MANAGEMENT PRACTISES OF KEY ECONOMIES OF THE WORLD

WHY DO MANAGEMENT PRACTISES DIFFER AMONG DIFFERENT COUNTRIES

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PRODUCT MARKET COMPETITION

When product market competition is not very intense, some low-productivity firms will be able to survive. Competitive product market leads better management practices.

LABOUR MARKET REGULATION AND INCENTIVE MANAGEMENT

Labor market regulations that constrain the ability of managers to hire, fire, pay, and promote employees could reduce the quality of management practices.

OWENERSHIP AND MERITOCRATIC SELECTION OF CEO

Firms can be divided up by ultimate ownership: including dispersed share holders, family ownership with an external CEO, family ownership with family CEO; owned by the founder ,the government or the managers of the firm; and owned by private equity and private individuals.

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MULTINATIONAL AND EXPORTERS

Foreign multinationals are better managed than domestic firms Foreign multinationals seem able to partially transport their better practices abroad despite often difficult local circumstances.

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HUMAN CAPITAL
Education is strongly correlated with high management scores, the worker-level education is also positively associated with management scores More basic business educationfor example around capital budgeting, data analysis, and standard human resources practicescould help improve management in many nations, especially in developing nations

MANAGEMENT PRACTICES IN USA

PLANNING
Primarily short-term orientation Individual decision-making Involvement of a few people in making and selling: the decision to people with divergent values Decisions are initiated at the top and flow down Fast decision-making; slow implementation requiring compromise

STAFFING

People hired out of schools and from other companies; frequent company changes - Rapid advancement highly desired and demanded - Loyalty to the profession ! Frequent performance evaluation for new employees - Appraisal of short-term results - Promotions based primarily on individual performance

ORGANISING

Individual accountability - Clarity and specificity of decision responsibility - Formal bureaucratic organizational structure - Lack of common organization culture; identification with profession rather than with company

LEADING

- Leader acts as decision-maker and head of group - Directive style (strong, firm, determined) - Often divergent values; individualism sometimes hinders cooperation - Face-to-face confrontation common; emphasis on clarity

MANAGEMENT PRACTICES IN JAPAN

PLANNING STAFFING
people hired out of school; hardly any mobility of people among companies - Slow promotion through the ranks - Loyalty to the company - Very infrequent formal performance evaluations for new (young) employees - Appraisal of long-term performance - Long-term orientation - Collective decision-making (ring) with consensus - Involvement of many people in preparing and making the decision - Decision flow from bottom-to-top and back - Slow decision-making; fast implementation of the decision

ORGANISING
Collective responsibility and accountability - Ambiguity of decision responsibility - Informal organization structure - Well-known common organization culture and philosophy; competitive spirit toward other enterprises

LEADING
group member - Paternalistic style - Common values facilitating cooperation - Avoidance of confrontation, sometimes leading to ambiguities; emphasis on

harmony

MANAGEMENT PRACTICES IN CHINA

PLANNING
- Long-term and short-term orientation (5year plan and annual plan) - Decision-making by committees. At the top often individual - Top-down-participation at lower levels. - Top-down-initiated at the top - Slow decision-making / slow implementation. (Now changing)

STAFFING
Most hired from school, fewer from other companies - Slow promotion, but regular salary Increase - Lack of loyalty to both company and profession - Infrequent performance review (usually once a year) - 5-year plan, otherwise short-term targets

ORGANISING
- Collective and individual responsibility - Attempts to introduce the factory responsibility system - Formal bureaucratic organization structure - Identification with the company but no competitive spirit

LEADING
- Leader as the head of the group (committees) - Directive. Parent-child relations (in TA terms) - Common values. Emphasis on harmony - Avoidance of confrontation - Communication top-down

RUSSIA


As has been stated, management tends to be centralised and directive. The boss especially the 'big boss' - is expected to issue direct instructions for subordinates to follow. Little consultation will be expected from people lower down the company hierarchy. Indeed too much consultation from a senior manager could be seen as a sign of weakness and lack of decisiveness. Middle managers have little power over strategy or input in significant strategic decisions. The most powerful middle managers are the ones who have the most immediate entree to the decision-maker at the top of the organisation. There is little point in wasting time debating with middle managers who do not have an easy access to the top. The most significant reason for delay in reaching a decision in Russia is that the decision has not been put in front of the real decision-maker. Delegation is usually in terms of managers giving precise instructions to subordinates who are expected to perform their allocated tasks with little or no discussion. Many westerners complain of a lack of initiative from local Russian staff, whilst Russian staff often bemoan the lack of clear, unambiguous advice from expatriate managers.

BRAZIL


A manager s personal style is considered to be of great significance and it could almost be said that his or her bearing is viewed as of great an importance as their technical abilities. The respect, which is afforded the manager by subordinates, is directly proportionate to the personality of the boss. Relationships are of key importance in this Latin culture and the boss and subordinates work hard to foster a relationship based on trust and respect for personal dignity. First and foremost, managers are expected to manage. The boss is expected to give direct instructions and it is expected that these instructions will be carried out without too much discussion or debate (if there is debate it should be done in private to avoid showing public disrespect to the hierarchy). If giving instructions to Brazilian subordinates, try to be as clear, precise and comprehensive as possible. If tasks remain undone after having asked for them to be done, start by questioning yourself. Were my instructions given clearly? Was I too vague? If you only give partial instructions, only part of the task will be performed. (As in most strongly hierarchical cultures, subordinates will undertake the exact tasks they are given but no more to do more might be seen as disobeying the boss!)

FRANCE


Senior management in most French companies were educated at the Grandes Ecoles which are the elite schools of France. These colleges champion an intellectual rigour in their students, which is rarely matched elsewhere in the world. This produces a highly educated management population, which approaches management with an unusual degree of academic precision. 'Intellectualism' is something to be cherished rather than sneered at and a comment once attributed to French management was that 'this idea seems alright in practice but will it work in theory?' Management is an intellectual task to be mastered and thought about in terms of detailed analysis, the complete mastery of complex concepts and information and the eventual application of rational decisions. More pragmatic issues of buy-in, motivating staff etc. (in the Anglo-Saxon understanding of these terms) are not as prominent in French management thinking. Decisions, once taken at senior levels, will be passed down the chain to lower management for implementation. This directive approach can be seen, especially by those from a consensus oriented, non-hierarchical background, as being overly authoritative and lacking in the necessary team-building elements.

INDIA
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As has already been pointed out, British managers tend more towards generalisation than specialisation. The proposition that the manager needs to be the most technically competent person would receive little support in the UK. Therefore, pure academic education is afforded much less respect than in other countries (notably Germany and France) and the emphasis is on relevant experience and a 'hands-on', pragmatic approach. Titles such as doctor or professor are rarely used outside academic circles and can even be seen a sign of affectation. Much more emphasis is placed on the man-management skills needed to produce the best results from the team. A manager is expected to have the interpersonal skills to meld a team together and it is this ability as a 'fixer' which is highly regarded. Modern managers often want to appear as a primus inter pares, cultivating a close, often humorous and overtly soft relationship with subordinates. This seeming closeness should not, however, be mistaken for weakness on the part of the boss - when difficult decisions need to be taken, they will be taken. The British find it difficult to be direct and British managers often give instructions to subordinates in a very indirect way, preferring to request assistance than to be explicit. This use of language can be very confusing for the non-British

UK
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British managers tend more towards generalisation than specialisation. The proposition that the manager needs to be the most technically competent person would receive little support in the UK. Therefore, pure academic education is afforded much less respect than in other countries (notably Germany and France) and the emphasis is on relevant experience and a 'hands-on', pragmatic approach. Titles such as doctor or professor are rarely used outside academic circles and can even be seen a sign of affectation. Much more emphasis is placed on the man-management skills needed to produce the best results from the team. A manager is expected to have the interpersonal skills to meld a team together and it is this ability as a 'fixer' which is highly regarded. Modern managers often want to appear as a primus inter pares, cultivating a close, often humorous and overtly soft relationship with subordinates. This seeming closeness should not, however, be mistaken for weakness on the part of the boss - when difficult decisions need to be taken, they will be taken. The British find it difficult to be direct and British managers often give instructions to subordinates in a very indirect way, preferring to request assistance than to be explicit. This use of language can be very confusing for the non-British

GERMANY
Managers in Germany are expected to be technically capable in their respective areas and to show strong, clear leadership. Although disagreement with a superior will rarely be seen in public this does not mean that Germans are Yes men. Subordinates tend to respect the technical abilities of their superiors and this will impact on their willingness to implement instructions. (The interesting corollary of this is that when less technically proficient non-Germans are asked to manage a team of Germans, the nonGerman can sometimes be seen as lacking the key prerequisite for developing the team s respect.) y Responsibility is expected to be delegated by the manager to the member of the team who is technically competent to carry out a particular task. The team member then expects to be left to perform the task without undue interference or supervision. Thus instructions need to be clear, precise and above all unambiguous. y People from cultures where managers are expected to develop a closer, more intimate ambience can see the German manager-subordinate relationship as distant and cold. The higher up the organisation people rise the more a sense of the dignity of the position becomes apparent. Socialising tends to be at peer group level rather than up and down a hierarchy.
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