The Asian Manager, March 1990 Issue

Sr'uesrno, tl,lc,

A PUBUCANON OFTHE ALUMNIREIATIONS

AND PI.ACEMENT OFFICESAND OFTHE FEDERANON OF

THE ASlAtl INSTITUTEOF MAAIAGEMENT

ALUMNI ASSOCIATIONS

voL ilr No. 1 / MARCH 1990

/&ttu

NEWDIMENSIONS

INFINANCIALSERVICES

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2 THE ASIAN MANAGER e MARCH 1990

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THE ASIAN MANAGER r MARCH 1990 3

THE EDITOR

FtomtlteMitor

AIM's21 stJoint Board of Governorsand Trustees Meeting

fhe Asian Institute of Management refers to the annualI event taking place March 1,-3 this year as the joint board

of governors and trustees meeting. It is an inportant timefor the Institute, for it is during these few short days thatbusinessmen from throughout Asia, Europe and NorthAmerica assemble to review the past year's programs and todel iberate upon the academic and business act iv i t iesprogrammed for the newyear.

AIM does much more than conduct the annual meeting ofits boards during thishec t i c and exc i t i ngweek, however. Joiningthe governors and trus-tees are the trustees ofthe AIM Scientifrc Re-search Foundation (10AIM alumni sit on the15-person board), theofficers of the Federa-tion of Asian Instituteof Management Alum-ni Associations and theIns t i t u te ' s rep re -sen ta t i ves i n As ia .These organizat ions,t oo , rev iew and ap -prove news plans andstrategies for the rapid-ly unfolding year.

1990 promises to be-come a special year forth is formal gather ing

wi th the conduct of aspecial half-day management conference titled, THEGLOBAL 90s: A Focus on the Asisn Manager. In the after-noon of March 2, governors, trustees, alumni, students,faculty, representatives of the Institute's donor communityand management experts will attend two plenary sessions: 1)The Implications of Developments in East Europe on [n-vestment and Business in Asia; and,2) Intra-Asian Tradeand Investment.

AIM governor and Rentokil Group PLC chairman DavidK. Newbigging will deliver the keynote address for the frstsession. Co-chairman of the Institute, Washington SyCip,will address the issue of intra-regional trade in the secondsession. A two-man panel composed of enterprise andmedia representatives shall react to their comments, and asubsequent open forum will conclude each session.

The conference represents the Institute's central role in

THE @t@BAt 9@s:

Asian management education and its growing role in publicaffairs affecting Asian governments, societies and organiza-tions. This second and relatively new role for AIM comes ata time when demand for its programs is outpacing thelnstitute's capacity to meet that demand. Although plansare being made to construct an additional building wherethe student parking area is now located, AIM's governorsand trustees will be both pleased and concerned that theneed to address the issue ofresources to support increasedfaculty and facility demand i5 Sessming critical.

In the meantime, ex-pec t t o read moreabout the Inst i tu te 'sGlobal Conference andthe March meetings inthe next issue of THEASIAN MANAGER.

Alumni FundUpdate

aster in BusinessM a n a g e m e n t

Class'70 will announceduring the joint boardof governors and trus-tees meeting, that it isestablishing a five-yearfaculty chair with a con-tribution of P1,000,0(X)(US$45,000) to theAlumni Fund. C lassrepresenta t ives met

early in January to for-malizn their plans for the donation and to plan yet anotherbusiness conference during the Alumni Homecoming inMay. The donation will be conveyed in five, equal annual in-stallments. the first to be handed over to the AIM ScientificResearch Foundation during the Homecoming Dinner.

Individual Commitments to the Alumni Fund (US$125annually) increased by over US$8,000 in the first threeweeks following distribution of the December issue ofTHE ASIAN MANAGER. Total commitments now ex-ceed US$80,000.

The administration and facultywould like to acknowledgethe generosity of these most recent donors and the manyotherswho have made and conveyed donations tothe Alum-ni Fund and the Twentieth Anniversary Fund Raising Pro-gram since 1988.

_MAH

4 THE ASIAN MANAGER o MARCH 1990

And in the business of Iife insurance, Insular Life should be the least likelyto go.

You see, for eighty straight years, Insular Life has been providing dependableprotection and seanrity to generations of Filipinos. We havtn't missed a singleyear of work since 1910. And not even a catastrophe as grave as $Uorld War IIwas able to stop us.

Of course it wasn't easy trying to work at all during a lVorld lJ7ar iust ask

all the other insurance firms that closed down at that time!Today, Insular Life is the first and largest Filipino life insurance company

with the longest unbroken service record in the industry. In 1988, we rankia &thin the nation's top 1000 corg;rations- Last year, our assets totalled P4 billion.

Now who says we can'r be in the business of life for gmd?

rHT INSULAR LIFEASSURANCE COMPANY, LID.

;1i:ii:iJiiiiiiitlii,i

Something permanent in a passing world.


Cover Story

Beyond Strategy: The CEO asMaestroby Dean Horacio M. Bonomeo, fnFor an organization to live its mission,the corporate culture must be real -

permeating each level and functionalarea. Transforming culture and valuesfrom sterile corporate pronouncementsrequires the organization's leader to domore than just lead: he or she must or-chestrate a harmony among its parts andits people. Junbo shares his experienceswith corporations privileged by thedirection of maestros and those mired inconvention by leaders who fail to evertake the podium - and the risk - ofleadership.

From the Editor

alzAIM's 21st Joint Board ofGovernors and Trustees Meeting

Articles

1 2"The Real Estate Boom" - ltsEffect on Income Redistributionby Prof. Donilo A- AntonioWe have heard of blessings in disguise;now, Danny opens our eyes totragedies hidden by the euphoria oflong-awaited and rapid growth in thereal estate sector. Without incentivesfrom government to direct privatecapital toward projects which benefitthe poor, the real estate steamroller is

flattening their chances to own homesor rent decent, conveniently locatedapartments and housing.

1 5Legal Struc{ures lo LiberalizeMarkets: The PhilippineExperienceby Prof.Wtor S. LimlinganWhat can government do for small andmicro enterprises? Stay out of the way,according to Vic, known in the Philippines as the father of the Law of Twenty.

Association of Asian ManagementOrganizationsNovember 27 -D last year, the Associa-tion of Asian Management Organiza-tions held its tenth annual conference inHong Kong focusing on entrepreneur-ship and management. The editors ofTHE ASIAN MANAGER have chosen aseries ofthe papers delivered at the con-ference to publish for the benefit of itsreaders. Two,we are pleasedto note, areauthored by AIM governors.

1 7organizing tor E ntrepreneurshi pby Tanin N imm an ah aemindaBreathing small team entrepreneur-ship into large organizations.

21Sustaining Entrepreneurship inlarye OrganizationsbyYotaro l{obayashiHow to avoid the dreaded "big com-pany disease": Take a few risks.

26EnUepreneurship in the PublicSectorbyMou-HuiKingBreathing life into semi-bureaucraticorganizations may not be easy, but itcan be done.

31Ma nufacturing Technologyby Dr. Reinosuke HaraComputers provide the integrating sys-tem for manufacturing processes andglobal management.

36Slnprq a Swiss Bankbrthe 1990sby Dr. Iturt SchiltnechtStrategic wi thdrawal f rom di rect

6 THE ASIAN MANAGER o MARGH 1990

global banking: an idea that's workingfor Bank Leu.

Features

40Models for Cebu: The NewlyIndustrialized Tiger Economiesof Hong Kong, Taiwan andSingaporeby Prof. GsbinoA. MendazaThe first thing a developing countrygovernment should do is decide what itwill not do.

45lmproving Corporate CaPitalInvestment Performanceby Prof. Emmanuel L. SantiagoA systematic approach to corporate in-vestment ensures maxmum returns.

Alumni News

t a r+6The Class ol'Tl - Partl

THE ASIAN MANAGERA Publicdion of thcAlumni Bebtims and Pleemfft OfiicEsd the Fcdq€tion of the Asim Instiluie of MmagementAlumniAssiations

PublisherFelipe Alfonso

Editor-in-ChiefMichael Hamlin

EditorsSusie Aroyo, Annie Pundol, Sally Flores

Design EditorAl Ballesca

Marketing DirectorDelia Gutienez

EdinrialBurdGaston Ortigas, Gabino Mendoza

Horacio BorromeoTomas lopez, Sonnv @loma

Assocrate EditorsEffie Goh (Malaysia, MBM'78)

lshtiaq Qureshi (Pakistan, BMP 7/)Gan Cheong Eng (SingaPore, MBM A2)

Teerachai Chemnasiri fihailand, MBM'73)Bhaskar Bose (hdia, MM'77)

Copyngftl t99o by thc Aim lrranagcr. Al rilhls rcwd.Rasoacf im in any matmar in v*lob o. in pad in Ehglbh q

ottid hnguagc p.ohittit.d. Thc Aslsn iranagr. is publish-cd qusddy byllEAumri Fbldimsard BaffirntO{fic6of thc Asie lFtitlj|c ot iranagGmnl'

'An original mural by Carlo V. Franciscq at the Administralion Building ol United Laboraloris

Bayanihan in Unitedmeans. . . we care for people

Bayanihan it is the old Filipino custom of working togetherfor a common goal and sharing the fruits of harvest.To us, in United, Bayanihan means commitment fo people.As markedly expressed in the how and the why we dothings. Whether in assuring the excellence of our products.Or in getting involved in socialupliftment. Or in doing ourmighty best to contribute more meaningfully to ourcountry's health, its economy, and the improvement of thequality of life.Caring for people. That's Bayanihan in Unilab.

wUilITED

sfl

United Laboratories, Inc.United Street, Mardaluyong Metro Manila, PhiliWbps

Sewingryr in the Philippina and $utheas.t Asia:Eliomedis o Medichem Pharmaceuticals o Pedhtrica o Theraphanna oUnited American Phamceuticals o Westnront Pharmaceutbals rMyra Pharmaceuticals. Unilab Gen€rics a United Home Mucts aUnivet Agricultural Products


COVER STORY

Living the missian...

Beyond Strategy: TheCEO as Maestro

I n the middle of the concerto's third! and final movement. the con-ductorturned hisbacktoth" o.- f-

by Dean Horacio M. Bonomeo, Ir.USIPHIL Professor of BusinessManagement

lntroduction

a fine pitch.Most corporat ions todaY have a

strategy which they formulate anddocument after countless hours ofconferences, workshops and meetingsduring which key managers reviewpast perfornance, study opportunitiesand th rea ts i n t he env i ronmen t ,analyze the company's strengths and

with their yellowed pages seeing someuse as inputs or reference for nextyear's strategic plan.

CEOs, by this time, have discoveredthat strategy, by itself, does not ensureattainment of goals and objectives.Neither can the most comprehensivcinformation and control systems (al-beit developed from, and built into,

the strategy) guarantee success.My own experience assisting

companies in the developmentof strategic plans suggests thatit is not enough for a comPanYto arrive at a strategJ - it mustspawn one. The difference liesin the extent of involvement ofpeople in conceiving and givingbirth to the stratery. From thisshared parentage comes theresponsibility and commitmentof parenthood, to nurse thestrategy, to see it grow, matureand succeed.

Stratery is a people-orientedprocess, hence the importanceof leadership.It is the CEO whoinitiates this process, who in-v i t es h i s managers t o pa r -ticipate, who inspires in themthe yearning to father a strategYand attend to its birth, who in-stills in them the responsibility

chestra, descended the stage,and seated himself in the frontrow. Leonard Bernstein. whohad nur tured the New YorkPhi lharmonic Orchestra in toone of the world's greatest, was,in his own inimitable and uncon-ventional style, announcing hisretirement. The musicians, assurpr ised and amazed as thePhilharmonic's patrons, neverm issed a bea t . I ndeed , t heyp u n c t u a t e d B e r n s t e i n ' sdramatic statement by finishinghis farewell performance mag-nificently, as if still guidedby themaestro's hand.

Many a chief execut ive haslikened his task to that of an or-c h e s t r a c o n d u c t o r . H i smusicians are the individuals ofthe enterprise; the string, wind,

o0 ' 0

brass and percussion sections are thed e p a r t m e n t s a n d d i v i s i o n s . H i saudience is the market, responding tohis creative interpretations. To pleasethis audience and earn anencore, hemust inspire the segments of the cor-poration in order that they performharmon ious l y , and mo t i va te h i speople to execute their parts master-fullv.

Work ing c losely wi th corPoratentaestros over several years has for-tified my belief that strong personalleadership, and the creative use ofthepower that leadership begets, are thekey to orchestrating an organization to

weaknesses, set goals and objectives,and evaluate and decide upon alterna-tive courses of action. The final docu-ment that results from these efforts isthen bound a t t r ac t i ve lY , w i t h"strategic Plan" proudly embossed ingo ld l e t t e r s on the cove r , andenshrined in the CEO's office, besidethe co f fee tab le books and o the rdecor.

Copies are prepared for the operat-i ng depa r tmen ts , whe re theY a requickly filed away and forgotten. AfterL2 months of hibernation, these docu-men ts a re resu r rec ted and thestrategic planning cycle continues,

to nur ture i t . The CEO cannot ac-complish this without focusing the or-ganizat ion around a fundamentalcommon cause - the mission.

Living the Mission11 mong the many fash ions tha t

Acaught lhe fancy of the manage-ment world in the 80s was the "Cor-

porate Mission Statement." It seemedevery company had to announce andassert its purpose, its reason for exist-ence - to draw a vision of its presentand future business and its relation-ship to the world outside. Yet despite

I THE ASIAN MANAGER r MARCH 1990

the enormous amounts of time, moneyand effort spent on the formulationand promulgat ion of such miss ionstatements, often they merely servedto decorate annual reports and rarelypermeated the organizational fiber.

Every corporate miss ion is am-bitious, as it should be, for man findsno chal lenge in mediocr i ty . Sadly,however, this same lofty aspiration istoo easily lost and forgotten in themaze and morass of corporate life'sday-to-day realit ies. The way out ofthis trap lies in discerning the missionin everyday life and making the mis-sion a part of l i fe's realit ies; i.e., inliving the mission.

Strategy as a Way of LifeEvery CEO would probably l ike toE seoall his manaeers. ciown to thel o w e s t l e v e l s , - u l k i n g d e c i s i o n sstrategically. This does not mean thatfrontline managers will dictate or evenp re -emp t a company ' s s t ra tegy .Rather, it suggests that managers, atall levels, should make decisions, even(and perhaps especially) the day-to-day ones, in accordance with the cor-porate strategy. Indeed, the ultimategoal of strateg5r is to guide such day-to-day decisions (As more and more in-f o rma t i on becomes ava i l ab le t ofrontline/firstline managers due to in-creasing technological sophistication,and as the companies'need to reactfaster to such information in order toremain competitive becomes critical,t he day - to -day s i t ua t i ons o ffrontline/firstline managers will be-come ma jo r s t ra teg i c dec i s i onpoints.).

The strategy itself (i.e., the substanceof the final document) must originatefrom the corporate mission, or thereason for the company's existence.F rom the m iss ion s ta temen t w i l levolve goals, objectives, strategies andaction plans. These are arrived at byasking a series of questions.

Irt us take the mission statement of amultinational pharmaceutical com-pany in the Asia-Pacific region as anexample. The miss ion statement ,which itself was finalized only aftermuch discussion and collaborationamong key personnel from corporateheadquarters, regional offices, andcountry operations, reads:

"Our mission is to be the leadingdeveloper and marketer of premium

qua l i t y p roduc ts i n se lec tedhealthcare categories for the benefito f our customers, employees andshareowners around the world."

Goals are statements of excellence,or distinctive competence, that arenecessary to fulfill the mission. In es-tablishing goals, the question is: Whatareas do we need to be reallygood at ino rde r t o be t rue to ou r m iss ion?Through intensive discussions anddeliberations at various levels of theorganization, management identifi edsix areas where the company neededto excel in order to realize its mission.I will enumerate three of the six, alongwith their corresponding goal state-ments.

indigenous management develop-ment."

From each c luster of object ives,management then designs strategicprograms (c lusters of re lated ac-tivities) for achieving the objectives.He re the key ques t i on i s : wha tprograms do we put in place to achievethese objectives? For instance, the ob-jectives supporting the "Marketing

Excellence Goal" might have strategicprograms centering on "market re-search" capabilities, product manage-ment systems, and sales force develop-ment.

Finally, for each strategic program,management wil l formulate actionplans. The questions to ask are: what

GOALAREA GOAL$TATEIITTTT

Marketing excsllerrce- &railistr awoiA Uasewhbh effestfuelyreryondstomer rpeds ln each d our markets.

Producl leadershiB Provide prodticts which result in superiorcuslomer saiis{action so as to achbveand sustain brand leadership in ourchosen ssoments.

People Develop end {nalntajn a motivat€d taarnot high qualr.ty peoplo wo*ing in an en-vironrnehl that fostere acoomdishrnent,delegation; oreEtiviE, mulual tosp6ct andp€Eonal development.

Necessarily, because of the long-term nature of a corporate mission(the mission always assumes that thecompany will exist indefinitely), thetime frame for the goals will tend to beunspecified; they, like the mission,represent a continuing effort (liketracking a moving target).

On the other hand specific objectivesmark the organizat ion's progresstowards its goals (and ultimately therebytowards its mission). Objectives reflecrthose areas where significant results arenecessary to arrive at the states ofexcel-lence the goals define. They representmeasurable levels of expected perfor-mance, Expressed in-more ilearlydefined imperatives and time frames.The key question here is: vfrat must weachieve and how soon do we need to -

achieve these things in order to getcloser to our goals?

Each goal area will have a set of suchobjectives. "The People Goal" in theabove example might have as objec-tives: "to have in place in 1989 the fullteam of quality people needed to fulfillour mission," and "to upgrade perfor-mance and attitude levels in anticipa-tion of 1988-92 Long-Range Plangrowth attainments, with emphasis on

specific steps do we undertake thisyear in each program? who wil l beresponsible? when do we start/frnish?

I have elaborated at some length onthe above example to make the pointthat the series ofquestions (and neces-sarily the discussions they engender)that lead to a strategic plan may ap-pear tedious and at times redundant,seemingly a matter of semantics (as indifferentiating goals from objectives,or strategies from action plans). In-deed the process may take months.But i ts purpose is to br ing mindstogether, to explore meanings andmo-tives, and to achieve consensus. It is anoccasion for dialogue, whether thattakes place in a seminar, the executivesuite, a workshop or the shop floor.And leadership is necessary for thisdialogue to be sustained, meaningfuland productive.

For strategic management to be-come a way of life, for the strategy tobe a living one, people need to be in-volved from its very beginnings, notjust as owners, but as fathers of thestrategy. The process described aboveinvolves many people from differentlevels of the organization, each bring-ing expertise and points of view. It is


not an easy process. To harness thediverse expertise and to reconcileeven more diverse perspectives, theCEO must keep everyone focused onthemission, as theymove fromgoals toobjectives to strategies to action plans.

As people participate in the strategyformulation process, the more awarethey will be of the larger parametersfor decision-making. Consequently,the more there are involved in thisprocess, the more therewill be amongthem those who th ink . and make

and interpreting the problems and op-portunities it presents.

Central to any culture are the valuesfrom which it emanates. From thesevalues spring norms and standards forbehavior, and the attitudes necessaryto successfully carry out the corporatemission through business strategies. Inmany corporations, these values arethose of the founders.

Once in a while, a corporation hasthe opportunity to identi$, to chooseits values. This can happen when

be served and reinforced, an environ-ment that will facilitate and encouragecommitment to these values.

This requires the creation ofheroes,establishing rites and rituals, holdingceremonies, writing and telling mythsand legends; all these in support ofthevalues, constantly transmitting themessage that these values are impor-tant, that these values are what the or-ganization lives by. Leadership there-fore must inspire and excite, ratherthan direct, because the development

decisions, strategically. At thatpoint, the companyis practicings t ra teg ic management andstrategy becomes a way of life.

Since s t ra tegy isoperationalization of the mis-sion statement, results shouldbe viewed in light of the cor-porate mission. Al l too fre-quently, especially at annualconferences, managers evaluateperformance against budgets.This is important enough, sincebudgets reflect objectives. Yetvery few managers ask themsel-ves if their periodic results havebrought them any closer to theirmission, if they have performedaccord ing to the i r u l t imateaspirations. The CEO must con-sistently and continually raisethis question.

This entire process requiresstrong hands-on leadership bythe CEO. He moves, guides,oversees and directs the effort throughtask groups, each dealing with greateror lesser, higher or lower parts of thestrategy, each spinning offother taskgroups as needed, thereby strengthen-ing further the strategy's pedigree.Agreement with the mission is fun-damental and a source of uni f iedthinking, for it is the mission that jus-tifies everything else that the organiza-tion does.

; f strategy and strategic managementlarethereperto i re - the musicalscores - that the organization plays,then surely culture must be its uniquetone and timbre. Every corporationhas a culture. It is the sum total of col-lective experiences translated into aspirit of coping with the environment

o f a co rpo ra te cu l t u re i s aprocess of discovery.

The same multhational com-pany I c i t ed ea r l i e r , a f t e rseveral months of implement-ing thei r s t rategic p lan, ob-se rved tha t p rog ress wassmoother where people d is-played a certain spirit, a certainat t i tude toward thei r work,their products and their cus-tomers , a conv i c t i on abou tthemse lves and the i r co l -leagues. What they had ob-served were values.

To ge t a be t te r hand le onthese va lues i n o rde r t opromote them in the organiza-tion, the managers who had puttogether the strategy recruitedothers and reflected at greatlength on the mission statementas well as corporate history andvarious inputs from all sectorsand segments. They concluded

management discovers that even asthey implement their strategies, cer-tain attitudes andbehavior either helpor hinder their ef forts. They thendeliberately set out to create, or re-create, the corporate culture. Theybegin to askwhat theybelieve in, whatbeliefs will guide them. Without thesebeliefs about themselves and thosethey deal with, without these values,the highest organizational purposeprovides insufhcient motivation for itsachievement.

A Process of Discovery1 n creating a culture, leadership is in-I dispensable. The CEO must chal-lenge his managers and the entire or-ganization to reflect onwhat is impor-tant to them and what will give mean-ing to their work. Having identifiedthese values, he must then design theenvirorunent in which these values can

that for their mission to be truly mean-ingful , their act ions needed to beguided always by the following corevalues: total commitment to quality,respect and care for people and sen-sitivity to customers' needs.

Claiming (in their mission state-ment) to be a marketing-oriented or-ganization, they applied their businesscompetenc ies to the bus iness o fmarketing the culture. The CEO ledthe effort by "anointing high priests"who would "convert" others to thenew faith. They devised programs tocommunicate and reinforce thosevalues throughout the organization.Reward systemswere recast to ensurethat those who behaved according tothe core values would be recognizedand held up as heroes and champions.It was no longer sufficient, for ex-ample, merely to reach sales targets;people had to demonstrate that inachieving those targets they had acted


according to the corporation's values.Support staff began to identify theirinternal clients so that thev could learnto be sensitive to the oeeds oftheir"customers," and their internal ser-vices would be of the highest quality.

For the CEO to succeed in fosteringa culture, he himself must be an ex-ample to others - a role model - onewho has reached the corporate heightsby living accordirg to the core values.In this way wil l he animate the or-ganization.

PeopleDevblopment andSucceisionPlanning11I ot every musician can become allvirtuoso, but everyone tries toexcel at his art. Even if his ambition istobecome a soloist, he knows he mustperform with others. As a soloist, hemust be better than the accompanylnginstrumentalists. As a member of asymphony, an ensemble, or even a trio,he must be at least as good as theothers. So the quest for excellencenever ceases.

Developing the human resource isalso a never-ending process. The skillsof today are never good enough fortomorrov/s competition and the ever-ghanging environment.As an organizat ion develops i ts

strategy, its managers begin to discernthe sk i l l s tha t peop le need tostrengthen or acquire. As the cor-porate culture takes root and thrives,winning attitudes become evident.Human resourcs development en-sures that the organization will alwayshave a pool of competent people,steeped in strategic management,committed to the company's corevalues, and honed in the skills of theirdisciplines.The multinational company in our

earlier examples formally reviews andupgrades its strategies twice a year. InNovember 1989, two years after theyfust adapted the strategic framework,and a year after implanting the cul-tu re , they looked to the comingdecade. They were sure o f the i rstrategies and confident of their pur-pose. It was an opportune time tolaunch a human resource develop-ment p rogram, to p repare the i rpeople to meet the challenges of the90s.

By example andbyfiat, the CEOmust point the way to perfection. Hemust encourage, facilitate and rewardany and all efforts at self-improve-ment. His vision for the compan/s fu-ture must depict in the clearest imagespossible the kind of people that futuredemands. This means championingthehumanresource cause - bygrui"git all the importance and support itdeserves, staffing the human resourceunit with professionals as good as anyin other department, promoting itsrole, and consistently endorsing itswork and worth. Similarly, he mustdignify and [snq1 threugh all possiblemeans those who make of themselvesthe kind of people the companyneeds.A key to any effect ive human

resource development program is suc-cession planning. The CEO can in-itiate this at his level. He should havethe courage and the confidence to seta time frame for vacating his office.This necessitates that he cultivatethose who report to him, preparingthem to be good enough, when thetime comes, to take over his job. Theprocess can move downwards; i.e.,who will take over from the personwho takes over the CEO, and so on. Infact, at any and every level of the or-ganization, the question can be asked:who w i l l succeed the d i rec to r ,manager, supervisor, or foreman andwhen? Other important questions willfollow logically: what skills and com-petencies will the successor need? ifhe does not have themyet, howcan heacquire them? how long will it take?

Once this process pervades the or-ganization, human resource develop-ment acquires its own momentum.Developing potential successors be-comes the responsibility of each andevery manager, equal to the classicmanagerial functions of planning, im-plementing and controlling. Succes-s ion p lann iqg cao c rea te manyanxieties. Through his own self-as-surance, in his relations and dealingswith his heirs apparent, the CEO leadsby example, thus providing the im-petus for people development.

l-eadershipFvervdav a CEO exercises leader-Eship over the men and women ofthe organization, many times directly(as the boss), more often in less ob-vious,yet more meaningful,ways. As a

role model, he inspires. As a teacher,he instructs and directs, influencesand t rans forms. As a f r iend , herewards and acknowledges; some-tines he chides and a.l-onishes.

When all is said and done, manage-ment is not as cerebral a process asbusiness schools unwittingly make it tobe, with their frameworks, models,tools and techniques. To be sure,management demands intellectualand technical skills ofthe highest level.But in the final analysis, managementis about people - people in search ofmeanings.

There are numerous opportunitiesfor a CEO to help the people of the or-ganization find these meanings. Theprocesses ofstrategy, culture and suc-cession planning are three examples ofsuch opportunities, which themselvescan open many more. It is through hisleadership ofthese processes that aCEO gives the organization a mean-ingful life of its own, or at least helpsthe organization discover it.

When Bernstein retired as musicdirector and resident conductor oftheNew York Philharmonic, he was suc-ceededbyZubin Mehta. A fewyearslater, Danny Kaye, a comedian and ac-complished musician who could notread a note of music, conducted thePhilharmonic at a special concert forcharity. He took the podium afterMehta had led the orchestra through abrilliant rendition of a Strauss waltz.Danny Kaye clowned, giggled, teasedthe musicians, heckled the audience,and even conducted the TriumphalMarch fromAida with his back to theorchestra. Through it all, the men andwomen of the New York Philharmonicplayed beautifully. This orchestra hada life of its own, unrnistakably.

THEASIAN MANAGER o MARCH 1990 11

ARTICLE

Ttw mmifesntion of irresponsibk growth and ircfficieru governmenl...

"The Real Estate Boom" lts EffectOn lncome Redistribution

by Prof. Danilo A. Antonio

11 ny keen obse rvc r o f Ph i l i pp inef{business would asree lhal the realestate sector in geneial has been ex-periencing unparallelcd growth pat-terns in the years following the 1986EDSA uprising.

The general consensus is that the up-surge in business confidcnce, led by apreviously hibernating investor base,served as a stimulus in waking up therest of the entrepreneurial class, par-ticularly in the area of real estate in-vcs tmen t . S ince re tu rns f r om suchland-based act iv i t ics normal ly taket ime to generate, the renewcd andv i g o r o u s a c t i v i t y i n t h e p r o p e r t ydevelopment scene serves as a con-crctc mani festat ion of the businessscctor's faith in the country's stability.

Whilc on the surface it looked likcsuch opt imist ic analyses and conse-quent actions taken by business wouldproduce bcneficial "trickle-down" ef-fccts to other sectors of Phi l ipp inesocicty, a deeper analysis ofthe conse-qucnces o[the "Real Estate Boom" atbes t p roduces m ixed resu l t s , andraiscs further issues which should con-cern public sector policy makers. Wespecifically point to the various reper-cussions which unrestricted growth inthc rcal estate sector could produceon income redistribution and relatedissues.

Condo Boom As"Foreign"-Bred

1 . h c r e a r e e a s i l y o v e r 5 0 " c o n -

I dominium" building projects nowongoing all over Metro Manila, mosto f wh i ch a re concen t ra ted i n t heMakat i and the Ort igas-Greenhi l lsarcas. By the end of 1990 to early 199L,there wil l be about 10,000 more con-d o m i n i u m u n i t s a v a i l a b l e i n t h emarke t , w i t h p r i ces rang ing f romP25,000/square meter to a h igh of

P35,000/square meter. An 80 squaremeter uniL (typically two-bedrooms)will therefore cost anywhere betweenP2 mill ion to P3 mill ion.

It is a fact that even as of this writing,condominium units are still being soldat a brisk pace, slowed only to a limiteddegree by the December 1989 coup.Yet, if we consider that there are lessthan 10,000 Filipino families who earnmore than P500,000 per annum andtherefore can afford such high pricedunits, we now begin to wonder wherethe demand for such p lush uni ts iscoming from.'Even assuming for the sake of argu-

ment that at least 50% of all high-in-come families will buy one additionalcondo uni t (probably as an invest-ment), it will still take two years for thelocal market to absorb the 10,000 unitsupply.

Demand therefore has to come fromoutside buyers, foreigners who con-sider the price of condo units in thePhilippines a bargain. These would in-clude investors with US$1 mill ion toU S $ 3 m i l l i o n f r o m H o n g K o n g ,Taiwan, Japan, South Korea and Sin-gapore, or individuals who would havedifficultybuying the same type of unitsat such prices in their home countries.With the sustained level of demandfrom these sources, it is therefore nosmal l wonder that pr ices of condounits continue to move up.

T h i s h a s , i n f a c t , s p u r r e d l o c a lproperty owners and developers tocontinue with their plans of putting upmore condo units, in view of the profitbonanza expected. Property ownersindeed are reaping the benefits of thefavorable market demand in increas-ing numbers.

It is conceded that the continuouslevel of construction does spur a lot ofact iv i ty in the focal economy. Al -though th is prov ides a cont inuingsource of employment for the laborsector and income opportunities forall construction-related businesses,the same development also contains

within itself the seeds of further fissureamong the various sectors of Phil ip-pine society. The rich and the proper-t i ed c l ass w i l l con t i nue to amasswealth through generation of morevalue-added from their land holdings.On the other hand, apart from partak-ing of the crumbs of such bonanza,( l i ke t empora ry and con t rac tua lemployment , etc . ) the low- incomec lasscs a te f u r t he r pusheddownward, with the increasing distantpossibility of their ever acquiring theirown homes. With units at the high-endmarket already costing P2 million, theprice for low-cost housing units hasalso been inevitably pushed upward,such that an increasing number of low-income households already considcrthe cost of "low-priced mass housing"units out of reach.

Taken in this l ight, therefore, it ap-pears that the condominium boom isnoth ing more than a s ignal that thePhil ippines has imported the "infla-

tion" of its prosperous neighbors, withthe net effect of driving up overall realestate prices. While this is beneficialfor the very few landed families, the in-flationary situation only further ex-acerbates the plight of the poor.

What makes the situation evenworseis the fact that construction activitiesare concentrated in Metro Mani la ,further compounding the imbalanceb e t w e e n a n " o v e r - d e v e l o p e d "

metropolis and an "underdeveloped"

rural sector.

fhe."Shopping Center"tsxprosron11 nother visible upswing in con-

l { s t ruc t i on ac t i v i t y i s i n t hedeve lopmen t / cons t ruc t i on o fnumerous shopping center projects inMetro Manila, initiated mainly by theSM and Robinson groups.

SM in i tse l f has three pro jects inMetro Manila which when completedwill have a total gross floor area of 60hectares. Robinson also wil l f inish

12 THE ASIAN MANAGER r MARCH 1990

about 25 hectares ofgross space by thee n d o f 1 9 9 0 . O t h e r t r a d i t i o n a ld e v e l o p e r s l i k e t h e A r a n e t a s i nCubao, the Ort igases in Greenhi l lsand thc Ayalas in Makati are also em-bark ing on re developme nt of thei rrespective centers, which should easilydoublc thei r current bui ld ing f loorareas.

Al l to ld therefore, the tota l grossfloor area ofall these shopping ccnterswill increase by morc than thrce timesthe total selling area of Metro Manilashopping centcrs by the end of 1991.Since demand (as indicatcd by overallGNP growth) can growno higher than6Vo per year, in rcal terms, it is obviousthat growth in demand will bc insuffi-cient to provide needed revenues forthe l essees o f t hese new shopp ingcenters. These centcrs wi l l bc com-pelled to compete for sales with theolder centers or draw f rom the so-callcd "unorganized" retail sector inDivisoria, Baclaran, etc. If this hap-pens, a lot of small-time entrepreneurswi l l bc d isp laced by the new "mal l

o p e r a t o r s , " w h o a l m o s t a l w a y sbelongs to the high and middle incomeclasses. In the final analysis, therefore,i t is again the smal l - t ime businesseswho gct caught by the so-called "shop-

ping center boom."Corollary to this, the new centers fur-

ther tax the a l ready over-burdenedroad and uti l i t ics networks of MetroManila, which have not kept pace withthe g row th o f t he p r i va te sec to r .Necdless to say, this wil l cause morestrain on the chaotic traffic system.

The new centers wil l l ikewise necdmore manpowcr to staff their stores,which will be an incerrtive for the influxo f m o r e j o b s e e k e r s i n t o M e t r oManila. Sincc there arc insufficienthousing units for these employees, thiswil l again add more problems to thea l r e a d y u n m a n a g e a b l e h o u s i n gshortage situation in the metropolis.

Low Cogt Housing AsLaggard

1111tith gross profit potentials grow-U U ins even more lucrative in thehigh-en*cl housing sector, there hasbeen a noticeable shift by subdivisiondcvclopcrs into higher priced lots. Acase in point would be the North Fair-view Subdivision startcd in the 1970s.The a rea has recen t l y been t rans -formed into a medium to high priccdsubdivision by its new developers, withsell ing rates alrcady reaching P3,000

per square meter. This is definitelyout of reach of the ordinary Fil ipinofamily. The fact however remains thathigh-priced lots continuc to bc soldl ike proverbia l "hotcakes" therebyproviding furthcr incentives to privatedcvelopers to develop more such lots.In fact, the situation has reached thoextcnt wherein raw land in the Caviteand Laguna area, which a fcw yearsago could be bought at less than P50per square meter, is now priccd at aminimum of P200 per squarc mcter.At these acquisition rates, dcvclopcrsreally have no altcrnative but to priccdeveloped salcablo lots at no less thanP2,000 per squarc mctcr. Again, thist r a n s f o r m s t h e s e a r o a s i n t o t h cdomains of the high and mcdium classmarkct.

Low IncomeHouseholds "DrivenOut" Of Metro Manila1l\ver the long run, unchecked andl\Junfcttercd erowth in hieh incomeh o u s i n g , w h i c f i c n c r o a c h c s o n t h cdomain of propcrtics hcretofore in-tended for low income households,fur ther l imi ts thc possib i l i t ies of thelatter to own property. Thc only arcas


available to them will increasingly bethose w i th ve ry l ow app rec ia t i onvalues ly ing on the outsk i r ts of themetropolis, where employment op-por tuni t ies are scarce. Hence, byforce of circumstance, the distance be-tween the place of work and place ofres idence fo r t he l ow i ncomehouseholds will become greater. Thisfo rces m in imum wage ea rne rs t osqueeze themselves into the slums ofMetro Manila, where their jobs aresituated. This of course further under-scores the widening gap in the lifestyleof the "few rich" and the "numerous

poor," as exemplified by the ultimateproliferation of "plush enclaves" side-by-side with bursting squatter slums.

Private Sector Takesthe Lead11 ll these developments manifest

l { the net el fect of untrammeledgrowth of private business initiative onoverall societal structures. The publicsector has definitely fallen behind,especially in the provision of basic in-frastructure and services which shouldhave gu ided pr iva te expans iondevelopment and perhaps placed it ina more organizsd Setting.

Thewonder of it allisthat despite theabsence of publ ic sector support ,private investments in the real estatesec tor cont inue to pour in . Thedanger, as already cited, lies in the

c o n c e n t r a t i o n o f p r o j e c t s i ng e o g r a p h i c a r e a s w h e r e p r i v a t emoney expects the best returns, and oninvestment pro jects which are ex-pected to provide maximum profits.Unde r t he p resen t sys tem, Me t roManila continues to be a favorite site.while shopping centers, plush con-dominiums and h igh- income sub-divisions remain the preferred havenof real property investment capital.A l though very prof i table to thei rproponents, these same projects con-t r ibute l i t t le , i f any, to the overal lpublic sector objective of "balanced"

development and more equi tablesharing of income.

Prospectsllte do not forsee any slowdown inU U activiw in the real estate sector forthe next year or so. Barring furthercoups (which affect all sectors of theeconomy anywa, business is expectedto expand, perhaps in a less overheatedand logical manner, but still toward in-vestment areas which are concentratedin Metro Manila and mostly in plushresidential housing areas. Only a few en-lightened individuals in the industryeven think of training their guns on low-cost housing, where margins are tightand profit potentials quite narrow, espe-cially for "newcomers."

Should this type of development bestopped? We submit that government

should pursue policies which will re-channel available investment fundsthrough the use of the "free market"mechanism and fiscal-policy medium.More incentives, such as tax-breaks,subsidized funding and liberalizedcredit should be provided to convinceprivate investors to begin low-costhousing pro jects in areas outs idcMetro Manila. The entry of private in-ves tmen t i n t he i ndus t r y shou ldrema in un res t r i c ted . Howeve r , i fgovernment wants to rechannel even atiny segment of the industry's inves-tible funds to suit its overall develop-ment and income redistribution objec-tives, much has to be done to convincethese private interests that it is worththeir while to do so. Otherwise, we willjust continue to witness the ever ex-panding gulf of the "haves" and the"have-nots," with all i ts consequentsocial implications over the long run.


Freedonfrornthc hreancra4t - rtu fost Stft gowmrnenl cut give...

Legal Structures to Libetalize Markets:The Philippine Experience

by Prof.Wctor S. LimlinganLudo Professor of BusinessManagement

(This paper was delivered at the Con-ference on "Microenterpises and theInformal Sector,' sponsored by theCenter for International PrivateEnterpise, Lahore, Pakistan, Decem-ber 11, 1989 - Eds.)

1n February 1986, as the result of aI peaceful uprising of the people ofthe Philippines, Corazon C. Aquinobecame president of our Republic.The government that she formed wasdemocratic in its political orientationand free market based in its economicprescriptions.

In fu r therance o f i t s economicphilosophy, the Aquino administra-t ion immediately dismantled thegovernment's monopoly powers oversugar and coconut, disposed ofseveralstate-owned enterprises and placed itsreliance on the private sector as themain engine of economic develop-ment. Moreover, the private sectorwas expected to accomplish its rolewith as little support as possible fromthe government. Thus, the govern-ment liberalized imports, removedsubsidies from credit and sought towithdraw from an active role in labor-management negotiations.Such public policies were easily ap-

plicable to medium and large businessenterprises. But what about the smalland micro enterprises? Do they notneed the help of the goverttment? Thetraditional response has been thatgovernment assistance is necessary forthe survival of these enterprises.We took the opposite view. We ar-

gued that Government, in a develop-ing country like the philippines, doesnot have the resources to reach downto the hundreds of thousands of smallbusinesses, either to assist them or to

effectively regulate their operations.To try to do so would require muchmore manpower than Governmentcan ever afford to marshal. Govern-ment regulations are therefore impos-sible to enforce uniformly and equi-tably. They serve merely to give thegraft ers in government opportunitiesto harass, take advantage ofand extortmoney from these small businesses;consequent ly , re ta rd ing the i rproliferation and growth.

Behind this observation is the beliefthat the government bureaucracyunder the previous president has, withits numerous regulations, denied ourpeople not only their political freedombut also their economic freedom aswel l . Furthermore, we held to thebelief that, left to themselves, theFilipino people have the capacity, theindustriousness and the will to per-form economic miracles.

In lieu of the government, we arguedfor depending on the highly resilientFilipino family to be both the focusand core of microenterprises, nanely:

o Filipinos whowish to earn adecent living and have or-ganir sd themselves into familyfirms must be freed fromharassment by the government

bureaucracy.o Filipinos organized into family

firms are better able to lookafter the welfare of their mem-bers. In an Asian societywhere personal relationshipsare paramount, who is morelikely to care about the wel-fare of a worker, the owner ofthe family frm or a bureaucratwho does 161 ftae1v him!

o Filipinos organi"ed into familyfirms, lookingafter their mem-bers should be rewarded bythe government bYbeing ex-empted from the gleatest num-ber of government regulationsincludi"g taxes and fees.

o Filipinos organized into familyfrrms deserving of such rewardfrom the government needonly to be registered with thelowest level of governmentauthoritY, namely themunicipality, which is mostaware of the conditions underwhich these family firmsoperate.

On the basis of such principles, wewere able to obtain the support of ourlegislators to file a bill entitled, "The

Magna Carta for Countryside andBarangay Business Enterprises" or asmore popula rly called, Kal akal an ngBeinte (Business of T*enty). Basicallythe bi l l seeks to exempt from al lgovernment rules and regulations, in-cluding income taxes, family firmswhich meet three basic requirements:

o They are engaged in economi-cally productive activity;

o They have?n or lessemployees; and,

o Their initial capital is less thanP500,000 (about US$22,500).Furthermore, to formally availof such exemption, all thefanily firm has to do isregister with the municipality(town government) and pay aminimal fee.

The proposed bill found ready sup-

THE ASIAN MANAGER e MARGH 1990 15

port in the legislature which percievedit as basically a populist measure. Infact the problem was in trying to ad-he re t o t he bas i c p r i nc ip le o f "no

government intcrfcrence" as the legis-lators wanted to provide a full range ofa s s i s t a n c e t o t h e s e e n t e r p r i s e s .Moreover, as the bill was not officiallycer t i f ied urgent by the president . i thad to go though a long public hearingprocess before being enacted into law.

Obtain ing the cer t i f icat ion of thepresident was not easy because thebureaucracy was against the bill. Thisis understandable because the bill wasb a s e d o n t h c p r e m i s e t h a t t h ebureaucracy was at best unnecessaryand at worst harmful to the growth anddevelopment of microenterpr ises.For tunate ly through the ef for ts ofCongressman Oscar Orbos, we wereablc to obtain an audience with Presi-dent Aquino who liked the idea andcertif ied the bil l urgcnt.

T h e p r e s i d e n t ' s c e r t i f i c a t i o nspeeded up the legislative process butopened up a new forum for discussion,the media. The opponents of the bil lraised certain issues about the legisla-t ion. Being a f i rm bel iever in a f reemarketplace for ideas, we sought to in-form the public about its benefits. Thismeant interviews with the print andbroadcast media, speeches beforeschools and civic organizations, as wellas testimonies in the public hearingsconducted by legislators.

The bill was passed by the legislaturein November 1989 and was signed intolaw by president Aquino the followingmonth. But this signing does not endthe fight to liberalize the markets formicroenterprises. What lies ahead arest i l l two formidable tasks; namely,convincing the bureaucracy to formu-late simple guidelines for registration,and more importantly, convincing themicroenterprises that freedom fromgovernment regulations is the best giftthat a government can bestow on itsentrepreneurs.

In connection with the formulationof simple guidelines, Speaker of theHouse of Representatives, Ramon V.M i t ra , exp la ined i n a l e t t e r t o t hemayors the procedures for registeringKalakulan firms. The letter stated:

Dear Mayor,Congress has just passed and Presi-

dentAquino has iust signed into law theKalakalan ng2fr bill.

You may recall that the Kalakalan bil/sought to liberste the entrepreneurialeneryies of our people in the countrysideby exempting the certified Kalakalan ng20firms from all govemment rules andregulations.

The basic idea behind this law is verys imple. Fil ipino family enterpris esshould not be harassed by the heavYhand of our govemment. More impor-tantly, the Filipino entrepreneur, ifentrusted with the well-being of hisworkers, can be expected to treat themas if they were his family.

With the passage of this bill, its im-plementation is now inyourhands. ForCongress, in formulating the bill alsosaw in its implementation the oppor-tttrity to strengthen the autonomy of ourlocal govemment wits. Congress man-dated that the licensing o/Kalakalan

firms be the sole responsibility of theMunicipality and that the fees to be col-lected be placed in an infrastructure

fund to be used at the discretion of theMunicipal Council.

At our request, the Department ofFinance and the Depaftment of Tradeand Industry have agreed to tap the ser-vices of ourfinancial instirufions in im'plementing the Kalakalan Law. Theresult of such discussiotts has resultedin whst we call the "Two Step Process ofBecoming a Kalakalan ng20."

Any entrepreneur wishing to registerhas to go through only two stePs:

o 1. He approaches any rePutableoffrcer, usually the branchmanoger of a financial instittr-tion like the Philippine Nation-al Banlg to certify that hisKalakalan operates in thecountryside, has twentY or lessemployees, is engaged in aproductive business and is caPi-talized at P500,000.00 or less.

. 2. With tltis cerriftcate, heproceeds to the MunicipalitY,pays the appropiate fee and isissued a certificate sigrcd bYtlte nwyor that he is now ar e gi s t e r e d Kalakalan fi rm.

For your information, the proceduredescribed above was devised by ourntanagenlent experts at the Asian In-stitute of Manogement. They advisedthe use of f inancial institutions forseveral reasons:

o 1. The financial institntions,and not the govemment agen-cies, are in the best Position tocertify that the requirentents of

the Kalakalanbill have beenmet;

o 2. They would not be able to ex-tort facilitation fees from the ap-plicants. Unlike with the govem-menL ertofiion by a branchmanager of PNB for the cer'tification would only mean thatthe entrepreneur goes to thebranch manager of Land Bankor DBP for the certification;

o 3. They would not need addi-tional fundingfrom the govem-ment to do the certification.The incentive to get the busi-ness of the entrepreneur will jus-tW their doingthe certification

for free;o 4. As o group, they would have

a wider coverage than ourgovemment agencies ; and,

o 5. As a group, they have bettersystems of control than ourgovemnrcnt agencies so that theis suance of fake or froudulantceftificates can be minimized.

I and my fellow legislators Plan tomeet with you in the very nearfuture todiscuss the implementation of theKalakalan L aw nr ore fu I ly.

Veryt tru1Y tourt,RumonV. MitraSpeaker

We end wi th the thought that wehave been thrice blest. We have seenour research efforts crystalize into apublic policy proposal. We have seenour public policy proposal enactedinto law. Lastly we have seen the lawpresented in this international forum.Surely , we can look forward to thefinal blessing of seeing this law trans-form the lives of our countrymen forthe better.

:*1-'*.-

Prof. Wctor S. Limlingan


AMMO.IO

by Tanin NimmonohaemindoPresident and Chief Exccutive OfficerSiam Commercial Bank Ltd.

(Delivered at the AAMO-10 Con-ference on "Entrepreneurship andManagemenl" Hong Kong November27-29 1989. - Eds.)

aFlver ayear ago, when I allowedlJmyself to be persuaded by Mr.David K.P. Li, chairman of the con-ference, to accept this task ofaddress-ing you, I was certainly far too confi-dent in my ability to explain the elusiveart of entrepreneurship. However,since my topic is "Organizing forEntrepreneurship," I shall take theliberty of dwelling mainly on or-ganizational aspects which induceentrepreneurship in larger organiza-tions. As such, my attempt to under-stand the art shall be through iden-tification of its associated elements. Inthisway, itwill be mypleasure to sharesome of my thoughts v16 tou, and alsoto have the opportunity to hear yourviews in the discussion afterwards.

CorporateEntfepreneurshap6f ten when one ta lks about anlJentreprenelu, one usually has inmind an individual or a small companywho is a risk taker, an innovator, acoordinator; essentially, an "enter-

priser." The emphasis seems to be onsmallness, a high degree of inde-pendence and speedy decis ionmaking. However, it is also evidentthat all these functions are performedby managers in larger corporations aswell. Corporate managers can be in-novative, take risks, orgarnzs resour-ces and produce advancements fortheir corporations in the same waysthat an individual entrepreneur canfor his enterprise. Moreover, largerorganizations as a whole can exhibitentrepreneurship. Some or ganiza-

tions are dynamic and innovative.Some simply coast alongbased on pastsuccess, established routines or iner-tia.

Accordingly,I shall approach mysubject of organiz ing for entre-prenuership in larger organizations intwo different dimensions. First, I shallexamine the issue of an entre-preneurial organization itself by iden-ti$ing the critical factors which makeit such an innovative organization.These success factors will therefore beaset of mustsin organizing coordinat-ing and managing all the resourcesavailable to that organization. Andonce these factors are identified, themost suitable organizational chart canthen be easily and intuitively deriveddepending upon the nature of thebusiness and whether i t is an in-dustrial, service or commercial opera-tion.

Second, at another dimension of en-couraging individual or small teamentrepreneurship within a larger or-ganization, I shall try to describe someof the usual organizational methodsused to induce and encourage cor-porate entrepreneurs. The f i rs tdimension is therefore entrepreneur-ship of the whole; the second dimen-sion is that of the parts.

Critical Success FactorsI et me now turn to the success fac-Lto.s which are associated wi thdpamic and advancing operations. Iwould say there are six such criticalfactors; they are:

o clear recognition of objectivesand responsibilities;

o a corporate culture of progres-sive values;

o an orientation towards rnarket-hg;

o a strongtechnologicalbase;o accurate and economical infor-

mation processing for decisionmaking and finally and per-haps most importantlY,

r a conviction that the firm'smost important resource is the

human resource.

Clear recognition of obiectivesand responsibilities

aFln recognition of objectives andl/responsibilities, a corporate en-tity, to realize its full potential, needsto be keenly aware of its operatingfra-ework, both physical and moral.While it is a common precept that thebottom line profit for shareholders iswhat counts the most, there should bemodifications to this rationale. Is itshort run or long run profit? In fact,long run proht maximization may callfor completely different sets of actionand strategies from those required tomaximize prof i t in the shor t run.Again, is it maximization or optimiza-tion of profit? And then is profit onlyfor the shareholders? How about thecustomers and the employees? Whendoes profit actually become exces-sive? All these are relevant questions.And now one more. How about the so-cially acceptable operating norms,respect for the law and maintenance ofethical standards? To sum up, mYviewis that an entrepreneurial corporationstarts by being profit motivated butonly optimally and for the long run,with benefits distributed equitably be-tween shareholders, customers andemployees, and also behaving in a so-cially responsible manner.

A corporate culture otprogressive values

I et us nowturn to the second char-Lacteristic of an entrepreneurial or-gan i za t i on , t ha t o f possess ing aprogressive corporate culture. To besuccessftrl, an organization must haveestablishe d values, traditions andbel ie fs which are conducive toproducing a competitive work atmos-phere. Here, I shall point out a fewsuch values.

First is the apprcciation of the valueof time. The organization should al-ways remind its staff that t ime is ascarce resource and timing is every-

Dewlqing entrepreneurial tndividnls in lnrge orgmizdions...

Organizing for Entrepreneurship


th ing in captur ing business oppor-tunities. After all, all the yardsticks foroperat ing resul ts are expressed intime, either in terms of a spot or at aninterval.

Second is a bel ie f in the power ofreason and imaginat ion. Decis ionmaking should always be made sys-tematically with all r isks well under-stood and trade offs examined withcare. Corporate planning for the fu-ture should be tightly and realisticallydrawn with alternative strategies fullyexplored. The future must be viewedwith a vision.

Third is a realization that achieve-ments are possible only through hardwork . Ha rd wo rk e th i cs mus t bepromoted. Recogni t ion of "cham-

pions" or "winning teams" is usuallyeffective in promoting job devotionand motivation.

Finally, proper delegation of powera n d r e s p o n s i b i l i t y s h o u l d b epromoted under a situation of freeand open two-way communication,both up and down the corporate chainof command.

The foregoing are then some of theusefu l va lues and at t i tudes whichshould not be conf ined only to themanagement level but widely d is-tributed down to the general stafflevelaswell. Also, theyshould have real andpractical applications and not remainonly theoretical.

An orientation towards marketing

I et me now turn to the third charac-Lteristic of an entrepreneurial cor-p o r a t i o n : a s t r o n g e m p h a s i s o n

marketing. Usually, an organizationthat is production oriented is con-cerned about its ability to sell existinggoods. But an organizat ion that ismarket ing or iented is concernedabout creating goods and services thatsatisfy current as well as future cus-tomer needs . A lways , an en t re -preneurial organization gives utmostattention to satisfying customer needsand arranging organizational objec-tives in terms of customer satisfaction.

Typically, such an organization tendsto be organized in a way that allowsmarketing functions to have overallauthority over planning, productionand after-sale services. Also, a highvalue is given to attaining market shareand the abi l i ty to increase marketshare over time; often, at a significantc o s t t o s h o r t r u n p r o f i t . M a j o rJapanese corporations are well knownto carry this practice in their approachto overseas markets. Moreover, insuch an organization managers andstaff are urged to keep close contactwith customers through advertisingand sales promotions and after-saleservice activities. And, typical to suchan organization, marketing costs tendto be substantial, often comparable toproduction costs.

A strong technological base

I et us now explore the fourth char-Lacteristic of a successful organiza-tion: heavy reliance on technologicalsuper ior iy to e i ther create qual i typroducts or to lower production costs.R i s i ng i ncomes o f consumersworldwide means forever changing

consumer t as tes and demands i nfavour of better quality. A premium isincreasingly paid for quality, some-times in astonishing amounts. Com-pan ies w i t h s t rong resea rch anddevelopment departments have a cut-ting edge over their competitors innew technological breakthroughs con-tributing to upgrading the quality oftheir products or even creating newproduc ts a l t oge the r . A l so i n t heproduction process, if proper infusiono f t echno logy i s i nco rpo ra ted i nproduction systems and engineeringworks , s i gn i f i can t cos t sav ings o rsteeply rising economie s of scale oftenresult.

However, possession of technologi-cal know-how and developing success-ful products are vast worlds apart. It isimportant therefore that the technicalteam is supervised by a good overallgeneralist manager in order to maxi-mize the applications of technology tothe other functions of the company.Also, there is likely to be a long timelag between R & D expenditures in-curred and increases in productivityand therefore much management at-tent ion is requi red to t ransfer newtechnology into operations.

For major innovat ions involv ingbasic research, the lag may be as longas ten years or more. IBM has recentlyobtained patent rights for the com-position of materials capable of super-conductivity at around -2.ffiF. This isafter more than five years of basic re-sea rch , and the ob jec t i ve i n t heproduct development of raising thatsuper conduct ive temperature to"near-room temperature" is s t i l l a


turn them into a minicomputer2

3

I

-z

a

5I

-

long way off. However, the time lag be-tween the successful application of R& D and adap t i ve o r im i ta t i veproducts can be much shorter. Onehas recently witnessed a very shorttime span between the lrst SLR auto-focus camera developed by Minoltaand a host of autofocus SLR cameraswhich followed.

Accurate and economicalinformation processing fordecision makang

I e t me move on now to t he f i f t hLcommon character is t ic , an em-phasis on the importance of informa-tion management and controls. In-creasing complexities, and the speedof change in the modern businessworld coupled with rapid advance-ments in electronic data processingmean that a dynamic business firmmus t con t i nua l l y upg rade i t scapability to convert an avalanche ofraw facts into usable and relevant in-formation. There is a definite trendwhereby firms are downsizing theirasset base without affecting earningscapacity.And thisis made possible be-cause of the availability of new com-munications technologies and effec-t ive use of data processing capa-bilities. Examples for this substitutionof information for assets are many -for instance, the rise in automatedte l ler machines (ATMs) have ex-panded the deposit gathering networkmultifold and have rendered obsoletesome brick and mortar approaches toconventional retail banking.

For industrial and commercial com-panies inventories generally have beenpared down due to better controls andaccessibil i ty to quick replacement.Also, some newproducts are possibleentirely because of rapid informationhandling. Think of the widespread useof credit cards in the world today. Thispartial success in attaining a cashlesssociety was only made possible be-cause of sophisticated communica-t i ons and compu t i ng capac i t i es .Moreover, in the field of decisionmaking, top management in large or-ganizations simply cannot operatewithout the full scale back-up of amanagement information system; orMIS, as it is generally known. Compli-cated issues requiring exhaustive ex-amination of alternatives are nowqu ick l y hand led by modern day

management, but this is made possibleonly because of good MIS. Informa-tion management is therefore criticalto entrepreneurship.

A conviction that the firm's mostimportant resource is the humanresource

11low, let us take a look at the lastI U but perhaps the most significantaspect of an entrepreneurial organiza-tion - the treatment ofhumanresour-ces. Everyone would likely agree thatthe most important resource to an or-ganization is its human element. How

to best treat, motivate and bring outcreativity from this basic resource issurely the key to the dynamism of anycompany's long run performance. But,taking proper care of human resour-ces overall may involve the full cycle ofa good recru i tment process at thebeg inn ing to ensu re a m in imumquality in personnel; then, compensat-ing them at market rates plus produc-tivity rewards and finally motivatingthem towards attaining objectives andgoals to bring out their best potentialand creativity. ln The Art of lapaneseManagement, the authors point out l.hep r i n c i p l e s w h i c h u n d e r l i n e t h e

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Japanese form o[ managcment as the"7-S Model . " Thc hypothesis is thatorganizat ional success occurs whcnthese 7-S's arc carefully activated andintegrated in the long term.

Thc 7-S's are strategy, structurc, sys-tcms, s taf f , s ty le, sk i l l and suporor-dinate goals. The authors also statcdtha t a l t hough Amer i can managershave focused on st ratcgy, s t ructureand systems for a long time, thcy havebecn paying much lcss attention to theremaining softer S's: staff, style, skil lsand supcrordinate goals. The implica-tion is that this may help cxplain whyon thc whole, Amcrican firms do notseem to be as p roduc t i vc as t hc i rJapancsc counterparts.

So, six charactcristics, namely, clcarobjectivcs, progressive corporatc cul-t u r c , i n t cns i ve markc t o r i en ta t i on ,strong tcchnological basc, keen infor-mation managcment and finally care-ful cultivation of the human resource,are, in my mind, the most significantaspcc ts o f an en t r cp reneu r i a l o r -ganization.

EntrepreneurialItrdivid-uals in LargeOrganizations

hat I have dwelt on at length sofa r has bcen the l cvc l o f t h t :

en t r cp rcneu r i a l o rgan i za t i on as awho lc . Howeve r , t he re i s ano l . he rdimcnsion of entrcpreneurship at thcindividual levcl within the organiza-tion. How to organize the work unitswi th in a larger organizat ion to bestb r i n g o u t t h e e n t r e p r e n e u r i a l a c -tivit ies of individuals or tcams of in-dividuals has recentlybeen a matter ofvery kccn interest among organiza-tional cxperts. This subject was wclle x p l o r e d i n a n a r t i c l c b y M o s e sShapiro, chai rman of the exccut ivccommittee, Gencral Instrumcnts Cor-p o r a t i o n , i n h i s b o o k , T h eEntrepreneuial Individual in the LorgeOtganizatiort And I shall rcly heavilyon the d i scuss ion i n t ha t a r t i c l e t opresent to you some organizat ionalideas or techniques for dcvelopingentreprencurial individuals.

B e f o r e e x p l o r i n g s o m c o f t h epopular models for entrepreneur ia ls t r u c t u r e s i n s i d e a c o r p o r a t i o n ,Shapiro stated two basic prc-condi-t i ons . F i r s t , t op managemen t mus thave strong egos - as opposcd to bigeqos. Hc maintained that thcre is, "al-

most a L:1 correlation bctween emo-tionally-sccure chief exccutive officcrsa n d t h e n u m b e r o f t r u l y e n t r e -prencurial types in a company." Thechief executive that inspires his staffand invokcs positive reactions fromhis team has to be a st rong Yet sym-pathct ic leader s imul taneously. Hispowcr of persuasion to br ing aboutrcsults from othcrs wil l be the key tohis organizat ion 's success. Second,within thc organization, "careful andconstant attention must be paid to in-ternal communication. Communica-tion is pivotal for it is both a means andan end to involvement and participa-tion." Good internal communicationbrings about a strong organizationalidentity and cnsures smooth team ef-forts. Participativc management tendsto allow ontrepreneurial staff to sur-face within the organization.

Shapiro then explores somc of theorganizational tcchniques to breed in-tcrnal entreprencurs which have beenpopularly tried in the past 20-30 years.And these are:

l. The "Franchise" aPProach inwhich, "an individualentrepreneur contracts withthe large corporation for theright to produce or market itsproducts." And within the cor-porate domain, this concePt isonc o[ the most commonwhcreby the organization reliesheavily on its "product

managers" to be totally respon-siblc for certain segments o[ itsproduction.

2. The "Corporate Spin-Off'method where, "large corPora-tions give their employees anopportunity to buY divisions ofthe company, while the Parentcorporation retains equitY inand perhaps a buy back-rightin the new comPanY." Againthis concept goes even furtheron the idea of segmentingproducts and markets andtreats diffcrent business unitsas separate entitics so thateach has to fend for itself. How-ever, all units are ultimatelY ac-countable to one lcadershiP.

3. The new"Yenture" concePtwhere, "... a group of in'dividuals work together on aproject while still in theemploy of the corPoration. The


group is organized and remainsin existence only as long as ittakes to reach a particulargoal." This is more a proto-typc project devcloPment ef-fort where emphasis would beon experimenting and testing.

4. The "Profit Center" concePtwhere a manager has more ac-countability for the "proht" ofhis work unit. This is probablYthe most widely used methodof encouraging different busi-ness units to act as inde-pcndcnt enlrcprencurs in Pur-suit of agrccd corporate goals;and lastly,

5. "Big Business Small Invest-ment Company" where t'big

businesses actively search forand make themselves availableto new operations in need ofcapital but possessed ofin-novative and potentiallYprolitable ideas. Theentreprcneur gets his caPitalfrom the corporation but runshis small busincss as if it werchis own." This idea is, ofcourse. modelled aftcr thc ven-ture capital concept which hassccn many successful applica-tions over thc years.

Thcse are some of thc organizationaltechniques to induce entrepreneur-ship within a large organization. Youmay find them to be interesting con-cepts which merit further refinemcntand consideration.

Now, I have surely taken altogethertoo much of your time to share some ofmy though ts on o rgan i z i ng fo rentreprencurship. I hope at least thatyou find them relevant and I would in-deed be vcry happy if you find themuscful.

AMMO.lO

Guarding against *big canpty diseose..."

Sustaining Entrepreneurship in largeOrganizations

byYotaro KobayashiPresident, Fuji Xerox Co., Ltd-Govemor, Asian Institute ofManagement

(This paper wos oiginally delivered atthe AAMO-10 Conference on"Entrepreneurship and Management, "

Hong Kong November 27-29, 1989 -

Eds.)

Ihe E <perience of FujiXerox '

Introduction

nl ot so long ago, a theory prevailedllthroughout Japan that the lifespan of a company was approximately30 years. This implied that a companywhich was negligent in innovationwould get the so-called "big companydisease" and its business would beginto decline after 30 years of operation.When a company reaches "big com-pany'' status, its employees tend to be-come complacent. A bureaucratic at-mosphere dominates in wh ichemployees feel, "However hard I try Icannot influence the general situationof the company," or, "Even if I wantedto challenge something new, the com-pany would not approve i t ." As aresult, large companies are beingseriously challenged by smaller, moreentrepreneurial firms.

In this sense, for most large com-panies, making their corporate cultureentrepreneurial is becoming more andmore critical.

Peter F. Drucker, in his book Innova-tion and Entrepreneunhip, yuinted outthat the problem of innovation andentrepreneurship matters greatly notonly to small venture business com-panies but also to large, establishedcomparues.

As he suggested, most large com-panies are trying to integrate srnall

company entrepreneurship and agilityinto their organizations.

In this sense, Fuji Xerox is no exc6p-tion. In just two decades, we havegrown from being strictly a sales or-ganization with 19 employees into acompletely self-sufficient, high-tech-nology company wi th more than11000 employees. Though we do notth ink o f ou rse l ves as one o f t heGo l i a ths , t he t o ta l number o femployees, including our subsidiaries,amounts to as many as 18,000.

Fortunately or unfortunately, we arenow perceived as a big company andquite a fewjob applicants tell us thatthey chose us because of perceived jobstability based on our size.

As our thirt ieth anniversary ap-proaches in just three short years, *'eat Fuji Xerox are trying hard to rein-vigorate the corporation in order to

chal lenge "b ig company d isease."What should be done to keep the cor-porate culture young and innovative?Fuji Xerox is now learning by trial anderror. Let me relate to you our ap-proaches to these challenges.

Overview of Fuii XeroxBusinessBusiness areas

t Fuji Xerox, we believe that im-proving the quality of documen-

tationis as important to a company asenhancing the quality or value of itsproducts. Equally important is docu-ment management, the practice ofcontrolling the production of qualitydocuments.

Since introducing the f i rst plainpaper copier (PPC) into the Japanese

THE ASIAN MANAGER o MARCH 1990 21

market, Fuji Xerox has made severalcontributions to documentation inJapan, and in so doing, our companyhas delivered products which havebeen well received by our customers.

However, Fuji Xero>C involvement isno longer limited to xerography (SeeFig. 1). Our services now extend to theentire process of documentation, in-cluding effective document manage-ment.

As the late Mr. Joseph C. Wilson,chairman of Xerox Corporation, usedto say, Xerox should not only providecustomers with copiers or hardwarefor document production but also tryto contribute to effective communica-tion in a broader sense. We want tocontribute to fostering a better under-standing among men in a global sense.This has led us to start businesses ineducation such as intercultural com-munication and strategic presenta-tion.

History of FujiXerox

F uii Xerox is indeed one of the mostF s u c c e s s f u l j o i n t v e n t u r e s i nJapanese business history (See Fig.2).

Inl962Fuji Xerox Co. Ltd. was es-tablished as a 50/50 joint venture com-pany between Fuji Photo Film andRank Xerox capitalized at ZX) millionyen. From the beginning, Fuji Xeroxwasgiven full autonomy, thanks to therelationship of deep trust between thetop management of Xerox Corpora-tion, the parent company of RankXerox, and Fuji Xerox. I would like totell you briefly about our company'shistory.

1960s, period of business commen-cement. Until 1968, Fuji Xerox heldexclusive patent rights in Japan toxerography technology, and in the ab-sence of competition, it flourished byleaps and bounds.

1970s, period of increasing competi-t ion. After the exclusive r ights toxerography technology expired in1968, Japanese competitors includingCanon, Ricoh and others rushed intothe PPC market one after another. Inorder to overcome such difficultiesand regain much of its lost marketshare, Fuj i Xerox adopted TotalQuality Control (TQC) under the ban-ner of the "New Xerox Movement"beginning in1976.

The objective of TQC is to improvequality through standardization and

e l im ina t ion o f d ispers ion . Th ismethod clears up and eliminates theroot cause of a particular problembased on thorough analysis of facts.TQC is effective in improving the ef-f i c iency o f any k ind o f job , be i tmanufacturing, R&D, sales or plan-nrng.

By initiating the TQC movement,Fuji Xerox succeeded in developingan "absolutely brilliant" copier, theFuji Xerox3500 in just two short yearsfrom1976 to 1978. I t shocked themarket, but most of all, it shockedXerox Corporation.

Concurrently with the introductionof TQC, through the establishment ofa corporate philosophy and course ofaction in1979, Fuji Xerox succeededin disseminat ing i ts ident i ty to al lemployees and integrating their viewsabout company attitudes in the cor-porate philosophy.

1980s, per iod o f res t ruc tu r ing .Through this movement, Fuji Xeroxsucceeded in regaining its technologi-cal lead in PPCs and restored its pricecompetitiveness. Fuji Xerox' efforts inimproving quality control culminatedwith the award of the Deming Prize in1980.In1982, Fuji Xeroxbegan to trans-

form itself from a PPC manufacturer

to an information processing com-pany, advocating the Office Informa-tion Systems (OIS) concept.

Subsequent ly, Fuj i Xerox madededicated efforts to restructure its or-ganization by introducing the businessunit system in 1983 and by strengthen-ing its R&D function through the es-tablishment of the Corporate Re-search Laboratory in 1982.

198E, second period ofgrowth. Be-cause of changes in the business en-vironment, such as appreciation of theyen and the matured PPC market, FujiXerox fe l t the need to make abreakthrough in its business strategy.TQC alone, stripped of all its contentby then, was not sufficient.

In 1988, Fuji Xeroxstarted the "New

Work Way" a program to provide"New Quality" to customers by en-couraging individual thinking in allemployees. Please remember thatNew Qual i ty does not necessari lymean only the quality of product, butalso the quality of service, manage-ment, administration and every otheraspect ofbusiness.Adopt ion of the New Work Way

does not mean that Fuji Xerox hasabandoned TQC. On top of TQC,which we consider basic, we renewedour understanding of creativity, in-

Fig. 1 Diversitication of Fuii Xerox's Business

#ff

22 THEASIAN MANAGER o MARCH 1990

dividual i ty and sensit iv i ty to beresponsive to customer needs.

Now,Iwouldlike to explain the NewWork Way in greater detail.

lmolementinq the NewWdrk Wav tolt/leet theChalleng6s of the 1990sEnvironmental changespropelling the adoption of theNew Work Way

f oday, the following changes areI evident in the business environ-

ment.1. Customer needs arc changing. We

see increasing need for value-addedservices, information systems, andunique, creative products.2. The ollice is changing. Needs for a

comfortable offi ce environment basedon ergonomics are increasing. Officebuildings will be required to havemore .,intelligence."

3. Work is changing. Using theelectronic network, working at homewil l become more commonplace.Since instantaneous communicationwith other countries has become pos-sible, the way to conduct global busi-ness has drastically changed.

4. Man is changing (Value system of

the individual is changing). Becauseof progression to a more aged societyand diversification of value systems,the Japanese are seeking self-fulfill-ment in their jobs, as wel l as theirpr ivate l i fe. Pe ople have come toreject making personal sacrifices forthe good ofthejob.

These changes have spurred FujiXerox to take up a completely new wayof approaching problems as well ascompletely new work ways.

Objectives of the New Work Way

The objective of the NewWork WayI is, in brief, to harness the thoughts

and actions of each employee and toencourage the individual to give fullplay to his creativity.

The New Work Way tries to actual-ae:

o breakthrough of the work way;r innovation in management;

ild,

o a comfortable business en-vironment.

ln the NewWork Way, it is importantto encourage understanding of dif-ferences between individuals and tomake the most of individuality andcreativeness.

Fuji Xerox aims to be a highly sensi-

t ive company (See Fig.3). In otherwords, Fuji Xerox is trying to trans-form itself to effectively deal withchanges in the business environment.To always be highly sensitive, com-panies must repeatedly ask themselveswhat they contribute to society andwhat values they can and will offer topeople.

Next, through the New Work Way,Fuji Xerox tries to offer new addedvalue, such as new products, systemsand services to its customers and even-tually provide an environment wherecustomers can realize their own NewWorkWay.

Again, please do not think that wehave given up TQC. The TQC theoryitseHis quite valid. However, since it isa method to eliminate deviation, itsometimes went as far as to eliminategood dev ia t ion as we l l as bad.Moreover, as a negative influence,workers became more and morehomogenous, which, as a result, sup-pressed creativity and individuality.

So our conclusion was to adopt theNew Work Way as a new tool whichcomplements TQC, even at the risk ofloss of organizational harmony. Thistrend is not unique to Fuji Xerox.Many Japanese companidb, especiallyin the electrical manufacturing and in-

Fig. 2 Fuji Xerox So Far: History and Plateau

Y lT ConceptDeming AwardPBU/MSU Org.Mult iChannel

1960 's 197O's 1 9 8 O ' s 1 9 9 0 ' s


formation industries, have started toadopt the same kind of movementthrough flexitime, renewal of the per-formance appraisal system and manyother systems, attaching importanceto individuality and creativity.

Activities in theNew Work Way

1 l nder the name of the New WorklJWay, Fuji Xerox is now trying tomake a breakthrough in the work wayby trying out new ideas generated byemployees. One of our trials was the"Vision 100 Committee." [t was or-ganized in 1987 to generate ideas con-cerning Fuji Xerox' long-term visionand future direction. It comprised 100employees aged24to 36. Out of 5,0fi)employees falling under this classifica-tion, as many as L,8fi) people appliedfor the committee. Many of their ideashave actually been put into practice,such as satellite offices, resort officesand flexitime and these contribute tothe provision of a new, comfortableworking environment.

The other was the "Venture BusinessChallenge Progran" which aimed toenhance entrepreneurship amongemployees. Under this program, if anidea passes the final examination, theapplicant himself canbe the presidentof the new venture company and bearthe responsibility for all of the opera-tions of the company. This resulted inthe foundation of two venture com-panies in 1988: Fuji-System Brain Co.,Ltd. and Protec Co., Ltd. The fcirmerdeals with total system integration ser-vices for smal l and medium sizedenterpr ises , and the la t te r , t r ia lmanufacturing and manufacturing ofoffice automation tools.

In L988, Fuji Xerox entered the tem-porary help business by founding FujiXerox Careernet Co., Ltd. whichoriginated from a proposal by a sales-woman who felt the strong need fortemporary workers on the part of thecustomers.

In order to develop creativity andoriginality in employees, we had to in-novate management as well. First, wechanged the performance appraisalsystem to one that places more impor-tance on the employees'merits. Be-cause of this change, employeeqlavebecome more willing to try somethingnew without being afraid of makingmistakes. We also simplified the Ringi

Fag. 3 Obiectives of the New Work Way

NEW WORKWAYproposal

Prov ide appea l l ing Highly senst ive toprocluct iveness customer neeos

Utilize NEW WORKWAY

l i i icEniient. i"76rm creauve,,/ \ Hishlv sensrt ive and

innovation. .a \- responsible in changes

ili:,**. .?r?i|"^r{ Environments D'anticipated ...,',,,',,#

iitliil,;!.:!il.!/ .. -"d,6'il#;'i'-*.. \i:ili:iiiii

Wr-i::ff,*ii:*r5'X

system and transferred more authorityto managers on the line.

The New Work Way resulted in notonly innovation of the work way andmanagement but also a product com-pletely new to Fuji Xerox'past busi-ness domain. In L988, with the intro-duction of Sharaku, a handy copier,Fuj i Xerox entered the personalproducts market . Sharuku wasdeveloped based on a concept createdby only a handful of employees whowere seriously tackling problems inthe low-end market. In other words,Sharaku was developed through a bot-tom-up approach and is'defined as a"New Work Way-like" product.

The marketing of Sharaku, namedafter a famotsukiyoe artist of the Edoperiod, was an enormous challenge forFuji Xerox since we have been suc-cessful mostly in products targetinglarge-scale companies, not individualconsumers. In spite of our concernover our inexperience in the home andpersonal products market, as soon asthe product made i ts debut in themarket, it attained popularityamong a

wide range ofpeople from varied agegroups and many occupations, such asstudents, housewives, business peopleand des igners to name a few. Inresponse to an advertisement invitingL00 people to monitor Sharaku, morethan 141,000 people applied, somefrom abroad.

The introductionof Sharaku into themass market resulted in great success.Even though, Sharaku's sales con-tribute little to Fuji Xerox'total salesof US$3.6 million, it has become thesymbol of Fuji Xerox' New Work Way,the driving force changing the direc-tion of Fuji Xerot' business.

A Hvbrid of Japaneseand?mericanManagement Style1.he introduction of the New WorkI Way may sound like nothing new

to you, since your cultures place ag rea t dea l o f impo r tance on i n -dividuality. However, Japanese com-panies, as the resul t o f g iv ing toppriority to their market share, tended


to sacrifice individuality, originalityand creativity in their employees. Inthe meantime, this trend has beenforcing Japanese companies to behaves im i l a r l y , i n o the r wo rds , t o behomogenous.

In order to change this attitude,some farsighted Japanese companieshave started to introduce manage-ment which differentiates itself fromother companiei; that is, in originalityof products, services, business corcepts and corporate philosophy.

On the con t ra ry , managers i nwestern companies tend to introducethe advantages ofJapanese manage-ment style into their management,such as functions to grasp customerneeds, informal communication andTQC. In this sense, I believe manage-ment of Japanese and western com-panies wil l increase the degree ofcross-overs and become more andmore hybrid.

One example of this is the "export"

of TQC to our parent company, XeroxCorporation. Fuji Xerot' commitmentto quality through TQC activities in-fluenced Xerox Corporation and in-spired them to initiate their Leader-ship Through Quality Program int9f34.

It has changed Xerot' corporate cul-ture and brought about dynamic andsatisfuing results. Xerox Corporationhas became a con tende r f o r t heBaldridge Prize and has been propell-ing company wide quality control.This year alone, more than 80 Xeroxpeople, including their top executives,visited Japan to study TQC.

Kev Factors forSubtaininqfinlrgB.rqn-eurhip inEstablishedCompaniesI 11 te started the NewWork Way be-UU cause we witnessed a lack ofwillingress to try out new ideas amongemployees. We are now trying tochange our corporate culture to makeit more adventurous, creative andcourageous to challenges; all the whilebeing quality-conscious.

Peter F. Drucker pointed out in hisbook,The Frontiers of Management,that the innovative company under-stands that innovation starts with anidea. He continues that, "ideas aresomewhat like babies... thev are born

small, immature and shapeless... andthat in the innovative companyexecu-tives say, "What would be needed tomake this embryonic, half-baked,foolish idea inls s66slhingthat makessense, that is feasible, that is an oppor-tunity for us," instead of saying, "this isa damn-fool idea."

I bel ieve the key for innovat ionwithin a company directly relates to, asProf. Drucker said, executives who en-courage work"tt 1s [ring up new ideasand give employees chances to trYthem out if the ideas contribute to thebusiness even in the long term.

The second point, which I think is im-portant, is to communicate to eachworker the idea that everYone is acatalyst of innovation.

Robert B. Relch, a professor at theJohn F. Kennedy School of Govern-ment, HarvardUniversity, wrote in hispaper "EntrepreneurshiP Recon-sidered: The Team As flero" in 1987:"In the new economic paradigm,ent repreneursh ip i sn ' t the so leprovince of the compan/s founder ori t s top managers , ra ther , i t i s acapabilityand attitude that is diffusedthrough the company."

He is right in the sense that eachmember of the companyhas a commit-ment to the compant's continued suc-cess. Therefore, it is important for topmanagement to enhance flexibilitYand creativity of both middle manage-ment and workers. Now we need tobring in the so-called, "collective

entrepreneurship" as a banner for theoompany.

Gonclusionginally, I am going to offer tips forF making your organization moreentrepreneurial.

1. To be morc innovative, it is neces'sary to mot ivate each and everyemployee... clear down to the bottomlevels of the organization. Companieswhich make continuous innovationsuse a structure designed to spur in-novation at all levels.

2. Top management should select at'tractive corporate goals to whichemployces would like to commit them'selves... goals which do not hamperindividual goals. Don't let workersfeel that they sacrifice themselves forthe company. "Visionary manage-ment" becomes more and more im-portant.

3. To motivate workers, it is imPor'tant to f i rs t act ivate middle 'managers.

4. It is important for companies tobalance the courage of taking risksand a sense of modesty to rrcsPond tocustomer needs and to mainta inquality products.

Robert Waterman, former directorof McKinsey and co-author of 1zseorch of Ercellence, concluded in hislatest book, The Renewal Factor, thatinnovative management fights stagna-tion and welcomes changes and thatwithout changes, it is impossible forfuture companies to maintain a com-petitive edge.

Innovative companies should bereadily cogrrizant of existing products,services, processes and markets thatare heading toward obsolescence, andbewillingto quicklyshift gears; that is,abandon obsolete disciplines. Some-times it is a dilemma for companies togive up o ld customs. However,entrepreneurial companies shouldabandon the obsolete rather thanhavethemselves made obsolete bythe com-petition.

I strongly believe that, in the comingcentury, constant self-innovation willbe a prerequisite for successful com-pan ies . Changes a re no l onge rplanned or forecast, it is an everydaypractice companies must undergo. Wemust take changes positively, and findexcitement in the creative process.Only through ceaseless self-innova-tion, can companies maintain theircompetit ive edge. In other words,companies must create change andprovide new values or what we call"NewQualit/'to society. It is the oneapp roach tha t can ma in ta inentrepreneurship and improve per-formance in large organizations.

THE ASIAN MANAGER r MARCH 1990 2s

AMMO.IO

Ertdowing resources witlt rcw wealth-prdrcing crybihty...

Entrepreneurship ln the Public Sector

by Mou-Hui KingChairman, China Steel CorporationGovemor, Asian Institute ofManagement

(This paper was oiginally delivered atthe AAMO-L0 Conference on uEntre-preneurship and Management," HongKongo November 27-29, 1989 - Eds.)

6 efore I begin I wish to qualify thatEDmv remarks relate onlv to thepubl ic sector in market-or ientedeconomies because that is where myexper ience or ig ina tes . I am notprepared to comment on the centrallyplanned economies because I havenever had any e4perience there.

Usual ly a r igorous presentat ionbegins with a series of definitions, foronly by knowing what one is talkingabout can one treat the subject matterintelligently.

Simple DefinitionsE ntrepreneurship: Many def ini-Etionshave appeared for tiiis term.In the early days when it first became afavorite subject for dissertations, thisterm referred to the starting of newbusiness, usuallywith a nuance of highreturn and high r isk. As progressdevelops in management science,there are added on to this definitioninnovation, flexibility, dynamic think-ing, creativeness and growth. I havereviewed a number of others andbelieve the best, all inclusive definitionis that of the great master of manage-ment, Dr. Peter Drucker. It is simple.An entrepreneur is somebodywho en-dows resources with new wealth-produc ing capac i ty . One canenumerate a great many things thatare being done in business today thatdemonstrate a close fit to this defini-tion.

For example:o bring new products into the

product line;

o expand production capacity;o improve productivitgo install new production process;o install new personnel systems;o revamp old equipment;o reorganize; and, many other

activities.In all cases, resources must be com-

mitted and risked. I say risked becausesuccess is never guaranteed. In allcases the objective is to endow theresource with new wealth-producingcapability. So one can say that the ac-tion ofentrepreneurship is carried out

every day in an enterprise.Then let us turn to management. One

definition is that management consistsof activities undertaken by one ormore persons to coordinate the ac-tivities of other persons to achieveresults not achievable by any one per-son alone. Please note: the word "per-

son" appears three times in this shortdefinition. This leads one to believethe most commonly used definitionwith only four words is adequate,namely "Do ing th ings th roughpeople."

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The Meat with aNameOut there are cattle and hogs with no name.

They are slaughtered for their meats. You buythem. You eat them. But you don't really know fromwhere they came. What they ate. How they wereraised and slaughtered for your meal.

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SZ-".**.c(no.marxN


AMMO.IO

by Dr. Reinosuke HaraPresident, Seiko Instruments, Inc.

(This paper was originally delivered atthe AAMO-10 Conference onnEntrepreneurship and Management,'HongKong November2T-29, 1989. -Edt.)

The TraditionalManufacturing IndustryMass production vs. newproduction systems

i th extensive efforts directedtowardthe development of mass

production systems based on roboticsand automation, the manufacturingindustry underwent a remarkable ex-pansion period spanning the 1960sand the 1970s. The manufacturing in-dustrybenefited much from the intro-duction of mass production. Some ofthe important accomplishments in-clude: higfi speed production, high ac-curacy in production processes, lowercosts, and uniform and high qualityfinished products.The concept of mass productionwas

hardware as well as manufacturer-oriented. Customers were satisfiedwith standardized products suppliedby mass production systems, as long asthe products met their requirementsfor quality and price.

In the latter part of the 1970s, themanufacturing industry underwent achange in character from massproduction to production of a widervariety of products in small lots, main-ly to cope with the increased diversityof customers' needs. Technologieswere also rapidly advancing as il-lustrated by the appearance of semi-conductor and micro-electronicstechnology. Such rapid change hasmade product life-cycles short. Massproduction involved a risk of over-production.

The "just-in-time production sys-

tem" developed by Toyota Motorspresents a t'?ical example of produc-tion process producing a wide varietyof products in small quanties. Thebasic concept of the "just-in-time

production system" was to avoid allpossible "waste" generated duringproduction process such as:

o Over-production;o Wasted machine time;. Waste involved in the ship-

ment of units and parts;o Waste in processing;o Waste in taking inventory;o Waste of motion; ando Waste in the form of defective

nni19.

Further improvements have sincebeen made in the " jus t - in - t ime

production system," lsnding to the es-tablishment of the "product systemwithout loss." The basic concept ofthis system was to achieve the follow-ing in production processes: no-defec-tive products, no machine failures, noneed for the transport of parts, com-plete synchronization of line speedand machine cycles, and full-automat-ion to permit 24-hour unmannedoperation.

Ccnryter-Inte gracd MmSacwring in thc glfuL e conarny...

M anufacturing Technology

Both the "just-in-time productionsystem" and the "production systemwithout loss" were markeVcustomer-oriented and software-oriented, asagainst the mass-production systemwhich was manufacturer-oriented andhardware-oriented.

Conventional technologies vsscience-based technolog ies

echnologies can be classified intotwo categories according to their

nature:o Conventional technologies

whose mechanism and perfor-mance are well established.Examples include convention-al mechanical ett gltreering,chemical engineering, andelectrical englneering.

o Modern high-technologieswhich are based on scienceand are in the stage of con-stant advancement. Exanplesinclude high-temperature su-perconductivity, semiconduc-tors, misls-slectronics, DNArecombination, new materialsand artifi cial intelligence.

Recent ly developed h igh- tech-nologies are all based on science. Insome technologies, both mechanismand theory are not fully clarified. Afeature of these technologies is theneed for highly sophisticated produc-tion equipment and facilities. Oftensuper-clean laboratories are needed.They also are highly capital intensive,and a large amount of investment is re-quired for equipment and facilities.

External elements

Fturing the period of mass produc-l/tion, the manufacturing industryacted based on the following tradition-al assumptions: resources are infinite,energy supply is infinite, production-related space is infinite, market ex-pansion is infinite, consumption is in-finite, and people's desires are in-finite.

These assumptions, however, have


lost their legitimacy for the currentmanufactur ing industry. Recentdevelopments indicate that there willbe shortages in resources and energ5rsupply, spaceis limited, market expan-sion will not last forever, consumptionwi l l a lso become sa tura ted , andpeoples desires are also limited andare becoming increasingly specific.To cope with this new situation, the

manufactur ing industry has beentaking measures to replace the old as-sunptions. Some of the measures are:high functional performance for alimited supply of resources; energyconservation and savings and develop-ment of alternative energy sources fora l imited energy supply; compactdesign, miniaturization and high den-sity to solve space problems; flexibleproduction for limited market expan-sion; consumption-oriented produc-tion to compensate for limitations inconsumpt ion ; deve lopment o fproducts which customers want fortheir specific needs.

There are also some external ele-ments which stand in the way of linearexpansion of the manufacturing in-dustry. These external elements arosein relation to limited capacity forwaste treatment and disposal, en-vironmental pollution problems, andsafety of new products or new tech-nologies. Processing and disposal ofindustrial wastes present a seriousproblem in the industfialized nations,as the amount of waste exceeds theircapacity for disposal. Environmentalpollution has become a serious prob-lem, as the manufacturing industry ex-panded its production and consump-tion by consumers increased.

Typical of such envirott^ental pollu-tion hazards are the destruction of theozone layer by fluorocarbon com-pounds and the green-house effectcaused by carbon dioxide. The safetyofnew technologies and products alsopresents a problem for public accep-tance. long-term efforts are requiredto demonstrate the reliability andsafety of new technologies.

lobal Businessperation

Vertical operation vs. horizontaloperation

he manufacturing industry is nowgoing into global operations and

there are four main elements respon-sible for the manufacturing industr/smove to global operations:

r Political elements as repre-sented by trade friction;

o Marketing elements such asdiversifi ed customers' needs;

r Formation of regionaleconomic blocs; an4

r Technological elements whichinclude needs for sophisti-cated scientifi c research

overseas sales of f ices. Of fshoreproduction was carried out mainly foreconomic reasons such as modestl abo r cos t s . On l y s tanda rd i zedproducts with established productionprocess and market needs were trans-ferred to offshore production. Later,product ion technology and someR&D work were transferred to off-shore operations. The manufacturingindustry was operated on a verticallyintegrated scheme.

Marketing rR&D I CountrYAProduction t

Offshore productionCountry B

O{ frlw}q p rodd# t i $ilCountry C

?:a_!\'

software and cooperativedevelopment projects.

With regard to marketing, there isrecently a trend in which products arebeing produced within or near themarketplace because of diversified

customer needs. The technologicalaspect is also an important element tobe considered for global operations.Because ofthe sophisticated nature ofrecent ly -deve loped h igh- tech-nologies, no single country can fulfilla l l necessary R&D ranging fromscience to software.It has nowbecomenecessary for the manufacturing in-dustry to seek technological expertiseand skills on a global basis.

It is not unusual to see basic R&Dcarr ied out in the US or EuroPe,designing of commercial products inJapan, software development in adeveloping nation and commercialproduction in NIEs.

In the 11b0s and part of the 1970s, allfunctions of the manufacturing in-dustry including marketi.g, R&D andproduction, were performed in onecountry and finished products wereexported to world markets through

Now that the manufacturing industryis operated on a global basis, all thenecessary fulctions are scatteredworldwide with equal participation ofeach function in the business opera-tion.

Present global business operationsare based on a horizontal scheme. Themanufacturing industry in short hasshifted its operation from a verticallyintegrated scheme to a horizontallyin-tegrated scheme.

Technology-sharing

f aking a close look at the history ofI science and technology, one can

observe that there is a shortfall in tech-nology-sharing among countries.

European countries and the UnitedStates have played lsxding roles in thefield of scientific research. Manynewtechnologies based on science werefirst developed in Europe andbroughtto the level of engineering in the US.The US effort focused on the develop-ment of super-high technologies andultra-large scale engl"eeling projects,while Japan has been active in improv-

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ing newly-developed technologies andproduct ion processes. Japan alsodevotes a large amount of her effortsto applying new technologies to con-sumer-oriented products. NIEs areshowing excellent capabilities in com-mercial product ion and softwaredevelopment.

US vs. Japan technologies

l.echnologies in the US and JapanI present two extremes. There are

numerous reports comparing thecharacteristics of US and Japanesetechnologies. The following is a com-parison of the characteristics of tech-nologies in the two countries.

Recently published reports point outthat US engineers and scientists thinkin terms of defense applications first,whi le thei r Japanese counterpar tsthink in terms of consumer applica-t ions. For example, in the Uni tedStates, alarge amount ofcarbon fiberhas been consumed by aircraft anddefense industries, whereas in Japanthey have been extensively used insporting goods.

Product innovation

There was a beliel that markets forI conventional consumer products

are already saturated with little or nopossibility for expansion. Markets for

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refrigerators, washing machines andcameras were believed saturated. Thisbelief, however, proved incorrectwhen a refrigerator with a new door-opening mechanism, a quiet washingmachine and a d isposable cameracontributed to generating markedlyincreased demand. This is indicativeof possibilities for future innovation inthe conventional durable consumergoods industry.

Current and FutureManufiacturing lndustryChanges and measures taken inmarket and technology

1t is important to review once againI changes in market trends and tech-nologies. In the 1960s, the manufac-turer-oriented approach was prac-ticed and standardized products weremass-produced for mass sales byemploying conventional technologiessuch as mechanical engineer ing,electrical engineering and chemicalengineering. In the 1970s, marketneeds began to diversify and newlydeveloped technologies such as semi-conductors and micro-electronicswere extensively adopted, lssufting infur ther d ivers i f icat ion of marketneeds in the L980s, along with con-sumer tastes reoriented toward luxurygoods. Newly-developed science-based or software-based technologiessuch as new materials and artificial in-telligence have begun to be applied tothe consumer market.

To meet such changes in markettrends and customer tastes as well asto cope with rapidly advancing tech-nologies, the manufacturing industryhas been taking a series of measureswhich call for operations on a global


basis. Thc following tablc shows thesummary of measures taken by themanufacl uring induslry.

Market trend

turing industry requires worldwide ef-forts not only for marketing, R&D andproduction, but also for the purchase

with .-+ System productfor individuallaste

Production of HighlY flexiblevarieties of -+ productionproducts insmalllots

ShorttermdeliveryShort life-cycleofproducts

Manufacturer- + Diversified -a Needs fororiented ap- market needs luxury productsproach

Tectrnologies

Production line

Standardized ->productwithsimplifiedfunction

Massproduction "'D

Prsductmulti$efunction

Conventional -> Semi, -> Science-basedtechnologies conductors technologies

Micro- Software-basedelectronics technologies

Long-termdetiveryLong life-cycleof products

Automation >NC machine

Operation on thenational basisVerticallyintegratedscheme

Flexiblemanufacturing Informationsystem (FMS) |

ComPuterintegratedmanufacturing(clM)

GlobaloperationHorizontallyintegratedscheme

Computcr integrated manufacturing(CIM) is dcfined as an integrated sys-tem o f marke t i ng , p roduc t i on anddel ivery to meet h ighly d ivers i f icd,specific consumer needs. As market-ing, R&D, product ion and sales areperformed on a global basis, CIM isbclieved to serve as a powerful tool forglobal operations. Today's manufac-

o f ma te r i a l s , emp loymen t o f sub -contractors, f inancing and recru i t -ment of personnel.

T h e w h o l e C I M o p e r a t i o n i sdatabased. In pursuing computcr in-tegrated manufacturing, careful stepsmust be taken. First, production CIMmust be completed, followed bY theestablishment of factory CIM. The last


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changed , ,

step in CIM operat ion is the estab-lishment of company CIM. The fol-l ow ing f i gu re shows a schemat i cdiagram of CIM, with the data base atthe center.

Summary=hs rnsnu fac t u r i ng i ndus t r y wasI on.e labor- and cquipment-intcn-

sive with mass production and masssales as its major objcctives. And itsglobalization advanced on this massproductiorVmass sales conccPt.

Now t imcs have changcd: marketneeds have diversif ied, technologicshave become highly sophisticated andformation of rcgional economic blocsis underway. Current globalization isg o i n g o n d u e t o t h e s e p o l i t i c a l ,economic, marketing and technologi-cal dcvelopments.

The manufacturing industry has thusbecome information-intcnsivc. CIMserves as a tool for the operation ofthcmanufactur ing industry on a g lobalb a s i s . F u t u r e m a n u f a c t u r i n g i n -dustrie s wil l become knowledge-in-tcnsive . Future CIM, therefore, wil lrequire highly integrated inteli igentplanning and automation.

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8:00 a.m.7:00 a.m.

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7:00 p.m.5:00 p.m.4:00 p.m.

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THE ASIAN MANAGER r MARCH 1990 3s

AMMO.lO

A differeru qprmch to tlu advmt of Sbbal futking...

Shaping a Swiss Bank for the 199Os

by Dr Kutt SchiltnechtChairman of the BoardBank Leu Ltd.

(This paper was oiginally delivered atthe AAMO- 10 Conference on" Entrepreneurship and Management, "

Hong Kong November 27-29, 1989. -Eds.)

I n thc per iod af ter Wor ld War I I ,I Swiss banks have f lour ished andthei r in tcrnat ional act iv i ty has as-sumed impressive dimensions.T h e f i g u r e s i n t h e b a l a n c eshect, howcvcr, do not tell thefull story. Swiss banks have al-ways had a vcry strong positionin off-balancc shcet operations.Thc political, economic and so-c ia l s tabi l i ty dur ing and af terWor ld War I I as we l l as t hestablc currcncy have created au n i q u c s i t u a t i o n f o r S w i s sbanks, particularly in thc fieldof portfolio management. Thelarge amounts of funds undermanagement stimulated othertypcs of act iv i t ies (gold andfo rc ign exchange dea l i ngs ,capital export, etc.) as well.

During the past 20 years, thenumber of banks in Switzerlandhas increased to almost 700 andabou t 5Vo o f t he t o ta l l abo rforcc is employed by banks andfinancial institutions. Almost all of thel e a d i n g b a n k s o f t h e w o r l d h a v eopcned a branch in Switzerland. As aresult, competition has become moreand more intense in domestic as wellas in in ternat ional markets. In par-t icu lar , deregulat ion has led to anerosion in profit margins.

In recent years there has been somedoubt as to Switzerland's position vls-a-r'rs the European Economic Com-munity (EEC) and the internationalmarkets atter 1992 in general and theSw iss banks i n pa r t i cu la r . Thesedoubts have been accentuated bv the

publication of the Swiss Cartell Com-miss ion repor t on cer ta in bankingconventions. Without any doubt, someof the existing conventions will disap-pear in the near future. Even if the im-portance of these conventions for thebanks is overstated in general, theirabolishment wil l make competit ionmore keen and wi l l lead to smal lerprofit margins.

Not all Swiss banks are aware of theimplications of the ongoing changes inthe international markets and have,the re fo re , no t t aken app rop r i a temeasures to adjust to the changingfinancial world. Bank Leu is a typical

example of the passive at t i tude ofmany Swiss banks in the past, neglect-ing the still very high potential of Swissbanks. Over time, Bank Iru was beenweakened financially by a lack of in-vestment in electronic data processing(EDP) research and adjustments tonew trends in financial markets. As aresult, profits eroded, requiring a cutin dividends. In L988 a managementshake-up took place and a new chair-manwas appointed. The newmanage-m e n t t e a m h a d t o t a c k l e t h e s eproblems and to shape thebank up forthe 1D0s. The pressures have yielded

a fresh approach to all aspects of or-ganizational design and strategy.

Shifting the Focusrounded in 1755. Bank Leu is theF sixth largest bank in Switzerland.Like most other Swiss banks. it is a so-called universal bank, playing an ac-tive role in traditional banking busi-ness as well as in the stock market andin portfolio management. In the 1970sand early 1980s Bank Leu made -

rather late - an effort to become aninternat ional commercia l bank tomaintain its relative position to the

three big Swiss banks.In order to expand business

volume at a high rate, Bank Leuoffered several services at dis-count prices and started to ex-pand i t s ac t i v i t i es on aworldwide basis (operations inLondon, New York, Luxem-bourg, and the Bahamas; andrepresentative offices in HongKong and Tokyo). This expan-s ion was not backed by sys-tematic planning, budgetingand controll ing. In general, itcan be said that planning andcon t ro l l i ng was unde r -developed at Bank Leu, in par-ticular there was no cost andprofit-center analysis and nodetailed management informa-tion system.

The lack of such importantmanagemen t i ns t rumen ts

might be surprising. It can, however,easily be explained by the fact thatSwiss banks could increase profits formanyyears without any difficulty. Theunique situation of the Swiss economyand the stability of the Swiss crurencycreated an environment in which itwas too easy to make a p ro f i t .Deregulation of the financial marketsand i nc reas ing compe t i t i onworldwide changed this situation andbanks like Bank Leu were in no wayprepared for the new and more com-petitive situation, and its relatively ag-gressive expansion at discount prices

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reduced profitability.Confronted with this situation, the

new management decided to shift thebank's focus from growth toprofitability and to define the newstrategic object ive as the estab-lishment of a top class Swiss bank withhigh-quality services and products.Th is sh i f t was coup led w i th thedecision to abstainfrom discount pric-ing. The strategyof"cheap" prices hasproven to be unsuccessful and in addi-tion had had a bad impact on the busi-ness attitude of the staff of Bank lru.The willingness to provide an out-standing service eroded (why shouldthe service be outstanding when it wasprovided at a discount price?) and theaggressiveness to sel l the bank'sproducts faded. In the banking busi-ness, where the quality of the serviceand the selling is of so much impor-tance, such a development canbs dis-astrous.

Recognizing these developments,the new management s ta r ted tochange the image and the culturalterms of the bank; e.g., from a "cheap"

bank to a high quality and relatively"expensive" bank. The position thathigh-quality services have their priceis becoming more and more thegeneral attitude. Today, the bank'sstaffis aware that high commissions orprices have to be defended by out-standing services.

Such a shift in attitude, however,takes time and not all the staff mem-bers have been willing or able to makethe change. To reach the ultimategoal it will not only require time andnew and highly qualified people, butalso continuous effort to train the staffand to put tearyrs together which arenot only willing but also able to pro-vide the outstanding service whichcustomers are demanding and withwhich the bank can generate profit. Ithas to be admitted that the intendedchanges are not nowfullyrealized butit can be said that the change is com-pleted at least in the major areas of thebank's activities. In these segmentsBank ku can again compete with thebest.

Ilefininq Products andServiceE

The Bank Leu Group, wh ichI employsabout 1,700people, isnot

in aposition to offer mostbanking ser-

vices on a world-wide basis. There-fore, the new management abstainedfrom the old and popular idea ofbe-coming a large international commer-cial bank. Instead it decided to focusprimarily on products and services forwhich Bank Iru has a "natural" com-parative advantage.

The decis ion to def ine the bankclearly and to determine not to be allthings to all people was done with theview that such a move will not onlyhave a positive effect on the bank it-se l f , but a lso on i ts c l ients. Thestrategic objective today is to becomea top-class Swiss bank specializing inactivities which are linked in one wayor another to Switzerland to the Swisseconomy, to the Swiss currency and tothe Swiss financial markets.

The decision to focus mostly on thesesegments is based on the assumptionthat the globalization phenomenon inbanking and investment will increase

lasting decline in inflationary expecta-tions and long-term interest rates (anevent, which can only be seen after along period of inllation and which will,therefore, not take place too often).Second, banks have to take into ac-count that the prosperous years haveled to overcapacity in f inancialmarkets. Under such circumstancesonly those institutions which can pro-vide outstanding services andproducts distinguishing them from themajorityof bankswill have a chance tosucceed in the future. In order to beone of the successful institutions,Bank Leu decided to concentrate itsefforts on a l imited number ofproducts and services and to "buy'' theremaining products from other top-class institutions if necessary.

Bank Leq to illustrate this point, isincreasing the number of researcherswho analyze the Swiss stock market,Swiss stocks and SFr.-bonds. At thesame time, the nunber of analystscovering other markets (e.g. Asianand American stock markets) isdeclining in relative terms. In addi-tion, they are not carrying out basic re-search on the company level; instead,they are evaluating the quality ofre-search mater ial which the bankreceives from, for example, thespecialists of the Asian or Americanstock markets.

The investment decisions of BankLeu in foreign narkets relythereforeheavily on the advice oflocal experts.Bank Leu does not intend tobethespecialist for the Hong Kong or Tokyostock markets, but it will alwaysbe oneof. theleading advisers for the Swissmarkets and for all operations relatedto Switzer land or to the Swisseconomy.In addition, the exchange ofresearch, advice and servicesstrengthens cooperation with middle-sized institutions abroad, who arefacing the same limitations in interna-tional markets as Bank Leu. Suchloose cooperation can be extremelyfruitful and can lead to institutionalcooperation in the long run.Another example describing the

"Swiss' approach in the businessstrategy of the bank is related to thespecial condit ions for port fol iomanagement in Switzerland. It is awell-knom fact that Switzerland is ex-cellently placed for portfolio manage-ment. In particular, political, socialand monetary stability as well as bank-

i1r^n* Leu...will always be

one of theleading

advisers forthe Swissmarkets...

,,

further and that the trend towards in-ternational diversification of assets,liabilities and risks will continue. Onthe onehand thisimplies enlarged ac-tivities in financial markets; on theother hand, arbitrage between finan-cial markets will be more efficient.There is no doubt that these develop

ments will reduce profit potential.Based on the actua! and probable fu-ture situation, banks have to be awareof two facts: first, they have to realiznthat the extremely prosperous yearsfor financial institutions during thesecond half of the 1970s and the firsthalf of the 1980s were due to the long

THE ASIIAN MANAGER e MARCH 1990 37

ing secrecy have made Switzerland asafe haven for the assets of foreigners.Foreign clients of Swiss banks areoften risk averse and are looking forinvestments with stable returns andlow risk. It is relatively seldom thatprivate foreign investors are going forhigh returns and high risk in Switzer-land. For this reason, Bank Leu hasshiftedits emphasis tothe supplyof in-vestment products with low risk andstable returns.

One of these low risk oroducts is theso-called fiduciary deposit. Fiduciarydeposits are made by the bank in itsown name but for the account of thecl ient. The discreet character offiduciary deposits relative to a directplacement is an advantage for manyclients. The detour througha f iduc ia ry t ransac t ionhelps to disguise the iden-tity of a person or institu-tion.

In order to attract a largeamount o f f iduc ia rydeposits, a bank has to havean excellent rating. In orderto keep the current highrat ing and the excel lentqua l i t y o f asse ts on thebalance sheet (Bank Leuhas a lmost no prob lemloans), the bank decided toabstain from high-risk lend-ing and to focus primarilyon domestic loans. The riskon domestic loans can beestimated much better thanthose for foreign loans.Loans to institutions andprivate individuals abroadare onlygranted to topbor-rowers o r on a coveredbasis. Such loans are, however, notvery profitable and profit can onlybemade if refinancing can be done atrelatively low rates.

Given the difficulties of attractingre lat ive ly cheap funds in fore ignmarkets, banks can only operateprofitably in the international loanbusiness if they are willing to grantloans with higher risk. This was thedilemma with which the New Yorkbranch of Rank Leu was confronted.S ince the new managemen t wasneither wil l ing to accept high riskloans; e.g. , to par t ic ipate in LBO-financing, nor losses, it decided toclose the New York branch.

If risk has to be taken, the bank will

t ake i t i n Sw i t ze r l and where therisk/return potential is much more at-tractive, at least for a leading commer-cial bank in Switzerland. A risk averseloan s t ra tegy i s cons ide red to benecessary in order to qualiff as a topbank in the private banking businessand to sustain profitability in the longrun. This strategy is underlined by thefact that Bank Leu keeps - even bySwiss standards - a very high capi-taVasset-ratio.

Chanqinq theOrgariizalion Design

1l lne of the weaknesses of SwisslJbanks in seneral and Bank Leu inparticular wai the selling of products

t o o the r banks was ve ry l ow , t hemanagement later decided to reducethe overall number of employees byaboutl}Vo over a period ofone to twoyears. While the reduction of the staffis almost complete, the restructuringstill continues.

In order to make selling more effec-tive, marketing committees have beenintroduced. One of the reasons for theestablishment of these committeeswas to provide information on market-ing plans, programs and success fromone business unit to another. Anotherreasonwas to improve the informationf l ow be tween resea rch , t r ad ing ,portfolio managers and clients. In ad-d i t ion, these commit tees ident i fypotential clients and regions where the

bank wil l target its futuremarket ing ef for ts . Theyalso coordinate cross sell-ing in the bank.

The experience resultingfrom the reorganization ofthe sell ing staff has so farhas been very promis ing.The bus iness vo lume i nsome sectors, in particularin security trading with in-st i tu t ional investors andlarge private clients, was in-creased at a rate greaterthan market growth. It isthe expl ic i t target of then e w m a n a g e m e n t t ostrengthen the sell ing or-ganizatiot further.In order to create incen-

tives for increased businessactivity and better perfor-mance, the compensationsys tem had to beredesigned. Under the old

system, the variable part of the salarywas very low and there were almost nobonus payments for outstanding per-formance. The only flexible part of thesalarywas linked to the total results ofthe bank and was very low (a few per-cent of the total salary at best).

Today's compensation system, whichwill be effective at the end of this year,is quite different. The variable part islinked - as in the past - to the totalprofit of the bank, to the result of adivision or to the single employee. Butin addition, abonus canbegranted forsolving difficult problems in time orfor providing outstanding service tothc bank. This means that more or lesseverybody in the bank can qualify for a

and services. For many years, clientsfrom all over the world came to Swissbanks and there was no need for activeselling. In recent years, however, it be-came - even for Swiss banks - moreand more d i f f icu l t to at t ract newclients and to keep old ones.

Faced with this situation, the newmanagement of Bank Leu began toreorganize the selling staffand to trimthe administrative staff of the bank.Compared with successful financialinstitutions the ratio of front to back-office staffwas very low at Bank Leu.Therefore, it was decided to increasethis ratio without expanding the totalnumber of employees. However, sincethe productivity of the bank compared


bonus. The amount of the bonus cango up to about 5OVo of the salary. It ishoped that the new compensat ionscheme will facilitate the hiring of ex-cellent people.

A prerequisite for meaningful ap-plication of the bonus system is theintroduction of cost/profit-centeranalysis as well as detailed planning,budget ing and contro l l ing on d i f -ferent company levels. Despite thefact that all these management tools,which are needed to implement thenew compensation scheme, have tobe improved further, they alreadyallow quite a lot of conclusions forfixing bonuses and for analyzing thequality and efficiency of work donein the bank. The new planning andcontroll ing process makes it easierto check whether the units are usingthe strategic input of top manage-ment in an appropriate way. It alsohelps to fix realistic targets. Realistictargets are a key factor to success.Wishfu l th ink ing has no p lace inplanning and targeting.

Aside from the technical improve-ments in the flow of information, othermeasures have been taken to facilitatereporting and decision making. One ofthe more important decisions was toeliminate one level in the hierarchyand to put very small units together.Fewer reporting levels are not onlyreducing the bureaucracy but also im-proving the flow of information andfaci l i ta t ing the decis ion-makingprocess.

In o rde r t o s t reaml ine thebureaucratic organization a task forcewas established. It is an ad hoc com-mittee of members of middle manage-ment and it was directed to identi$ in-efficient units and divisions. The taskforce came up with several proposalsfor improving productivity. Their im-plementation, however, has takenmore time than e4pected. The carefulredesign of inefficient divisions provesto be a t ime consuming task, par-ticularly if there is resistance to theredesign. There are st i l l a fewmanagers le f t who are more con-cerned about the size or existence oftheir division or unit than about profitfor the bank.

The w i l l i ngness o f t he s ta f f t ocooperate, to develop and supportnew ideas and to accept changes willbe crucial for further success. Such apositive attitude can onlybe reached if

the flow of information between topmanagement and the staff and viceversa functions; and, finally, whenthere is a c lear l ink be tween theindividual's work and his other com-pensation. Under these circumstancesit will be possible to change the cultureo f the bank and to s t rengthenentrepreneurial thinking on all levels.

The organization of the whole groupwill go along these lines. Efforts arebeing made to make certain unitsmore independent and to decentralizeoperat ions. The benef i ts of moreautonomy lie in the transparency ofresults. Suddenly there is no longer adiscussion about responsibility forcosts, r isks, business act iv i t ies orprofits. For this reason the daughterbanks in Basle and Geneva, as well asthe security house in London and therea l es ta te company in Zur ich ,operate quite independently. It ishoped that the banks in Luxembourgand the Bahamas will become more in-dependent as we l l . The t rend to"break up" the bank and to form inde-pendent units does not mean that noef fo r ts a re made to s t rengthencooperation within the group or tocent ra l i ze techn ica l p rocesses .Cooperation must, however, be basedon commercial conditions. A unitshould only buy a service or productfrom another of the group when thequality and the price is in line withmarket conditions.An important step has been taken

in the data processing organization.Instead of developing internally anintegrated EDP solution, a softwarepackage with an integrated solutionwas bought from another institutionand has been adjusted to the needs ofthe bank. It was difficult for the newmanagement to decide whether thebank should continue to work on theinhouse solution or buy an externalsoftware package. The uncertaintyabout the termination of the ongoinginternal project - i t was alreadydelayed many times - was in the enddecisive for the choice of the exter-nal solution, which does not suit allthe needs of the bank but will allowus to imp lement the app l ica tonsalong a fixed time schedule. There-fore, quite a lot of the previous un-certainty was reduced and the staff ismore confident that it will get the an-nounced EDP so lu t ion a t the an-nounced date.

Some First Conclusions1'he shaping-up effort of Bank LeuI is showing its first results. Cash-

flow has increased significantly. Theprofitability of the bank is better butnotyet good. Part of the irnprovementis also due to excellent market condi-tions, which have facilitated improve-ment in profitability and have madethe necessary organizatiola[ sfuangespossible without destabilizing thebank too much. Therefore, it would bewrong to stop the redesign and reor-ganization ofthe bank.

The new management is aware thatonly the most urgent and importantmeasures have been taken and manyothers have still to be implemented.Many di f f icul t ies st i l l have to beresolved. The neworganization has tobe stabi l ized and has to be testedunder more difficult market condi-tions. The current targets have to bedefined more sharply, unprofitableactivities have to be given up or soldand new attractive business has to bedeveloped.

This process requires leadership andhighly qualified staff. To upgrade thework force cont inuously, a clearstrategy is inevitable. A recruitingpolicy as well as training, developmentand career programs are still missing.The human factor wi l l f inal ly bedecisive whether the measures takenup to nowwill lead to further improve-ment in profitability and whether thebank will achieve flexibility, in par-ticular the ability to adjust to changingfinancial markets. Judging by the in-crease in profits, by the response ofclients, and by the attitude of the staffin the first round ofshaping the bank,there are good reasons to believe thatBank Leu has an excellent chance tobe successful in the 1990s.

THE ASIAN MANAGER r MARGH 1990 39

FEATU R ES

Doing ofery things weU - very weA...

Models for Gebu: The NewlyIndustrialized Tiger Economies ofHong Kong, Taiwan and Singapore

by Prof. Gabino A. MendozaRi c h ard We ath erh e a d F ou n dat i onProfessor of Business Management

rG tratesv must be directed towardDat ta i i l iU le goals. Wherher i t bestrategy for a company, or a country,or even a c i ty , i t must be a real i ty-bound set of competencies, skills andcompe t i t i ve advan tages d i rec tedtoward attainable goals.

Second, strategy is not about every-th ing that can be done. Strategy isabout choosing from the many pos-sible things that canbe done; choosingthe crucial things, choosing the fewthings that must be done so that thevis ion can be at ta ined. Too of ten,strategy is presented as a list of 20 dif-

ferent things that can be done. That isnot strategy, that is a wish list; becausedefinitely strategy involves a focusingof efforts, a massing of resources; it ischoos ing the few key th ings tha tshould be done to reach an objective,to bring about a desired outcome.

The third thing that I would l ike toemphasize has to do with the role ofgovernment. Government cannot beall things to all men. The countries thathave tried to do that, l ike China andRussia, have found that they cannotp lan everyth ing, do everyth ing foreveryone. Government works bestwhen it clearly defines what it will doand clearly defines what it will not doso that the rest of the society knowswhat it must do for itself, so that theprivate sector knows precisely what itssphere of action can and should be.

Moreover, government works bestwhen it picks out a few things that itwill do and then does these few thingswell, rather than trying to do every-thing and doing them badly. The effec-tive government prudcntly chooscsthe few strategic things that it can dowell and concentrates on doing an ex-cellent job on them. That's the essenceof my message to you today.

Let's take a look now at three newlyi n d u s t r i a l i z e d c o u n t r i e s - H o n gKong, Taiwan and Singapore - andsee what we can learn from their ex-perience about development strategyand government's role in its formula-t i o n a n d i m p l e m e n t a t i o n . I h a v cchosen these three bccausc they areeither small cities or an island. Theirexperience is closer to Cebu's thanthose of Japan or South Korea, or

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Malaysia, al l of which are largecountries.

Hong KongIJ ong Kong started out, not with aJlvision but with an ideology: abelief in minimalist governmenl /cis-sez-faire economics and free trade.The theory in Hong Kong was that thegovernment should do as little as pos-sible; the governnent should be assmall as possible; the governmentshould be as inexpensive as possible.The role of government was preserv-ing law and order, doing some in-frastructure - roads, water, etc. - andproviding low cost housing. Thqse fewactivitieswere fundedwith aminimumof taxes and with income that i tderived from auctioning off primeland which it ovmed. A lot of activitiesin Hong Kong ins[gding the provisionof power and mass transportation,were inprivate hands. The theorywasto let the private sector do as manythings as it could possibly dobecause itcould do them better thrh governmentcould.

It was the great Hongs-JardinMatheson, Wheelock Marden,Hutchison, Wampoa, Swire, amongothers - that had a vision of whatHong Kong should be. It was a visionbuilt onyftat theywere good at trad-ing and putting deals together. Theysaw Hong Kong as the trading postand financial conduit for China. Andthat's what they made Hong Kong intoa financial center and half-wayhousewhere goods from all over the worldwere gatlered and sold to the Chineseand all the goods from China weresold to the rest of theworld.

Hqng Kong started its post WorldWar II development sometime in 1949when the communists took over themainlsld. llsy &ove the Hongs frontheir outposts in Shanghai Foochow,Tientsin, Hankow and Ichang back totheir main base in Hong Kong. Theyalso caused the Chinese industrialissof Shanghai toflee from the mainlandand settle in HongKongThe Hongs wheeled and dealed from

Hong Kong as only they knew how.Theyfound waln to re-establish theircontacts inside China and exercisedtheir age-old e:pertise at penetratingclosed markets. In the process, theydeveloped Hong Konginto the inter-national marketplace and financial

center that it is today.The Shanghai industrialists, on the

other hand came out of China know-ing how to run textile mills. Theystarted building textile mills in HongKong. Littleby liftle, their supervisors,their technicians, their skilled workersalso came out of China and theystarted to produce very competitiveproducts. Since the markets of themainland were closed to them, theystarted to look around for alternativemarkets. Theywere luckythe KoreanWar broke out in 1950. The Allied

- -t -- -I II -

The role ofgovernment

in Taiwanwas a very

activist one,the opposite

So, from textiles, they went into gar-ments, which had a bigger valueadded. From low cost garments theywent upmarket into high fn5fuisa g31-mentswhere thevalue addedwas evenhigher. They allied themselves withthe West, Hong Kong became theworkshop where all the name brandgarments were made. They becameoriginal manufacturers for the bignames in Europe and in the UnitedStates. They also went into electronicproducts, again with people from theWestbringing in the technology. Withtheir low cost and highly skilled labor,they were able to invade the UnitedStates.

The success of Hong.Kong was builton its strengths: the tradingHongs andthe Shanghai Industrialists who weregiven a free hand by the governmentand who took advantage of it. Andthey grew. Oh how they grew!

TaiuvanI et us move on from Hong Kong toLTaiwan. Taiwan also started on itsupward movement after the fall of theIfuomintang in China. They all ran toTaiwan: the discredited politicians,the failed military men, the intellec-tuals, the Nobel Prize winners. Whatdrove them afterwards was a dream: adream of recapturing the mainland.Tbey rcalized that the only way thatthey could do this was to convince theChinese people who had driven themaway that thelir system of governmentwas superior to the communist systemof government. Theyhadto prove thatthelives of peoplewouldbebetter in aprivate enterprise system rather thaninacommunist system.Theyfrst started out to improve the

system in Taiwan. Taiwan was essen-tiallyan agricultural state. Andso theystarted to upgrade its agriculture.They did this through a very drasticland refonn program. They took thefarmlands from the big land ownersand distributed these to the farmers.Then, government took over the bigindustries - the utilities, cement,steel- that had been left behind by theJapanese and ran these themselves.Beyond tha! they encouraged privateentrepreneurs to start producinggoods for the home markets ofTaiwan.

While theywere trying to develop aninternal market, they were very con-

of Hong *o"n,

Forces in Korea became a lucrativemarket for a lot of their goods. Whenthe war ended, they looked toSoutheast Asia for markets andstarted to serve Indonesia where therewas plenty of pent up demand forcloth. After a few years, they visitedthe United Kingdom and realized thatbecause of their lowcost labor, and thenew equipment that they had been ac-quir ing, they could undersel lManchester which was then the centerof the textile world. In fact, they couldserve Manchester 's tradi t ionalmarkets cheaper than the Manchestermills coul4 so they started to sell firstto England; then to the United States.That is how they began. Later, theywent into the production of otherlabor-intensive consumer goods likewigs and plastic flowers, plasticcombs, and all kinds of simihl things.

As other developing countr iesstarted to invade the markets of HongKong offering them cheaper goods,Hong Kong deliberately moved up.

THE ASIAN IIANAGER o MARCH 1990 41

scious ofthe fact that there should notbe too big a gap between the rich andthe poor in Taiwan. To track this, theymade use of a very interesting tool,called the Gini index. They were, as faras I know, the only country in the worldthatwas usingthis tool. The Gini indexi s t he ra t i o be twee n t he i ncomereceived by the richest 20Vo of thepopulation and that received by thcbottom ?n%. And they kept watchingthis index to make sure that the gap be-tween the rich and the poor would notbe too much. Theministers of govern-ment kept watch on it. Whenever itstarted to move upward, they wouldtalkwith the private sector and suggestthey do 5smsthing about the wages oftheir workers. They tried very hard tomake sure that the gap did not widenbecause they kept looking at Chinaand saying to themselves, "We shouldbe able to prove to them that we canhave a just society under the f reeenterprise system."

During the 50s they concerned them-selves with increasing their capacity tosatisfy the basic needs of the localmarket, supplanting goods they hadhad to import wi th those of localmanufactures. In the 60s, they decidedthat they had done all they could forthe local economy and so they adoptedan export orientation. They decidedthat thei r market was the Uni ted

States and so that is what they tar-geted. They got together with theJapanese who were gradually beingeased out of the U.S. market becausetheywere getting too rich. They usedthe Japanese as their souroe of tech-nology and as their marketing arm.They invaded the United States usingJapanose technology and Japanesemarketing know-how. They were will-ing to go into partnership with theJapanese because they figured thatwas the fastest way to fulfill their aims.They surprised even themselves onhow successful the strateg5r was.

Then, as they got richer, they real-ized that they could not stay longwiththe labor-intensive, low-cost itemsthat they were exporting. They movedup from low-tech industries to hi-techindustries. They welcomed foreign in-vestors from the United States andfrom Europe. They opened up scienceand industrial parks where high tech-nology industries would come in. Theywere already very dependent on theUnited States for their defense, fortheir security. They also became verydependent on the United States fortheir capital and for their markets. Sothat when you take a look at Taiwan,you will notice that Americans can dono wrong in Taiwan because thecountry is completely dependent onthe Uni ted States. The last t ime I

looked, Taiwan had foreign exchangereserves that would cover our Philip-pine debt twice over and still leavesomething to fund their own opera-tions. It was at the level of more thanUS$70 billion. So, being willing to becompletely dependent has made themvery rich.

The role of government in Taiwanwas a very activist one, the opposite ofHong Kong. They ran the big com-panies. Theypushed the private sectorinto investing in Taiwan's growth.They encouraged them by giving themincentives. They gaye them cheaploans. They even set up marketingfacilities for them. They did not, how-ever, go into the consumer goods busi-ness themselves. They left the privatesector to deal with consumer marketsbecause they figured this was some-thing that private business could dobetter than government.

Singapore

I et us take a look at Singapore. Sin-Lgaporewas hit bya "double wham-my''sometime in the 1950s. First, theBritish set them free and they becamea part of Malaysia; and then Indonesiadeclared war against Malaysia. Now,one of the hinterlands of Singaporewas Indonesia. And when Indonesiadeclared war against Malaysia, they


were in danger of losing that part oftheir traditional market. Second, theywere kicked out of the MalaysianFederat ion by the Malays underTunku Abdul Rahm31. f fiis was a verytraumatic thing for the Singaporeans.They had always thought of themsel-ves as part of Malaysia. The MalayMalaysians, thebumiputro, the sons ofthe soil, however, had taken a look atthe number of Singaporeans - therewere two million of them at that time,mostly Chinese- and realized thattheywould tip the racialbalance in theFederation making the Chinese in-stead of the Malays the dominantgroup. And so the Malays said "out"

which meant that Singapore's marketin Malaysia was also threatened.

At that point, Lee Kuan Yew real-ized that they had a problem of sur-

health facilities. And finally, wewillbevery active in picking out the strategicindustries that Singapore should con-centrate on, where we should be thebest. That's all. All the rest should beleft to the private sector."

He also decided that with only twomillion Singaporea',s they would wel-come foreign talent, foreign technol-ogy and foreign capital into Singapore."Wewill notbe afraid of the foreigner.We will welcome him into SingaFnre ifhe has talent, skill, technolog5l or capi-tal. He is welcome to help us make Sin-gapore great."

Originally, Singapore was the trad-ing center for Malaysia and Indonesiaand an Imperial fueling station for theBritish fleet. Realizing that they werevery strategically located between theoil of the Middle East and the markets

ter, they decided that they were goingto be a global high-tech manufacturingcenter. They deliberately set out toupgrade the structure of manufactur-rng in Srngapore from low-tech, labor-intensive operations to high-techknowledgeable worker-or ientedoperations. To do this they raised theminimum wage in Singapore by?n%annually for a period of years. In ef-fect, by abruptly raising labor rates,they forced their manufacturers to getout of the low-tech businesses thatthey were in and to go into the high-tech industries. They also put up a newschool: a computer institute which isarguably the most sophisticated com-puter center in all of Southeast Asia,probably in all the developing world.Theyalso pouredin alot of moneyintoupgrading the teaching of science andtechnology in Singapore University.Singapore has now turned into a veryhigh-tech manufacturing country.The role of government in Sin-

gapore, as I have pointed out, had todo with a very few things: housing,education, health, and inve5ling in cer-tain strategic industries where theprivate sector was not willing to invest.But even these they did with a dif-ference. When they invested in an in-dustry, they made sure it was ade-quately capitalized and managed likea private sector operation, responsiveto the market and with an eye fixed onprofits. If one or two of these did notmake money, they did not shore themup with additional capital, they letthem die. They sometimes also wentinto joint ventures with private inves-tors. Even when the government wasthe majority investor, the private sec-tor group was asked to manage thecompany. The government kept itshands o f f as long as the pr iva temanagers did a good job of runningthe company. And of course, whathappened was that they created someof the most competitive companis5 i11the world. gingapore Airlines, for ex-ample, is one of the best run and mostprofitable in the world.

ConclusionI11te have looked at Hong Kong,UU Taiwan andSingapore. We haveseen the sources of their visions. Wehave seen how they tried to attain theirv is ions w i th d i f fe ren t k inds o fstrategies. We have seen how their

vival. Theywere two million people ina little island with no resources. Eventhe i r water had to come f romMalaysia; lre Kuan Yew also realizedthat in order to survive they wouldhave to be very disciplined. And inorder to be very d isc ip l ined , thegovernment would have to be verycredible because if government wasnot credible, then their trying to dis-cipline the people would cause allkinds of disruptions, would cause allkinds of dissent. He decided that thecrucial thing that they had to do was toestablish the integrity and effective-ness of government. And so he said,"There are only a few things thatgovernment will do but it will do themwell. First, we will provide low-costhousing. Second, we will make sureour young people get a good educa-tion. Third, we will have excellent

of East Asia, they decided to expandtheir role. They decided to become theregional trading center not only forMalaysia and Indonesia but also for allof Asia. Thevwould also trv to becomethe service center for shipping the oilprocessing and petroleum productsdistribution center, and the financialcenter for the region. Governmenttherefore made substantial invest-ments in modern port facilities, shiprepair and shipbuilding facilities, ando11efining capacity. Theymade it veryeasy for the local banks to expand andfor the major City Banks of the worldto set up shop in Singapore.

As they moved forward anddeveloped, they started to run out ofpeople. They began to have to irnportMalaysian workers into Singapore. Sothey decided to adopt a new strategy.Instead of merelybeing a regional cen-


strategies changed over time based onthe changing environment and on theincreasing skil ls and technologicalknowledge that they were able to ac-quire along the way. We have also seenhow their governments assumed dif-ferent kinds ofroles in relation to thedevelopment of the society. We haveseen how important it was for govern-ment to be very clear on what it wantedto do. They could be very passive likeHong Kong or they could be activistlike Taiwan and Singapore. What wasimportant was that they madc it clearto the private sector, "This is as far aswe will go. No further. The rest is yourresponsibility." Finally, we have seenthat they did not try to do too much.

They did not try to be everything toeverybody because they recognizedthe reality that they could not.

Let me conclude by reiterating thatv is ion is not a b lue sky th ing. I t isgrounded in reality: the reality of at-tainable opportunities, the reality ofavailable resources and of skills. thereality of distinctive competence andof competitive advantage.

Second, strategy is not about every-th ing that can be done. I t is aboutchoosing a few key things, a few crucialt h i ngs tha t mus t be done so tha tdevelopment can ensue.

And third, government cannot be allthings to all men. Government worksbest when it clearly defines what it will

do and what i t wi l l not do: when i tpicks out a few things it wil l do anddoes those things well.

Thty cell as...

The Little Giant

URBAN BANKTHE PRIVATE BANKERS

URNANCORP INVESTMENTS, INC.4EWff iE ' IL I f r6W

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Time-weighted methds vs. the nniye...

lmproving Gorporate GapitalI nvestment Performance

by Prof.Emmanuel S. Santiago

The lmoortance of theCapital InvestmentPrdcess

41 apital investment opportunities

(. ::: i:,:"":',#? :;:l:ffi :::Each investment is an attempt to as-sure some facet of the company's well-being. The selection of investmentprojects and the allocation of cor-pora te cap i ta l a re among topmanagement 's pr imary respon-sibilities. A good corporate invest-ment program can mean sustainedgrowth; failure to invest wisely can im-pede growth or threaten company sur-vival. Capital expedditures requireusage of scarce corporate resourcesand thus should be undertaken in amanner that will maximize contribu-t ion to the value of the f i rm. Ap-propriate steps, therefore, must betaken to ensure that capital invest-ments will produce most, if not all, oftheir expected benefits. A systematicapproach to unders tand ing theprocess is to divide it into six distinctbut interrelated stages.

These are ; iden t i f i ca t ion o fproblems/opportunities; generationof benefits and costs for different al-ternatives; evaluation of costs andbenefits for different alternatives;selection of the best alternative; im-plementation of selected project;monitoring; and, post-project evalua-tion. These different stages can be thebasis for allocating resourses, respon-sibilities and outputs within the com-pany.

Capital BudqetinqPrdctices inlhe US.

I n the U.S., capital budgeting prac-I tices have alwavs been a favoritetopic of academic research. Studies

have been designed to develop a bet-ter picture of how corporations makecapital expenditure decisions, andalso to determine whether they repre-sent theoretically sound, superiorcapital budgeting techniques. Themain focus of most previous studies isthe project choice of evaluat ionmethods: discounted, time-weightedmethods such as Internal Rate ofReturn (IRR) and Net Present Value(NPV) non-discounted vs. "naive"

methods such as Return on Invest-ment (ROI) and Payback.

Research l i terature abounds inproof of the theoretical superiority ofdiscounted models over naive models.Use of IRR and NPV will lead to theselection of investments that will max-imize the value of the company andthus corporations should apply thesetechniques in their capital investmentdecision-making processes. Results ofsurveys conductedin the60's and early70's reveal the contrary: most corpora-tions were using ROI and Payback in-stead of IRR and NPV as theirprimary methods in evaluating invest-ment proposals. A switch to IRR andNPV as primary capital budgetingtechniques was observed during themid-70's. Studies conducted in the80's indicate that although ROI andPayback remain popular, they havehowever been relegated to secondaryimportance with IRR and NPV beingthe primary methods used.

Discussions with corporate prac-titioners have elicited comrnents onwhy the transition to discounted cash-flow models took some time. Thesecan be summarized as follows: lack offamiliaritywith IRR and NPV; ROIand Payback are easier to computeand interpret; usage of discountedmetiods requires an information setthat is not easily available.IRR andNPV models will generate reliableresults only when the correct data isused. This meens 1y6 things; the datafor al l relevant var iables are es-timated, and, they must be highly ac-

curate. These conditions are neces-sary because discounted cash-flowmodels are sensitive to the data util-ized. As the saying goes'Junk it\ junkout." If the needed data are not avail-able, then IRR and NPV are no betterthan the ROI and Payback. Amongthe above mentioned impediments,the information constraint is regardedas the most formidable. But with theadvent of min icomputers andmicrocomputers, the task has beenreduced to manageable proportions.

Cash Flow EstimationPractices?e dsleppiae howUS corporationsI generate their cash flow informa-

tion for capital investment purposes, asurvey of the Fortune 5fi) firms wasconducted in 1986. The frndings revealinformation which has not beenreported in previous capital budgetingstudies. Most of the results are sum-marized in Exhibits L,2and3.As an indicator of the extent of or-

ganizational support that firms pro-vide to their cash flow estimationprocess, respondents were asked iftheir companyhas a person or personsresponsible for coordinating/super-vising the generation of cash flow data.Over two.thirds replied affirmatively.The positions that oversee the processinclude staff accountant, financialanalyst, treasu rer, vice-president,department manager, controller,division director, assistant controller,or assistant treasurer. Results showthat firms which are capital intensiveand highly levered are more likely tohave a person or persons coordinat-ing/supervsing cash fl ow forecastingthanthosewhich are not capital inten-sive and have low debt ratios. Thisresult is not surprising, consideringthe magnitude of capital expendituresand the level of frnancial risks involved(as indicated by a higher debt ratio).Because capital intensive firms aremore likelv to have nemerous invest-

THE ASIAN MANAGER e MARCH 1990 45

Exhlbil aAYeihbility ot Company

Standard Procsduroo for GensrrfingCect Flow lnformdion

*;*;; "JT*A, Docs ttd csrFsfiy Fp !9S' &vidr. a $arldtrd pGo&e (85.3t6)* (t25%)iry csttmaling ilttB ltkti*xes. depi+chioh, FG,mamUjg"wrmz

B. Do6 the @rilpany r& i 52 73quhc uw of a srtrindad (65-5tq P2 Si)modet tot iixmsting6*rltuG? r

c. Do.$tlE coftnp9{rJ l8lhs* dml*d formi q (78.q1rcdcf$G to doliacl6hlkt-dda sC ottnr iriwsl-iiEnt hbrimtim?

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mcnt proposals to cvaluatc, having ancxpcricnced and capable olficer ofthcfirm supcrvise the process not onlyscrvcs to fac i l i ta tc thc cxchange ofv i t a l i n fo rma t i on among un i t s i n -volvcd. but also cnhances thc ovcrallc f f i c i c n c y o f L h e f i r m ' s p l a n n i n gproccss. This could a lso bc a com-p o n c n t o f c o r p o r a t e s t r a t c g y t omanago or reduce business risks whcnfinancial risks arc high.

Ano thc r i nd i ca to r o f t hc i n -s t i t u t i ona l i za t i on o f t hc cash f l owlorccasting process is the availability ofcompany-widc standard practices ingcncrating cash flow information. Ex-hibit 2 summarizcs resgrndents' rcpliesto thcqucstions. Overall about eightoutof ten samplc f i rms had a companymanual prepared for capital invcstmcntpurlnscs. The manual usually provideddc ta i l s o f p rocedu res to f o l l ow i nprcparing a capital budgct rcquest, thecash flow inlormation needed, as wcll asthc forccasting horizon. The forms to bccomplctcd rangc from a single page toscvcral pagcs dcpending on the type ofproject and the amount of funds in-volvcd. Thc results indicate that thcprcscncc of an individual within the or-ganization responsible for coordinat-ing/supcrvising the firm's cash flow es-timation proccss is positively relatef,with the adoption ofcompany-wide prgcedures. Firms which have a person incharge of their cash flow forecastingprocess are likely to have a more struc-tured approach for gcnerating capitalinvestment information.

Exh ib i t 2 shows the d i f f e ren tforecasting methods respondent fi rmsuse in estimating cash flows for capitali nves tmen t . Among the sevenmethods l isted, four are reportedly


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uscd by a majority of the sample firms:management 's subject ive est imates,sens i t i v i t y ana l ys i s , consensus o fcxpe r t s ' op in ions , and compu te rsimulation.

This indicates that, although qualita-t ive forecast ing methods (such asmanagement's subjective estimates andconsensus of experts' opinions) arepopular and perceived to be highly im-portant when generating cash flowforecast, corporations clearly do notrely solely on them. Instead, estimatesfrom sophisticated quantitative modelsare given ample consideration. This ob'servation is reinforced by results show-ing that over two-thirds of the com-panies in the study reported using threeor more techniques in forecasting capi-tal expenditure cash flows.

Further analysis reveals that cor-porations with larger capital expendi-t u res do no t on l y adop t mu l t i p l eforecasting methods, but are also in-c l i ned to be more quan t i t a t i ve l yor iented. Addi t ional ly , f i rms wi thlonger forecasting periods ar€ morel ikc ly to requi re several est imatesder ived by numerous methods. Tof ind out more about the cash f lowforecasting experiences of corpora-tions, respondents were asked if theyconduct post audi ts on completedprojects. Three-fourths of the samplefirms responded positively. The mag-nitude of forecasting errors reportedby sample firms by type of cash floware presented in Exhibit 3.

Among the three different types ofcash flows, initial investment has thelargest percentage (about 68%) otrespondents claiming a9OVo level ofest imat ion accuracy, whi le annualoperating cash flows hold the smallestpercentage (about a3%) of respon-dents claiming the same level of ac-

frfiibit 3.P€r@nt g€ D,iftrenco Bctresn

F6reca3ted andAetuel Cslr Floffi

fnlHTWc of Caoh no!

Annual qrhatrnt Ot idid lrehE

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F-b{Jief iffiidd piledhiEes it|drcd.o rudnDor ott;.sa.tar*e

curacy. This result is not surprising;the forecast of initial outlays rypicallyinvolves estimates of current costs.whereas annual operating cash flowsare based on forecasts of a number ofvariables - some of which are highlydependen t on f l uc tua t i ons i neconomic conditions.

Further analysis reveals undcrlyingfac to rs t ha t con t r i bu te t o h ighe rforecasting accuracy. Firms that havesomeone coordinating/supervising theinformation gathering system and usecompany-wide standard practices ex-perienced relatively smaller errors intheir projections. A balanced mix ofqualitative and quantitative forecast-ing tools provided more reliable es-timates. Preparation of cash flow in-formation for all types of investments(vs. selected ones only) and for dif-ferent capital budget sizes (instead oflarge amounts only) have y ie ldedmore accurate forecasts for corporatecapi ta l investmcnts. Last , but notleast, post-audits are functional andwill go a long way in continuously im-proving a corporation's capital invest-ment program.

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a


WltercAre T'ltq Now...

The Class ot'77: Part I

Master In BusinessManagemenl,lgTT

Abdul Rahman bln Mohamed, MBM'77Assistanl DirectorJabatan Odit NegaraJalan Tugu50518 Kuala Lumpur, MalaysiaTel.0$299001

Agulnaldo, Tere.lt Franclsco, MBM'7717691 lsland Inlet CourpFort Myers, Florida 33908u.s.A.Aller, Regino Supangan, I|BM '77

General ManagerCebu Tradecraft InternationalHighway, Mandaue CityGebuTel.835@

Ang, Anlhony Y., MBM '77

828 N. El Camino #16San Mateo, California 94401u.s.A.Au Yong Mun Bong, MBM 'ft

Agency SupervisorGreat Eastern Life lnsurance Sdn. Bhd.19th Floor, Semua HouseJalan Masjid India,50100 Kuala LumpurMalaysiaTel. 2934921/2939066

Azcuela, Honorlo Sunico, MBM'77PresidentEurasia Carriers Company, Inc.Royal Match Bldg., 2111 Pasong TamoMakati, Metro ManilaTe|.881290

Balleoleros, Je3u. Slchon, MBtrl'77Director, Mgt. Info. ConsultingSGV-Na Thalang & Company Limited514/1 Larnluang Road, DusitP.O. Box 812, Bangkok 10300ThailandTe|.2800900

Bartolome, Ellzabeth Eugenlot, MBil'776 Macopa Street, Sta. Mesa HeightsQuezon City, Metro Manila

Binrmlra, Jerur Salnz, )IBn'Tlc/o Mrs. Elizabeth Zuniaga3019 &nnifer DriveCollege Station, Texas 77840u.s.A"Brlmo, Gerard Henry, llBM'77PresideniPhilex Mining CorporationBrixton cor. Fairlane StreetsPasig, Metro ManilaTel. 786351/6731971

Bullnlrrllkul, Somporn, MBM'77A9/20 Soi Pongdamri 2Ngarmwongan Road, BangkokThailand

Cabarrubla, Gll dol Cadlllo, nBn'TfGroup Finance ConttollerGunung Sewu Kencana, P.T.Chase Plaza Tower, 22nd FloorJl. Jend. Sudirman Kav 21, Jakarta 12910lndonesiaTel.5782O3O

Cha Yong Shllq MBM '7l

Manager, Int'|. Business DePt.Shin Han Bank10 Dadong, Ghoong-kuSeoul, KoreaTe|.7564505

Chan, Vlclorlano Jr. Gochanco, llBM'77OrnerEnhance Enviaonment5 Dainty Boad, \Mtite PlainsQuezon City, Metro Manilafel722NO

Ghan, Wilcon Llu, MBM 'ft

PresidentUnimasters Conglomerate, Inc.60 Times Street, West TriangleQuezon City, Metro Manilafel98228315fi1122

Chanyungco, Rene Florencio, MBM'7/Vice PresidenVTreasurerManila Mining Corporation2oth Floor, BA Lepanto BuildingPaseo de Roxas, Makati, Metro ManilaTel. 819iY86/8159447

Chec Klm Meng, llBM'77General ManagerMatang Holdings BerhadOrchid Plaza, lorong SatuJalan Wong Alt Fook, Johor Bharu, JohorMalaysiaTel.07-27211

Chen Kee Chong, Joceph, nBn'Tl706880 Lucas Road, RichmondBritish Columbia WC4T8Canada

Chue Kok lleng, Vlctor*, ilBll'7t66 Tiong Poh RoadSingapore

Corpuz, Angol ilag3ay3ay, nBil'TlVico President, Treasury & Trust GroupLand Bank ol the Philippines319 Sen. Gil Puyat AvenueMakati, Metro ManilaTel. 883782818941 1

Cua, Fobort T., MBll '7l

Part OrnerPedro Trading CorporationRoom 30i|, 1386 Narcisa Rizal StreetTondo, ManilaTel.2s€6,27

Dayama, AMnd Sllaram, llBM'77ProprietorFunctional &rsiness Servicee70 Shalmali Coop HSG Societyldeal Colony, Kothrud, Pune 411 029hdiaTe1.434661

Dayrlt, Conrado lll Mlllar, MBlt'TlConsultanuDirectorScanning Technologies ol the Phils., Inc.3rd Floor, Midland Buendia BuildingSen. Gil J. Puyal Avenue, Makati, M.M.Tel. 8180131/8173930

De Leon, Carmellla L, itBM '77

Executive DirectorValdes Consultants, Inc.lOth Floor, Manilabank BuildingAyala Avenue, Makati, M.M.Tel. 8181987/8101601

Dlaz, Peter Cabotale, MBM'77Director, Human Resources Dept.Tuppenrare' Philippines, Inc.1ah Floor, Alied Bank CenterAyala Avenue, Makati, Metro ManilaTe|.8159616

Dy PIco, Robert Siao, MBM'77ManagerDy Pico Sons, Inc.J. Famiro Streetlligan City, Lanao del Nortefelm67l21067

Estrada, Jocelyn Minda P., MBM 'z

PresidentInter-Asia Property Management Corpora-tionRoom 313, Atrium ot MakatiMakati Avenue, Makati, Metro ManilaTel.81@2118171352

Evangelbla, Caezar Paragas, MBM '77

Asst. Mce Pr€sidentAsia Trust Development Bank1'l(X Asia Trust Building, Quezon AvenueQuezon City, Metro ManilaTel.921242719229o18

Faustlno, Manuel Otdoveza, MBM'77PresidentFaustino-Baron Food Services2220 Robert StreetPasay City, Metro ManilaTel. 831981 1/81s5{3i}

Ferrer, Jalme lV Bernabei, ltBil'rt7605 V. Medina StreetParanaque, lt/letro Manila

Ferret, Renalo Samanlego, I{,AII'TlPresidentErecsa, Inc,7th Floor, MGF Champaca Bldg.Arnorsolo Street, Makati, M€tro ManilaTel. I 1 85971 -zl81 85976

Fr8n@, Gabrlel Alonlo, MBll'77Prop€rty ManagerTrizec Equities Limited2900ts700 2nd St. SWCaf gary, Alberta f 2PAt't2GanadaTef. (cgg1xtr7lzJ

Garcla, Raymund Locrln, MBM'7tGeneral ManagerR.J. Garcia Enlerprises, Inc.La Salle AvenueBacolod City, l,legros OccidentalTe|.26596/20885

tt8 TtlE ASIAN MANAGER r MARCH 1990

Herera, Edgardo Mayuga, MBM '77

Mce President/ControllerCFC/URC Group of CompaniesCFG Bldg., 110 E. Rodriguez AvenueLibis, Quezon City, Metro Manilaf e!.721n77

Honrado, Antonio Panuncialman, MBM'77

Asst. Managing Director, EIMPTechnology & Livelihood Resource CenterTLRC Bldg., Sen. Gil J. Puyat AvenueMakati, Metro ManilaTel.81714851864248

Huang, Gary Chen, MBM '77

Mce President, MarketingCenlral Azucarera de la CarlotaFJE Bldg., 105 Esteban StreetLegaspi Village, Makati, Metro ManilaTe l . 8159131

Huang, Philip Tan, MBM'77Exec. Mce President, Mgt. ServicesCommonwealth Foods, Inc.Sen. Gil J. PuyatAvenueMakati. Metro ManilaTe|.855661-79

Humam bin Haji Mohamed*, MBM'77Mara Institute of TechnologyShah AlamSelangor, Malaysia

Javelhna, Emmanuel Hamon O., MBM'7tManager, New ProductsStandard (Phils.) Fruit CorporationLadislawa Mllage, BuhanginGeneral Santos City, South Cotabatofel.7U41

Kannan, Sivaramakrisflna*, MBM'77Assistant Vice PresidentGroup Developers, Inc.6th Floor, United Life Building837 Pasay Road, Makati, Metro Manila

Khaw Pe€ Seng @ Koh Pee Seng, MBM'77

General ManagerArab-Malaysian Finance Berhad1Oth Floor, Arab-Malaysian Bldg.55 Jalan Raja Chulan, 50200 Kuala LumpurMalaysiaTel.03-2382100

tai Kim Leong, MBM'77Director/General ManagerPublic International Investment Ltd.'1903 \Mng On Centre71 Des Voeux Road. CentralHong KongTel. *222101

|.au Kwok Hang, Clarence, MBM'77Senior Treasury Marketing OfficerChase Manhattan Bank, N.A. fihe)One Exchange Square, 39/FCentral Hong KongTel. 5-2451 53/S81 0931 1

Um Boon Koi, MBM'77Finance Manager/TraderSoctek Sdn. Bhd.5/F, Wisma Kuala Lumpur PlazaJalan Bukit Bintang, a5100 Kuala LumpurMalaysiaTel.0$2€0419

Llm, Philip Lester, MBM'77Vce President, AdministrationPeggy Mills, Inc.'l 1th Floor, BA-Lepanto BuildingPaseo de Roxas, Makati, Metro ManilaTe|.8158787

Mehta, Rajiv Ajit, llBM '77

General Manager, Treasury/Fin'1. Plan'9.United Breweries GroupUB House 1, Grant Road24 G, Bangalore 560 001, IndiaTel.57880e9

Mendieta, Luis Mari Bilbao, MBM'77Export Manager, Bayex Div.Bay Mills LimitedP.O. Box 728, St. CatherinesOntario L2R6Y3. CanadaTel. (a16) 6883160

Mohamed bin Jamrah, MBM'77MemberPKNS4lATingkat 1, Kompleks PKNSMedan Gopeng, lpoh, PerakMalaysiaTel. 05-518955

Nicdao, Ruperto Jr. Songco, MBM '77

Sr. Mce President, FinanceCentral Azucarera dela Callota'105 Esteban Street, Legaspi VillageMakati, Metro ManilaTel. 8159131

Parayno, Guillermo Jr. L, MBM '77

Flegional Director, NCREconomic Intelligence & lnvestigationBureauDepartment of National DefenseCamp Aguinaldo, Quezon City, M.M.Te!.792718n83624

Peckson, Winaton Ll., MBM'77Manager, Corporate BankingLloyds Bank PLCSlF,Tower l, Admiralty CentreHarcourt Road, Hong Kongrel ffi2322il

Phang Thiam, MBM '77

Oriental Bank Berhad14th Floor, Menara PrometJalan Sultan lsmail,50250 Kuala LumpurMalaysiaTef. (03)241ffi24

Reyee, Pedro lll Evangelista, MBM '77

Asst. Mc€ Pres./Deputy General ManagerPhilippine National BankPhil. Center Bldg., 556 sth AvenueNew York, New York 10036, U.S.A.rel. (212) 3823300

Risbud, Sudhir Vasantt, MBM '77

Flat No. 1, lndrayani Apts. BPrabhat Hoad, Lane 15, Poonalndia

Sansingkeo, Piseksook, MBM'77Deceased

Sen, Tifak, MBn'TlExecutive Mce PresidentGeneral Diesel Power Corporation6305 South ExpresswayMakati, Meiro ManilaTel. 8152181/85{}956

Shen Kuo-Chuan*, MBM'77T7-1,Lane 132Fu Lin Street, TaipeiTaiwan

Siglos, Thelma Sanla Cruf, MBM'771067 E 1ah AvenueVancouver, BC V5T2J7Canada

THE ASIAN MANAGER o MARGH 1990 49

Soon Kian Tiong, MBM '77

Personnel ManagerMulti Purpose Holdings Berhad4th Floor, Magnum PlazaJalan Pudu, 5O917 Kuala LumpurMalaysiaTe!.2tt8802212417599

Suarez, Jose Jr. Narciso, MBM '77

Unit 45. TownhouseAyala Alabang Mllage, Muntinlupa, M.M.

Tan, Wilson Hao, MBM'77Unit Head, Accounts PayableCitibank123 Front Street W.Toronto, Ontario, CanadaTel. (a16) 9475619

Taniuatco, Joee Sumulon g, MBM'77Exec. Assistant, Office of the PresidentPhil. Long Distance Telephone CompanylOth Floor, PLDT BuildingLegaspi Street, Makati, Metro ManilaTel.8168077

Tiu, Roberl Tan, MBM '77

PresidentWoodchips International, Inc.Suite 224, Equibank ll, Ortigas StreetSan Juan. Metro Manilaf e!.7214191172'14194

Tolentino, Conrado Kasilag, MBM'7718 Biscayne StreetFairview Park, Ouezon CityTe l .907197

Tong Kam-Shek, Pelet, MBM'77Director, Card MarketingArnerican Express International, Inc.23lF, New World Tower16-18 Queen's Road, CentralHong KongTel. 5€431718

Wei Huang, Janei, MBM'773969 Alley, 205 lane1Zth Chang, Hsin Tien, TaipeiTaiwan

Wong Hung Kok, David, MBM'27Branch ManagerPacific Bank Berhad (Ihe)Ground Floor, Wsma GentingJalan Sultan lsmail, 50730 Kuala LumpurMalaysiafeL 2613€,2812614822

Yip Weng Gheng, MBM'77Flegional ManagerFraser & Neave (M) Sdn. Bhd.P. O. Box 22881200 Johor Bharu, JohorMalaysiaTel.O7-3224*

Yu, Luis Jr, Ng, MBM 'Zl

14 Pikador Street, Midtown Subd.San Roque, Marikina, Metro ManilaTe|.9479033

Master In Management, 1977

Abdul Karim bin Tun Abang HJ Openg,MM'77lnterfinance Be.had\Msma Bukit Mata Kuching, Jalan TunkuAbdul Rahman, 93100 Kuching, SarawakMalaysiaTel.B2-2fi2U141O434

Abduf Latif bin Nordin, MM'77Director-GeneralJabatan Perhutanan Negeri PahangTingkat 2, Wisma Seri Pahang25990 Kuantan, PahangMalaysiaTel. 09-522589

Adnan bin Maaruf, MM'77Managing DirectorMARA Holdings Sdn. Bhd.22nd Floor, Medan MARA, Jalan Raja Laut50350 Kuala Lumpur, MalaysiaTel. 03-2985122

Arevalo, Manuel Serranilla, MM'77General ManagerJimenez Oil Mills, Inc.19th Floor, BA-Lepanto BuildingPaseo de Roxas, Makati, Metro ManilaTel. 8166801-O5

Arora, Satya Prakash, HM'77Chief ExecutiveSmit Def Tech LimitedD 105 Anand NiiketanNew Delhi | 10 021. IndiaTe|.6093il

Baharuddin Haji Ghazali, ll$'TlDirector GeneralMalaysian Timber Industries BoardSth Floor, Bangunan SaterasJalan Ampang, 50728 Kuala LumPurMalaysiaTel. (03)246233

Borromeo, Horaclo Jr. Melo, MM'77Associate Dean, Mid-Career ProgramsAsian Institute o{ Management1 23 Paseo de RoxasMakati. Metro ManilaTel. 87401 1-19

Bose, Bha:kar, lil|il'TIManager, Management ConsultancyDevelopment Consultants Int'|. LimitedP.O. Box 2067Secunderabad 500 003, IndiaTel.24€153

Bradberry, Wlllhm James T., Mil'77Asso. Professor, Int'|. ManagementLoyola University6363 St. Charles AvenueNew Orleans, Louisiana 70118u.s.A.Tel. (504) 86524,18

Bumanglag, Hon€alo Pablo, llM '77

Asst. Chief of Staff, B/Director, Opns.Iniegrated National Police (lNP)INP Headquarter, Camp CrameOuezon City, Metro ManilaTel. 7218598

Catibog, Mercela dela Roea, llil '77

Chief , Management ServicesDepartmenl of Scienca and TechnologyBicutanTaguig, Metro ManilaTel. 822@61€718220575

Choo Jee Sam, MM'77Ch ief Operating OfficerMBf Card Services Sdn. Bhd.1ah Roor, Wisma MCA, Jalan ArnpangP.O. Box 10486, 50714 Kuala LumPurMalaysiaTel.0$2612566

Das, Tushar Kantl, MM '77

College of Business AdministrationTexas Technical UniversityLubbock, Texas 79u109, U.S.A.Tel. (806) 7427533

Datu, Danilo Matic, MM '77

Manager, Financial PlanningTupperware Phils., Inc.Allied Center Building, Ayala AvenueMakati, Metro ManilaTe|.8159622-25

De Guia, Eduardo Bartolome, MM'77Partner, Audit DivisionSyCip, Gorres, Velayo & ComPanY6760 Ayala AvenueMakati, Metro ManilaTel. 819301 1

De Luzuriaga, Robert Jr. M.R.r' MM '77

939 Maligaya Street, Leon GuintoMalate, Manila

Gavino, Angel Q., MM'77PresidenVOivnerReputable Protective Security, Inc.312 Santolan StreetSan Juan, Metro ManilaTe|.700190

Guadalquiver, Rogelio Mesina, MM'77Partner, Audit DivisionSyCip, Gorres, Velayo & ComPanYMalayan House, Km 7, J.P. Laurel AvenueLanang, Davao City, Davao del SurTe|.79328[9333

Gutierrez, Beniamin Evangelisla, MM'77Airline Captain, Flight OperationsPhilippine Airlines, Inc.Manila Domestic AirportParanaque, Metro Manila

Hashim Haji Haron, Mln'TlChief Administtator/SocretaryMajlis Perbandaran Johor BharuP.O. Box 23280000 Johor Bharu, JohorMalaysiaTel. (07) 21446,

ll,or Kim Choon, nln'TI3 Faber GreenSingaporefel.mWT

Kong Yong Yeo, MM '77

Group Corporate PlannerPrima Umited201 Keppel RoadSingaporeTel.2228811

lacar, $ylvio g.r, MM'77151 1 Abila AvenueCarson, California 90745U.S.A.

Lim, Roberto Veloeo, MM '77

Sales Manager, EvereadyEveready Battery Co. (Phils.), Inc.EOSAMandaluyong, Metro ManilaTe!.78ffi71

Lorenzo, llario Cruz, MM'77FirstVice President, Legal DePt.Security Bank and Trust ComPanY6718 Security Bank BuildingAyala Avenue, Makati, Metro ManilaTel.8187677

Madera, Ambrosio Ahsiong, MM'77Production ManagerKTB Industries. Inc.Jose C. Cruz Street, Bo. UgongPasig, Metro ManilaTe|.6737361-65

Marasigan, Rodolfo Vasquez*, MM '77

91 Fleetwood Drive, Glendale Heightsl l l inois 60139, U.S.A.312-6653660

McDougald, Charles CamPbellt, MM'77Managing DirectorScotch Vvhisky Brokers UmitedJ. Hotung House, B-2, 11th FlrKowloon, Hong KongTel. 693735

Molato, Ruperto Jr. Concepcion, MM '77

Chief Security OfficerComsavings Bank7 Real Street, ZapoteLas Pinas. Metro ManilaTel. 8280s98/8201061

Nepomuceno, Luis Carbungco, MM '77

ConsultantSkyways Development CorPoration11-A Country Space I BuildingSen. Gil J. Puyat Avenue, Makati, M.M.Tel.8188,222

Non, Alfredo Jacinto, MM '77

Partner, Audit DivisionSyOip, Gorres, Velayo & ComPanY6760 Ayala AvenueMakati, Metro ManilaTel. 819301 1

@ij Chin Lye, MM'77General Manager, Consumer ProductsEast Asiatic Co. (S) Pte. Ltd. fihe)5 Namly DriveSingapore 1026feL7347877

Pe Benllo, Segundino g.*, MM'7741-G Narra St.eet, Project 3Quezon City, Metto Manila

Ramfi bln Othman, Mlt|'77Director. AdministrationInstitute of Strategic & lnt'|. Studies1 Jalan Sultan SalahuddinP.O. Box 12424,fi48o Kuala LumPurMalaysiaTel. (03) n39437

Rao, Ramananda Saniiwa*, MM'774 Velayudha Mudali StreetNungambakkam, Madras 600 03flndia

Sibal, Rosauro Villadolid' Mlt'77Assistant SecretaryDept. of Transportation & CommunicationsA. Boces Ave. cor. Scout FleYesQuezon City, Metro ManilaTel. 973559/921892

Snyder, Mirlam Eslher, MM'77Head of SchoolHarley School fihe)1981 Clover StreetRochester, New Yotk, U.S.A.Tef. (716) 4421770

Subedl, Bharat Prasat' MM'77Marketing ManagetRoyal Nepal ArlinesKatipathKathmandu, NePalfe!.2fr757

s0 THE ASIAN MANAGER r MARCH 1990

Suronegoro, Sublyanto, MM'77RepresentativeBank lndonesia Singapore11 Collyer Quay 08{18th Storey, The ArcadeSingaporeTe1.2232700

Tampf, Indar L.ngco*, MM'77Assistant ManagerLanao del Sur Electric Cooperative, Inc.Marawi CityLanao del Sur

Tan Kian Chung, MM'77Managing DirectorTechno Services UmitedRm. 911-912, Sincere Building173 Des Vouex Road. CentralHong KongTel. 5{158386

Teo [am-Am, MM'TlDresser Singapore Pte. Ltd.'t22Middle Road #07{6SingaporeTe|.3373030

Vafdes, Antonio Abad Sanlos, MM'77Senior Managing PartnerCarlos J. Valdes & CompanyCJVC Building, Aguirre StreetLegaspi Mllage, Makati, Metro ManilaTe|.8175769

Villanueva, Rafael Sian, MM'77c/o Lourdes Jalandoni, 12 EDSA BroadwayNew Manila, Quezon City, Metro Manilafel.7U927

Violago, Bernabe Jr. Rueda, MM'77A.V.P./Area Head, North M.M. AreaUnited Coconut Planters BankAurora Boulevard. CubaoQuezon City, Metro ManilaTe!.7214971

Wan Zaid bin Wan Abdullah, MM '77

Managing DirectorZaibi Group of Companies3774 Jalan Hospital15730 Kota Bharu, KelantanMalaysiaTel. (09) 743397

Yabut, Cecilia Oue, MM'77DirectorPhilville Development Housing Corp.17 Gov. Pascual StreetMalabon, Metro ManilaTel. 3624179

Yangas, Robert Allen, MM'77lmplementation and TrainingNational Daia Corporation13O0 Piccard DriveBockville, MD 2085G43O3u.s.A.Tel. (847) 5710203

Management DevelopmentProgram, March 1977

Antonlo, Alberto Jr. Mendoza, MDP'7714 Tirona Str€et, Project 4Quezon City, Metro ManilaTel. 721 1769

Araneta, Jesus Aldeguer, MDP'77Mce Chairman of the BoardOre-Line Mining CorporationR.T. Lim StreetZamboanga City, Zamboanga del Sur

Aehak bin lahak Hassan*,MOP'77Manager, Project AnalysisMalayan Banking Berhad92 Jalan BandarKuala Lumpur, MalaysiaTel. 87451

Bautista, Ceferino F., MOP'TlMce President, MarketingTeam Pacilic CorporationElectronics Avenue, FTI ComPlexTaguig, Metro ManilaTel. 8163261/81ffi244

Bautista, Felix E., MDP'77Asst. Vice President, TreasurySan Miguel Corporation,10 San Miguel AvenueMandaluyong, Metro ManilaTe!.7223ffir22ffi

Belamide, Josolito Kiamzon, llDP'77PresidentSpica, Inc.11th Floor, Unit C, Strata 100 BuildingEmerald Avenue, Pasig, Metro ManilaTe!.6732222

Blanch, Ramon Garrido, MDP'77East Drive, Countryside HomesMarikina Heights, Metro Manila

Bonoan, Dionisio S.V., MDP'77Director, Hong Kong RegionMallinckrodt, lnc.Room 316, Marsman BuildingSen. Gil J. Puyat Avenue, Makati, M.M.Tel. 8170351/889731

Bulaun, Orlando Galcia, MDP'77Manager, General Santos ZoneStandard (Phils.) Fruit CorporationYap Building, National HighwayGeneral Santos City, South CotabatoTel. zloo3

Carino, Jaime M., MDP'7714 Salvi Road, Tiena Pura Subd.Diliman, Quezon City, Metro ManilaPhil ippines995721

Chafermsaphayakorn, Phaibul, ]lDP'77ChairmanUnique Gas & Petrochemicals Co., Ltd.33121-22 Sukhumvit 11, Klong ToeYPrakanong, Bangkok 101 10ThailandTel.25?0€,ml2s.72fi

Chang, Edward, MDP'7760 Sir Tze, lah StreetShihlim, Taipei, Taiwan

Chew Fook Yew, Alan*, MDP'7710, SS3/29, Taman SentosaSelangor, Malaysia

Ching, Warmelo Galamiton, MOP'77Executive Vice PresiJentVitarich CorporationAbangan SurMarilao. BulacanTe!.81672A18167461

Claravall, Eduardo Paredes, MDP'77c/o George Claravall44 T. Mascardo Street, Quezon City, M.M.Tel.7922ffi

Cruz, Lorenzo Ctuz.- ltDP'77Deceased

Cula, Gener B.*, MDP'779452 San Pablo StreetSan Antonio Valley l, Paranaque, M.M'

THE ASIAN MANAGER r MAHCH 1990 51

Dato'Haji Khalid bin Muhammad, MDP'77

Deceased

Dato'fsmail bin Mansor, MOP'7743, Jalan Maktab54O00 Kuala LumPur, MalaYsia2937763

De Guzman, Uldarico Franco, MDP'77Deceased

E}e Leon, Abelardo Ouinlo, MOP'77Officer's Row, Navy RoadBaguio City, Benguet

Empainado, Magdaleno L, MDP'775 San Pablo Street, Capitol Subd.Pasig, Meko ManilaTe|.6733412

Esguerra, Hernani Carlitos, MDP'77Mce President, Finance & Admin.Industrial Products CorporationSuite 212, Sarmiento CondominiumYakal Street, Makati, Metro ManilaTel. 866868

Franco, Salvador 8., MDP'77Mce President and General ManagerMedichem Pharmaceuticals, Inc.5th Floor, Dyna Msion Building108 Rada Street, Makati, Metro ManilaTel. 8158501/8186O52

Gandaprawira, Dllmitro, MDP'77Program Director, PLKPLembaga Pengembangan Perbankan In-donesiaJalan Kemang Raya 35Jakarta Selatan, Indonesiaf el,799{)8€717992012

Goh Peng Khim*, MDP'7748 Jalan lkan MerahSingapore

Guerreto, Toribio Santoa, jl'-OP'77176 Tirona Streel, BF HomesLas Pinas, Metro ManilaTe|.8425186

Hain, Jose Bonita, MOP'77Asst. Mce PresidenVSales ManagerAG&P AMSCO Foundry, Inc.A. Bautista SireetPunta, Sta. Ana, ManilaTel. 707830285931

Ho Kim Bing', MDP'77162 Sening Garden, Kg. BoyanTaiping, Perak, Malaysia

Hung Hak-Tai, l-arry, MDP'77ManagerOverseas Union Bank Ltd.5&52 Queen's RoadCentral, Hong Kong

Jaurlgue, Edgardo lantin, MDP'77PresidenVGeneral ManagerUltramar Reinsurance Brokers, Inc.Room 205, Dona Narcisa Building8751 Paseo de Roxas, Makati, M.M.Tel. 889247/889185

Jomiffa, EdwSn L., MOP'77Internal Audit ManagerNational Steel Corporation377 Sen. Gil J. Puyat AvenueMakati, Metrc ManilaTel. 889540/8162036

Kishan Singh Gill, MDP'77Deputy Managing DirectorAgriculture Bank of PNGP.O. Box 6310Boroko, Papua New Guineafe!.247fi

Kok Ah Foong, P€tor, MDP'TlDirectorBylander Meinhardt Partnership'162 Bukit Merah Central #04-3555SingaporeTel. 02-2735255

Lee Boon Hing, MDP'77Administrative ManagerCentral Mercantile Corp. (M) Sdn. Bhd.Penthouse, \Msma CentralJalan Ampang, 50450 Kuala LumpurMalaysia

Lee Meow Lock, MDP'77Manager, KL Automated Glearing HouseBank Negara MalaysiaP.O. Box 1@2/ Jalan Kuching5O€129 Kuala LumpurMalaysiaTel.0$2988014

Llmuaco, Pelagio Cabale, MOP'77PresidentPCL International, Inc.47 Sc-out Fernandez Street, Diliman1103 Quezon City, Metro ManilaTe|.984020

Lforin, Carloe Jr. Ocampo, MDP'77Manager, Corp. Comm. & ProjectSan Miguel CorporationMagnolia Division, 710 Aurora Blvd.Cubao, Quezon City, Metro ManilafeL721n41 Local 358

Mahtoz bin Khalid, nDP'TlDeceased

Manfgeaca, Romulo Meralles, MDP'77Manager, Materials and SuppliesSan Miguel CrcrporationBeer Division, Mandaue BreweryMandaue City, @buTel.87W187214

Mardhl, Wang Sutyono*, llDP'77Division ManagerWijaya Karya, P.T.Jl. D.l. Panjaitan Kav. 3 & 4Cawang, Jakarta, lndonesiaTel.84017

llaloma, Joso Jr. Buck*, MDP'777 Holiday Drive, GSIS Hol. HillSan Pedro, laguna

llanono, l'nDP'TlManaging Direc{orAskrindoJl. Cikini Raya 99Jakarta, Indonesia

llfranda, Jore Galang, nDP'Tl62 Summit Avenue, Cedar Knollsl.lew Jersey 07927, U.S.A.

NadrArfi $DP'TIPurchasing Operations ManagerDatuk Keramat Group ol Companies73 Jalan Daiuk Keramat10150 Penang, MalaysiaTel. 0+27166

Pacho, Allredo G., MDP'77President & General ManagerPricon Microelectronics, Inc.1st Avcnue, Manalac Ind'|. EstateKm. 16, East Service Road, Taguig, M.M.Tel.8220453

Rafael, Bayanl S,, MDP'77Consultantfunon Trading Corporation2231 Pasong TamoMakati, Metro ManilaTel. 815081 1-20

Refova, Rogelio Jr. Palisoc*, iLDP'77Assistant General ManagerNatural Aero Manufacturing CorporationDomestic AlrportPasay City, Metro Manila

Rodif, Deograciao Jr. T.*, |lDP'Tl242Hen. T. de Leon StreetValenzuela, Metro Manila

Salazar, Mariano de Sena, MDP '77

Assistant S€cretaryPresidential Management StaffPMS Building, Arlegui StreetSan Miguel, ManilaTe!.7419377

Salvador, Jose Alivio, MDP'77Orvner/General ManagerJA Salvador Contruction62 Dunwoody Tech. St., University HillsCaloocan City, Metro ManilaTe|.3622861

Saphakkul, Suphak, )lDP'TI11 Soi 13, Seri 2 Road, PhangkanongLadprao Road, BangkokThailand3145060

Sapie bln AlF, MDP'77Assistant Branch ManagerBank Pertanian MalaysiaNo. 19 Jalan Sultanah83000 Batu Pahat, JohorMalaysia

Sfenes, Jose Villarosa, nDP'TlOnnerBWT Enterprises43 Kowloon Street, BF HomesParanaque, M€tro ManilaTel.8279318

Skulralana, Tlra, MDP'772,14 Soi Roong Aroon, ladpraotadyao, Bangkaen, BangkokThailand

Talan, Benlamln Anacleto Sosito, MDP,TI

Asst. Mce Pres.. Business Dev't. Int'|.United Laboratories, Inc.66 United StreetMandaluyong, Metro ManilaTe|.7216501-50

Tan Kim Swee, Francle,nDP'77Managing DirectorConsult Managemont Services Pte. Ltd.1 Selegie Road #03-07Singaporo 0718

Tecron, Fernando Jr. V.,MDP'TlPlant Manager, Tijuana, MEX PlantEvenllo Juv. Furn. Co.6235 South Saint Andews PlacesLos Angeles, CA 9@f7, U.S.A.Tel. (213) 7s99191

Villamor, Melchor O., liDP'77Division Manager, Flat ProductNational Steel CorporationNSC Building377 Sen. Gil J. Puyat Ave., Makati, M.M.Te|.8162036

Yang Yim Mlng, Vincenl, MDP'77Controller, MISRothmans of Pall Mall (M) BerhadMrginia Park, Jalan University46300 Petaling Jaya, SelangorMalaysiaTel.03-7566899

Yaplangco, Rogelio 3.*, MDP'77235 Ortega StreetSan Juan, Metro Manila

Z, Anthony Louls, MDP'77296 Prince Edward Fbad, 1/FKowloon, Hong Kong @SUBHEAD :Management D€velopment Program,Jultt 19Tl

Achacon, Epifanio C., MDP'77Part O/vnerJebon Garments14th Swimming St., New St. Francis Subd.Cainta, RizalTel. 6654740

Adhikary, Ganesh Prasad', MDP'77Of f i cer ,O&MBranchNepal Raska BankCentral OfficeKathmandu, NepalT e | . 1 5 1 5 9

Aguado, Jose Roco, MDP'77PresidentBasic MachineriesGround Floor, Revilla BuildingAguirre Street, Makati, Metro ManilaTel.8163521/8163522

Aguinaldo, Carmelito Evora, MDP'77Vice President, Technology & DevelopmentFilsyn Corporation14th Floor, BA-Lepanto Bldg.Paseo de Roxas, Makati, Metro ManilaTel. 8162790/8159319

Alcaraz, Eduardo S., MDP'7r7Assistant General ManagerMedifarma Lab. Inc., P.T.P.O. Box 110Jakarta, lndonesiaTel.489913i]

Alicbusan, Leopoldo Carandang, MDP'77

PresidentPhiltranco Service Enterprises, lnc.EDSA cor. Apelo Cruz StreetsPasay Gity, Metro ManilaTel. 8337180/8335O61

Alikpala, Erequlel G., MDP'ZzVics PresidentGovernment Service lnsurance SystemOffice of the ChairmanArroceros, ManilaTel. ,034n?496628

Ang Kim Thlah, MDP'77Operations ManagerPort ol Singapore AJthorityP.O. Box 300, PSA BuildingPost Otfice, Singaporef eL 271221' l

s2 THE ASIAN MANAGER o MARCH 1990

Anie, Nazarlo Aguirre, nDP'TlCommissionerCommission on AuditCommonwealth Avenue, Constitution HillsQuezon City, Metro ManilaTel. 971067

Antafan, Rogelio Paralso, MDP'TlMce President, Human Resources DivisionFar East Bank and Trust CompanyMuralla StreetIntramuros, ManilaTel. 47ffi491401021-39

Avena, Juanito C.t, MDP'77Poblacion, San Jose del MonteBulacan

Avendano, Ernanl Valencia, MDP'7725 Marikit cor. Masaya Sts.West Triangle, Quezon City, Metro ManilaTel. 971002

Balderas, Fauslino Jr. Lachica, MDP'77Mce President, ManufacturingAllied Metals, Inc.z160 Quirino Highway, Bo. TalipapaNovaliches, Quezon City, Metro Manilafel.9n,2272l9o5788

Barretlo, Federico Jr. Oclavio, MDP'77114 K€, Kamias DistrictQuezon City, Metro ManilaTel. 9218752

Barsabal, Benito Balenton, MDP'77Managing PartnerB. Barsabal and Company2nd Floor, Greenfield Bdg. I750 Shaw Blvd., Mandaluyong, M.M.Tel. 78991 1

Basco, Edilberto Sanchez, )IOP'TlManager, Management Services Div.SyGip, Gones, Velayo & Company105 Dela Rosa Street, Legaspi MllageMakati, Metro ManilaTel. 8170301

Basri, Jurnalie Hasan, ltlDP'77Superintendent, Computer Center Opns.Caltex Pacific Indonesia, P.T.PekanbaruSumatra, IndonesiaTe!.21377

Batugal, Ponciano Abedesr, MDP '77

Assistant DrectorPhil. Council for Agric. & Resources Re-searchCollegeLos Banos, LagunaTel.2308

Bos, Joeo Ante, llDP'77Plant Managerlligan Coconut Oil MillingSanla Pilomenglligan City,lanao del lrlorteTeln422-24

Boey Soc't{en,n0P'TlDoputy Manager, SalesMala),wata Steel BerhadP.O. Box 601 2700 Butterworth, PenangMalaysiaTel.331814

Boeano, Antonlo Pona, mDP'77Proprietor & OrnerMiriam Marketing68 Emerald Street, City Fleights SuM.Bacolod City, l,Iegros OccidentalTe|.22366

Boucher, Therosa A., MDP'77Deceased

Bueno, Conrado Hernando, MDP'77PresidenVDivision ManagerBenguet Management CorporationWagner Road, P.O. Box 105Baguio City, BenguetTel. /142-5393/442-n51

Bulaong, Amado Jr. A., MDP'77Deceased

Caasi, Vicencio Camangian, MDP'77ConsultantFinancial Banking CorporationOUR Otfices Building, Esteban StreetMakati, Metro ManilaTel. 8109603/881294

Caritativo, Ernesto Cunanan*, MDP'77Embassy Garden Homes, G#5 Benitezcor. Bayanihan Sts., Quezon City, M.M.

Chan, Ruperto C., MOP'TIAudit ManagerErectors, Inc.2nd Floor, Mantrade BuildingPasong Tamo Ext., Makati, Metro Manilafel 8187721 Local 24

Chen Jung-Chung, Johnt, MDP'7VBranch ManagerEkman and Company, LimitedP.O. Box 22603Taipei, Taiwanfel.O7-252W

Choo Wee Liang, MDP'77Manager, OperationsPort of Singapore AuthorityP.O. Box 300Singaporefe!.2712211

Chung Kwok Kel, Simon, nDP'77Clirecto,lndosuez Asia UmitedRoom 2601Aexandra Flouse, Hong KongTel. $211501

Cochrane, Raymond Clifford, MDP'77Regional Manager, WaikatoWestpac Banking CorporationP.O. Box 50Hamilton, l.lew ZealandTe1.391780

Coyukiaq llavH Clroa, nDP'TlPresidenUGhief Executive Off icerPioneer lnsurance & Surety Corpotation109 Pas€o de RoxasMakati. iletro ManilaTe|.817907'l Local 216

Damole, Cerar Aslbal, nOP'TlDirector, Regional Cilf'rce XCommission on ArditDavao Oity, Davao del $rr

llapat Sablno R, UDP "Z7

Flesident Partne.SyCip, C'orres, Velap & Company?F, Philamlife Building, Jones AvenueCebu City, C.;ebuTe].743(J1n43fl,2

Ilrrflr!, ,ldy,||'DP'TlCroodyear Margonda Tire Service CenterJl. Margonda Raya l,lo. 156Depok, lndonesiaTel.021*511274

Dato'Oltrman bin Abdul Manan, MDP'TlAsst. Director General, Forestry HQForestry DepartmentJalan MahameruKuala Lumpur, MalaysiaTel. 03-29286&t

Dimaporo, Apipa Dimakuta, MDP'77TreasurerLanao Agro-lndustrial CorporationRoom 307, Jovan CondominiumShaw Blvd., Mandaluyong, Metro ManilaTel. 783051-53

Divinagracia, Jose Parrenas, MOP'77Dy. Cmdr-Naval Dist.4/Cmdr-Task Force 41Philippine NavyNaval StationPuerio Princesa, Palawan

Dizon, Ceoilio Lorelo, MDP'77Asst. CommissionerCommission on AuditCommonwealth Avenue, Constitution HillsQuezon City, Metro ManilaTe|.963358

Diamoeddin, Radius*, MOP'77SuperintendentCaltex Pacific lndonesia, P.T.PekanbaruSumatra. IndonesiaTel. 44385

Elizaga, Noe Calinawan, MDP'77Executive Vice PresidentDavao Fruits CorporationBo. PampangaDavao City, Davao del Surf e!.7277'l-s

Flores, Enrique Ericta, MDP'77Mce PresidenVChief Operating OfficerAsian Arts, Inc.Salvador Street, labangonCebu City, CebuTel.90331

Galvez, Agripano Gacal, MDP'77Regional Director, Region 4Bureau of Budget and Management4th Floor, Ven-Lor Bldg. AnnexQuezon Avenue, Quezon City, Metro ManilaTe|.998692

Gonzales, Manolilo Fernandez, MDP'77Partner, Ardit DivisionSyCip, Gones, Velayo & Company6760 Ayala AvenueMakati, Metro ManilaTe|.8193011

Gorrez, Femando D.*, llDP'775$l Katipunan Street, Loyola FleightsQuezon Clity, l\tletro Manila

Gouch, Warren Eernaby, llDP'7713 Silver Lane, EtillingshurstWest Sussex RH149RP, England040381-2415

Grapa, Edgard V., nDP'TlMce PresidenVResident ManagerHiio Plantation, lnc.Madaum, TagumDavao del lrlorte

tfamami, llann Hamzar, )lDP'TIC}irector, AdministrationTrakindo lrtarna, P.T.P.O. lbx282Jakada, lndonesiaTel.781G)3

The Class of 77 listingwill continuenert issue.


AIM l0ternational Management Gonference

Hosted by the Indian Chapter

October25-27, lSX)Bombay,Indh

For Inquiries, write or call:Hilda Tolentino or Arlene Aguilar

123 Paseo de Roxas, MCC P.O. Box898Makati, Metro Manila, PhiliPPines

Tel: 87-40-11 o Telerc AIMPNGabfe: AIMMANILA o Fax (632) 817-9240

54 THE ASIAN IIATTIAGER o MARCH 1990

Fridoy

Moy1- 1_

AlMAlumniAssociation

THE 1990 ALUMNI HOMECOMING

fl The traditional Homecoming Night dinner and showat the Main Hal l of the Manila Polo club!

An exciting raffle during Homecoming Night withgrand prizes and door prizes for lucky alumni!

ilt Family fun at the sportfest and golf tournament!

Publication of a first-of-its-kind Alumni Directory,with a new Trade section - AIM's own Yellow Pages.The ultimate networking toolforthe 90's, atP395.00or US$ 20.00 per copy, delivery included!

A ticket for the Homecoming Night, that coversdinner, entertainment and a raffle stub, willcost onlyF 300.00 per person.

So, keep May 11 free. Get in touch with your classrepresentative or contact the AIM Alumni RelationsOffice (TEL# 874011 or FAX# 8179240'llor details.

Come to the 1990 Alumni Homecoming.

It always pays to keep in touch.

THE ASIAN ilAflAGER o IIARGH 1990 s5

MCC P.O.8ox 898Makati, Metro Manila, Philippines

The Asian Manager, March 1990 Issue

Documents

Transcript of The Asian Manager, March 1990 Issue