Eastern vs western management styles differences

What is management? Takeo Fujisawa, funder of Honda Motor Company says: Japanese and American management are 95% the same, yet differ in all the important aspects.

Management, according to L. Cardy (Gomez-Mejia, 2008) are every activit y used by a company in the act of getting employees to accomplish the desired goals and objectives. Management can also be seen as a system of human actions and can differ from country to country and is influenced by c ultural behaviours.

Introduction

Thanks to the rapid expansion of large businesses in the world, in these days people and information travel easier and, due to such a rapid expansion, strategic alliances and partnerships are being created. Various busine ss activities are conducted between different areas and brands must have a clear vision and strategy in order to accomplish the other partners culture and ethics. For example, in Eastern companies, strong consumerism is not indicated as the core business style, in fact in countries such as China, companies business strategies are based on strong group mentalit y and on Confucianism theories. Therefore understanding the partners cultural system and habits is necessary to achieve common goals and objectives (Hofstede, 1980). However many cultural aspects can be acquired thanks to casual informal and direct experience, perhaps most of the informal cultural aspects can be learned from people themselves: from the way they think, talk and relate with others. There are several differences in fact only in the way people live, or in the mannerism or even in the way they communicate, for example in Korea people dont handshake or waves or do other gestures that in the US is considered normal: it is considered not po lite Kublin, 1995; Hofstede 1980).

Eastern and Western management styles

S.J. Chang, from Illinois State Universit y, finds several differences between Eastern and Western management st yles taking into conside ration America, Korea and China even tough one of the biggest difference is the concept of individualit y (S.J. Chang, 2008). Western businesses and cultures think that the individual is the most important part of a company, while Chinese workers think that they are just part of a bigger famil y, part of a group (the company) The difference between the two cultures from this point of view is the market itself, in the US individual investor s are the epicentre of the whole market and the competition among them is the driving force of it. In Eastern countries such as Korea or China people do business with other people mostl y if they know him personall y: Networking. Networking is not onl y encouraged in Eastern countries but is the base of the these markets, cooper ation and mergers are seen as ways to avoid bankruptcy (International monetary fund, 2004). The problems with such a different view are mostl y the companys reactions: while flexible and adaptable in America, very rigid and hierarchical in Asia. The Western and eastern system differs also from the development and progress point of view, while countries such as US, Germany and UK rel y on innovations and breaktroughs that can innovate and change the company, Chinese Japanese and Korean business syst ems are based on continuous and gradual improvements leading to two different view of future profits: Long -term in Eastern countries (Kaizen in Imai) and short-term in the West. One of the most important issues that arises when taking a multicultural decision is if to accomplish the American individualistic approach or the communitarianism Asian approach. This issue brings to surface many pros and cons between the two t ype of management st yles th at can be summarized like this:

Western countries Culture and ideology

Eastern countries

Collectivism, Individualistic, liberalism competition Economic system cooperation

paternalism,

Controlled economy: regulated Free market: flexible and volatile Management style Shareholders driven profit oriented high costs strong shareholders activism market efficient strict financial control information asymmetry conservative gradual financial innovations and continuous famil y owned long term investments high leverage costs cross ownership rigid and collusive

improvements

Eastern and western countries management st yles are also influenced by several philosophical points that criticall y changes their work attitude. For example contracts differ dramaticall y when compared: in Western countries such as Europe and US contracts are filled by future employees making them know that their behaviour will have to be always the same during a set period of time; in Eastern countries such as China, the contract is more a statement of the companys principle and it will change by time. According to Summer Zhang, Marketing director of Salvatore Ferragamo in Shanghai, signing a contract in China is merel y the beginning of a negotiation (Summer Zhang, 2012). American management st yle is based therefore on individual participation and ownership of task, this idea reflects Western traditions of rational control, while in Asia, the management st yle is generall y chara cterized by a subordination of the individual. When an western manager works in Asia many aspects of him have to adapt to the new management st yle, such as for example in meetings. During Eastern

countries meetings there are no brainstorming, unless with other participants that work at the same level, but the leader directs and gives orders that have to be assessed. These are some of the most important factors that come out when comparing Western to Eastern countries management st yles, however the biggest difference derives from a deeper study of the work philosophy. Eastern countries are influenced by what is called Confucianism, principles that advocate respect for work, discipline and economic egalitarism while Western countries are influenced from a more Protestant work ethic (Bond & Kwang, 1986; Hofstede & Bond 1988; Vonglinow & Teagarden 1993) . In Webers work The religion of China (1951) the contrast between the two work philosophies is clear: while Eastern countries tend to achieve harmony, equalit y and hard work (nonetheless frugalism and diligence), Western countries tend to achieve capital thanks to the highest vocation that an individual can have for a particular work. Chinese workers for example , tend to see Webers ideolo gy more as a pursuit of harmony that can be achieved thanks to actions for the societ y as a whole: since if the societ y is wealthy he will be wealthy as well (Weber, 1951).

Gomez-Mejia,

Luis

R.;

David

B.

Balkin

and

Robert

L.

Cardy

(2008). Management: People, Performance, Change, 3rd edition. New York, New York USA: S.J. Chang; Illinois State Universit y, 2008 When East and West meet Hofstede, G. H. (1980). Culture's consequences: International differences in work-related values. Beverl y Hills: Sage Publications. Kublin, M. (1995). International negotiation. New York: International Business Press, Haworth Press, Inc. International Monetary fund, 2004, concluding statement of 2003, article IV Summer Zhang, 2012, Ferragamo shanghai trading, quote Bond K. & Wang, S. H. 1983. A ggressive behavior in Chinese societ y: the problem of maintaining order and harmony, in A. P. Goldstein & M. Segall (Eds.). Global perspectives on Aggression. New York: Pergamon Press.

Hofstede, G. & Bond, M. H. 1988. Confucius and economic growth: N ew trends in cultures consequences, Organizational Dynamics, vol. 16, no.4, pps 4 -21. Von Glinow, M. A. & Teagarden, M. B. 1988. The transfer of HRM technology in Sino-US cooperative ventures: problems & solutions, Management vol. 27, no. 2 Weber, M. 1951, The Religion of China, Toronto: The Macmillian Company Human Relations