Faculty
Professor David C. Kang
Objectives
Course Overview
Asia, ablaze with economic energy, is changing the shape of the world economy and the scope and nature of competition among the world's companies. Western firms face a world far different and more challenging than just a few years ago, thanks largely to the rise of new and increasingly powerful competitors from Japan, Korea and now China.
After being virtually absent from international commerce and competition during the height of the Cold War, China has burst onto global markets, growing its economy faster than any other country since the start of the industrial revolution - averaging over 9% annual growth over the past thirty years - and becoming the manufacturing "workshop of the world." Burgeoning exports, vast pool of low wage labor, an extraordinary level and growth of foreign direct investment, along with a host of other factors are creating major new challenges and displacing established competitors in developed and developing countries alike. China is changing the face of global business competition and economic power.
At the same time the huge Chinese population, increasingly urban and prosperous, offers tantalizing prospects of a vast market for companies around the globe. Japan - the world's second largest economy and home to many of the world's leading companies - is now growing again after a decade and a half of stagnation, thanks in part to Chinese demand for Japanese capital goods but now increasingly to renewed domestic demand. Korea -- which overtook Japan in steel, shipbuilding, semiconductors -- is now threatening to do so in consumer electronics. With China racing toward the lead, the Asian economies are now key players in the world economy which no western companies can ignore.
Objectives
This course provides an introduction to the variety of ways in which business is conducted in East Asia. It also provides a foundation in cultural and political aspects of business, which tend to be thoroughly intertwined in international business. The primary goal of the course is to help you become a more skilled global business leader.
Another important goal is to encourage a more disciplined thinking process in the way you approach international management situations. As a result of this course you will become more confident in understanding and dealing with different business international practices.
More specifically, the course will:
Introduce the key factors driving the economies and companies of Japan, China and Korea.
Compare the institutions and characteristics of these three economies and their business systems and structures.
Explore the factors behind the success of, and the strategic issues facing, their best-known global competitors, including Toyota, Sony, Samsung as well as newly emerging Chinese competitors such as Lenovo and Haier.
Analyze the challenges confronting the managers of western corporations doing business in these economies and competing against their East Asian rivals.
Hear directly from a number of those managers who will be visiting and sharing their experiences - and the lessons they have learned - with the class.
Against this background, the course aims to provide the student with:
classroom introductions to and comparisons of the distinctive characteristics of Chinese, Japanese, and Korean businesses, and the business environments within which they operate; and possible in-country field visits to plants, corporate boardrooms, and government and financial institutions in the region during the spring break.
The Asian Business Club, with administrative support from the Center For International Business, will arrange these visits depending on student interest. Previous trips have included visits to plant facilities and management briefings at Nippon Steel, Nissan, General Motors/SAIC, STAR Television, Walt Disney consumer products and meetings with key political and economic figures in the region. This will be an optional part of the course. Students will cover their own costs of the trip. Participation in the trip will be limited. Students enrolled in Doing Business in Asia will have first priority.
Requirements
Materials
Required readings are almost all found in the course packet of photocopied materials.
Schedule of Material:
Prepare Material = Required reading and in the Course Pack
Background Material = On reserve at Feldberg Library
Honor Principle
We consider honor an individual matter guided by the policy set forth in Section I of the MBA Student Handbook. We would usually not consider anyone who did what he or she believed proper to be in violation of an honor principle. It may be difficult to determine what is proper in particular situations in spite of the notes here or guiding comments by the Honor Committee. If there are any questions about what is expected, please raise them.
Visitors
Visitors will include a number of experts with substantial experience in observing and analyzing as well as managing company operations in China, Japan and Korea. The list of names and topics will be announced.
Grading
Class Participation
The final grade for the course will reflect your overall performance, but will be constrained by Tuck's grade distribution policy as shown in your Student Handbook. The grade will represent the overall judgement of the instructor, taking into consideration specific graded assignments and class participation.
Class Participation 25%
Participation includes attendance, discussion, and readings. Wherever possible and appropriate, students will be called upon to lead the discussion by preparing case studies and actively participating.
When a particular case will serve as the cornerstone of the class, an individual student or several students will be called upon to lead the discussion that day.
Hence, you are required to read all items labeled "Prepare" in advance of class and be prepared to take the lead in framing the issues for discussion. If you are inadequately prepared for a particular class, you should inform the instructor prior to class that you do not wish to be called on. Don't plan to "wing it."
All "Prepare" items are included in the course packet. All "Background" sections of the syllabus have been put on reserve in Feldberg. They provide further background on specific issues.
Because class participation is a critical part of the course, non-emergency absences will adversely affect grades. You should schedule all other activities, including job interviews, so as not to conflict with your class meetings. If, due to circumstances beyond your control, you are not able to make it to a particular session, you should inform
Professor Kang prior to class.
Group Presentation 35%
Details for the group projects will be given in class.
Individual Paper 40%
Each student will prepare a short paper (5-7 pages double spaced plus bibliography and notes) on some aspects of business development on strategy of a U.S., European or Asian company in an Asian market of the student's choice (i.e., not necessarily limited to Japan, Korea or China). The paper should lay out a problem confronting the firm. Briefly describe the particular challenges arising from the culture or other aspects of the business environment in the country, and analyze the firm's options. Students should feel free to consult with the instructors about specific topics.
The paper will be due on or before 4:00 PM on Wednesday, February 6, 2008. Please turn it in at the box provided outside Carole Petrillo's office, 103 Woodbury.
Schedule
Monday 01/07
Questions:
Is the Anglo-American model the best mode of organizing an economy?
What important characteristics do the major Asian business systems share? Are these culture-bound or transferrable?
What characteristics are specific to individual Asian countries?
Prepare:
Paul Krugman, "The Myth of Asia's Miracle," Foreign Affairs (November/December 1994), pp. 62-79.
Responses to Krugman, Foreign Affairs (March/April 1995), Vol. 74, No. 2, pp. 170-177.
Paul Krugman, "America the Boastful," Foreign Affairs, (May/June 1998), pp. 32-45.
Background:
Chalmers Johnson, MITI and The Japanese Miracle Ch. 1, pp. 2-34, "The Japanese Miracle."
Chapters on China, pp. 55-62, Japan, pp. 202-208, Korea, pp. 340-348 in Morrison et al, Kiss, Bow or Shake Hands (Adams, 1994).
Robert Wade, "East Asia's Economic Success: Conflicting Perspectives, Partial Insights, Shaky Evidence," World Politic, Vol. 44 (January 1992), pp. 270-320.
Tuesday 01/08
Questions:
Does culture have any impact on a Western business manager's ability to compete overseas?
How are high-context and low-context cultures different?
With what advantages compared to the Western norm? And what disadvantages?
How is human resource management changing in Japan, and with what consequences for individual careers?
What issues does the foreign firm face in managing Japanese staff?
Edward Hall and Mildred Hall, Hidden Differences: Doing Business with the Japanese (New York: Anchor Books, 1987), Part I: Key Concepts, pp. 3-35.
Background:
Sebastian Moffett, "Going Gray: For Ailing Japan, Longevity Begins To Take its Toll," Wall Street Journal, February 11, 2003.
Mohammad Ala and William Codeeiro, "Can We Learn Management Techniques From the Japanese Ringi Process?," Business Forum Vol. 24, No. 1 (June 1999).
Murray Sayle, "The Social Contradictions of Japanese Capitalism" Atlantic Monthly, (1072-7825), (June 1998), pp. 84-94.
Monday 01/14
Be prepared to outline - and defend - a U.S. trading company and "keiretsu" on the Japanese model. Which kinds of firms would be included? How would governance work? What lessons does the Nissan case offer in this regard? Be ready to address the following:
What are the strategic advantages - financial and organizational - of Keiretsu forms of corporate structure and inter-firm relationship?
How would US corporations benefit if they were to adopt such an organization?
What would be the downside of doing so?
How do Carlos Ghosn's actions at Nissan square with traditional management practice and corporate governance in Japan?
Prepare:
HBS Case: "Nissan Motor Co., Ltd.," 2002, 9-303-042.
Background:
HBS Case: "Mitsubishi Corporation (A)," 482-050.
Abegglen and Stalk, Kaisha: The Japanese Corporation, Chs. 1-3.
"The Sun Also Rises," The Economist, Survey of Japan (October 8, 2005).
"FT Special Report: Japan," Financial Times, (October 12, 2005), pp. 1-6.
"Mitsui Liquidates A Third of Group," The Nikkei Weekly, (October 27, 2003).
"An Overview of Corporate Governance in Japan," Standard and Poors, (September 11, 2002).
Richard Katz, "Japan's Phoenix Economy," Foreign Affairs, Vol. 82, Issue 1 (January/February 2003), pp. 1-8.
Laura Silverman, ed., Bringing Home the Sushi, (Mangajin, Inc., 1995), Ch. 4, "Director Hira Namijiro," pp. 79-112.
Tuesday 01/15
Be prepared to outline - and defend - the following:
Why has reform been so difficult?
What would be the downside of doing so?
What are the main problems and opportunities with the Japanese financial system?
Prepare:
HKU Case: "Japanese Banking: Crisis and Reform," December 21, 2005, HKU 551.
HBS Case: "Japan: Deficits, Demography, and Deflation," December 2006, 9-706-004.
Background:
A.K. Kashyap, "Sorting out Japan's Financial Crisis," Economic Perspectives (2002), pp. 42-55.
Ed Lincoln, "Japan's Financial Mess," Foreign Affairs (1998).
R. Taggart Murphy, The Weight of the Yen (Norton, 1996), ISBN 0-393-03832-7.
Tuesday 01/22
Note: This week's class days are Tuesday and Friday due to Martin Luther King day.
Questions:
Where did Ellen Moore go wrong?
What different preparations would you have done in her case?
How would you have dealt with the conflicts that occurred?
Is this different from American business culture? How?
Prepare:
Jon P. Alston, "Wa, Guanxi, and Inhwa: Managerial Principles in Japan, China, and Korea," Business Horizons (March-April 1989), BH 015, pp. 26-31.
HKU Case: "Daewoo and the Korean Chaebol," HKU 143.
HBS Case: "Ellen Moore (A): Living and Working in Korea," 97G029.
Background:
Clifford, Troubled Tiger, Chs. 1, "Uneasy Alliances," pp. 3-17, Ch. 4, "To Build a Nation," pp. 45-66, Ch. 16, "Dangerous Corner," pp. 218-235.
Howard Tu, Seung Yong Kim and Sherry E. Sullivan, "Global Strategy Lessons from Japanese and Korean Business Groups," Business Horizons, BH072 (2002), pp. 39-46.
David C. Kang, Crony Capitalism: Corruption and Development in South Korea and the Philippines, Ch. 4, "Mutual Hostages in Korea."
Wednesday 01/23
Questions:
What are the cultural problems Americans face working for a Japanese corporation?
What are the unique problems women face in such situations?
How is this different from working for a US firm?
Prepare:
Laura Silverman, ed., Bringing Home the Sushi, (Mangajin, Inc., 1995), Ch. 8, "I'm number one!," pp. 166-187.
HBS Case: "Sumiko Ito," 9-943-011.
Monday 01/28
Questions:
How is Korean business culture different from Japanese businesss culture?
How do Korea's industrial groups, the chaebol differ from Japan's keiretsu and sogo-shosha?
What are the strengths and weaknesses of each system?
How far has economic reform in Korea proceeded?
What are the remaining barriers and tasks?
How "Korean" will business in Korea remain?
Prepare:
Bruce Cumings, Korea's Place in the Sun (1998), pp. 9-14 and pp. 19-22.
Peter Beck, "Revitalizing Korea's Chaebol," Asian Survey , Vol. 38, No. 11, (November 1998), pp. 1018-1035.
HBS Case: "Samsung and Daewoo: Two Tales of One City." 9-804-055.
Background:
Edward M. Graham, Reform of the Chaebol in Korea, p. 83-104.
Jeffrey D. Jones, Ingredients For a Successful Korean Economy, pg. 36-40.
Tuesday 01/29
Questions:
Do Western firms necessarily raise business standards?
What are the requirements for successful market entry?
What lessons do you take away from the case?
Prepare:
James Watson, ed., Golden Arches East: McDonald's in Seoul, Sangmee Bak, "Food Choices, Identity & Nationalism," (Stanford: Stanford University Press, 1997), Ch. 4, pp. 136-160.
Seung-Kuk Kim "Changing Lifestyle and Consumption Patterns of the South Korean Middle Class and New Generations," in Beng-Hua Chua, ed., Consumption in Asia: Lifestyle and Identities (Routlege, 2000), Ch. 3, pp. 61-81.
Ivey Case: "American Fast Food in Korea," 903M16.
Background:
Kin Wan-Soon and Michael Jae Choo, Principal Barriers to FDI in Korea, (Korea Economic Institute), pp. 27-35.
Clifford, Troubled Tiger, Ch. 5, "High Priest of Steel," pp. 67-75 and Ch. 8, "Chaebol," pp. 113-127.
Monday 02/04
Tuesday 02/05
Questions:
In what ways is China "socialist"?
What is the nature of an "enterprise" in such a system?
How is Chinese culture different from Korean or Japanese culture?
How did China grow so fast with such a system?
Prepare:
"The Great Transition," Kenneth and Geoffrey Lieberthal, HBR 5059.
Scott Seligman, Chinese Business Etiquette: A Guide to Protocol, Manners, and Culture in the PRC (Grand Central Publishing, 1999), Ch. 1, "Protocol & the Larger Picture," pp. 7-12.
Background:
James McGregor, One Billion Customers (Free Press 2005), Introduction and Ch. 1, pp. 1-57.
Ted Fishman, China, Inc., Introduction and Chs. 1-5, pp. 1-136.
Barry Naughton, The Chinese Economy: Transitions and Growth (MIT Press, 2007).
Monday 02/11
Prepare:
Material to be distributed.
Tuesday 02/12
Questions:
What are the major problems that foreign firms face in entering the Chinese market?
What are the problems facing Samsung?
How would you segment the Chinese TV market in terms of product, customers, and competition?
Which market segment should Samsung target?
Prepare:
Ivey Case: Samsung China: The Introduction of Color TV," 898G03.
James McGregor, One Billion Customers (Free Press 2005), Ch. 2, "Same Bed, Different Dreams," pp. 58-93.
"Proctor and Gamble," Parts I and II, Financial Times, (November 15-16, 2005).
Monday 02/18
Sessions 12 and 13 (February 18):
***Class will meet from 10:15 a.m. to 1:00 p.m.***
Questions:
What are the big challenges to growing a private firm in China?
Is the township and village enterprise (TVE) a socialist or a capitalist form of company?
What advantages/disadvantages does a private Chinese firm have compared to a state-owned enterprise? Compared to foreign firms operating in China?
Prepare:
HBS Case: "Kelon (A): China's Corporate Dragon," 9-701-0531.
Background:
HKU Asia Case Research Centre Case: "China's Home Appliances Industry 2004," HKU 376.
Donald Sull, Made in China, Ch. 6, "Manage Relationships Dynamically," pp. 123-143; and Ch. 7, "Go For the Gold," pp. 145-166.
Monday 02/18
Questions:
How important is a government strategy for Western firms doing business in China?
What are the weaknesses of the Chinese financial sector?
What opportunities are there for Western firms?
What are the main regulatory obstacles firms face in doing business?
Prepare:
Material to be distributed.
Tuesday 02/19
Sessions 15 and 16 (February 19):
***Class will meet from 10:15 a.m. to 1:00 p.m.***
Questions:
How is the Chinese globalization different from that in Japan or Korea?
What are the strengths of this approach?
What opportunities are there for Western firms?
Prepare:
Material to be distributed.
Tuesday, Feb 19
Session 15: The Private Sector
Question:
What are the key issues Chinese firms face in seeking to create brand recognition among Chinese consumers?
What strategies can late-comers to the Chinese market use to overcome the brand recognition advantage of early entrants?
What are future risks to growth?
Prepare:
Material to be provided.
Monday 02/25
There is no class on Monday, February 25, 2008.
Tuesday 02/26
Nuts and bolts on how to conduct meetings and negotiations in Asia.
Monday & Tuesday, March 3 & 4
Sessions 17 & 18
Student group presentations
