Comparison of the Socio-Cultural, Economic, Governmental, and Infrastructure

Environments in Singapore and the Philippines from a Technology Management

Perspective*
Leonard Olive1, Uthai Chulapongwanich2, Carol Kvinge Radabaugh3, Charlie Mack4, Susan Adam5,
Swaminathan Jayasankar6, Lowell Rogers7, Carlos Andino1
1
Bureau of Transportation Engineering and Development, 1120 SW 5th. Ave. Room 802, Portland, OR 97204
2
Engineering Management Program, Portland State University, Portland, OR
3
LSI Logic Corporation, 23400 NE Glisan Street, Gresham, OR 97030
4
Underwriters Laboratory, Portland, OR
5
Tektronix, Inc., PO Box 500, M/S 48-214, Beaverton, OR 97077
6
TRW Supply Chain Integration, Portland, OR.
7
Black & Veatch Corporation, 4004 Kruse Way, Place, Suite 200, Lake Oswego, OR 97035

Abstract – The purpose of this paper is to develop and States’ Fourth largest trading partner, with two-way trade
apply a methodology for the comparison of different countries reaching $110 billion that year. ASEAN is also the fastest
as potential business investment alternatives. This paper growing market for the U.S. Millions of Americans have
focuses on the geographical region of Southeast Asia, with the investments in ASEAN countries, owing to the rapid growth
contrasting countries of the Philippines and Singapore having
the region has experienced in the last two decades.
been selected as case-studies. Four key country characteristics
(socio-cultural issues, economic conditions, governmental In October of 1995, ASEAN members adopted the
factors, and infrastructure) are studied in order to evaluate the ASEAN Framework Agreement on Intellectual Property
attractiveness and feasibility of a mid- to high-tech American Cooperation. In effect, this agreement begins to strengthen
company conducting business in one of these countries. intellectual property rights’ standards and practices of
member countries, making them more consistent with
international standards [2].
I. INTRODUCTION ASEAN countries differ markedly in their level of
industrialization. While the founding members tend to be
Southeast Asian countries have experienced very fast more highly industrialized, the others rely on their
economic growth in the last two decades. Much of this agricultural power. The growth markets for ASEAN are
growth has been seen within the countries that make up the mainly high technology products. ASEAN leaders have
union known as Association of South East Asian Nations anticipated and considered many of the structural, economic,
(ASEAN). ASEAN was established on 8 August 1967 by technical and procedural issues expansion will bring,
five of the nine countries that belong to ASEAN today. The however, they could not have anticipated the depth and
five countries, which signed the original Bangkok breadth of the financial crisis that it faces today. The
Declaration, are Indonesia, Malaysia, Philippines, Singapore political aspect is the one that undermines the cohesion of
and Thailand. Brunei Darussalam joined in December 1984, the group and challenges the ability of the Southeast Asian
Vietnam became a member in 1995, and Laos and Myanmar countries to endure the current economic crisis. It is difficult
became members in 1997. Cambodia is the only country in to say how much the current crisis may slow ASEAN's
Southeast Asia which is not a member of ASEAN. The progress toward its long-term goals.
ASEAN union was created with the goal of promoting the
economic, social and cultural development of the region II. METHODOLOGY OVERVIEW
through cooperative programs; and to safeguard the political,
social and economic stability of the region. This study seeks to provide information relevant to a mid
South East Asia has a combined population of 470 to high-tech U.S. company considering initial or expanded
million people, making it one of the largest markets in the investments in the countries of ASEAN. For the purposes of
world, larger than the European union and the United States. this study, the Philippines and Singapore will be compared
Its strategic geographical situation provides an excellent link and contrasted in terms of four key country characteristics:
between the Pacific Ocean, Middle East, Africa and Europe, socio-cultural issues, economic conditions, governmental
making this region a center of commerce for the different factors, and infrastructures in order to evaluate the
companies operating there. By 1996, ASEAN was the United

* This paper was prepared as a Portland State University EMgt 520/620 class project, fall term, 1998.
attractiveness and feasibility to an American company Filipinos greet each other with their eyebrows. Eye
conducting business there. These countries were selected contact is established and instantly both eyebrows rise up
because of their differences and the extent to which they are and down, it is a recognition signal. A smile to go with it
representative of the differences found across Southeast Asia. becomes a friendly ‘hello’ without words. An abrupt
The categories of country characteristics researched in this backward toss of the head with hard eye contact is a
study were identified based on the work of Saldivar-Sali challenge. Staring is rude and aggressive; intense eye contact
[19]. is a danger signal. Filipino culture becomes complex by
The research began with a qualitative comprehensive traditional insistence on clouding all social and business
literature search to compile country attribute profiles. The intercourse with a harmonious, pleasant, polite atmosphere.
profiles were then subject to analysis using the pairwise Filipinos use different time frames for Americans, fellow
comparison methodology (PCM) and the scoring model. Filipinos, and other strangers. Punctuality does not correlate
While the pairwise comparison method was conducted to to politeness. It is customary to be late; so 15 minutes after
normalize weights and measure internal discrepancy, the the appointed time is being ‘punctual.’ The more important
scoring model was conducted to evaluate the results. These the invited guest, the later he will make his appearance,
two quantitative methodologies were used to ensure that sometimes by as much as two hours or more.
results of the qualitative analysis would be consistent and Hiya or shame is the foremost cultural value. Hiya is a
reliable. universal social sanction, applied within the society,
controlling and motivating individual and social behavior.
III. LITERATURE SEARCH Filipino employees tend not to ask questions of a supervisor.
This is true even if they are not quite sure what they should
A. SOCIO-CULTURAL FACTORS do. The Spanish term amor-propio, (literally ‘love of self,’ in
Professor Stella Ting-Toomey has studied the cross- other words self-respect) reinforces hiya. The traditional
cultural problems, particularly in the area of communication, oriental attitude about ‘face’ comes into play as well in
that arise when western companies do business in Southeast Philippine society, reinforcing hiya and amor-propio. Unlike
Asia [29]. This research has concluded that between fifteen the Western code of behavior which hinges on an established
and forty percent of managers sent to Asian overseas code of right and wrong for which an individual feels guilt if
operations have experience failures that have resulted in he realizes he is wrong, hiya operates even when the person
their premature return home. The root cause of these failures is right and the other person wrong, because of the Filipino
appeared to be due to inaccurate and unrealistic cultural interaction between hiya and amor-propio. In practical
assumptions. A company and its representatives should be applications, business executives dealing with Filipino co-
aware of cultural and communication sensitivities. workers and subordinates should know that the Filipino
value of hiya-amor-propio is often the cause of much
1. Philippines misunderstanding. The Filipino has a high sense of personal
The Philippines is the only predominantly Catholic dignity. His dignity and honor are everything to him, so that
country in Southeast Asia. At the latest count, there are 111 the wounding of them, whether real or imagined, becomes a
linguistic, cultural and racial groups in the country. While challenge to his manhood. He respects other people but they
an essentially Malayo-Polynesian genetic mix makes the must also respect him. A sacred of individual dignity, has
Filipino relative of most Southeast Asian and Pacific fueled many a conflict between a foreign superior and a
peoples, there are also traces of Indian, Arabic, Chinese and Filipino subordinate [1].
Spanish blood. The national language is Pilipino based on Filipinos make a distinction between their private space
Tagalog, but approximately 70 other languages and dialects and the public space. Filipinos do not think of public space
are also spoken in the Philippines today. as being a shared community asset, cared for and respected
English has been the primary language of instruction for by all. That concern passes on as the task of government.
the last eighty years; however, many words and phrases in Filipinos have not really come to terms with their
Filipino English have evolved non-Western meaning. relationship with the government (taxes, jaywalking,
Misunderstandings over language occur less over littering, etc.). Without the physical presence of a traffic
peculiarities of Filipino English and more because of the policeman, for example, Filipinos do not obey traffic lights
deeper and broader social meaning given to terms. It is not and signs. They respect a person in authority, but they
just what one says, but the tone and manner of speech that generally ignore an abstract de-personified sign. While
conveys meaning. To make things more complex, it should stealing is considered immoral and a crime, ‘borrowing’ and
be noted that it is difficult for a Filipino to say ‘no’ openly in pilferage are rampant. Mail delivery is not very reliable for
his/her effort to avoid confrontation. This cultural this reason. Traditional Filipino kinship patterns develop a
characteristic can seriously compound miscommunication. lax attitude about helping oneself to a family member’s
possessions, and they consider reluctance to share extremely Singaporean business people always act as a whole.
stingy. Collectivism is the main principle for all acts. They belong
The style of doing business in the Philippines is casual to a close group of friends, classmates, friends of friends;
and leisurely. Things may seem to go speedily and smoothly relatives and associates with shared interests. These people
at the top level, but at the level of implementation things do favors for one another and always remember what they
move much more slowly. A go-between can assist in pushing have given or received. The importance of personal
through any kind of barrier. All decision-making comes connections has its roots on the traditional concept of family
from the top. Access to the top is only through where the individual is part of a whole entity. This entity is
intermediaries in informal social meetings which then move the source of protection and strength against forces from the
to a more formal discussion, though still in a social situation outside. Under this principle Singaporean business people
such as a luncheon. Even at the top, the chief executive may work for the prosperity of the whole country and not for their
not want to commit himself and he may say a proposal has to own personal gain. Executives and entrepreneurs work
go to a board or committee. Back room caucuses likely made constantly to expand their personal networks of connection,
the decision to approve or disapprove a proposal. The while the companies grow with the purpose of mutual
business pace slows considerably in the Philippines and one financial profit. The criterion is the same with personal
must provide generous margins for timetables, deadlines, connections, based on trustworthiness and loyalty.
and work schedules. On many occasions nothing moves Americans have to look at this aspect very carefully when
without a lagay, a euphemism for a small bribe, which some doing business. Any sign of individualism that could hurt the
scholars prefer to call ‘persuasive communication.’ unity of the network will result in the termination of the
2. Singapore deal. Singaporeans like to have all the information possible
Singapore is a multicultural city-state where Chinese, about a project. First business meetings have little or no
Malay and Indian traditions coexist under the veneer of a results. A very complete presentation should be prepared
western cosmopolitan culture. Singapore reassembles any without leaving out any aspect, even if it does not seem
western city with clean streets, modern skyline and efficient relevant. Foreign delegations must also observe the rank of
transportation. Yet, Singapore maintains the cultural the executives that form the delegation. Singaporeans
traditions of its people. Cultures have marked the way measure the seriousness of a proposal by looking at the ranks
Singaporeans do business with foreign companies and of the team members involved; they would not give it any
investors. Singaporeans do not adopt habits from all the importance if only junior executives formed the delegation.
cultures existing there; people preserve their values and
ethnic identities. Understanding the business culture of a B. ECONOMIC CONDITIONS
particular Singaporean requires knowledge of whom one is It is essential to understand the current Asian financial
dealing with. It is necessary to have a good knowledge of crisis in order to effectively explore economic conditions as a
that person’s cultural backgrounds and values. key country characteristic. The current Asian Financial
The official language of Singapore is English, but for Crisis began in July, 1997, with the currency crisis in
most Singaporeans, English is a second language. The result Thailand and the financial contagion surged through Asia
is a mix of English, Malay and Chinese, which combines causing the collapse of many currencies. The instability of
with non-English slang. They call the mixed language these currencies caused investors to lose confidence and to
“Singlish.” Visitors can find the accent hard to understand. draw their money out of Southeast Asia, further exacerbating
However, with a little attention and remembrance of a few the crisis. Three common situations across Southeast Asia
linguistic characteristics, visitors will soon communicate can be seen to have contributed to the instability of these
freely and without hesitation. financial markets: overextended banding systems, excessive
When western people do business with a Singaporean debt financing, and volatile real estate markets.
woman executive, they have to be very careful of the way Many of the banking systems were overextended. Interest
they speak or act. Every interaction has to be very formal. rates had been elevated to attract foreign investors and many
Flirtatious behavior is a taboo in Singaporean society. Men Asian countries were competing against one another to
inside the work environment have more freedom. Face value attract the available foreign investment dollars. However, in
is a mark of high dignity and honor. Face is a cherished order to pay these interest rates, banks require interest
possession that could be lost or taken away. According to the income from performing loans. The banks overextended
Singaporean culture, face can be lost when you insult or themselves by lending far more money than their equity was
degrade a person in front of others. However, as face can be worth. For example, the debt-to-equity ratios for the top 30
lost, thanking someone or remarking about his or her Korean conglomerates averages about 400 percent, more
performance in front of the superiors returns it. Western than three times the average of large American companies.
people should always wait for their turn to speak; A prevalence of corruption and unwise business investments
interrupting someone could cause them to loose face.
contributed to poor lending decisions and a large proportion The levels of international investment have continued to
of loan defaults. grow since 1990. The net income from abroad has increased
Rapidly emerging new business ventures were by 6.8 % since 1990 [8]. The agricultural and manufacturing
disproportionately dependent on debt rather than equity segments have seen the greatest activity from international
financing. When the crisis affected the profits for Southeast investments, but since agriculture is highly sensitive to
Asian businesses, they could not pay back their bank loans. environmental impacts, there are concerns that the growth
In turn, the banks could not pay their debts to investors. may not be sustained. The slower pace of the manufacturing
The volatile real estate market also contributed to the sector can not finance the country’s investment. Foreign
crisis. Real estate values had been growing rapidly, making exchange remittances of Filipino workers abroad continue to
it a good investment choice. Many foreign investors took out be the primary booster of the Philippines' economy.
loans with banks to purchase real estate at elevated prices, When the GDP dropped during the period from 1980-
believing its value would continue to rise. The demand for 1985, the government of the Philippines decided to reform
real estate finally caught up with the price; the market the tax system. The more significant changes of recent years
became saturated. Real estate prices not only leveled out but include adoption of a 10 % value-added tax (VAT) to replace
also began to fall leaving the banking system to further an over abundance of business and excise taxes. VAT
suffer from defaults on real estate loans. includes a withholding tax on residents and the Simplified
Most Southeast Asian countries had seen growth rates of Net Income Tax Scheme (SNITS) for professionals and the
five to nine percent of GDP through the decade of the 1990's. self-employed. This is especially critical since most foreign
The stronger countries are now only expected to realize three investments in the Philippines in the past five years come
to seven percent growth in 1998 and 1999. The weaker from countries such as the U.S., Europe and Japan, all of
countries will see contractions in their economies in 1998. which have a tax system based on net income. By imposing
Indonesia is expected to face negative growth of 6.3 percent, a minimum gross asset tax, the Philippines might be on the
Thailand negative growth of 4.1 percent. cutting edge of the new wave of tax reforms for developing
countries.
1. Philippines Tax reform has influenced several Philippine industry
In the 1980’s, the economy of the Philippines was sectors, for some there have been benefits, for others there
substantially behind those of its ASEAN neighbors. have been penalties. Production of metal mining has fallen,
However, “Yesterday’s sick man of Asia (Philippines) looks while the production of the nonmetal mining industry has
pretty perky today – and without the help of an autocratic expanded. Capital intensive industries have gained more tax
doctor” – The Economist, November 16th 1996. Although benefits than have land or labor intensive ones. While the
there are many different perceptions (both positive and consumption of energy, clothing, transportation, and
negative) concerning the current Philippine economy, it is education has increased, the consumption of housing, fish,
still considered attractive to foreign investors in many ways. medical services, milk and meat has decreased [3].
Exports, imports, and foreign investments keep increasing.
The GNP from 1993 through 1997 grew from 746.9 to 931.1 2. Singapore
billion pesos. In addition, the statistic trend of economic Singapore's high technology sector is lead by government
growth rate (in terms of GDP by industrial types) has also initiatives. A National Science and Technology Board
been increasing gradually. The predicted economic growth (NSTB) was established in 1983 and the Ministry of Trade
in the Philippines will continue to advance with a GDP and and Industry (MTI) was set-up in 1991. The positive side of
GNP growing 5-8 % each year. Because of these growing high government involvement in technology industry is
numbers, the Philippines is seen as a strong example of a strong financial support and incentives for individuals to
‘Newly Industrializing Economy.’ seek scientific and engineering training with the promise of
The mobility of labor in the Philippines is relatively many high-paying, secure government jobs. Singapore has a
intense. Filipinos primarily work in agriculture and forestry mandatory public savings plan. The government reviews and
sectors. Many Filipinos work aboard, typically on identifies promising technology ventures and supports their
construction projects in the Middle East, on ships at sea, as development. The government provides university
English teachers in Asia, and in hospitals in the United scholarships in science and technology in return for
Stated and Europe. In 1996, the Filipino workers abroad obligatory public service terms by the students when they
contributed nearly 8% to the GNP, that is more than 71.72 graduate. Singapore's nurturing government involvement in
billion pesos [8]. It is unfortunate the country can not make the technology sector has been highly successful to date. In
use of its considerable human resources, but the working 1996, US$1,798M was expended on R&D (63% from non-
class Filipinos have turned this to their own advantage, governmental sources). The government has begun to more
marketing themselves abroad and sending the money home closely monitor the health of the high-tech private sector,
to create broad-based capitalism.
and advertise that private sector R&D investment grew compared to its neighbors, Malaysia and Thailand. Each of
28.6% between 1995 and 1996 [21]. these factors lends stability to its financial institutions and
In 1996, the Organization for Economic Cooperation and economic health. However, in 1998, the International
Development (OECD) took Singapore off the list of Monetary Fund’s (IMF) economic review encouraged
developing countries in need of international assistance. improved financial disclosure standards for government
Even in the midst of the Asian economic crisis, Singapore assets and for individual banks regarding non-performing
continues to see GDP growth, however, the GDP growth for loans and hidden reserve levels to decrease the perceived risk
1998 is expected to be only 1% from 1997. Except for 1998 to international investors [11].
(due to the Asian Crisis), Singapore has been seeing strong
growth since their 1985-86 recession. The fast growth over C. GOVERNMENTAL FACTORS
the previous decade has contributed to a soaring cost of labor Southeast Asian governments, having realized the
and property. Looking at the period from June 1995-1996, importance of high technology as a vehicle of economic
the Unit Business Cost Index of the manufacturing sector growth, have established many programs to promote it. Most
saw quarterly increases around 6%; Unit Labor Cost Index governments have invested in setting up technical training
saw increases of 4.3%; and the Consumer Price Index schools and institutions to train workers in the latest
increased only 2.0%. Due to these rising costs of doing technology. Several governments have established
business, Singapore has lost some business to Malaysia and technology parks focusing on such technologies as
Thailand. Unemployment increased to 3.2% in 1998, but this multimedia or semiconductors. The Malaysian government,
is still below the levels seen in most Western countries. for instance, has set up the Multimedia Super Corridor
Singapore’s National Wages Council implemented a (MSC), which hosts the world's biggest computer companies
policy during the 1985 recession of wage restraint. The [11]. Encompassing a 15 by 40 kilometer area, the MSC will
government can reduce the wages of civil servants by as be a multimedia research and manufacturing zone and will
much as 20 % in a given year to control inflation. The eventually include high tech suburbs, technology parks, and
private sector can vary wages by as much as 16 %. The wage a multimedia university. Such concentrations of technology
council maintains that “wage restraint is an integral part of encourage multinationals in similar business to participate in
our response to the current problems, for both the private these parks. The SE Asian nations offer many incentives
and public sectors.” [10]. This policy has a significant effect designed to increase foreign investment in their country.
in controlling the CPI and the unemployment rate. These include tax concessions and holidays, research and
Singapore’s exports were valued at US $125B in 1997. development incentives, export incentives, and loan/grant
Primary exports include computer disk drives, printed circuit programs. Industry incentive programs are administered by
boards, integrated circuits, refined oil products, and the trade development organizations of the respective
chemicals. Imports for 1997 were valued at US$132 B. governments. These are institutions such as the Trade
These primarily include electronic components, crude oil, Development Board, Economic Development Board which
food, electric generators, aircraft and ships. In 1997, 44% of have played a key role in promoting and channeling
manufacturing output and 2/3 of exports were electronic investment into the country. ASEAN business leaders need
products. to adapt to the pressures and benefits associated with foreign
“Singapore has attracted more foreign direct investment investors and international trade. They particularly need to
per capita than any other major Asian country-by a mile.” focus on the issues of labor standards, multilateral
[6]. However, this high foreign investment, especially by investment agreements, environment protection, intellectual
multinational electronics firms, positioned Singapore property rights, competition policy, and transparency of
precariously for the current Asian economic crisis. Once regulations and procedures in government dealings.
Asian currencies became unstable, international investors Since the law enforcement in intellectual property issues
pulled many of their investments out of Singapore. is quite weak in many SE Asian countries, companies such
Singapore has felt this sting through slowing growth in 1997 as Microsoft have established their own network of informers
and 1998. However, the country’s economy has to keep track of pirating in their products. After identifying
demonstrated itself to be among the strongest in Southeast the suspects, they seek the help of state authorities to stop the
Asia due to a high level of government control and theft. The US company doing business in Southeast Asia
regulation. Strong fundamentals form the basis for the should be aware of the fact that it may not get much state
Singapore economy. Citizens are encouraged to maintain a protection in safeguarding its products and hence must take
high savings rate and the government maintains large fiscal some steps of its own to protect its commercial interests.
and external current account surpluses, along with high The political systems across Southeast Asia vary from
regulation and supervision of domestic financial institutions. dictatorship (Vietnam) to a largely functional democracy
The corporate tax rate is currently 26%, one of the lowest in (Thailand) with all other countries lying somewhere in this
Asia. It has also maintained relatively low interest rates as spectrum; however, the liberal democracy on the western
model is not a characteristic of a SE Asian society. Though on imports. This governmental trend will require industry in
their formal institutions of government resemble western the Philippines to brace themselves for competition with a
structures it is largely because they were inherited colonial strong foreign market.
legacies. The actual style of government, reflecting deeper
social traditions, is authoritarian ranging from paternalism 2. Singapore
to outright military rule. In Indonesia, Thailand and the Singapore is a republic with a parliamentary system of
Philippines the military has a powerful influence in running government based on the British, model. This means that all
the government. A US company should be on the lookout for cabinet members are elected members of Parliament. The
possible changes in the political climate of a country and cabinet is the visible representation of the government, led
determine how changes would affect their business. It should by the Prime Minister, appointed by the President. On the
seek the services of people who can guide the company advice of the Prime Minister, the President appoints other
during such changes; this has to be considered as a cost of ministers from among the members of parliament to form
doing business in the specific SE Asian country. the cabinet. The Singapore government pays its ministers
salaries in par with the private sector industries, minimizing
1. Philippines the temptation of the office holder to misuse his/her position.
The Philippines models its Government from the United The Singapore government has put in place laws and
States. There is a President, Vice President, Senate and procedures so that the business transactions run smoothly. It
Congress. The government was structured in 1946, after promotes and facilitates foreign investment, and investors
World War II. The Philippine Government is currently in a face few restrictions. Government promotions include tax
state of flux. The current president of the Philippines, Joseph concessions and holidays, research and development
Estrada, took the office June 30 of this year. His new party, incentives, export incentives, and loan/grant programs. The
Laban ng Masang Pilipino (Fight of the Filipino Masses), is Economic Development Board (EDB) administers the
a merger of the Laban nb Demokratikong and the Nationalist industry incentive programs.
People’s Coalition. Estrada has had problems from the Singapore produces very little of what it consumes and is
outset. There is growing concern that there will be a return very active in international markets. Most of the imports are
to the bad old days of dictator Ferdinand Marcos. In August free of duties and restrictions. Certain products such as arms,
of this year, the new president shocked the foreign business pharmaceuticals, transmitters, meat products, publications,
world by announcing that the government must use Filipino audio-video materials, and coffee require “endorsement”, or
language rather than English in official business. This was approval, from the relevant government authorities. There
the culmination of a nationalist movement that had been are no capital import restrictions in Singapore. A foreign
brewing over the previous two decades. Companies like firm is free to bring in as much capital as it needs and is free
Texas Instrument have stated that the use of English is a to borrow from the local banks. Foreign investors are also
major reason for companies to relocate to the Philippines. free to transfer the profits abroad. However, these firms have
Estrada retorted that globalization should not be an excuse to to comply with the local banking and tax laws. The
suppress the use of the national language. government has enacted strict environment-friendly laws.
Government has had great influence over the economic These laws are well enforced and reflect international
conditions in the Philippines in the past. Initiated under standards. The environment ministry inspects factories
Corazon Aquino, the government has begun divesting its periodically to ensure compliance with existing emissions
holdings of companies in an effort to reduce a horrendous standards and laws.
debt. At the end of 1985, the Government owned 300 Enforcement of intellectual property rights is generally
businesses. The fourteen largest combined for an annual debt good in Singapore. For instance, the government has taken
of US$580 million [28]. In an effort to further reduce the active and effective measures in eliminating many pirated
debt, government has focused on five goals: consumer goods, such as watches, audio-video cassettes, and
1. Securing much needed foreign aid clothing. However, enforcement of software copyrights
2. Stimulating domestic consumption by increasing remains weak. In February 1995, Singapore joined the Paris
government spending on employment generating Convention for the Protection of Industrial Property
projects (Stockholm version) and the Patent Cooperation Treaty
3. Freeing the economy from the distortions of the Marcos (PCT). Singapore is in the process of establishing its own
era patent office and board of examiners. Previously they were
4. Restructuring and reducing the burden of the country’s subject to the British patent system, being a former British
US $26 billion in foreign debt colony. Furthermore, Singapore has established the Patent
5. Encouraging new domestic and foreign investment. Application Fund (PAF) in an effort to encourage Singapore
The government is currently contemplating a full-scale organizations and individuals to register their innovations.
import liberalization policy on tariffs and eliminating quotas
The fund provides financial assistance to defray the costs of been so successful. Philippines Airlines (PAL) is
patent applications. unimproved and continues to have the reputation of being
unreliable. Incentives to continue investments in the region
D. INFRASTRUCTURE include the strategic location of the Philippines as the center
Development of high-technology sectors is a key element of the worlds fastest growing region, and a local market of
of Southeast Asia’s economic development strategy. Three nearly 70 million people.
countries in which high-technology development is Regardless of all this optimistic news for the Philippine
particularly visible are Singapore, Malaysia, Indonesia. For infrastructure, it is apparent the existing infrastructure is
example, in order to improve Malaysia's telecommunications substandard to infrastructures experienced by an American
system, a government-linked company is about to launch business in the United States. Strategic planning for any
Malaysia's first telecommunications satellite. In addition, in company doing business in the Philippines would need to
constructing Kuala Lumpur's new international airport (at include contingent plans for the time and money lost due to
Sepang), the Malaysian government and private sector the inadequate infrastructure. Economic success for the
intend to install the latest technology in air traffic control, Philippines requires an infrastructure that supports the
baggage handling, and other equipment. In Indonesia, requirements of predominate business ventures. If the
infrastructure development has necessitated a tremendous Philippines is to become the “Silicon Valley of the east”
infusion of technology including the inauguration of the investors must have access to reliable utilities, fast
multifunction earth station in South Sulawesi in September transportation, and a good communications network [18].
1993.
2. Singapore
1. Philippines Development of high-technology sectors is a key element
In 1992, the Philippine government managed power of SE Asia’s economic development strategy. Three
industry was in crisis. Twelve hours of power brownouts countries in which high-technology development is
were common place in the Philippines. When President particularly visible are Singapore, Malaysia, and Indonesia.
Ramos took office, he proposed a legislation that allowed With its advanced infrastructure, Singapore has been a
Build-Operate-Transfer (BOT) of power projects and the leader in developing various high-tech sectors. Specifically,
government passed laws allowing BOT in 1993 [25]. Over the Singapore government is engaged in an effort to make
the next three years, eighteen private power projects worth Singapore an "intelligent island." In this endeavor, there is
$3.4 billion were successfully completed. Later, the BOT emphasis on developing Singapore's information technology,
scheme extended to other infrastructure industries such as as enunciated by the government's "IT 2000" plan. Already a
shipping, telecommunications, airlines and roads. The BOT center for information hardware--especially computer
used $50 billion as the target project cost to upgrade the equipment--Singapore is seeking to develop more software
Philippines infrastructure. In the last 5 years, the BOT and advanced audiovisual products. Singapore has probably
scheme and its variations have been the primary method the best general infrastructure in the Asia-Pacific Rim. For
used by the Philippine government to upgrade their example, Singapore has a world-class airport complete with
antiquated infrastructure. By 1996, thirty-five private sector fast-computerized trade documentation. Along with these,
projects, worth $5 billion, were almost complete. The there is Mass Rapid Transit (MRT) whose trains covers most
government ended the telecommunication monopoly by of the island, a central expressway and one of the very best
1994, which resulted in nine new telecommunication container ports in the world. For transportation, most people
companies. The Philippine telephone density increased from living in Singapore take advantage of MRT and the bus
1.67 to 2.80 lines per 100 people, and is expected to increase system that supports it. Buses and taxis run where the MRT
to 10.00 lines by the end of 1998. The Philippines plan on a does not run. There are a few toll roads on the island, and
complete makeover of its roads, railways and water system most roads are maintained well and have good signage.
using the BOT method of financing. A $514 million dollar Singapore constantly invests to upgrade its infrastructure. In
skyway project has a consortium of investors consisting of 1989, Singapore introduced a $15 million cellular phone
Philippine National Construction Corporation, PT Cita network for its mass transit system. In 1994, all financial
Lomtoro Gung, and American International Group Inc. The exchanges went digital and fiberoptic cables replaced copper
Philippine National Bank has issued a letter of credit for wiring for communication lines.
$192 million for the project. A planned new railway will tie
two business districts together at a cost of more than $650 E. LITERATURE RESEARCH CONCLUSIONS
million. Privatization has made the existing markets leaner Singapore is a clean, prosperous, predictable, trustworthy
and more competitive. The Subic Shipyard & Engineering nation which is linked within itself and with the modern
Inc., a state owned business, is an example of a success story world by state-of-the-art infrastructure. The Philippines, in
after its sale to private business. Yet, not all ventures have contrast, is a developing country suffering from growing
pains leading to conditions characterized by graft,
corruption, economic volatility, pollution, sub-standard Respondents were asked to compare all criteria in pairs.
infrastructure, and unpredictability. These two countries The respondents were instructed to divide 100 points
exemplify the contrasts to be found in Southeast Asia. between each pair of items being compared, based on their
own perceptions about the relative importance of each in
making international project/technology business
IV. PAIRWISE COMPARISON AND SCORING MODEL investments. For example, consider a respondent comparing
two criteria for their relative importance in the decision
In additional to the literature search used in this paper, process to invest abroad. If the respondent felt that the first
the researchers utilized the judgment quantification criterion was far more important than the second criterion,
technique accompanied with the “Pairwise Comparison” and he or she should assign 80 points go to the first criterion and
the “Scoring Model” as operations for analyzing the results. 20 points to the latter.
While the pairwise comparison method (PCM) was
conducted to normalize weights and measure internal § Results
discrepancy, the scoring model was conducted to evaluate Results were calculated using the PCM program. Since
the results. These two quantitative methodologies were used perceptions and experiences of target respondents are not
to ensure that the results of the qualitative analysis would be identical, consideration must be given to variations within
consistent and reliable. and between respondents. Thus, levels of significance of
criteria and internal inconsistency measures from individual
A. QUESTIONNAIRE DESIGN AND PILOT TEST results were compared across all respondents (Appendix C).
At the heart of this analysis was the process for
questionnaire development. The key considerations were the 2. Questionnaire Format for Scoring Model (Appendix B)
way the attributes were paired and ordered within the survey
instrument. The survey was called “Managing a Project in § General Information
Southeast Asia”. Responses by the team to the questionnaire Again a set of background questions assessed the
were based primarily on the results of the literature review. experiences of team members. This survey was performed
After developing the first questionnaire, a simple pilot later in the semester so that the team members had relatively
test was conducted to validate the survey. All eight project greater experience with the topic, having completed the
team members completed the survey and gave comments in literature searches and participated in lengthy group
terms of clarity, ease of use, and readability. With discussions. Level of confidence of the responses was also
consideration of this feedback, the questionnaire was addressed in this questionnaire.
modified and then distributed to the larger sample of target
respondents. The final format of the questionnaire was § Individual Perception - Effects on Judgment
separated into two sections for analysis as shown below. Quantification Analysis of Comparison
This section is similar to the first questionnaire format
1. Questionnaire Format for Pairwise Methodology except that it is used for evaluating each of two countries
(Appendix A) with respect to each criterion, using the 5-point scale model.
Criteria used in this section are a bit different from the
§ General Information former format. The following are details:
A set of background questions was posed to determine the Philippines
backgrounds of those respondents in terms of work and Criterion B1: Socio-cultural issues
personal experience. The respondents were also requested to Criterion B2: Economic conditions
rate their level of confidence regarding their responses. Criterion B3: Governmental factors
Criterion B4: Infrastructure
§ Individual Perception
This section focused on the decision criterion for the Singapore
project decision. Five criteria for survey were conveyed for Criterion C1: Socio-cultural issues
asking all possible target respondents. The following are the Criterion C2: Economic conditions
decision criterion used in the questionnaire survey: Criterion C3: Governmental factors
Criterion A1: Socio-cultural issues Criterion C4: Infrastructure
Criterion A2: Economic conditions
Criterion A3: Governmental factors Project team members compared all criteria in pairs
Criterion A4: Infrastructure (Philippines vs. Singapore). Like the former questionnaire
format, quantitative measures of internal consistency were
calculated. The significance of these initial results were perceptions and experiences of team project members varied,
limited by the small sample size, having collected responses weights were calculated for each attribute. The result of the
only from the eight project team members. analysis was the determination of “expected values”
regarding the determined importance of each country
§ Results attribute in technology investment decisions (Appendix C).
Project team members independently expressed their own
attitudes and preferences in addressing the relative
importance of the criteria for each country. Since

Scoring Model
CHAR. L.S. PHILIPPINES SINGAPORE
Socio-cultural W1 C(P)W1 C(S)W1
Economics W2 C(P)W2 C(S)W2
Government W3 C(P)W3 C(S)W3
Infrastructure W4 C(P)W4 C(S)W4
SUM E(C(PhIippines)) E(C(Singapore))

B. TARGET RESPONDENTS & SURVEY DISTRIBUTION own experiences and perceptions. However, respondent
The next step was to distribute the questionnaire to as weights were highly similar (with a small degree of
many participants with experience relevant to the study as inconsistency - 0.013). The statistical analysis indicated that
possible. The researchers defined target respondents who the most important issue of decision-making process for
had direct and indirect experiences of working and/or investment in Southeast Asia was economic conditions, with
investing in Southeast Asian countries. These targeted government & politics, infrastructure and socio-culture
respondents held expertise in various functional areas, and issues following in that order.
included professors at Portland State University, Asian The subjective judgments made by research members
students, and white-collar workers at local companies in demonstrated an overall preference for Singapore over the
Portland. Philippines when considering each as an investment
The distribution of the surveys was begun in the middle of alternative. It is interesting that when the researchers
the academic session and lasted for three weeks. Forty applied this multi-criteria decision model to decision-making
surveys were distributed throughout Portland, 26 people process, the results were quite different from initial
responded (65% total percent responses). The respondents perceptions. Even in the same decision situation, conducted
may be categorized as follows: by the same group of people, the results from the two
different samples and situations can significantly vary. This
§ Professors of School of Business Administration – 3 indicates that a multi-criteria decision process is much
responses effective than single criteria, especially in important decision
§ Professors of Economics Department – 2 responses domains.
§ Professors of Engineering Department – 3 responses
§ White-collar managers who have experiences in the V. CONCLUSION
Philippines and/or Singapore – 4 responses
§ International students (Asian students) – 6 responses The pairwise comparison method (PCM) and scoring
§ Project team members – 8 responses model applied to the research data clearly points to a
preference favoring Singapore over the Philippines as a place
to conduct business. However, the literature search as well
C. ANALYSIS OF RESULTS as the PCM analysis targeted ‘mainstream,’ medium-high to
By using the project/technology evaluation accompanied hi-tech organizations. This research does not necessarily
with “Pairwise Comparison” and “Scoring Model” infer that the Philippines is a ‘bad’ place to do business. To
methodologies, the researchers found that the attractiveness the contrary, the country has a huge built-in market
of Singapore was far greater than that of the Philippines consisting of 72 million consumers. The Philippines has a
(0.86 and 0.43, respectively – Appendix C). Based on the vast and relatively untapped reserve of natural resources and
results of the pairwise comparison methodology, it was labor. There are presently numerous non-mainstream
discovered that the level of significance of criteria used organizations possessing entrepreneurial spirit and
varied among the respondents. Relative criteria weights were unorthodox flexibility who are making huge returns on their
determined for each respondent and depended on his/her
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[8] C. G. Hernandez, “The Philippines in 1996: a house finally in order?”
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[9] G. Hofstede, “Understanding Cultures: Four Dimensions of
Using this study as a platform, future work might look at Organizational Management Practices,”
[10] R. Hu Tsu Tau, Minister of Finance, Singapore, “Ministerial Statement
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characteristics. Similar types of companies would have to be Focus on Asian Crisis, Monetary Cooperation, Debt Relief Issues,”
considered in separate analyses, the categories would be International Monetary Fund, v. 24, n. 10, May 25, 1998.
[13] International Monetary Fund “World Economic Outlook: A survey by the
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factors determined by the nature of different industries and Part II, Chapter III-IV, September 1998.
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This study concluded that Singapore is a country that has [15] J. Linden, “Philippine City Plans to Renew Infrastructure,” The Wall
a stable and solid government and supports high tech Street Journal, p B6, August 19, 1996.
business. The risk seen in this environment lessens with [16] J. P. Martino, “The Environment for Technological Change,” Paper
presented at PICMET 97, 1997.
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[17] PERC, “Country Risk Report; Philippines,” WEBSITE Political &
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international businesses located in these countries in an Philippines,” Innovation in Technology Management: The key to Global
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[20] G. A. Shilling, “Tired Tigers,” Forbes, v. 160, p. 227, September 22,
determinants of success. 1997.
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16, 1998.
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1996.
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 -Appendix A-

Judgment Quantification
By Pairwise Methodology

General Information

Name (Optional):

Work Experience:

Project Category: Managing a Project in Southeast Asia

Level of Confidence: Very Low___ Low___ Medium___ High___ Very High ___

Judgments on Decision Criteria

Criterion A1: Socio-cultural issues

Criterion 2: Economic conditions
Criterion A3: Governmental factors
Criterion A4: Infrastructure

A1___: A2___ A1___: A4___ A2___: A4___

A1___: A3___ A2___: A3___ A3___: A4___

Individual Results (Internal Use)

Level of Significance: A1:___
A2:___
A3:___
A4:___
A5:___
Inconsistency Measure: ___________

Overall Result (Internal Used)

Level of Significance: A1:___
A2:___
A3:___
A4:___
A5:___
Inconsistency Measure: ___________
 -Appendix B-

Judgment Quantification
By Scoring Model

General Information

Name (Optional): _

Category: Managing a Project in Southeast Asia

Level of Confidence: Very Low___ Low___ Medium___ High___ Very High ___

Comparison of Characteristics between the Philippines and Singapore

Criteria B1& C1: Socio-cultural issues

Preference Level of Sig. Philippines (B1) Singapore (C1)
Very High 1.00
High 0.75
Medium 0.50
Low 0.25
Very Low 0.00

Criteria B2& C2: Economic conditions

Preference Level of Sig. Philippines (B2) Singapore (C2)
Very High 1.00
High 0.75
Medium 0.50
Low 0.25
Very Low 0.00

Criteria B3& C3: Governmental factors

Preference Level of Sig. Philippines (B3) Singapore (C3)
Very High 1.00
High 0.75
Medium 0.50
Low 0.25
Very Low 0.00

Criteria B4& C4: Infrastructure

Preference Level of Sig. Philippines (B4) Singapore (C4)
Very High 1.00
High 0.75
Medium 0.50
Low 0.25
Very Low 0.00
 Team Results (Internal Use)

Philippines
Team Members Socio-cultural Economics Government Infrastructure
1
2
3
4
5
6
7
8
Mean (Team)

Singapore
Team Members Socio-cultural Economics Government Infrastructure
1
2
3
4
5
6
7
8
Mean (Team)
 -Appendix C-

Judgment Quantification
Analysis of Results

Table 1: Judgment Quantification by Pairwise Methodology

Respondents Socio-cultural Economics Government Infrastructure Inconsistency

(W1) (W2) (W3) (W4)
1 0.20 0.36 0.25 0.19 0.003
2 0.20 0.30 0.29 0.21 0.003
3 0.17 0.35 0.22 0.27 0.057
4 0.13 0.25 0.43 0.18 0.013
5 0.16 0.33 0.27 0.24 0.004
6 0.16 0.30 0.27 0.27 0.005
7 0.07 0.12 0.52 0.29 0.075
8 0.15 0.27 0.27 0.32 0.012
9 0.11 0.46 0.15 0.28 0.037
10 0.24 0.33 0.29 0.14 0.004
11 0.13 0.29 0.29 0.29 0.000
12 0.10 0.30 0.30 0.30 0.000
13 0.17 0.36 0.17 0.29 0.005
14 0.22 0.14 0.36 0.28 0.014
15 0.07 0.26 0.22 0.45 0.021
16 0.12 0.18 0.30 0.40 0.003
17 0.30 0.33 0.20 0.18 0.013
18 0.15 0.31 0.34 0.20 0.002
19 0.19 0.29 0.29 0.23 0.000
20 0.12 0.21 0.28 0.40 0.024
21 0.47 0.22 0.22 0.10 0.002
22 0.15 0.33 0.29 0.23 0.001
23 0.18 0.33 0.24 0.24 0.021
24 0.21 0.32 0.32 0.16 0.000
25 0.20 0.35 0.24 0.21 0.003
26 0.30 0.25 0.20 0.25 0.016
Mean 0.18 0.29 0.28 0.25 0.013
Min. 0.07 0.12 0.15 0.10
Max. 0.47 0.46 0.52 0.45
Std.. Dev. 0.07 0.07 0.08 0.07
Table 2: Judgment Quantification by Scoring Model for the Philippines

Team Members Socio-cultural Economics Government Infrastructure

(CPW1) (CPW2) (CPW3) (CPW4)
1 0.75 0.25 0.50 0.75
2 0.50 0.50 0.25 0.25
3 0.50 0.25 0.25 0.50
4 0.50 0.50 0.50 0.25
5 0.75 0.75 0.75 0.50
6 0.75 0.50 0.25 0.75
7 0.50 0.25 0.00 0.25
8 0.25 0.50 0.25 0.25
Mean 0.56 0.44 0.34 0.44

Table 3: Judgment Quantification by Scoring Model for Singapore

Team Members Socio-cultural Economics Government Infrastructure

(CSW1) (CSW2) (CSW3) (CSW4)
1 1.00 0.75 1.00 1.00
2 1.00 0.75 1.00 1.00
3 1.00 0.75 0.75 1.00
4 0.75 1.00 0.75 1.00
5 0.50 1.00 0.75 1.00
6 1.00 0.75 1.00 1.00
7 0.75 0.75 0.75 1.00
8 0.75 0.50 0.75 0.75
Mean 0.84 0.78 0.84 0.97

Table 4: Results of Judgment Quantification

L.S. Scoring Model (C w1-w4 )

CHAR. (Wi) PHILIPPINES SINGAPORE
Socio-Cultural (W1) 0.18 0.56 0.84
Economics (W2) 0.29 0.44 0.78
Government (W3) 0.28 0.34 0.84
Infrastructure (W4) 0.25 0.44 0.97
E(C w1-w4 )* 0.43 0.86
*Note: E(CPwt-w4) = (W1*CPW1) + (W2*CPW2) + (W3*CPW3) + (W4*CPW4)
E(CSwt-w4) = (W1*CSW1) + (W2*CSW2) + (W3*CSW3) + (W4*CSW4)