New Asian Emperors: The Business Strategies of the Overseas Chinese

Citation

Greeven, M.J. (2011), "New Asian Emperors: The Business Strategies of the Overseas Chinese", Journal of Organizational Change Management, Vol. 24 No. 3, pp. 400-401. https://doi.org/10.1108/09534811111132776

Haley et al.'s recent book New Asian Emperors deals with what is arguably one of the most significant economic groups in the world: Overseas Chinese companies. Focusing on the dominant role played by the Overseas Chinese in Southeast Asia, the authors shed light on management practices and strategic perspectives of the New Asian Emperors. Multinationals that are or would like to be active in Southeast Asia and students of economics, sociology and management with a focus on Asia will find this book rewarding not only for the insights but also for its readability.

The book is divided into three parts. The first part discuss in much detail the historical and cultural background of the Overseas Chinese with particular emphasis on networks. The second part provides an explanation of the core argument of the book. Identifying a “black hole” or lack of information about business in Southeast Asia as a key management problem, the authors try to single out specific strategies of the Overseas Chinese that have made them comparatively successful and dominant in the region. The second part of the book tries to connect patterns of strategic planning to competences and informational “black holes”. The third and last part discusses the implications of the Overseas Chinese way of doing business. In particular, the book deals with the response of the New Asian Emperors to crises such as the financial crisis and SARS. The book concludes with the competitive implications for doing business with the New Asian Emperors.

The book's main arguments are illustrated by numerous examples that do not only make it highly readable but, more importantly, emphasise the importance of historical context and cultural background for understanding the Overseas Chinese business practices. By placing the emergence and development of Overseas Chinese companies in historical and cultural context, the authors (implicitly) acknowledge the role of path dependency. In my opinion, this is one of the key contributions of the book. Without understanding that the features of today's business environment have developed over the course of history as a result of the interaction between political, economic and social change agents, we cannot explain the distinctness of Overseas Chinese companies and their strategies.

A second contribution of the book is the search for patterns of organizational behaviour, in particular company strategies, in response to informational voids in the business environment. The authors focus on the role of alternative means of information gathering of Overseas Chinese in response to asymmetric information in the market. By identifying alternative mechanisms such as networks and flexibility, the authors find that the Overseas Chinese do have strategic plans and develop specific capabilities for information gathering. In their perspective, company strategies are ways of gathering crucial information in a information‐poor business environment. It is in response to risks and challenges that we can best understand capability development and organizational behaviour and change. However, this is also where the book fails to develop to its fullest extent.

New Asian Emperors is not an academic book. There is neither an overarching analytical framework nor a clear and transparent methodology. The authors might not have intended to write an academic book, which becomes obvious in the last chapter, but it is useful to pinpoint a set of shortcomings. First, the use of anecdotal evidence and lack of a methodology result in overgeneralizations of Chinese strategic practices and disregard for the cultural diversity within China. Overseas Chinese companies clearly have distinct strategies for dealing with the informational void and they do vary in their success. More importantly, acknowledging the value of the cultural context, it is surprising that the authors disregard the cultural diversity within China. The origins of the Overseas Chinese are within China and the particular local cultural, social and economic environment shaped the principles and business practices of the Overseas Chinese. It is difficult to speak of one homogenous Chinese culture. The authors do accept the importance of local embeddedness but fail to consistently adopt this notion in their explanations. In general, the lack of specificity and systematic analysis result in too simple explanations, such as the emphasis on networks as explaining most aspects of the Overseas Chinese success.

My second reservation is the over‐emphasis on culture, specifically with regard to networks. I do not disagree that culture – in the form of religion, philosophy and tradition – shapes our current belief and value systems but it has limited explanatory power when it comes to organizational behaviour, company strategies and patterns of economic activity. In the example of networks, I would suggest that it is more useful to look for patterns of economic activity and coordination and focus on the social embeddedness of economic action as opposed to labelling them successful due to their cultural and traditional features. Lastly, within a cultural perspective on networks it is easy to ignore the potential disfunctionality and costs of networks. In this perspective, it is often assumed that networks can only do good, as they are culturally embedded and based on tradition, whereas the costs of establishing and maintaining networks are nontrivial and not to be ignored.

My third and last comment is about the focus on Overseas Chinese in Southeast Asia. We are witnessing a wave of outward foreign investment by Chinese companies in Europe, the USA and Africa. The effects of an increased presence of Chinese companies in Western‐European and American markets is not to be underestimated and potentially more interesting as these Chinese companies are starting to compete on our “home turf”. All in all, New Asian Emperors is interesting for multinationals and students of Asian management and economics. The book provides rich insights in the Southeast Asia region and in particular in the business practices of the Overseas Chinese based on unique in‐depth interview data.