 |
 |
|
AM Lecture 4Management > Asian Management > Culture-organisational background > Laoban characteristics
Laoban characteristicsLaoban have a number of distinguishing characteristics: Independence from the government Diversification of business contracts, which adds to economic strength. Subcontracting networks among SMEs very highly developed. The wide range of business partners spreads risk and the links are informal, like a traditional CFB. Risk-taking, such as taking the first mover advantage in moving abroad. Businesses in low-skilled and labour-intensive export-orientated markets, where entrance barriers are very low. This means that they can take more risks as they have less to lose by making leaps into the unknown, such as working cross national borders. Laoban are very quick-moving and flexible organisations, and their decision-making skills are swift. This can be compared to the slow decision-making abilities of the Japanese Keiretsu, due to their massive size. Primarily profit-seeking organisations Family assets over corporate capital. These firms have developed from family businesses, and as the business environment is unstable the most beneficial course of action is to support the family. Tend not to reinvest profits to enhance their firms' capital, but to enlarge their families' assets. As the main goal is to support the family (since the government isn't going to help), firm capital remains low. However, they can create economic power through partnerships. Emphasis on not losing independence. The Taiwanese pride themselves on being independent. It is a strong cultural issue and it stimulates the desire for everyone to want to be their own boss. Every employee is a Laoban in waiting. You lose your independence in working for someone, but this is temporary. This means that SMEs can rarely expand, as it is difficult to keep or expand the workforce. Partnerships are used to exploit business opportunities. It is an effective means to maximise profits. Everyone in a partnership has equal say in decision-making. There is also the option of easy exit, meaning that parties can leap out of a deal quite easily. This results in an emphasis on developing harmonious relationships (guanxi), as it keeps people in the bargain and spreads risk. This is all done without a written contract. Partnerships in Laoban demonstrate skillful and effective use of personal networks and points to organisational innovation, rather than technological innovation.
Laoban have a strong overseas orientation, which is normally preserved for large MNEs, but here is works well for SMEs.
Internationalisation of Taiwanese firms
|
|
