Foreign Policy wrote an interesting article on 10 Reasons Countries Fall Apart, looking at some of the reasons economies and governments fail. “Most countries that fall apart, however, do so not with a bang but with a whimper. They fail not in an explosion of war and violence but by being utterly unable to take advantage of their society’s huge potential for growth, condemning their citizens to a lifetime of poverty.” It made me think about the ways Western businesses, not with a bang but with a whimper, keep Asian employees in poverty despite injecting huge amounts of money and opportunity into the economy.
Obviously, I am no expert on what I want to write about – I am just a simple person with some observations and personal experiences. I’ve lived and worked in Singapore for 2 years (some would argue, it’s Asia for dummies) and have a wonderful Singaporean partner and family in law. So, please take this all as a bit of an essay – in the truest sense of the word, which came from the French word ‘essayer’ which means to try. I’m just trying out a few viewpoints to see what I come up with.
Asia is developing, but still has living standards far below those of the West. Western businesses are a great way to bring money and job opportunities to a new market. It’s a place ripe for profit making, with cheap labour and emerging middle classes. However, there are Western businesses that come in and make a quick buck, and there are Western businesses that transform the working landscape of the country for the better.
1. Lack of Property Rights – Lack of Decision Making Authority
Foreign Policy writes that “North Korea’s economic institutions make it almost impossible for people to own property; the state owns everything, including nearly all land and capital.” As a consequence, this “destroys their incentive to succeed.”
A parallel I have observed with Western businesses in Asia, is operations that place all decision making power with the home country operation – or only allow home country expatriate employees in Asia to make the decisions. This strips the decision making authority from local employees who may have the competency, and even the position in the organisation, to make these decisions. Their skill and expertise, no matter how excellent, eventuates to reporting and recommendations. The opportunity to become a decision maker is simply not available, and it’s completely demotivating.
Just as “in 1998, [when] a U.N. mission found that many of the country’s tractors, trucks, and other farm machinery were simply unused or not maintained,” in these kinds of organisations, I often find disempowered employees simply don’t use their higher skills or choose not to maintain them. When there is no opportunity to be promoted for using these skills, what is the point?
Now of course, unlike the unfortunate North Korean population that is unable to move, employees are able to change employers. But positions with no decision making power tend to become résumé deadwood. The employee comes out of the organisation in a daze. Their decision making muscles have not been flexed, they have not learnt and developed from their own mistakes. They are not able to go into that interview and wow future employers with their professional growth. In order to change employers, they are generally required to make a sideways move, rather than an advancement.
I believe a society advances most when positions of power are held by the people of that society. Colonialism sucked – its modern descendent of Western businesses in Asia sucks too. Western business would bring prosperity to Asia by entrusting decision making authority to Asian employees. This act would develop individual’s careers, change their lives and their family’s lives as their income increases, it would expand the local talent pool for future ventures, and it would change the employment landscape as opportunities become evident for future generations. The transfer of skills, so that the transfer of power can be made, results in a great transfer of prosperity.
Of course, this is all written from my simple observation and personal experience. So what do I really know? I am definitely no authoritative expert on this subject – I look forward to your take on it all. Please, do comment below.
Btw, if you’re wondering how I can be employed in HR, and write about HR – here‘s my explanation.