Managing Effectively in Asia

By Hebard, Clifford C. | Training & Development, April 1996 | Go to article overview

Managing Effectively in Asia


Hebard, Clifford C., Training & Development


Many experts view the Pacific Basin as the next major hub of worldwide business. Here are some guidelines for recruiting and developing effective managers to work in Asia.

Once upon a time, there came a Texan to Shanghai to do some business. In his first meeting with his Chinese hosts, he put his feet up on a table. Then, he used a business card to clean his teeth. The Chinese hosts abruptly left the room. Meeting adjourned.

You see, in Shanghai, it's considered highly offensive to show the soles of your feet. And business cards are considered prized possessions.

The moral of the story is fairly obvious: People who recruit and manage businesspeople to work in Asia need to know the cultural and business customs of Asian countries.

Peter Koveos, who directs the Kiebach Center for International Business Studies at Syracuse University's Crouse Hinds School of Management, says:

"Most economic activity in the world is going to take place in the Pacific Basin. So, it's important that companies learn now how to operate in countries over there, especially China. China and the United States are going to be the two economic powers of the twenty-first century."

One example of global expansion is McDonald's. Bob Wilner, McDonald's director of international human resources, spends most of his time in China, the fast-food restaurant's newest market. He says that the number of McDonald's is expected to increase from 46 restaurants to 300 by 2000. "We're growing at an unbelievable rate in every country in Asia in which we're doing business."

"With such rapid growth, there's an overall shortage of management talent throughout Asia, especially in China," says David Hoff, director of international resources at Anheuser-Busch. Hoff cites one reason as the Cultural Revolution of the 1960s and 1970s. Most schools in China closed, so an entire generation didn't receive much education.

"In Japan, it's particularly difficult for women to make it out of the secretarial ranks," says Hoff. Anheuser-Busch makes it a point to recruit women in Asia. In its joint venture with a Chinese brewery in Wuhan, Asian women have been particularly effective in sales.

In addition to the cultural hurdles, assigning expatriate managers to Asia is expensive, according to a report in the Economist (June 24, 1995). The costs include high salaries, extensive insurance coverage, and frequent paid leaves. Despite the drawbacks, the accounting firm Price-Waterhouse estimates that 450,000 "expats" are now working in China and that the number will increase through 2000.

"The cost of expatriates is enormous," says Hoff. "As a long-term strategy, companies need alternatives."

One alternative Hoff is working on is hiring foreign nationals, developing their talents in the United States, and reassigning them abroad as local managers. In fact, George Renwick, president of Renwick and Associates in Arizona, says that it's a mistake to impose "global managers" on Asia.

"It's much more effective to take Asian managers and enable them to lead Asian organizations more effectively. I'm concerned that, out of our ignorance, we're creating an American model for the global manager. Out of our arrogance, we're imposing this model on Asia. And out of our impatience, we're insisting that Asian managers develop quickly along the lines of this model. In doing that, we may be rendering them ineffective in the long-term in their own societies - and inadequate as our managers of their people."

Wilner says that McDonald's tries to develop local people in Asia, finding that more effective than bringing in someone from halfway around the world who doesn't know the marketplace or the customers.

In another example, Renwick points to an international financial-services firm in Taiwan. Its most successful unit is headed by a Chinese manager from Hong Kong.

"He's outstanding," says Renwick. "But he couldn't manage the Korean operation, the Indonesian operation, or the Spanish operation. …

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