MBA - International Corporate Strategy

International Corporate Strategy study  ( This report was for purpose of project study and may not carry any significant weightage on the findings to the organization named )


MBA ICS Report1

What it means to be Rich ??

What does it mean to be rich? Are rich and famous completely different from you and me? Recently one market research did a survey and found some answers we could learn from those being interviewed. Whether the survey is anything conclusive or not but the general findings below are likely to be "commonsense" if you were getting those feedback and probably you will also buy into the ideas coming out from the rich.  Try only if you have spare cash to flout or flounder, otherwise you end up in misery and alone if you end up bankrupt.

While almost everyone the interview had carried out said luck and timing played a role in their success, this had some similarities in the responses. Most of the truly rich, perhaps surprisingly, are not that different from you and me. They have the fears about their health and their children's future and the same basic desires as you and me have.

However, some differences.
The first secret of the truly rich is that they are never afraid to fail. Most said that at one point they had had a choice to either stick to an easy, secure route or take a calculated risk. To reach the truly heights of wealth, some extreme risk is needed. If you look for security in a job or are scared to try something different, you won't get far in the pursuit of super wealth.
Even when they had failed--and every single one of them had at least once--the truly rich said they had used those experiences to learn from their mistakes and get back in some time later. They had avoided letting failure destroy their optimism and their passion.

An Internet executive said his net worth had surpassed $1 billion during the dot-com bubble. He had partied with famous rock singer and jetted around the world on in his own jet plane. His net worth collapsed when the bubble burst. Instead of letting failure and financial difficulty stop him, he went out and tried again. He learned from his mistakes and created another tech company that actually had a business model and didn't rely merely on eyeball hits and being cool. The result? He just sold his last company for several hundred million dollars. He has that jet back, but he isn't resting on his laurels at the beach. Instead, he has started yet another company.

The second secret of the truly rich is that they look creatively at problems to find new income sources. Often they looked at problems from different angles and liked to go against the grain. They recognized that everyone else believing or doing something didn't make it right. But being a contrarian for the sake of being contrary was no solution either. They knew they always had to think critically when analyzing any problems

An oil executive said decades ago he had wanted to make better use of gas stations. They were profitable, but he felt they wasted space. People would drive up, fill up and then drive off again from the expensive real estate. His solution? Put in convenience stores, so people could buy gas and snacks at the same time. At first, he got a lot of ridicule for the idea. Who would buy petroleum and coffee together?
Well, today you'd be hard pressed to find a gas station without a convenience store. That executive is among the truly rich because he looked creatively at a problem and didn't let a little criticism discourage him.
The third secret of the truly rich is that they marry well. Not that they find a rich heir or heiress to wed, though that might not hurt. Rather, most of the truly rich, especially the self-made ones, said that having a good spouse had been critical to their success. Starting a company or running a conglomerate takes a lot of sacrifices. The stress can be a killer. Having a good spouse to support you and, most important, believe in you as you struggle to the top is critical.  [ Obviously the Woods having a good wife did not follow this advice and gone astray and now trying hard to find back his club not just his broken tooth ?? ]

Global leadership practices for local bosses

While the demand for leadership skill talent has been strong following the rapid growth in Asia in recent years, the supply pipeline has not been able to keep up. Asian companies that want to grow their business globally will require managerial talent with global business skills, whereas MNCs that want to grow their Asian businesses require talent that can operate effectively in the region. These present a unique set of leadership and human capital challenges.

The first chapter, by Prof Ulrich’s book - Leadership in Asia: Challenges and Opportunities, provides a contextual basis on which leadership is explored in the book. He is careful to point out that Asia cannot be seen as a single entity, where the same formula of doing things will work across all industries, cultures and levels - rather, this is a continent that is 'an amalgamation of countries, companies, cultures and contexts'. Given that they differ in terms of cultural heritage, political systems and population demographics, among various aspects, no single Asian view of leadership can be applied across the region.

Prof Ulrich's definition of leadership is not only 'the individual or executive team at the top of the organisation'; 'anyone who is charged with getting work done by guiding the behaviour of others would be considered a leader'. In other words, a 'leader' is not just the CEO or his inner circle of senior executives, but also the people behind new products, heads of finance, information technology, human resources, etc.

The book has got valuable information for practitioners of leadership – by the collection of views from renowned figures from various backgrounds and industries who have taken on leadership positions in the region.

Positive leadership and talent engagement are two factors that can help Asian firms ride out of the recession, according to Gerald Chan, country head and CEO of UBS Singapore. Positive leadership refers to 'the ability to lead oneself during times of crisis' while talent engagement refers to 'the ability to keep one's talents engaged, committed and resilient during difficult times'. UBS has also invested significantly in talent development. To train a growing number of relationship managers, a refurbished colonial-era bungalow nestled just off Bukit Timah Road is used to train and induct in the finer art of engaging and managing clients.

Liew Mun Leong, president and CEO of CapitaLand, the biggest property developer in South-east Asia, places great emphasis on grooming 'internationally experienced corporate leaders and a strong management bench'. He listed three reasons why Asian companies did not train or nurture enough CEOs.

First, they are 'late developers in the area of leadership development'. With the exception of Japan, Asian states were 'command' or 'protectionist' economies for a long time. This is why, he explained, they lag behind their Western counterparts in modernising managerial methods and corporate culture.

Second, management becomes hampered as most Asian companies (13 out of the 20 largest) are either family-owned or state-owned. As the top ranks in these companies are filled by family members or state-appointed managers, there is no real incentive to nurture employees for positions of leadership.

Finally, Asian managers working for multinational companies, despite their value and proven expertise in running Asian operations for international outfits, are hardly deemed to be potential occupants of corner offices in MNC headquarters.

Managing change, diversity

Liak Teng Lit, CEO of Alexandra Hospital, shared his experience on leadership at a time of major change. Alexandra, which was founded in the 1930s as a British military hospital, required a major upgrade. Plans were drawn up for a new hospital, to be located in northern Singapore. Mr Liak's team was asked to move and manage this new hospital - named the Khoo Teck Puat Hospital, in honour of the $125 million donation made by the late banking tycoon's Khoo Foundation.

The key challenge : 'to transform the model of healthcare'. This means that the hospital's managers cannot 'simply repeat successful solutions of the past in addressing new challenges'.

With a team drawn from various public and private hospitals, people came from diverse backgrounds and had different personalities. This diversity served the leadership well, as 'we had numerous challenges to solve that required different perspectives'. But it also presented challenges, especially when it came to getting 'everyone to row in the same direction.

Thus, people were systematically inducted into the organisation through a mix of programmes conducted by the top leadership team personally, as opposed to the human resources department - so that everyone could better appreciate the organisational philosophy, strategy and approach.

In short, 'leadership is clearly more art than science. However, by bringing industry, consulting and academic thought leaders together, lessons can be learnt that can be adapted to many,' wrote Prof Ulrich.

Great Leadership do not command excellence, they build excellence. Excellence is "being all you can be" within the bounds of doing what is right for your organization. To reach excellence you must first be a leadership of good character. You must do everything you are supposed to do. Organizations will not achieve excellence by figuring out where it wants to go, then having leadership skill do whatever they have to in order to get the job done, and then hope their leaders acted with good character. This type of thinking is backwards. Pursuing excellence should not be confused with accomplishing a job or task.

Some traits a Good Leader must have before he could exercise his leadership skills

1. Honest - Display sincerityand integrity in all your actions. Deceptive and insincere behavior will not inspire trust.

2. Competent - Base your actions on knowledge, reason and moral reasons. Do not make decisions based on "childlike" and inexperience, emotional desires or feelings.

3. Forward-looking - Set goals and have a vision of the future. The vision must be owned throughout the organization. Effective leaders envision what they want and how to get it.
4. Inspiring - Display confidence in all that you do. By showing endurance in mental, physical, and spiritual stamina, you will inspire others to reach for new heights.

5. Intelligent - Read, study, and seek challenging assignments.

6. Broad-minded - Seek out diversity, think out-of-the-box.

7. Courageous - Have the perseverance to accomplish a goal, regardless of the seemingly insurmountable obstacles. Display a confident calmness when under stress.

8. Straightforward - Use sound judgment to make a good decisions at the right time. Do not jump into conclusion and just by "hear say" from others. Do no pre-judge or make assumptions.

9. Imaginative - Show creativity by thinking of new and better goals, ideas, and solutions to problems. Be innovative!

The Hopeful Tiger Year 2010 ?

The 2010 Tiger seems to bring possible opportunities in the property market - albeit risky ones - if historical record hold true. Tiger Years are typically good years to invest but this year could hold full of hope and anticipation as the market recovers from one of Singapore's steepest recessions.

Some agree the Singapore economy expected to expand between 3-5 per cent by year end and may present opportunities for investors to buy in anticipation of a price recovery. But the element of risk remains. Like the tiger, the market is likely to remain active for the first half, but the second half of 2010 remains unpredictable. Although property prices have already reached a high level in the past 12 months, the prospect of further increases would be tempting to some investors. However, further price growth would also bring higher risks of a correction.

The last Tiger Year came around in 1998, smack in the middle of the Asian financial crisis. Then, the property price index for private homes shrank 34 per cent over 12 months. There was a very pessimistic mood at the start of 1998 in the property market.

But by the Chinese New Year of 1999, people were optimistic again. The market rebounded from Q1 1999 and, over the next two years, prices rose more than 40 per cent on the back of strong pent-up demand, increased investor confidence and a global IT boom.

Twelve years before that, in 1986, Singapore was in the midst of another crisis.

That Year of the Tiger (1986) came after the 1984-85 economic recession, which was exacerbated by the collapse of Pan-Electric. The property market dived to the lowest point in Q2 1986. But it then made a remarkable, long recovery over the next 10 years until May 1996 (when anti-speculation measures were introduced by the government), with prices rising more than five times. [ Maybe, I should take a side-step look at the car COE prices, which probably behave the same phenomena effect of rise and fall ? ]]

Similar history applies to 1974. The global oil crisis hit Singapore that year - the first major economic crisis the island had to weather post-independence. But property prices then went on to rise steadily from 1974. Over the next seven years until 1981, prices of residential properties rose more than four times.

IT seems that the Year of the Tiger has historically been linked to tumult and upheaval.

Relooking back the last century showed that almost every year of the ferocious Cat has been accompanied by either market downturn, wars, or crises of other forms. In many cases, the markets walked into crises in a Tiger year, while on some occasions, they climbed out of turmoil.

As the world now stands on the brink of yet another Tiger year, the top questions on every market player's mind are: Is there an Asian property bubble in the making and is the equity rally over.

On property, the consensus is that although markets have rebounded, they still fall short of the dizzying heights seen during the 2006-2007 years.

On equity, markets posted spectacular gains in 2009, but the increases only offset some of the outsized losses that were registered during the preceding year. Likewise, China is not experiencing a property bubble as compare to what you can see with much higher prices in Australia and or Hong Kong and lately the Chinese government stepped in to cool down the market.

Indeed, analysts felt that most Asian stock indexes remain well below peaks that were reached in 2007 and although forward-looking price-earnings ratios in Asia may have gone up a lot, they are not at levels yet that most would associate with asset bubbles.

Plus, the governments will be looking at signs of asset inflation in property sectors, in particular. Any selldown should give yield-buying opportunities as markets would eventually get used to the idea that governments are not going to over-tighten. Market watchers believe that the 10-month rally which started last year has already ended and stocks are now seemed to be in a correction phase rightly or not.

This came as risk appetite for Asian equities has sunk due to credit tightening in China, while equities have priced in the V-shaped recovery. At current environment, an overweight position could see the Singapore market and a year-end Straits Times Index target of 3,200.

Be aware of valuations, avoid well-known themes and search for value laggards. OCBC Investment Research believes that 'smart money will take note of the more reasonable valuations now and will be ready to re-enter the market'. Some estimates are that Singapore's economy shrank 2.1 per cent last year, while growth of between 3 and 5 per cent is expected for 2010, and private sector economists are even more bullish.

But leading indicators from a recent BT-UniSIM study showed that the present recovery may look more like 1986's gradual recovery, even though it lasted about as long as the crisis of 1998.

This Tiger year brings political uncertainties too. Economists say oil price spikes, a top risk in 2010 according to the World Economic Forum's recent report, could be triggered by a conflict in the Middle East.
And for the global economy, looming concerns over the withdrawal of stimulus plans and sovereign debt persist.

Shield your savings from a double-dip recession....

Question: You are in your 60s, soon to retire or getting the golden handshake from your boss and have some amount of money in your retirement accounts. You may want to liquidate most of your holdings and put the proceeds in money market funds or maybe an annuity, as you fears the political situation will lead to another recession.


Answer: If you're asking whether if it is right about your concerns that the political situation will lead to another recession, then the answer is, Who knows?

Considering the beating it's taken, the economy seems to be bouncing back pretty well so far. The recovery at this stage looks as strong as the recoveries after severe recessions in the early 70s and early 80s. That said, the news as the economy climbs out of a recession, particularly a severe one, is usually mixed reaction with both positive and negative developments. So it's hard to say at this point whether the recovery could stall or even reverse, whether due to the global political situation, deteriorating fundamentals or both.

Whether it is right to liquidate your mutual fund portfolio and essentially hunker down in cash and an annuity because of fears, the more direct answer: No, that doesn't sound like a very good idea.

One reason is that, as a rule, investors should not make drastic moves with their investments. Radical shifts are usually triggered by the gut, not the head, and acting on emotional impulse is a notoriously bad way to handle your money.

Besides, even if your actions are based on rationale rather than emotion, there are doubts about such planned move. Getting it right when predicting trends in the economy is difficult even for economists. So for any investment strategy in such a heavy-handed manner to make a bet on one particular economic scenario playing out is seen as not very prudent.

It's a mistake to let emotions dictate your investment strategy, you should take them into account when investing money. You can't live your life feeling you're teetering on the precipice of financial disaster. So if it is really some concern about the damage your retirement portfolio might sustain if the market heads south, we ought to address those concerns, but in a more thoughtful, methodical way.

Invest for the long-term

Say you are in your late 60s then you're looking to your investments to support you throughout retirement, which, given your age could easily be another 20 or more years.

That means that, unless you've got a ton of money socked away, putting virtually all of it in cash (the annuity excepted) would probably make it difficult for you to get sufficient income that will both last the rest of your lives and stand up to inflation over the long run.

In short, it's very likely that you should be investing at least some of your stash in a diversified portfolio of stocks and bonds that can generate some long-term growth. The trick is to get some growth, but not so much that your stomach flutters every time the Dow takes a hundred-point dive.

Achieving this balance of growth and safety will depend, among other things, on how much income you need from your investments, your tolerance for watching your portfolio's value fluctuate and how much room you have for paring living expenses should investment values take a hit.

Now, about that annuity. Making an immediate annuity part of your retirement portfolio could make sense in your situation for two reasons. First, the steady income, which you get regardless of what the market is doing, may allay some of your anxiety about the economy and the markets. That, in turn, may make you less apt to batten down the hatches in cash and more inclined to devote at least a portion of the portfolio to investments that can generate growth.

Second, combining an immediate annuity with traditional assets like stock and bond funds can actually help your retirement savings last longer, which is a definite plus for retirees.

The bottom line is that whatever you end up doing, you should do it based not on some vague notion of what the political situation may do to the economy. Rather, you should make a plan after considering several alternatives and seeing what effect those different choices might have on your ability to live off your investments the rest of your life.

Year 2010 buy on weakness, sell on strength ???

“Small timers” & "part-time" investors should throw away the thought of the “buy and hold” approach as increasing volatility may lead to a proliferation of pullbacks which could erase your potential gains for the year 2010 market situation. Instead, we may take the recent correction opportunity to buy into markets, say some strategists.

Some says: Buy on weakness, sell on strength. There will be two to three corrections in 2010 but also opportunities. It seems that the market appreciation isn't completely behind us, but it's getting more volatile. Looking at the current trend, we may have to focus on the cyclical and tactical calls.

Some says that equity valuations had looked 'fair' in the beginning of the year, and now look 'more interesting' in Asia following the recent market pullback.

'We're talking of a proliferation of pullbacks. This will be the case in 2010. If you have positions with a gain of 10 or 20 per cent, be disciplined and sell. You'll have another pullback and another entry level. 'When we see that emerging market valuations are higher than developed markets, we'd cut down on buying. Hopefully this will lead to a promising strategy.'

The market correction over the last month has reversed the year's early gains, and on a year-to-date basis, most markets are in the red. Some emerging markets are down by more than 10 per cent. EPFR Global, which tracks fund flows, reports that emerging markets saw the worst outflows in 24 weeks in February.

Still, redemptions from money market funds continued despite the uncertainty. 'The fact investors have pulled nearly US$80 billion out of this fund group during the first month of the year suggests the desire to put money to work.

The outlook seems to be forecasting a “bull” on emerging markets in the medium to long term, as their share of global GDP is expected to rise from the current significantly over the next five years.

The current average portfolio allocation to emerging markets for a global investor is about 10 per cent. This could rise to 30 per cent in five years. That means a strong chance for those potential buyers to watch out for the “dips” to build up their portfolio positions.

The current market weakness could be an 'excellent' buying opportunity, as emerging market stocks are expected to deliver a 'sub-par' performance in the near term, due to momentary strength in the US dollar.

Some of the positive underpinnings to a buy stance are: 'The macroeconomic environment continues to improve; valuation readings are already back in undervalued territory thanks to growing corporate profits and the latest markdowns in share prices; markets are oversold; and there are few viable investment alternatives.'

The markets are unlikely to re-test previous lows. 'We're pretty convinced that we're not back in a sustainable bull market . . . We think that over the next one to three years, the cyclical markets with sideways volatility will go on. Risky assets are well backed up and there is limited downside. (Investors) who missed the rally in 2009 will try to step back into the market for more healthy strategic allocations.'

Credit Suisse remains 'moderately overweight' on risk assets, particularly equities and corporate bonds. It also has an overweight call on gold.
Deutsche Bank believes that with the transition to an 'alpha' market where there will be differentiation within and between asset classes, one way to take advantage is through 'pair' trades. This means to long one stock, asset class or market, and short another.

One example of differentiation is in markets where the corporate bond yield is lower than the dividend yield, says the bank's global chief investment strategist Helmut Kaiser. Investors could sell the bond and buy the stock and benefit with a higher income stream.

The outlook on sovereign bonds, however, is cautious, although corporate bonds still offer opportunities.
The supply of corporate paper is expected to rise as well, although the outlook for bond returns is poorer for 2011 than for 2010. The expected return on bonds is usually the coupon plus capital appreciation driven by shrinking yields. Now it's the coupon minus price depreciation driven by a moderate rise in yields.

The Rise or Fall of Internet use .......

The internet was an extraordinary invention, with the greatest potential to usher in social change since the old days of the printing press or the railway steam engine.

Built upon a technology that is not fully regulated, it empowers everyone with ability to access to the internet to be creators of information.

It is also an enormous library of global information with consciousness and knowledge from the past and the present and presented in an easy-to-access format commonly HTML.

As a result, we now have the liberty to create our own information, either personal or public, and share it with everyone across any part of the continent in this global world. It permits the equality of access that we have never seen in the past where hardcopies of information being the mainstream media in circulation.

But has its potential as a great leveller for the whole world already passed?

Twenty years ago, the web was colonised by a group of early adopters who believed that the ideal society was equal - every individual had a right to get involved, there should be no hierarchy, and rules would be mutually determined for the common intent and purpose.

People believed the sanctity of the individual was superior to that of the governing state, and that getting in touch with people from across any region in the globe would be enough to solve the world's ill intent.

But the idealistic web pioneers maintained that the new digital frontier would provide an avenue for intellectual ground on which to create a freer “information exchange” society.

The original loose approach to social behaviour online has clashed with the essential features of our nature - our desire to take control, to own and to profit.

Implicit inequalities emerged early, but once the Internet became a space for commercial gain in the mid-1990s and its population exploded, being at the top of the pile - translated as holding the first position in Google's search results - became the benchmark for offline financial returns. The vast multiplying effect and increase in content on the web during the late 1990s and throughout the last decade has meant that reliable, trustworthy and credible information is increasingly difficult to verify and certify to be genuine or true.

InterNet hope

At an individual level, we rely on colleagues, friends and family members for what to trust and what to believe, but we also look to intelligent experts and professionals with high track record status to point us in the right direction and correct use of the information in the web.
Jimmy Wales, founder of the online-user generated encyclopaedia Wikipedia, admits that despite being the current poster child of information levelling, Wikipedia has explicit hierarchies that determine whose knowledge is more worthy than others'. It seems that, for all its talk as a great leveller, the web is as unequal as we are. Indeed, despite the medium, human beings seek hierarchies to help us make sense of our world.

It turns out that this is as relevant online as offline. After all, we can only bring to this digital age what we already know and what we have gained from our existing experiences.
The search engine works on a principle of the "wisdom" of crowds, basing its results on which searched sites receive the most links to their pages. And how does this reinforce the inequalities that exist between the developed and the developing world?

Ultimately, the internet is a reflection of humanity, not a humanity-changer. We bring to it all of our other human foibles,weakness, warts and all.