Sometime back, I was in Shanghai on a conference. During that trip, I asked a Singaporean friend (who has been working there for at least two years) to tell me more about the business culture and what are the rising industries there. He told me that the Singaporeans are better in the education sector as compared to the other sectors in Shanghai. In his opinion, Singaporean business men did not do so well against businesses from Hong Kong and Taiwan, particularly the food and beverages industry.
He offered an explanation on why this is so. Most Singaporean business men (and there may be exceptions) tend to work on free market principles rather than relationships. What does that mean? The Singaporean business men do not care whether they are collaborating with other Singaporeans and believe that they extract the best value by going for the lowest costs and maximum return. Some calls this pragmatism and the principle of free market. In case of business men from Hong Kong and Taiwan, they tend to work with their fellow country men to maximize their winning chances. Some calls this trust or relationships. As a result, Singaporean business men lose out in some major industries in China. Of course, there is no right and wrong to how one should do business and I am not in any position to criticize anyone's way of doing business.
Somehow, it offered me some perspective as to why some Singaporean businesses have difficulties on gaining a foothold in other countries. My sense is that a lot of that stems from our culture. Singaporeans grew up with a meritocratic system where people are concerned with their own grades. I can substantiate with my experiences talking to students from schools. When you are in a secondary school and junior college, the immediate response from contributing to community projects will be "Does it help my ECA or increase my chances in getting into universities?" The reward incentive comes first before the objective. Hence it may rub people the wrong way. Second, Singaporeans place a value on brand rather than relationships. They prefer to work with a credible and big company than with a small and upcoming company. The same goes for the way how people employ in Singapore at one point of time: some business men employ cheaper Indian and Chinese engineers as compare to the Singaporean counterparts.
The same attitude is translated into the way which they do businesses. So, as a result of our cultural upbringing, the pragmatism shaped a different business culture unlike those of Japan, Korea, India, China, Taiwan and Hong Kong, where they tend to work with their own fellowmen. Ultimately, whether you are doing businesses in the east and west, credibility and trust are important attributes to successful businesses. Singaporeans tend to work on credibility but not so much on trust. It may be useful to bear that relationships (in the theme of trust) may actually help to create a win-win situation.
Comments (4)
Hey BL, this comparison is quite common in scholarly discussions too, sometimes guanxi is seen as a variant of corruption, sometimes as a positive Asian value. My own take: the reliance on one's own ethnic networks is universal (rather than Asian) when one is faced with strong business competition or the lack of strong government enforcing clear market rules. Thus, that S'poreans are not reliant on ethnic networks show the lack of competition and/or too strong a government, or perhaps, simply, a lack of trust and a disdain for their fellow countrymen.
Posted by dansong | July 17, 2007 2:44 PM
Hey Dan,
I agree with you on that. I am inclined to believe that the reliance on one's own ethnic networks is universal. Let me use another example. For e.g. in academia, some professors in the UK from overseas tend to prefer to work with people from their home countries. I have seen cases where some academics pick their PhDs based on guanxi (the Indians, South Africans, South Americans and Chinese) rather than merit.
A personal story to share. I once wanted to offer a summer research project to the Singaporean scholars which I know will end up in a research publication. Of course, since no Singaporean take it, I offer it to my foreign students who were queueing up for it. A German student of mine took it, and he ended up in Princeton. I also know of prominent Singaporean scholars out there (who does not seem to be doing what the other nationalities are doing). Perhaps, an American friend of mine is right, "Singaporeans seems to hate fellow Singaporeans for some reasons."
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July 17, 2007 3:31 PM
BL,
Another hypothesis is that given the much smaller size of the Singaporean business community (within or outside Singapore) as compared to Hong Kong, Taiwan, India etc, it may be statistically harder to find fellow Singaporeans to do business together. Therefore, there may be a greater incentive to look for business people from other countries. For the business people from other nationalities, it may be easier for them to find someone else within their country network to work together.
Dan,
I will assume that the more successful and sharper business people from Singapore will work with Singaporean or non-Singaporean to achieve maximum economic benefits, rather than choosing not to work with other Singaporeans for non-economic reasons.
What may be the reason why Singaporean business people will inherently trust other Singaporean business people less as compared to non-Singaporean? I think trust is a rather individual issue in business, depending on whom you work with.
Posted by Soon Sze Meng | July 18, 2007 1:32 PM
i think this is due to the fact that people from Japan, china, taiwan and hong kong and singaporeans have some kinda different culture background. in the previous ones, people believe in Confucious, which has a history of five thousand years. one of the most important points that emphazise in Confucious is about the complex relationship. some chinese people have the opinion that if u want to run business successfully in china, you must first build a very concrete realtionship with different kind of people. the relationship with the local government is quite critical for a company.
while, singapore culture has been influencd by the western culture. people believ that hard working can make more than what ur background that suggest u cn do.
as long as u cn make large amount of money and make ur compnay famous, you can get the promotion. but this may not work well in counties like china, taiwan. how u can intercommunicate with people will affect ur position in the company. so if u determine to work in china, you probably have to build strong realtionship with ur collegues.
Posted by lindsayfm | August 8, 2007 2:47 PM