Meeting the Global Challenge
|Title:||Global Logic: The Challenge of Globalisation for Southeast Asian Business|
|Review by||Chong Kin Onn|
IN some ways, the 1997 financial crisis was a watershed event for Malaysia. That was the year Malaysians woke up to fact that its economy was joined to the global economy and that actions of individuals a few thousand miles away can – and did have – devastating effects. Globalisation has well and truly hit home.
Yet its march continues. How does increasing globalisation
affect the South East Asian economies and what should Asean (Association
of South East Asian Nations) businesses do? These are the key issues explored
by business lecturer and consultant Christopher Reynolds in his book Global
Logic: The Challenge of Globalisation for South-East Asian Business.
Dr Christopher Reynolds
Global Logic can essentially be divided into two parts: The first half defines globalisation and how it impacted the South-East Asian economies. Reynolds provides a background on the region's miraculous economic growth; what were the main factors and the events leading up to the financial crisis. The second half of the book details the impact the 1997 financial crisis had on the South-East Asian bu- sinesses and its aftermath, namely a changed business landscape.
Over 90% of Malaysia and Singapore businesses are SMEs. Today, these companies are being pressured by the changing global market, and trade and investment liberalisation. SMEs need to wrench themselves away from being suppliers to multinational companies to becoming global players in their own right.
The challenges are multiple. Reynolds says that the SMEs should start to access the global market, become more focused on customer value, keep their borrowings to a manageable level and avoid dishonest business relationships.
There are strengths in the SMEs business structure. Reynolds strongly believes that “the Asian model of business can become a third major tier to the European stakeholder and the American free trade model. The Asian model is a model based on cooperation between corporations and governments.
It is an alternative model to be reckoned with and that others can emulate.” The model is what some may call the “guanxi” model or the cynics may call the cronyism model. Today, however, the strengths inherent in the Asian business model are insufficient.
For South-East Asian companies to compete in a global economy, managers require what Lee Kuan Yew calls a “mental revolution”. What does the “mental revolution” involves? One part of it is to change how a business views its employees. Reynolds says: “A business assets doesn’t lie in what the company owns. It lies in the imagination of its employees.”
In the Industrial era, employees clock-in and clock-out. In the global era, fostering constant innovation is the key to profitability. According to Reynolds, a global minded business manager comes in to work and says what can be changed today.
And the best people to answer him or her are the employees themselves. Freedom, empowerment and respect for employees would be the values practiced by managers in a global world.
Global Logic is not without its flaws. Reynolds tries to weave too many ideas in this book and they don’t always gel. There are discussions on multinational corporate behaviour, overseas business Chinese practices, sociology, Asian values & culture, economic history and current issues. This reader had a hard time following the threads of the arguments, as they were too expansive.
It would have been a more coherent read if Reynolds had limited himself to a few issues and elaborated on that. For example, the discussion on South-East Asian SMEs mostly relates to Chinese businesses and isn’t fully explored to cover indigenous companies.
Knowing the Chinese they would be inclined to change if it provides them with business opportunities. For some cultures where material achievement doesn’t play a key role, what is their trigger point? How would you get them to eagerly participate in the global economy?
For all that, there are no concrete examples of South-East Asian businesses that have truly adopted the global logic (Reynolds’s term for the set of values and attitudes needed to compete effectively in the global arena).
Instead what Global Logic has is a brief case study of a family business in Brunei – and that is showcased probably because Reynolds spent some time there.
What about companies operating in Multimedia Super Corridor? Are they the businesses of the future? Should global logic be confined only to companies? How should it be adapted to government agencies?
A lot of issues and questions are raised. Global Logic is not a bad read but it could be more focused.