Establishing a Successful Organizational Strategy in Asia

New Accenture research examines how multinationals can achieve or maintain high performance in Asia's enormously diverse and complex markets. It reveals that 90 percent of respondents from multinational companies are planning to increase the role of Asia Pacific in the growth of their company in the next 2-5 years.

Yet almost the same number remain apprehensive about their ability to assess and manage risk in the region. In fact, twice as many multinationals as companies operating regionally consider their risk management practices in Asia to be ineffective. Multinationals are often aware of where their strengths and weaknesses lie, but they still struggle to design organizational strategies that allow them to achieve their full potential.

This study was based on interviews with over 200 CEOs and senior executives across the region. In the five years to 2008, Asia's economy is expected to grow 30 percent faster than that of the rest of the world. Multinational companies are very enthusiastic about the opportunities that Asia's markets present for the future—84 percent of them are planning to invest significantly more in the region over the next 2-5 years.

However, they are still grappling with the risks that the region poses and are searching for organizational strategies to help manage the risk.

Ninety percent of respondents to the survey plan to increase the role of Asia Pacific in their companies, and 84 percent plan significant additional investments. But about a quarter of the multinational companies were not confident about their ability to manage risk in Asia. This is in contrast to about half that number—that is about one in eight—of regionally-based companies that lacked confidence about handling risk.

There was also a contrast between multinational and regional companies on decision-making. About half of the multinationals organized this globally, while less than 20 percent of regional companies did so. And less than 30 percent of the multinationals used a country-by-country approach, while over half of the region companies did so.

Whether the company is a non-Asian multinational or a regional one, it is important to identify the particular strengths of the company and what these mean for organizational and management structures across the region.

Accenture believes that a fundamental challenge is to combine the many advantages of global operations with those of local knowledge and responsiveness. Establishing a successful organizational strategy in Asia shows how global companies can build or maintain high-performance in Asia by:

• Capitalizing on the increasing economic integration in the region.
• Multiplying the insight and responsiveness of local workforces.
• Developing strong communication and relationships between global leadership and empowered Asian operations.

The study was produced by Accenture Policy and Corporate Affairs group working with the Accenture Strategy practise in Asia Pacific.

Armen Ovanessoff led the study for Policy and Corporate Affairs and Sandra Leitch led for the Accenture Strategy practise in Asia Pacific.

See also other studies from Policy and Corporate Affairs group on International Competitiveness—Asia.