Foreign Policy
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George Krompacky
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On Tuesday, April 17, Hewlett-Packard's Richard Walker spoke to a SPRIE audience on the "Impact of Globalization on HP's PC Business." Walker, vice-president and general manager of consumer desktop PCs and a SPRIE advisory board member, discussed the aggressively competitive nature of the PC market and how HP has met the challenges of time-to-market and managing costs to emerge as the #1 PC maker in the world today.

Walker gave a detailed account of HP's operating model and its critical relationships with global supply partners, as well as touching on HP's efforts in local markets.

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Complementarity between incentive instruments is regarded as one of the central themes of theoretical research in the economics of industrial organization in recent years. However, despite its importance, empirical evidence on the existence of complementarities is limited. In this paper we identify complementarities between incentive mechanisms used by firm-owners to motivate managers. Using a multi-task principal-agent framework we consider a problem in which the owner uses two incentive instruments, profit-sharing and investment-bonding, to motivate the manager in two tasks, production and asset-maintenance. Our theoretical model yields testable hypothesis regarding the complementary and individual effects of incentives on performance. We test the hypothesis of our theoretical model against a dataset on 56 rural firms in China, observed in 1988 and 1995. Our descriptive results clearly show that the two instruments are complements. Our econometric model using a panel regression framework confirms that significant complementaries exist in terms of the impact of the two instruments on performance. In order to evaluate the robustness of our results we account for unobserved differences in firm quality using fixed effects and instrumental variables regressions. Support for the complementarity hypothesis is also found after controlling for unobserved heterogeneity.

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Scott Rozelle
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The PC business is one of the most aggressive in the world, with operating efficiency a critical factor for success. At the time of the HP/Compaq merger in 2000, both PC businesses were losing money. Now, seven years later, HP has reported a record first quarter for PCs, generating $8.7B in revenue, a 17% year over year growth and delivering 4.7% in operating profit, representing 0.8pt improvement year over year. So, what operating model has HP used to accomplish this turnaround and be ranked #1 in the world today? How are resource deployment decisions made? What are the key supply chain considerations? How does the company manage P&L and balance sheet tensions? How will HP continue to stay ahead?

As Vice President and General Manager for HP's Consumer Desktop PC Business Unit, Richard Walker is responsible for a global business that provides desktop PCs and digital entertainment centers to consumer markets. Immediately prior to his current assignment, Richard was Vice President of Emerging Markets, responsible for developing long term strategic growth plans for HP's targeted list of emerging countries, with an initial focus on Brazil, Russia, India and China (BRIC). Richard received his bachelor's degree in business from Sheffield Hallam University, Sheffield, England. He also serves on the advisory boards for R&D Logic, a San Mateo based life sciences company; Pacific Peninsula Group, a Menlo Park property development company, and SPRIE at Stanford University.

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Richard Walker Vice-President & General Manager, Consumer Desktop PCs Speaker Hewlett-Packard
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How has Iran become the most serious foreign policy issue in Indonesian politics? Since democracy was restored to Indonesia in 1999, governments there have had to balance public demands for a strong, independent foreign policy against the reality that the economic and political crises of the past decade have limited Jakarta's influence in global politics. Earlier in this period, presidents and foreign ministers faced little more than sporadic challenges over issues that stood little chance of affecting Indonesian foreign policy beyond Southeast Asia. More recently, however, Iran has actively courted Indonesian legislative and civil society leaders, and they, in turn, have pressed their government to oppose international efforts to curb Tehran's nuclear programs. They sharply criticized the Yudhoyono government for failing to oppose a motion in the International Atomic Energy Agency to refer Iran to the UN Security Council in 2006. This year they triggered a heated debate by opposing the government's decision to join a unanimous Security Council vote that broadened sanctions on Iran. Prof. Malley will examine these trends and assess their implications for Indonesian foreign policy and international security.

Michael Malley teaches comparative and Southeast Asian politics at the Naval Postgraduate School in Monterey. Before joining the School in 2004, he taught at Ohio University. He earned a PhD in political science at the University of Wisconsin-Madison, an MA in Asian Studies at Cornell University, and a BS at Georgetown University's School of Foreign Service.

This is the Southeast Asia Forum's fifth seminar of the 2006-2007 academic year.

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Michael Malley Assistant Professor, Department of National Security Affairs Speaker Naval Postgraduate School
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This is a CDDRL's Special Seminar, co-sponsored with Shorenstein APARC.

Dr. Fu-Kuo Liu is currently a Visiting Fellow at Center for Northeast Asian Policy Studies, Foreign Policy Studies, Brookings Institution and is an Associate Research Fellow and Adjunct Associate Professor at National Chengchi University's Institute of International Relations. Additionally, he serves as the Executive Director of the National Committee of the Council for Security Cooperation in the Asia Pacific (CSCAP) Taiwan.

Previously, Dr. Liu was Chairman of the Research and Planning Board at the Ministry of Foreign Affairs (2002-2004) and a Consultative Advisor for the Mainland Affairs Council (2004-2006). He has taught at the Chinese Culture University and National Chung Shing University. He was a Visiting Fellow at Aoyama Gakuin University in Tokyo and Georgetown University. His research mainly covers Taiwan security and foreign policy, regional security, and the cross-strait development. He received a Ph.D. in Politics from the University of Hull in the United Kingdom in 1995.

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Fu-kuo Liu Visiting Fellow, Center for Northeast Asian Policy Studies, Foreign Policy Studies Speaker The Brookings Institution
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"As goes India, so goes the world," declared Mira Kamdar, Asia Society fellow and author of Planet India.

On Tuesday, April 24, Mira Kamdar will address the Stanford community at a seminar hosted by Shorenstein APARC and the Pacific Council. Ms. Kamdar will speak on the global rise of India from a developing nation to a major player on the international stage. She will discuss the country's economic and democratic growth and the consequences India's transformation has for the rest of the world.

Ms. Kamdar, who frames an optimistic yet realistic future for India, was a principal contributor to the Pacific Council's India-U.S. task force report released in June of 2005 titled, A Vision for the Future (pdf). The report explores the impact of technological and cultural globalization on promoting the emerging partnership between the U.S. and India. Shorenstein APARC's Daniel Sneider and Rafiq Dossani were also on the task force with Ms. Kamdar.

Publicity co-sponsor: The Global Management Program at Stanford's Graduate School of Business.

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Daniel C. Sneider Moderator
Mira Kamdar Senior Fellow, World Policy Institute, Associate Fellow, Asia Society, and author Speaker
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