Name: Koyel Ghosh

MBA Cohort 6 Section A

How ASIAN business system is asian:

There are few distinguishing features in asian business system that made it unique and different than
other systems such as western or European business systems. Multiple social, cultural, economic and
technological factors attributed to this difference.

Social/cultural factors: To understand the difference between asian and other culture, we need to
understand the difference between HIGH-CONTEXT-CULTURE and LOW-CONTEXT-CULTURE.
Businessmen/ Employees from high-context cultures adapt to their good friends, families and also to
close colleagues (in-group members). They communicate with them intensively and exchange detailed
information about many different topics. The result is that every in-group member is constantly up-to-
date with the facts around the business. On the contrary, low-context cultures orientate on many
people of their daily life because they don’t differentiate as much as high-context cultures between in-
and out-groups. So their direction of communication is orientated on personal characters and referred
to situations. They mostly communicate within their out-groups in a broad and diffuse way. Within
communication they exchange information just to the necessary extent so that work can be done and
they don’t discuss or exchange information constantly in their work environment and colleagues. Asian
countries Japan follow High context culture while western countries like USA, Germany follow Low
context culture. High-context culture values family and honor whereas low-context culture gives
emphasis more on financial gains and profitability. But these days many asian businesses are
transforming them to corporation from family businesses though there are higher stake of families in
those corporations.

Economic factors: Variations in organization structures, market economies and dominant market factors
or economic agents makes asian business system unique and different than others. Asia is the most
populated and rich in natural resources continent in the world. But its proportion of population living
under poverty line is also high and much of the natural and mineral resources are untapped. So western
countries have a natural interest in tapping asian abundant resources for their growth and prosperity. It
made asian countries skeptical of open economy in the past, so they kept themselves in closed economy
for many years. But lack of infrastructure, technological knowledge and realization of mutual benefit
made them to open their economy and go global. So there is a dilemma in many asian organization
between going global or be within the geographical boundary and serve internal market.

Technological factors: As asian business needs to cater to large population in cheaper rate, so it makes
technology more challenging to help business. This leads to economies of scale production system and
better waste management technology in resource management such as Just in Time delivery system.