The push for innovation, the search for talent, and competitive pressures require that new entrants and long-established players rethink their Asia business strategies and organisation structure. Companies often restructure their Asia-Pacific operations – as frequently as every three to five years. It’s not surprising since business conditions across the region are constantly in flux.
Companies operating across Asia have to deal with the complexity of diverse cultures, vast distances, differences in consumer wants and needs, and inconsistent regulatory requirements. To manage effectively, MNCs need capabilities, knowledge and insights from multiple sources. Members at a recent IMA Asia CEO Forum discussed how they effectively deal with this intricacy.
Matrix: we can’t live with it, but we can’t live without it
Most MNCs have adopted a matrix management structure to support their operations in Asia Pacific. As one regional CEO remarked,
‘A matrix organisation has helped us make huge strides in corporate compliance, in our supply chain network, and in our business model. Digital technology also has enabled us to have worldwide platforms for our service organisations that are much more effective when launched globally.’
Matrix management helps manage complexity and balance competing priorities. But, greater complexity in decision-making, in processes, and in accountability often accompanies the matrix. Plus, managing within a matrix structure requires leadership skills often in short supply. The hierarchical nature of many Asian cultures compounds this challenge for regional executives.
A light matrix offers relief from bossy oversight
A ‘light’ matrix is the answer for some companies. A light matrix is a structure that encourages local empowerment. At the same time, it still helps retain globally-consistent standards for quality and efficiency. An Asia CEO explained,
‘We were tying up too much of our country leaders’ time, instead of letting them focus on customer-facing work. We want to give greater empowerment and authority back to the markets. We want to create a “skinny matrix”.’
‘At the same time, we have global agreements that we must honour. We cannot violate those at a country level. We are empowering the day-to-day operational activities, while ensuring that we have strong global alignment around key strategy, innovation, and global delivery.’
Regional HQ acts as a bridge
Regional headquarters act as the bridge between global compliance and local empowerment. The regional leaders provide support and guidance to the country operations and facilitate interaction with global HQ. Increasingly, they do not ‘manage’ the local operations. The ideal is to have knowledgeable regional experts that customer-facing staff can call upon for constructive non-judgemental advice.
Click on ‘Deep Read’ at the top of the page to learn more about how companies are restructuring their Asia Pacific operations (again).
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