The Changing Face of Multinationals in Southeast Asia

by Time G. Andrews, Nartnalin Chompsurin, Bryan J. Baldwin
Publisher: Taylor & Francis Asia Pacific

This book seeks to assess the changing nature of western multinationals (MNCs) in Southeast Asia following the 1997 economic crisis. The crisis period marked a turning point in the way western MNCs approached emerging markets, and the authors have effectively transformed their analysis of this change into an insightful, interesting read. Through its use of real-life case studies and its frank examination of both failures and successes, the book addresses a gap in the literature. 

The authors organised the book into three parts. Part I lays the foundation for the rest of the book and provides an overview of the incumbent MNCs. Part II goes on to analyse the nature of organisational change within MNCs in the post-crisis business environment. Part III addresses the evolution of marketing strategies among MNCs, triggered by global pressures to rationalise product and service offerings across the region. 

The dominant thesis of this book is that the post-crisis standoff between “Eastern” and “Western” models of business practice results from a far deeper clash of cultures, which in turn hinges on fundamental societal values. 

Of particular interest is the “cross-vergent” framework for strategic thinking, which prescribes how to achieve optimal results through a compromise between “Eastern” and “Western” managerial cultures. The authors should be applauded for taking local idiosyncrasies seriously when theorising management practices and strategies among MNCs in Southeast Asia. 

The theme of Western corporate theory facing resistance from local Asian management is best brought across in the discussion of organisational downsizing (pp. 61-65) and corporate consolidation (pp. 95-99). The authors go on to make a strong case for thinking local and acting local when facing such challenges. 

The book contains a helpful sprinkling of “straight from the trenches” insights (p. 307) and case studies that provide a window on what really happens on the ground. These candid and detailed accounts record the key issues chief executives typically face in the Asian business environment. 

In the section titled “It’s Your Country”, for instance, the author posed a problem to local executives. He faced a period of silence because, as the boss, he was traditionally expected to know all the answers. He said, “Look – this is your country and you’ll be here long after I’ve left, so what do you think we should do?” This struck a chord and the suggestions that followed were often novel and surprising. The next question naturally was: “Why do you think we should do it that way?” This discussion helped the expatriate CEO learn about local cultures of thought. More importantly, by involving the local executives, it secured buy-in from the local management team. 

While this book is a very helpful reference for executives working in MNCs in Asia,there is perhaps an overstated emphasis on the battle between “Eastern” and “Western” business practices without sufficiently examining the validity of these popular categories, or considering possible commonalities and convergence between the two. 

In addition, the focus on cultural differences as the source of the challenges faced by Western companies in Asia appears stretched. Other important and non-cultural factors – such as income levels, product life cycle immaturity, fragmented distribution systems and institutionalised economic and political norms – are probably more important in explaining these challenges. Moreover, the experiences cited tend to reflect mainly the petrochemical industry and certain Southeast Asian countries, limiting the scope for broader comparisons. 

Nevertheless, this book provides the reader with more than just a glimpse of the realities behind MNC operations in Asia. It is highly recommended to any theorist or practitioner seeking to deepen her understanding of how MNCs are changing, and being changed by, the Asian business landscape.