Cultural Differences in Management Styles

Cultural Differences in Management Styles

A Directed Study Project Submitted To The Faculty Of The Graduate School Of Businesss

in candidacy for the degree of master of business administration

DR. LAWRENCE NESS

WINTER 2011

CERTIFICATION and APPROVAL

Batts, February 20, 2011

Approvals

Dr. Lawrence Ness

DRP -- supervisor

Within organizations lies different cultural diversity. Being cultural aware helps managers and coworkers get along better. Someone who is not aware of different cultures make them hard to adapt to certain work environments and it could lead to or cause problems within the workplace. This paper examines cultural differences in management styles. Three countries (the United States, Japan, and Germany) were chosen as a research basis for this paper. The different cultures will be examined as well as management styles. The three countries were chosen because each of them has different ethnicities and cultures that entail them. This paper will analyze how miscommunication among management and employees could quickly arise due to the lack of cultural awareness. The United States, Japan, and Germany are unlike each other in many ways and they have similar aspects also. The unlike and similar aspects will be examined throughout this paper. This research paper will also go into detail of how to handle cultural conflicts in a business setting and will also detail strategies and solutions for conflict resolution.

ACKNOWLEDGEMENTS [Optional]

[Enter text…]

TABLE of CONTENTS

iiiABSTRACT

ivACKNOWLEDGEMENTS [Optional]

vTABLE of CONTENTS

viiLIST of FIGURES

1 CHAPTER 1: INTRODUCTION

Context of the Problem

Statement of the Problem

Research Questions

Significance of the Study

Research Design and Methodology

Limitations of the Study

Organization of the Study

3 CHAPTER 2: LITERATURE REVIEW

Introduction

4 CHAPTER 3: TITLE

Introduction

Data Collection/Research

Analysis

Findings

5 CHAPTER 4: TITLE

Introduction

Data Collection/Research

Analysis

Findings

6 CHAPTER 5: TITLE

Introduction

Data Collection/Research

Analysis

Findings

7 CHAPTER 6: INTRODUCTION, SUMMARY, CONCLUSIONS and RECOMMENDATIONS

Introduction

Summary

Conclusions and Recommendations

8 REFERENCES

9 APPENDIX a TITLE

10 APPENDIX B. TITLE

LIST of FIGURES

CHAPTER 1: INTRODUCTION

Context of the Problem

The increase in cultural diversity is reflected all around the United States in every country. Living in the United States today it is obvious that there are many different cultures that surround everyone and it does not go unnoticed. When managing an organization there are many different and diverse cultures. Managers must know how to handle diversity within the workplace. Diversity is not a new issue but it has become a common issue that everyone must adapt to. Having the ability to manage a cultural diverse group increases flexibility and adaptability of an organization and helps with environmental changes. Managing cultural diversity within the workplace has become an increasing concern and this research paper will prove to show the extent of the concern..

Statement of the Problem

Three countries (United States, Japan, and Germany) were chosen to measure and identify management conflicts and cultural awareness. United States, Japan, and Germany are totally different cultures that have many different and similar ways they manage conflict and diversity. Some managers may not know how or have the proper training to manage or lead a diverse group of employees. Within this research, a thorough in depth look at cultural differences in management will be explored. The different types of cultures and diversity will be explored. Where there are cultural differences there will be conflicts that will have to be resolved through management. "Cultural diversity goes beyond race relations. It includes issues on gender, education, sexuality, religion, upbringing, nationality, occupation, personality, customs, beliefs and values. A person with a different culture is anyone who is different from you (2008).

Research Questions

The purpose of this research is to determine the cultural awareness of organizations in the United States, Japan, and Germany. These were three countries that were chosen to analyze management within different organizations. The following questions will be used to stimulate discussion of the topic.

RQ1. Do cultural diversity exist within companies in the United States, Japan, and Germany?

RQ2. What cultural diversity training programs or cultural awareness programs available at different organization within the three countries?

RQ3. What is the percentage of cultural diversity of different industries in the United States, Japan, and Germany, that include a diverse culture of management and employees?

Significance of the Study

It is not easy to manage employees that have many different types of cultural backgrounds. The motivation of this study is rapid and continued growth within cultural diversity of the population around the globe and the United States. Cultural Diversity can be managed through communicating (creating awareness among all employees amount diverse values of peers through communication), cultivating (facilitating acknowledgement, support and encouragement of any employee success by all other workers), and capitalizing (linking diversity to every business process and strategy such as succession planning, reengineering, employee development, performance management and review, and reward systems) strategies (Cascio, 1995).

This study will provide many different innovative strategies or ways that organizations have adapted to manage cultural differences. This study will show how promoting a culturally aware and diverse environment helps and organization have a friendly reputation. It will also show how a diverse group of employees are creative and efficient when it comes down to problem solving.

The United States, Japan, and Germany have language barriers that exist. Some organizations have employees that are bilingual and this helps with some language barrier concerns. This study will also explore the many different languages within organizations in these three countries and how they interact together. Cross cultural communications will also be a part of this study. Similarly, the Cheesecake Factory had put special effort to understand Japanese quality and packaging culture as Asian employees assist management to understand Asian tastes so that they can target exports to Asia (Nankervis et al., 2002).

Research Design and Methodology

This direct research proposal is a study that is based on primary and secondary data. Data within this study is being provided by a search of LexisNexis Academic and the e-library databases, via search through Strayer University online. Business and academic journals are being used that are peer-reviewed articles. Full text articles are being utilized from 1999 to present to get past and present analysis. This research utilizes information from this time period so that the outcome would help with conflict resolution, strategies, and implementation of a direct summary. There is a need for management and employees to be aware of cultural diversity because of the way organizations change in structure. This research will help to analyze awareness, strategies, and statistical analysis.

Limitations of the Study

One of the major limitations of this paper will be the use of secondary data. There will be some primary sources that will be mentioned throughout the paper. The research data presented will be limited from 1990 to the present year. The literature review and research will focus on management styles and cultural diversity for three countries which are the United States, Japan, and Germany.

Organization of the Study

This section will outline the structure format for the continuing of this paper. This paper will represent and analyze the cultural differences within management in different countries.

Within chapter 2 there will be a presentation of the Literature Review of the research on cultural differences within management.

Research question number one will be addressed in chapter 3. It will address the different cultures within companies in the United States, Japan, and Germany.

Chapter 4 will analyze research question two. It will ask about cultural diversity training programs available within countries in the United States, Japan, and Germany. It will also address some training programs within those countries.

Chapter 5 will examine research question three. It will analyze statistical data of cultural diversity. Chapter 5 will also examine management's diverse culture and the diversity of the employees.

Chapter 6 will entail the summary of this DRP for more effective ways of management within the diversity of the three countries outlined. The chapter will also present a summary of the findings from chapter 3-5. Recommendations that will make transition of working in a diverse culture will be addressed in the final section of this DRP.

CHAPTER 2: LITERATURE REVIEW

Introduction

This chapter presents a review of the relevant peer-reviewed and scholarly literature to provide an overview of cultural diversity, its effect on organizational performance and some of the more salient cross-cultural differences between the United States, Japan and Germany.

Overview of Cultural Diversity

On the one hand, proponents of cultural diversity point to the enormous potential represented by people from different cultures that come together in an organizational setting. These proponents cite the benefits that diversity can provide organizations by drawing on the strengths and talents that people from different cultures possess (Cleveland & Gardner, 1995). On the other hand, critics of cultural diversity cite the problems that can develop when people from different national cultures attempt to collaborate in achieving organizational goals based on preconceptions and misunderstandings about other people. For example, Naylor emphasizes that, "In addressing cultural diversity, other ideas and terms immediately come to mind -- prejudice, racism, discrimination, and minority -- all of which have evolved with the topic. 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

Key:

Power Distance Index

Individualism

MAS

Masculinity

UAI

Uncertainty Avoidance Index

LTO

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).

CHAPTER 3: TITLE

Introduction

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.