01 Apr 2001
Beyond the Rim: New Paths to Success in AsiaRe: Camille Tang (MBA 1980); Richard Vietor; Lynda Applegate; Richard Nolan; Dorothy Leonardby Alejandro Reyes and Deborah BlaggTopics:
Businesses in the Asia-Pacific region today are caught up in a dizzying swirl of economic, cultural, political, technological, and social change. Enormous opportunities await managers who can harness these powerful currents to drive their business forward, but their task is made more difficult by the fact that they are often breaking new ground.
A lot of people think that dot-coms in Asia are just taking U.S. technology and
replicating the same business models. That may have been a valid criticism in the
past, but things are really changing. The speaker is David Lane, an HBS senior
researcher in the Global Research Group who has been working recently with a number
of faculty members to develop Asian-based cases for the Schools curriculum.
Theres one Chinese company, for example, that has established an
e-mail/postal service that expedites correspondence with people in rural areas who
dont yet have computers, he continues. This companys service
allows e-mail messages to be sent from anywhere in the world to a post office near
the addressees home, printed out as a letter, stuffed in an envelope, and
delivered in just a few days. Theyre even selling advertising space on the back
of the envelopes. Its one example of how Chinese companies are looking at their
own environment and finding interesting opportunities that someone in the United
States wouldnt even consider.
Business frontiers are being pushed back in countries throughout the Asia-Pacific
region. Poised to enter the World Trade Organization, China is sowing the seeds of
entrepreneurship in its state-owned enterprises; the Japanese government is
challenging its own telecom monopolies; and wireless technology in South Korea and
elsewhere on the Pacific Rim has leapfrogged U.S. advances. In this dynamic
environment, detailed insights such as those developed by Lane and other HBS scholars
are essential to understanding the realities of doing business. They provide what
Asia-Pacific Initiative director F. Warren McFarlan calls local content.
For HBS faculty, access to such information has been made easier since the 1999
opening of the Schools Asia-Pacific Research Center in Hong Kong, which has
served as a jumping-off point for scholars who are involved in a fascinating exchange
of ideas with many of the senior executives who are charting the future course of
Asia has always been a tough place to do research, notes McFarlan, the
driving force behind a joint HBS-Tsinghua University executive education program that
premiered in January (see sidebar). With a 24-hour plane trip and
thirteen time zones between Boston and China, the language barrier, and cultural
differences Japan is as different from China as the moon is from Europe
having the Research Center as a base has made a tremendous difference, he
observes. Executive Director Camille Tang Yeh (MBA 1980) (see Q&A from February 1999 Bulletin) and her staff, says
McFarlan, have helped our faculty make the best use of their time by providing
logistical and research support, establishing contacts with leading CEOs in the
region, and sharing expertise that comes from living and working in the Asian
environment on a daily basis.
Under McFarlans guidance, seven new cases were prepared for the Tsinghua
program and will find their way into the Schools MBA and Executive Education
Programs. They range from a study of a century-old Hong Kongbased trading company
that has extended its global reach with a $200 million Internet operation to a
profile of a new state-owned enterprise charged with developing Chinas first
all-fiber-optic broadband Internet infrastructure. The region is rich with
research opportunities, McFarlan notes. And the growing number of HBS faculty
members who are studying companies throughout this rapidly changing area of the world
would doubtless agree.
In Japan, for example, Professor Lynda M. Applegate is working on a case on the
launch of Nasdaq Japan. This new venture is developing a hybrid financial
market model for Japan that integrates Nasdaqs U.S. market and the traditional
Osaka Securities Exchange market model, Applegate explains. It ties in
with my ongoing research on the impact of information technology on industries,
markets, and organizations. This interest has also brought Applegate to
Singapore, where she is studying PSA, formerly the Port of Singapore Authority.
PSA has launched a new business, Portnet.com, that licenses its world-class
transshipment port operations and technology to ports around the world. In some
cases, PSA not only sells the software but also operates the port. Im looking
at how Singapore is using such technologies to create a global presence that far
exceeds its modest size.
Technology has also inspired Professor Richard L. Nolans current interest in
Asia. Nolan, who was involved in the recent Tsinghua program and teaches Competing in
the Information Age in the MBA curriculum, is intrigued by how different countries
react to new technologies. In the United States, we embrace new technology with
a huge amount of enthusiasm, he observes. We develop a lexicon, rush to
invest large sums of money and energy, and a phenomenon is born! Then, after a year
of unsustainable stratospheric growth in stock prices, we wake up to find that we
have really created a lot of dot-nothings.
However, in Japan, China, and elsewhere, Nolan continues, you see a
different perspective. Many companies abroad have been very smart about importing the
U.S. dot-com model without all the hype and are really looking at what
works and what doesnt. China knows it has a huge price advantage in terms of
production capability if it can make the Internet work to its advantage to market
goods to the West. American managers are still reeling from last years wild
dot-com ride, while managers abroad are busy applying its lessons. (Nolan will
document management lessons from the recent experience of dot-com companies in a
forthcoming book, dot vertigo.)
An interest in the concept of mentor capitalism brought HBS professor Dorothy A.
Leonard and Professor Walter Swap of Tufts University to Singapore and Hong Kong last
fall. The pair had been studying Silicon Valley mentor-capitalists (successful
entrepreneurs who have cashed out of their own companies but serve as business
coaches to fledgling enterprises) and wondered if a similar phenomenon were taking
place in Asia. We looked at industries from timber to Internet software and
found that there is a real difference between Silicon Valley and Asia, Leonard
We encountered far fewer mentor-capitalists in our research in Hong Kong and
Singapore, she elaborates. First of all, we found that there arent
as many Internet executives who have been in their businesses long enough to be able
to cash out. Also, mentoring is done through the more traditional channels of venture
capital and, more recently, business incubators. The family business concept is still
pretty strong over there. Leonard and Swap did observe, however, that more
family companies are starting their own business incubators, often run as a kind of
venture arm by younger members of the family. Silicon Valley is definitely a
strong influence in Asia, says Leonard, but its trends are subject to a
different cultural filter.
The list of HBS research projects in the Asia-Pacific region is long and destined to
get longer. The dividend, of course, is new programs, books and papers, better
teaching materials, mutually beneficial relationships with Asian companies, and more
top-notch Asian students in our programs, notes Warren McFarlan.
Were in a much-foreshortened global economy today, where the impact of
developments in one part of the world is felt across the globe in pretty short order.
The importance to the Schools mission of in-depth, locally based research is
more significant than ever.
The Case Method Goes to China
Does the HBS case method play in China? The answer is a resounding yes, judging by
the success of Managing in the Internet Age, an innovative executive education course
offered jointly by HBS and Chinas Tsinghua University School of Economics and
Management. The six-day program, held this past January at Tsinghuas Beijing
campus, brought together some 85 executives from Greater China for a
thought-provoking consideration of some of the key challenges facing Asian businesses
A central part of the program was built around seven new cases developed over the
past year with the help of the Schools Asia-Pacific Research Center. CEOs from
five of the companies studied attended classes and provided commentary. Along with
program chair Warren McFarlan, HBS professors Richard Nolan and David Upton shared
teaching duties with several counterparts from the faculty of Tsinghua University.
Cases were available in English and Chinese. Classes taught by HBS faculty were
translated simultaneously into Chinese, including materials presented on overhead
projectors, which were transcribed into Chinese characters by Hao Shen, an assistant
director in the Schools Executive Education Program.
Asian interest in the program was high; more than forty newspapers covered the event.
At first, there was some uncertainty among the HBS contingent about how the Asian
participants, who are more accustomed to lecture-style learning, would respond to the
case method. Those concerns were quickly put to rest. When you think about
it, explains Nolan, the challenges that theyre facing in managing
large companies, motivating people, and figuring out how to distribute products are
exactly the same as what American and European managers face. The case method allows
them to look at a generic kind of problem and then take that problem into their own
situation and engage other managers and the faculty in discussing a solution. Once
they were exposed to the case method, they didnt want to hear lectures.
McFarlan points to the participation of so many leading CEOs, to Tsinghua
Universitys standard of excellence, and to the local content of the
new cases as keys to the programs success. The cobranded program was a
catalyst for a mutually beneficial transfer of knowledge, he says. The
new cases will feed our curriculum, we have opened lines of communication with many
new companies, and the case method has found a firm foothold in China.
A second collaborative program, Competing in the Age of Globalization, is scheduled
for this June at Tsinghua. The HBS teaching team, headed by Professor Richard Vietor,
will also include Associate Professors Alexander Dyck and Yasheng Huang.