A comparison of management styles in China and Germany


Term Paper, 2018

11 Pages, Grade: 1,9

Anonymous


Excerpt

Table of contents

1. Introduction

2. Market approach

3. Culture
3.1 Integration level
3.2 Leader-follower relationship

4. Values
4.1 Decision making
4.2 Meetings and Negotiations
4.3 Conflicts

5. Key factors to success
5.1 Personal relationships
5.2 Feedback culture

6. Challenges
6.1 Cultural training
6.2 Communication

7. Practical implication

8. Conclusion

Literature

1. Introduction

Due to the increasing importance of globalization and the emergence of many competitors, management structures have become dramatically different in China. Behaviors, dynamics and team conformations change rapidly, requiring organizations to react respectively to stay competitive (Cullen, 2002). Managers face the challenge to compromise different cultures within the workplace. Practical management techniques of one country cannot be easily adapted in another. They differ greatly depending on the culture (Hofstede, 1998). To what extent the organization benefits from a culturally diverse workforce is controversial.

National values and culture are the biggest obstacle when it comes to achieving management excellence. It requires culture proficiency and responsiveness to meaningful differences in the working environment. But also other factors like the organization’s strategy, economic conditions or the labor market of the host country have an influence on how management practices should be applied (Shi and Chen 2009). Thus, developing the ability to manage in a cross-cultural context is a prerequisite in doing business successfully in today’s world.

In the following paper, important factors necessary to excel in international management with a clear focus on China will be discussed, while drawing a comparison to Germany. Throughout the examination, the way of approaching the Chinese market is described. Afterwards, culture is considered with relevant factors like power distance and the leader-follower relationship. Then, values are described with important topics like the decision making processes, meetings and negotiations and conflicts. Afterwards, key factors to success will be mentioned, including personal relationships and the feedback culture. Before drawing a conclusion, challenges likely to occur will be mentioned.

2. Market approach

China is a very interesting market for companies seeking for international expansion, because of its strategic fit for any product category (Li, 1999), its globally acknowledged brand names and modern technology (Kao, 1993). It is the second most popular nation worldwide to receive Foreign Direct Investment, which is a very popular method for firms approaching this market. In fact, the nation is dependent on Joint Ventures, as it improves the export and import situation (Goldenberg, 1988). It is most important for its economy (Wang, 1992).

Accession criteria for foreign companies entering the Chinese market are the modernization and industrialization of its economy, in particular through technology, energy, transportation and communication projects. While technology can easily be transferred from one country to another, adapting management styles is a more challenging task. Especially because German management practices aren’t widely accepted in Joint Ventures (Warner, 1995). This is due to the fact that Chinese managers are not well informed about and acquainted with them (Goldenberg, 1988). Penetrating the Chinese market is an important step towards international success. Nevertheless, there are major risks that need to be considered when going to China, particularly with respect to the management task. Joint Ventures make it difficult, because cooperating doesn’t necessarily lead to a mutual understanding and agreement of management styles (Wang and Satow, 1994). However, when cultural and institutional differences just as emerging problems are tackled properly, companies can take full advantage of going international (Tsang, 1994).

Managers adapting to the host country’s culture are confronted with inconsistency between the foreign and home office which makes working abroad a challenge (Huo and Glinow, 1995). There are some similarities in management styles between Germany and China, but to enable successful foreign operations in China, management policies and practices need to be adjusted depending on the individual culture (Stephen TK) and the company’s preferences (Ireland, 1991).

3. Culture

Evidence is given that the Chinese culture is very different to the Western culture (Chen, 1995). Culture differentiates one group from another and is shaped by its current and former ecology and sociopolitical context (Hofstede, 1993). Confucian values have shaped the collective and “high context” Chinese culture. Hierarchy, harmony and an intimate and supportive interaction at work are highly recognized (Chew and Lim, 1995). Managers and employees usually endorse harmonious relationships and are rarely egoistic or aggressive in their goal achievement (Goldenberg, 1988). High power distance is a measure of the integration level in China which indicates the preference of an authoritative and autocratic leadership style. Hierarchy is favored in both private and business settings.

3.1 Integration level

Important to note is that scores in values like integration, moral discipline or human-heartedness are higher than in the Western world (Goodman, 1995). Collectivist cultures are characterized by placing a lot of importance on their families, putting it over work.

Also, traits like self-respect, social position and status or dignity which can all be summed up in a mode of behavior called “face” are typical character traits (Hofstede, 1991). As a strong indicator of the relationship quality between themselves and the community, the Chinese place a lot of importance on the maintenance of their “face” (Brunner and Wang, 1988).

3.2 Leader-follower relationship

Worthy of mention is the fact that leaders care for followers, respect tradition and support morality. Egalitarian structures are common and employees are expected to respect leaders’ decisions consistently (Dong and Liu, 2010). They endorse a paternalistic leadership style and have a positive bound to their leader, for example by identifying with him, by being grateful or having a feeling of repay (Cheng et al., 2004).

This is a strong contrast to the “low context” Western culture which is characterized by being individualistic, emphasizing personal rights and independence (Adler and Doktor, 1986). Managers with those values are known to exercise an aggressive behavior in favor of the achievement of their own goals and efficient work (Goldenberg, 1988). They are straight-forward in their intentions which conflicts with the Asian point of view. Chinese employees easily understand it wrong (Brunner and Wang, 1988). All of these factors mentioned above influence the organization’s success considerably (Adler and Doktor, 1986).

4. Values

The values held by those in management influence the business philosophy to a great extent (Ralston et al., 1993). Primarily influenced by culture, they don’t only change behavior in private and business settings; they also change the organization itself (Trice and Beyer, 1993).

When companies internationalize, employees usually go abroad as expatriates and therefore share and import the values from their home countries. This in turn has a remarkable impact on the way priorities are set and how the organization deals with cultural differences. Value systems held by management don’t only play a role in how decisions are made, but also how inter-organizational interactions and problem-solving takes place (Ali, Azim and Krishnan, 1995).

Important factors influencing the values prevalent at work are for example the leadership style, job satisfaction or organizational effectiveness. In China, it is proven that value systems differ greatly depending on managers’ origins (Hofstede, 1991). It becomes particularly obvious how different management systems are when decisions are made in uncertain situations. Managers’ attitudes and strategies typical of their culture affect how these situations are handled (Trice and Beyer, 1993).

4.1 Decision making

The different value systems of two cultures have a strong impact on the way decisions are made. While in China, managers don’t like to be held responsible for their actions and therefore prefer to not make decisions on their own, German managers have a contrasting point of view, making it difficult for Chinese managers to take part in the decision-making process. They like to take responsibility for their decisions and are very initiative (Ireland, 1991).

4.2 Meetings and Negotiations

Another significant difference in management systems is the participation in meetings. In China, it is considered inappropriate and impolite to state one’s opinion without being asked for it. It indicates disobedience. Therefore, meetings take place very differently. It is common that employees remain quiet and don’t participate at all.

For a Chinese manager it would be usual to ask his superior for advice or help when uncertain situations occur, even for everyday jobs. However, in the Western world they would feel like they didn’t live up to their responsibilities as managers.

Generally speaking, the management structure in China is much more indirect, controlling and authoritarian than in Germany in the West. This leads to little disruption and motivates employees (Cui, 1998).

[...]

Excerpt out of 11 pages

Details

Title
A comparison of management styles in China and Germany
College
University of Cooperative Education Villingen-Schwenningen
Grade
1,9
Year
2018
Pages
11
Catalog Number
V514979
ISBN (eBook)
9783346120656
ISBN (Book)
9783346120663
Language
English
Keywords
china, germany
Quote paper
Anonymous, 2018, A comparison of management styles in China and Germany, Munich, GRIN Verlag, https://www.grin.com/document/514979

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