4

Asia market overview 2008

China & North East Sea: China, Japan,

Hong Kong, North Korea, South Korea, Macau and Taiwan

South Asia: Bangladesh, India, Pakistan

and Sri Lanka

South East Asia: Cambodia, Laos,

Myanmar, Thailand, Vietnam, Indonesia,Brunei, Malaysia, the Philippines and Singapore,Mongolia, Papua New Guinea, Pacific Islands, Timor - Leste

Central Asia: Tajikistan, Kyrgyz Republic,

Azerbaijan

West Asia: Quatar, Arab Saudi, U.A.E GDP Growth (Constant Prices, National
Currency) 8.383 %

GDP (Current Prices, US Dollars)US$

7,049.93 Billion

GDP Share of World Total (PPP) 20.972 % Investment (% of GDP) 39.174 %

Facts & figures

Asia market overview 2008

Asia markets characteristics:
- Globalization - Domination by Japan - Fast growing China

- India is the second massive emerging market with IT extensive

- The continued rise of the first two Asian tigers, South Korea and Taiwan: electronics and manufacturing

- South East Asian tigers of Thailand, Indonesia, Philippines, Malaysia

- The initial promise of Indo China, (Cambodia, Laos, Myanmar/Burma and especially Vietnam)

- The strong finance and rich in nature resources in UAE, Arab Saudi

Rank of Ease doing business in Asia

Business structure
Asia traditional business structures tend toward the culture aspect as religion as well as political Islam with the West Asia Hindu and Buddhist in South Asia, South East Asia Confucian and its derivatives in China, Japan, Taiwan, Hong Kong Hierarchical (Family-like structure) and decision maker at top: CEO tends to be the oldest male family member, other senior employees also being family members. Religion and Political Influence: Sharia law, Hindu, Communist

Business structure

Business structure & management

Relationships are deemed to be unequal: older person/the senior should automatically receive respect. Managers tend to be very instructional in their approach. Group discussion with the final decision being taken by the leader. Lack of clear directional leadership as very poor management.

China: directive management, subordinates will not question the decisions of superiors, managers have close relations to the Communist Party

India: hierarchical society, the boss gives explicit instructions which will be followed to the letter

Japan: need of information flow from the bottom of the company to the top, leading to largely supervisory, policy is often originated at the middle-levels

Business management

Religions
Religion can be a powerful cultural force in societies of all levels of economic development.
The major religions are: Christianity, Islam and the broad grouping of Asian religions (including Buddhism & Hinduism)

Many religions including both Christianity and Islam have split into different sects, often divided along traditional/ reformist lines.
Most states are secular, but many have strong religious ties. Individuals freedom of religion is recognized in UN conventions, but is not always respected in practice.

World religions

(as percentages of world population, 2005)

Source: World religions data, http://www.adherents.com

9

Hofstedes cultural Dimensions

Sources: Hofstede, G. (1994) Cultures and Organizations: Software of the Mind (London: HarperCollins); Hofstede, G. (1996) Images of Europe: past, present and future, in Joynt, P. and Warner, M. (eds) Managing Across Cultures: Issues and Perspectives (London: Thomson) pp. 14765

10

UNCERTAINTY
AVOIDANCE

quite low, except Japan(92) & Korea (85) others below 40, Singapore (8) POWER DISTANCE High, Malaysia (104), Philippine (94), China (80), Singapore (74) with average of 60

1-20

21-40

41-60

61-80

81-100

101-120
11

MASCULINITY AND
FEMININITY

medium level, except Japan for 1st rank (95), other below 60

12

INDIVIDUALISM AND
COLLECTIVISM

quite low with average of 24, except Australia for 2nd rank(90), Strong group orientation

13

LONG TERM ORIENTATION

LONG TERM
ORIENTATION

quite high, exceptional China for 1st rank (118), other Hong Kong, Taiwan, Japan, Korea (90)

14

Asian Business Etiquette

When in Rome do as the Romans do Inappropriate Appropriate greeting greeting

Arrange for appointments a few days ahead

Meeting & Greeting

15

Asian Business Etiquette

When in Rome do as the Romans do Inappropriate business card exchanged

Treated with respect.

Exchange by both hands in Japan Islamic world: right hand always

Japan: Lay the name card on the table. Should not put card in wallet or pocket.
Korea: have a glance only and place in the pocket

Business cards

16

Asian Business Etiquette

When in Rome do as the Romans do Seating layout in a business meeting offers strong hints on seniority.

Meetings begin more or less on time in Japan, China, Hong Kong, South Korea, Thailand, except Malaysia, Vietnam, and the Philippines.

Seating etiquette on hierarchy

17

Asian Business Etiquette

When in Rome do as the Romans do Business men often wear shirts with trouser with and without ties, jackets are not compulsory. Business women often wear light business suits (no pants) with good quality accessories and low heeled shoes. Colors tend to be light.

Casual Dress is always Inappropriate

Non business dress

Business dress
18

Negotiation skills
Relationship Group than individual: group discussion before making decision Till having I in team Saving face Gender and hierarchy: Males (Japan, China, Korea, India, Muslim countries), females (Thailand) Age of negotiator
Bargaining Fear of making mistake Slow decision making Things arent always considered as being black and white. Negotiations amid a variety of legal, financial and governance frameworks. First meeting should not talk much about business.

People

Process

Avoid conflict Prices are subject to negotiation. Volume is significant, so small changes have big implications. Cyclical wealth causes a short-term focus. Multiple currencies add cross rates to the agenda

Content
19

Negotiation tips
Prepare well: sales approach, negotiating rates at high then bargaining Homework: Check credit standing of proposed client. Business card supply. Promotional Material Greeting Meeting: arrive early or on time, Speak clearly and slowly, Be patient, retain 'face, not aggressive, silence sometimes no problem .

20

Business tips
Dont underestimate: Asian market & legal frame developing so fast
Think ahead: most companies are still government-controlled so dont make decision changed after night, should consistent from the very 1st day. Get tactical: local tactics Seal the deal: necessary though having two directors signatures. Think round comers: Legal systems throughout Asia are derived from a variety of sources. Languages: Local language skills are advantage. Go local
21

Conclusion

Face is key: Most Asian business people rate people by

external factors such as their perceived wealth, (the hotel you stay at, the maker of your clothes, your title, the status of your company, a doctorate degree from a prestigious university and your contacts). There is less emphasis on your capability in doing a job.

Asian business people are less direct than Westerners: If they don't like you or your offering, they will not
tell you to your face. They will "tell you" by ignoring your follow up faxes and phone calls. You are meant to "take the hint".

22

Conclusion

Asian business people are usually infinitely patient: If you approach them, you are
expected to convince them of your offering, not the other way around. You are expected to get to know them personally. Personal relationships are key. The quality of your product may be assured, but unless you can develop a personal relationship, progress will almost always grind to a halt. If you keep on losing proposals when you know you offered the best one, don't feel personally affronted. It is highly likely in some countries (but definitely not all), that you lost due to the fact that others offered better kick backs, and favors to affiliated partners.

23

THANK YOU

24