This article first appeared in the 17 August 2009 edition of The Irish Times and is reproduced here with their kind permission.
Richard Whelan reviews Business Journey to the East: An East-West Perspective on Global-is-Asian by Chow-Hou Wee and Fred Combe; McGraw-Hill Professional; £16 (€19).
The authors start with a simple warning: “More companies have failed than succeeded in Asia because they simply do not invest enough in equipping their western-trained managers with the appropriate cultural skills, knowledge and emotional intelligence to work and relate with their Asian counterparts.”
The joint authors are well placed to bring an east-west perspective to doing business in Asia. Fred Combe, who was born in Ireland and spent 18 years working for a multinational in Asia, now runs a management consulting business in Singapore that focuses on optimising his clients’ business in Asia.
Chow-Hou Wee is professor and head of the division of strategy, management and organisation at Nanyang Business School and is director of several companies in Singapore.
Interestingly, the authors base a significant amount of their analysis on the Chinese classic Sun Zi Bingfa, which they translate as the Military Philosophy of Sun Zi( better known in the West as the Art of Warby Sun Tzu).
“In many parts of Asia, business is regarded more as a battlefield. This tends to create a different mindset. First, Asians tend to think in terms of clear winners and losers, instead of seeking win-win outcomes. Second, when they view the other side as adversaries, they tend to suspect that they have hidden agendas against them, causing them to approach the matter with a highly suspicious stance. Third, and arising from the second point, they tend to have a higher tolerance for the use of ‘deceptive tactics’ as means to fish out the real intentions of the other side and, if necessary, to throw the other side off-guard so as to gain the decisive advantage.”
Asians, according to the authors, see little difference between military tactics and boardroom negotiations, so they tend to conduct business using warlike tactics. Many Asian leaders have gone back to ancient knowledge gained from the examples of history to seek guidance for their day-to-day business and political affairs.
The authors describe the significant differences that exist between East and West in terms of mindset and approaches to business, negotiations, contracts and much else. “A lot of it boils down to how their approaches in life have been driven by Aristotle in the West and Confucius in the East. These have created very large differences in habits of thought,” they argue.
You need to know the huge importance of social interaction and “face” in Asia, how to deal with binge drinking, karaoke and the likelihood of post-contract negotiations, and how to manage expatriate executives (only 25 per cent of whom the authors say are successful). You must also be able to deal with the victim mentality in Asia, corruption, guanxi (building personal relationships) and even mobile-phone interruptions. Just setting up a business in Asia is a marathon endeavour compared to the sprint it can be in the West.
The book is written in appalling “consultantese”, but if you are serious about doing business in China or in an Asian Chinese- dominated state, the benefits of reading it significantly outweigh its shortcomings.
One footnote alone makes the book worthwhile: “When a key official, eg a city mayor, is transferred or removed from office for whatever reason, it is often very difficult to enforce existing signed contracts on the new person in charge.
“The common excuse given for not fulfilling any previously signed contract is that it was not signed by the new official and, as such, he is not obligated to the commitment. As a result, such contracts often have to be renegotiated.”
You may also wish to remember the current Japanese guide to doing business in China – “China +1” – if investing in China, spread your risk and invest in one other Asian state as well.