Comparative Cultural Differences In Managerial Performance Commerce Essay

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As the soil, however rich it may be, cannot be productive without cultivation, so the mind without culture can never produce good fruit - Roman philosopher, mid-1st century AD

1. Introduction

India and china are the fast growing economies. Understanding the cultural differences and different cultural issues is very useful to the international management. Through the comparative cultural issues business activity can be identified. This is to review differences in managerial performance across two different cultures. Cultural values score indicates vast difference between countries (Hofstede, 1980). The values and performance which influence an effective manager is affected by culture. The country and the origin from which a man hails are essentially important for the act of knowledge or doing something successfully. A complex mental state involving beliefs, feelings, values and dispositions to act in certain ways towards business practices and priorities vary by cross-border activities or in simple by nationality. Thus, "Culture is the collective programming of the mind which distinguishes the members of one human group from another". (Geert Hofstede, Culture's Consequences, 1984, p.21).

Managerial performance can be defined as accomplishment of a given task measured against preset standards of accuracy, completeness, cost, and speed.

With the help of many researches and publications, the differences in managerial performance between India and China will be discussed with following studies and implications.

2. Indian Managerial Culture

Tradition and modernity have combined to transform Indian managerial mindset in a unique way and this has created dualities of value that is often difficult for others to understand (Chattergee 1991, Garg/Parikh 1995). Other than any other countries Indian managers gave lot more prominence to organizational stability (England/Lee 1974).

Managerial values at the individual level are strongly influenced by the crossvergent influences of organizational and social forces. A study reveals that the senior managers of the Indian organization have difficulty in reconciling their value paradigms with frameworks of action at least in the ethical domain. (Samir R Chattergee et al. 2000).  The modern technological market ideology based societies need managers who are able to add extra dimensions to the classical problematic. Several management scholars have recently developed models linking broad cultural value dimensions with micro-level managerial issues (Anderson 1997, Hampden-Turner/Trompenaars 1993, Kabanoff/ Waldersee/Cohen 1995, McCoy 1985, Trompenaars 1993). 

2.1 India and its index

The individualism index (IDV) score for India is 48. This shows India is not an individualistic country in more. Typically Indian managers are happy to perform as team. There exists masculinity among them which also affect the values. The Masculinity Index value for 50 countries shows India's score rank as 20/21 and masculinity score as 56. Social gender roles are clearly distinct.

While considering these indices, another important index which is the member of a culture free threatened by uncertain or unknown definitions; uncertainty avoidance index (UAI) for India is 40. The maximum is 112 to Greece and minimum of Singapore is 8. As per Hofstede's reply to question for this UAI was," ... perhaps government is looking for uncertainty".

Long Term Orientation (LTO) score is 61 and so it stands in 7th position out of 23 countries. This LTO is a fifth dimension often called Confucian Work Dynamism. It explains the stability of society whether is based on unequal relationships between people and whether family is prototype of all social organizations and finally virtuous behavior towards task.

When looking up the above index, a question would arise immediately. To what extent and/or how this index really create an impact towards the managerial performance? Any country can be categorized in the index which shows how people originate and formulate. So when we see the score that country can be realized how the managers would involve. Many researches and studies were undergone in this particular subject area and critically analysed. In that line, an article from The Journal of Management Development says, "Effective leadership then may not be so different depending on whether you are leading in Pittsburgh or in Paris." (Karin M Johnson et. al. 2001). As the purchasing power property shows that India has the fourth largest in the world economy and it likely to be fourth in after a decade according to the World Bank growth estimation.

2.2 Values of Indian managers

Researchers (Marcelline Fusilier & Subhash Durlabhji 2001) have found that there is spirituality adhered within Indian Managers. They believe strongly that work is God. Also some studies projects that there is some western style influence are more in Indian managers. They are ready to adopt western style and are doing with it. Problem when finding their thoughts and perspectives are they are not ready to accept that they have adopted to western style value decisions. There exists some lack of uniformity among the managers and thus results small fear for an outsider to start or do business (Marcelline Fusilier & Subhash Durlabhji 2001).

Interconnectedness is a core value of belief. About 80% of the Indians follow Hinduism. Their strong belief on God makes them happy to involve in a divine manner up to any extent so that God will lead them. This creates a larger impact from basic cultural beliefs and its values in their managerial philosophy. Outcome of such inner thoughts and beliefs and hierarchic pattern of family are underpinned.

2.3 Indian Caste system

The caste system plays a major role in India though caste discrimination has been against law. Over 3000 castes and nearly 25000 sub-castes are there. Every caste associates with a particular work. Even a well educated group of people would behind this caste system. India has got much criticism for such a racist partitions and discrimination. A group of particular caste will never marry to another. There may be an attack against inferior caste people. These sort of crucial practices are still followed by many remote villages. Educated youngster will deny if someone ask his opinion about caste but he will marry or look up for his spouse in a same category of caste which he belongs. This sort of partiality remains in every aspect of their life which includes business. The core values and decisions towards managerial philosophy are extremely influenced by this caste.

Caste system created inequalities and people feel that is fundamentally good. They respect their senior and believe their boss because he is boss. All such variations among workers and lack equality are the result and impacts of this so called caste system.

2.4 Power Distance and Ethical posture

According to Hofstede power distance defined as solution of a society to lack of equality (2001). Inequality could find to be exist where high standards, influence, money and ability plays a vital role in the society. Such a way, in organizations how a manager obeyed by workers and to his superiors there comes power distance. In modern India power distance are getting decreased but the impact of the caste system affects profoundly. Indian managers are conscious that their subordinate should be dependent on him. Subordinates also accept happily to depend on manager. Power Distance Index (PDI) values for India is 77 and ranked at 10/11.

Interestingly, power distance takes into effect that the way people communicate with their managers or superiors. The conflicts arise while communicating their superiors and in which manner those conflicts resolved by the managers are very fundamentally acquainted by their culture. Maintaining hierarchy is explicated by inequalities. Indian subordinates are not adaptive in decision making (Colin M Fisher, Raj Shirole, & Ashutosh P Bhupatkar 2001, p 698). It is also argued Indian managers live through collide between knowledge obtained from their education and job training. Indian managers express Indian social values and social culture noticed from Colin M Fisher et al.'s (2001 p698)

Major differences between managers tend to be over looked. Superiority, departmental boundaries are the sources which increase the distance to maintain from their subordinates. According to Södertörns Högskola's study, national cultures have number of subculture and people from different subculture might be differing even if they belong to the same national culture. (2005) India has 28 states and 18 scheduled languages and 96 non scheduled languages. Each person from a different state has his own ethics and posture.

3. China

China stood as a leading civilization for many centuries (Geography iq). According to sources Han Chinese is the largest ethnic group which occupies 91.9% of total population. There are 7 major dialects and many sub dialect the sources added. Ranking positions of china is 1st in total population and its land boundaries and telecommunications as well. It also held 3rd place in roadways and railways.

As per 2006 estimate GDP (purchasing power parity) is $10.17 trillion and growth rate is 1.7% (official data). China's economy is one of the fastest growing economies in recent years.

From The Chinese, by Jasper Becker, 2000, " Subjects were expected to obey the laws out of fear, not out of loyalty to the law-giver, respect for traditions evolved over centuries or because of a belief in higher being" (p.294) " Perhaps surprisingly, there was no atmosphere of rebellion, no sign that something like the Polish Solidarity movement was springing up. Independent trade unions were strictly forbidden. The local population was largely composed of migrants in whom habits of dependency and passivity seemed to have become deeply ingrained" (p.144)

Basically china is an extreme collectivistic country. Though it is so, there exist low interpersonal trust impose widespread personal or external control.

3.1 Chinese Managerial Culture

Chinese managers like to store their cognition inherent and are like to share in an informal manner (Jin Tong and Amit Mitra 2009). Five Chinese key cultural characteristics as per Jin Tong and Amit Mitra are hierarchy conscious, fear of losing face, modesty, competitiveness, preference for face to face communication.

3.11 Collectivism

China is often called collectivist society. It is based on family, village, lineage and family business. The moral code of Chinese is familism which puts great stress on lineage. Confucianism in china held great prominence on lineage that adopt from a family. (Hajime Nakamura 1964). A series of personal relationship is created in the organization with result of personalization and collectivism. Collectivism is more limited social link and creates smaller social institutions.

Confucianism is one of the extraordinary characteristics of Chinese managerial philosophy. Traditional Chinese culture influences the management and organization. Chinese culture remains more hierarchy conscious and traditions than India. Traditional Chinese cultural expectations encourage competitiveness (Jin Tong and Amit Mitra 2009). Another important thing is "trust". Trust can be defined as "the willingness of a party to be vulnerable" ([11] Dirks and Ferrin, 2001)

Unlike India according to cannon and Jenkins, china embraces many regions with their sub culture (1990). The strong attribute of Chinese society and its member stand self conscious is also their culture (J Child and M Warner 2003).

3.12 Managerial Posture

Management style is highly influenced by the communist practices before 1949 (Schurmann 1966). Chinese firms are tends to operate in a highly centralized manner. Their tradition is to rely on mutual obligations from relationship expressions than legal contracts are the significant. In Chinese society it is not expected to express your personal opinions in most public. They are more comprehensive in Confucian values. Management practices that reward personal competition might not be valued in collectivistic culture. As Hsu argues, harmony and conformity in Chinese society not only govern all interpersonal relations (1981).

From a study conducted by James P. Neelankavil et al. the comparison and perceptions of middle level managers in India, China, Philippine and United States of America, Chinese managers were most unique in their perceptions, as if representing an extreme position or viewpoint. It also added,

"The Chinese society had long been closed to western influences until the Open Door Policy was instituted in the late 70's. Deep-seated cultural values and customs and a central planning system led to substantial differences in management styles. Despite recent gradual abandonment […], many Chinese managers are still new to modern management theory and techniques. Remnants from the old economic system are bound to influence managers' perception and practices" (2003).

Chinese culture was isolated from the outside influence. Societal values, managerial practices and the congruence between 2 sets has been shown to influence critical organizational outcomes.

3.2 China's Index

China's score on individualism dimension is 17. A report for class films and channel 4 dispatches from An Economic Profile reads school performance by ethnic group, 2003 was +11.0 by Chinese. Power distance index is 80 and the individualism index scores 20. This highly illustrates the collectivism in China. Uncertainty avoidance index shows 40 and masculinity index is 66. UAI is a tolerance of society which deals with uncertainty and unclearness by virtue of having more than one. Long-Term Orientation is the fifth dimension of Hofstede which was added after the original four to try to distinguish the difference in thinking between the East and West and china scores 118.

4. Comparison

Although India and china both are Asian countries, also face very similar and parallel issues in their economic development and many social activities, they are very different from being homogeneous. Significant differences exist from their cultural heritage and the managerial philosophy (James P. Neelankavil, Anil Mathur and Yong Zhang 2003). India has the western influence and the impacts in managerial philosophy. According to the literature china is not yet ready to adopt the western style of management. On the contrary, china is self-conscious on what they do and they believe that is sufficient. In fact the secret from their spontaneous successes and extraordinary growth is the result of their cultural philosophy in management.

Bearing Hofstede's dimension in mind apart from the other dimensions such as religion, comparative wealth and economical development, transparency international corruption index (2007) China and India score for CPI is 3.5 and in same rank. So the corruption indexes in these countries are very similar. Coming to the bribe payers index 2006 companies from emerging export powers, India and China ranked among the worst.

"Corruption and poverty cause one another. Corruption is inversely related to FDI. Corruption puts off foreign investors. Moreover corruption leads to misallocation of resources, in that resources are diverted away from their optimal allocation according to marketing criteria. It is increasingly recognized that this is a major obstacle to economic development." (Malcolm Chapman, semester 2, week 6 - Corruption [lecture notes] 1st march 2010)

5. Conclusion

Generalizing people with their culture is a great venture. With reference to the studies and research it is possible to assume and understand people attitude towards a particular business performance. So far it is understood that Indian managers are more precise in their culture, religious ways and also they have been impacted by their culture and their ethical stances with the help of beyond Hofstede's idea. Categorization of people is highly tentative upon the impression and retention. India is a perfect example of adopting western style of developing ideas and decision making values.

When an outsider starts a business in china, there are many constraints to be re think in his mind to be taken in to an account. At the same time since already western influence has been created in India. The adoptive nature from any other country can be achieved would be perspective for an outsider. From that perspective starting and running a business in India is better than china in the aspects of cultural issues and customization of foreign philosophy.

Traditional china and cultural India, how it looks today? Firstly China, apart from the managerial philosophy and organizational decision making values and performance China is highly impressed by western life style right from dressing style to food style. Although India is also impacted by these style, when compared to the growth of affect it is comparatively smaller. While talking about doing business in these countries, to be practical a firm can train a manager from the native country but sending a team to the different nation; adaptability matters.

Ultimately performance of a manager from these two culturally different countries may not be perfectly matched. Of course it is not required to match the nations but when come to the globalization all the above discussed factors to be considered for an effective management. Growth rate and development of an organization will decide the efficient managerial performance.

Karin M. Johnson et al. concluded that "Effective leadership (and managerial performance) may not be so different depending on whether you are leading in Pittsburgh or in Paris." (2003). Leadership qualities from a 10der approach are reader, divider, decider, ladder, recorder, reminder, responder, commander, enfolder and applauder. Are these qualities really related to culture? From my point of view it is. But not entirely related to the managerial values. Even food is also a culture, a tradition. People take more spice tend to get anger easily and people add very less spice are not. This is totally absurd. Similarly managerial and leadership qualities are how much curiously involving into an action is the prime thing. Culture also plays some inner decision making sense and reacting to the situation but knowledge and clarity in what we do and understanding skills about people is predominantly override culture.