1) What are the main variables used in the World Values analysis and what does each of them represent? 2

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1) What are the main variables used in the World Values analysis and what does each of them represent?

2.How do you explain societal development towards a modern condition?

3.Why and how can Confucian dynamism be so influential in the region?

4.Will China get through the middle income trap and if so what will be the main influences on its doing so?

5.Why and when might India catch up with China?

“ ? Chapter 2 ASIAN CULTURES AND BUSINESS SYSTEMS + Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 2 Chapter objectives After reading this chapter, you should have an understanding of: The principal economic cultures of the region The cultural features of Asian economies 0 1 2 3 The nature of societal change when developing towards prosperity Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 3 Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 4 Table of Contents 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. The cultural origins of Asian economies Comparative data for East Asian economies World Values Surveys Cultural Map 2005–08 Societal values Tendencies in the transition to the modern condition Societal change towards development The principal economic cultures of the region The advanced city-states JAPAN The advanced Northeast Emerging ASEAN The post-socialist economies Review Questions Case Study: Motorola in Malaysia Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 5 The cultural origins of Asian economies • The region contains great contrasts in culture and in development • Per capita GDP ranges from $646 in North Korea to $53,000 in Singapore • The variety of business systems influenced by six major religious/philosophical systems : Confucianism, Islam, Buddhism, Taoism/Zen, Hinduism, and Christianity • Influential injections of Western Enlightenment rationality in places like Hong Kong and Singapore recently by Globalization and WTO • Japanese production rationality spread into the region’s factories • This region is highly influenced by a fifth dimension with a special relevance to the region known as “Confucian dynamism” • The learnings include diligence, patience, tolerance, and a long-term search for respect with some variation in the social unit of primary identity: family in China and Korea; work-group in Japan • Events in 20th century including colonization, war, cultural revolutions played a big role in shaping the society Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 6 Comparative data for East Asian economies Notes: Human Development Index: less than 50 = low; 55-69 = medium; 70-79 = high; 80+ = very high Economic Freedom Index (Heritage Foundation): ratings out of 100, higher is better Ease of Doing Business (World Bank): rankings out of 190 countries, lower is better Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 7 World Values Surveys Cultural Map 2005–08 Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra Source: Inglehart and Welzel (2010) 8 Societal values • The World Values Surveys studied human values using data representing about 90 per cent of the world population • There are two primary dimensions: survival versus self-expression; and traditional versus secular-rational Survival versus self-expression • Survival versus self-expression reflects the degree to which individuals are free to express themselves in the society • Individuals are not repressed or restrained by the social system in which they live • Opinions are openly expressed without de-stabilizing the society Traditional versus secular-rational • Traditional society: Life is lived mainly in a way that reflects ancient ideals of identity, relationships, and order. • A secular-rational society is different from a traditional one in that its people generally do not accept subordination to a supreme being Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 9 Tendencies in the transition to the modern condition The above figure outlines in simple terms the transition from one set of three balanced forces (pre-modern) to another set (modern) Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 10 Societal change towards development v Societal business systems are not static but adaptive in nature with changes in technology and politics v Centuries of societal change required to move from one to the other v The pre-modern society: Political: variations on autocracy. § Political power may be concentrated at the top of one hierarchy, as in dictatorship. § In Form of dominant elite military dictatorship, or single party-controlled structure eliminating contenders, or an oligopoly as in crony capitalism. v Economic: extraction of the surplus § The elite uses its authority to extract wealth from the economy. § Payments for licensing and permission-giving, access to capital, ownership of key assets, ventures via key intermediaries and participation in v Social: sedation of the masses § In Poverty its difficult to mobilize radical change and ideology to sedate the mass of the people into believing that the elite are working for the total good v From pre-modern to modern § Societies operating on the basis of elite dominance cannot easily develop the kind of institutional infrastructure and conditions of hyper-competitive global business Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 11 Societal change towards development The modern society Political § In a modern society people think and act for themselves § Dominant elite is acting on behalf of the population & can be replaced if required. § The system entail an elected leadership, allows open pluralist debate, academic freedom supported by free press Social § Adaptiveness helps the system to be flexible in the face of change and of new opportunity. § Cooperativeness foster the knitting together of the whole system beyond the networks of personal connections. § The adaptive society embraced science and technology & encourage innovative thinking among its opinion leaders § Governing & entrepreneurs Collaborate to create institutions which cooperates by guaranteeing reliability and predictability in dealings. § Civil society represents collaboration in the search for order Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra Economic § Economic wealth accumulates through competition on fair market terms. § Free market & government helps in fostering competitiveness & efficiency § Success in the ecosystem helps key players to act based on moral principles that support societal good in a legitimate way which adds to society’s driving force The modern results § Modern societies share certain universal achievements. These are: 1.Societal leadership is by election and is temporary, with orderly succession. 2.Many institutions have evolved to achieve dense cooperativeness in transactions, and this goes beyond that based on personal networks. 3.Many institutions have evolved to achieve a high level of adaptiveness and innovation to manage change; open, informed, and pluralist debate maintained; and scientific enquiry encouraged. 12 The principal economic cultures of the region Main regional clusters of economic culture in order of per capita GDP The advanced city-states 1 The advanced Northeast 2 Japan 3 The post-socialist economies Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 4 Emerging ASEAN 5 13 The advanced city-states v Hong Kong and Singapore have much in common but evolved to be distinct from each other v Main similarity is their experience in blending Asian and Western culture v Historically Hongkong was British and its legal and administration systems forwarded from the colonial period v Hong Kong grew with a open free-market capitalism with Government positioning itself as “positive non-intervention.” v Singapore has grown with a much more interventionist development policy v Primary cultural influence in both countries has been Confucianism v High levels of self-reliance but low levels of communal belonging is visible v Both the state is not considered a democracy but high level of local consultation and government accountability is visible v Several features flow together : • Traditional, Moral social order • Free market ideology and opportunities for familistic entrepreneurship • Long traditions of commerce • Access to utilitarian formulas for capital and business ownership • Powerful work ethic & openness to the benefits of globalization Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 14 JAPAN v Culture quite different from most other Asian societies v De-centralized authority, both in the society and in economic organizations v Very orderly society capable of great adaptiveness, a rare combination owes much to its history: • The political philosophy of Tokugawa’s interpretation of Confucian order • Sorai’s amendments towards decentralizing power • Meiji Restoration brought reformations in practices and institutions to match in a Japanese way the imported modernizing initiatives v 1st wave of modernization at the end of the 19th century followed by a 2nd after World War II v Horizontal order in Japan reflects an unusually high level of societal trust and cooperativeness with complex ownership groupings & supply chain dependencies v Elaborate systems of guidance and consultation linked with government policy with industrial interests v Cooperativeness is also fostered by high standards in public administration, a legacy from the samurai era & an echo of earlier Confucian ideals Some culturally influenced tendencies: • Consensus seeking • Ritual deference to hierarchy, • Cooperativeness based on a sense of common good • Professionalism in administration • Accountable governance Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 15 The advanced Northeast v Korea and Taiwan, both with Confucian influence & subjects of Japanese colonial dominance for the first half of the 20th century v Confucianism traditions of vertical and horizontal order v The Japanese experience added to those traditions idea of “developmental state.” • Strong government control supervising the economy • National investment in the provision of needs in human capital and technology • Encouragement of local entrepreneurs in building globally competitive companies v Taiwan's natural, cultural affinity with China resulted in flow of business dealings and investments from China v Great deal of investment and influence flowing in from the USA in the development of technologies in both countries v Post-war growth with strong government direction and slowly adopted democratic government v Both got through the middle income trap Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 16 Emerging ASEAN Philippines, Indonesia, Malaysia, and Thailand comes in this category Region of great contrasts & of four main cultural origins: Islam (Indonesia, Malaysia), Catholicism (Philippines), Confucianism (everywhere with ethnic Chinese), and Buddhism (Thailand) Traces of different colonial histories: Dutch in Indonesia, British in Malaysia Most striking cultural feature:Economic power of the very small proportion of ethnic Chinese A common social feature is dependence on authority figures in the immediate society, such as landowners, local politicians, or employers Accumulate cultural norms of deference and connection such as bapakism in Indonesia, and the compadre tradition in the Philippines. Hasegawa & Witt, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 17 The post-socialist economies v The main societies here are China, India, and Vietnam, v Versions of socialism § § § Extreme in China’s Cultural Revolution India’s attempted self-sufficiency through import substitution Vietnam the Communist outcome of long wars of independence v These societies struggle with the dilemma of resolving the conflict between (a) the control of stability and (b) empowered initiative v INDIA § Indian version of progress rests on democracy and widespread empowerment § it leaves the society handicapped by a huge bureaucratic machine inherited from the socialist past and § Weakened by petty corruption. CHINA § Benefitted from the 30-year period of opening up sponsored by Deng Xiaoping. § Utilitarian familism within the culture, allied with the temptations of authority § Led to rampant corruption among officials. § The weakness of public good consciousness remains China’s main cultural handicap § Underlying weakness that will limit the society’s capacity to handle complexity at world standards of competitiveness. v Hasegawa & Noronha, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 18 Review Questions What are the main variables used in the World Values analysis and what does each of them represent? How do you explain societal development towards a modern condition? Why and how can Confucian dynamism be so influential in the region? Will China get through the middle income trap and if so what will be the main influences on its doing so? Why and when might India catch up with China? Hasegawa & Noronha, ASIAN BUSINESS AND MANAGEMENT Powerpoint Presentation Production by Tanmaya Mohapatra 19 THANKS! Any questions? 20