written. This b o o k - " T h e D e m o c r a t i z a t i o no f

Development", is about the stategres of participation a.ndempowerment.It is about the interaction betweentechnologt, valuegculture andecology,betweenliberationanddevelopment.It is about new ideas for organizing,for planning for investnent,useand cmservationof resources.But mostof all it is about the developmentof the wholehunan being and of all hunan beings.This book is aboutdiscovery and it is being writt€n from th€ experiencesand lives of the farmer, the fisherman,the laborer and factory worker. the civil servantand the un-

31

And maywe,in the nameof this solidarity onceagain extendto oneanotherthe hand of peace? ,,

employed.It is alsobeingwritten fron the reflections of the growingbody of workersin developmen!in the formal inquiriesof government,acaderne,and in the huts and meeting placesof p e o p l e ' so r g a n i z a t i o n sa n d n o n governmentorganizationsand ercn in the board roomsof corporationsnewly seDsitizedto humandevelopmenl Even aswe proceed alongthis difficult patb, we are remindedthat we a r e n o t a t p e a c ea n d m a n yo f o u r brothersandsisterscontinueto Frrsue the way of arned revolt. To thoseof them who hara chosenthe way ofwar, convincedthat the wayofpeacefor justice and freedon is no longer a viable way,we hope that our responseto the c ll of Sollicitudo Rei.locialrswill be decisirein persuadingthembackto the waysof peace.Many thousandshave alreadybeen sacrificedto our wars.

Warsthat havebeenwagedin the name ofjustice and built on solidaritywith

the pmr. And maywe, in the nameof this solidarity onceagaineI(end to one anotherthe hand of peace.

We look backto a little morethantwo yearsafter EDSA, two yearsafter we, in awesomesolidarity, prayed for freedom,guardedthe ballot boxesand turned awaygunsand armor. "People Power" brought down a dictatorship, one symbolofthe "unjuststructures" that have obstructed true human d e v e l o p n e n t . O u r r e s p o n s et o Sollbindo ReiSanlzlr'sis a rededication, a recommitnent to dismantlethe other uniuststructurestbat standin the way of development.We are very hopeful yet fearfirl that w€ maynot be e q u a lt o t h e d e m a n d so f p a t i e n c e , courage,and self sacrifice that this tas( the "developmentofpeoples" entails. Sollicitudo Rei Socialis rcnews our strengthandwe reassertthat the churchasan"E4rert 6a 1{r'manit/ has the authority to develop "Principles for reflection, criteria for judgment and directivesfor action" md that we, as membersof this Church havethe privilegeand the duty to participate in formulatingtheseprinciplesand the responsibilityfor practicaland effective trarslation of theseprinciplesinto action.

We accept the exhortation that "Anyone wishing to renouncethe difficult pt nobletaskof improvingthelot of nan in his totality and of all peopb with the exqse that the struggleis difficult and that constanteffort is required or simply becauseof the experienceof defeatand the needto begin again,that personwould be beraying the will of God the Creator."

Finally, we pray that "By shadngthe good thingsyou giverx;,maywe secure justice and equalityfor everyhuman being, an end to all division and a hn'nensocietybuilt on love andpeace."

Dean GastonZ. Ottigas,Sn

37

-FEATURE

Manaet V. Pangilindn otadlos. L Cuirb sign donolion ded.

of Management TheAsianInstihrte

of 20thArnivercaryTw_e_ntyYears Adia'sMafiagerc Educating C. Barranta ByBenjamin taining theAsianInAn thcoccasionof i* twentiethannivenaryofprovidinggrad otetnanagement V stiute of Management is initiatinga majordriveto misesclalanhipfuttdsfor i* dcgeeprogcms andfacukydevelopment fundsto supportitsprofessonandtheirresearchpositiansmanagement andprograrnpa.rtbipantslwveassamed Since1968,over12,500AIM Sradilates governnents, and ASEAN in in Asia's leadingcorporations,decision-mikinglesponsibilities otd sowcesof ra,enuzto support of new.enterprises oppoiunitiesfor thedevelaprnenl entreprenewial grov'th. regbnal

20thAnniversaryLeadDonols FirstPacificGroup

ot theFirstPacific Us$m.mo for theestauishment Fund.

AIMFacultyDwelopment

MerrillLynchPhiliPPines

US$20,0mto eslauish the MerrfllLynch ASEANSchdarshipFurd

FarEastBank& TrustGomPanY ' p1,2s),000 of ths for ths €stadishment P1,5(x),m0 forsc,*Rxs:*'8"uhy dadopment.

ScholaFhips D€\rdopfii€nt FEBTCManagpment PhiliooineLonoDistance ComPanY ManilaElectric TeldphoneGompany P500.(nOfor th€ estaHishmsntof th€ RamonU. Colmngco M€morhlScholarhip

P1,000,q)0tor tho €staHlshrFnt cf the t ev€lopfll€ntSchdarships MERALCOManageTnent

WellingtonFlourMills

ADB- Japan

P100,mOfor resrhrch IntoAshn famty-owned coQo.atlom.

38

cf the Pl5,750,(n0for the estEiHishm€nt ADBSchdarshlpFund

and earlierfund raisingprograms.The assistance ofthe ASEAN businesscommunity,socialdonors,and alumniin providingneededfundswill be appreciatedby the Institute Eifty-two percent(52Vo)of t he Insritule'sstudentscome andthedirectrecipientsof yourgenerosit$mor€imtnrtattI from countriesoutsidethe Philippines, andAIM offers ly,everyeducational dollardonatedto helpprovidemaaagenineteenexecutivedevelopmentprogramsannuallyin ment training for Asian leadersmay be a dollar which helps Malaysia,Indonesia,Thailand,Singapore,andTaiwan. contributeto a better life for countlessotherswho will The Institute's twenty-yearhistory,the large number of benefit from the leadership provided by future AINi ASEAN andregionalcaseswhichhavebeenpublished,and graouates. theinternationalstatureof its Facultyall pointto AIM asthe regionalleaderin providingmanagement educationwith a The Opportunity reglonalperspectrve.

To offer the qualitymanagement educationthat is critical The tnstitutewasfoundedduringa periodof rapidlyinto the future developmentof ASEAN and the region,AIM I creasing demandfor professional managers [o oversee mustcontinueto makesignificantinvestments in termsof a n dc o n t r i b u t et o t h e d e v e l o p m e notf t h e A s i a nr e s i o n . faculty,supportstaff,services, andfacilities.As a result,the Throughtwoworldwiderecessions and a revolutionii the costof an AIM degreeis risinghigherthanmanyotherwise Philippines,wheretheInstituteisbased,AIMhascontinued qualifiedAsianstudentscanafford.Yet manyofthesefinan- to demonstrat€its capacityto train Asia'stop decisionciallyncedyindividuals maybeamongthemostacademical-makersandto equipthemwith manag€ment toolsreflecting Iy qualifiedto pursuemanagement careers. the realitiesofthe regionalenvironment.

With worldwideatThe cost of the Institute'stwo-!,earIUasterin Business tentionfocusedon Asia asthe TwentiethC€nturvdrawsto (MBM) program,includingtravel living,tuition, and sup- a close,thisneedis greaterthanever. plies expenses, is approximatelyUS$15,000.

The one-year Masterin Management(MM)programcostsapproximately The Mission US$10,000 includingexpenses.

In 1988,AIM receivedover five hundredapplicationsfor the one hundredpositions f\ IM yas founded with the intenl that it become a center available in theMBM program.

A numbcro[thosewhowere faof Asian managementcul(ure,reflectingthe varietyof acceptedintobothdegreeprograms wereableto registerbe- culturesand philosophiesofthis dyuamic region.lts stal.ed causefinancialaid wasmadeavailableto them throuehthis missionis to train competent, socially responsiblemanagers,

The lnstitute

AIMAlumniOutsideThePhilippine3 (1969- r98s) Thirly-ThreeOthgr Countries

Olher Counlrlo!

Othercountri€s includeAust.alia, Gormany, US, UK,Pakistan, HongKong, France,and manyrnor6.

Levelot Management (AllAlumni) CEO/Owner:

12%

VP/Headof Function:

23%

Manager:

65%

Total:

Indonesia

'| 00%

In 1988,bothdegreeand nondegreeprogramsenioyed unprecedentedincreasesin enrollment by Filipinoand non-Filipino studentsand participants.

39

equippingths6 with 1[s nniquetoolsand understandingre- opportunity and socialmobility a businesseducationatAIM quired to be capabledevelopersand managersof Asian affords regardlessof their financial circumstances.

Currently, over halfof the overseasstudentsat AIM are economiesand societies.

Only a fraction of the availablescholaroompany-sponsored. havebeen provided by the regional community,and ships The Quality therefore few of theseare availableto studentsfrom outside e Facultv and Administration of the Institute havees- the Philippines.AIM's goal is to increasethe number of I tablished policies governingadmissionto its degreeand scholarshipsavailableto non-Filipino studentsby thirty annon-degreeprograms desigpedto assurethe higheststand- nually. ards of academicendeavorand integrity. The Rank and The Institute also intends to recruit five visiting faculty TenureCommitteeof the Instituteis chargedwith maintain- membersfrom outside the Philippines to maintain and ing a faculty representingsubstaritialacademicachievement strengthenthe regional perspectiveof the Institute.

The assistanceof the Asian businesscommunity,social aswell as a record of high professionalaccomplishmentin the practice of management,classroomperformance,and donors,and alumni in meetingthesegoalsis vital. program participation.

TheAIM Manager:Who he ls

TheFuture fiver the nextfive years,the Institute will continueto place Vemphasis on attractinga high percentageof students and faculty from the Asian region. This emphasisis in part a responseto the perceived need by the Faculty and Administrationto offer promisingyoungmen and womenthe

fhe AIM Managerhasreceiveda graduate-levelmanageI ment educationsupported by twenty yearsof development and research-His managerialperspectiveis regional reflecting the mission of the Institute. Through the Federation of Asian Institute of ManagementAlumni Associations andothersources,he keepsabreastoftrendsinmanagement

(AllAlumni) BasieDemographica

FacultyEducationalLevel

Age:

25-55

Sex:

850,6Males; 150,6Females

lncomeBracket:

90% In Top Ten Percent

In 1987,graduatingMBMstudentsacceptd positionswith salariesaveragingover200%higherthan thoseof positionsheldpriorto enteringAlM. Distributionby Industrhl Sector(All Alumni) Transportation, Communications Electric,Gas:

12%

Ma'nufacturing:

15%

PublicService:

15%

Finance,lnsurance,RealEstate:

18%

: Harvard, rantingInstitution GraduateDegree-G Yale,Cdumbia,Stanford,NYU,Michigan, Chicago,AlM,Oxford,Universityof WesternOntiario,Ateneode'Manila,NagoyaInstituteof TechFordham,University ndogy, UCll, Northwestem, of the Philippines Consultancies- Areas- Locations MajorCorporations: Entrepreneurial: Govemments:

67 22 3

MarketAreasof Expertise:GeneralManagement, TechniIng,Finance,Operations,Quantitative ques,DevdopmentManagement, Organizational Behavior,ProductivityandTechnology,Buslness Policy

Services:

8%

Trading:

4%

Mining,Agricuhure,Forestry:

4%

UnitedStiates,Malaysia,InLocations:Philippines, donesia,Taiwan,HongKong

22%

Areagof Rcearch

Other:

(MBM'87) Areasol Responsib:lity Advertising, Administration, AccountManagement, AudiVGeneral Accounting,BankOperations, ConServices,GeneralManagesulting,Engineering ment,Manufacturlng Operations/Production, Planning,PurchasMarketing/Brard Management, ing,ResearchandAnalysis,SalesandTraining, Treasury/Burdget

40

All facultyholdadvanceddegreesin businessadministration or a relatedfield.

Srnalland MediumIndustry,Dwelopment Womenih BusinessOrganizations, Management, JointVeniuresin Ash, WomenIn Development, Practices,Familyâ&#x201A;ŹwnedCorAsianManagement pontlons,MarketResearchPracticesin ASEAN, of Technology,TechnologyTransfer, Management AgrarianReform Agrlbusiness, Entrepreneurshlp,

theory and practice. Typically, he holds a top decisionnaling position in a large corporation or governmentagency. He can also be found leading small- and medium-sized v€nturesas they develop fron entrepreneurial firms to professionallyrn2nagedorganizations.

He holds signilicant board directorships in his company and in others, Operationally, the nost conmon areasof responsibilityare in administration,marft6tin& and finance.

Wherever the AIM Manager is found, he is in a position to inlluence or make the top decisionsin his organization.

management,small-andmedium-scalebusincsqandwomen in developmentand businessorganizations.

The Institute is seekingto aBract additional faculty from tbroughout the region by establishing6ve faculty sponsorshipsfor senior professors,Through this processof continually regionalizing its faculty, AIM intends to refine its regionalcharacterand assurea steadyflow of newideasand development strategiesas the Asian region conpletes two decadesand entersanother.

whendonorsprovidestholarships forArtristudents, they FaCulty SpOnSOfShipS Help Malntaln arehelpingassure theeducation ofAsianleaders likethese. and Stfengthen AIM'S ReglOnal perspective Managers whohavearegional andn.nrgement Managenn6m pgfSpgCtfugtools keyedto the needsof Asia.

TheAIM Profiessor: Openlnga Dlrect Lineto Practitioner-BasedlGowledge /l brief glanceat the credentialsof the averageAIM Aprofessor revealsa record of high academicand professionalexperience,The record itself indicatesthe average professor'scomnitment to Asia andthe continuingdevelopment of Asian Managers.

Among the faiulty are managerswho haveheadedmultinational product and servicefirms, airlines, publishing concerns,and developmententities and mary more, including top positionsh governmentand international agencies, Sincethe 190s when the Institute lirst beganits research programs,the faculty hasbeen awardedorrerUS$5 million to conduct researchin such areasas rural development

AslanFacultyFund AssociateDonor: P,1{X),000 Annually ExecutiveDonor: P800,000Annually AssociateDonors will co.sponsoronevisiting facultymenber; the nane of the sponsorshipwill reflect the contributions of two donors.

ExecutiveDonors will sponsoronevisitingfaculty member, and the sponsorshipshall be naned exclusivelyafter the Donor.

It is expectedthat donors will sponsor faculty from their own countries.

Each sponsorshipis expectedto me€t the expens€sassociatedwith r€cruiting hiring and naintaining on faculty one professorfrom a regionalcountry for 1 rninirnnrnperiod of two years,and up to five y€ars.

D.4n G4aon OnW withADB PttsiCcntMasa Fujiol<o

41

Full scholarshipsare expected to me€t all of the costsof studyat AIM for ihe particular degreeprogram to which the Howto Contrlbute funds are applied. MM scholarshipsare P2fi)'00 and MBM include trav4 living; Contributions may be made by contacting Gaston Z' Or- scholarshipsare Flifi),000. Ttresesums Scholarshipsare Perpetual expenses. and supplies tuition, If Hamlin at AIM. tisas.FeliDeB. Alfonso, or Michael A. inter€st ealnedon enfrom expensed MBM scholarships page pledge 6 ofthis Special on card mire convenient,the and supplies living tuitioq travel Section can be lilled out and returned to any of thesein- dowed funds, and cover expenses. dividuals,and they will contact you upon rec€ipt'

YourContributlonNowWll Determlne AtMAlumniOccuPYMarryof the Most lmpodantDecisionMaklngPosltions WhetherAcademicallYQualified and Businssses ln i\sianGovernments StudentsWho NeedFinancial AssistanceCan Cometo AIM AnnualAlumnlFund

Scholarships Genef.l Fund - l.dlvuuals Friend of AIM: P2,000Amually for Five Years Patron of AIM: P5,000Annually for Five Years Sust2iningDonor: P20,000Annually for Five Years Neming Furd - Indivktuals and CorPotatlon8 Donor: Citation P100,000Annually for Five Years

Tiger: USf100 Annually for Flve Years white Tiger: US$250Amually for Five Years Asial Tiger: US$50 Annually for Five Years lndlvlduab .nd Cla$e3 Bronze Tiger: USt1,000Antruaily for Five Years Silver Tiger: US$5,000Annually for Five Years Gold Tiger: US$10,000Annually for Five Years

ExecutiveDonor: P40,000 Annually for Five Years lradership Donor: H|00,000Annually for Five Years

Sochl Equity:ConcePtand Reality

Pofpetual schohBhlp Fund Indlv|du.l3 lnd Corporations DistinguishedScholarshipA&ocate: P500,0mAnnualy for Five Years

In recent )Ears,much hasbeen written about the conc€pt of socialresponsibilityof organizationsand the providing of equal opporlunity for thosewho possessthe talent, corrrage, and determinationto better themselvesand their society.

FEBTC Wenr

42

lndlvldual!

O.Y. ESitiu Maldtrg ScholarshiPDonatiort

Despitethe acconplishmentsofthe Institutein bringing modernmanagenenteducationto the region,there remains much work to be done to extend the benefits of a superior educationto the averageAsian student.

Regionally,entry into AIM's degreeprograns is effectively restricted to tho6ewho enjoythe benefits associatedwith establishedweafth, those who are fortunate enoughto win the foot race for the linited scholarshipsamilable, or those who are selectedby their conpaaies for study.

A portion of thosewho win tuition scholarshipsare unable to begin studiesbecausetheir families cannotafford the cost ofbooks, supplies,and living expenses.

Theselessfortunate individuals represent a vastpotential developmentforce for our region.Among the millions of poor who still populate our continent are tlousands of individualswho possesseveryrequisiteneededto excâ&#x201A;Źlat AIM savetbe financial resources.There must be tro greater waste or one more debilitating to Asia than the lossof this vastintellectual resource.

If the strengthof Asia is to be determinedby its peopleand the capacityof its leadersto manageand lead development, then it can be said that the pace of our developmentis restrained by the severeurder-utilization of the intellectual resourcesmanifest in the young men and women of our regionwho lack the financial meansto properly equip themselvesto assumea productive and meeningfirlcareer.

Your personal or corporate investmentin thesepotential managersand leadersof Asian developmentis a steptoward a nore equal and just socialorder; your contributioncan nake a differencâ&#x201A;Ź for Asia.

Mctil LWh Philiplirvs heridou Rotut Se@s

Aslan Instltute of Management

20thAnniversarv Twefi Yearsof EducatlngAdla'sManagers FundRaisingProgram PledgoCard Full Name Company Address Telephone.s

City,Country Gcrtlemen:

(or Phlllpplnc Pcros ) annually for a pedod of Plcasc acccpt my (our) plcdge of US$_ (our) particlpate AIM 20th Annlvcnary Fund Ralslng my deslrc to In the of _ Frrs cs colrnadon Program as an Annual Donor. I understand that an of,lclal ofthe Instltu& wlll contsct mc shorily to lnallzc the teiDr of my EIIL SAled

Date

Witness

43

FEATURE Beginningsand endings:cashingin md passingon...

EnUepreneurial Sfiategiesfor Success

by Prof. GabinoA. Mendoza Don Andres Soiano Distingtished Professor of M anagement

time that the idea of publishingWorld Executive'sDigest,.amanagement mageine, was conceived.It was after ' office hours- about sixin the evening.

A group of friendswho weremanaging an executiveclub on the side had gotf h e l i f e o f a c o m p a n ym a y b e I likenedto the life of a man.The ten togetherto discussthe amazing companygoesthrough severalstages responsethat an issueof the club's in its life cycle.It is born, sometimes newsletterhad elicited from their with a great deal of difficulty. Then it members.In the previousissueof the goesthrough childhood- a perilous newsleftertheyhadincludeda condenperiod- wherethe slightestaitnent sationof an article on the management can very quickly prove fatal. Next of managerialtime. The numberof recomesa very excitingperiod" adoles- questsfor reprintsofthe condensation cence,whenil is garrghtup in surgesof from the club memberssurprisedand rapid growth that require greatchanpleasedthem immensely.Someone gesin the organization.Then comes said, "Why don't we expandthe idea the period of maturity, a more stable and haveseveralcondensationsin the period, when it hasgatheredenough nextissue?n Anotherrepliedfacetiousresourcesand enoughexperienceto ly "Why don't we go further and pubbe ableto meetlife's challengeswith a lish a whole magazine?nAnd somemeasureof equanimity.Finallycomes body elsesaid,"Yeah,somethinglike the period of decline,whenthe lifeReader'sDigestfor managers.n That's force beginsto weaken,the bonesbehow it began.Of coursequite a numcomea brittle, when the musclesgo ber of monthswere spent studyingthe slack,and the mind wanders;the end proposition, doing a surveyof the is near. market,consultingexpertsin the inEachstageinthe company'slifecycle dustry (all of whom,by the way,were brings with it its own characteristic very pessimisticabout its chancesof crisis,its own particular set of challensuccess),looking for a good printer, ges.Each stagedemandsfrom the doinga proiectstudy,lookingforcagimanagera different set of skills, of tal. But everythingremainedacademic knowledge,and of attitudes;he must until four of the meninvolveddecide4 nlt seemsveryriskybut we'rswilling to posseisjust the right combinationof put in our time, our nnney, our effor! theseif he is to successfrrllymeetthese challenges,surmountthesecrises;ifhe is found wanting,if he fails, then the companydies or he losescmtrol of it.

Let us examineeachof thesestages in the life cycleof an organizationin - - more depth.

and our reputationson the line. It's worth it.n Today, manyyearslater, World Executive'sDigest hasa circulation of more than sixty-five thousand and it is distributed all over SoutheastAsia and the Indian subcnntinent.

There are manygoodideasfor establishinga newbusiness floatingaround.

But only a small percentageof them are ever turned into reality. And the crucial questionis alwap, who is willingto put inwhateverresources arerequired to give the idea a chanceto prove its worth. Only rvhensomeone makesthis decisiondoesthe ideablossominto tri-dimensionalrealitv.

Childhood l hilanood is a time of nanow esYcapes from death.A sliptt chill becauseof a suddcndownpour,a rcJtless night with afever, conwlsions, a fosh to the hospital, a fear of pneumonia, nurcesand docton rushingaroun4 and justassuddenly,disasterisaverted.The child is backin theplalground,running with abandon as if nothinghad happened.New companiesalso und.ergo this childhoodphase,this time of Crcat danger. Very often, at this stage, the dangerspingsfromthe insufficiencyof resounces investedin the business.

Peter Chan set up a small paint

- I

Birth lhe binh of en enterpiseis a momenI tousevent.No matterhow small the companymay be,thoseinvolvedin the prccessrememberit always.Therearc two eventsin particularthat theyrecall mostvividly:themomentwhentheidea of the companyis conceivedand the momentwhenthefirmdecisionis made a go aheadwithformingthe computy.

I remembervery clearly the precise

44

The birth of an enterpriseis a momentous event.No matter how small the company may be,thoseinvolvedin the process rememberit always.

manufacturingcompanyin Iloilo City in early October, 1982.This washis secondventureinto this business.Five yearsagq with a capitalof sixthousand pesos,he had set up a paint compan),; after a few months, however,the g o v e r n m e n td e c i d e d t o r a t i o n petroleum productsand so the cost of his oil-basedrns, anlslials rosesharp_ ly. He had had to discontinuehis business.In 1982,a national livelihood programdesignedto createjobsin the provinceswaslaunchedby the government. Encouragedby the offer from the program'sadministratorsof a loan of fifty-six thousandpesos,Peter decidedto revivehis business.He put in fifteen thousandpesosof his own savingsand startedproducingand selling paint in the local market.Seven 6snths later, hewasin troubleagain.

He hadbarelybrokenercnon operationsby dint of not payinghimself and hiswife, who worked asthe company's bookkeeper,any salaryat all. Because thehardrparedealertbroughwhom he sold seventypercentofhis production waspayinghis accountvery slowly,he hadhadto put in anothertenthousand pesosasadditional capital And findly, his biggestsupplierwastbreatening to cut him offbecausehe could not pay his overdueaccountof ten thousand pesos.The only lining in his cloudy skies was the offer of a local businessmanto buy into his company.

The decisionthat he had to makewas this: how much more of a sacrificewas he willing to makein order to keephis businessalive?For how long could he affordnakingsacrifices? Were the future payoffsworth it? Wasthe birsiness at all viable?

Thesewere the questionsthat Peter hadtoanswer.Thesearethesamecrucial questims that entrepreneurshare to face during the childhood stageof the company'slife.

tomerswere complainingthat theystill had not received orders that should havebeen delivered three to four weeksago.Moreover, with only one month left before the openingof classes,he knew that they had very little Growth time left to gear the factory up for increasedorders.And asJoeput it, \ile survivol of childhood's cannotafford delaysnowbecausewe lleyond Uperils, thereis the excitemengthe haveour loan amortizationsto think rapid growtlt, and the hean-wrenching about. Also we have to keep our tormentof odolescence. present market sharein this highly Sooneror later in the life of a companyif the oiginal competitivefootq/earmarket.nJoewas part owner and financemanagerofa businessidea was valid it reachesthe adolescentstage.At this stage,every- shoe manufacturing and marketing thingbeginsto work. Thecompony's companyin the Metro Manila area. product begins to move well from His wife, Carmen,vrhohadgrown up dealer'sshelves.Theadvertising and in the shoe business, was the promotions programsstart to take efcompany'sproduction manager.The company'smajority stockholderand fect. Theproduction line in thefac'tory beginsto balanceout. Sourcesof raut founder washis daush1e1, Imelda Gq mateials becomestable,Unit costsof who took care of marketingand asproduction start to go down. Opporsistedher mother in production tunitiesfornew products,newoutlets, In the past few years,businesshad new markctsbeginto surface,Eventhe beenbooming Salesgrowth &dng the cashflow beginsto smoothoul 'lilhcn last five yearsaveragedover fifty per: wasthelost time wehad to scranble in cent per year.Profits grew evenfaster. order to meet the payroll? Do you Becauseof this, the companydecided ranember?'Bentare, beware.This is a to expand.Byborrowing 1.5 million pesosfrom the Industrial Guarantee time of grea danger.It is also a time of greatopportunity.

Loan Fund- thus increasingthe In May 19&1,JoeOrbetawasalarmed compan/s total assetsfrom 1.2millim by recurring delaysin their company's to 2.7million- theywereableto purdeliveryschedules.

He suspectedthat chasenew equipmentfrom Taiwan (this doubled the mechanizedcomthe delayswere causednot onlyby frequentraw materialshortagesbut also ponent of the plant's operationsfrom by internalinefficienciesin theproduc20 percentto 40 percent);theyalsoexpandedthe factory's floor area,intion system.Bottleneckswere commonly experiencedin certAinstagesof creasedtheir work force, and set up the production processwhich in turn three new retail outlets in the most resultedin machineand manpower prestigiousshoppingcentersin Metro idle time in the other stagesof the Manila. I suspectthat they had exprocess.Someof their wholesalecupandedtheir operationstoo muchand too quickly that they had exceeded their presentcapacityto manageit. At the time we wrote this case,the Orbetasdid not yet seemto realizewhat kind of a roller coasterride theywere in for. I suggestto you that ifthey are norv to survivethis crisig by this time next 1car,theywill hara gone throug! the trauma of bringing into their cmpany new people with new skills, new managementtechnologies,and with their onmideasof how this company should be run. In addition to their old workerswill probablyresentthe new managersand find it difficult to adjust to their ways.Morale will drop and labor problemswill increase.On the other hand, should they successfully surmount their company'spresent

45

problems,then theywill emergefrom this crisis with a much larger, a much stronger,andanuch morecmpetitive enterprise.

The challengeofthe adolescent stage,is rapid gronth- The responseit demandsfrom tle entrepreneuris that he efrbit the will and the capabilityto build an organizationand to enforce discipline,mols on himsâ&#x201A;Źlfthan on his people.He needsself-disciplineto pursuegrowth only up to the point and at a pacethat the resourcesavailableto him can sustain.He needsself-discipline to passon to others functions that he used to exercise,to delegate authoritiesthat he usedto wield.

Maturity punher along in the line of a com' I pany,it reaehesmatuity. Thisis the time of life when a certein level of stabilityis attained. The companyis substantial enough- its salesshow steadygowth, itsptofits orerespectable' its linlc to itscustomerc,itsbankcn, its suppliers arefirmly established- so thatitis abletoweatherthesquallsand storm that peiodically rock the componywithouttakingon tu much water, without floundering. At this point the entreprcneurfndshimself ablc to statt hir*ingabant he longterm dircctbns of the company.

GusTancincoestabfishedhis kitchen equipmentoompanytwentyyearsagq when he was still in his early thirties.

Today, it was a fairly large company that yielded him enoughso that he could enjoy life a little- it gavehim enoughleisure tine so that he could enjoyhispassionfor golf, takehis fanilyforaracation abroadonceayear,indulge wheneverhe wished his well developedtastefor gourmet food and fine wine. His companyspecializedin dssigning manufacturingand marketing institutional kitchensfor high class hotels, restaurants,and company cafetorias.His plant produced only top-of-the-linestainlesssteelkitchen equipment.The equipmenthe could not produce he imported fron the United States;he wasthe distributor for the most prestigiousbrands.Over theyearshe had servedcustomâ&#x201A;Źrsnot onlyin the Philippinesbrn alsoin Hory Kong Indonesia,Thailand and Saudi Arabia. Recentlyhe had gotten contracts to supplythe kitchen equipment needsin Asia of two very rapidly ex-

46

pandingfastfood chains.The company was managed essentiallyby four people: Gus handled marketing, financg and the import operations;his older brother took care of the manufacturing operation and helped him in marketing;hissister-in-law,who had specializedin kitchen designin the United States,took care of product development;and his wife was the companfs heasurer.

About six months ago, Gtts wasin a quandary.In quick successionhe had gotten offers for three new rrcntures; fi rst, anAnerican marketingoryanhation offered to place orders with his companyfor sewral piecesof kitchen and hospital equipmentwhich they wanted him to nass produce- this would meanthat he would not only haveto expandthe capacityof his plant but that he would havetomodifyits process of operation because heretoforehe hadbeen operatingon a job order rather on a line production basis;secondone of the fast food chainswith whom he was doing businessproposedto him that he go into thebusinessof producingplasticdairs for their newoutlets- theywereunhaP py with their presentsupplierwho had the necessarytechnologl but was unableto managehis businessefficiently they wantedhim ts go into ajoint venture with this supplier and promised him an exduive contract for all their needs in Asia; finally, he had a proposal that he supply the needsof severalrestaurantand fasifood chaim for processedpotatoesfor french fries - this would involvesettingup a purchasingoperation in the provinces north of Manila. 'Each of these

propoeals,"Grs said "areconnoctedto one or other part ofour operations.

Tte pcsiUlity of spergt is very clear; eachtherefore should be very lucrative.If I take them on, however,thcy will changethe operation completely.

Two of them will involve brinqing in operating partners who are not members of the family and sefting up two new production facilities. We will also haw to learn how to operatein a cmpletely new market, the United States Completely new products, new production processâ&#x201A;ŹEa newnarket, a whole set of newcompetitors- whY, we'll need to thoroughly revampour corporate mission, our definition of what businesscie are irt.

Even thoug! up to now we havebeen nrming the companyon a pretty infunal basiq becauseof the fast growth we havebeen experiencingin the past few yearsI have noticed the greater n unber of piecesof paper that have been clogging up our desks.Can 1,ou imaginewhat the floodwill look like if we decide to go into these new ventures?I'm surerrrcwill be compelledto changethe nature ofthis organizatio in or&r to copewith it. We will haveto set up more formal sYstems;make managementmuch mce professional; rearrangcthe distribution of functions' evenmire.I probablywon't be able to do 6e thingsI like to do just becauseI enjoy doilg then. And the time I'll harc to put in Is it reallyworth it? I'm not getting anyyounger. SometimesI get tempted to just sell tbe aompanyto one of the conglomeratesthat have been dropping hints and just enjoY life."

Grs Tancincois at the point that Har'

3i

In eachof the periodsin the life of a company,therefore,the responses required from the entrepreneurare differ.ent. , ,

vard professorDaryl Wyclotr cailstbs "BermudaTriangle Management." of This is a very crucial decisionpoint for the entrepreneur. In order to grow much greater, the organizationneeds to changeits character:from an infcmal, intuitive, personal, entrepreneurialorganizationinto a formal organization,logicallystructured, operating on the basisof armslengt\ impersonal ground rules, and controlled by frequent and detailed measuringsystems.At this point, the entrepreneurhasthree options:one, he can decideto control the grorrth of his company,to keep it small; two, he can go with it, grow tremendously, changethe character of his company, and live with its consequences; or three, he can decideto get off, sell tbe company,let someoneelse worry aboutdevelopingit to fulfill its destiny.

Theseare not easydecisionsto make.

Oecline lhe last slagein a company's life I cycleis theperiodof decline.This is not an inevitoble Wriod- it doesnot necessarily have to come. With forcsight, it can beprevented,Decline sets in only when the fire of the entrepreneur'sdcsireto achievebums low,whentheshatpnessofhis min4 the crcotivity of his imagination be4in to dtq and he startsto yield to borcdont andfaipe.

But this is not a subjecttbat nE need to drrell on. I an sure that long before this dreaded time comes, the entreprtneurs amongyou will have hadthe foresightto either cashin their chipsor to passon the managementof t h e i r c o m p a n i e st o t h e i r s o n so r daughtersor whoever they may have chosenastheir successorsin order to infusenew life, new vigor, into their compames.

In eachof the periods in the life of a company,therefore, the responsesrequircd from the entrepreneurare difErent. At the birth" he mustbe deternined and decisive; at the childhood stage,he must be self-sacrificing and tenacious;at the period of adolescence,he must endorsediscipline, exercirc self-disciplire, andstart to build an organization; at maturity, he must clari$ in his own mind what his ralues andhis long-termgoalsare and decide whether he can fulfill them in a much more structured. much more

prograrnmed,much more formal organization;and finally, before the period of decline setsin, he muste:rercisethe foresightthat is required to ensure that his companywill be evervrgorous,e\â&#x201A;Źr.growng evergreen.

When we talk of great stratâ&#x201A;Źgistsand outstandingleadersof men,we havea tendencyto recall the exploitsof the great conquerorsatrd Captainsof War from the West:Alexanderthe Great and the Empnror Napoleon, Marshal Rommela:rdGeneralMacArthur. Yel there is a nan from Asia who was greater than all of them: Genghis Khan.

By the time he died in 1227,Genghis Khan had put tog*her the mostesensivecontinental enpire the world has seen.It extendedfrom the Ctina Sea to the CaspianSea,from Tibet to Russia. It dwarfed the empires of Alexander and Napoleon, of the CaesarsofRome andthe CzarsofRussia.

While modern entrepreneurshave much to learn about strategyand leadershipfrom GenghisKhan, to thoservfioare waried aboutproviding for their successionto ensurethe lotrgevityoftheir companies,perhapsa more importatrtlessoncal be found in cenghis Khanh ability to successfully develop the strategicsenseand the leadershipabilitiesof his threegreat generals,of three of his sonsand three of his grandsons.Orkhon Muhuli, played a major role in his conquestof the Chin Dynasty.ChepeNoym spearheadedhis victorv over the Khares-

mian empire.And SubotaiBahadur,in 121, bro.sht Europe to its krees with an army of only 1ff),00 rnenby crushing three great army groupsand a dozenarmiesof the Holy Roman F-pire. Three of his sons- Juchi, Chagatai,and Tuli - becane outstanding commandersof their oumarmies.

Three of his grandsonsbeca.meconquerors in their own right: the legeldaryKublai Kha4 founderofthe Mongol empire in Chin4 Batu Khan,of the Golden Horde in Russi4 and Hdagu Ktran,of the empire d the l-Iftans in Persia.

The enpires of Alcxander and Napoleondied with them.Mqe than a hundred years after Genghis Khaa's death,beld togetherand led by his grandsonsand their greatgenera\ the greatMogolemphe still livedon May thce of uswto are entrepenzurs have t h e w i s d o n o f G e n g h i sK h a n t o prepare and train our successorsto take over the companiestbat v/p ha\â&#x201A;Ź founded ashe did"

Messor GabinoA. Mmdoza

47

-ALUMNI

NEWSE ANDINSTITUTE

Sixfull-timefacultyjoin theInstilute...

YearBeginsBy TheNewAcademic Faculty NewProgram Welcoming DaniloAntonio (MBM'78) llofessor Danilo A. Antonio is. a I c o r e m e m b e ro t t b e E x e c u t l v e DevelopmentProgramfaculty.He servedin variousma.nagerialpositions at the Ayala Corporation from 1978to 1 9 8 8 .H e w a s t h e s e n i o r d i v i s i o n managerfor thâ&#x201A;Ź theatre division as well asthe commercialcenterdivision.

H e w a s a n e c o n o m i s ta n d l a t e r , program loan officer of the Private DevelopmentCorporation of the Philippines prior to his studiesat AIM.

curnlaude)at theDe l,a SalleUniversityin 194.

SonnyColoma(MBM'78)

pine Holdings(1978-1979).

Before pwsuing his studiesat AIM, he wasassistantnanager for FEBTC's corprorateplenning division.

He is currently the president of the PersonnelManagementAssociation ofthe Philippines,and the Internationa l A s s o c i a t i o no f B u s i n e s sC o m municators(Philippine Chapter); chairmanof tbe AIM Alumni Association; and vice president of the Rotary Club of University Distict Manila.

He receivedhis MBM degree(with distinction) in 1978.

He received his MBM degree (with distinction)in 1978and Bachelorof Arts in Economicsdegree(summa

drofessor SonnvColomais a core l - m e m b e r o f t h e M B M f a c u lt y .

Prior to joining AIM, he wasvice presidentof FEBTC's corporaterelavicepresitionsdivision(198?-1988); dent of the employmentandemployee relations division (L982-1987); management consultantof California Bus Lines, Inc. (1982);concurrently held the positionsof assistantvice presidentof operationsand assistant vice presidentfor managementservicesof the PantrancoNorth Express, lnc. (1979-7982);andsenior nanager - manpowergroup of the First Philip

Flrofessor Rtvmundo L- Robeno is l - a s s i g n e di o t h e D e v e l o p m e n t Ma.nagementProgram.He is current-

Prdessor Da.niloAntonio

ProfessorSonnyColoma

Robexo fuessor Raymundo

48

Raymundo Roberto (MBM

'82)

ly affiliated with Occidental Agro-Industrial Systems,Inc.; Pagka,Inc.; and E.R. Associates, Inc. Beforeioining AIM, hewastreasurer and later, actinggeneralnanager of WoodwasteUtilization and Development Corporation;director of the TechnicalVenturesDevelopment Programof the TechnologyResource C e n t e r ; a n d p r o j e c t e n g i n e e ro f Elizalde & Compaay,Inc. P r o f e s s o rR o b e r t oo b ta i n e dh i s MBM degree(with distinction) at AIM in 1982and B.S.ChemicalEngineeringdegreeat the Universityof thePhilippinesin 197. He is alicensed chemicalengineer.

Inc. where he held variouspositions from chief financial officer to vice presidentfor fmance.

ProfessorCastillo wasa professorof financial managementat the De La SalleGraduateSchoolofBusinessand the AteneoGraduateSchoolof Businessaswell as a resourcespeakerin severalseminars.His current affrliat i o n s i n c l u d e m e m b e r s h i pi n t h e COPE, FINEX and CMAP. He obtainedhisdegreeof Masterin BusinessAdministration at the Nsw York UniversityGraduateSchoolof BusinessAdministration wherebewas a recipient ofa graduatescholarship.

tions centâ&#x201A;Źr, accounting, and EDP departmentsof the countr/s largest co--ercial bank.

A New York CPd a.nMBA graduate of ColumbiaUniversity,and a DBA candidateat the University of the Philippineg he is a me.nberof the MM core faculty.

Teresa Abesamlr (MM '79) rcfessor TeresaS.Abesamis is a member of the DMP core faculty.

ofessorfose Ma- G. CastiUoIII is a memberof the MBM core of faculty.Prior to his joining the Institute.he wastreasurer/fina.ncialconroller.of the PT Cold RollingMill lnoonesla.

He was formerly connectedwith companiessuch as the Philippine PhosphateFertilizer Corporation,Atkins,Kroll Group, BancomGroup,

Arofessor FelixbenoU. Bustos.Ir. is l-an EDP orofessional whoselnirial involvemeniwith computersdates backin 1971whenhewasassistant DP managerof a multinationalcompany in New York. Subsequently, he transferred to PriceWaterhousewherehe wasinvolvedin audit and consulting engagements.

He movedback to the Philippinesin 1978and supervisedthe internal audit office, telecommunica-

Sheis at present the managingdirector of the Management and ConmunicationsConsultantandan acti\â&#x201A;Ź member of the Manindigan! and Zen Center.

Shewasformerly vice presidentand generalmanagerof the Asia-West MarketingCommunications, Inc.;via presidentand generalmanagerof BasicAdrrertising,Inc.; maragement supervisorof J. Walter ThompsonCo., and wasa fellow of the Develooment Academyof the Philippines.

ProfessorAbesamisobtainedher MM degreefrom AIM in 1979.

Professorfose Castillo

Messor Felifretto Bustos

@essor TeresaAbesanis

Felixberto Bustog

JoseCestillo

49

MMandMBM TheNewAcademicYear:

Gommence

by CleofasAltamirano Directorof Admissions Eachyear the AdmissionsBoard of the Asian Institute of Management must selectentering classesfrom a large number of applicantswho possessthe basicqualificationsto benefit from the two degreeprograms.

Evaluationof applicantsis basedon a number of factors such as intelligence,managementability and potential for future management gtowth, and personalcharacteristics.

To ensurethe richnessof educational experience,the committeeselectsa classwith a diversityof work experience,background,balancedperand a regional sonalcharacteristics, mix The AIM's one yearMasterin Management(MM) Programfor experiencedmanagersstartedJune6, 1988with 46 studentsenrolled composedof the followingnationalities:2 B a n g l a d e s h i s4, I n d i a n s , 1 0 I n L Chinese donesians,5Malaysians, (from PROC), 1 Pakistani, L Taiwanese,1Thai, l British and20 Filipinos.The classhasan averageage of .3616years and averagework experienceof L4years,6 yearsofwhich are supervisory and 6 years In thisyear'sclas60Voare managerial. sponsoredby their companies.At present,AIM has only two available s c h o l a r s h i p sf o r t h e M M : t h e Alejandro A. ReyesScholarshipand theAIM Scholarship.

For the two-yearMasterin Business Management(MBM) Programschool year1988,there'san enteringclassof 101$udentg 20Voof. ttthiehis overseas 6Indiang composedof 1 Bangladeshi, 3 Indonesians,3 Malaysians, 1 Nepalese,2 Pakistanis,2 Taiwanese and 2 Thais whrle80Voare Filipinos.

The averageageof this year'sclassis 26 yearc,the youngestbet"g 2.0andthe eldest,39 years.The classhas an averagework experienceof4 years.

Femalestudentscomprise34Voof this

50

year'sclass,the highestaveragefemale populationin the MBM's history.The studentshavevariededucationalbackgrounds: 38% have business/economics degreeq33Vohave engineeringdegreesand the rest have liberal arts/sciencedegrees.

An institution's applicantpool may be increasedconsiderablyby the developmentof creativefinancial packagesthat allow candidatesto regulatecashflow. The numberof MBM applicationsincreasedfrVo thk year mainly becauseof the establishmentof numerousscholarships.

The establishment of regionalsdolarE ' - L

IT The numberof MBM applicationsincreased 207othis year mainly becauseof the establishmentof numerousscholarships. ,, shipslike the Asian Development Bank (ADB) Scholarshipshasdrawn an increasednumberof inquiries/ap plicantsto the program,particularly from the developingcountries.Usually, from the acceptedapplicants,there is a fifty percent deferment.Financial considerationsareusuallythe deciding factor in urhethera studentenroll.

AIM administersfinancial aid prqgram from funds contributedby its comesin donors.Financialassistance the form of either full or partial scholarshipor in the form of student loans,8voare companysponsoredand the rest are on their own.

Fifteen of the scholarshipsawarded this year are ADBank Scholarships fundedby the governmentofJapanto offer an opportunity to individuals from the Bank'smembercountriesto undertake further studies. The scholarshipswere awardedto the following nationals:1 Bangladeshi3 Indians,2 Indonesians,2 Malaysiang1

Nepalese,1 Pakistani,l Thai and 4 Filipinos. Thesescholarshipprovide for all academicfeeg dormitoryfees, travel expenses,book allowancg food allowanceand approvedincidentalexpenses.As ADB scholars,studentsare expectedto return to their countries for the purpose of applyingtheir enhancedknowledgeand skills toward helping acceleratethe economicand socialdevelopmentof their countries. givenout The othernewscholarships this school year are the following: ScholarBritish Telecommunications ship;The RamonU. Cojuangco (PLDT) scholarship;the Far East Bank and Trust CompanyManagement DevelopmentScholarship,the Merrill Lpch AseanScholarshipand the Meralco ManagementDevelopmentScholarship.

Other scholarshipsawardedthis year are the following: SimeDarby Scholarship, Dole Phils.,Inc., CaltexPhils., Colgate-PdJoseTuasonScholarship, moliveScholarship,Ford Motorg IBM World Trade, PilipinasShell and Apolonio Aguirre Scholarships.

The awardof a scholarshipis decided on a competitivebasis,merit beingthe first consideration.The school's decisionon the type of financialaid awarded has an impact on the applicant'sdecisionto enroll. Surely, scholarshipshelp not only in increasing the number of applicants to the prqgram,but morein creatrnga highly intellectual,competitiveand diversified classregardlessofculture and economicstanding.Thus,we acclaim donorswhosesupportis essentialto the fulfillment of many men and women'sdrertns in uplifting and contributing to society'sgrowth and the fulfillment of AIM's missicn.

CleofasAltatnirano

llhaeoetleynow?

TheClassof '72 Masterin BuginessManagement Abed,RuflnoHellll MBltl'72 GenoralManager PDCPlnsurancoBrokers,Inc. PDCP&rilding,AyalaAvcnue Makati,iletro Manila Tel.81(D231/810@26 Abrn.r, Crlrortomo Fr|n MBM'zl Plan'g SrVicePres.-Stratogic Developmenl Bankof the Philippines Sen.GilJ. PuyatAvenue Makati,iietro Manila Tol,817535:l Aco.||, Crmr Golledo MBil'72 DavaoPlantManager FranklinBakerCo.of the Phils. &.rilding clo4O2lTC Sen.Gll J. PuyaiAve.,Makati Tol.888386/888389 Agullrr, Arthur llbhob llBltl'7!l Prosidont Maricalum MiningCorporation Marlnduque Building 2283PasongTamoExt.,Makati Tel.87862t879141 Aerllh-Bellear, Wllmr MBm'72 Vics-Presidenl, Merchandising RustanCommercialCorporation L. MercasolBuildlng,EDSA Manddqpng, i/btro Manila Tcl.7/4O4128&F1 Alvcndh, Crrmcllno Jr. P. MBM'7'2 Marketing Sr.Vics'President, PhilippineAppliances Gorporation CitylandM Condominium 124ValoroStroct,Makati,MM To1.8158q11 Anpll, Frrllen Gonzrlcr President AccrelgConglomerates, Inc. MagallanescornerRoctoStro€ts DavaoOty Tel.7/983/64S5 Ar.lhno, Gcrry Gomoz mBl| ?2 Bo Guaddquivir,92-501Col. Deleg,Cuauhtemoc065(X) Mexlco (Fhils.)

Tc1.788861 &lclcbDoVore, Amollr 30 Sta.F! S1.,Bo. Fapitalp Pasig,ilctro Manila Tcl.673{514 Bngenzr, Emllle l{onloneyor ITBM'Zl i/lanag.r,MarkctlngAdmin.

PhlllpplncArllncs,Inc. VemldaBdg., LcAasplStrect l$akatl,lrloto Manlla Tol.81801 II

Grbarruble-Rodrlgucz,Wlrdnh UBM 1tl GeneralManager MalayanFinanceC.o.Ltd. [the) 8Ol AdmiraltyCentro,TowerI HongKong Tel.$294416 Celdcron-Tluklnhoy, Arecoll llBM'22 Pres.Asst.- P'lanning & Devt.

Univercityof SanGarlos Officeof the Presidsnt CebuCity Tel.!{3{1 Cenb, FellpoFoo llBll'Zl President Enterpriso Dovolopmont Consutlents 8th Flr.,FilipinasUfeEdg. AyalaAvenue,Makali,M.M. Tel.8101,f5ry8100712 Crpey, llorb.rto ll Ecrcdlcto fBltl'Zl Asst.VlcoPres.,MgVAdmServ MctoriasMillingGompany Mstorias,l.legrosOocidental Tc|.8158101 Ccntdro, RogclloPunzalenMBM'72 Prssident Asset&.rildersCorporation Edg. 3rd Flr.,RajahSulayriran Bonavidez St.,Makati,M. M. fal.81il247181il247 Chlco, Antonlo Cdauen MBt ?2 Ardit Manager DoloittaFlaskinsand Sells 6 BatteryRoad#27-01 StandardCharteredBankBldg.

Singapore Tel.2$N Drvld, EduerdoLcrmr IIBM'72 107Sto.DomingoStreet OuezonC)ty Tal.712Ms llevH, RonrcoSollmen UBll 72 ChlclOpcratingOflicer Phil.Arnuscment & GamingCorporation llXtr RoxasBoulrvard cor. Prdrc Faura,ltlanila Tcl. 5211606/857t45 DfenFonrioYon nBnlz Sr.Mcc-Prcsldcnl- Financ Fillplnarq6thadc FlberCorp.

8&t pento &rilding Parcodc fuxac, Mrkad,M.M. Tcl.81segtg Edr.lhdo, Rodolio St6lFto tBll ?2 ArmcdForco Altachc ArmedForcogof lhc Phillpplncc Phil.Embassy,11-24l.lenpcidal+nachi Shibqra-ku,Tokyo150 Japan Tcl.03.1981q) Frrmfq Rodolllobplnm ngld'li2, Dislriatilsnagcr, Markcting Cattcx(Phlla.),lnc.

540Frdn Faun Sbort E mltr, Mmib Tc|.5213501

Fcnendo, llorborto Trlnldd ]||BM'7:l Marketing Generallt/lanager, Caltex(Phils.),Inc. 540 PadrsFauraStret Ermita,Manila Tel.5213501/5210556 Flguoroe,JuenltoErguerrr HBU'7!l Sr,VicePres.- Fin.& Admin.

Ferrochrome Phils.,Inc. Suite,l02,GoldenRockEdg. 168SalcedoSl.,llakati, M.M. fal879406,18177Tt9 Flgucror, Rcnc Enop HBH 72 Chairman TotalC.ommercial & IndustrialCorp.

7th Floor,DCGBuilding LcgaspiStroot,Makati,M.M. Tcl.818888V8852€ Fbrcq Sldnlo Jr. Genler tBI{ ?:l 701IndopcndsntC)rdc Suilc202Beach,VA23455 U.S.A" Gerc|e' Manuol Loorln MBll 7l FVP/ChiefOperatingOfficer tlegrosNavigationCompany,Inc. DOLL&.rilding,6th Srtrcet Capitol9rbd., BacolodCity Te|.22655 Gclll, Remerh llBM ?2 Chairman& ChiefExocutiw WSYA Banl Umited (Ihe) 72 Admlnietrative off icc Sl. MsrkgRoad,Bangalort560q)1 lndia Tal.57O72lSm1 Gotn z, Frrnclrco Jr. Mrrleno nBn72 182SolivrnAro.,P. Greenpark Manggahan Strc€t,Pasig,M.M. Tcl.94780gl Grcn Edgnrdo FrenclrcoJr. C. tBtl ?2 llanaging Dircclor Rrxma<Aviation Ar Ad Hangar,&rdrewsAw. PasayOty, lilctro Manila Tcl.E l217t l{ooton, Toifo Amp[ UBt a2 Vlo. Rcddcnl - Truddng t{eilond TrencportGroup lllblnn Sfcd, Ercood Slte.t{.sa, Mmllr Tcl.dX7O1 ttcmrnCoa Lulr tegillbry HBU ?2 Prcsidcnt LM. Hcmandcz&Agodetm 29 ArgullldStrcct SenLorcnzoVllrgo, Makail rd.a7nq817n8 Hlddgo, Jullo Fey L tBl| ?ir Mcc-PrcaldcnUMmrecr Roxrs& Company,hc.

10'lAgulncStreet L4alpl Vlllagc,l|akld, M.M. To1.888891

51

Lcc,John nBn72 GeneralManager Dennieon FarEaet(HR Ltd. RogencyC€ntro,12thFloor 39WbngChukHongRoad l-longKong Tel.$5597291519441 Llceuco,JalmcTcodco UBM'72 President SilvaMindControl(Phil.),lnc.

P.O.BoxMRFA10153 Makati,ltlctroManila Tel.8738f2 Lfmgcnco,Lulr Wflanco ld,B]t'72 ChiefOperatingof{icer Panorama Enterprisos, lnc.

King'sCourtBuilding 2'129PasongTamo,Makati,M.M. Tol.888iYU878$7 l-ucero,EduerdoRoycr MBM'72 Generallvlanager BagongKKKUvelihoodCorporation 8thFloor,HanstonBuilding EmeraldAvcnue,Pasig,M.M. Tel,6/36348 lhk llntd, Ambrorlo Gonzeler MBM'72 BarrenCounty Greonbac, Callfornia

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Mallarl,Albcrto P.don MBM'72 Olner/Manager Dwrsified CommoditiesExchange 227ilorth Bay Boulevard Navotag,ttlstro Manila Tel.2&)1f,) lldver, &rc Artrrro llcndlole llBM'72 lnternalArditor InternationalGorporataBank(Ihe) I 11 Paseodc Roxas lvlakatl,lrlctro Manila Tel.818@57 tcf_lcor, tcdrrdo tlrcdlnceg nBn 72 18Greenlt/leadow Avcnue Grecnillsadow Subd,QuezonGity Tel.7PcS8t722W tondoza, t-oopotOollendozr |{,BM'72 Troasurer SikaturlaFishingCorporation 18tFloor,JBL &ilding 544P. Gomez,Quiapo,tvhnila Tel.345861/358084 ll[arcr, Psrclvrl Samron MBtl ?2 4115,4nh$root SullySlde,tlcw York

u.s.A.

llonto, EduerdoJr. Angnn tBil'Zl Profeesor Asianh8tltutc of ltlanag.ment 123Pes€ode Roxag Makali,MetroManile Tol.87|01'l-19 llenegm, \llhllmo ll ll. ilBtrl "2 Dlres:tor ot ilarketing, W.C.G. Citibank,N.A. 399ParkAwnuc, lrlar YorkCity, l.lY 10043

u.s.A.

Tcl.(212)5591cXB lfodrnkrvll, Jenor Prul nBn'f2 Asroclatclban Hofstrathhrersity l.lcwYork,hlY11550 U.S.A. Tcl. (5rO)5605676

52

Ongpfn,Magln-MrrdnJr. Loulr nBll?2 President OKand Associatss 5782FolipcStreot Makatl,lvblroManila Tel.88298/8163115 Pegeduen,Tomer Jr. C.rdllo tBM ?2 GeneralManager PolircsinsPhils.,Inc. #36 StanfordStreet Gubao,QuezonCity Tsl. 922530519225554 Prlo, Porfrlo lrur tlBM'7il Supt.,HardwareMaintenance ManilaEleetricCorporation MeralcoCompound,OrtigasAve. Paeig,MetroManila Tel.72197n Percuel,Jor Kllayco MBM'72 Managcr,HumanResources Dept.

AG&PCompanyof Manila,lnc.

345Scn.Gil PuyatAvenue E<t. lilakati, lttotroManila Tsl.873061/Ssltbl Plemonco,Jor AvellnoC. tBM'72 Exec.Mcc Pree,- Operations UniversalFoodCorporation 39 EulogiaDrivc QuezonOty Tol.36163i|3/3616355 Rodrlgo,Faoul Buktew MBll'7il &. Vlcc Presidsnt PhllippineGarpa,Inc. BA-LrpantoBuilding Pascode Roxas,Makati,M.M. Te1.81590'16 Rorerb, Fnnc{lco Flhmord.l UBil ?2 Vicc PrcsidenuTre!8urcr C.oca€olaBottlsrsPhils.,Inc. 6th Floor,Ace tuilding DelaRosaStrcat,Maksti,M.M. Te|.8150108 Sendcler, Antonb Fcyor tBll ?2 Blk 18 Lot 1,M. RomuddezSt. BFHomes,LaePinas,M.M. Srntor, Elbert Obllb lr|Btl U Prosident Funclional,Inc, Royalllatch tuilding 2111PasongTamo,Makati,M.M. Tcl.852O41'f5 Scgw1 ReymundoRoe MBltl 7l Vicc Prcsidcnt .JvAManagcmcntCorporttion 505AguhoSfnt, Juna'Subd.

Matine,DaveoCily To1.6,f961 Somrnq Fomlgb Plotcm tBm ?2 Penncr,Atdlt DMsion SyOp,Gorres,Vdap &Company 67d) AyaleAwnuc Malcd, MotroManila Tcl.819iU1 SlngrnrVlorntr lll Foru mBt ?2 \4a. Pre.ldrnl \rJrctwlndShipplngCorporadon Mctorlatuilding 429 U.N.Aro., Ermltr, llrnlle Tcl.5C154/5@7 XBt ?il Sob, JotoVlcolb&m.tr O Conrtcllalon Strcct Brl-ArMllagc,Makad,M. M. Tc|.868618

Srlnlvuen,AbhlnevenS. mBil ?2 ilbrketing Manager PeirccLsaliclndiaLlmhed 2-D,Thc Peningula 7/g PosnamdleHigh Foad,Madrag lndla Surrcz, RupcrtKrpunen tBtl ?2 - Finance Mce Pres,/Treasurer ManilaCordageCompany 2372OsmenaStrost Makati,lvbtroManila Te|.888481€9 Surledl, Rulmto llEM ?2 GeneralManager,Finance/Mm. BercaIndonegia, P,T. Jl. P.Jakarla149A" lndonesia Tol.ff|91609 Sy-Qule,Lcopoldo Jr. ltlarh llBll ?2 Mce Preeident, Eng'g./Opn'g, FilipinasSynlheticFiberCorporation BAl'epantoBuilding Paseode Roxas,Makati,M.M. Tel.8159i119/6827992 Tleh Thcc Klrn, Tony ilBtl ?2 GeneralManager TAS€curlties 20thFloor,UBMTower Malapia Tel.q3-2B?277 Velcnzonr'Fnnclroo Jr. G. llBM'Zf ChisdInd. Dcvt.Spocialist Depadmentof Tradeand lndustry 3rd Floor,EscalonaBulldlng Poncianofu1oa St., DavaoClty TalT8964,Z52250 Vrfbfo, AgurUn Wuftrlcfr nBn 72 1507GaminoCerrado SanJoee,CA95128

u.s.A.

Tcl. (4S) ssg6345 Vllh, Bcnrto $hrod. MBtl ?2 Chicl of Steft ArmcdForcesotthc Philippines GampAguinaldo Oity Qr.rczon Tol.721g(x)l Vll!rcortq Eoqulol Jr. P. UBU 7l EtcctrlivcMco President Bancode oro Savlnge& Mor$age Bank Arrora Bouhverd Cubao,OnozonGtty Tc|.9225656 Yllrl-D.zl EMre llBll ?2 FinancoManlgcr, FinanacDopt.

Coce€ola Etport Corporeton(the) Klng'aCouil &rllding 2129Prcong TamoEd., Makad fcl.8774)11884786 Yuhbo, Ilolfrn Jr. lluyde MEt 7l ilbnaglng Dlr.ctor SPLC|Pitd iLrkGb@rp. $jltc 3(8, MSE&.rlldlng Alale Alanuc, llekrtl, M.M. T.1.81Xp27ru00e€

i

Management Development Program Meva, Jose Jr. Blunas nDP'72 Deceased Agulrre,E ron Crlstob.l )nDP'72 McePresidenVExecutive Asst.

FilipinasUfeAssurance Company 6786FilipinasUfe Bui|ding AyalaAvenue,Makati,M.M. Te|.816051 1/8160662 Alas,BayanlMaranandc lec MDP'72 SAVP/D|r., Planning& Systems SanMiguelCorporation #,10SanMiguelAvenue Mandaluyong, MetroManila Tel.8163018/8194000 Alto,RonatoBara MDP'72 Partnsr Sycip,Gorres,Velayoand Company 105DelaRosaStreet Makati,lVhtroManila Tel.8170301 Alvlr,AntonloM.. B. MDP'72 4$2$56 WoodsiiiideStreet NewYork,NY1137/

u.s.A.

Aqufno,GabrlelZamora MDP'22 VicePresident, Operations Intorcontinental Development Corporation Suite426,4th Flr.,MSEBldg.

AyalaAvenue,Makati,M.M. Te|.868768 Bautsta,A{uro Padua MDP'72 GeneralManager-Spec'1.

Projs.

AsiaIndustries.

Inc. 2281PasongTamoExtension Makati,MetroManila Tel.82011/884691 Baudrta,ManuelA nD?'72 Parlner,AuditDivision SyCip,Gones,Velayo& Company 6760AyalaAvenue Makati,MetroManila Te|.819301 1 Belen,Slrlo Peullno nDP'72 VicoPres.,Corp.Adm.Serv.

NationalSteelCorporation 377Son.GilJ. PuyatAvenue Makati,MetroManila Tel,8153625 Colayco,Me. Thcrcre J. MDP'72 VicePresident, Administration ManilaCordage@mpany OsmenaStreet,Makati MetroManila Te|.888481 Cortcz,Gll Equlvcl MD/P'72 Prosident JardineDaviesInsurance Brokers,Inc. 22.*n. GilJ. PuyatAvenue Makati,MetroManila Tel.856011/81O439s Guyegkcng,Antonloll C. MDP'72 Manager,Management Services Sy0ip,Gorres,Velayoand Company 105Dela RosaStreet Makati,MetroManila To1.8170301

Dacarl Fulgenclo P. |lDP'n2 Vice Pres.,Fin. and Treasurer Tamaraw Security Service,Inc. 185i| E. RodriguezSr. Blvd.

Cubao, Quezon City Tel.976646118 Dawfnan, Clodualdo V. MDP'72 Manager, Mold Technology San Miguel Corp./ManilaGlass Plant Muella de la IndustriaStreet Binondo,Manila Dayos, Blenvcnldo V. MDP'72 Chalrman of the Board/Pres.

Claimsmen Adjustment Corporation Boom 508, MagsaysayBuilding T.M. lGlaw, Ermita,Manila Tel. 598655/498561 Dlmatatac, Horeclo M. MDP'72 Consultant, Eng'9. Services Eng'g. Dovt. Corp. of the Philippines Gen. llojica cor, SSHW Makati, Metro Manila Tel.875721 Enrllc, Ramon lll Caplstrano MDP'72 Marketing Direc{or Proconsult.lnc.

2nd Floor,HanstonBuilding EmeraldAvenue,Pasig,M.M. Gaba! Antonio Macapagal MDP'72 12 T arlac Street, Philamlite Pamplona,Las Pinas,M.M. Gan, Eduardo Baylon MDP'72 Deceas€d Garcla, Eucobio Mella MDP'72 Presideni Chemical Industryot the Philippines Ghemical Bldg., 851 PasayRoad LegaspiMllage,Makati,M.M. Tel.8188711/8186267 Garclr, Ralael lll Mendoza MDP'72 Chairman/President Mega Group of Computer Companies ,1033rd Flr., Midland Building Sen.Gil J. PuyatAve.,Makati Tel.818il290 Gufdotd, Antonlo Aguado MDP'72 President Zontrum Finance,Inc. 4th Floor, Salamin Building 197 Salcedo St., Makati, M.M. Tel.861470/861€7 Guzman, L.mbcrto S. lrlDP'72 Mcc PresidenVAssistantHead Manila Electric Company Lopez Edg., Ortigas Avenue Pasig, Metro Manila Tel.7219777 Huang Wcn-Hrlung llDP'72 Prolessor& Chairman, M. Eng'g Tatung Instituteof Technology 4OChung Shan tlorth Road Taiwan Te|.5925252 Jorc, Rfcardo Hernrndcz MDP'72 Grp. Mce Pres.,Exec.Otfices EnginceringEquipment,Inc. 110 E. Rodrigucz Jr. Avcnue Oligas lnd1, Esr., Libis, QC Tel.7W24n219251

Joson,ManuelSevllla MDP'72 President J.P.RealtyDevelopment Corporation #65 GeneralLim Street HeroesHill,QuezonGity Tel.987U41967772 Klntamr, JovencloRoral MDP'72 BoardChairman Nitratics,Inc. Suite521,P.S.BankBldg.

AyalaAvenue,Makatl,M.M. Tel.855536/887&15 Koh ChoonHul,Ilanlel li|,DP'72 ManagingDirector RocheSingaporefte. Ltd. RocheBuilding Singapore Te|.283003i! l"eo,ReynaldoLlm MDP'72 FirgtVica-Pres./Treasu rer ChinaBankingCorporation JuanLunacor.Dasmarinas Sts. Binondo,Manila Tel.486340/482011 Lederma,PuraKalaw |/iDP'72 PresidenVGeneral Manager TandangSoraDevelopment Corporation 117GamboaStreet Legaspi Village,Makati,M.M, Te|.8189449 LeongHelnHak MDP'72 FinancialController Ingersoll-Rand SouthEastAsia(Re.) 42 BenoiRoad Singapore Tel,8611555 Lfn,YVffflam 8. |t|DP'72 Partner Chiang,Lai,Un & Co. 13/F,Chinese Television Bldg.

Taiwan Tel.2-741025 Macatufad,Evergl.toC. lnDP'72 GeneralManager NinoyAquinoInternational Airport NinoyAquinoAvenue Paranaque, MM Tol.992691/973474 Marlgan,Alftcdo Domlngo ttl0P'72 PresidenVGeneral Manager C & M Enterprises #39 Col.BoniSerranoRoad QuezonCity fel.783fJ71n224233 Mendoze,BenlemlnAlborlo nDP?2 President ZamboangaBusinessManagers, Inc. P.O,Box 199,GonzalesDriw ZamboangaCity Tel.31€812+75 Mercado,ScMllano Jr. ltl. MDP'72 Vica-President, Corp.Plan'g.

FarEastBankand TrustCompany MurallaStreet lntramuros,Manila Tol.|o1021/186191 Obcn,BgnlemlnL llDP'22 VicePresident, Marketing PilipinasShellPetroleumCorporation Shellhouse &ilding 156ValsroStroot,Makati,MM Tcl.8174133/8179871

53

OhKcenHock MDP172 Manager SereneShlppingAgonciesRe. Ltd. P.O.Box3@, 10Ansontuad Singapore Te|.225300 Ordoncz,Vlctol llerdncz M,OP'72 Undorsecrotary Dept.of Education, Cultureand Sports Palaciodel Gobernador Manila lntramuros, Te|.492496 Luclt Uacardg MDP'72 Panganfban, McePres.- Gontrol& Finance GeneralTextiles,lnc.

E.Rodriguez Jr. Avenue Ubis,QrezonCity Tel.721921-23 Perunglo, Fellpc Felerdo ]/|,DP'72 Elecsased Percud, HorecloEu3ttqulo ]/|DP'72 Sr.VicePros,- Production Hi C,amont Corporation 3rdFloor,PhinmaBuilding SalcedoStreet,Makati,M.M. Tel.874061/8180788 Phurlphoykal,Thevach MDP'72 Director, ludit Division Thalang& Company.,Ltd. SGV-Na 514/1larnluangRoad Thailand Tel.6&2-280@q) Qufzon,Aelandrlno Salcedo |,llDP'72 Consultant Poolol LiveStocklnsurers 1lth Flr.,InsularLifeBldg.

AyalaAvenue,Makati,M.M. Tel.817n32 Rlllcra,Alho Florcr MDP'72 GeneralManager CatalinaSecurityfu ency 154G.AtanetaAwnue QuezonCity Tel.734218 Roqucze,RlcardoSlo mDP'72 President RS. Roquezaand Company 2nd Floor,MidlandPlaza AdriaticoSt.,Ermita,Manila Tel.5223910 Rorarfo,Juan MlguelV. del tt|,DP'72 c/o ElviePugal,TreasuryDiv. AG&PCo. SenPuyatAve,Makati,MM Rorer, ConccpclonSlhre nDP'72 Controller MaryChilesGenerall-lospital 667GastambideStreet Sampaloc,Manila Te|.7413950 Segane,lgmldlo Bra$ MDP'72 Deceased Salezel,Cermclllo Crrreon ilDP'72 Principal SyCip,Gorres,Velalo& Company SGVBuilding,AyalaAwnue Makati,MetroManila To1.8170301 Sm !ufr, Ilomlngo llcrmrdcz MDP'72 Deceagsd

54

Santrmarle,Jorgc GohengcolilDP'72 ManagingDirector CarecrSlBtems,Inc. AexenderHousa,S/lle 4Ol 132AmorsoloSt.,Makati,M.M. Tol.865270/8s9367 Sarmf,onb,Bcnlemln Peguh l',OP'72 Direc-tor ManilaMachinery& $rpply Co.,Inc. 4th Flr.,Pifco&.rilding 23(n PasongTamoExt.,Makati Te|.852961 Sr?mfdrto,DanlloPaguh M,DP'72 Ghairmanof the Board ManilaMachinery & SupplyCompany,lnc.

4th Floor,PifcoBuilding 23@ PasongTamoExt.,lt/bkati Te|.867861 Sombrho,Romoollellzo llDP'72 FacilitiesMgr.- Fin.&Adm. KodakPhilippines, Limited 2247PasongTamo Makati,MetroManila Te|.8158851 Sorllno, Clcrlto Fellchno MDP'72 SalesManager Phils.,Inc. BordenInternational LifoBuilding 1@1Filipinas 6786AyalaAve.,Makati,M.M. Tol.8152471/8161720 Trlllene,FranclrcoJr. B. |nDP'72 PresidenUManaging Drector SSG&B:LintasWorldWde (Manila) 14thFlr.,Producer's BankCtr Paseode Roxas,Makati,M.M. Tel.81762118182216 Velcnch, Lconldo Cruz ilDP'72 UnitManager Sr.AVP/Bus. MegnoliaDvision SanMiguelCorporation ArroraBlvd.,QtrezonOity Tol.8183231i8191m Vlfflmryor, RomulfoBclten |nDP'72 Partnor,Aldit Dvision SyGip,Gorres,Velap &Company SGVEdg., 6760AyalaAvenue Makati,iretro Manila Tel.819301 1 Yembot,llarlo tenleul llDP.'Zl Asst.VlcoPres.,Corp.Affair PacificOementCompany,lnc. sth Floor,PdnceBuilding 117RadaSt.,Makati,M.M. To1.812961 Zabatlero,Argu.to terquez nDP'72 Mca-President, Gorres.Bank'g Bankof the Philippinelslands AyalaAve.cor.Paseode Roxas Makati,illetro Manila Tel.8187261/81&53f1 Z,cta,Bcnltmln dclr Cruz MOP'72 Manager PreddonUGenerd Wostinghouse Asia@ntrolsCorPoration 8th Floor,Mamson Building AllaroStrcet,Makatl,M.M. Tc|.8151007

Air TransportCourse Garollno,Gll ATC'72 Director- ISSA Inc. Philippine Airlines, PALMministrativeBuilding LegaspiStroet,Makati,M.M. Tsl.81607â&#x201A;Ź18180111 Erplno, Lorllc ATC 72 Sr.VicePres./COO PhilippineAirlines,lnc.

Building PALAdministrative LsgaspiStreot,Makati,M.M. 11/817816 Tef.81801 lncr, Rorneo ATC'72 VicePres.- InternalAtdit PhilippineArlines,Inc. Building PALAdminislrative LogaspiStreet,Makati,M.M. 11 Tel.81801

Lettersand Manuscripts Readersare encorragedto submit letters and nanuscripts for publication. The editors reserve the right to edit materialsselected for publication asthey deemappropropriate or necessarydue to content tr spacerestrictions.

Manuscriptsshouldnot exceed 3,500words and must be typed, double-spaced.All manuscripts become the property of THE ASIAN MAMGER. Send contributions to: Alumni RelationsOffrce c/o Emy R. de Veyra Alumni RelationsDirector Asian Institute of Management MCC P.O.Box898 123Paseode Roxas Makati,MetroManila Philippines

AlumniNews Updates on alumni are publishedin everyiSsus.Alrrmni :re encouragedto sendreports on the progressof their orur careers and that of their classmatesand other fellow alumni. Sendinformation1eFmyR. de Veyraat the addressabove.

Recordsof DevelopmentandAchievement

Proqram: TopManaqement Aumni Uptates,1979--1981i| (Thefollowingupdatesweretaken from theretumedsunq forms sent outto allTMP alumnionthe occasionof preparationsfor the homecominginBagtio. Theyare beingreproducedfor your information. Wewould appreciateit if you would continueto regtlarly send us mateials whichwe canfeaturein theALUMNI UPDATESof THE ASIAN MANAGER -E. deVqra) 1979 Dr. Nilo Aventura is presently teachingat the University of Sto. Tomas College of Medicine and Surgery,and servesaschairmanof the Heart Foundationof the Philippines, and medical directu of the Philippine PacemakerBank while continuingto practiceasa heart surgeonwith offices at UST Hospital and the Philippine Heart Center.

Gerry Gaor is generalmanagerof FILPHONE ManagementCorporation, the subsidiaryof Philippine Long DistanceTelephoneCo. (PLDT) which managesand operatesthe government'stelephonesystemin RegionsI and II (North Luzon) in addition to beingassistantvice president of the RegionalTeleom Development Division of PLDT. Johnny Kuan Yung-Shih has left ChinaPetrochemicalDevelopment C o r p . a n d h a sb e e n p r e s i d e n to f ChinesePetroleumCorporation since November1987.

Todsie Quisumbing ischairmanof the Board-NorkisGroup, chairman and presidentof UMDESIA, anewly organizedcorporation which concentrateson export developmentof Philippine and Asian designsand products.

Abe Yabut is chairmanof the Board and presidentof Nation Broadcasting Corp., Vacation Hotels Corporation,

ALY Management& Development Corporation,aswell aschairmanof the BroadcastMedia Associationof the Philippines and presidentof the Manila OverseasPressClub.

1980 Mohamad Abd. Rahman, group general managerof Mara Holding Sdn. Bhd. is presentlydeeplyinvolved in the World Expo '88 in Brisbane, AustraliaasExecutiveDirectorof Sate FranchiseSdn.Bhd. The conpany is engagedin the preparationof traditional satayand other Malaysian cuisine.The expo started in April and will go on throughOctober.Mohamad is inviting fellow TMPers who may be in the areato drop by at the Malaysian Pavilionfor a tasteof their Malapian srllinaryprids.

Mon Santiago is first vicepresident for regional operationsat PLDT. As suchhe supervisesinternational negotiationsfor Long Lines Operations and overseesdomestictransactions of provincial operations.

Board of Supervisors(Komisaris) of P.T. GriyawisataHotel Corporation andtreasurerof the JakartaHilton ExecutiveClub.

Duane Quintal startedClDd aninternational design company in Phoeni:gArizona at the start of 1988 and is very pleasedwith its development.

Suraga wasappointedPresidentof Bank Bumi Daya effectiveApril23, direc1988.He wasformerlymanaging tor of BankDagangNegara.

Zahid Majid relocated from Singapore in 1986to the Middle East region asregional generalmanagerof the Gulf International Lubricants,[Id. 1982 Christi Awan, as director for personneland finance of P.T. Waskita Karya, a state-ownedconstruction company,is heavilyinvolrad inthe improvement of Total Quality Control and Quality Control Circles for all employersand employeesin the organization.

1981 Tony Calvo is seniorvice president for administrationat Great PacificLife AssuranceCorporation.

Chan Hung Kee, fromSingapore,is generalmanagerof Djajanti Group of Companieswith officesin Jakarta,Indonesia.

IVisno Martokoeoemo is now managingdirector of P.T. ENERGY SYSTEM INDONESIA, a joint venture with CombustionEngineeringof USA and P.T. PAL and'Pt BarataIndonesia.He is alsochairmanof P.T.IndonesianMarine Corporation,an engineeringand shipbuilding company basedin Jakarta Indonesia.

Kris Martokoeoemo holdsthe following positions:managingdirector of P.T. API, deputydirector of P.T. Trihasta Consultants,memberof the

r983 beeninCaliforRosaryBenitezhas nia sinceAugust 1984norking for DescampsArchitecture involvedin the restorationof Victorian homes,a job which she finds tremendouslysatis$ingand rewarding.

Tony David is partner-in-chargeof the Integrated ServicesGroup in the SGV Audit Division which catersto the needsof small- and medium-sized new businessesfor professionalservices in accounting/auditing, tax systems,financial and related matters.

Ron Fullerton, president of MAI Philippines, Inc is busy negotiating a leveragedbuyoutof their companyand transfer from a forergn corporation to a local Philippine companywhose completion is expectedthis month-

55

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tttCCP.O.Box 898 Mrkrti, Mrtro Mrnilr, Phllpplncr