The behaviour of the members of any cultural group is dependent, almost entirely, on the history of the people in that society. Besides being a creation of historical influence and climatic environment, the mentality of a culture are also dictated by the nature and characteristics of the language of the group.
The term "organisation” automatically implies leadership – people in authority who write the rules for the system. There are many historical examples of leadership having been vested in the person of one man or woman – Alexander the Great, Louis XIV, Napoleon, Queen Elizabeth I are clear examples. Others, equally renowned and powerful but less despotic (Washington, Bismarck, Churchill) ruled and acted with the acquiescence of their fellow statesmen. Parliamentary rule, introduced by the British in the early part of the seventeenth century, initiated a new type of collective leadership at government level, although this had existed at regional, local and tribal levels for many centuries. Minoan collective rule – one of the earliest examples we know about – inspired a similar type of leadership both in the Greek city-states and later in Rome.
In the business world, a series of individuals have also demonstrated outstanding abilities and success in leadership – Ford, Rockefeller, Berlusconi, Barnevik, Gyllenhammer are some of them. It is now common for leadership and authority also to be vested in boards of directors or management committees.
The way in which a cultural group goes about structuring its commercial and industrial enterprises or other types of organisations usually reflects to a considerable degree the manner in which it itself is organised. The basic questions to be answered are how authority is organised; and what authority is based on. Western and eastern answers to these questions vary enormously, but in the West alone there are striking differences in attitude. There is, for instance, precious little similarity in the organisational patterns of French and Swedish companies, while Germans and Australians have almost diametrically opposing view as to the basis of authority.
Organisations are usually created by leaders, whether the leadership is despotic, individual or collective. Leadership functions in two modes – one of networking and one of task orientation. In network mode the concerns, in order of appearance, are the status of the leader(s), the chain of command, the management style, the motivation of the employees and the language of management used to achieve this. In task-orientation mode, the leadership must tackle issues, formulate strategies, create some form of work ethic, decide on efficiency, task distribution and use time.
Managers in linear-active cultures will demonstrate and look for technical competence, place facts before sentiment, logic before emotion; they will be deal oriented, focusing their own attention and that of their staff on immediate achievement and results. They are orderly, stick to agendas and inspire with their careful planning.
Multi-active managers are much more extrovert, rely on their eloquence and ability to persuade, use human force as an inspirational factor. They often complete human transactions emotionally, assigning the time this may take – developing the contact to the limit.
Leaders in reactive cultures are equally people oriented, but dominate with knowledge, patience and quiet control. They display modesty and courtesy, despite their accepted seniority. They excel in creating a harmonious atmosphere for teamwork. Subtle body language obviates the need for an abundance of words. They know their company well (having spent years going round the various departments): this gives them balance – the ability to react to a web of pressures. They are paternalistic.
Because of the diverse values and core beliefs of different societies, concepts of leadership and organisation are inevitably culture bound. Authority might be based on achievement, wealth, education, charisma or birthright. Corporations may be structured in a vertical, horizontal or matrix fashion and may be moulded according to religious, philosophical or governmental considerations and requirements. No two cultures view the essence of authority, hierarchy or optimum structure in an identical light. International exposure and experience will suggest a series of norms, rationalisations and patterns; these will invariably be eroded, even in the short run, by unswerving local beliefs about human and interaction.
Different concepts of status, leadership, and organisation
Germans believe in a world governed by Ordnung, where everything and everyone has a place in a grand design calculated to produce maximum efficiency. It is difficult for the impulsive Spaniard, the improvising Portuguese or the soulful Russian to conceive of German Ordnung in all its tidiness and symmetry. It is essentially a German concept which goes further in its theoretical perfection than even the pragmatic and orderly intent of Americans, British, Dutch and Scandinavians.
Germans, just as they believe in simple, scientific truth, believe that true Ordnung is achievable, provided that sufficient rules, regulations and procedures are firmly in place. In the business world, established, well-tried procedures have emerged from the long experience of Germany’s older companies and conglomerates, guided by the maturity of tested senior executives. In Germany, more than anywhere else, there is no substitute for experience. Seniors pass on their knowledge to people immediately below them. There is a clear chain of command in each department and information and instructions are passed down from the top. Status of managers is based partly on achievement, but this is seen as interwoven with the length of service and ascribed wisdom of the individual, as well as formal qualifications and depth of education.
German management is, however, not exclusively autocratic. While the vertical structure in each department is clear, considerable value is placed on consensus. German striving for perfection of systems carries with it the implication that the manager who vigorously applies and monitors these process is showing faith in a framework which has proved successful for all. Few junior employees would question the rules. As there is adequate protection in German law for dissenting staff, most Germans feel comfortable in a rather tight framework which would irritate Americans and British. Germans welcome close instruction: they know where they stand and what they are expected to do. They enjoy being told twice, or three or four times.
German managers, issuing orders, can motivate by showing solidarity with their staff in following procedures. They work long hours, obey the rules themselves and, although they generally expect immediate obedience, they insist on fair play.
In task-orientation mode, German basic values dominate strategies. The use of time resembles the American: meetings begin on the dot, appointments are strictly observed, late arrivals must be signalled by telephone calls in advance, time is linear and should not be wasted. The work ethic is taken for granted and although staff working hours are not overlong and holidays are frequent, the German obsession with the assigned period. Each department is responsible for its own tasks and there is far less horizontal communication between equals across the divisions of a German company than there is in US and British firms. Secrecy is respected in Germany both in business and private. Few German companies publish their figures for public consumption or even for the benefit of their own employees.
Working with Germans
Latins and some Anglo-Saxons frequently experience some difficulty in working or dealing with Germans on account of the relatively rigid framework of procedures within which many German companies operate.
Cooperating successfully with Germans means respecting their primary values. First, status must be established according to their standards. Efficiency and results will win the day in due course, but a foreign national must have adequate formal qualifications to make an initial impression. The German manager with a university degree is promoted on an average every four years and those possessing doctorates have a career path to top management. Punctuality and orderliness are basic. While familiarising yourself thoroughly with the rules and processes of the organisation, any instructions you yourself issue should be firm and unambiguous. If you want something written in black ink, not blue, then you should make this clear. Germans want content, detail and clarity – they hate misunderstandings.
Communication is vertical, not horizontal. Don’t go across the company to chat with people at your level in other departments. Most of your business ideas should be communicated to either your immediate superior or immediate subordinate.
French management style is more autocratic than German, although this is not always evident at first glance. German companies are highly structured with clearly visible hierarchies, but these are normally readily accepted and welcomed by the staff. In France the boss often seems to have a more roving role, using ‘tu’ to subordinates and often patting them on the back. Such behaviour is, however, quite deceptive, as is the frequent donning of overalls by Japanese company presidents when they visit the factory floor.
The French chief executive’s status is attributed on grounds of family, age, education and professional qualifications, with the emphasis on oratorical ability and mastery of the French language. French managers can well be described as all-round cadres who are familiar with all or most of the aspects of their business or company, able to deal with production, organisational procedures, meetings, marketing, personnel matters and accounting systems as the occasion requires. They have less specialisation than US or British managers, but generally have wider horizons and an impressive grasp of the many issues facing their company.
The French Leader
French history has spawned great leaders who have often enjoyed the confidence of the nation. Napoleon and Pétain are remembered for their heroics rather than for their disasters; Louis XIV, Charles de Gaulle were charismatic figures who excited the French penchant for panache and smashed the mediocrity and mundanity that surrounded them. Ultimate success in French culture is less important than the collective soaring of the national pulse – the thrill of the chase or crusade. French failures are always glorious ones (check with Napoleon Bonaparte).
While mistakes by German executives are not easily forgiven and American managers are summarily fired if they lose money, there is a high tolerance in French companies of blunders on the part of management. As management is highly personalised, it falls on the manager to make many decisions on a daily basis and it is expected that a good proportion of them will be incorrect. The humanistic leanings of French and other Latin-based cultures encourage the view that human error must be anticipated and allowed for. Cadres assume responsibility for their decisions, which they made individually, but it is unlikely that they will be expected to resign if these backfire. If they are of the right age and experience and possess impeccable professional qualifications, replacing them would not only be futile, but would point a dagger at the heart of the system. For the French, attainment of immediate objectives is secondary to the ascribed reputation of the organisation and its socio-political goals. The highly organic nature of a French enterprise implies interdependence, mutual tolerance and teamwork among its members as well as demonstrated faith in the appointed leader. French managers, who ‘relish the art of commanding’, are encouraged to excel in their work by the very intensify of expectation on the part of their subordinates.
Role in society
In the case of the French, emotion is a factor and managers or department heads will concern themselves with the personal and private problems of their staff. In addition to their commercial role in the company, French managers see themselves as valued leaders in society. Indeed cadres see themselves as contributing to the well-being of the state itself. Among the largest economies of the world, only Japan exercises more governmental control over business than the French. French protectionism dates back to the seventeenth century, when increased trade and exports were seen as a natural consequence of French military successes. Modern French companies such as Renault, Peugeot, Framatome etc. are seen as symbols of French grandeur and are ‘looking after’ by the state. A similar situation exists in Japan and to some extent Sweden.
The feudal as well as imperial origins of status and leadership in England are still evident in some aspects of British management. A century has passed since Britain occupied a preeminent position in industry and commerce, but there still lingers in the national consciousness the proud recollection of once having ruled 15 million square miles of territory on five continents. The best young men were sent abroad on overseas postings to gain experience and to be groomed for leadership. It was the English, Scots and Irish who provided the main thrust of society in the USA – the power which was to assume the mantle of economic hegemony.
The class system persist in the UK and status is still derived, in some degree, from pedigree, title and family name. There is little doubt that the system is on its way to becoming a meritocracy – the emergence of a very large middle class and the efforts of the left and centrist politicians will eventually align British egalitarianism with that of the US and Northern Europe – but it is worth nothing that many characteristics of British management hark back to earlier days.
British managers could be described as diplomatic, tactful, laid back, casual, reasonable, helpful, willing to compromise and seeking to be fair. They also consider themselves to be inventive and, on occasion, lateral thinkers. They see themselves as conducting business with grace, style, humour, wit, eloquence and self-possession. They have the English fondness for debate and regard meetings as occasions to seek agreement rather than to issue instructions.
Toughness and insularity
There is a veneer to British management style which hardly exists in such countries as Canada, Australia, Germany, Finland and the USA. Under the casual refinement and sophistication of approach exists a hard steak of pragmatism and mercenary intent. Subordinates appreciate their willingness to debate and tendency to compromise, but also anticipate a certain amount of deviousness and dissimulation. Codes of behaviour within a British company equip staff to absorb and cope with a rather obscure management style. Other problems arise when British senior executives deal with European, American and Eastern businesspeople. In spite of their penchant for friendliness, hospitality and desire to be fair, British managers’ adherence to tradition endows them with an insular obstinacy resulting in a failure to comprehend different values in others.
At international meetings British delegates frequently distinguish themselves by their poise, charm and eloquence, but often leave the scene having learned little or nothing from their more successful trading partners. As such conferences are usually held in English, they easily win the war of words; this unfortunately increases their linguistic arrogance.
Calm approach to tasks
As far as task orientation is concerned, British managers perform better. They are not sticklers for punctuality, but time wasting is not endemic in British companies and staff take pride in completing tasks thoroughly, although in their own time frame. British managers like to leave at five or six, as do their subordinates, but work is often taken home. As for strategies, managers generally achieve a balance between short- and long-term planning. Interim failures are not unduly frowned on and there are few pressures to make a quick buck. Teamwork is encouraged and often achieved, although it is understood that individual competition may be fierce. It is not unusual for managers to have ‘direct lines’ to staff members, especially those whom they favour or consider intelligent and progressive. Chains of command are observed less than in German and French companies. The organisation subscribes in general to the Protestant work ethic, but this must be observed against a background of smooth, unhurried functions and traditional self-confidence. The contrast with the immediacy and driving force of American management is quite striking when one considers the commonality of language and heritage as well as the Anglo-Celtic roots of US business.
The Puritan work ethic and the right to dissent dominated the mentality of the early American settlers. It was an Anglo-Saxon-Celtic, Northern European culture, but the very nature and hugeness of the terrain, along with the advent of independence, soon led to the ‘frontier spirit’ which has characterised the US mindset since the end of the eighteenth century.
American managers symbolise the vitality and audacity of the land of free enterprise. In most cases they retain the frontier spirit: they are assertive, aggressive, goal and action oriented, confident, vigorous, optimistic, ready for change, achievers used to hard work, instant mobility and making decisions. They are capable of teamwork and corporate spirit, but they value individual freedom above the welfare of the company and their first interest is furthering their own career.
In view of their rebellious beginnings, Americans are reluctant to accord social status to anyone for reasons other than visible achievement. In a land with no traditions of aristocracy, money was seen as the yardstick of progress and very few Americans distance themselves from the pursuit of wealth. Intellectuality and refinement as qualities of leadership are prized less in the USA than in Europe. Leadership means getting things done, improving the standard of living, finding short cuts to prosperity, making money for oneself, one’s firm and its shareholders.
With status accorded almost exclusively on grounds of achievement and vitality, age and seniority assume less importance. American managers are often young, female or both. Chief executives are given responsibility and authority and then expected to act. They seldom fail to do so.
Motivation of American managers and their staff does not have the labyrinthine connotations that it does in European and Oriental companies, for it is usually monetary. Bonuses, performance payments, profit-sharing schemes and stock options are common. New staff, however, are often motivated by the very challenge of getting ahead. Problem-solving, the thrill of competition and the chance to demonstrate resolute action satisfy the aspirations of many young Americans. Unlike Europeans and Orientals, however, they need constant feedback, encouragement and praise from the senior executive.
In terms of organisation, the rampant individualism in American society is strictly controlled in business life through strict procedures and paper-work. American executives are allowed to make individual decisions, especially when travelling abroad, but usually within the framework of corporate restrictions.
There is precious little sentimentality in American business. The deal comes before personal feeling. If there is no profit, a transaction with a friend is hardly worthwhile. Business is based on punctuality, solid figures, proven techniques, pragmatic reasoning and technical competence. Time is money and Americans show impatience during meetings if Europeans get bogged down in details or when Orientals demur in showing their hand.
Europeans, by contrast, are often miffed by American informality and what they consider to be an oversimplistic approach towards exclusively material goals. Eastern cultures are wary of the litigious nature of American business.
The Swedish concept of leadership and management differs considerably from other European models. Like Swedish society itself, enterprises are essentially ‘democratic’, although a large percentage of Swedish capital is in private hands. Managers of thousands of middle-sized and even large firms have attained managerial success through self-effacement, but the big multinationals have also thrown up some famous executives who might well claim to be among the most far-seeing business leaders in the world: Carstedt, Gyllenhammar, Wennergren, Barnevik, Carlzon, Wallenberg, Svedberg.
Modern Swedish egalitarianism has age-old cultural roots. Although some historical Swedish monarchs such as Gustav av Vasa and Charles the Great were dominating, compelling figures, the Swedish royals, like those of Denmark and Norway, have espoused democratic principles for many centuries, no doubt mindful of the old Viking lagom tradition when warriors passed round the drinking horn (or huge bowl) in a circle where each man had to decide what amount to drink. Not too little to arouse scorn; not too much to deprive others of the liquid.
In Latin Europe, as well as in South America, the management pattern generally follows that of France, where authority is centred around the chief executive. In middle-sized companies, the CEO is very often the owner of the enterprise and even in very large firm a family name or connections may dominate the structure. More than in France, sons, nephews, cousins and close family friends will figure prominently in key positions. Ubiquitous nepotism means that business partners are often confronted with younger people who seem to have considerable influence on decision making. Delegations may often consist of the company owner, flanked by his brother, son, cousin or even grandson. Women are generally, although not always, excluded from negotiating sessions.
Status is based on age, reputation and often wealth. The management style is autocratic, particularly in Portugal, Spain and South America, where family money is often on the line. There is a growing meritocracy in Brazil, Chile and in the big northern Italian industrial firms, but Latin employees in general indicate willing and trusting subservience to their ‘establishments’.
Task orientation is dictated from above, strategies and success depend largely on social and ministerial connections and mutually beneficial cooperation between dominant families.
Cultural values dominate the structure, organisation and behaviour of eastern enterprises more than is the case in the West, in as much as deeply-rooted religious and philosophical beliefs impose near-irresistable codes of conduct. In the Chinese sphere of influence (China, Hong Kong, Taiwan, Singapore) as well as in Japan and Korea, Confucian principles hold sway. Thailand is Buddhist, Indonesia and Malaysia strongly Moslem. Although national differences account for variations in the concepts of status, leadership and organisation, there is a clearly discernible ‘eastern model’ which is compatible with general Asian values.
This model, whether applied to corporations or departments of civil service or government, strongly resembles family structure. Confucianism, which took final shape in China in the twelfth century, designated family as the prototype of all social organisation. We are members of a group, not individuals. Stability of society is based on unequal relationships between people, as in a family. The hierarchies are father-son, older brother-younger brother, male-female, ruler-subject, senior friend-junior friend. Loyalty to the ruler, filial piety to one’s father, right living, would lead to a harmonious social order based on strict ethical rules and headed up in a unified state, governed by men of education and superior ethical wisdom. Virtuous behaviour, protection of the weak, moderation, calmness and thrift were also prescribed.
Confucianism entered Japan with the first great wave of Chinese influence between the sixth and ninth centuries AD. For some time it was overshadowed by Buddhism, but the emergence of the centralised Tokugawa system in the seventeen century made it more relevant than it had been before. Both Japan and Korea had become thoroughly Confucian by the early nineteenth century in spite of their feudal political systems. In the twentieth century Japanese have wholeheartedly accepted modern science, universalistic principles of ethics, as well as democratic ideals, but they are still permeated, as are the Koreans, with Confucian ethical values.
Confucianism in business
The Chinese ideal was rule by men of superior education and morality rather than by those merely of superior birth. Japanese and Korean business leaders today flaunt qualifications, university and professorial connections more than family name or wealth. Many of the traditional Japanese companies are classic models of Confucian theory, where paternalistic attitudes to employees and their dependants, top-down obligations, bottom-up loyalty, obedience and blind faith are observed to a greater degree than in China itself. Prosperity makes it easier to put Confucianism into practice: in this regard Japan has enjoyed certain advantages over other countries.
Buddhist and Islamic variations
In Buddhist Thailand and Islamic Malaysia and Indonesia, slight variations in the concept of leadership do little to challenge the idea of benign authority. Thais see a strict hierarchy with the King at its apex, but there is social mobility in Thailand, where several monarchs had humble origins. The patronage system requires complete obedience, but flexibility is assured by the Thai principle that leaders must be sensitive to the problems of their subordinates and that blame must always be passed upwards. Bosses treat their inferiors in an informal manner and give them time off when domestic pressures weigh heavily. Subordinates like the hierarchy. Buddhism decrees that the man at the top earned his place by meritorious performance in a previous life. In Malaysia and Indonesia status is inherited, not earned, but leaders are expected to be paternal, religious, sincere and above all gentle.
What is work?
The work ethic is taken for granted in Japan, Korea and the Chinese areas, but this is not the case throughout Asia. Malaysians and Indonesians see ‘work’ as only one of many activities which contribute to the progress and welfare of the group. Time spent (during working hours) at lunch, on the beach or playing sport may be beneficial in deepening relationships between colleagues or clients. Time may be needed to draw on the advice of a valued mentor or to see to some pressing family matter which was distracting an employee from property performing their duties. Gossip in the office is a form of networking and interaction. Work and play are mixed both in and out of the office in Thailand, where either activity must produce fun or it is not worth pursuing. Thais, like Russians, tend to work in fits and starts, depending partly on the proximity of authority and partly on the mood. Koreans – all hustle and bustle when compared to the methodic Japanese – like to be seen to be busy all day long and of all Asians most resemble the Americans in their competitive vigour.
Asian management, when organising activity, attaches tremendous importance to form, symbolism and gesture. The showing of respect, in speech and actions, is mandatory. There must be no loss of face either for oneself or one’s opponent and as far as business partners are concerned, red carpet treatment, including lavish entertaining and gift giving, is imperative. Ultimate victory in business deals is the objective, but one must have the patience to achieve this in the right time frame and in the correct manner. This attitude is more deeply rooted among the Chinese and Japanese than in Korea, where wheeling and dealing is frequently indulged in. Individualism, democratic ideals, material goals, compulsive consumerism, penchant for speed, environmental concerns and a growing obsession with the quality of life (a strange concept in Asia) are powerful, irreversible factors to be reckoned with in North America and Northern Europe.