ASIA: Asian Management Theory - Brain gain.

ASIA: Asian Management Theory - Brain gain. - Forget Eastern promise, Asia has been busily developing management thinking that is already proving an inspiration to Western business.

by Stuart Crainer.
Last Updated: 31 Aug 2010

Forget Eastern promise, Asia has been busily developing management thinking that is already proving an inspiration to Western business.

As the world has become increasingly over populated by management gurus, consultants and business schools, the Western management model has dominated. Though Asian business has been lauded as a source of best practice, it has rarely been seen as a source of original thinking. Indeed, the East's greatest managerial export to the West - the quality movement of the 1980s - was generally accredited to two American thinkers, W Edwards Deming and Joseph Juran.

But, while the West has generally been content to look inwards, Asian businesses have always looked outwards. They have a lengthy track record of taking the West's bright ideas and making them their own, adapting them to their own cultures. Early management thinkers, such as the Americans Frederick Taylor and Mary Parker Follett, found keen audiences in Japan when they were often ignored in their homeland. Dale Carnegie is big in Taiwan (7,000 students graduate from Carnegie programmes each year). Modern gurus, such as Tom Peters, are feted. There is even a businessman in South Korea who has changed his name to Peter Drucker.

Increasingly, however, Western gurus look to the East for inspiration.

MIT's Ed Schein has reported on the Singapore's Economic Development Board; futurist John Naisbitt based himself in Kuala Lumpur to produce Megatrends Asia; Tom Peters spends time in India and castigates managers at his seminars who haven't been to Asia recently. And increasingly, Asia is developing its own strain of management thinking. Its champions are not gurus in the brash American mould, but cerebral and low key; not only material, but spiritual too; informed by the West but gaining thoroughly Asian insights.

STRATEGY AND GLOBALISATION

Kenichi Ohmae is the most famous Asian management guru. Indeed, he is regarded by many as the only one of his kind. Calling Ohmae multi-talented does no justice to his skills. Born in 1943, he is a graduate of Waseda University, the Tokyo Institute of Technology, and has a nuclear engineering PhD from Massachusetts Institute of Technology.

He is also a talented flautist and was an advisor to the former Japanese prime minister, Nakasone. Ohmae rose to fame in the West as head of the Tokyo office of the consulting company, McKinsey & Co. He left the company in 1995, after 23 years, to stand for the governorship of Tokyo.

Ohmae is the author of countless books which chiefly focus on strategy and globalisation. While his American employers westernised him as Ken, Ohmae retains a thoroughly Eastern view of the world. His The Mind of the Strategist was important in demystifying Western views about Japanese strategic thinking. Ohmae then went on to look at globalisation in Triad Power where he suggested that the route to global competitiveness was to establish a presence in each area of the Triad - United States, Japan and the Pacific, Europe; and utilise the three Cs of commitment, creativity and competitiveness. Globalisation and strategy continue to be at the heart of Ohmae's recent work.

'The essence of business strategy is offering better value to customers than the competition, in the most cost-effective and sustainable way,' Ohmae writes. 'But today, thousands of competitors from every corner of the world are able to serve customers well. To develop effective strategy, we as leaders have to understand what's happening in the rest of the world, and reshape our organisation to respond accordingly. No leader can hope to guide an enterprise into the future without understanding the commercial, political and social impact of the global economy.'

SINOLOGIST

Professor Kam-Hon Lee holds one of the most intriguing academic positions in the world. He is dean of business administration at the Chinese University of Hong Kong, a post resonant with geographical importance, political complexity and the ideological paradox of studying capitalism in a communist country. 'The 21st century is the Asia-Pacific century,' Lee predicts. 'Among Asia-Pacific countries, China is set to play an especially prominent role in that new order. Hong Kong will become of paramount important in China. It serves, and will continue to serve, as the regional headquarters of business operations in the region and is universally regarded as the business gateway to China.'

Lee is also professor of marketing and has an impressive marketing pedigree.

He has a PhD in the subject from Northwestern University, home of the doyen of marketing thinkers, Philip Kotler. Northwestern has close and developing ties with China and has recently launched an executive MBA programme with the Hong Kong University of Science and Technology.

Lee's research focuses on cross-cultural marketing, strategic marketing and marketing ethics and has been featured in academic journals worldwide.

Lee has also worked with the World Bank, the Hang Seng Bank and Western giants including Coca-Cola and Procter & Gamble. His influence may also be broadened with the development of the Asia Academy of Management which was set up in 1997 and in which the Chinese University of Hong Kong plays a central role (also run by a Northwestern alumni).

KNOWLEDGE MANAGEMENT

Ikujiro Nonaka's work reached a big audience for the first time with the success of The Knowledge-Creating Company which he co-authored with Hirotaka Takeuchi. His prominence culminated in May 1997 with Nonaka's appointment to the first professorship dedicated to the study of knowledge and its impact on business at the University of California's Haas School of Business. Nonaka is also professor of management at Japan's Hitosubashi University but is no stranger to the University of California from where he has both an MBA and a PhD.

Nonaka and Takeuchi's 1995 book was at the vanguard of interest in managing knowledge. In it the duo argued that Japan's industrial success was grounded on innovation. But why is Japan more innovative than the West? The answer from Nonaka and Takeuchi is that the West emphasises 'explicit knowledge' - things which can be measured and monitored - while the Japanese value 'tacit knowledge', the elusive and abstract. The West is hidebound by its faith in rationalism; the East enabled by its 'oneness of body and mind'. Interestingly, Nonaka and Takeuchi also speak up in favour of middle management. Rather than regarding middle managers as the burdensome masses, they suggest that they are a vital conduit for innovation, a voice of reason below the chaotic creativity of the top.

Nonaka has also written Relentless (with Johny K Johansson), a populist insight into Japanese marketing.

ANCIENT HISTORY

When Western managers fell in love with the art of Japanese management in the 1980s, there were few books to turn to. Instead of seeking out contemporary thinkers many raided the vaults and emerged clutching Sun Tzu's The Art of War, written some 2,500 years ago.

Sun Tzu is a combination of Machiavelli and Michael Porter with added mystery. The mystery is whether Sun-Tzu actually wrote the book which became a surprise best-seller. It may have been written by Sun Wu, a military general who was alive around 500 BC.

The book's actual title is Sun Tzu Ping Fa which can be literally translated as 'The military method of venerable Mr Sun'. Sun Tzu allows for no distractions.

'Deploy forces to defend the strategic points; exercise vigilance in preparation, do not be indolent; deeply investigate the true situation, secretly await their laxity; wait until they leave their strongholds, then seize what they love,' he advises. Quite how you apply this to running a crisp factory in Ipswich is difficult to determine. But, managers continue to lap up Sun Tzu's brand of cunning and brazen brutality. 'If you are near the enemy, make him believe you are far from him. If you are far from the enemy, make him believe you are near,' wrote the master. 'A sovereign should not start a war out of anger, nor should a general give battle out of rage. For while anger can revert to happiness and rage to delight, a nation that has been destroyed cannot be restored, nor can the dead be brought back to life.' Celebrated for his Schwarzanegger-with-a-strategy approach, there is great subtlety to Sun Tzu which is usually overlooked.

'To subdue the enemy's forces without fighting is the summit of skill.

The best approach is to attack the other side's strategy; next best is to attack his alliances; next best is to attack his soldiers; the worst is to attack cities.'

These ideas have had, and will have, a significant impact on the way managers in the West go about the day-to-day work of management. Often the impact of Asian thinking on Western practice has gone unacknowledged or has been hijacked and given a Western sheen or interpretation. (The Art of Japanese Management was, after all, written by two Americans.) There is no better example of this than Sun Tzu, whose wisdom, though thousands of years old, remains a mainstay of reading lists. His The Art of War is the direct intellectual antecedant of Carl Von Clausewitz's On War and BH Liddell-Hart's Strategy. And it is to Sun Tzu that the prevailing military metaphor of management can be traced.

ONE FOR THE FUTURE

The South Korean W Chan Kim is professor of international management at INSEAD. Professor Kim was formerly at Michigan Business School and also studied at the Asian Institute of Management and Seoul National University.

He is currently one of those select academics whose intellectual star is in the ascendant. This can be accredited to his work with Renee Mauborgne which has produced a series of articles and a forthcoming book (in 1999) on managing in the knowledge economy.

With diligent academic work, Kim and Mauborgne inject an air of common sense into the frenzied debate on knowledge. Among the concepts they champion is that of 'fair process', which contends that 'people care as much about the fairness of the process through which an outcome is produced as they do about the outcome itself'. Fairness should permeate managerial systems.

In a study of 19 companies Kim found that there was a direct link between processes, attitudes and behaviour - 'Managers who believed the company's processes were fair showed a high level of trust and commitment which, in turn, engendered active co-operation.'

Elsewhere, the pair argue that successful companies are differentiated from the chasing pack by 'the way managers make sense of how they do business'. Outsmarting the competition involves challenging industry conditions; not benchmarking against competitors; focusing on what customers value; thinking like a start-up business; and thinking 'in terms of the total solution buyers seek'.

More recently, Kenichi Ohmae has provided much of the impetus to studies of globalisation and Ikujiro Nonaka has done a great deal to push knowledge management to the forefront of the managerial agenda. Their achievements are symptomatic of a broader change in perspective.

Today's Asian management theorists are often more truly global in perspective than their Western counterparts. How many top Western academics spend time in Asian business schools? A select and enlightened few. Yet, leading Asian thinkers - such as INSEAD's Chan Kim - can be found in ever greater numbers in Western business schools. Their ambit is equally broad. Many - like Kam-Hon Lee - are bringing a fresh perspective to subjects which were once the sole preserve of the West. It is perhaps significant that the newest visiting professor at Aston Business School is an emerging Chinese expert in brand management - Fu Guoqun.

Find this article useful?

Get more great articles like this in your inbox every lunchtime