Global Business: Robert Azar's recipe for success

Asia is at the opposite end of the time horizon spectrum; companies calculate short term as one to three years, mid-term is four or five years, and long term is five to ten years. Europe is in between these two extremes. The result is that executives plan, invest and operate business on two entirely different time tables. Each has expectations, performance measures, and business development strategies that are different and typically conflict with each other. 

Another way in which management practices diverge is what drives business in the two regions. In the west, business is transaction driven. Two companies work together to achieve a mutually agreed upon business objective or purpose. The transaction is the focus of business collaboration. Once the project ends, the firms say goodbye and go their separate ways.

It is quite different in Asia where business is relationship driven. Relationship is the foundation upon which business collaboration takes place. So while developing, investing in, and actively managing a business relationship is necessary in Asia, it is not in the west. The result is that companies in the west are able to focus only on their own corporate interests when collaborating with other firms while in Asia they are obligated to also take into consideration the interests of their partner companies. 

This is a significant difference that adds a whole new dimension to working in Asia, entirely different dynamics in the companies' relationships, and expectations not found in the West. For instance, I have seen on numerous occasions how companies are willing to accept a lower return on investment (ROI) from a project in order to accommodate the interests of a business partner and promote their mutual relationship. This fundamental difference is outside the norms of western management and very often difficult for western companies to recognise and accommodate.

A third fundamental difference in management practices is the goals of companies. In the west, companies' primary goal is short-term profit and shareholder value, whereas in Asia it is market share and stable, long-term value creation. A fascinating difference is that Asian management will pursue these long-term goals even if that entails red ink in the short and mid-term. This is radically different from the US where executives are quick to "cut their losses" and exit a business if profit goals are not met in a short time. From the perspective of Asian management, this makes working with western companies much more unstable and riskier as a result.

What are the soft skills and the hard skills to know to be able to work in Asia? And, for Asian people, what are the soft skills and the hard skills to know to be able to work in western countries?

I have taught students from five continents and I always tell them that being a functional expert in their chosen field of business (such as marketing or finance) is not enough to succeed in today’s complex and constantly changing global business environment. For example, in addition to their business specialisation, students also need to master foreign languages—the more the better.