Cultural Differences in Management Styles Research Paper

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In a large measure, these concepts reflect the problems that have accompanied increased diversity as both a consequence and a cause of a great many social problems" (1999, p. 1). In this regard, Naylor defines culture as being "the learned way (or ways) of belief, behavior, and the products of these (both physically and socially) that is shared (at least to some degree) within human groups and serves to distinguish that culture group from another learning different beliefs and behaviors" (1999, p. 2). It is important to note as well that "cultural diversity is not restricted to particular nationalities; it includes issues of gender and individuals with disabilities" (Russell & McLean, 1999). Because there are some fundamental differences between cultural beliefs and behaviors, it is not surprising that cross-cultural differences can have a profound effect on organizational performance, and these issues are discussed further below.

Effect of Cultural Diversity on Organizational Performance

The research to date has produced some mixed results concerning the effect of cultural diversity on organizational performance. For example, McMillan-Capehart and Simerly (2008) report that, "The extant body of research on cultural diversity has so far yielded mixed results, with some studies finding positive performance effects, but others concluding that culturally diverse groups perform less well than homogeneous groups" (p. 446). Some companies with high levels of cultural diversity have taken steps to overcome these cultural differences and help improve their performance by encouraging employees to "pay attention to their differences as unique individuals and as members of groups, raising their level of comfort with differences, and by capitalizing on differences as a major asset to the company's productivity" (Davidson & Fielden, 2003, p. 50).

Cross-Cultural Differences between the United States, Japan, and Germany

Although the world is becoming increasingly globalized and many countries, such as the United States and Germany, have become a multicultural blend of many national cultures, the populations of some countries such as Japan remain largely homogeneous. There are some significant cross-cultural differences between these three countries as can be readily discerned from Figure 1 below.

Figure 1. Cultural dimensions the United States, Japan and Germany


Power Distance Index





Uncertainty Avoidance Index


Long-Term Orientation (see complete definitions at Appendix a)

Source: Based on individual bar graphs by Hofstede (2011)

As can be seen in Figure 1 above, across the board, significant cross-cultural differences exist between the United States, Japan and Germany that have the potential to positively or negatively affect personal and professional relationships. The differences between these two outcomes can be influenced by how what type of organizational culture is in place and companies that draw on the collective strengths that diversity can provide stand to gain a competitive advantage over those that do not. As Tefry (2006) points out, "Organizational culture is even more critical in multicultural organizations because of its impact on the benefits and challenges of employee cultural diversity - and thus on organizational performance, organizational learning and potential competitive advantage" (2006, p. 564).



One recent expert in Asian diversity wrote "effective diversity management should encompass these four principles; 1) like scholars, managers must adopt an ethical learned approach to diversity, always striving to do the 'right thing', 2) like farmers, they must respect their employees unique characteristics, 3) like artisans, they must introduce creative solutions as they strive for excellence in diversity management, and 4) they must have the ambition to utilize diversity to promote business goals and profitability for the organization" (Barak, 2005). Barak's words echo the culture of the business arena in many of the Asian cultures including Japan, where a very holistic approach to business is oftentimes revered. Additionally, Japanese companies are very family oriented and provide for a more 'closed' approach than either Germany or the United States. In referring to a closed approach, the author is describing employment in general by Japanese companies that generally seek to employ and promote from within the company, especially if the employees are from a Japanese heritage or family.

Data Collection/Research

Japanese firms tend to hire from within due to the fact that the Japanese business culture takes a distinctly different approach to management than that of the Americans. Japanese firms like to use a consensus approach to management that includes the input of many subordinates attempting to reach a consensus. One recent study determined that many Japanese firms are "using a Japanese shared decision-making (method) called ringi" (Klein). The same study found that historically, the Japanese business culture plays a much more important societal role than that of the American or German corporations.

According to the study, as many as 80% of the workforce in Japan is guaranteed lifetime employment with the firm and additionally, that the company also provides housing, social activities, day-care and educational assistance for the employee as well as the employee's children. This distinctly Japanese approach to management tends to ensure that the prospective employee is given a complete and thorough character examination before he or she is hired. The approach also ensures the on-going loyalty of many, if not all, of its employees.

Many Japanese firms seek to hire and develop these type of employees because the company's approach is so team oriented. As Klein wrote, the emphasis is on the corporate team rather than on individual performance, business decisions are made through consensus building. According to Klein, the Japanese firms seek to reward the employee for loyalty rather than initiative.


Comparing the Japanese approach to the American and German approaches is a relatively simple matter. For example, Schlumberger, a large German corporation, states on its company website "we must attract and retain top performers worldwide from the full depth of the talent pool and address the evolving needs of our workforce in terms of quality of life and dual career expectations" (Schlumberger, 2011).

Clearly, the Germans and Americans value different aspects of professionalism and workforce culture than do the Japanese. Yet, Americans can also be much more individualistic and zany than their German and Japanese counterparts. Looking at the chart included in this paper that displays the statistical differences between the three cultures determines that the U.S. greatly appreciates individualism as compared to Germany or Japan. A good example of this individualistic culture in America is the culture found at Zappos, a company headquartered in Henderson, Nevada. A recent article espoused Zappos culture describing it as 'zany and weird" (Frauenheim, 2009, p. 20). Frauenheim writes that Zappos feels like a holdover from the dot-com era, with tattoos, piercings, shorts, t-shirts, free food and an open-mike stage in the cafeteria. According to Frauenheim Zappos has ten 'core values' that includes creating fun and weirdness, as well as building a positive and family spirit. Observing such a culture one might be led to think "only in America." Zappos is only one example of how America's professional culture can often be infiltrated with a very individualistic environment. Upon comparison of this individualistic environment as compared to Germany's staid approach and Japan's sober family culture, one might also believe that such a crazy approach might only work in America. Zappos is only one example of how America's professional culture can often be infiltrated with a very individualistic environment.


Other approaches work just as well as the zany approach practiced by Zappos, however, it seems as if all three countries are looking at developing much more diverse workforces than was previously developed. As companies in all three countries are quickly discovering, diversity does create stressful situations, but at the same time can be quite conducive to leading to a workforce that can enhance the profitability and viability of the respective firm.

A good example of company culture that is enhanced by the diversity of its workforce is a firm in Michigan (U.S.) that seeks to have its employees focus on common goals and objectives, even though the employees hail from very diverse backgrounds.

The company, Gilreath Manufacturing Incorporated, located in Howell, Michigan recently emerged from bankruptcy and seeking to re-establish itself as a viable force in the manufacturing arena. The two new owners, one black and one white, knew that the only way they could stay viable was be building a workforce out of the surrounding communities that was diverse and team oriented.


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