Write a reviewing the past two weeks of materials and discussions by responding to the following questions. Note that this is not short answer, and should be written as one , conforming to the guidelines under Syllabus & Couse Info.
a) Based on the article “The growing business power of the Pacific Rim ”(Bosch & Kleiner, 2001), explain why is it critical to differentiate between the Pacific Rim as a geographic region and as an economic region. In your post, highlight the international business implications of such differentiation.
b) Highlight three key ideas from the article “The reality of the Eastern business mind ” (Boettcher, 2007) and explain how each would influence your thinking when conducting business in the Pacific Rim countries.
Management Research News The growing business power of the Pacific Rim Thomas Bosch, Brian H. Kleiner,
Article information: To cite this document: Thomas Bosch, Brian H. Kleiner, (2001) "The growing business power of the Pacific Rim", Management Research News, Vol. 24 Issue: 3/4, pp.141-144, https://doi.org/10.1108/01409170110782766 Permanent link to this document: https://doi.org/10.1108/01409170110782766
Downloaded on: 27 March 2018, At: 07:48 (PT) References: this document contains references to 0 other documents. To copy this document: [email protected] The fulltext of this document has been downloaded 248 times since 2006*
Users who downloaded this article also downloaded: (2001),"Effective personnel management practices in the Philippines", Management Research News, Vol. 24 Iss 3/4 pp. 149-152 <a href="https://doi.org/10.1108/01409170110782784">https://doi.org/10.1108/01409170110782784</a> (2001),"How to manage personnel with positive drug test results", Management Research News, Vol. 24 Iss 3/4 pp. 145-148 <a href="https://doi.org/10.1108/01409170110782775">https://doi.org/10.1108/01409170110782775</a>
Access to this document was granted through an Emerald subscription provided by emerald-srm:247805 
For Authors If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.
*Related content and download information correct at time of download.
THE GROWING BUSINESS POWER OF THE PACIFIC
RIM by Thomas Bosch and Brian H. Kleiner
The Pacific Rim can be defined in two ways. Geographically, the name refers to the areas containing volcanoes located on the east and west coasts of the Pacific Ocean. These areas include the west coasts of North and South America, the east coasts of Asia and Australia, and the many islands in the Western Pacific including Japan, the Philippines, Indonesia, and New Zealand.
When referred to in an economic or business context, the Pacific Rim is usually used to indicate just the United States and Canada and their significant trading partners in the Western Pacific. This latter group of coun- tries consists of Japan, South Korea, China, Hong Kong, Taiwan, the Philippines, Thailand, Malaysia, Singa- pore, Indonesia, Australia, and New Zealand.
It is the latter definition of the Pacific Rim that will be discussed in this article.
The Pacific Rim covers a vast area of the globe. Countries within this region range from large in area and rich in natural resources, such as the U.S., Canada, Australia, and China, to very small in area and almost non- existent in natural resources, such as Hong Kong, Singapore, Taiwan, and Japan. Over 60% of the world’s popu- lation lives in the Pacific Rim and because of the high economic growth rates in many parts of this region, the Pa- cific Rim will soon become the world’s largest market for consumer and industrial goods. The Soviet Union has demonstrated the importance it places on the region by maintaining a Pacific fleet of approximately 440 surface ships and 135 submarines, which is larger than either the Russian Black Sea or Atlantic fleets.
Growing Economic Power in the Pacific Rim
Of growing importance to corporate management in the U.S. is the rise in trade with the Asian nations of the Pa- cific Rim and the resulting rise in their economic strength. In 1959, trade with these countries represented only 6% of American GNP. By 1986, trade had grown to 17% of GNP. Trade with the Pacific Rim has reached 25% by the year 2000.
2 As of 1980, trade with Asia had surpassed trade with Western Europe; and Asia has been the
number one trading region with the U.S. ever since.
The rapidly expanding trade in the Pacific Rim has allowed many Asian countries to raise their per capita in- comes dramatically. In addition, the higher savings rates of these countries (17% in Japan versus around 2% in the U.S.
3 ) has allowed Asian banks to accumulate large asset pools which have been used to expand industries at
home and, recently, to invest abroad. The ability to accumulate and concentrate capital has allowed Nippon Tele- graph and Telephone Company of Japan to replace IBM as the world’s largest public company and allowed Dai Ichi Kangyo of Japan to surpass Citicorp as the world’s largest bank in terms of assets.
The Japanese have also invested heavily abroad. In 1980, Japan had only $11 billion in net overseas holdings. Since then that total has risen to over $180 billion. During the same period American net overseas investments fell from $106 billion to -$264 billion. This year alone the Japanese are expected to buy over $50 billion in American stocks and bonds and loan billions more on commercial ventures.
5 The Japanese banking system has
become so strong and the Japanese have invested so much money in the U.S. that decisions made in Japan’s Min- istry of Finance presently affect stock prices on Wall Street and even the mortgage rates paid by American home buyers.
Although Japan is clearly the economic leader of the Asian Pacific Rim, the newly industrialised countries of Taiwan, South Korea, Hong Kong, and Singapore have also made enormous economic gains in the last decade. Averaging close to 10% annually, the newly industrialised countries have an economic growth rate which far surpasses every other region of the world. Along with Japan, these countries have developed strong export economies in spite of the fact that they all have small areas, large populations, and weak resource bases. They have been successful because they share the several critical ingredients for economic development necessary to succeed in today’s world economy—a strong work ethic, an openness to new ideas, and the ability to co-operate within groups to achieve goals. As a result of their successful export economies, over 50% of the United States’ current trade deficit is with Pacific Rim countries; and the currencies of these countries have appreciated consid- erably versus the dollar.
Volume 24 Number 3/4 2001 D
Opportunities and Threats
The strong economic gains of the Asian Pacific Rim nations present many potential opportunities and threats for American businessmen to consider. The opportunities will be in the areas of exporting and finance, while the threats will be mainly from more vigorous competition and corporate takeovers.
The major opportunity for American businessmen is in the area of world trade, where an unprecedented opportu- nity exists for exporting American products. The opportunity has been created by the following factors which are the direct result of the Asian Pacific Rim’s growing economic power:
– Rising per capita and disposable incomes in Asian nations along with a strong desire by young Asians for foreign name brands.
– The successful pressure byworld trade agencies toreduce tariffs inJapan, Taiwan, and South Korea.
– The recent encouragement of the Japanese government for more internal consumption and less sav- ing by the Japanese people, which has stimulated the demand for imports in that country.
– Reduced shipping rates for American goods because ships that bring cargo from the Western Pacific often cannot find cargo for their return trip.
– The comparative advantage American high-tech products still have over the Japanese, especially in Asia where the Japanese often attempt to export low quality goods.
AWord of Caution
Although the returns can be quite high for a successful exporter, many of these ventures also carry a high degree of risk. Any exporter should plan carefully and move cautiously in any prospective market. The exporter will need to familiarise himself with the language, customs, and institutions of the particular market he is entering so as not to alienate his product from his potential customers or local authorities. One method used by some compa- nies is to send an Asian-American sales force who are fluent in the language and are already familiar with many of the local customs. To be successful, exporters should also maintain sales facilities in the prospective coun- tries, advertise, price competitively, produce specially designed products, and build research facilities in these countries (especially in Japan in order to gain product acceptance by the older generations and to monitor new developments in Japanese technology).
Exporters of technology have an additional risk to consider. They must weigh carefully the immediate profits of such a venture against the possibility that the technology they export may eventually be used competitively against them. This can happen easily because many Asian nations do not have strong laws that will protect an ex- porter against patent infringements. The risk is particularly great in China where laws and contract terms change constantly with the political environment. An American businessman hoping to take advantage of the great mar- ket potential in China will normally face the following conversation: “‘What protection or redress do I have if things go wrong with a deal?’an American executive is likely to ask. ‘You have our good will’, a Chinese official is likely to reply with a smile. ‘You can trust the word of the Chinese people’. Negotiating in China has reduced many strong men to tears”.*
Financing Growth Opportunities
Another opportunity for American businessmen is in the area of finance. The large savings rates in Asian nations have left Asian banks with large sums of money to invest while the recent devaluation of the dollar, high Ameri- can interest rates, and low returns on Asian investments have made American investments look quite attractive to foreign investors. American businessmen can take advantage of this situation by borrowing money from Asian banks to finance growth opportunities within American companies. Organisations which have already taken advantage of foreign investment capital are VF Corporation, Boston College, Marriott Hotels, and Bank of America.
Another method of taking advantage of foreigners’ willingness to invest in the U.S. is the use of sale and lease-back arrangements. American companies can raise capital for new projects or retire debt by selling their office buildings and real estate assets in major American cities to foreign investors and then leasing the assets
Management Research News D
back. The Japanese are willing to pay extremely high prices by American standards for these assets because of the relative strength of the yen and the low returns on real estate investments in Japan. An example of this type of Japanese investment is Shuwa Corporation’s purchase of the Arco Plaza in Los Angeles for $620 million in 1986. This was the highest amount paid for a piece of property in L.A. history and a much higher amount than any of the competing bids.
7 Many other Japanese investors are overpaying for prime real estate in other cities, al-
though not to the excess that Shuwa Corporation did.
Threats to American Business
The strong economies of the Asian Pacific Rim also pose several threats and concerns for American business- men. Some potential problems American executives should be aware of are:
– Increasing competition in the market place both here and abroad for the sale of manufactured goods and high-tech products, especially as China, Indonesia, Thailand, and Malaysia industrialise and en- ter the competition.
– A greater production advantage for many developing Asian nations whose higher birth rates, younger populations, and larger rural populations will keep industrial wages low while American labour rates continue to rise because the U.S. will have no such sources of labour.
– American businesses that have not already moved their production facilities overseas will have to give serious consideration to doing so or be priced out of the market. An example of this is the soft- ware industery where the cost of designing, producing, or adapting software programmes is ap- proximately 50% less in Asia than it is in the U.S.
– The possible take over of American companies by foreign competitors. The strength of foreign cur- rencies versus the dollar and the recent drop in American stock prices makes this an attractive oppor- tunity for foreigners. The Japanese are currently attempting to buy financial companies as well as entertainment and manufacturing companies.
– The possibility of retaliatory measures by foreign governments if the U.S. passes protectionist legis- lation, a likely occurrence if there is no significant improvement in the balance of trade.
– Continued building of subsidiaries in the U.S. by the Japanese in order to avoid American trade laws. Production from these factories will also compete with American exports in Europe where many restrictions apply to products produced in Japan but not to products produced by their Ameri- can subsidiaries.
Stronger economic power in the Pacific Rim will provide both positive and negative prospects for American management. Some industries will be able to take advantage of the situation by increasing exports or using Asian nations as a source of financing while other industries will need to develop new strategies to fight a new wave of competition, corporate takeovers, and competition from foreign built subsidiaries. Because of the latter two possibilities, managers in American companies as well as graduates entering a business career should re- member that some day they may be working for a company whose headquarters are based in a foreign land and whose management may expect things done in a manner that most Americans are unaccustomed to.
*Aikman,David(1986).PacificRim:Areaof Change,Areaof Opportunity.Boston:LittleBrown&Co.,p.67.
1. Aikman, David (1986). PacificRim:AreaofChange,AreaofOpportunity. Boston: Little Brown & Co., p.14. 2. Ibid., p.5.
3. Milner, Brian (Nov. 14, 1987). “Home Ownership in Japan is a Fading Dream”. The Register, p.F3.
4. Dow Jones & Company (Sept. 18, 1987). “Tracking the Leaders”. Wall Street Journal, p.23D.
5. Sesit, Michael R. (Sept. 18, 1987). “When Tokyo Picks Up the Tab”. Wall Street Journal, p.5D.
Volume 24 Number 3/4 2001 D
7. Lowenstein, Roger (Sept. 23, 1987). “Maverick Tokyo Firm Acquires Office Towers in U.S. at a Fast Pace”. Wall Street Journal, p.1.
8. Besher, Alexander (Nov. 15, 1987). “Asians Put Hard Sell on Software Firms”. The Register, p.M2.
Aikman, David (1986). Pacific Rim, Area of Change, Area of Opportunity. Boston: Little Brown & Co.
Besher, Alexander (Nov. 15, 1987). “Asians Put Hard Sell on Software Firms”. The Register, p.M2.
Darlin, Damon (Nov. 20, 1987). “Feud With U.S. Drains Japan’s Diplomats”. Wall Street Journal, p.20.
Darlin, Damon (Nov. 10, 1987). “Japan Turns Corner on its Trade Surplus”. Wall Street Journal, p.30.
Dow Jones & Company (Sept. 18, 1987) “Tracking the Leaders”. Wall Street Journal, pp.23D-25D.
Lowenstein, Roger (Sept. 23, 1987). “Maverick Tokyo Firm Acquires Office Towers in U.S. at a Fast Pace”. Wall Street Journal, pp.1,22.
Milner, Brian (Nov. 14, 1987). “Home Ownership in Japan is a Fading Dream”. The Register, p.F3.
Sesit, Michael R. (Sept. 18, 1987). “When Tokyo Picks Up the Tab”. Wall Street Journal, pp.5D-7D.
Sesit, Michael R. and Herman, Tom (Nov. 20, 1987). “Plan For U.S. Trade Bill Could Allow Big Japanese Ex- pansion in Bond Market”. Wall Street Journal, p.20.
Williams, Jack F. (1983). “Patterns of Economic Development”. In Clifton Pannel (Ed.), East Asia. Dubuque Iowa: Kendall/Hunt, pp.127-154.
Yoder, Stephen K. (Nov. 12, 1987) “Western Research Labs Sprout in Japan as Firms Lured by High-tech Boom”. Wall Street Journal, p.32.
Management Research News D
THE REALITY OF THE EASTERN
Jacques G. Boettcher
During World War II American troops sent to Europe were
provided with small handbooks which contained a smattering of
words and phrases and comments on customs designed to permit
those troops to exist with the Dutch, the French, and even the
Germans. When dealing with people in the Pacific-Rim area mod-
ern American businessmen still use the ‘‘handbook approach,’’ and
they are frustrated when they can’t understand the attitudes,
subtleties, and procedures of Pacific-Rim business practice. They
know the details of the ‘‘handbook,’’ but they fail to understand the
roots of cultural differences. They fail to understand that they are
dealing with thousands of years of philosophy, ethics, and culture,
and for this necessary understanding they have to realize both how
and why their counterparts think as they do. The modern business
person should go back to Taoism and Confucius for an explanation
of contemporary business practices.
* * * * *
One time when the author of this article was conducting a
seminar at the University of Detroit in American legal systems and
anti-trust for a group of visiting Chinese government officials he
resorted to a tactic common in American law schools. He began to
challenge the visitors in a Socratic approach with questions that
Jacques G. Boettcher is Associate Professor of Management at the University of Detroit Mercy in Detroit, Michigan.
THE INTERNATIONAL TRADE JOURNAL, Volume XXI, No. 3, Fall 2007 275 ISSN: 0885-3908 print/1521-0545 online. DOI: 10.1080/08853900701416374
forced them to be analytical and quick in the formation of answers—
questions that forced them to ‘‘think on their feet.’’ No one had
told him that these Chinese delegations are always seated with the
most important members sitting at the front of the room and the
less distinguished at the rear. He, thus, directed a question to the
man sitting directly in front of him, and the guest answered with a
pained expression on his face. He lowered his eyes, and for some
reason, even though his answer was slightly off course, the profes-
sor responded by saying, ‘‘I think you have studied far more
American law than what I was led to believe.’’ Immediately there
was a very slight smile around his eyes, and the delegates at the
rear of the room responded with affirmative nods.
This professor was not aware at the time, but he had come
dangerously close to humiliating that guest in front of his subordi-
nates, and that his comment about the guest’s knowledge of
American law permitted him to ‘‘save face.’’
II. THE FAR EAST AND THE WESTERN POSITION
‘‘Saving face’’ is a western expression legitimized in 1934 by the
Oxford English Dictionary, which, actually, fails to express the
importance of the matter. To the Korean, for example, or to the
Chinese and, to an extent the Japanese, there is a sanctity to
‘‘saving face’’ which incorporates one’s ‘‘integrity,’’ ‘‘pride,’’
‘‘honor,’’ ‘‘character,’’ ‘‘self esteem,’’ and ‘‘reputation.’’ It is
based on over 2,500 years of history. It dates back, at least, to
K’ung Fu Tau—Confucius—551–497 B.C. and there is little like it
in the western world.
This type of positional security or ‘‘saving face’’ is, at least,
secondary in the minds of many American business people and
even less important with American attorneys. We, at times, take
pride in the President Harry Truman approach to business of ‘‘let’s
cut out the crap,’’ or most commonly, ‘‘let’s get down to the
bottom line.’’ For Americans there is a sort of strength in this
276 THE INTERNATIONAL TRADE JOURNAL
approach and a feeling that it conveys a sense of forthrightness or
honesty. It never occurs to us that this ‘‘forthrightness’’ is not only
a source of embarrassment to our counterparts in the Pacific
business arena, and that it is a very serious violation of their
social-political business foundation. For these business counter-
parts ‘‘saving face’’ is an art form which has been cultivated not
only over generations but throughout centuries.
The phrase ‘‘saving face’’ or the idea of ‘‘saving face’’ is
obviously, only a part of the collage making up the far eastern
business mind, but its importance cannot be over estimated. In the
western world the idea of ‘‘crime’’ is coupled with the idea of
‘‘punishment.’’ It is individual and personal. In the eastern mind
the keynote is ‘‘shame’’ which is followed by ‘‘disgrace.’’ This
disgrace does not remain personal. It ripples out to infect friends,
families, coworkers, departments, and even entire business units.
For people inculcated with this fear the secret or solution is to
avoid the occasion wherein shame might arise, and this leads to a
formula wherein one does not make a decision and does not make a
commitment but seeks an escape into a rigid vertical protectionism
wherein one can hide within a committee or a bureau or an agency.
The keynote is ‘‘I didn’t do it, and I can’t be held responsible.’’
III. INDIVIDUALISM VS. COLLECTIVISM
When one tries to fathom this eastern self-protectionism one
wonders how an attorney or business person form the far east,
steeped in a neo-Confucian or quasi-Confucian non-confrontational
heritage would interpret the American Declaration of Independence.
We hold these truths to be self
evident, that all men are created
equal, that they are endowed by their
Creator with certain inalienable
rights. That among these are Life,
Liberty and the pursuit of Happiness.
Boettcher: The Eastern Business Mind 277
To the American business person the language of the
Constitution or the Declaration of Independence is an invitation
to individualism. And despite all of the efforts of the last ten years
to inculcate team work or team thinking, the American mind still
focuses on the ‘‘best team,’’ ‘‘on the best team thought,’’ and the
‘‘best team leader.’’ Individualism, personal accomplishment and
personal rewards have not been eliminated. They are still
rewarded, and they staunchly enforce the western approach to
Americans still find romance in the concept of the ‘‘self-made’’
person—the Warren Buffit or Bill Gates—the person who rises
from obscurity, faces adversity, challenges the establishment and
finally triumphs. The northeast Asian—the Oriental world people
are far more likely to look on this illusion as egregious or, at least,
as an egocentric display. They are far more ready to move as a
unified whole and turn to the benevolence of the State or the
business director, (Clissold, 2004).
To the American attorney, for example, who is even slightly
infused with this individualism and who is drafting a contract, the
essence is to legally dominate—to anticipate every contingency, to
be prepared for every problem or question, and to be absolutely
complete. This author who has drafted contracts for thirty years,
has spent hours, if not days, in detailed analysis, and the phrase
‘‘but what if’’ becomes as common as punctuation. To attorneys
drafting commercial contracts disgrace lies in not being all-inclu-
sive, in not being prepared for a question, and in not considering
every possibility. As a consequence their documents are as exact
and detailed as possible.
IV. THE FUNCTIONAL ASPECT OF GRACE
To the Asian counterpart this approach is not only foreign, but
it contains a horrible or unthinkable potential. ‘‘Saving face’’ is not
only the most desirable personal attribute, but one can’t ‘‘save
278 THE INTERNATIONAL TRADE JOURNAL
face’’ if one inflicts embarrassment on or humiliates his colleague
by showing that person to be wrong. ‘‘Saving face’’ then is a two
way street, which can only be preserved or achieved by sensitivity,
harmony and grace, and ultimately, it is the balm which allows
avoidance of personal accountability and, possibly, ‘‘disgrace.’’
It is this objective that governs the organization, presentation
and undermining philosophy of the laws of many of the northern
Pacific-Rim countries, and many western business people fail to
realize that this personal characteristic not only dominates the
thinking of their Pacific counterparts, but that it is the essence
which permeates the being of their Pacific-Rim colleagues
(Fishman, 2005). It cannot be attributed to any sense of inferiority
or even personal modesty. It is the resultant of the amalgam of San
Chiao—the Three Doctrines, Confucianism, Taoism, and
Buddhism. It extends from the production worker in many
Pacific northern Rim countries who is dominated by the idea
that if his work becomes shoddy or if he doesn’t meet his quota
he will ‘‘lose face,’’ even up to the Chinese Central Committee
where a personal mistake may lead to disgrace (McGregor, 2005).
V. THE GRACE OF HARMONY
To the Korean people, for example, to the Chinese, the citizens
of Singapore, or the Japanese, ‘‘harmony,’’ ‘‘sensitivity’’ and
‘‘grace’’ cannot be achieved by preparing for a syntactical war or
by having one party to a contract dominate the premises by
preparing a contractual analysis which purports to consider
every eventuality, (McGregor, 2005).
To the western business person this is not only impractical, but
it is self-defeating. The western business person often is frustrated
by the fact that his carefully prepared and orchestrated approach
is not accepted immediately and at face value. This western busi-
ness person fails to understand that his Pacific counterpart is not
prepared to accept a previously prepared, all-inclusive package,
Boettcher: The Eastern Business Mind 279
has not gone through a completely orchestrated arrangement or
contract and is not fixed or dogmatic in his thinking. His approach
is not to attempt to deal with the whole, but to begin with a step by
step analysis, which allows adaptability in solution, circumvention
of the painful, and, if necessary, retreat and digression. Accept
problems as they arise, and if they never arise, then time has not
been wasted in useless preparation.
This approach begins with the first contact with the foreign
counterpart. This contact allows the establishment of a personal
base. It allows a time for ‘‘sizing-up’’ the foreign counterpart. It is a
time for analysis and preparation, and it is not a time for negotia-
tion. Americans, for example, at a business lunch, will look at the
menu, and then immediately start negotiations. This puts the
Korean, the Chinese, the Japanese, or the businessman from
Singapore in a defensive mode wherein a mistake might be made,
where prestige might be lost because of lack of preparation and/o
We are a professional custom writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework.
Yes. We have posted over our previous orders to display our experience. Since we have done this question before, we can also do it for you. To make sure we do it perfectly, please fill our Order Form. Filling the order form correctly will assist our team in referencing, specifications and future communication.
2. Fill in your paper’s requirements in the "PAPER INFORMATION" section and click “PRICE CALCULATION” at the bottom to calculate your order price.
3. Fill in your paper’s academic level, deadline and the required number of pages from the drop-down menus.
4. Click “FINAL STEP” to enter your registration details and get an account with us for record keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
5. From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.
Why Hire Safehomework.com writers to do your paper?