Geo-Political and Economic Organization of Asean
Geo-Political and Economic Organization of Asean
The Association of Southeast Asian Nations is a geo-political and economic organization of ten countries located in Southeast Asia, which was formed on 8 August 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand. Since then, membership has expanded to include Brunei, Burma (Myanmar), Cambodia, Laos, and Vietnam. Its aims include accelerating economic growth, social progress, and cultural development among its members, protection of regional peace and stability, and opportunities for member countries to discuss differences peacefully. ASEAN has emphasized regional cooperation in the “three pillars”, which are security, sociocultural integration, and economic integration. The regional grouping has made the most progress in economic integration by creating an ASEAN Economic Community (AEC) by 2015.
AEC envisages the following key characteristics: (a) a single market and production base, (b) a highly competitive economic region, (c) a region of equitable economic development, and (d) a region fully integrated into the global economy. The implementation of AEC is able to boost economic returns of countries in ASEAN due to cooperative and collaborative as a group could have generated a larger overall pool of benefits to be distributed among than countries than each will ultimately achieve by working on its own. But nevertheless in my opinion, Thailand will be of great concerns to many businesses in the region when AEC is established.
Thailand possess in an advantageous geographical position which is located at the strategic center position in ASEAN, foreign companies be obliged to set up a solid foundation for the base material storage and product distribution to export their products to the countries in ASEAN if they are intend to establish market in ASEAN. Other than that, open economy policy of Thailand is closely integrated in the AEC blueprint. Thus it can be seen, Thailand’s markets will be benefit most among the countries in ASEAN when it come into effect in 2015.
According to a news report on Thailand newspaper World Journal, also known as Chinese Daily News, a sense of urgency is palpable in enterprises all type and in virtually every industry in Thailand since AEC will be organize soon. A number of listed companies adjusting corporate business strategies and formulating an aggressiveness marketing program are being stepped up without cease in order to meet the new challenges and opportunities that will be occur after two or three years. Managing director of TICON (Ticon Industrial Connection Public Company Limited), Mr. Virapan Pulges indicated that TICON had already the corporate strategies to cope with the regional economic integration by 2015, focus on the greatly increasing future demand of distribution center and warehouses facilities in Thailand. The Chief Executive Officer of CMO (Creative Management Organization), Sermkhun Kunawong revealed that convention and exhibition industries will be enormously benefit from the establish of AEC because the convention and exhibition industries in Thailand are occupied leading level among ASEAN countries.
CMO planned to gain further insight into related convention and exhibition industries regulation of other countries in Asian in order to seek business opportunities and establish close contact with logistic industries in Asian countries. Chairman of the board of DRT (Diamond Roofing Tiles Public Company Limited), Prakit Prathipasen mentioned that his company always maintains their products export to Vietnam and Cambodia, but they will expand their export markets to Malaysia and Indonesia from now on, they planned to set up a warehousing distribution center at Changwat Surat Thani, Thailand to aiming at above markets. The presidents of MFEC (MFEC Public Company Limited), Siriwat Vongjarukorn stated that Information and Technology industries will benefit from establish of AEC.
The implementation of open and liberal investment policies and actively encourage inward investment will extremely intensify markets competitive in ASEAN. Company must pay close attention in adjusting corporate strategies, increasing competitive advantages and implement performance evaluation on a more concrete form, herein attract the investment that is in favor of the Information and Technology industries. His company has long been prepared for the establishment of AEC through service integration with various companies to increase competitive advantages and the advantage of fully satisfies known customers’ demand.
The new report above let us know about that how the leaders of companies in Thailand deal with the change. Four of them accept the inevitability of change and recognize changes as potential of sources of energy and self-renewal, they develop effective management skills that help organization move towards something better. They shared a common vision of responsibilities and economy opportunities for their companies and countries, an idolized goal has been created by them to seize the opportunities for expand their markets and try to maximized their benefits from the establishment of AEC. That is every appearance that we can almost certain they possess Charismatic Leadership- they have a vision, they are willing to take personal risks to achieve that vision, they are sensitive to follower needs, and they exhibit behavior that are out of the ordinary. The Key characteristics of charismatic leadership that they possess are:
1. Vision and articulation- They has the clear visions that proposes a future better than the status quo and is able to clarify the importance of the vision in terms that are understandable to others. They planned and implementing the new corporate strategies to meet the establishment of AEC by 2015 and they has a good idea how the strategies can benefit their companies and countries. 2. Personal risk- They willing to take on high personal risk, incur high costs, and engage in self-sacrifice to achieve the vision.
According to their narrations, their new corporate strategies involve high costs to build large infrastructure facilities within or outside their country for large scale productions, they has to take on the responsibilities and possibilities of failure at their own risk. 3. Sensitivity to follower needs- They are perceptive of others’ abilities and responsive to their needs and feelings. Due to their company involve in large scale capitals and productions, they must appoint some qualified person to important positions. 4. Unconventional behavior- They engage in behaviors that are perceived as novel and counter to norms. They being as successful leaders will never assumed that if they could just keep things running on a steady without changing and vision, their companies would be successful.
AEC is an international collaboration project among ASEAN countries, good workers or followers will be an essential part if the companies endeavor to obtain benefits and advantages from the project. Followers of charismatic leaders have higher task performance, task performance, and adjustment to the leader and to the group than did followers who worked under groups led by noncharismatic leaders. There are four-step process shows that how do charismatic leaders influence followers.
1. Articulate a vision- It begins by the leader articulating an appealing vision. A vision is a long-term strategy for how to attain a goal or goals. The vision provides a sense of continuity for followers by linking the present with a better future for the organization. The leaders share their vision with followers about the steps to attain goals in future through AEC by 2015. 2. Create a vision statement- A vision is incomplete unless it has an accompanying vision statement. A vision statement is a formal articulation of an organization’s vision or mission. Charismatic leader may use vision statement to “imprint” on followers an overarching goal and purpose. Once a vision and vision statement are established, the leader then communicates high performance expectations and expresses confidence that followers can attain them.
This enhances follower self-esteem and self-confidence. Leaders create framework for all their strategic planning that will apply to entity companies to meet the goals. 3. Create a new set of values- The leader conveys a new set of values and through words and actions by his or her behavior, set an example to followers to imitate. Charismatic leaders were more effective because their employees personally identified with the leaders. Finally, the charismatic leader engages in emotion-inducing and often unconventional behavior to demonstrate courage and convictions about the vision. There is an emotional contagion in charismatic leadership whereby followers “catch” the emotions their leader is conveying.
As I have mentioned at above, AEC is an international collaboration project among ASEAN countries, so leaders should create a new values that can apply to ASEAN countries instead of old values that are relate only with a country. 4. Demonstrate the vision- Because the vision is such a critical component of charismatic leadership, we should clarify exactly what we mean by the term, identify specific qualities of an effective vision, and offer some examples. Leaders implement the visions with their followers to achieve the goals.
According to the other news report of Thailand newspaper World Journal, Department of Foreign Trade, Ministry of Commerce held a round table meeting with regard to tourism recently, discussed the opportunities and development in tourist industry after Thailand join AEC by 2015. The round table meeting invited the Ministry of Tourism and Sport, relevant departments and travel agencies to participate in discussion.
Head of Foreign Trade Department indicate that the integration of ASEAN will mainly reflect the effect in investment and mobility of human resource after the establishment of AEC. By that time, Thailand will see further competitive in tourism markets from other ASEAN countries. Therefore, Thailand is critical to maintain and increase its own competitiveness to adapt to the markets and create great development progress. After the discussion in round table meeting, the methods were considered as effectiveness in increasing competitiveness of tourist industries of Thailand included:
1. Unify the standardization of tourism service, adopt international standard progressively to guild and measure. 2. Train employees with systematically, instill professional knowledge to them and also let them learn to master foreign language. 3. Formulate trade standard, avoid price war break out.
4. Establish good relationship with other ASEAN countries. 5. Create stricter law and legislation, crack down on illegal activities related to tourist industries.
Moreover, the round table meeting believed that short term and long term plans should be formulate to guide travel agencies solve their problems in order to accelerated development and faces the competitive from ASIAN countries positively.
We can address the foregoing changes of Ministry of Commerce, Thailand as an international and goal-oriented activity, we can also described the scenario as planned change. Essentially there are two goals in planned change. First, it seeks to improve the ability of the organization or industry to adapt to changes in its environment. Second, it seeks to change employee behavior. If an organization or industry is to survive, it must respond to changes in its environment. When competitors introduce new products or services, government agencies enact new laws, important sources of supplies go out of business, or similar environmental changes take place, the organization or industry needs to adapt.
Efforts to stimulate innovation, empower employees, and introduce work teams are examples of planned-change activities directed at responding to changes in the environment. Because an organization or industry’s success or failure is essentially due to the things that its employees do or fail to do, planned change also is concerned with changing the behavior of individuals and groups within the organization.
In the above case, Ministry of commerce improves the competitiveness and abilities of tourist industries in Thailand and train employees to improve their qualities to face the changes brought by AEC, like the increase of competitors are fully consistent with planned change. Change agents are responsible for managing change activities, change agents can be managers or nonmanagers, current employees of an organization, newly hired employees, or outside consultants, but the Ministry of Commerce, travel agencies and employees of tourist industries are the change agents in this case.
However, when people are confronted with change, resistance to change appears to be natural and positive state. One of the well-documented findings from studies of individual and organizational behavior is that organizations and their members resist change. One recent study showed that even when employees are shown data that they need to change, they latch onto whatever data they can find that suggests they are alright and don’t need to change. Our egos are fragile, and we often see change as threatening.
In order to avoid continue walking in the old steps and seclude oneself, seven tactics have been suggested for use by change agents in dealing with resistance to change:
1. Education and Communication- Resistance can be reduced through communicating with employees to help them see the logic of a change. Communication can reduce resistance on two levels. First, it fights the effects of misinformation and poor communication. Second, communication can be helpful in “selling” the need for change. The changes are most effective if Minister of Commerce communicate its rationale balancing various participants’ interest versus a rationale based on minister or heads of department’s interest only. 2. Participation- It’s difficult for individuals to resist a change decision in which they participated. Prior to making a change, those opposed can be brought into the decision process. Assuming that the participants have the expertise to make a meaningful contribution, their involvement can reduce resistance, obtain commitment, and increase the quality of the change decision. Therefore, Minister of Commerce should invite participations from various industries that are related to tourist industries to increase the success rate of changes.
3. Building Support and Commitment- Change agents can offer a range of supportive efforts to reduce resistance. When employees’ fear and anxiety are high, employee counseling and therapy, new-skills training, or a short paid leave or absence may facilitate adjustment. Research on middle managers has shown that when managers or employees have low emotional commitment to change, they favor the status quo and resist it. So firing up employees can also help them emotionally commit to the change rather than embrace the status quo. Minister of Commerce should fully support all of the participants by effort and money due to they are same sided and share same purposes to benefit their countries and industries. 4. Implementing Changes Fairly- Try as managers might to have employees see change positively, most workers tend to react negatively. Most people simply don’t like change. But one way organizations can minimize the negative impact of change, even when employees frame it as a negative, is to makes sure the change is implemented fairly.
Procedural fairness becomes especially important when employees perceive an outcome as negative, so when implementing changes, it’s crucial that organizations bend over backwards to make sure employees see the reason for the change, and perceive that the changes are being implemented consistently and fairly. Technical support and financial support allocate by Minister of Commerce to participants must be absolutely fair and free of discrimination or bias. 5. Manipulation and Cooptation- Manipulation refers to covert influence attempts. Twisting and distorting facts to make them appear more attractive, withholding undesirable information, and creating false rumors to get employees to accept a change are all examples of manipulation. Cooptation, on the other hand, is a form of both manipulation and participation.
It seeks to “buy off” the leaders of a resistance group by giving them a key role in the change decision. The leaders’ advice is sought, not to seek a better decision, but to get their endorsement. Ministry of Commerce can conceal the fact that will be against by participants in order to cooperative production. This method is not recommended to change agents unless there are left with no choice, because the tactics can backfire if the targets become aware they are being trick or used. 6. Selecting People Who Accept Change- Research suggests that the ability to easily accept and adapt to change is related to personality.
It appears that people who adjust best to change are those who are open to experience, take a positive attitude toward change, are willing to take risks, and are flexible in their behavior. Ministry of Commerce should select participants who are positive self-concept and high risk tolerance because they are coped better with change. 7. Coercion- Coercion is the application of direct threats or force on the resisters. The examples of coercion are threats of transfer, loss of promotions, negative performance evaluations, and a poor letter of recommendation. This method can use to be directed against participants who are not follow instructions or rules that made by Ministry of Commerce.
No discussion of resistance to change would be complete without a brief mention of the politics of change because change invariably threaten and the status quo, it inherently implies political activity.
In the frame of ASEAN Economic Community, enterprises need to the notion of operation and management to get the best of the achievement of free flow system from essential productive factors. Companies should convert to from the operation strategies that confines only to domestic markets transnational operation though establish relationship with business partners in the area of ASEAN. The most important thing is to put the pressure on formulate a new business planning for strives to adapt the changes and committed to the new business opportunities.
The establishment of AEC is expected to create bigger markets for products of Thailand, at the same time, companies of Thailand should examine themselves if they are brace to become a member of AEC while speed up with enhance comprehensive strength. Most of the ASEAN countries are not fully prepare to meet AEC, there are still some disadvantages in various directions for Thailand, especially the political situation of Thailand not showing any specific development route, some corporation are still lack of related knowledge result in not fully prepare of relevant plans. For this purpose, Thailand should make full use of advantages and rational utilization of resources to increase competitiveness to differentiates their superiority with other ASEAN countries for the in coming of establishment of AEC by 2015.
Aseansec.org (2007) ASEANWEB – ASEAN Economic Community. [online] Available at: http://www.aseansec.org/18757.htm [Accessed: 1 Oct 2012]. Chinaasean.org (2005) Ministry of Commerce of Thailand Appeal Tourist Industries to Increase Competitiveness. [online] Available at: http://www.chinaasean.org/html/report/1259802-1.htm [Accessed: 1 Oct 2012]. En.wikipedia.org (1967) Association of Southeast Asian Nations – Wikipedia, the free encyclopedia. [online] Available at: http://en.wikipedia.org/wiki/ASEAN#From_CEPT_to_AEC [Accessed: 1 Oct 2012]. ROBBINS, S. and JUDGE, T. (2010) Organizational Behavior. 13th ed. Prentice Hall, p.447-450,654-659. News.sina.com.tw (1996) Thailand Listed Company Adjust Strategies to Meet AEC [online] Available at: http://news.sina.com.tw/article/20120626/7156145.html [Accessed: 1 Oct 2012].
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 14 October 2016
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