- Business leaders base expansion decisions on gut 'feel'
New research from Grant Thornton's International Business Report (IBR).
Kuala Lumpur, 1 June 2015: Business leaders in the emerging Asia-Pacific region are more than willing to admit the role that gut feel or more correctly called – instinct, can play in their decisions, according to new research from Grant Thornton's International Business Report (IBR).
The report highlights that executives in the Asia-Pacific region are most likely to expand abroad simply because it 'felt' good. Nearly two-fifths (37%) cite this gut feel as a key driver behind their expansion decisions, ahead of proximity to key clients (36%), and access to a key market (31%).
This instinct is developed from many years of experience, overseas business visits, learning from the successes or failures of others. Where it differs from objective decision is that much less emphasis is placed on market research and statistics.
Dato NK Jasani, Country Managing Partner at Grant Thornton Malaysia commented:
The survey shows that 34% of Malaysian businesses owners are planning to expand their businesses to new international market in the year ahead.
22% of Malaysian businesses with international ambitions last entered or are next planning to enter Indonesia, 15% in other Asia Pacific, 15% in Middle East or North Africa and 11% in the United States of America.
Emerging APAC businesses buck the 'fear of missing out' trend
The IBR research uncovers a worldwide trend for businesses to be spurred on by a 'fear of missing out' (colloquially known as 'FOMO') than by a positive desire for growth when expanding abroad.
However, businesses in the emerging Asia-Pacific region buck this global trend. When provided with a scenario, whether the opportunity is framed positively or negatively, business leaders in this region are left unaffected. This contrasts with nearly all other regions where negatively-framed opportunities significantly boost the likelihood for business leaders to opt to expand.
The study also shows this 'fear of missing out' is most pronounced in developed markets, including Australia and Japan, where negative framing has more than five times the impact that it does in emerging economies, such as Malaysia, Thailand and the Philippines.
Dato' NK Jasani added:
“We know from behavioural science that we tend to place a higher value on loss than on the equivalent level of gain. Our research shows that this is true for business leaders in most regions, but not in the emerging markets of Asia Pacific. The greater impact in developed markets suggests that businesses are more aware of 'first mover' advantage, or a focus on retaining rather than expanding market share.”
Making business decisions
Dato' NK Jasani said:
“There are a huge number of variables that must be taken into account when making business decisions. Business leaders face immense execution risk on a daily basis, demanding speed, judgement and accuracy. They build up an instinct for growth during their careers and it is this experience that enables them to make swift decisions while taking these factors into account.”
"It is important to note that these instinctive ways of thinking and behaving are not inherently wrong or bad. Rather they are shortcuts which have been learnt and acquired over many years. Often they are extremely helpful in making decisions quickly and efficiently, but they can also lead to irrational decisions. And it's clear from our results that the precise reasons behind these decisions can often remain hidden even to those who make them. For business leaders looking to expand abroad, a key challenge is when to 'go it alone' and when to ask for advice.”
“This gut feeling or instinct has created great successes for business leaders like Steve Jobs of Apple Inc., Jack Ma of Alibaba.com, and in Malaysia, late Tan Sri Dato Seri Lim Goh Tong of Genting Group.”
“Grant Thornton values the above concept and does have as its tagline 'an instinct for growth' which will be coupled with our comprehensive professional services to ensure the achievement of growth.”
For more information please contact:
Sharon Sung, Technical and Corporate Affairs Partner, T +60 3 2692 4022,
Charmane Koh, Corporate Affairs Assistant Manager, T +60 3 2692 4022,