TeamAsia

Home > Media Articles > 1999 > Does the Philippines Have Too Many Good Managers?

< Back

Does the Philippines Have Too Many Good Managers?
By Michael Alan Hamlin
May 17, 1999

Although the Philippines ranks 32nd in world competitiveness according to IMD’s most recent report, middle and top management among multinational and local firms working here are much more enthusiastic about the availability of competent senior managers than their counterparts in Hong Kong, Australia, Singapore, Taiwan, and Japan.

When asked, on a scale of 0-10, about the availability of competent senior management, the Philippines handily outranked every other nation in Asia, at 8.29. The closest rival was India at 7.82. Hong Kong came next with 7.58. Powerhouse Singapore meanwhile recorded a respectable 7.03. Japan, however, came in at a miserable 4.76. Those guys are really down on themselves.

What are some of the things these numbers tell us? On the surface, they clearly suggest that the Philippines is blessed with an overwhelming — and presumably underutilized — abundance of management talent. But if that’s the case, why does the Philippines trail most of the other countries that follow it on this list in per capita income and gross domestic product?

Before we get into that discussion, we should look at how this ranking is put together. These numbers come from IMD’s soft survey of 4,160 executives that actually answered the latest questionnaire. Participants responded to the questions only in the context of the country in which they live and work. So a Filipino manager here does not rank, for instance, the availability of competent senior managers in Hong Kong. It’s assumed that he’s not in a position to know what’s going on in Hong Kong, and that, because he lives here and is supposed to be close to the market, does know enough about local conditions to reliably speculate.

In other words, the survey measures perception, or perceived reality, but not reality, which may in fact vary dramatically, depending on how well respondents in each market really understand their environs.

This is a pretty interesting question for me because I frequently write about management competence in the Philippines and the rest of Asia in the context of global best practice. And, because a reader recently wrote criticizing me for my naivete. This reader, apparently a respected Filipino academic based in the U.S. argued, "the Philippines needs a reality check very badly. If the Philippines were a human being, I would recommend regular visits to the therapist. This is no longer the time for illusions: that we are the best, that we produce the best."

His argument was that the easy assumption, "magaling ang Pinoy," makes people complacent, and dangerously divorced from reality. While positive thinking is no doubt an attribute to be admired, unrealistic appraisal of how tough the competition is in comparison to our own competencies and competitiveness can’t be said to be a great contributor to successful management. Another way of saying this is that it is time to face up to the fact that there are huge challenges ahead, and that success is far from guaranteed.

Perhaps another thing these numbers tell us is that other countries utilize their management talent much more effectively than we do, increasing demand and pressure to increase supply. This happens when governments successfully stimulate economic activity. All the good managers quickly get sucked up into booming companies. In the Philippines, demand is low because the country has never managed to grow as fast as its neighbors do. The fact that it temporarily contracted at a slower rate is insignificant because the Asian financial crisis, I believe, was a near catastrophic, but nevertheless temporary, aberration. It might be more accurately called, The BIG CORRECTION.

On the other hand, it’s probably wrong to assume that governments that successfully stimulate economic activity — as opposed to wild-eyed speculative expansion — adequately provide for the education and development of competent managers. Take China, for instance. "The single largest barrier (to increased business efficiency) may be management," Michael Coorey recently wrote in The Asian Wall Street Journal in explaining why Chinese companies will have a hard time competing in international markets. Nevertheless, China comes out just ahead of Japan on the IMD survey. It also does better than South Korea.

The poor showing of Japan and South Korea raises another question, and that is, "What constitutes good management?" Or, what are the management models and attributes that will work best in the evolving global economy? Respondents in Japan and South Korea — only Indonesia made a poorer showing — are not confident of the supply of managers attuned to new realities that highlight the importance of focus, efficiency, productivity, profitability, and innovation over amoebae-like diversification and asset and market-share growth.

Finally, the results of the IMD survey may also suggest that the Philippines may be better at creating professional managers than entrepreneurs. Conveniently, IMD also asked that question, and the Philippines finds itself quite a way down the scale this time, but ahead of Singapore (no surprise there, eh?), Thailand, Indonesia, South Korea, and Japan.

Ahead of the Philippines, in relative order, are Hong Kong, Taiwan, New Zealand, India, China (!), Malaysia, and Australia. Now, this is really interesting, in large part because with the exception of Malaysia and its peculiar situation, these are the countries that best-braved what we, or at least I, have decided to call The BIG CORRECTION.

What this says is that entrepreneurship and the creation of innovative, relatively little companies may be a more important factor than the production of competent professional managers in building a strong economy. That also appears to be more important than sector champions, such as technology, a notion that frequently distracts macroeconomic managers from more important issues like education, infrastructure, and good government.

Well, any way you slice the data, there are important lessons. The question is, "Will we learn them?"

Media Archives