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Management Practice of Bangladesh

Management practice around the globe has a lot diversities because of the presence of

different social, economic, political, and legal and tax systems. After independence the

industrial enterprises of this country were initially brought under the control of the

government. Very soon it was realized that the nationalized sector was not performing as

desired because of unsuccessful management practice. Since then the country has been

going through denationalization process. And then every type of concepts and theories of

different countries has been practicing in our country. But it is very difficult to say which

type of management practice should be applicable for our country. The author has

attempted to analyses the different types of management practice especially in U.S.A.,

Japan and China in the context of Bangladeshi management practices on the basis of the

basic functions of management. As per the findings, management practice in Bangladesh

is not being dominated by any specific country's management practice. The author tries

to select and makes suggestions of what types of management practice should be made

applicable with respect to socio-cultural or environmental circumstances and other legal

and govt. policies.

Planning & Decision Making

Long-term orientation:

Now there are only two types of management in the world, one is Japanese and the

other one is American. Bangladesh follows a mixed concept of these two types of

management. For some work they follow the Japanese and for some work they follow

the American type of management.

Bangladeshi managers follow 5-year plan. They make a 5-year plan to improve their

organizational condition. Government also takes 5-year plan. Sometimes these plans do

not come true when Government changes; the new Government takes new plans.

Private organizations are free from this problem; they take their own plans as they want.

When they need they can take short term plan what can make good to their

organization.

Decision making differs from organization to organization. Organization type is another

big factor for decision making. Some prefer short term and some prefers long term

planning, but all the executives like long term planning for their own benefit. So,

Bangladeshi managers like to take long tram plan

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PLANNING & DECISION MAKING

Individual decision-making

In case of making decision we see that Japanese Mgt takes decision collectively, U.S. Mgt

takes decision individually and Chinese Mgt takes decision by their committees. In this

case we see that Bangladeshi Mgt also takes decision individually like the U.S.

management.

It is a very common fact that everyone wants to be big in the world. Everyone wants to

express him or her where s/he works. For these reasons some people don't like to talk to

others before taking a decision. This is a common mentality of the executive people of

our country.

The executives have another point that if a group of people sits together to make a

decision then no decision will be made. There happens only some waste of money and

time. This is why the executives want to take decision individually.

Bangladesh is using a mixed management system of Japanese and American. In private

section the American system is very much popular for its fast working capacity. Govt.

sections like the Japanese system and sometimes the American system. When they don't

want to do any work they form a committee to make a decision and in the most cases the

committee can't take any decision

Decision initiated only at the top

In American system the top-level management takes decision and the lower level follows

that decision. Here every one has his own area of thinking. Top-level thinks how to take

an effective decision and lower level thinks how to follow that decision. Bangladeshi

Long -term orientation (5-years plan)

Decision are always made individually

Involvement of few people from top level in making decision

Decision initiated at only the top level

Fast decision making and slow implementation

There is often communicatin with subordinates before making decision

Bangladeshi managrs make decisions only for some small issues or non critical issues

Bangladeshi Management

In Planning and Decision

Making

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follows the American way in this case. Here in Bangladesh the top-level always takes

decision and the lower level follows that. This is why decision is initiated only at the top-

level, not from the bottom-top.

Fast decision making and slow implementation

Decision can be made by anyone, but everyone can't implement the decision. In

Bangladesh the managerial parsons take decision, but they can’t implement all the

decision when they want. In Bangladesh this problem mainly occurs in Govt. sectors.

Here one takes decision very fast but at the time of implementation no one comes

forward to make it happen. So, here every decision is made very quickly but the

implementation of that decision is very slow.

Involvement of few people from top level in making decision

An individual always takes decision but if there arises any critical problem in the

organization that can't be solved by only one person, then he (Bangladeshi manager) may

call some reasonable and some of the best subordinates for talking about the problem.

Often this can give a good solution to the problem because two heads are better than

one. But even after such discussion if an individual takes a decision it is not sure that

decision would be always perfectly alright because there may be some chances of

mistakes.

Organizing in Bangladesh

In Bangladesh employees are making informal relationship. The responsibilities are not

divided equally along with equal authority

and they are overburdened with their

responsibilities. For this employees are not

happy with their position. Employees are

waiting for better opportunities to go

away. The organizations are unable to fulfill

the requirements of the employee's need.

So the company is losing skilled employees.

Personal connections, family relationships,

and seniority are frequently more

important for promotion. Most of the

organizations have not well-defined rules

and regulations to maintain discipline. As

well as organizations have no organogram.

Bangladeshi

Management

Individual Responsibility and Acountability

Motivational and predicative decision

Mostly govt.firms use formal bureaucratic organizasional

structure.But Pvt. organizations use informal organizational structure.

Well-known common organizational cuture

Holistic concern including family

Firms have high employee turnover

rate becouse of uncertainty of job

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Leadership Approaches in Bangladesh

Leadership research has also been conducted among managers in , developing countries

such as India, Peru, Chile and Argentina. Although there will always be important

differences between various parts of the world, as countries develop and become more

economically advanced, participation leadership styles may become more prevalent.

The leading process of BD is almost similar with that of India at present, new organization

tries to follow U.S. leading style. And the leading approaches are continuously changing.

Leaders of Bangladesh are assigning two tasks at a time to an employee. Dual

subordination and overlapping authority is a conventional phenomenon of our country.

Every employee is working with over burden. Evaluations and promotions are very slow;

big promotions may not come for the first 10 years. Promotion depends on group

lobbying and bossing as well as internal organizational politics. Leaders are not very

motivated to attain the objectives of the organization. They like face-to-face

confrontation. They try to impose all liability for unsuccessful work to their subordinates

and success goes on the individual performance. But in our country the leader generally

adapt an autocratic view in taking decision. In our country the leaders gives supreme

importance to their personal benefit to gratify their own desires rather than the

organization welfare.

BANGLADESHI LEADING

Leader acting as the

decision-maker and

head of the group.

Mostly benevolent autocratic style (parent-

child relatons)

Divergents values ; groupism sometimes

hindering cooperation

Face -to-face confrontation

Liders give not too more importance to the

organizations goal-attainment than

Interpersonal relationship

Responsibility is assigned to individual

Promotion is slow and often depends on Group

Lobbying

Critical and non-critical communication top

down

Leaders do care much to make the subordinates work to meet the time schedule or deadline

Leaders are not very motivated to attain the

objectives of organization

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Controlling in Bangladesh

In Bangladesh, primarily group Leaders exercise control. Japanese importance is given to

the unskilled person. U.S., China and Bangladeshi managers' importance is given to the

skilled person. In Bangladesh control focuses primarily on the group but also on the

individual performance. They try to increase the productivity rather than quality.

Bangladeshi managers look for maximization of profit. Most of the time, the work forces

are not adequate. Skill persons are not treated in a fair way. The enterprise's wage

structure does not meet going level of the community. For the unexpected result

managers try to find out the human errors.

Control by superior

Control focuses on individual performance

Fixing blame

Limited use of quality control circles

Chance of partiality

Importance is given to the skilled person as well as political persons.

Duration of work is not fixed

Bangladeshi

Management

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Management thought has always been and probably will continue to be highly dynamic.

New theories will emerge and old one will be discarded. Some consolidation among the

many present management theories is to be expected. The future may bring a viable

integration of presently separate schools of management. Dynamic management thought

will continue because a discipline is vital as management - with its involvement in

fundamental issues that affect human wants, values and technology- is certain to attract

schools and practitioners to contribute to a modern and meaningful theory.

In some managerial areas, we predict results from selected actions with an acceptable

degree of certainty, but in the other areas, we are still in what can be termed the

descriptive stage. That is, we can apply certain managerial knowledge, but we are not

positive what specific results will ensure from such action. Once a manager has the

symptoms identified, he or she can prescribe exactly what to do, with assurance that the

desired results will be forthcoming.

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Management Practice of America

From the beginning of industrial revelation in England, a “System” was introduced in

manufacturing and other industries in America. The system relied on machine tools, jigs

for guiding the tools and fixture for properly holding the work and gauge blocked for

checking the fit of parts. These methods eventually were known as the “American

Systems” of manufacturing. Application of the American system was to the sewing

machine and reaper industries in the 1880 resulted in substantial increases in

productivity. The American system was applied in the manufacturing industry almost

from the beginning. Later, in the 1880 and 1890, concept developed during the period

was “Scientific Management” or Taylorism developed by Frederick Winslow Taylor and

others. Scientific management initially concentrated on reducing the steps taken in

performing work such as bricklaying or shovelling by using analysis such as time and

motion studies, but the concepts evolved into fields such as industrial

engineering manufacturing engineering and business management that helped to

completely restructure the operations of factories, and later, entire segments of the

economy.

Thus scientific management’s application was contingent on a high level of managerial

control over employee work practices. This necessitated a higher ratio of managerial

workers to labourers than previous management methods. The great difficulty in

accurately differentiating any such intelligent, detail-oriented management from mere

misguided management also caused interpersonal friction between workers and

managers.

After that, basically from 1960, most of the American organizations follow McGregor’s XY

theory for the purpose of management.

At that time, autocratic “Theory X” American managers liked to retain most of their

authority. They made decisions on their own and informed the workers, assuming that

they will carry out the instructions. Autocratic managers were often called

"authoritative" for this reason; they acted as "authorities". This type of manager was

highly tasked oriented, placing a great deal of concern towards getting the job done, with

little concern for the worker's attitudes towards the manager's decision. This showed

that autocratic managers lost ground in the work place, making way for leaders who

shared more authority and decision making with other members of the group.

On the other hand, who were soft in management practice and belied in workers

potentiality, they followed “Theory Y”. In managing the organization who believed in

"participative" (Theory Y) leadership style they shared decisions with the group. Also

mentioned, were subtypes to this type of leader, namely the "Democratic" leader who

allowed the members of the working group to vote on decisions, and the "Consensual"

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leader who encouraged group discussions and decisions which reflected the "consensus"

of the group.

But, in late 1960, American business organizations faced global challenges. Almost every

day, competitors followed those. Competitors changed their strategies to compete the

American organizations. Therefore, fixed strategies for achieving goal were not suitable

for the betterment of organizations. That’s why; organizations of America had been

following Contingency Theory and it took into account the fact that managers must be

flexible and took the approach that best fits the situation.

By following, contingency theory of management American companies ensured that the

employer got what they were paying for in an employee and eventually results in more

wealth for everyone involved. Organizations were open systems that needed careful

management to satisfy and balance internal needs and to adapt to environmental

circumstances. There was no one best way of organizing. The appropriate form depended

on the kind of task or environment one was dealing with.

But in the 1970s and 1980s, many United States industries lost market share to

international competitors, particularly Japanese companies. Concerns about the

competitiveness of U. S. companies led some to examine Japanese management

practices for clues to the success enjoyed by many of their industries. This led to many

articles and books purporting to explain the success of Japanese companies. It was in this

atmosphere that “Theory Z” was introduced into the management lexicon.

A Management Comparison between American Organizations and Japanese

Organizations “before Theory Z” followed by American Organizations

United States Management Japanese Management

Planning

Primarily short-term

orientation

Individual decision-making

Involvement of a few people

in making and

“selling: the decision to

people with

divergent values

Decisions are initiated at the

top and flow down

Fast decision-making; slow

implementation requiring

Planning

Long-term orientation

Collective decision-

making (ring) with

consensus

Involvement of many

people in preparing and

making the decision

Decision flow from

bottom-to-top and back

Slow decision-making;

fast implementation of

the decision

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compromise, often resulting

in suboptimal decisions

Organizing

Individual responsibility and accountability

Clarity and specificity of decision responsibility

Formal bureaucratic organizational

structure Lack of common organization

culture

Organizing

Collective responsibility and accountability

Ambiguity of decision responsibility

Informal organization structure

Well-known common organization culture and philosophy; competitive spirit toward other firms

Staffing

People hired out of schools and from other companies; frequent company changes

Rapid advancement highly desired and demanded

Loyalty to the profession Frequent performance

evaluation for new employees

Appraisal of short-term results

Promotions based primarily on individual performance

Training and development undertaken with hesitation (employee may go to another firm)

Staffing

Young people hired out of school; hardly any mobility of people among companies

Slow promotion through the ranks

Loyalty to the company Very infrequent formal

performance evaluations for new (young) employees

Appraisal of long-term performance

Training and development considered a long-term investment

Leading

Leader acts as decision-maker and head of group

Directive style (strong, firm, determined)

Often divergent values; individualism sometimes hinders cooperation

Face-to-face confrontation common; emphasis on clarity

Communication primarily top-down

Leading

Leader acting as social facilitator and group member

Paternalistic style Common values

facilitating cooperation Avoidance of

confrontation, sometimes leading to ambiguities; emphasis on harmony

Controlling

Control by superior Control focus on individual

performance Fix blame Limited use of quality control

circles

Controlling

Control by peers Control focus on group

performance Saving face Extensive use of quality

control circles

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Theory Z was first identified as a unique management approach by William Ouchi. Ouchi

contrasted American types of organizations (Type A) that were rooted in the United

States' tradition of individualism with Japanese organizations (Type J) that drew upon the

Japanese heritage of collectivism. He argued that an emerging management philosophy,

which came to be called Theory Z, would allow organizations to enjoy many of the

advantages of both systems.

Ironically “Japanese Management" and Theory Z itself are based on Dr. W. Edwards

Deming's famous "14 points" (appendix-2). However, Theory Z is a form of management

in which workers are involved in the work process on the factory floor. Schedules,

division of labor, work assignments, and other aspects of the labor process are given over

to workers to do as they see well. Investment policies, wages, fringe benefits and kind of

product are not given over to workers to decide; only how best to do that decided by top

management. American businesses ultimately have been trying to use "Japanese"

approach to improve their competitive position.

Today’s the features of management practice of America are as follows …

PLANNING

The process and function of planning focus on organization purposes and objectives and

possible paths to achieve them. Plans themselves can be broad (long term, strategic) or

narrow (short-term budgets and operating plans). The planning process can be formal or

informal, decentralized or centralized, or continuous or discontinuous. It can be done

individually or by groups. It may or may not involve outsiders (e.g., customers,

consultants, suppliers). Plans can be put in writing or remain mental maps in the minds of

managers (for a comprehensive conceptual overview of the planning process.

History shows the following tendencies in large U.S. companies compared with their

counterparts.

More formalized long-range planning

More recourse to external consultants

More willingness to accept change

Slow decision making

Fast implementation

Planning

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ORGANIZING

Organizing is concerned with the integration and coordination of resources and effort

and the flow of information and authority. It considers what activities to decentralize and

whether company structure should focus around business functions (e.g., marketing,

finance, manufacturing), or around product group, geographic region, processes,

projects, or some hybrid approach (e.g., a matrix). The preferred choice can depend on

circumstances (e.g., organization size, strategy, performance, technology, people, and

goals). For example, a smaller business, or one with a narrow product line, will normally

structure itself around the business functions. But if it grows or diversifies, then changing

to a product or geographic area orientation can enhance coordination and integration of

operations (see Chandler, 1962; Stop ford &Wells, 1972). External factors (e.g., intensity

of competition) can also influence change. High acceptance of change in American

culture makes organizational change more welcome than in most cultures. Two

organizational tendencies in large U.S. corporations (relative to counterparts abroad) are

as follows:

More likely to decentralize authority (i.e., to delegate

key tasks and decision-making authority to

subordinates)

More frequent organizational change

Organizing

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DIRECTING

The managerial function of directing involves guiding, commanding, nudging, exhorting,

and inspiring subordinates, colleagues, superiors, and others to higher performance. This

requires skills of leadership, communication, and motivation, in turn influenced by

culture. Among some general tendencies of U.S. managers and subordinates (relative to

many counterparts abroad) are the following:

Much directness in interpersonal communication

Aversion for authoritarian leaders

Motivation mainly from money, ego gratification, and personal challenge (and less from loyalty and personal

relationships)

Directing

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CONTROL

Managerial control assesses whether organizational objectives are being met and calls

for corrective action (or maybe a change in objectives) when needed. Control can be

both broad and narrow. Very broadly, enterprise is controlled by its external product,

capital, and labor markets. For example, if sales and profits fall (or are expected to fall),

company share price and debt rating normally fall, making new funding more costly until

performance improves. Boards of directors normally are empowered to control

management (e.g., hire, advise, counsel, evaluate, reward, persuade, or remove

managers) on behalf of owners, and they do so with varying effectiveness. Internal

control systems (e.g., financial controls, budgeting systems, quality control, and

supervision) are also part of the control process.

Some control tendencies in large U.S. companies (relative to peers abroad) include the

following:

However at the end it is said, after 1980 and till now by analysing the different case

studies of management of American organizations it is identified (Heinz Weihrich, (2011),

Management Practices in the United States, Japan, and the People's Republic of China)

Broader and more transitory shareholder base that is more inclined to flee (sell their holdings) rather than

fight (engage with managers) for change

More attuned to shareholder interests relative to other stakeholders

More vulnerable to buyout and takeover pressures

More focused on quantifiable performance criteria

Shorter-term time orientation

More bottom-up appraisal of managers

Controlling

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that by following the “Z Theory” now the features of American organization’s

management practices are slow decision-making; but fast implementation of the

decision, collective decision-making (ring) with consensus, Long-term employment and

job security, collective responsibility Implicit, formalized measures collective decision-

making, slow evaluation and promotion, moderately specialized careers, concern for a

total person including their family, informal control with explicit. There has been a

stronger tendency in the United States than abroad to decentralize organizations and to

effect organizational change (acquisitions, mergers, restructurings, managerial mobility).

Leadership, communication, and motivation style conform to the low-context nature of

U.S. culture; in general, people prefer no authoritarian leaders; directness and frankness

are valued in personal communication, including in performance evaluations; pay, public

esteem, and personal challenge are stronger motivators than is loyalty to an employer.

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Management Practices of Germany

Overview of German Management and Practices

German management, as it has evolved over the centuries and has established itself since

World War II, has a distinct style and culture. Like so many things German, it goes back to

the medieval guild and merchant tradition, but it also has a sense of the future and of the

long term.

The German style of competition is rigorous but not ruinous. Although companies might

compete for the same general market, as Daimler-Benz and BMW do, they generally seek

market share rather than market domination. Many compete for a specific niche. German

companies despise price competition. Instead, they engage in what German managers

describe as Leistungswettbewerb, competition on the basis of excellence in their products

and services. They compete on a price basis only when it is necessary, as in the sale of bulk

materials like chemicals or steel.

The German manager concentrates intensely on two

objectives: product quality and product service. He

wants his company to be the best, and he wants it to

have the best products. The manager and his entire

team are strongly product oriented, confident that a

good product will sell itself. But the manager also

places a high premium on customer satisfaction, and

Germans are ready to style a product to suit a

customer's wishes. The watchwords for most German

managers and companies are quality, responsiveness,

dedication, and follow-up. Product orientation usually

also means production orientation.

The business set up in Germany is extremely formal. In order to achieve successful cross

cultural management, you must be prepared for a host of regulations, guidelines, and

principles covering every aspect of conducting business in Germany. German

businesspeople have deep-seated rules and regulations. This is a formal culture that

believes time is money. Relationships are clearly defined, which intimates the type of

communication and behaviours expected.

Some employees in Germany do not feel that they are authorized by station, education, or

position to either aspire to leadership or to express themselves freely in management

circles. Nevertheless many do, and especially with the influence of intercultural expansion

and globalization, organizations are tending to rely more heavily on the wisdom of their

people and not just the direction of leadership.

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The Management Style of a German Manager

Subordinates demonstrate their respect of their supervisors and managers by following

their directions to the letter. In return, managers provide explicit directions and ensure that

their subordinates have the proper materials and understand the appropriate procedures.

All work hard within the official working hours. However, neither managers nor

subordinates expect to work past normal quitting time.

There is often a gulf between managers and their subordinates, although this is less so in

newer companies, high tech, or other high growth industries. Managers are expected to give

precise directions when assigning tasks so that there is no question what is expected.

01. Approach to Change:

Germany’s intercultural competence and readiness for change is low, meaning that social

change is difficult to bring about and the idea of it is not received with enthusiasm. The

underlying belief is that change may threaten the social fabric.

02. Approach to Time and Priorities:

Germany is a controlled-time culture, and adherence to schedules is important and

expected. In Germany missing a deadline is a sign of poor management and inefficiency, and

will shake people’s confidence. People in controlled-time cultures tend to have their time

highly scheduled, and it’s generally a good idea to provide and adhere to performance

milestones. Since Germans respect schedules and deadlines, it is not unusual for managers

to expect people to work late and even give up weekends in order to meet target deadlines.

Effective cross cultural management skill will depend on the individual’s ability to meet

deadlines.

03. Decision Making:

For effective cross cultural management it is important to remember that in general,

subordinates do not expect their managers to seek their concurrence. They are comfortable

complying with decisions. Again, this may depend upon the industry, the professional level

of the employees concerned, and the corporate culture. Germany is undergoing rapid

changes which are impacting business life.

04. Boss or Team Player?

Germans like working in teams and collaborate quite well across hierarchical lines. The

communication within a team is generally quite collegial, albeit somewhat direct and blunt.

Role allocation within the team is generally quite clearly defined and people will take

greater responsibility for their specific task than for the group as a whole.

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Successful cross cultural management will depend on the individual’s ability to harness the

talent of the group assembled, and develop any resulting synergies. The leader will be

deferred to as the final authority in any decisions that are made, but they do not dominate

the discussion or generation of ideas. Praise should be given to the entire group as well as to

individuals.

05. Communication and Negotiation Styles:

Direct communication is valued and your German counterparts will be quite unabashed in

pointing out any deficiencies they may find in your product or business plan. Germans will

also be quite comfortable saying "no" directly when necessary, or let you know when they

cannot meet your expectations. To gain control of a conversation, a German will interject

into what the other party is saying, or speak over the other parties in a louder volume. To

avoid any cross cultural miscommunication make sure your printed material is available in

both English and German.

The Culture of German Management

The German manager concentrates intensely on two objectives: product quality and product

service. He wants his company to be the best, and he wants it to have the best products.

The manager and his entire team are strongly product oriented, confident that a good

product will sell itself. But the manager also places a high premium on customer

satisfaction, and Germans are ready to style a product to suit a customer's wishes. The

watchwords for most German managers and companies are quality, responsiveness,

dedication, and follow-up. Product orientation usually also means production orientation.

The business set up in Germany is extremely formal. In order to achieve successful cross

cultural management, you must be prepared for a host of regulations, guidelines, and

principles covering every aspect of conducting business in Germany. German

businesspeople have deep-seated rules and regulations. This is a formal culture that

believes time is money. Relationships are clearly defined, which intimates the type of

communication and behaviours expected.

Some employees in Germany do not feel that they are authorized by station, education, or

position to either aspire to leadership or to express themselves freely in management

circles. Nevertheless many do, and especially with the influence of intercultural expansion

and globalization, organizations are tending to rely more heavily on the wisdom of their

people and not just the direction of leadership.

However, there is a strong emphasis on efficiency, people tend to use their working time to

be highly productive and there is little or no time spent socializing or chatting. The exception

to this is during break periods, which are usually 15 minutes, with 45 minutes for lunch.

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Management culture in Germany is usually highly hierarchical. Germans like to work on

well-thought-out plans and make factually-based decisions. Orderly and well scheduled

meetings form a large part of what tends to be a consensual, group approach to decision-

making. Punctuality is expected and lateness is not tolerated, so be careful, especially if

you're from a country where this is endemic!

01. Salaries:

Salaries in Germany are among the highest in the world. Most jobs for graduates start from

€30,000/year. Student jobs or unqualified work is generally paid around €6-15/hour.

Salaries are usually talked about gross, i.e. before deductions for tax and social security. Be

aware that taxes, depending on your salary, can be more than 50% of your gross salary, so

don't get gross and net figures confused!

Salary is stated monthly in your employment contract, which should also detail special

benefits, bonuses and salary reviews. Many employers pay 13 monthly payments a year,

which is normally paid out in December for Christmas or split between summer and

Christmas. In some management positions, you might even get a 14th salary.

It's difficult to get exact salary data for specific jobs or positions, which can be useful for

negotiating salaries. Personal market offers you a salary analysis for a fee that takes into

account sector, education, work experience and the geographical region. This might be

helpful for negotiating your future salary.

02. Labour law:

To enter employment, you need a work permit (Arbeitsgenehmigung or Arbeitser laubnis)

or a residency permit that allows you to work. You also require a tax card (Lohnsteuerkarte)

and a social security number (Sozialv ersicherung summer). Tax cards are issued by the

city/regional authority where you are registered as living. Social security numbers are issued

by pension insurance institutions.

When an employee first enters employment, the employer generally makes their

registration for them and provides a social security number and identity card. Queries

should be directed to your employer, your health insurance company or your state

insurance institution.

03. Labor regulations:

Germany has one of the most highly regulated labor markets in the world, with its Labor law

designed to protect employees. Whether or not an employment contract exists, all

employees have basic rights to:

holidays

sick pay

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chose to work part-time

receive training

receive maternity/paternity leave and related employment protection

Periods of notice are also laid down under law, but companies can agree longer periods of

notice under individual or collective labour law agreements. Working conditions which do

not reach the legal minimum standard are not permitted and are not legally binding.

04. Collective Labor Agreements:

There is also a collective labor law which stems from the laws protecting collective labor

agreements and the framework for the rights of employees at their place of work

(Betriebsverfassungsrecht). The laws governing collective labor agreements allow both

partners (trade unions and employers' federations or individual employers) to make their

own labor agreements. Labor agreements regulate wages, working hours, holidays and

notice periods. Most employees work under a labor agreement, although in recent years

more companies have received exemptions in order to negotiate their own agreements.

05. Framework for Employee Rights:

The Betriebsverfassungsrecht regulates the relationship between employee and employer in

the workplace. Employees are represented by the works council (Betriebsrat) whose

members are elected by the workforce. Among other things, it is responsible for protecting

employee rights in the workplace. Management must also consult with the Betriebsrat

about issues regarding staff or the company. If you have problems in your workplace, you

should consult your Betriebsrat for advice and help.

In firms with 2,000 or more employees, the 1976 Codetermination or Worker's Participation

Law (Mitbestimmungsgesetz) applies. This law requires that the company's supervisory

board contains a certain number of employee representatives. The principle of

Codetermination means that unions and employees have a say in company policy, as well as

sharing responsibility for the firm.

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Management practices of Japan

Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the

Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of

Okhotsk in the north to the East China Sea and Taiwan in the south. The characters that

make up Japan's name mean "sun-origin", which is why Japan is sometimes referred to as

the "Land of the Rising Sun". Japan is an archipelago of

6,852 islands. The four largest islands are Honshu,

Hokkaido, Kyushu, and Shikoku, which together

comprise about ninety-seven percent of Japan's land

area. A major economic power, Japan has the world's

third-largest economy by nominal GDP and the world's

fourth-largest economy by purchasing power parity. It is

also the world's fourth-largest exporter and fourth-

largest importer.

Japan

Flag

Capital Tokyo

National language Japanese

Ethnic groups

98.5% Japanese 0.5% Korean 0.4% Chinese 0.6% other

Government

Unitary parliamentary constitutional monarchy

Legislature National Diet

Total area 377,944 km (62nd) 145,925 sq mi

Population (2012 estimate) 126,659,683 (10th)

Currency Yen

Time zone JST (UTC+9)

Calling code +81

ISO 3166 code JP

Today, Japan is considered as one of the super-economic powers of the world. As the saying

goes that: Rome was not built in a day, Japan was also not built in a day. The process of

development started 130 years backs. Japan as it stands today, is due to the efforts of

Japanese people who were smart enough to adopt the foreign technology and management

philosophy and develop suitable technological and management systems that can be

effectively and efficiently applied for the development of the country.

21

1.0 Special Features:

The Special features of Japanese management practices can be broadly classified into two

areas. Such as:

People-oriented, and

Work-oriented.

Figure 1: Special features of Japanese management practices.

The Japanese style of People-oriented management practices mainly focus on personnel

and human resources management aspects like the life-time employment, the seniority

system and the groupies whereas the work oriented management practices manly focus on

production and engineering functions which include, the just-in-time production system, the

subcontracting and the Quality control. These specific features of Japanese style of

management have been developed as a result of the socio-cultural characteristics of

Japanese society, which has largely contributed to the built –up competitiveness of the

Japanese companies leading to make Japan a super-economic power in the world.

1.1 The personnel and human resources management practices:

The personnel and human resources management practices of Japanese companies are

mainly oriented towards people and their development. There are some specific

characteristics, which are not found in the traditional western management system. Some

of these distinct characteristics are the life-time employment, seniority based promotion

and wage system and groups.

a) Lifetime Employment:

The lifetime employment system involves hiring people who have just graduated a high rate

of stability among employees and guaranteeing work until the mandatory retirement age.

The system is oriented towards human relations, human development and training

guaranteed employment, equality, participation and welfare. Thus, in a Japanese company,

employees are "born", and develop in terms of work.

People-oriented

Work-oriented

22

b) Seniority based promotion and wage system:

The promotion from lower level to immediate higher level is mostly based on seniority.

However, the pace of promotion is very slow though. It does not mean to say that

promotion does not take account of performance evaluation and qualification of the

employee. Higher weight age is given to senior person, or on the number of years he or she

has worked with the company. Wage structure is also based on seniority.

c) Groupies:

The special cultural quality of Japanese society has a great deal of impact on the Japanese

management practices. The typical Japanese ways of thinking –"Uchi" (insider) and "Soto"

(outsider) is actually practiced in Japanese management system. The special character of

"WE" is very strong in Japanese companies.

1.2 Work/operations or production management practices:

The operations or production management practices of Japans companies has some specific

characteristics quite different from traditional or western management system. The

Japanese production management system attempts to pursue efficiency in connection with

work while at the same time, shows due considerations for human factors in the company.

Some of the major distinctions can be found in the just-in-time production system,

subcontracting and quality control.

a) Just-In-Time (The Production) System:

Producing and dispatching the products just-in-time is the main objective of employing JIT.

This contains many other areas of improvement like low cost of production, low inventory

cost, low investment for warehouses, immediate checking of abnormalities, high value-

added per person, better quality and improved productivity.

b) Subcontracting:

Large companies, particularly in manufacturing sector, rely heavily on a regular

subcontracting system. To secure punctual and regular supply of quality parts and semi

finished products from subcontractors at various levels, large companies provide smaller

ones with technical, managerial and financial assistance in various forms. This way, the large

and small companies need not compete and contract for every supply and purchase. Mutual

trust is the basis of their long-term transactions.

c) Quality Control:

The Japanese production management now cannot work without considering the concept of

quality or customers in a broader sense. Now-a-days, the Japanese style of management is

also referred to as Management by Quality. This does not mean controlling the quality but

rather managing the company with the "Quality First" concept. Japanese management

23

philosophers together with Dr. Juran and Dr. Demming of USA has substantiated that quality

and productivity are positively related, and not a contradictory phenomena as traditionally

believed. Quality and productivity are also defined in a broader perspective encompassing

customer's interest. The productivity (quality) is:

Production or service capacity of the organization.

Quality specification of the product or service.

Cost of Production products or service.

Delivery time of products or service.

To continuously improve the Production Capacity, Quality of Goods and Services, Cost of

Operation, Delivery timing factors of productivity and quality, an organization gives special

priority to the safety and Morale of the people working in the organization. Beside, all

employees from top-management to workers concentrate on improving these six

fundamentals of quality management to improve productivity and ensure sustainable future

growth of the company.

2.0 Japanese management practices:

The management practices of Japanese companies exhibit a number of distinctive

characteristics. Some of the major areas where we can find distinction are, ownership

structure, corporate structure, company strategy, Total quality management (TQM),

decision-making system and communication, given below:

2.1 Ownership Structure:

The vast majority of typical Japanese companies are not family-owned. Some of these

exceptions are Toyota Motor Corporation, Oobayashi Corporation, Taisho Pharmaceuticals

Co, Santory Ltd, and a few others. The owners are mainly financial institutions and

companies that are affiliated to the same business group. The relationship among the group

member institutions are mutual assistance and stockholding, interlocking directors, human

resource development, joint R & D, independent members, no holding company, regular

meetings.

2.2 Corporate Structure:

The top-management in Japanese companies has an extremely closed structure. Although

two or three directors may be invited to join the company from outside, in most cases,

directors are appointed from within the company's former management level-staff.

Moreover, employees are not considered to be consumable physical resources, but as

important corporate members in the corporate structure. A Japanese company is fully

participatory and not authoritative. The following figure shows the typical roles at different

level in a Japanese company:

24

Figure 2: Different levels in a Japanese company.

Roles at Different Levels:

i. Keiei:

Determination of corporate policy.

Full support for managers and workers.

External relations for favorable operations.

ii. Kanri:

General planning and friendly supervision.

Facilitation pleasant work atmosphere.

Assistance for non-supervisory employees.

Development of self and subordinates.

Positive evaluation of employee performance.

Cooperation with other departments.

iii. Ippan Shain:

On the spot planning and reporting.

Facilitating workplace meetings.

Leadership by good examples.

Continuous improvement- technical and human.

Cooperation for productivity, quality, human relations.

2.3 Company Strategy:

The distinctive characteristics of the strategies that most of the Japanese companies adopt

as management practices:

Investment in equipment and human resources development for long-term profit.

Quality or customer oriented decision.

Bottom-up problem solving rather than top-down command.

Continuously improving products rather than developing innovative new products.

Improving market share for long term profit.

Providing importance to process rather than results.

Keiei

Directors

Kanri

Administration

Ippan Shain

Rank & File

25

2.4 Total Quality management (TQM):

The Japanese management philosophy, system and practices, all focusing mainly on people

and work is also termed as "Total Quality Management". The common goal of TQM is to

produce and serve the quality the customers need in a most economic manner. To achieve

this goal, common approaches adopted in TQM are:

Policy deployment (PDCA cycle).

Small group activities (QC circle).

Systematic problem solving (QC story).

Statistical methods (7 QC tools).

We can consider Total Quality Management (TQM) as an umbrella under which many

components of Japanese management practices work simultaneously for improvement of

productivity and quality.

2.5 The "Ringi System and Decision Making:

Japanese companies employ a method of group-oriented and participatory decision making

called: “Ringi" system. This system helps in quick implementation of policies because the

basic approval and the opining of persons concerned have already been taken during the

process of "Ringi" decision making system.

2.6 Communication:

Some distinctive characteristics regarding communication methods within most of the

Japanese companies are as follows:

Regular morning meeting of top, middle level managers and other employees.

Open working office area where all level of employees work together with managers.

The layout is very conducive for good communication among employees.

Regular management-labor discussions on productivity and gain sharing.

"Nemabashi" or leaking information unofficially to those concerned with or taking

part I the decision on some matters and influencing them to think in a certain way

before the decision is made.

High volume of information flow as a prerequisite for communication.

26

3.0 Summing up:

The Japanese management practices can be understood better by comparing it with the

Western or traditional management practices.

(Western) Traditional management practices Japanese management practices

1. Capitalism 1. Companyism

* Maximization Profit * Increasing value-added

* Growing company * Growing with company

2. Shareholders' satisfaction 2. Customers' satisfaction

3. Office priority 3. Shoofloor priority

4. System oriented 4. Human oriented

5. Innovation approach 5. Kaizen approach

6. Top-down method 6. Top down+ Bottom up

7. Theory by specialist 7. Practice by all people

8. Result oriented 8. Process oriented

9. Sophisticated technology 9. Simple technology

10. Optimization 10. Continuous challenge

So we can say that Japanese offers interesting insights into management practices.

Successful Japanese companies also provide hints into future management trends in Japan

& demonstrate that they can make necessary changes to deal with a changing economic

environment.

27

An overview of Chine

China is one of the biggest countries in the world. It has an area of about 9.6 million square kilometres which comprises about 6.5 per cent of the world total land area. Its population of more than one billion accounts for 23 per cent of the world's population. China is the world's oldest continuous civilization. World Travel Organization predicts that by year 2020, China will become the number one travel destination in the world. China, officially the People's Republic of China, is a sovereign state located in East Asia. It is the world's most populous country, with a population of over 1.35 billion.

Capital: Beijing

Population: 1.40 billion

Currency: Renminbi

Government: Communist state, Socialist state, Single-party state

Official language: Standard Mandarin

Management practice of Chine

China's recent and impressive economic gains have captured the attention of the world. With the world's fastest growing economy and largest population, China is poised to change the landscape of global business. China has become the fourth largest economy in the world in a very short time. This economic gain is driven in part by an impressive expansion of China's manufacturing base and export abilities; both of which are expected to continue to increase in the coming years and to outperform its large competitor, India (Black 2007; Wu 2007; Lee, Rao, and Shephers 2007). With China's economic growth comes an increased need to better understand the strategic thinking of the Chinese. The last few years have seen an increased interest in understanding the business and managerial practices of the Chinese (Quer, Claver & Rienda 2007). In the hope of either capitalizing on China's growth, or being able to defend against its economic threat, many in the West and beyond have taken a much greater interest in China. One area of particular interest is a better understanding of Chinese culture and management system.

28

Some of the more common characteristics of Chinese management and organization are: centralized control, collectivism, harmony, authoritarian and paternalistic leadership, flexible strategies, family-staffed businesses, and strong organizational networks and business connections. These characteristics are practiced both in China and overseas by the Chinese Diaspora. All of these practices can be traced to important historical figures and schools of thought beginning with the very early rules and philosophers of China.

1.0 Management Development in China

The dramatic changes in the Chinese economy have greatly affected the role of the

manager in Chinese society. The managers’ role is changing from a concentration mainly on

people-handlers towards the need for awareness of the market, financial management and

thinking strategically to encourage competition and deal with joint ventures (Chen, 1988).

Consequently, such changes have raised questions about Chinese managers’ abilities to

deal with competition, uncertainty, unpredictability and increased autonomy. The

localization of the management group in the foreign-invested ventures, due to the cost

reasons, puts strong demands on the general management development of local managers

and professionals (Bjorkman and Lu, 1997).

Management in modern day China is argued to be characterized as an exact science with a

clear and definable knowledge base, with a set of quantitative and operational methods

with universal applicability linked to specialized functional skills (Borgonjon and

Vanhonacker, 1992; Qiu et al., 1989). This is supported by the evidence of a knowledge-

based curriculum for trainee managers where a great deal of emphasis is placed on the

traditional numbers-oriented (hard) subjects and far less time is spent on people-oriented

(soft) subjects (Bjorkman and Lu, 1997; Warner, 1995). Underpinning this approach are

three issues - professional background, tradition and ideology - all combining to dictate this

distinctly Chinese interpretation of the theory and practice of management. Management

development within the traditional educational system is described as: supporting the more

didactic, teacher-centred teaching methods (Boisot, 1987); a concentration on theory rather

than on practice with little contact with the wider industrial community; and a dearth of

well trained and well qualified management trainers (World Bank, 1985).

China’s successful development as a major economic power can only be achieved with the

aid of highly skilled, professionally trained management (World Bank, 1985; Fischer, 1990). In

China the management training function is not only aligned to economic structure and

development but also to political and ideological beliefs. Since management development is

perceived as an important means of enhancing managerial competence and improving

competitive advantage (Benson, 1996; Gregory and Wales, 1996; Osbaldeston and Barham,

1992), international companies involved in joint ventures need to be aware of the cross-

cultural implications in the design and implementation of management training programmes

for Chinese managers and its integration into the strategic human resource system.

29

Management has five major functions which are apply almost all countries organizations.

There are five managerial functions which applied in the Chinese management:

1. Planning

• Long-term and short-term orientation (5-year plan and annual plan)

• Decision-making by committees. At the top often individual

• Top-down-participation at lower levels.

• Top-down-initiated at the top

• Slow decision-making / slow implementation. (Now changing)

2. Organizing

• Collective and individual responsibility

• Attempts to introduce the “factory responsibility system”

• Formal bureaucratic organization structure

• Identification with the company but no competitive spirit

3. Staffing

• Most hired from school, fewer from other companies

• Slow promotion, but regular salary increase

• Lack of loyalty to both company and profession

• 5-year plan, otherwise short-term targets

• Promotions are supposed to be based on performance, potential ability, and

education. But family ties and good relations with top managers are important

• Training programs available. State exam administered for managers

4. Leading

• Leader as the head of the group (committees)

• Directive. Parent-child relations (in TA terms)

• Common values. Emphasis on harmony

• Avoidance of confrontation

30

5. Controlling

• Control by group leader (superior)

• Primary control by groups-but also by individuals

• Try to save face

• Limited use of quality control

Now broadly describe all these five major functions which are successfully implemented in

the china managerial practice system of any organization.

In China, the situation is quite different. Most of the businesses are state-owned, and it is

only more recently that some private companies have come into existence. In these

businesses, both long- and short-term plans are prepared. The five year plan is prepared at

the top (the State Planning Commission) while more detailed plans are made at lower levels.

The orientation is to meet objectives and achieve the assigned plan, rather than to be

successful in the market. There is also the difficulty of integrating organizational and

personal goals because the achievement of organizational objectives has little bearing on

individual benefits.

Organizing involves setting up a structure to coordinate human efforts so that people can

contribute effectively and efficiently to the aims of the business. This requires determining

roles, responsibilities, and accountability.

In China, major decisions are made by people at the top, but many people are involved in

operational decisions. Lower-level managers have very little authority to make decisions.

Decision-making through the central planning bureau is under the direct control of the

state. This, unfortunately, results in a lack of flexibility in the implementation of the

decisions. Although there is a realization of the need to change, managers in the upper

echelons of the hierarchy resist reforms because it would mean giving up some of their

privileges they have as officials.

Chinese managerial practices are very much influenced by the fact that the businesses are

owned by the state and guided by government officials. This results in a bureaucratic

organization structure that does not respond well to changes in the environment. This may

not have been crucial in the past (although it is ineffective) because managers did not have

to respond to competition. While factory managers, as people, are expected to achieve the

yearly plan, on lower levels the notion of a vague collective responsibility prevails. Within

the formal bureaucratic structure the relationships among people are rather informal.

Recently, attempts have been made through the "factory responsibility system" to delegate

more authority to lower levels. In fact, factories are allowed to make profits, though these

profits are specially taxed. Like in Japan, there are strong organizational cultures in Chinese

businesses. Research indicates that the degree of identification with the business may vary

31

greatly. Even with a low degree of commitment to the company, this does not result in

frequent organizational changes because it is very difficult to change jobs among state-

owned organizations. And there is a lack of competitive spirit among Chinese employees.

Staffing requires identifying human resource needs and filling the organization structure-

and keeping it filled-with competent people. It is in the management of human resources, in

addition to the decision-making process, where the Japanese and Chinese approach to

managing differs greatly from that of the United States.

The staffing practices in China have aspects similar to those in Japan. Like in Japan,

employees are hired from school. They are expected to stay with the business for a long

time. More recently, however, personnel are also hired from other organizations; but

people are usually assigned to their positions by higher authorities. As in Japan, employees

are promoted slowly through the ranks with regular salary increases.

Leading involves the process of influencing people so that they contribute to organizational

aims; it is concerned with leadership, motivation, and communication.

The managerial function of leading in China has characteristics of Japanese and U.S.

practices. The leader is the head of the group (in committees, for example), but the

leadership style is generally quite directive. One interviewee described the relationship

between the leaders and followers as "parent-child" in transactional analysis terms. In other

words, it is expected that the leaders' commands are to be obeyed. Leaders, in turn, are

responsible to higher authorities for performance and goals, but not for meeting customer

needs and demands (but this is slowly changing).

In the view of Western managers, controlling involves setting standards, measuring

performance, and correcting undesirable deviations.

In China, control is exercised primarily by group leaders. The control focus is on the group,

but also on the person. Factory managers, for example, are expected to meet their yearly

quotas. Thus, Chinese control practices are a mixture of U.S. and Japanese managerial

practices. In identifying deviations from standards, there is a tendency to let the persons

responsible for poor performance save face (like the Japanese practice). There is some use

of quality circles, but it is not a common practice.

32

2.0 Modern Management Practices in China

Globalization has shrunk the whole world into a single small market in the recent years.

Technology, products, process and people have become easily accessible throughout the

globe. Unlike the olden days each country has started towards contributing the global

market thereby improving its own economy. As the saying goes the world highest populated

country China has also started shifting its management model from the conventional

planned economy to decentralized market economy in the recent years.

2.1 Planned economy

Planned economy as the name suggests is a centralized model in the sense depends upon a

central managing body, here none other than the central government. For centuries the

Chinese Management System has been a centralized system where majority of the

organizations are State Owned Enterprises (SEO).State Owned Enterprises as the name

suggests belong to or are controlled by the government bodies.

2.2 Market economy

Market Economy, on the other hand can be considered as the polar opposite of Planned

Economy. In contrast to centralized system, market economy believes in privatization of

enterprises for the betterment of the industries as well as individuals of the nation. Market

economy is focused towards principles like individual freedom, equal contribution, and

division of labour and so on. World players like United States and United Kingdom follow

market economy.

2.3 From centralized to decentralized structure

But for the initiative of Deng Xiaoping, the former Chairman of the Chinese People’s Political

Consultative Conference, China would have never dreamt of something called market

economy [Selmer J, 1998]. Yes it is the socialist thinking of Deng that stood as an eye opener

to China. A revolution in Chinese Management practices began to take place only after

1978.For his good work Deng is considered even today as the architect of socialist thinking.

China from then on has shifted gradually from a centralized management structure to a self-

managed decentralized structure over the years. Further in 1992 the Chinese government

introduced the concept of ‘modern enterprises’ in which it gave the managerial autonomy

to organizations thereby decreasing the interference of state government in business

affairs. Recent studies have identified remarkable changes in the management practices of

Chinese Organizations.

33

2.4 Independent directors-a revolutionary approach

An Independent director is a person who is capable of exercising his control in an

organization’s decision making process and while taking those decisions work exclusively for

the benefit of an organization and does not give place to conflict of interest. The concept of

Independent directors first was introduced in China by the China Securities Regulatory

Commission in 1997, which later turned out by a success by exhibiting improved

performance of the organizations.

2.5 Need for independent directors in China

The corporate management practice introduced the management by Independent directors

in China keeping in mind the following reasons.

• Protecting minority stockholders

• Solve problems brought by shareholders

• Protection of company by being looted by its managers

• Equal sharing of profit

• Promote Foreign Investments

• Effective Overall management

2.6 The leadership style

Chinese leadership style is more focused towards personal feelings and emotions than that

of factors like motivation and recognition. Humanity comes first and then comes business.

The major role of a leader is to look after the wellbeing of a team and its members. For

example: dispute or misunderstanding among two employees may lead to a situation that

one might feel like quitting the job. In Chinese management practice the leader should

come forward to resolve the conflict and establish peace among his team members.

2.7 Retention management today

The Chinese have and still proving to be the best retention managers since they focus

towards collectivism and long term commitment rather than individualism and short term

employment. Their employee turnover is less whereas retention period is high [Tang J,

2003]. Seniority is given more importance than the fresh candidates. The Chinese are by

nature self-motivated and hardworking individuals. Therefore the organizations do not take

extra pain in motivating the employees. On the other hand they reward and recognize the

employees based on their commitment towards the organization.

34

Management, many Chinese managers are at the threshold of a managerial revolution in

which more government-owned organizations gain greater autonomy. Selectively,

competition is encouraged and incentives for private initiatives are promoted. There is an

increasing market orientation, and decision power for meeting customer needs is

decentralized (there have been even some highly publicized bankruptcies). To adapt to

these and other changes, Chinese managers look at both Japanese and United States

managerial practices and compare them with their past experiences. Some may be

transferable, but others are not. The environment, especially socio-cultural factors, does

influence practice, but its impact may have been overstated.

35

References

Armen A. Alchien and Harold Demsetz, (2005), Production, Information Costs, and Econoimc

Organization

The American Economic Review-2011

Nicholas Blooma, Christos Genakosb, Raffaella Sadunc and John Van Reenend, (December 19th 2011), Management practices across firms and countries

Heinz Weihrich, (2011), Management Practices in the United States, Japan, and the People's

Republic of China

www.dineshchapagain.com.np/.../Japanese%20Style%20Management.pdf

-

cob.jmu.edu/icpm/

36

Appendix-1

In U.S. organizations, decisions are made primarily by people and usually only a few people are involved. Consequently, after the decision has been made, it has to be sold to others, often to people with different values and different perceptions of what the problem really is and how it should be solved. In this way, the decision making is rather fast, but its implementation is very time-consuming and requires compromises with those managers holding different viewpoints. The decision that is eventually implemented may be less than ideal because of the compromises necessary to appease those with divergent opinions. It is true that decision responsibility can be traced to people, but at the same time, this may result in a practice of finding "scapegoats" for wrong decisions. In all, the decision power and the responsibility is vested in certain people in U.S. companies, while in Japan people share both decision power as well as responsibility.

Organizations in the United States emphasize individual responsibility, with efforts to clarify

and make explicit who is responsible for what. Job descriptions are perhaps the best

evidence of this. Many organizations, especially those operating in a stable environment,

have been rather successful in using the formal bureaucratic organization structure. As far

as the climate is concerned, not many managers make special efforts to create a commonly

shared organization culture. This may indeed be difficult because professionals-managers as

well as technical people-often have a closer identification with their profession than with a

particular company. In addition, the work force often consists of people with different

values derived from diverse heritages. Many U.S. companies have a high employee turnover

rate, which is partly due to the great mobility of the people in this country. With a relatively

short duration of employment with any one company, the loyalty toward the company is at

times rather low. Organizational change is often accomplished by changing goals instead of

processes. But organizations using change agents with a behavioral science orientation may

focus on interpersonal processes to reduce conflicts and improve performance. In the

United States it is quite common to use outside organization development consultants.

The management of human resources in the United States is quite different from the same

practice in Japan. Like the Japanese, U.S. companies recruit employees from schools, but

they also hire from other companies. High turnover rates among recent MBAs are quite

notorious. Rapid advancement is expected and, if it is not forthcoming, an employee may

change companies. Professionals such as engineers or accountants often identify more with

their profession than with their company, and job-hopping is not unusual.

A common practice in U.S. companies is to appraise the performance of new employees

comparatively soon after they are hired. If performance does not meet the company's

expectations, employment may be terminated. But even for those who have been with a

company for many years, performance is evaluated at least once a year and in many cases

their performance gets reviewed periodically during the year. In general, the focus of

performance appraisal is on short-term results and individual contributions to the company

aims. Moreover, differentials in pay increases are often based on individual performance.

These differences in pay may be substantial, especially at upper levels of management.

37

Promotions in U.S. companies are based primarily on individual performance. Although

progressive companies provide continuous development, training is often undertaken with

hesitation because of the cost and the concern that the trained person may switch to

another company. Thus, employees are often trained in specialized functions resulting in a

rather narrow career path within the company. Finally, in many U.S. companies, employees

feel that they may be laid off during economic hard times which, naturally, contribute to job

insecurity. The managerial function of leading is carried out quite differently in U.S.

companies. Leaders are seen as decision-makers heading the group; they are expected to be

directive, strong, and determined. Their job is to integrate diverse values, but the emphasis

on individualism in the society in general and in organizations in particular may hinder

cooperation. Managers are expected to take decisive actions, and clarify the direction of the

group or the business, even if this requires face-to-face confrontation with those who may

disagree. Although managers work hard, they value their private lives and separate them

from their work. Within the organization, the communication pattern is to a great extent

from the top down the hierarchy, with considerable emphasis given to written

communication.

Control in the United States often means measuring performance against precise standards.

Management by objectives, widely practiced in this country, requires the setting of

verifiable objectives against which individual performance is measured. This way the

superior can trace deviations to specific people and this frequently results in fixing the

blame. In an attempt to maximize individual results, group performance may suffer. We all

can think of examples in which the self-interest of people was placed before group or

organizational interest. The use of quality control programs is not new. Hughes Aircraft, for

example, had such programs for a long time under the names of "zero defects" and "value

engineering." Many of these programs were developed in this country and later used by the

Japanese in the improvement of their product quality and productivity.

Appendix-2 Dr. W. Edwards Deming's famous "14 points"

1. Create a constant purpose toward

improvement.

2. Adopt the new philosophy.

3. Cease dependence on inspection to

achieve quality.

4. Cease dependence on a single supplier

for any one item.

5. Improve constantly and forever.

6. Institute training on the job.

7. Institute leadership.

8. Drive out fear.

9. Break down barriers between

departments.

10. Eliminate unclear slogans, exhortation

and targets.

11. Eliminate management by quotas and

objectives.

12. Remove barriers to pride of

workmanship.

13. Instigate a rigorous program of

education and self-improvement.

14. Make "transformation" everyone's

job.

38