Management Styles: U.S., Europe, Japan, China, India, Brazil, Russia

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“My main job was developing talent. I was a gardener providing water and other nourishment to our top 750 people. Of course, I had to pull out some weeds, too.” ~ Jack Welch, G.E.

Management styles are characteristic ways of making decisions and relating to the organization, managers, and subordinates. Different management styles can be employed dependent on the culture of the business, the nature of the task, the nature of the workforce and the personality and skills of the leaders. Every style has its own characteristics, strong points, shortcomings, and methods for getting work done.

There are four basic types of leadership styles, further classified as per specific methods of management. They are autocratic, democratic, participative, and laissez faire.

Democratic Management Style: Manager delegates authority to subordinates in the decision making process.

Autocratic Management Style: Manager is completely responsible for making the decisions with no participation by subordinates.

Participative Management Style: Manager allows subordinates and staff to get involved in the decision making process.

Laissez-faire Management Style: Similar to democratic management style, but less communication between the manager and staff.

Other management styles, including;

  • Charismatic Management
  • Situational Management
  • Transformational Management
  • Bureaucratic Management
  • Task-oriented Management
  • Transactional Management
  • Relation-oriented Management

In the article “Are We Entering an Era of European Management Leadership?” by James Heskett, Baker Foundation Professor, Emeritus, at Harvard Business School, he writes there are marked differences in the social environment for management in Europe and the United States. In some parts of Europe, they foster management policies that may encourage more balance in a manager’s life, between work & private activities and risk & stability. Whether this will produce sustained economic superiority or a model to be emulated in the U.S. is debatable.

Antonio De Luca, Warner International NV, describes important differences this way: “If one has to generalize, it is fair to say that Americans pursue risk and Europeans seek stability … (leading) to fewer opportunities with more limited financial rewards, but possibly more balance for Europeans. The solution, as usual, is a sensible convergence of these two nuanced cultural approaches.”

Roy Bingham, Managing Director/Partner, Health Business Partners, LLC, points out that “American management seems to work best when the key needs are speed, aggression, last-minute genius, and take-chance, inspiring leadership. In boom times when it’s expand at all costs–pick the American style. At other times the more deliberate, consultative European approach is your ally. Maybe this is why we are hearing more from the Europeans these days.”

Jose Pedro Goncalves, Managing Partner DecisionMaster, Lda, takes issue with the idea of a “European” style of management, pointing out that there is no one style. In some parts of Europe “(as a manager) I’m a human being”. In other parts, “I’m just a number”.  In general “we (Europeans) are more human, but less flexible…”

Dr. B. V. Krishnamurthy, Professor M. P. Birla Institute of Management, India, picks up this theme by commenting “to argue that Europe might be snatching the lead in management is a little far-fetched. When one looks at the very successful organizations anywhere in the world, one discerns striking similarities—emphasis on efficiency, innovation, quality, and responsiveness to customers—even as one also finds adaptations to cultural differences.”

These comments tend to question whether management leadership has a “geographic home” as opposed to a winning set of behaviors in part fostered by the competitive, social, cultural, and legal environment. Given the prospect for continued movement toward competition and the propagation of “best practice” management ideas on a global scale; is the question largely academic?

Dr. B. V. Krishnamurthy writes: “The Triad countries have dominated international business to such an extent that after Japan’s amazing success story, followed by the resurgence of American companies, it is perhaps natural that the focus should now shift to Europe. The catalyst for this might have been the economic union that Western Europe has achieved.  The search for that elusive concept of the “best style of management” continues, although one could argue on the basis of lessons learned that there may not be a best style. Centralization and decentralization can go together, flex-time and tele-working are meant to improve productivity, and many of the “either/or” concepts can be treated as complementary, to be used with discretion…

Gunasekar C Raharatnam, manaagement consultant, writes about the India Management Style: ‘I doubt if there is clear approach that can be described today. Some might point towards the many family owned and managed business organisations in India, some of these are large corporate entities and leaders in their industry but most are small tightly controlled family businesses. Even such family business are increasingly being controlled by the recent generations of well educated inheritors. The management “styles” are changing and perhaps shifting more towards Western “styles” that are being pushed by management schools.”

India is an enormously hierarchical society and this, obviously, has an impact on management style. It is imperative that there is a boss and that the manager acts like a boss. The position of manager demands a certain amount of role-playing from the boss and a certain amount of deferential behavior from his subordinates… Anglo-Saxon concepts of egalitarianism where the boss is the primus-inter-pares are virtually incomprehensible in a society still dominated by the historical conventions of the caste system… Managing people in India requires a level of micro-management which many western business people feel extremely uncomfortable with but, which is likely to bring the best results.

In Brazil a manager’s personal style is considered to be of great significance and it could almost be said that his or her vision/bearing is viewed as of great an importance as their technical abilities… 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).

Decision-making in Brazil is often reserved for the most senior people. Taking the time to build the proper working relationship is crucial to success. Coming in as an outsider is often difficult, so it is advisable to have a third-party introduction… Often the people you negotiate with will not have decision-making authority. Decisions are made by the highest-ranking person.

China management style tends to follow Confucian philosophy: Relationships are deemed to be unequal and ethical behavior demands that these inequalities are respected: Older person should automatically receive respect from the younger, the senior from the subordinate. This is the cornerstone of all the China management thinking and issues such as empowerment and open access to all information are viewed by the Chinese as, at best, bizarre Western notions… Management is directive, with the senior manager giving instructions to their direct reports who in turn pass on the instructions down the line. Subordinates do not question the decisions of superiors – that would be to show disrespect and be the direct cause of loss of face (mianzi) for all concerned.

Japan management style emphasis the need for information flow from the bottom of the company to the top: Senior management is largely a supervisory rather than “hands-on” approach. Policy is often originated at the middle-levels of a company before being passed upwards for ratification. The strength of this approach is obviously that those tasked with the implementation of decisions have been actively involved in the shaping of policy.

The higher a Japanese manager rises within an organization, the more important it is that he appears unassuming and not ambitious. Individual personality and forcefulness are not seen as the prerequisites for effective leadership. The key task for a Japanese manager is to provide the environment in which the group can flourish. In order to achieve this he must be accessible at all times and willing to share knowledge within the group. Manager is seen as a type of father figure who expects and receives loyalty and obedience from colleagues. In return, the manager is expected to take a holistic interest in the well-being of those colleagues. It is a mutually beneficial two-way relationship….
 

Russian management style tends to be centralized 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 organization. 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…

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Management “Theory Z” is a name applied to three distinctly different psychological theories. One was developed by Abraham H. Maslow in his paper Theory Z and another is Dr. William Ouchi’s so-called “Japanese Management” style popularized during the Asian economic boom of the 1980s. The third was developed by W. J. Reddin in Managerial Effectiveness.

Abraham Maslow, a psychologist and the first theorist to develop a theory of motivation based upon human needs produced a theory that had three assumptions. First, human needs are never completely satisfied. Second, human behavior is purposeful and is motivated by need for satisfaction. Third, these needs can be classified according to a hierarchical structure of importance from the lowest to highest (Maslow, 1970).

Maslow’s “Theory Z” in contrast to Theory X, which stated that workers inherently dislike and avoid work and must be driven to it, and Theory Y, which stated that work is natural and can be a source of satisfaction when aimed at higher order human psychological needs.

Theory X and Theory Y were both written by Douglas McGregor, a social psychologist who is considered to be one of the top business thinkers of all time. In McGregor’s book The Human Side of Enterprise (1960), McGregor describes Theory X and Theory Y based upon Maslow’s hierarchy of needs, where McGregor grouped the hierarchy into a lower order (Theory X) needs and a higher order (Theory Y) needs. McGregor suggested that management could use either set of needs to motivate employees, but better results could be gained from Theory Y, rather than Theory X (Heil, Bennis, & Stephens, 2000).

For Dr. William Ouchi, “Theory Z” focused on increasing employee loyalty to the company by providing a job for life with a strong focus on the well-being of the employee, both on and off the job. According to Ouchi, Theory Z management tends to promote stable employment, high productivity, and high employee morale and satisfaction.

Ironically, “Japanese Management” and Theory Z itself were based on Dr. W. Edwards Deming’s famous “14 points”. Deming, an American scholar whose management and motivation theories were rejected in the United States, went on to help lay the foundation of Japanese organizational development during their expansion in the world economy in the 1980s. Deming’s theories are summarized in his two books, Out of the Crisis and The New Economics, in which he spells out his “System of Profound Knowledge“. He was a frequent advisor to Japanese business and government leaders, and eventually became a revered counselor. Deming was awarded the Second Order of the Sacred Treasures by the former Emperor Hirohito, and American businesses ultimately tried unsuccessfully to use his “Japanese” approach to improve their competitive position.

Professor Ouchi spent years researching Japanese companies and examining American companies using the Theory Z management styles. By the 1980’s, Japan was known for the highest productivity anywhere in the world, while America had fallen drastically. The word “Wa” in Japanese can be applied to Theory Z because they both deal with promoting partnerships and group work. The word “Wa” means a perfect circle or harmony, which influences Japanese society to always be in teams and to come to a solution together. Promoting Theory Z and the Japanese word “Wa” is how the Japanese economy became so powerful. And also because the Japanese show a high level enthusiasm to work, some of the researchers claim that ‘Z’ in the theory Z stands for ‘Zeal’.

Ouchi wrote a book called Theory Z How American Business Can Meet the Japanese Challenge (1981), in this book; Ouchi shows how American corporations can meet the Japanese challenges with a highly effective management style that promises to transform business in the 1980’s. The secret to Japanese success, according to Ouchi, is not technology, but a special way of managing people. “This is a managing style that focuses on a strong company philosophy, a distinct corporate culture, long-range staff development, and consensus decision-making”(Ouchi, 1981)…

Another commentary on management is by bhattathiri, management consultant, who writes: The Western idea of management centers on making the worker (and the manager) more efficient and more productive…but it has failed in ensuring betterment of individual life and social welfare. It has remained by and large a soulless edifice and an oasis of plenty for a few in the midst of poor quality of life for many. There is an urgent need to re-examine prevailing management disciplines – their objectives, scope and content. Management should be redefined to underline the development of the worker as a person, as a human being, and not as a mere wage-earner. With this changed perspective, management can become an instrument in the process of social, and indeed national development.

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