MANAGEMENT ACROSS CULTURES

Chapter 6

“Intuitively, people have always assumed that bureaucratic structures and patterns of
action differ in the countries of the Western world and even more markedly between East and
West. Practitioners know it and never fail to take it into account.” Michael Crozier
Patterns of organizing clearly differ across borders and cultures. Family business is an example.
The culture creates the environment in the organization and influences the nature of the long-
term plans that move the organization toward its vision. Culture also dictates the policies and
processes that enable the organization to live its mission every day. Because of this, we turn
now to a comparison of current and future trends in organizing frameworks for five countries:
China, Japan, Germany, Mexico, and the US. This comparison is done using the core cultural
dimensions.
So, how can we describe the culture of any of the 5 countries? What are the organisations and
management trends in each country?

Let us begin with a look inside a typical US business organization. Identifying a “typical”
company in any culture is a challenge, but perhaps nowhere is this challenge more acute than
with respect to American firms. First, how we might describe American culture? The
tendencies of American culture are moderately egalitarian, strongly individualistic, strongly
mastery-oriented, strongly monochromic, and moderately universalistic. Individualistic
cultures like the U.S. place individual rights and self-reliance above all else and success is
determined by personal effort. It is important to be independent and stay out of other
people’s business. Also, Americans tend to be materialistic. Americans are often described as
being overly trusting and friendly towards people they hardly know. In the business world,
Americans are highly risk-oriented, optimistic and opportunistic and superficial. The most
important thing is that America is very heterogeneous society consisting of many strong
cultures.
Based on what has been learned so far about prevailing American cultural patterns, consider
how the people characterized by this description might build organizations. First, in many US
firms, CEOs get most of the credit for company successes and much of the blame for failure;
they also get much of the money, regardless. US CEOs tend to have considerable power as
decision-makers and leaders so long as they succeed. US firms can be highly autocratic or
highly participative, mastery-oriented or harmony-oriented, and so forth. Even so, a general
model serves a useful purpose as a starting point for cross-cultural comparisons.
Talking about Canada and Uk, British are less tolerant of power aggregation, they also prevent
banks from owning major shares. They are more liberal in ownerships and governance but
more conservative in management policies. Canadians believe in collegiality, give more
importance to formal titles and family names, and believe in more collective responsibility
across society.
Moving to Japanese culture, Japan is often the country of choice when making
comparisons with American, British, and other so-called Anglo countries. Japanese culture
includes a strong belief in hierarchy, strong collectivism, a strong harmony orientation,
moderate monochronism, and strong particularism. Hierarchy beliefs in Japan can be seen in
the deep respect shown to elders and people in positions of authority. Japan is considered to
be a collectivistic country. The results indicate that the Japanese type of collectivism is rather
based on interpersonal relationships within a community than on social relationships beyond
a community. Japanese keiretsu can be divided Into two basic types : horizontal (YOKO) and
vertical (TATE). A good example of a horizontal keiretsu can be seen in the Mitsubishi Business
Group. Mitsubishi has a main bank (Mitsubishi Bank), a trading company (Mitsubishi Shoji),
and a flagship manufacturer (Mitsubishi Heavy Industries). TOYOTA is an example of a vertical
group. In point of fact, there are two kinds of vertical keiretsu: a production keiretsu, in which
a myriad of parts suppliers join together to create subassemblies for a single end product
manufacturer (such as Toyota), and a distribution keiretsu, in which a single large firm, usually
a manufacturer, moves products to market through a network of wholesalers and retailers
that depend on the parent company for goods. Since most manufacturers have both keiretsu
types (production and distribution).

Moving to Chinese culture and to describe it, Confucianism is an ancient Chinese belief
system, which focuses on the importance of personal ethics and morality. KONGFUZI the Great
Master Kong promulgated a code of ethical behavior that was meant to guide interpersonal
relationships in everyday life. This code was summed up in the so-called five cardinal virtues :
Filial piety, strict seniority, subservience, mutual trust among friends and family and absolute
loyalty. In view of China’s strong cultural traditions, it is not surprising that its companies, both
large and small, reflect this heritage. Chinese companies are generally called gong-si. The
dominant management style of the gong-si is patrimonialism, which includes paternalism,
hierarchy, mutual obligation, responsibility, familism, personalism, and connections. Gong-si
companies have little formal structure, few standard operating procedures, and little
specialization. The trend in Chinese management philosophy is changing rapidly towards a
greater emphasis on competitiveness, innovation, and individual responsibility.

Talking about Germany cultures, Germany is a country widely known and respected
for its cutting-edge technology and craftsmanship. It is also known as a high-cost producer.
So, How can German companies compete now and in the future? To answer this question,
let’s talk about Germany cultures. A typical German is relatively individualistic but not so
extreme as americans. Germans tend to be conservative, formal, and polite. Germans tend to
be broadly educated, multilingual, and widely travelled and punctual about time. Like the US,
German firms generally take one of two legal forms: a limited partnership designated by a
GmbH (Gesellschaft mit beschraenkter Haftung) following the company name, or a public
stock company designated by an AG (Aktiengesellschaft) following the name. On a plant level,
workers exercise their influence through works councils. Works councils typically have no
rights in the economic management of the firm, but have considerable influence in human
resource management policies and practices. The German industrial relations system is highly
standardized, extensively organized through state regulation, and characterized by formal
recognition of employee rights at all levels of the firm. A principal method for developing this
technical competence in workers begins with widespread and intensive apprenticeship
training programs. The dual system of apprenticeship training represents a partnership
between employers, unions, and the government.

Finally, we take a brief look at organization and management in Mexico. Cultural

anthropologists and other social scientists tend to describe the Mexican culture as being
collectivistic, hierarchical, polychromic, paternalistic, group-centered, security oriented,
somewhat formal, and at times fatalistic. Networking is very important in Mexico. Also, In
general, Mexican management style follows the high power distance and collectivism found
in Mexican societal culture and this means that Mexican firms are more likely to adopt
hierarchical structures with power vest at the top of the pyramid and introduce and follow
formalistic relationships between managers. In Mexico, time is frequently used intentionally
to demonstrate who is more important. Making someone wait shows power, prestige, and
status. At the same time, managers must be careful not to offend their counterparts and
thereby risk losing business. Mexico is famous for the concept of mañana. The idea here is
that there is always another day to complete today’s work. Paternalistic approach is adopted
in Mexican firms.
When doing business in Mexico, proper contacts with various government departments can
be vital for success. Mexico as a nation remains concerned about being economically or even
politically absorbed into the wealthy and powerful US economy to the north. Mexican firms
tend to reduce as possible management layers. Mexican managers see Anglo-American ones
as being too direct, too impatient and reticent to accept blame. In other hands, Anglo-
Americans managers see Mexican managers as being too polite, too indecisive and too slow
to act.
Americans seek rational, linear decisions based on concrete and business related evidence.
But Mexicans use more a non linear approach and reaching decisions through extended
discussions with various parties. Managers in Mexico are so respected and tend to exhibit a
story sense of paternalism like Japanese. As a result, many Mexican firms are characterized by
strong centralized decision making. The boss has the final say. Not unlike the general trend in
China, foreign observers also suggest that management in Mexico tends to be somewhat more
autocratic than is typically found in Anglo-American or European firms.

Finally, where does this leave us? From a managerial standpoint, three challenges emerge that
must be resolved for managers to successfully work with organizations across cultures.
It should again be noted that, while the organizing frameworks discussed here may represent central
tendencies in various countries, wide variations can obviously be found everywhere. As a result, while
these frameworks may be instructive for purposes of general comparisons across cultures, they are
not intended to represent universal patterns of organizing.