Horasis:The Global Visions Community Horasis China and business Asian business Asian business globalization systemic risk sustainability management consulting Asian trade globe visions leadership skills scenario-building World Economic Forum Frank-Jürgen Richter Frank-Jurgen Richter Frank-Juergen Richter Frank Richter
      Home Site Map Email
Electrification of cars helps establish China as global tech leader
2018 Reforms Beckon For India And Modi
China in driving seat toward greener future
Business must get on board with B&R, Brexit, CPTPP
China leads way amid need for green tech progress
Asia Needs more Dialogue
Solutions to urban pollution may prove complex
Spread of ESGs could herald new global movement
Investing in quality education is imperative if India wants to reap demographic dividends
China needs to lead in new multi-stakeholder world
China’s B&R initiative leading a resurgence of Asia
Education is key - but long-term: Can we survive?
New wave of robots will be beneficial to all
China needs to continue with its ‘heavy lifting’
Time is right for Chinese firms to invest in Europe
Robots to the rescue for China?
Asian Multinationals are Going Global, But to Where?
China ratchets forward with energy efforts
China’s calm necessary for globalization push
Bridging managerial gaps involves trust-building
China well-placed to power its future through green technology advances
China's new 'springtime' is here
China’s moves show it’s banking on the future
Mindset for action at the G20 summit will be determined by Chinese presidency
Chinese head-hunting intensifies for rare managers that can steer overseas firms
US talk of isolation jars with growing links in Europe and Asia
Electoral rhetoric on global trade not in sync with reality
Is it time to be prudent and consider austerity policies again?
What will we do if we have no oil?
Unlock talent by finding the right fit for a person
The benefits are real and tangible
Trade along China’s ‘One Belt, One Road’ won’t succeed without the currency of trust
Reasons for optimism about the long term
Can big oil go green and win?
Poorer Nations Could Sway Climate Talks
Combating Idleness and Deprivation
How China can be a model of food sustainability for the developing world
Kyoto II – Is it a Done Deal?
A meeting of the two largest economic powers
Why China will experience a 'soft' landing
Beware of superstitions
The Elephant and Dragon move ahead
G-7 target on fossil fuels raises many questions
Why Battle for Net Neutrality in the US Matters Globally
China’s resurgence – the ‘normal new’
Wanted: A managerial culture that embraces cultural differences
China's early education plan a smart investment in the future
The New Normal for China and India
China's infrastructure push offers a sure track to better growth
US-China climate pact a good start, but not quite enough
Rethink the human’s place in the ‘digital revolution’
China springs a carbon surprise
Infrastructure - the invisible hand in full view
Dialogue vital for survival of Iraqi nation
China must nurture a new generation of beautiful minds
Great expectations in China and India
GM Cereals – The Pros and Corns
Time to be Honest about Our Energy Prospects
Weathering the Storm of Climate Change
Making a Big Decision? Beware of Your Biases
West Deserves Better Logistics Infrastructure
Digital Currencies do Represent the Future
From 'Printed' Houses to Wooden Skyscrapers
It’s time to bail out our schools, not our firms
Solution to India’s housing shortage – print new ones!
And the most promising green technologies of 2014 are ...
Transport infrastructure key to domestic, export growth
Oil stopgaps: Not worth risking
Why the US should grant Edward Snowden amnesty
May we be more optimistic!
China headed for another massive social experiment?
A dialogue that worked
Yes, politicians deserve vacations - because we benefit
NPOs, NGOs invaluable as creators of dialogue
Look closer and ask: Is America reinventing itself?
Boston bombings case underlines need for dialogue
Millennium Development Goals or own goals?
As usual it's about balance - and timing - of course
Chinese strategists make right moves for growth
Preparing for tomorrow
Austerity or growth?
Japan in danger of becoming 'just a place to fly over'
Beware of the business cycle?
An inconvenient truth
Limited offer sale: Buy a country
Where did our money go?
Leading from behind - a year of elections is almost over
Driving towards a green future
Waiting for springtime
Preserve or Perish
Startlingly similar Asia policy for Obama, Romney
Globalisation remains an irresistible trend
Google has the edge in smartphone war
U.S. Braces for China's Rise
Mankind’s General Scourge
The summer holidays are over and nothing has changed!
Put the hidden trillions to work
Making sense of India’s woes and wonders
Storm in a teacup!
Let’s give bad bankers a venue to admit their sins
News is about depth, not puff or velocity
Booming India, but too few toilets
Delayed Court decisions doesn't mean one may continue to play 'Great Game'
We need media to reflect on data and offer public a balanced view
Big polluters can lead in forging common purpose
The weighty issue of choosing a leader
EU-India Relations - Facing similar challenges
Educating with a goal
The Judicial Malaise
We are growing out, but not growing up
EU´s retrenchment enigma
Urbulence in the Eurozone and the effect on SMEs
Skolkovo May Help Russia to Diversify
Make things more effective
Tapping into the Commonwealth connection
Innovative models for public finance
Facebook revolution but Indian style
The feel-good factor
Asian investors - a private equity opportunity
India needs to be taller and stronger
China´s low sales volume...
Nations playing leapfrog
Shafts of sunlight
What webs we weave
As performers go to Davos, the circus steals the show
Can we control the politicians?
Europe’s reminiscence
China firms should go for win-win in overseas ventures
Of procrastination...
Making sense of profiteering
Truth about financial mess must be laid bare
Small is also beautiful
China can help Europe with debt crisis
Excising the cancer of global corruption
Education, a critical asset
Arab uprisings set in motion forces of creative destruction
A new era of change
We must ensure better education for all
Beijing wary of bankrolling a lost cause
Asean's re-emergence as a local and global leader
Why India's Role in the Global Economy is Still Work in Progress
Its the leadership, stupid!
Reverse globalisation: The new buzzword
Asian Multinationals are Going Global, But to Where?
By Frank-Jürgen Richter
BrinkAsia, March 15, 2017

Entrepreneurship has a long tradition of first exploring the local neighborhood, then expanding into the next country before going global. Yet, there is a growing community of firms that are designed from the start to be global, called “born global.” However, they work in niche markets and never manufacture without a prior order being placed—typically several thousand pairs of shoes, for instance.

What is evident to many—in government ministries, regional advisory centers and to concerned managers—is the growing strength of globalization that touches everyone. Global firms’ representatives and local firms alike discuss what subcomponents can be made, at what price, and at what production rate. Then, third-party logistics providers link original equipment manufacturers to the assemblers and eventually to customers across the globe. Few are untouched by this process.

The questions asked by local managers are “Is my product good enough?” and “What is my next step?”

Big Picture Considerations
Taking the big picture first, we note that Asian pan-national groups meet regularly to assure each other and the rest of the world that Asia prioritizes the success of its economy and its international relationships. These groups, such as the International Conference of Asian Political Parties(ICAPP), the Association of Southeast Asian Nations (ASEAN), the Asia-Pacific Economic Cooperation (APEC) and the Shanghai Cooperation Organization (SCO), regularly update their targets and present their communiqués on their websites.

They also have focused sub-groups, such as APEC’s Human Resources Development Working Group, which considers the ramifications of global and regional interactions into the future. The working group has noted that 40 percent of global employers claim that they cannot find the talent they need, and in some APEC countries, this figure may be over 80 percent. This shortfall costs businesses lost revenue and is projected to become more problematic. This is challenging even if Asian businesses remain content to work as global assemblers, but is almost insurmountable if they aspire to progress to knowledge or management work.

Expansion Challenges
Academic research shows a need to bridge the gap between the perceptions of management academics and practitioners. Policymakers demand a wider repertoire of skills, demanding an intensive insight of the fundamentals of disciplines—but the rapid rate of change in reality and the slow change in academia (to formulate and initiate new courses, for instance) magnifies this fundamental fissure.

For example, China has a very large population of predominantly young smartphone users who download all trending apps, including online financials, making China the global leader in fintech. These apps permit 95 percent of China’s citizens to order online, making the country’s user base half the global total. Consequently, the operation of “fulfillments centers” (taking Amazon’s usefully descriptive noun referring to its warehouses and their operations) have, in China, become very highly tuned—both to customer needs and to the commands of web operators like Alibaba, Tencent and Baidu. They have moved into online banking, and although they are regulated, they are nevertheless huge operations. Ant Financial, an affiliate of Alibaba, is the world’s third-largest online payment platform and valued at $60 billion—about the same size as Switzerland’s largest bank, UBS.

Such business innovators wish to move deeper into other Asian countries, or go global, having proved their systems within China. They feel they are able to leapfrog conventional banking, but they have been regulated in China not to compete fully with the much larger traditional banks. However, while meeting local regulations, they do not necessarily meet overseas regulations. Foreign customers will soon demand Chinese fintech and will require regulations to be more accommodating—although the important requirement is in recognizing the differing needs of customers located far from one’s homeland.

Dealing with Diversity
A few years ago, Professor Owen James Stevens at INSEAD found his teams arranged in regional groupings were inclined toward their national norms—the groups either looked to rules-based solutions, remitted difficulties to their bosses, insisted on pragmatic one-off solutions, or looked to family members to give advice (which was a difficulty as they were not working in family-based teams). This research complemented the global organizational dynamics research of Geert Hofstede. Imagine, therefore, a team of bright entrepreneurs with a hierarchy comprising individuals from different countries—alone, they would work differently from each other, but forced to work together, they could be offended by the management style of their team members. It is difficult to obtain training academically and in practice that will overcome such diversity issues—as Hofstede notes, “culture is the software of the brain,” and it changes very slowly.

Successfully Going Global
I have chosen to look, not at exemplars of good “going global” practice, but at potential gaps in the development of Asian firms wishing to expand from their homelands. The major issue is the lack of education. In part this is basic—not enough quality, early teaching is given to youngsters across the region; but in tertiary education, there is a schism between academic training and the realization of theory having a practical purpose.

If firms go global by acquisition, they risk developing a management hierarchy that does not work effectively together. If they expand into greenfield sites, they risk over-extending their own management structure and having staff always in-flight rather than on the ground.

The answer is to allow time for firms to expand at their own tempo, allowing them to absorb the best global customs and practices—they must engage in lifelong education. If they rush to expand, for a while they may be successful, but they are likely to trip over foreign regulations, or more likely, over their lack of culturally specific interpersonal skills.

Yet, on a positive note, better transport links, potentially afforded by the Chinese “Belt and Road Initiative” (formerly known as One Belt, One Road) have the potential to produce greater virtual density, lowering congestion and pollution, spurring innovation, productivity, job growth and a more powerful sharing of knowledge, labor and investment. As The Belt (as it is known now in China) connects via land and sea, its creative impact will be large, limited only by one’s imagination.


The author is founder and chairman of Horasis, a global visions community.


Horasis is a global visions community committed to enact visions for a sustainable future. (http://www.horasis.org)

For more information, please contact:
Communications and Public Affairs
Horasis. The Global Visions Community
phone: +41 79 305 3110
fax: +41 44 214 6502
e-mail: visions@horasis.org
Copyright © 2005 Horasis Web by Toronto Web Design