Sasin Journal of Management: Volume 4, Number 1, 1998


Sasin Journal of Management: Volume 4, Number 1, 1998

na_sjmF. Gerard Adams and Heidi Vernon:
How do Firms Adjust to Economic Crisis? The Case of Thailand

Until the summer of 1997, economic development in Thailand was amazingly robust, a rate of 6-8 percent a year since the mid-1980s. Although there were warning signs of stressed-out banks, inflated property markets, rising trade deficits, a glut of factories, and stiffening competition from China, to most observers it seemed the Asian miracle would go on indefinitely. Few economists, investors, or business people worried about overheated economies or precipitous currency devaluation.

This rosy picture changed abruptly in early July 1997, when the East Asian meltdown began with the devaluation of the Thai baht. The result was balance of payments crisis, internal financial stringency, and a depression that threatens to devastate many enterprises.

A great deal has been written about the macroeconomic and political implications of the Thai crisis but little, if anything, has been published about micro reactions. There has been little attempt to examine systematically the situation in the trenches, at the level of the enterprises themselves. Few businesses in Thailand have escaped the effects of the crisis. In this paper we examine the perceptions and coping strategies of Thai managers before and during the crisis. We base the paper on the results of a questionnaire we administered to Thai middle and upper-level managers in August 1998.

na_sjmAdith Cheosakul:
Case Study: The Siam Kubota Industry Co.,Ltd.

The Siam Kubota Diesel Company Limited(SKDC), which has received promotional privileges from the Board of Investment of Thailand, was registered on July 28, 1978 as a manufacturer and a distributor of small diesel engines for agricultural purposes. The change of name from the Siam Kubota Diesel Company Limited to the Siam Kubota Industry Company Limited in 1993 reflects a wider range of its products including power tillers, and both diesel and non-diesel engines for agricultural cars(lorries), water pumps, generators, rice milling machines and small boats. Besides, the company is also engaged in selling “Elephant Brand” lubricants specially formulated for agricultural diesel engines, and importing other “Kubota” agricultural machines form Japan such as tractors, reapers, and power sprayers. The Siam Kubota is one of the 36 associated companies of the Siam Cement Public Company Limited, the largest Thai conglomerate, which also has investment in 44 subsidiaries and 9 other companies. Major shareholders of Siam Cement consist of the Crown Property Bureau, the Industrial Finance Corporation of Thailand, the Krung Thai Bank, the International, Finance Corporation, and the Siam Commercial Bank. Siam Cement has been the largest shareholder (41%) of Siam Kubota while the Kubota Co. (Japan), the Marubeni Corporation Limited, the Industrial Finance Corporation of Thailand, and the Minsen Machinery Limited have invested 30%, 10%, 10%, and 9% respectively.

na_sjmRungsun Hataiseree:
Monetary Tactics with a Monetary Target: A Thai Perspective

This paper studies the suitability of the application of a monetary targeting strategy to the Bank of Thailand’s conduct of monetary policy.

The empirical results indicate that of all the monetary aggregates, M1 (the narrow definition of money) bears the closet long-run relationship to developments in nominal income and the price level. Thus, it provides the most useful information regarding the future movements of inflationary trends. Moreover, short-run movements in M1 are a reliable indicator of short-term trends in nominal income or inflation. Empirical evidence form the vector autoregression analysis also suggests that the MB can adequately serve as a good indicator for the Bank’s conduct of monetary policy in the short run in that the information content of MB helps in forecasting the short-run money supply.

The findings in this paper seem to provide additional empirical evidence in support of the BOT’s use of monetary aggregates as intermediate targets for the conduct of monetary policy. They indicate that monetary targeting is feasible and perhaps desirable. However, we must continually question such stability in the face of continuing changes to the financial environment in the late 1990s. Of particular importance in this regard are the move towards the managed floating exchange rate regime in the period since July 2 1997, as well as the increasing volatility of the international capital movements and international financial markets which may have exerted the potential impact of stock price volatility in the money demand function of Thailand in the period ahead.

na_sjmPongsak Hoontrakul:
Triangular Peg: A Strategic Anchor for Thai and ASEAN Currency

This paper discusses how a government may strategically stabilize its currency in the midst of financial and economic crisis. The advantages and disadvantages of strategic anchors for both alternatives–currency peg and inflation target-are examined. The ‘Triangular Peg’, namely Thai and/or ASEAN currency pegged to three world major currencies: US dollar, Japanese yen and euro (or D-Mark) in equal weighting-is conclusively recommended. The ‘Triangular Peg’ will be an effective means, during and in the aftermath of current financial turmoil, to stabilize currency, the promote export, and to control inflation, resulting in eventual lower interest rates. ASEAN as a whole would be better off if this triangular peg is widely adopted by ASEAN countries to avoid competitive devaluation and to be less prone to currency speculation. An ‘Escape’ clause should be provided during turbulent periods, while widening the band is suggested during speculation attack. In the long run, it may be advisable for ASEAN to move toward an ASEAN Monetary System and a common currency like euro.

na_sjmN. Rao Kowtha and Serene Seah Kia Mei
Information Seeking Patterns of Organizational Newcomers: Replication and Extension

This study has examined the information seeking patterns of organizational newcomers in Singapore. We replicated some of the findings from prior research. We also found that supervisory accessibility influences newcomers is whether they ask their supervisors about technical and social information. We did not find any support for our predictions on self-efficacy but found that self-efficacy affects the willingness to experiment and learn about social information. Self-efficacy also affects the probability of the newcomer asking the supervisor for information.

na_sjmJohn Merson, Donna Green, and Cathy Xu:
An Australian Perspective on the IT&T Industry: Two Case Studies of Cross Cultural Technology Transfer

The American economist J.K. Galbraith in the New Industrial State defined technology as being “the systematic application of scientific or other organized knowledge to practical tasks.” In other words, a technological system is not simply a collection of techniques or tools. A technological system in this sense represents the necessary organizational, educational and management structures needed for the effective operations of a power plant, an airline, an infra-red spectrometer, or a biotechnology fermentation plant. From the perspective of technology transfer, the actual hardware involved in the exercise may represent only a small part of the process, compared to the investment in training technical staff and the establishment of correct procedures and management infrastructure.

In examining the problems associated with cross-cultural technology transfer(CCTT) this paper will concentrate on Information Technology and Telecommunications(IT&T). The reason for taking this approach is based on the assumption that IT&T is a determining technology, one which has a formative impact on the efficiency and competitiveness of whole economies. This idea has been articulated in a wide range of studies, from that produced by the World Bank in 1994, which reviewed the importance of IT&T for developing economies, to the one by King & Kraemer, who assessed its importance for industrial competitiveness.

The paper involves two case studies. The first reviews the major issues of CCTT from the perspective of five Australian IT&T companies involved in the transfer of technology throughout the Asia Pacific region. The second case study deals with a specific strategic alliance involving Telstra of Australia, NTT of Japan, along with Indosat and PT Telkom of Indonesia. This joint venture established the company MGTI of which they are all shareholders and which has a charter from the Indonesian government to modernize and manage Central Java telecommunications network. This, we believe, is an interesting case study in itself as it represents a different approach to overcoming the problems of cross cultural technology transfer within the APEC region. A series of interviews were carried out with key personnel in all these companies using both the standard APEC/CCTT survey form, and a more informal interviewing approach to gain more detailed responses.

na_sjmChad Perry:
Handling Bribery in International Markets

Bribery in international markets is a fact of life that can lead to astonishment, bewilderment and misunderstanding for expatriates, at both organizational and personal levels. This article examines bribery from two viewpoints and tries to develop procedures to bridge them. The first viewpoint is relativist, accepting that different cultures have different ethical values and not imposing an expatriate’s values onto another culture. The second viewpoint is that ethics are universal and apply anywhere in the world, and trying to understand the cultural forces that determine home and overseas’ attitudes to the many forms of bribery, is a first step to adjustment. The next step is the development of a global or regional code of conduct that allows flexibility within a ‘gray’ zone. The result could be an evolving code that adapts to the many dimensions of bribery of each country’s situation, in a manner that is a negotiation between the cultural, psychological and economic values of an expatriate’s organization and of local officials.

na_sjmWai-sum Siu:
Machiavellianism and Bank Marketing: The Case of Hongkong

Critics often attack marketing as being manipulative, unethical, or ‘Machiavellian’ in nature. Recently, banks in Pacific-rim countries have widely and aggressively adopted marketing for growth and expansion purposes. However, it is generally believed that Machiavellianism is not suitable for conservative banking practices. This paper reports the research findings of the Machiavellian orientation of bank managers in Hong Kong and the relationship between Machiavellianism and job satisfaction in the banking sector. The results indicate that a relation between Machiavellianism and job satisfaction exists in bank managers.

Clem Tisdell, Tatjana Kehren, Thomas Murphy and Menkhoff:
The Pig and Poultry Industries in Thailand: Development, Trade and Commerce

The pig and poultry industries are the major livestock sectors in terms of commercial livestock production in Thailand. The dramatic growth of the Thai economy since the 1960s was spearheaded by rapid expansion of agricultural industries such as the poultry sector and has since generated increased demand for other livestock commodities such as pork. While pigs have traditionally been an important part of the integrated farm system in Thailand, pork production has only recently developed into a promising commercial sector. In the past, small growers dominated the industry, but it is now reported that over 80% of the industry is involved in commercial production. Some countries including Thailand have asked for a relaxation of Australian quarantine controls on imports of chicken meat. According to one Australian study, it seems that Australia would enjoy a net gain from allowing imports of chicken meat, assuming the absence of a disease outbreak. While the commercial development of the poultry sector was characterized by substantial support from government and private sectors, the swine industry has suffered a long history of government intervention and associated factors. The level and control of disease have been critical factors in the development and performance of both industries and will continue to determine how well they compete.

na_sjmJochen Wirtz Thomas:
From Entrepot to NIC-Economic and Structural Policy Aspects of Singapore’s Development

This paper describes the development of Singapore from an entrepot to an industrialized economy and analyzes the role of its structural and industrial policies as one important factor in this success story. The advance of Singapore to an industrialized economy can be structured into four phases. Phase I, the early phase from 1959 to the mid-1960s is characterized by an import substitution policy followed together with Malaysia. Phase II describes the enhanced export-orientation and industrialization from 1967 to 1973. Phase III includes the industrial restructuring from 1973 to 1984. Phase IV describes the development towards diversification of the industrial base as well as an increased orientation towards industries with high value-added. The role of Singapore’s structural and industrial policies in each of the four phases is examined.

na_sjmSJM Interview: M.R. Chatu Mongol Sonakul

On September 7, 1998, four months after becoming the Governor of the Bank of Thailand, M.R. Chatu Mongol Sonakul granted an interview to the SJM in which he expressed his views on a number of topics, including the past, present and future of the Bank of Thailand (BOT).

na_sjmSpecial Address by U.S. Secretary of the Treasury, Robert E. Robin

On the occasion that the United States Information Service and Sasin Graduate Institute of Business Administration of Chulalongkorn University hosted Mr. Robert E. Rubin, U.S. Secretary of the Treasury, to share his concern about the Thai and Southeast Asian economies, Secretary Rubin addressed Sasin students on June 30, 1998 at Sasin.