Professional Documents
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1. CONTENTS.................................................................................2 2. `SAN LU`, THE CHINESE MILK PRODUCTS MANUFACTURERS PRODUCT FAILURE: CHINESE MILK SCANDAL CAUSES RIPPLES WORLDWIDE................................................................1
a.THREE (3) main reasons for serial product failures and frequent food crises in China...............................................................................................................1
4. B.SPECIFY THE SAN LU MILK CRISIS AND HOW IT AFFECTS THE COMPANYS PERFORMANCE..........................................7 5. PAOLA SAPIENZA AND LUIGI ZINGALES. (2009) MEASURING TRUST; INTRODUCING THE FINANCIAL TRUST INDEX . 7
c.THREE (3) ways and means available for San Lu to manage the crisis in the short term as well as the long term. ................................................................13
6. LOONG
a.Major ideology differences of Lee Hsien Loong as compared to Lee Kuan Yew, the development of Singapore under his new leadership and the challenges ahead for the incumbent prime minister. ..............................................17 b.Singapore's current economic and social problems and the Prime Minister's efforts to deal with them. .............................................23
c.The concentration of decision-making power within the Lee family and the pros and cons for the Singaporean citizens........................................................26
7.
8. QUANG LUONG; KAMAL MOHAMMED; RUTA RUTKAUSKAITE; [2007]: BUSINESS OWNERSHIP AS A SOLUTION TO UNEMPLOYMENT : A CASE STUDY OF SELF-EMPLOYED IMMIGRANTS IN JONKOPING MUNICIPALITY........................................29
b.THREE (3) major barriers for Datuk Maznahs business in order to face challenges and the reasons why it prevent her business to succeed in the competitive environment............................................................................................32 c.THREE (3) main areas of the Knowledge Revolution needed by Datuk Maznah and the issues to be address for each..........................................................35 man. d.Perception of a ladys managerial capability in business as compared to 42
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`SAN LU`, THE CHINESE MILK PRODUCTS MANUFACTURERS PRODUCT FAILURE: CHINESE MILK SCANDAL CAUSES RIPPLES WORLDWIDE
a. THREE (3) main reasons for serial product failures and frequent food crises in China.
Weld Royal (11.1.1999)1 in his article stated that many manufacturers are reducing their costs of production via sub-contracting; they divested their manufacturing operations and sub-contracted the jobs to foreign owned operations overseas such as in South America and Asia. Many of these divested operations faced quality problems due to product quality problems arising from besides labor, processes and standards related problems; this function as an opposite of the intended affect of being able to achieve better profitability. In the meanwhile Md. Ashfaqul I. Babool and Michael R. Reed2 indicated of the problems faced by developing countries food producers in trying to comply with the more stringent food safety standards imposed by developed countries. A wide range of chemical substances including pesticides were used in food production and processing. However developed countries are found wanting in terms of compliance to those standards imposed on them by the developed countries. Production control procedures, raw material acceptance testing, quality control of finished product are part of the internal regulations that can be put into place in organizations that are then going to be monitored and enforced by the government. Even in a metal based industry controls and regulations become part and parcel of operations what more in regards to food based industries that
Weld Royal (Industry Week Publication Date 11.1.1999) Contract Manufacturing: Perils And Profits Veteran companies struggle with crooked contractors, quality and labor problems, and outsourcing decisions. 2 Md. Ashfaqul I. Babool & Michael R. Reed (2007) Food Safety Standards and Export competitiveness in the Food and Processed Food Industries in Asia-Pacific Countries
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are to be consumed by humans. These control activities become the utmost importance for organizations in order to prevent product failures and crisis China is the third largest economy in the world in the year 2008, with a Gross Domestic Product (GDP) of USD 4,222,000,000,000, based on the Wikipedias publication; http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal). China had been known for the last many years as an emerging economy and also being cheap producer of goods, hence the necessity in the part of China to be able to maintain its low production cost to attract businesses to establish manufacturing plants in China. However, in its efforts to being a cheap alternative, over last several years Chinas reputation as a low cost producer of goods had been tainted by product failures and frequent food crises.
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Three main reasons for the serial product failures and frequent food crisis in China are primarily due to: Weak Federal Government regulatory systems and enforcement. Lack of corporate governance. The need to produce cheap goods to stay competitive.
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to provide cheap production costs but also to have the regulations to ensure safety and health of consumers are protected. In passing the regulations, China is plagued with overlapping and also conflicting regulations and this proved to be a weakness in Chinas regulations. The regulations, policies and standards may have been put out as laws to be complied with, but the enforcements of such laws had been found to be difficult to be carried out to the fullest extent. Being a vast country did not help the Chinese government to enforce such regulations, thus this function as a loop hole in Chinas effort to regulate its industries, creating crises such as San Lu
Lin, C. (2002, updated 2009) Corporation and Corporate Governance in China's Economic Transition.
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governments shareholding in those firms also functions as a hindrance to these organizations when insiders were colluding with each other. The lack of experience and the traditional business paradigms as oppose to a global business paradigms function as another factor in these lack of governance.
Corporate governance consists of the set of processes, customs, policies, laws and institutions affecting the way people direct, administer or control a corporation. Corporate governance also includes the relationships among the many players involved (the stakeholders) and the corporate goals. The principal players include the
shareholders, management, and the board of directors. Other
stakeholders include employees, suppliers, customers, banks and other lenders, regulators, the environment and the community at large.
http://en.wikipedia.org/wiki/Governance#Corporate_organizations There is a high likelihood that corporate governance is being subordinated by the greed to make more money. Corporate governance functions as a check and balance mechanism for organizations to enable them to operate in an ethical manner, to safeguard the interest of every stakeholder. As discussed above the weak regulations and the lack and difficulty of enforcements of those regulations had proven to be a source of problem for Chinas industries. Corporate governance is supposed to complement the regulations to protect the interest of every stakeholder, and hence compliance to corporate governance became the responsibility of every officer of the companies.
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These two instances, the weak regulations and enforcements and the lack of corporate governance, seem some what complimentary in China spiraling into product failures and crises.
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the multi-nationals that operated in China would also sub-contract the manufacturing of their products to Chinese companies. With the speed of businesses relocating it was highly likely that China, in its eagerness to expand its economic reach, since its market liberalization and opening its door to foreign business had not been able to introduce, implement and enforce a proper control system and mechanism of compliance to its industries. The companies which are benefitting from this liberalization too had not been able to put into place and implement such internal regulations. This resulted in the Sanlu milk crisis and many other product failures.
b. Specify the San Lu milk crisis and how it affects the companys performance.
For all intent and purpose, I believe that San Lu is on its way to cease to exist. There is already a withdrawal of trust by the public and corporations onto Sanlu and this would greatly affect Sanlu presently and in the future. An interview between Amy Trang and Professor Paola Sapienza published by the Kellog School of Management, NorthWestern University United States of America4 (2009) stated of a new measure for businesses called the Trust Index' where it measure the loss of confidence in financial institutions stating how trust has a bearing on businesses financially. Paola Sapienza and Luigi Zingales5 (2009) stated that the new measure of a nations financial strength or weaknesses is now about Trust. They included the value of trust in terms of social capital and also economic behavior. In this regards, we can easily say that the same measure that a nation has would also
4
Kellog School of Management, NorthWestern University United States of America , A trust crisis As the economic crisis deepens, Professor Paola Sapienza's 'Financial Trust Index' measures the loss of confidence in financial institutions (2009)
5
Paola Sapienza And Luigi Zingales. (2009) Measuring Trust; Introducing the Financial Trust Index
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be the measure for any organization, be it for profit or not for profit organization. These would directly impact businesses if they do not have the trust in their relationships with all the stake holders. Base on the above, there is a direct relationship between trust and a companys performance. If there is no trust or lack of trust by the consumers, investors, stakeholders and general public onto a company, it would not bring the kind of economic impact that the company planned to achieve. What needs to be understood is why this crisis had become such a landmark case for China and the whole world. First, it concerns a product failure. Second is that the product in question is food and more so for consumption by human. Third is where San Lu had serially recorded product failures. San Lu is company involved in the manufacturing of food products. Being the manufacturer of a certain product encumbered the company to comply to certain product standards that define the products as fit for use or to be consumed. In San Lus case, the product failure was then compounded by the fact that the product that failed was food supposedly to be consumed by human and what more the furor was over the fact that baby milk was one of the product affected, causing several deaths. It was not the first time that San Lu had failed on its production, the first case happened in the year 2004.
A December 7, 2004 reprint of state-run Xinhua news by China Pharmaceutical News headline reading: Sanlu Powdered Milk: Turn Crisis into an Advantage provided a clue that the group was aware the powdered milk had been tainted. On January 16, 2004, Zhang Guangkui of Yongzhuang Village, Luzhai Town, Linquan County, Fuyang City, Anhui Province complained that the Sanlu infant powdered milk formula that he bought was tainted. On April 22, the front page of local Fuyang newspaper Yingzhou Evening News printed a list of tainted powdered milk brands resulting from the spot check. Sanlu infant milk formula was 32nd on the list.
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On the same day, Sanlu Group deputy general manager Zhang Zhenling and other high level staff members hurried to Fuyang City to negotiate with the local government. A statement said: a mistake was made by related workers and Fuyang City apologized. http://feww.wordpress.com/2008/09/23/sanlu-was-first-banned-in-2004-thenreinstated/
However San Lu was then reinstated to continue production, and due to weak regulations and enforcements and corporate governance, of tainted products. What is the San Lu milk crisis essentially? In a nut shell, San Lu being a producer of milk based product, added into their milk production a substance called melamine cyanurate or better known as melamine to make diluted or poor quality milk to appear to have more protein content when tested. In so doing, San Lu would be able to use poor quality milk added with melamine, which generally would not pass food quality standards, to show compliance to standards imposed on them by their business principals. Melamine, instead of enhancing the milk products acted as a contaminant that affected thousands of babies. Posted Thu Sep 18, 2008 11:00 a.m. AEST. Updated Thu Sep 18, 2008 12:39 p.m. AEST
Ten-month-old Hao Jiaqi receives medical treatment after a bladder stone operation at a hospital in Bengbu, Anhui Province, China, on September 12, 2008. (Reuters)
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The New Zealand milk company caught up in the Chinese milk powder crisis says it has a responsibility to help deal with what it calls a "criminal contamination".
More than 6,000 babies are sick, three have died and 150 have serious kidney failure after drinking milk powder that had been deliberately contaminated with melamine, a toxic substance used in plastics.
http://www.abc.net.au/news/stories/2008/09/18/2367880.htm
How then San Lu is affected by the crisis? Financial Losses Withdrawal and absence of foreign partnership/collaboration Withdrawal of market confidence on the company
1. Financial Losses
When the first food poisoning crisis committed by San Lu in 2004, sales fell and contributed to losses of tens of million of Renminbi (Chinese currency). The financial losses may come from: a. b. c. d. Decline in sales. Payment of damages to consumers affected by melamine consumption. Payment of fines to the government. Penalties imposed by principal partners for non-compliance to contract terms. As of to date, the actual total of financial damages to San Lu has yet to be finalized and there is a likely hood over all this that San Lu may file for bankruptcy protection. The Sanlu Group, the source of tainted powered milk, will pay huge refunds and even medical bills for babies suffering from kidney-stones. Sanlu, facing
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the fate of bankruptcy, would layoff 30,000 employees. Those who would be impacted nationwide may reach 350,000. Hong Kongs Ta Kong Po online newspaper quoted a source as saying that the communist regime has frozen various Sanlu accounts amounting to 800,000,000 Yuan (approx. US$116,876,000). It was estimated that Sanlu would recall the powered milk, as much as 10,000 tons and pay compensation of up to 700,000,000 Yuan (approx. US$102,277,000). http://www.theepochtimes.com/n2/content/view/5054/
They've only got a 43 per cent share in the company ... they needed to have the controlling interest or this sort of thing was going to happen."
Fonterra had also indicated of writing off its investment in San Lu amounting to $139 million. Mr. Hazlehurst said the "flow-on effect" to farmers like
himself was inevitable after the company said it was writing down its investment in the Chinese milk company by $139 million
http://www.nzherald.co.nz/the-fonterra-float/news/article.cfm? c_id=1501678&objectid=10534448 Being a business concern, Fonterra will be highly concerned to its reputation as not an investor in San Lu but of its reputation being a New Zealand company, where many of its shareholders are also its milk suppliers.
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Fonterra in this case would pull-out of its investment in San Lu, thus also would not want to further collaborate with a serially tainted company. On this eventuality, there is likelihood that no other foreign company would want to invest or collaborate with San Lu.
US$14,610,000) if each victims hospital expenses amount to 10,000 Yuan (US$1,461); Sanlu might have to sell assets, including production facilities if it recalls liquid-milk products in the near future. The insider said, The brand is not worth a damn right now, which used to be worth one billion. A company wont survive without funds and a brand. http://www.theepochtimes.com/n2/content/view/5054/
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c. THREE (3) ways and means available for San Lu to manage the crisis in the short term as well as the long term.
In time of crisis, businesses would scramble to minimize the economic impact to their financial positions. Professor Daniel Diermeter in his research entitled Crisis Management Essentials (2003)6 indicated that when a crisis is handled by the Public Relations and/or Legal departments of an organization, it would be just too late as the crisis has already happened. Offhand, this section is only answered because it is assumed that San Lu would still be operating. Should San Lu cease to exist there is simply nothing to manage. Should the Public Relations and/or Legal Department had gotten involved in the crisis then it means that the crisis is already full blown, and what organization is doing is to only mitigate the crisis. What really needs to happen is also to prevent a crisis from happening and hence we are looking at both short-term and longterm initiatives to be implemented by Sanlu. At the same time the Chinese federal government, through its Chinese Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) must play a more proactive role as an enforcer of standards. Both, the business and the governmental regulatory bodies, need to be cooperating and working in tandem to ensure that any other incidences of this type no longer would happen. In order words, instead of looking at it in the context of crisis management, they need to look at it in the context of crisis prevention.
Prof. Daniel Diermeier: Crisis management essentials; (2003) Business, it seems, has entered the age of crisis. Almost every day another venerable company or institution finds itself in the headlines, and usually not in a flattering context.
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What can be done by Sanlu in this case are: Damage control apologies to the market, payment of damages and product recall short term Recover market confidence rebranding as a responsible corporate citizen short term/long term Corporate governance - Implementation of controls and standards, and enforcement long term
1.
Damage control apologies to the market, payment of damages and product recall short term First of all the owners and the managers of San Lu has got to issue a public apology to everyone affected, directly and indirectly, by the crisis. It must show remorse over what had happened. This would also entail the removal of all those involved and the termination of any contractors or vendors or suppliers who were in the know of what had happened. The next thing that San Lu can do is to assume the payment of damages, health or otherwise, for any cost incurred as an outcome of the scandal. There were many parents who reported of their children coming down with health problems and needed medical treatment. San Lu will bear the cost of treatment, caused by melamine tainted products produced by San Lu and its associate companies. This may prove to be costly and would drain the financial resources of the company and thus disrupt San Lus financial independence. Products recall exercise of products produced by San Lu and its associate companies that have milk as its primary component, to be implemented. This may also entail a global recall of products. This is also another costly exercise.
2.
Recover market confidence rebranding as a responsible corporate citizen short term/long term
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San Lu needs a corporate make-over after going its second crisis/scandal over a 5 year period. It needs to rebrand itself a responsible corporate citizen, having the welfare of its customers and stakeholders at heart. Implement a communication exercise to inform the public of its efforts to handle the crisis and to stop the recurrence of the same crisis. San Lu may need to lay out its plans, the steps it is going to implement and explain how these may stop the recurrence of the scandal. Changing its name from San Lu to something else may work in the short run; however it may be misconstrued by the public as an effort to hoodwink them. Internally, San Lu needs to garner the loyalty of its workers, to be the ambassador of the company, in informing the public of its efforts to rectify and prevent the crisis from happening again. Internally too, the workers must be convinced that San Lu is sincere in its effort to stop the crisis, otherwise the rebranding as a show of corporate commitment may not succeed as a result of no internal buy-in.
3.
Corporate Governance implementation of systems, procedural controls and standards, and enforcement long term Even though, as mentioned in the earlier part, that the Chinese government had implemented weak, overlapping and confusing regulations to regulate the manufacturing industries, San Lu would need, on its own, to implement such regulations internally to complement and enhance the external regulations. These would include: o Decision making controls, separating management and operational decision making. This would allow the separation of power and deter management from interfering or unilaterally deciding on production or operational matters. o Operations control, such as the vendor selection, material selection to ensure compliance to standards, particularly health and safety.
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Incorporating quality control standards. One of the primary reasons for the crisis to happen was the lack of quality control with regards to the melamine or any contaminant and toxic content in the milk products. This would allow testing to determine the presence of contaminants in food products and also whether it is within the safety standards determined by the Chinese Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) and also by the World Health Organization (WHO) 7 (2009). The same can also be implemented onto vendor supplied materials used in Sanlu produced products.
Incorporating audit and compliance processes to ensure the adherence to the defined standards, and to strictly enforce the standards.
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a. Major ideology differences of Lee Hsien Loong as compared to Lee Kuan Yew, the development of Singapore under his new leadership and the challenges ahead for the incumbent prime minister.
Ideological Differences Ideology is defined by Wikipedia as; a n ideology is a set of aims and ideas, especially in politics. An ideology can be thought of as a comprehensive vision, as a way of looking at things as in common sense and several philosophical tendencies or a set of ideas proposed by the dominant class of a society to all members of this society. The main purpose behind an ideology is to offer change in society through a normative thought process. Ideologies are systems of abstract thought (as opposed to mere ideation) applied to public matters and thus make this concept central to politics. Implicitly every political tendency entails an ideology whether or not it is propounded as an explicit system of thought.
First of all I would like to suggest that there are no political ideological differences between Lee Hsien Loong (Lee HL) and Lee Kuan Yew (Lee KY). Lee HL joined politics in 1984, joined the Peoples Action Party (PAP) a political party of which his father founded in the 1950s/1960s. PAP was an offshoot of the Malaysian based Democratic Action Party (DAP) which was established based on a certain political ideology. The fact that PAP is a political party it is thus understood that it has its fundamental ideology as to define its aims, ideas and vision to pursue, refer definition by Wikipedia above. I would put forward that, by virtue of Lee HL joining PAP, it is then hypothesized that he shared the same political ideology as his father, Lee KY as one that would ultimately uphold the ideology of PAP. However having the same ideology, does not mean that Lee HL would act on the same things as his father, behave and have the same character traits in the same ways as his father and
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share the same ideas as his fathers. Based on the research by Benjamin F. Jones and Benjamin A. Olken (2005)8 it can be stated that a leader can have a different style and focus than the ones earlier or the ones succeeding him/her. Each would have their own ways of doing things, subject to the needs of the day and thus focus on what needs to be done. Each leader is a man of his own in order for him to make the organization, in this case a country, to be able to withstand the challenges of the day and the future, and to be able to act on the present needs and challenges. It is suggested then, these following differences between the two of them as the Prime Ministers of Singapore, that arose from the different eras, education, political and economic climates during their respective times: What can be termed as differences between these two could be in the form of how the PAP might have changed over the last 40 years in Singapore based on the challenges that were and are faced by Singapore from the period of 1950s until the new millennia of 2000s. Formation of the PAP On November 21, 1954, Lee, together with a group of fellow Englisheducated middle-class men whom he himself described as "beerswilling bourgeois" formed the socialist PAP in an expedient alliance with the pro-communist trade unionists. This alliance was described by Lee as a marriage of convenience, since the English-educated group needed the pro-communists mass support base while the communists needed a non-communist party leadership as a smoke screen because the Malayan Communist Party was illegal. Their common aims were to agitate for self-government and put an end to British colonial rule. http://en.wikipedia.org/wiki/Lee_Kuan_Yew
Benjamin F. Jones and Benjamin A. Olken,; (February 2005): Do Leadership Matter? National Leadership and Growth Since World War II;
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The PAP was formed with the initial leaning towards the communist/socialist ideology. However during the many years Singapore had transformed itself on an exemplary Capitalist state. Whilst Lee Hsien Loong was too small to be able to form much an opinion during the initial phases of Singapores nationhood, he became actively involved in politics in 1984, or was earlier exposed to politics, during a time when Singapore had turned itself into Capitalist country. Therefore in terms of ideological difference between these two Lees, would lie in the phases of their respective active participations in politics, seen in the following areas: o o Focus areas and challenges Leadership styles
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Lee Hsien Loong: During his time Singapore was already known as the country that was not reliant on natural resources, having established itself as one of the financial capitals of the world, and having zero borrowings. It was a country with economic vibrant. However that does not mean Lee HL did have his focus areas: Maintaining and improving economics results of the previous 2 Prime Ministers in making Singapore into what it was in 2004, when he took over. This involved economic activities that would ensure that the economic results are sustained. Growing the population: Singapore to a large extent was challenged over its lack of population growth. Singapore was developing to become a country that lacked the population growth to enable it to continue to become the prosperous nation. There was a gap in the population as to the number of young people who can take over the running in the various areas of the country. Singapore relaxed its immigration rules to attract foreigners to set up base and to apply for Singapore citizenship. There were even incentives to encourage couples to have more than 2 children. Social reforms: Singapore had a large population of young people, living a wealthy country, with modern technology available. These coupled with the fact that Singapore is also a melting port of culture, brought forth social problems. Security and safety: The infamous 911 (Al-Qaida attack on the Twin Towers) brought about a heightened state of security. Singapore having had its own local Al-Qaida cell and its proximity to Indonesia became a concern.
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Autocratic: security and safety of the country being paramount, to stabilize the country from political turmoil. Known to apply the use of Internal Security Act (ISA) to imprisoned dissidents and oppositions. Diplomatic in order to establish international relationships with other countries Lee Hsien Loong Reformist: to reform Singapore as a country that has the number of population ample to carry the economic challenges of the country. Consultative: he needs be because not only he needs to understand the new economic challenges but also having 2 Senior Ministers, who are his predecessors. Modernist: to bring forth Singapore into the 21st century, with Goh Chok Tong coming from the same school as Lee Kuan Yew. Liberalist: allowing homosexuality in the open. Development of Singapore under the premiership of Lee Hsien Loong To say that his work is already cut out for him, having taken over from the previous 2 Prime Ministers would be an understatement. Singapore had grown to be financially and politically stable country. Much of the question would lie in the manner in which how he would ensure that Singapore would be able to sustain, if not improve on the two factors. Some of the development initiatives are to sustain the stability are: Introduction of a 5-day work week to enable people to give it all during work days and spent time with their families to encourage harmony. Introduced a 2-month paid maternity leave and financial incentives for giving birth to the 4 child. This was initiated in response to the declining birth rate in Singapore, in order to ensure that Singapore has the population to carry out its policies. Liberalizing businesses to allow for Integrated Resorts that incorporated gambling into the resorts.
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Introducing the financial Progress Package where surplus budget from the previous financial years where are cash distributed to adult Singaporean as means of topping up pension funds, finance education, utility rebates. Stronger relationships with the likes of United States of America and China to ensure growth of bilateral trades.
Challenges for Lee Hsien Loong As mentioned above, in each would have their own challenges. I would like to touch only on two things: Taking over from Goh Chok Tong. Goh Chok Tong left the premiership post to Lee Hsien Loong at the time where Singapore is stable and economically healthy. His challenge primarily would be whether he can continue the remarkable work that Goh Chok Tong had done. During that same time, terrorism became something of a major concern. Would he be able to ensure that Singapore is going to be a nation that has one of the lowest crime rates in the world, which both his father and Goh Chok Tong had managed to attain. Please remember that Lee Hsien Loong was the premier in waiting, while Goh Chok Tong was known to be just warming the seat for Lee HL. However Goh Chok Tong had done remarkably well. Under scrutiny of the public and his two predecessors. It can be a very stressing and challenging thing after having taken over from a prime minister who was known as a seat warmer but yet able to successfully run Singapore. Compound that one of Lee HS predecessor was also his father. Again compound those with the fact that both of his predecessors are Senior Ministers in his cabinet. To make matter worst, the public and the citizens of Singapore are bound to compare him with his predecessors. Would be able to do the same if not better than them. One the surface both father and son could be not be more different, due to their styles and focus, but both share the same ideology, one that was the basis for the establishment of Peoples Action Party, and by far the sole party that had been the ruling party of Singapore since the day of its independence from
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Malaysia. Even though today, more opposition parties had been established and some had won the general elections, they are still a minority and had not made much significant political in road in Singapore. Both Lees share the same political ideologies but their focus and styles are different.
b. Singapore's current economic and social problems and the Prime Minister's efforts to deal with them.
CASE YEAR 2004 onwards with events beginning 2001, how Lee Hsien Loong to overcome problems & making sure of economic growth.
Economic development post- Goh Chok Tong era. Lee Hsien Loong became the Prime Minister after taking over from Goh Chok Tong and Lee Kuan Yew as mentioned above, Development of Singapore under the premiership of Lee Hsien Loong. and social stability. One related economic and social challenge that Singapore has is about its ageing population. The population of the generation after the current one is not ample to carry the load of economic activities that Singapore government had garnered over the years and this is compounded by migration of Singapore citizens to other countries. The birth of babies had slowed down that it became a major concern to Singapore. Many married Singaporeans, whilst being busy with their professional lives do not see the need to have babies or many babies. To overcome this, Singapore liberalized its immigration rules to welcome inward migrations and to introduce incentives for Singaporean to have more children. Liberalizing businesses to allow for Integrated Resorts that incorporated gambling into the resorts and introducing the financial Progress Package where surplus budget from the previous financial years where are cash
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distributed to adult Singaporean as means of topping up pension funds, finance education, utility rebates. SARS, cross-boundary accessibility Singapore is a densely populated city-state. In the first half of the year 2003 Singapore was one of the many countries to be hit by a relatively unknown disease called Severe Acute Respiratory Syndrome (SARS). This is an air-borne disease and the challenge to Singapore, by being at the center of the global financial and manufacturing market, Changi Airport being one of the busiest in the world and its easy access to Asean countries and also with the high volume of human traffic from Malaysia that supplied workers to many of its factories, was not so much on how to treat this disease but how to contain and arrest the disease from spreading. The Singapore government implemented several measures an early reporting and warning mechanism of SARS infection and particularly at its immigration check points to screen people entering Singapore for SARS infection. Security/safety, the war on terrorism Singapore is a country friendly to the United States of America and Israel. In the eyes of the Muslim extremist Singapore is an enemy state . Its proximity to Indonesia and the rule regarding citizens of ASEAN countries not needing visas to enter each others country proved to be a challenge on how to stop the flood of ideas of extremism from influencing Singaporeans. The Singapore government went on an offensive to arrest suspected extremist and deported people who were known for having terrorist connections. Economic crises 2008-2009 Singapore is a country that is reliant on exports and its attraction as a financial center apart from tourism as part of its economy. With the current economic crisis the factories are producing lesser due to lesser
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demands and high production costs. The financial market had taken a beating with scandals and bad loans. The Singapore economy is projected to shrink by 5%. Singapore is the wealthiest in terms of gross domestic product per capita amongst the South East Asian countries; however because of its export based economy, is also the most sensitive to economic disturbances. Financial analysts expect Singapores output to further drop in 2009.
The city-state is Southeast Asia's wealthiest economy in terms of gross domestic product per capita, but its heavy dependence on trade makes it sensitive to economic
5NqX07ebe1w One of the initiatives implemented was the liberalization of air travel, for example in Singapores agreement with Malaysia to allow each countrys low cost carriers to land at each others airport. This is something of a breakthrough as for the last several years both countries had only allowed state-owned airlines, Malaysia Airlines and Singapore Airlines, to monopolize the route. It is also expected the Singapores economic and financial fundamentals to remain strong. One of the most challenging things for Lee Hsien Loong would be to continue the good work of his predecessors and when they are also being his cabinet member. He would be under tremendous pressure not only to perform under the scrutiny of the critical citizens of Singapore but also putting the effort while his predecessors are present. He would need to establish himself as his own man, distancing but not abandoning the old regime preceding him.
disturbances
in
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nations
http://www.google.com/hostednews/afp/article/ALeqM5ixmr1heqb9tQl35kp
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LKY to LHL
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c. The concentration of decision-making power within the Lee family and the pros and cons for the Singaporean citizens.
Minyuan Zhao, Kathy Fogel, Randall Morck, and Bernard Yeung (2005)9 stated that institutional development can be staged, or in this case planned and executed to allow for the institution to be stronger and would allow the institution to develop further. If we take Singapore as an institution and Lee Kuan Yew as the matriarch of the family that established the family business, then he of all people would want to make his institution to be stronger, better and developed. In an environment where family members are to be the more trusted, he needs to develop a successor to lead the institution that he had established. By the time that Lee Kuan Yew was ready to step down, Lee Hsien Loong, the son, was not ready to play the role of his fathers successor. Hence Goh Chok Tong took over to warm the seat, enabling Lee Hsien Loong to get himself ready to take over one day. Both father and son are members of the Singapore cabinet. Lee Hsien Loong is the Prime Minister, and Lee Kuan Yew, the former Prime Minister is now a Senior Minister a very influential position in the Singapore government. Even though another former premier, Goh Chok Tong, is also a Senior Minister, Lee Kuan Yew by virtue of being the first Prime Minister and one of the founding fathers of Singapore remain an authority figure. Based on this fact, the seat of power and decision making in Singapore is concentrated in the Lee family. In a kingdom where monarchy is being practiced, the King would expect his prince to one succeed him however the same does not apply in a republic and in a democracy. In the case of Singapore, it is construed that nepotism was at play
9
Minyuan Zhao, Kathy Fogel, Randall Morck, and Bernard Yeung (2005): Openness and Organizational Change
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when Lee Hsien Loong took over from Goh Chok Tong, where it was fully understood that Hsien Loong was the ultimate one. Such a situation, where the prince took over seem to be perceived that monarchy was being practiced in a republic. What more when family members were appointed to head and run several organizations related to countrys government. What can be the advantages or disadvantages to the Singapore citizens when both, an influential father and his son, have strong presence in the Singapore government?
i.
Perception of the world - disadvantage The Singapore citizens would be encumbered by the perception that their government is practicing nepotism and cronyism. To the eyes of the world this is not a proper thing to do and Singapore as a country is not democratic and corrupt. People would compare this with the likes of Ali Bhutto and Benazir Bhutto, Bush Senior and Bush Junior, and Sheikh Mujibur Rahman and Sheikh Hasina Wajed of Bangladesh even though their ascend to leadership of different circumstances. Lee Hsien Loong, was the youngest ranking officer, a Brigadier General, at the age of 32 and since young was widely tipped to be his fathers successor and Goh Chok Tong was just a seat warmer. Lee Hsien Loongs wife, Ho Ching, was appointed to be a director of Temasek Holdings, a state owned investment arm. Lee Hsien Yang, CEO of Singtel
ii.
Check and Balance - advantage Lee Hsien Loong in making decisions in his role as a Prime Minister would have someone to validate those decisions with. Whether he likes it or not, he would not be making harsh decisions not with his father present in the cabinet. The wise old man would be imparting his views and wisdom in helping his sons decision making.
iii.
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There would be perceptions that Singapore is going to be rules by a legacy established by their first Prime Minister. The rule of law established during the years when Lee Kuan Yew was Prime Minister may be seen as archaic and not suitable in the new Knowledge Worker age. The disadvantage would be that the citizens may feel that these laws are already obsolete and would be unfair to them. On the other hand, the same laws that were established by the Lee Kuan Yew government regarding security would still be relevant during the war on terror. One significant matter would be who is Lee Hsien Loongs successor? Even though Lee Hsien Loong has two deputy prime ministers, but who is being groomed to take over?
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Independence
Datuk Maznah is a visionary person, who envisioned herself to be involved in the security business. Her vision would also entail her being able to grow the business into what it is today. She desired the independence to be her own boss. She would not be able to be involved in such a business without her vision of being independent, as she herself did not have much business experience. She was able to see in the long run, picturing the kind of business and company Securiforce she want it to be. Based on those visions then she embarked on building an almost bankrupt company.
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Quang Luong; Kamal Mohammed; Ruta Rutkauskaite; [2007]: Business ownership as a solution to unemployment : A case study of self-employed immigrants in Jonkoping municipality
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Motivation
She was motivated by her vision, of her being her own boss and being able to see herself turning her company to become a better company and competing with the boys. Her desire in not wanting her children to go through the same kind of hardship that she and her husband had gone through became another motivating factor. Without these motivations, she will not be able to persevere and be patient to grow and develop Securiforce to be not just a Malaysian company but also an international company.
Self Discipline
One of the things that you would observe from the case was her willingness and self discipline to undertake and learn the different roles and responsibilities in the sales activities, as a Public Relations person, a customer service person and also as part of the team that manned the shifts. Without her self discipline and proactivity as a trait, she might not put in her part of the effort to make her company as a success. She can employ other people to do those jobs; however in her understanding of the lack of staff and maybe the funding to pay for the extra hands, she undertook those roles proactively.
Hard Working
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Datuk Maznah made a decision to be involved in a business she hardly had any knowledge about. She needed to learn basic security operations, she studied the laws that pertain to her nature of business. One other aspect that was very admirable was about her learning about armory, of which she could have employed personnel who are experts in armory. But instead, she took it upon herself to learn about armory. Over and above that, in her proactiveness to undertake the many different roles in Securiforce, she also learned about office management, sales, public relations and others.
Confidence
It is not an easy thing to for a twenty something year old married woman with children to embark in a business that she lacked experience in. What more when she was decided to be involved in a business that is not only was dominated by men, but also taking over a business in the brink of bankruptcy. She was confident of her abilities to turn around the business, even though she did not have much experience in it. She was confident that she can turn the business into a successful venture and to grow the business to be an international player.
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b. THREE (3) major barriers for Datuk Maznahs business in order to face challenges and the reasons why it prevent her business to succeed in the competitive environment.
The three barriers for Datuk Maznah to overcome in order to succeed are: Gender biasness The image & perception of the public over the industry Manpower shortage & staff turnover
Gender biasness
Datuk Maznah had entered into a predominantly mans business. All the other private security companies prior to Datuk Maznahs involvement in the business were controlled by men. With her involvement into the business, she had intruded into a domain that had always been a male domain. She would need to overcome the challenges below in order to succeed. Sara Parssinen (2009)11 stated that the male and female preferences may differ caused by either gender-specific motives or gender stereotypes, thus relating to the thinking that security related business may be the bastion of the males rather than the females. Datuk Maznah entered into the industry with an added disadvantage. Her competitors, initially, would not be so forthcoming in wanting to provide her with assistance or to share information. They would expect her to prove her capabilities and worth. They would also be cynical of her capabilities in operating the business and by her being a woman expect something extraordinary in terms of capabilities to play with the boys.
11
Sara Parssinen; (Feb 2009) How Gender-based Discrimination Affects Growth in an Extended Romer Model
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Her employees too would have similar biasness. They initially would be very skeptical of her capabilities to operate the business, particularly of her lack of experience in that industry. They would most probably look down on her; always of the opinion that she was not cut out for the job. Many of them, supposedly are either former military or police personnel, came from a male dominant background and are not used to have a woman for a boss. She needs to command their respect by proving her capabilities. The customers would also be skeptical, thinking as to whether she is out of her depth when she started her business. Not many customers would be opened to the idea of employing a security company headed by a woman. It initially is a slow process to gain the confidence of her clients and future clients. Of all these, if she was able to employ the right kind of people and with their support she would able to overcome those challenges stated above. In terms of business acumen, she would be the person, however when it comes to the technical aspects of the security business she needs the technical expertise of those who were uniformed personnel, regarding particularly the types of arms required, the sort of skill sets required in order to be a professional security personnel and any other technical matters that pertain to the security business.
The image & perception of the public over the security industry
There is a general perception that the security industry is not of a high quality and often looked down. These perceptions often come from the image drawn from how people view the security guards. Often they are being manned by old men, retirees who need to make extra money, very young but unemployed man who could not get any other jobs, often in drab and loose fitting shabby uniforms and its low paying and low skill kind of job, with no future career advancements.
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With these general perceptions, Datuk Maznah challenges kept on piling. Not many people have high regards to the nature of business that she had ventured into. Clients and potential clients would be difficult to be convinced that her company, what more she being the boss, would be the better alternative amongst the other security companies. In order to overcome this perception or image problem, she needed to reinvent Securiforces image in order to distinguish her company, to differentiate from the other security companies. These are not limited to just arming her personnel with better armory and uniforms and vehicles. She needs to implement such a system that would allow her personnel to show more professionalism and commitment to their jobs. Securiforce would also need to improve their service levels to their clients in order to gain customers confidence and also to for ways to innovate and modernize and providing better solutions.
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Provide better welfare and compensation and benefit terms to the employees. Reorganize the business/industry to portray professionalism that allows people to feel proud of what they are doing. Getting close and involve the employees in some of the decision making processes, not only to make them feel important but also to get their input on how to improve their work conditions and customer service.
c. THREE (3) main areas of the Knowledge Revolution needed by Datuk Maznah and the issues to be address for each.
the top software developers are more productive than average software developers not by a factor of 10X or 100X or even 1000X, but by 10,000X. Nathan Myhrvold Former CTO, Microsoft, Cofounder, Intellectual Ventures Knowledge revolution- definition Wikipedia
The knowledge revolution refers to a global-scale paradigm shift that many compare to the agricultural and industrial revolutions. The revolution is about a fundamental socioeconomic change from adding value by producing things which is, ultimately limited, to adding value by creating and using knowledge which can grow indefinitely. The nature of the final form of the revolution is not yet known, but it will be very different from the industrial society from which it emerged. Overviews by Marilyn Ferguson (1980), who refers to the ascendance of an irreversible shift in the global state of mind; a fundamentally new
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_______________________________________________________________________ _ world view that encompasses insights from ancient times through current breakthrough science. Sakaiya (1991) indicates that three major disrupters of the established order population shifts, resource supply, and technological developments are producing phenomena never before encountered in the industrial society. Brown (1997) states that the revolution will not flow from the mobilization of new machines; rather it will require a fundamental revamp of the human context in which machines are used From an organizational perspective, Amidon (1997) indicates that the knowledge movement is reshaping how organizations are created, evolve, mature, and evolve or die. It is reshaping how business is done, how economies develop, and how societies prosper. Ruggles and Holtshouse (1999) note that the movement is characterized by a dispersion of power and by managers who lead by empowering knowledge workers to contribute and make decisions.
In a nut shell Knowledge Revolution, based on the Wikipedias definition and also by Graciela Chichilnisky (1998)12 stated that Knowledge Revolution, refers to the shift in the ways organizations are able to create value not by producing things through machinery, but by using and creating knowledge, in what is now known as the Knowledge Worker Age. Prior to the Knowledge Worker Age, the preceding ages of civilization are the Hunter/Gatherers, Agricultural and the Industrial Ages. Each of these economic ages focused on knowledge too, but what the knowledge were attuned to be on how to better use tools and equipment to be able to produce and provide better products and services. In the Hunter/Gatherer, Agricultural and Industrial Age, the prevalent paradigm was of that value of any organization came from the things they produce; it can be products or services, through the use of tools. Since the managers of the organizations have so called defined the processes and
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procured equipment to produce their products, manpower was only required to run the machines, follow the set processes and make sure production targets are met. Typically in this kind of setup, it required minimal workers involvement and participation other than to follow the instructions. Workers ultimately were treated like machines (physical) and in the long run would create dissatisfactions and demotivated the employees. In Knowledge Revolution Age, or what has also been termed as the Knowledge Worker Age, the paradigm shift is to understand that Human Capital, being a resource, ultimately would be the one they are going to produce those products and services for the organizations. It is the age where workers are the ones who are going to be producing, using, and improving the organizations. In this new age, workers who are knowledgeable need to be engaged in the things that they do to allow them to be empowered, to be creative, to be self-motivating and also to allow them to be working as a team where collectively they would be able to use their knowledge to improve not only the products and service, but to also improve themselves and the organizations they work for. Organizations need to pay more attention to the development of Human Capital, developing people as a source of value creation, for the improvements, developments and also the achievements of the organizations. Human beings have the abilities to improve themselves and as a direct impact the organizations that they belong to would also improve together. They want to be able to do things they are passionate about and these would enable creativity and innovations. They want to be able to manage themselves, without the need of micromanagement by their bosses, they want empowerment. They can be motivated and inner-driven; even when rewards and punishments can be used to a certain degree but human being want purpose and meaning in whatever they do. Many managers who are still caught in the Industrial Age paradigm are finding it hard to adapt to the Knowledge Age. These managers still want to micro manage, ideas for improvements must come from them not from the workers
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who are doing the jobs, where whatever instructed by the managers are to be adhered to without question, will find themselves being left behind and disconnected from the changes and challenges of their days. What the Knowledge Workers want and what the Managers have been trained to do are at the opposite ends and organizations and bosses who are not able to adapt to the Knowledge Revolution/Knowledge Worker Age would not be able to optimize and realize the potentials of their workers. In Stephen R. Coveys book The 8th Habit: From Effectiveness to Greatness, he stated of the Whole Person; humans are 4 dimensional: o o o o Physical person body Mental person mind Emotional person relationship Spiritual person spirit
In the Industrial Age, a man is only Physically engaged however in the Knowledge Worker Age, coming from the knowledge revolution, a man need to be Wholly engaged in all four dimensions as each of the parts has needs. Looking at the challenges and issues faced by Datuk Maznah in the Knowledge Revolution that brought about the Knowledge Worker Age is that she needs to address the following areas of needs in order for Securiforce to become the best player in the industry:
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after so that they would be able to pay attention to their jobs and responsibilities.
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need to be created. This can come from staff involvement, being informal with them, participating in staff events and maybe to lend an ear when they need them.
The question to address is how to bring about people in the company to subscribe and find meaning in delivering the mission of Securiforce? Datuk Maznah needs to address this issue as it can function as a deterrent to Securiforce to progress. Personnel need to be engaged in trying to make the connection between their own mission and the companys mission, to enable them to find meaning in what they do. In the Knowledge Revolution, where organizations are dealing with Knowledge Workers, Datuk Maznah, like all managers adapting and living in this new era need to have a paradigm shift, changing from the old age where workers are just there to produce, do as told; to enable her to tap on her employees capabilities. By getting her employees to be engaged, she would not just be able to get their
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commitments but also their passion and ideas to enable Securiforce to be a far larger and better organization.
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1. Planning
When it comes to planning the obvious difference would be in their focus. A male manager would want to look at the big picture whilst a lady manager would want to look at the details. Each of them has its own merit and demerit. Looking at the big picture will give a person a point of view of what it takes to be there, however by just looking at the big picture people can become disconnected with the reality of things at hand. On the other hand, being a detail person would give you the idea of what needs to happen to reach the objectives but not focusing on the big picture might make loose sight of the objectives and being caught in crisis and fire-fighting.
2. Organizing
In this particular area, I tend to believe that the lady manager is more capable in organizing for example a work team, event or for that matter anything that needs organizing a more hands-on approach. This would be due to their meticulousness; however organizing is not the same as leading. It may tantamount to setting-up, identifying needs and mobilizing the resources needed to be readied for the team as an example. A male manager may approach this in a different manner, he would most probably organize to get the team together but not often be in a whole lot of details, a rather hands-off approach, and only to be involved when the team is in need of assistance.
_______________________________________________________________________ _ 3. Leading
In this particular aspect, a male manager would rather take the leadership role head on, looking at the various aspects holistically . He would be looking at the breadth of the areas that he is leading, making his presence felt. However a lady manager plays a good complimentary leadership role, she need to be able to see what the male manager missed out. A male manager would lead by his visible actions, but a lady manager would lead in the background. In another aspect, a woman can be sensitive, hence a lady manager can be sensitive to the needs of the team she is leading, however the question is not about how sensitive she can be but would she be emotional with that sensitivity. One the other hand the male manager may seem to be aloof to the team he is leading but not as emotional.
4. Controlling
A male manager would allow for more delegation and empowerment to take place, hence allow the staff some freedom to act and make decisions. But the empowerment and delegation are tied to a certain performance agreement. The same may happen to a lady manager, but because of their attention to details and being meticulous they might micromanage and become too controlling. I would like to suggest that both the lady manager and the male manager rather have complimentary roles to play for one another, rather than roles that are suppose to be at odds or competing. Each has their own strengths and shortcomings, but on that strength complimenting one another then the shortcomings will be neutralized.
APPENDICES
http://insight.kellogg.northwestern.edu/index.php/Kellogg/article/measuring_trust Appendix 6 Prof. Daniel Diermeier; (2003): Crisis management essentials http://www.kellogg.northwestern.edu/kwo/win03/indepth/crisis.htm Appendix 7 World Health Organizational; (2009): Contamination levels http://www.who.int/foodsafety/fs_management/infosan_events/en/index1.html
The Chinese Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) have reported to have found levels of melamine in dairy products (including Infant Formula) that ranged between 0.09 to 6196.61 mg/kg. In food processing ingredients (i.e. egg yolk, egg albumen powder, etc.) the levels found ranged between 0.1 to 5.03 mg/kg. Fresh eggs produced in China have also been found to be contaminated with the chemical compound at levels that ranged between 3.1 to 4.7 mg/kg. The Center for Food Safety, Hong Kong SAR, has reported levels of 6.6 mg/kg in a brand of animal feed produced in mainland China. Due to the current event various countries had also initiated the performance of melamine tests in products that originate from China or that had been manufactured using Chinese ingredients. The official levels reported by national authorities ranged between 0.38 to 945.86 mg/kg for dairy products. For processed foodstuff and food processing ingredients the levels ranged between 0.6 to 6694 mg/kg. Animal feed manufactured in China has also been reported to contain melamine traces in amounts that ranged between 61 to 797 mg/kg.
Minyuan Zhao, Kathy Fogel, Randall Morck, and Bernard Yeung; (2005): Openness and Institutional Changes
http://www.kellogg.northwestern.edu/base/papers/yeung.doc
Hgskolan i Jnkping/Internationella Handelshgskolan. http://www.essays.se/essay/f200778f53/ Appendix 11 Sara Parssinen; (February 6, 2009): How Gender-based Discrimination Affects Growth in an Extended Romer Model. http://biblioteket.ehl.lu.se/olle/papers/0003278.pdf Appendix 12 Graciela Chichilnisky; Columbia University (1998): The Knowledge Revolution MPRA Paper No. 8891, posted 28. May 2008 / 21:25; The Journal of International Trade & Economic Development 7:139-54 http://mpra.ub.uni-muenchen.de/8891/