Faculty
Professors David C. Kang, John B. Owens
Objectives
Course Overview
This course is designed to introduce students to the cultural, legal, and business environments in Southeast and Central Asia. The course will focus on the practical issues that a foreigner will encounter in conducting business in international venues, focusing on managing in a developing or transition economy in a third world country, and combining the academic research and skills with the experience and wisdom of management practitioners. In particular, we will emphasize the acquisition of skills required to manage in third world, emerging and transition economies.
The DBSEA course will focus on two aspects. One is to provide specific knowledge about the business systems in Southeast and Central Asia. However, just as importantly, understanding and dealing with these issues clearly works best when there is a specific context for the general point: for instance, how to deal with the many facets of pressure, corruption, and influence in a foreign environment; how to deal with the problems of having one central headquarters and yet operations around the region; and issues of dealing with and understanding myriad of different ways that business is both organization and exercised. The goal is to use Southeast and Central Asia as a springboard for more generalized lessons.
Objectives
This course provides an introduction to the variety of ways in which business is conducted in Southeast and central 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 Southeast and Central Asia.
* 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, companies doing business in these regions. This will include discussions of religion, ethnicity, gender, history, and culture, which confront business managers in their daily decisionmaking.
* 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.
In addition, we will invite selected guest speakers who can provide an inside perspective on doing business in these regions. This course is designed to be both distinctive from, and a complement to, the course “Doing Business in Asia,” which covers Japan, Korea, and China.
Visitors will include a number of experts with substantial practical experience in Southeast and/or Central Asia. Potential speakers include:
Dr. Christine Chin, Associate Professor of International Relations in the School of International Service at American University;
Professor Dirk Vandewalle, Associate Professor of Government, Dartmouth College.
Students should familiarize themselves with the general information about Southeast and Central Asia. At the end of this syllabus are a number of recommended readings about various countries that students can read to orient themselves.
Requirements
Materials
For all “Read” and “Prepare” sections on this syllabus, the reading is required for each class. Readings cited with a "(CP)" at the end will be found in the Course Packet.
Material listed under the “Background” sections are optional reading, but highly encouraged to review.
Tuck Honor Code
All aspects of the Tuck Honor Code must be adhered to during the course.
Grading
Grading
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 judgment of the instructors, taking into consideration specific graded assignments and class participation.
Class Participation - 50%
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.
Research Paper - 50%
Each student will use the frameworks and ideas learned in class to prepare a short paper (5-7 pages) on some aspects of either doing business in a specific country, or a business issue that faces a foreign company, in one of the countries studied in this class. Briefly describe the particular challenges arising from the culture or other aspects of the business environment in the country, and analyze the firm's (or country’s) strategies and options. Students must have their topic approved by the instructor.
The paper will be due the last day of class.
Schedule
Session 1
Mon., 3/24
Introduction and Overview
Questions:
* How are emerging and transition economies different?
* What are the key managerial issues facing companies in both environments?
* What different organizational or managerial steps would you take in one or the other environment?
READ:
• Benedict Anderson, The Spectre of Comparisons (Verso, 1998), Introduction pp. 1-28 (CP).
• Robert Kaplan, Eastward to Tartary (Random House, 2000), Chapter 6, “New Khanates,” pp. 286-302. (CP)
Optional:
Background:
Martha Brill Olcott, Kazakhstan: Unfulfilled Promise (Carnegie, 2002), pp. 1-23.
Optional: Martin Lewis and Karen Wigen, “Introduction,” and “World Regions: An Alternative Scheme,” from The Myth of Continents: A Critique of Metageography (University of California, 1997), pp. 1-19, 157-188.
Optional: Svat Soucek, A History of Inner Asia (Cambridge, 2000) (Put on reserve at Feldberg Library).
Optional: Steve Sabol, “The Creation of Soviet Central Asia: the 1924 National Delimitation,” Central Asian Survey, Vol. 14, no. 2 (1995), pp. 225-241.
Optional: The Economist, “The Tigers that Changed Their Stripes: A Survey of South-East Asia,” February 12, 2000: pp. 1-16.
Optional: The Economist, “In Praise of Paranoia: A Survey of Taiwan,” November 7, 1998: pp. 1-18.
Session 2
Tues., 3/ 25
The Cultural Makeup of Southeast Asia
Questions:
* What important characteristics do the major Asian business systems share? Are these culture-bound or transferable?
* What characteristics are specific to individual Asian countries?
READ:
• Murray Weidenbaum, “Asia's Bamboo Network,” The American Enterprise 7 (Sept./Oct. 1996): pp. 68-9.
• Journal of Popular Culture, Book Review, (Samuel Collins) OF: James L. Watson, ed. - Golden Arches East: McDonald's In East Asia, Berkeley: University of California Press, 1997), pp. 160-167.(CP).
• Timothy White and J.E. Winn, “Islam, Animation, and Money: the Reception of Disney’s Islam in Southeast Asia,” Kinema (Spring 1995).
Optional:
Background:
AnnaLee Saxenian and Jinn-Yuh Hsu, “The limits of guanxi capitalism: transnational collaboration between Taiwan and the USA,” Environment & Planning A 2000, Vol. 32 Issue 11, (Nov. 2000), pp. 1991-2006.
Optional: Raymond Fisman, “Estimating the Value of Political Connections,” American Economic Review 91, No. 4, (September, 2001).
Optional: Pasuk Phongpaichit, Guns, Girls, Gambling, Ganja: Thailand's Illegal Economy and Public Policy (Silkworm Books, 1999).
Optional: Sheridan Prasso, The Asian Mystique: Dragon Ladies, Geisha Girls, and Our Fantasies of the Exotic Orient (New York: Public Affairs, 2005), Introduction and Chapter 1.
Optional: Janet Landa, Trust, Ethnicity, and Identity: Beyond the New Institutional Economics of Ethnic Trading Networks, Contract Law, and Gift-exchange, (Ann Arbor, MI: University of Michigan Press, 1994).
Session 3
Mon., 3/31
Vietnam: Doing Business with a Transition Economy
Questions:
* What is “fair trade” in international business? Was the Vietnamese government too heavily involved in promoting business?
* What are the key steps U.S. catfish producers should take in response?
* Was this merely protectionism?
READ:
• John McMillan and Christopher Woodruff, “Entrepreneurship in a Harsh Business Climate: Reform-Era Vietnam,” Stanford GSB case 1B-45 (March 28, 2003) (CP).
Prepare:
HBS Case, “The Delta Blues: U.S.-Vietnam Catfish Trade Dispute (A),” HBS 9-706-003 (CP).
Optional:
Background:
Henry Kenny, Shadow of the Dragon: Vietnam’s Continuing Struggle with China and the Implications for U.S. Foreign Policy (Washington, D.C.: Brassey’s, 2002).
Optional: Brantley Womack, “China and Southeast Asia: Asymmetry, Leadership, and Normalcy,” Pacific Affairs 76, No. 4 (Winter 2003-2004).
Optional: Gu Xiaosong and Brantly Womack, “Border Cooperation Between China and Vietnam in the 1990s,” Asian Survey, Vol. 40, No. 6 (November/December, 2000).
Session 4
Tues., 4/1
FDI, Capital Flows, and Southeast Asia After the Financial Crisis
Questions:
* Was Malaysia’s decision to impose capital controls the right one?
* How would you have responded if you were the Malaysian finance minister? As a foreign investor?
* Should Malaysia or other countries hit by the crisis reform even more deeply than they have?
* Have the effects and concerns of the financial crisis largely dissipated, or should we still be worried?
READ:
• Robert Wade, “The Asian Debt-and-Development Crisis of 1997-? Causes and Consequences,” World Development, Vol. 26, No. 8, (August, 1998), pp. 1535-53 (CP).
• Jagdish Bhagwati, “The Capital Myth: The Difference Between Trade in Widgets and Dollars,” Foreign Affairs, Vol. 77, No. 3, (May/June, 1998), pp. 7-12 (CP).
Prepare:
HBS Case, “Malaysia: Capital and Control,” 9-702-040 (CP).
Michael Ross, “Indonesia’s Puzzling Crisis,” (m.s., UCLA, 2002). See link below.
Optional:
Background:
T.J. Pempel, ed., The Politics of the Asian Financial Crisis (Ithaca, N.Y.: Cornell University Press, 1999).
Optional: David Kang, “Transaction Costs and Crony Capitalism in East Asia,” Comparative Politics, 35(4) (July, 2003): pp. 439-458.
Optional: Yoshihara Kunio, The Rise of Ersatz Capitalism in South-East Asia (Oxford, 1988).
Optional: Paul Hutchcroft, Booty Capitalism (Cornell, 1998).
Optional: Jeff Winters, Power in Motion: Capital Mobility and the Indonesian State (Cornell, 1996).
Optional: Richard Doner, Driving A Bargain: Automobile Industrialization and Japanese Firms In Southeast Asia (California, 1991).
Session 5
Mon., 4/7
Gender in Southeast Asian Business (Dr. Christine Chin)
Questions:
* Are there differences in how men and women are treated in Southeast Asian business?
* Are there socioeconomic differences in treatment?
* How about ex-pats?
READ:
• Christine Chin, “Walls of Silence and Late Twentieth Century Representations of the Foreign Female Domestic Worker: The Case of Filipina and Indonesian Servants in Malaysia,” International Migration Review 31, (Summer, 1997) (Handout).
Optional:
Background:
Sheridan Prasso, The Asian Mystique: Dragon Ladies, Geisha Girls, and our Fantasies of the Exotic Orient (New York: Public Affairs, 2005).
Session 6
Tues., 4/8
Emerging and Transition Economies – Central Asia Introduction and Overview – How Things Really Work
Questions:
* What are the differences between emerging and transition economies?
* What are the major problems for economic reform in transition economies?
* What special issues do ex-pats face when attempting to conduct business in Central Asia?
READ
• Alena V. Ledeneva, “How Russia Really Works: The Informal Practices That Shaped Post-Soviet Politics and Business (Culture and Society After Socialism) (Cornell University Press, Dec. 2006), Ch. 1, pp. 10-27, Ch. 2, pp. 28-31, Ch. 3, pp. 58-66, Ch. 6, pp. 142-163 and Ch. 7, pp. 164-188 (CP).
• “How Things Really Work in Russia” (Russian Commerce News, May, 2001)(http://www.russianamericanchamber.org/newsletter/What_Tucker-Adams_Has.html).
• Richard T. Bliss, “A Venture Capital Model for Transitioning Economies: the Case of Poland,” Venture Capital, 1999, Vol. 1, No. 3, pp. 241-257 (CP).
• Roger S. Leeds, “Financing Small Enterprises in Developing Nations,” (Transnational Publishers, July, 2003), Introduction –“SME Investing: Some Common Features” – xxi-xxviii (CP).
Session 7
Mon., 4/14
Dealing With Corruption
Questions:
* How would you respond to the dilemma presented in the case?
* Is it possible to avoid dealing in corruption, or is it inevitable?
* How can American companies learn the best ways to manage competing political and business interests?
READ:
• John McMillan, “Private Order Under Dysfunctional Public Order,” Michigan Law Review, (Aug. 2000), Vol. 98, No. 8, pp. 2421-2424 (other sections optional).
• Katharina Pistor, “The Demand for Constitutional Law,” Constitutional Political Economy, (Mar. 2002), 13, pp. 73-87.
Prepare:
John Owens, “Stroi Service: Dealing with Bribery in Central Asia, and Conflicts Between US Law and Local Cultural Rules,” Tuck School of Business case study (CP).
Optional:
Background:
“Tricksters and Tyrants,” Canada & the World Backgrounder, March 2003, Vol. 68 Issue 5, pp. 8-13 (online syllabus).
Optional: “Put Your House In Order” (Central Asia Survey), The Economist, February 7, 1998, pp. 14-16, (Link to be provided via online syllabus).
Optional: Kathleen Collins, “Clans, Pacts, and Politics in Central Asia,” Journal of Democracy 13 No. 3 (July 2002), pp. 137-154 (online syllabus).
Optional: Pranab Bardhan, “Corruption and Development: A Review of Issues,” Journal of Economic Literature 35 (1997): pp. 1320-1346, (Link to be provided via online syllabus).
Optional: Robert Wade, “The Market for Public Office: Why the Indian State Is Not Better at Development,” World Development 13, No. 4 (April 1985), pp. 467-497.
Optional: Andrei Shleifer and Robert Vishney, “Corruption,” Quarterly Journal of Economics, Aug. 1993, 108(3):599-617 (Link to be provided via online syllabus).
Session 8
Tues., 4/15
Muslim Finance in Southeast Asia (with Professor Dirk Vandewalle)
Questions:
* How is Muslim finance different from Western finance?
* How would you have responded if you were the Malaysian finance minister? As a foreign investor?
* What are the ethnic/religious differences between Southeast Asian and Middle Eastern Muslims?
* What opportunities are there for foreign firms to become involved?
READ:
• Mohammed El Qorchi, Islamic Finance Gears Up, Finance and Development (December 2005, Volume 42, Number 4) (https://www.imf.org/external/pubs/ft/fandd/2005/12/qorchi.htm).
• Robert Hefner, “Islamic Economics and Global Capitalism,” Society 44, no. 1 (November/December 2006).
Optional:
Background:
Robert Hefner, “Islamizing Capitalism: On the Founding of Indonesia’s First Islamic Bank,” In Mark Woodward, ed., Toward a New Paradigm: Recent Developments in Indonesian Islamic Thought (Tempe: Center for Southeast Asian Studies, Arizona State University, 2003), pp. 291-322.
Optional: Muhammad Ayub, Understanding Islamic Finance (Wiley, 2008).
Session 9
Mon., 4/21
What Have We Learned?
Questions:
* What are the key lessons you have learned in this class?
* What are the key managerial issues facing companies in both environments?
READ:
• Morton Abramowitz and Stephen Bosworth, “Rethinking Southeast Asia,” The Century Foundation, April 21, 2005, http://www.tcf.org/list.asp?Type=NC&pubid=955 (online syllabus) (CP).
• C.K. Prahalad and Kenneth Lieberthal, “The End of Corporate Imperialism,” Harvard Business Review, August, 2003, pp. 109-117.
General Background (Optional)
BACKGROUND READINGS OF GENERAL INTEREST
Optional: Cathy McIlwaine, “Gender and Export Manufacturing in the Philippines: Continuity or Change in Female Employment,” Gender Place & Culture: A Journal of Feminist Geography (September, 1995), Vol. 2 Issue 2, pp. 147-77.
Optional: Francis Roman et al., Family Corporations in Transition (Manila: AIM, 2001)
Henry Wai-chung Yeung, “Economic Globalization, Crisis and the Emergence of Chinese Business Communities in Southeast Asia,” International Sociology, Vol. 15 Issue 2 (June, 2000), pp. 266-88.
Ruth McVey, ed., Southeast Asian Capitalists (Cornell, 1992)
Virginita Capulong Ma, David Edwards, and Juzhong Zhuang, eds., Corporate Governance and Finance in East Asia: A Study of Indonesia, Republic of Korea, Malaysia, Philippines, and Thailand: Vols. 1 and 2 (online at: http://www.adb.org/Documents/Books/Corporate_Governance/Vol1/default.asp
Optional: Adam Schwarz, A Nation in Waiting: Indonesia’s Search for Stability (Westview Press, 2000)
David Steinberg, The Philippines (Westview Press, 2002)
Stanley Karnow, In Our Image: America’s Empire in the Philippines (Ballantine Books, 1989)
Irene Franck and David Brownstone: The Silk Road A History, Ch. 9.
Peter Hopkirk, The Great Game: The Struggle for Empire in Central Asia, Prologue, Chs. 5, 10, 24, 25.
Lutz Kleveman, The New Great Game: Blood and Oil in Central Asia, Chs. 1-3.
Charles King, Black Sea: A History, Chs. 1, 6.
Oliver Roy, The New Central Asia, Chs. 1, 9, 10.
Shirin Hunter, The Transcaucasus in Transition, Chs. 1-2.
Robert Kaplan, Eastward to Tartary, pp. 220-308.
Optional: Energy Information Administration: Country Analysis Briefs: Click on Caspian Sea Region, and Caucasus Region.
Optional: For statistical information on the individual countries in the region, go to the CIA World Factbook.
Optional: For maps of Central Asia, see the UNEP site:
Click on the special map section. This site has excellent links to the programs of other international agencies in the region such as the WHO, UNDP, and the World Bank. Ignore the link International Fund for Saving the Aral Sea. It takes you to a pornographic site.
General Background (Optional)
BACKGROUND
Optional:
THE PHILIPPINES AND SOUTHEAST ASIA:
Stanley Karnow, In Our Image: America's Empire in the Philippines (Ballantine Books, 1989).
Alfred McCoy, An Anarchy of Families (University of Chicago Press, 1994).
Walter Hatch and Kozo Yamamura, Asia in Japan's Embrace: Building a Regional Production Alliance (New York: Cambridge University Press, 1996).
Optional:
WEBSITES ABOUT ASIA:
Far Eastern Economic Review: http://www.feer.com/
Optional: Asiaweek: http://cgi.cnn.com/ASIANOW/asiaweek/
Optional:
WEBSITES ABOUT SOUTHEAST ASIA:
Makati Business Club: http://globe.com.ph/~mbc/welc.htm
Optional: Ayala Group: http://www.ayala-group.com/default.html
Optional: US Embassy in Manila: http://www.usia.gov/posts/manila
Optional: Asian Institute of Management: http://www.aim.edu.ph/
Optional: Singapore Straits Times: http://straitstimes.asia1.com
