Post-Crisis Trends in Asian Management
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Post-Crisis Trends in Asian Management Min Chen The American Graduate School of International Management, 15249 N. 5th Avenue, Glendale, AZ 85306-6000, USA. E-mail: [email protected]
This article reviews recent major changes of management practices among Asian companies and analyzes trends of development. The 1997 financial crisis, combined with the ‘Information Revolution’ and globalization, brought unprecedented pressures on traditional Asian companies to change. Japanese keiretsu, Korean chaebol, ethnic Chinese family businesses and even China’s state-owned enterprises have begun to transform themselves, though the pace of such transformation varies from country to country. One Western concept of management that has uniformly received attention from these Asian management systems is that of shareholder value, as most Asian companies previously cared much less about building up shareholder value than increasing market share and pursuing rapid growth. Asian business practices are Asian companies’ reaction to a relatively unique business environment in Asia. Without that environment being fundamentally changed or modernized, it would be unthinkable for Asian companies to completely transform themselves from what they have been. Nor is it necessary for them to completely shed their traditions. Their practices led to growth in the past and in some situations could continue to permit short-term growth. Asian Business & Management (2002) 1, 39–58. DOI: 10.1057/palgrave.abm.9200005 Keywords: Asian management; keiretsu; chaebol; Chinese family businesses; China’s state-owned enterprises; Asian financial crisis
Introduction The financial crisis that broke out in the summer of 1997 has brought pressures on traditional Asian companies to change. In order to survive the crisis and cope with the challenges of the ‘Information Age’, Japanese keiretsu, Korean chaebol, ethnic Chinese family businesses and even China’s state-owned enterprises have begun to transform themselves, though the pace of such transformation varies from country to country. However, one Western management concept that has uniformly received increasing attention from these Asian management systems is that of shareholder value, since up to now most Asian companies have cared much less about building up shareholder value than increasing market share and pursuing rapid growth.
Min Chen Post-Crisis Trends in Asian Management
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Transformation has brought new life to some struggling Asian companies. Nissan is among the most encouraging examples. The debt-ridden keiretsu, led by Carlos Ghosn of Renault, has experienced a dramatic turnaround. In contrast to US auto-makers gasping in the throes of production cuts and layoffs at the beginning of the new century, Nissan announced a new expansion in North America. For others, transformation has seemed too late and too weak. Daewoo is a classical example. The founder of the Daewoo Group, Kim Woo Choong, was once revered as the man who built a small textile-trading house into Korea’s second largest industrial conglomer
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