CBQ, Inc. (China Business Quotient) (fka CBQI)

[Da !]

Here is an ineresting article on decision-making that contains a section about China and the tendencies of the Chinese management style. Read it all if you can. The section I mentioned is in bold.

http://www.emeraldinsight.com/now/spotlight.htm

SPOTLIGHT ON DAVID HICKSON

In this issue of Spotlight, Professor David Hickson speaks to editor Sarah Powell about his research into the process of decision making, the impact of national cultures on this, and the growing economic importance of China in the twenty-first century.

David Hickson is Emeritus Professor of International Management and Organization at the University of Bradford's School of Management. His academic life began with work as a researcher under Professor Reg Revans at UMIST. David subsequently researched at the University of Aston where his role model was Derek Pugh. Later he took up professorships at the University of Alberta, Canada and the Netherlands Institute for Advanced Studies in the Social Sciences and Humanities.
Professor Hickson's main interests are the process of decision making and the impact of cultural differences between countries. From his earliest days he recognized the value of team working in research and he has worked closely with many influential management thinkers of different nationalities. His research interests led him in 1970s to become a founder member of EGOS, the European Group for Organizational Studies and, later, founding editor of the supranational research journal Organization Studies. He holds a Swedish Honorary Doctorate.

Best known among David Hickson's many works published in collaboration with other authors are Top Decisions, Management Worldwide, Exploring Management across the World, Managerial Decision Making and Writers on Organizations. He is a co-editor of The Bradford Studies of Strategic Decision Making which is to be published later this year.

Spotlight: It is often said that making decisions lies at the core of management. Is that how you see it?

David Hickson: Yes, I certainly do. Major decisions about such issues as takeover bids, new product launches or breaking into a new market, for example, focus what management is doing. Our research has shown that the average time needed to make major decisions is about a year; it can be shorter than this if there is an urgent need, but it can also take far longer - often as long as four years. There usually follow several years during which decisions are implemented which means the total process focuses the management for some considerable time and, of course, other decision making is taking place simultaneously.

Decision making can be destructive. We at Bradford have written about what we call 'decision over-reach' which describes a situation in which an organization over-extends itself and is unable to retract. I can cite from experience the case of a small brewery which acquired another brewery plant with eight times the capacity of the original. Production was no problem but the company was unable to sell the beer fast enough to finance the interest on its borrowing - the result was that it ceased to exist as a working entity and became a mere shell, owned by a lender firm.

Of course many decisions are safer than that. About a third are what we term 'quasi-decisions', i.e. they are a foregone conclusion. Though managers may spend a year or so considering such a decision, a useful process because it acts as a check that everybody agrees, everyone knows what the decision is to be anyway.

In twenty-five years of work on decisions at Bradford we have found that, as we put it, 'the matter for decision matters most.' By this we mean that a significant decision about, say, a takeover or a new plant or entering a new market, has similar features in whatever organization it occurs. The type of organisation: hospital, factory, university, whatever it might be, makes relatively little difference. What is crucial is the subject, or matter, of the decision. For instance, a takeover is very different from a new market launch and cannot be approached in the same way.

Spotlight: To some degree does this not place a question mark over the value of benchmarking or case studies?

David Hickson: It certainly suggests a proviso. Benchmarking gives you something at which to aim, but how you go about making a major decision must remain flexible around a benchmark standard, reflecting what it is you are doing. Similarly, while a case study is obviously a superb illustration, it is always dangerous to generalize from it. So, yes, the case study of our brewery overreaching by buying too much capacity is a warning, but other companies might manage something similar in a better way. Each case depends on its own history and circumstances.

Spotlight: Is there a particular style of managerial decision making that sets the standard in today's fast moving competitive world?

David Hickson: No one style is appropriate worldwide. We can illustrate this with a brief description of each of three of the most successful economies in the last fifty years: the American, the Japanese and the Swedish. The stereotypical American is fast and assertive in his or her approach to management. Decision making is therefore fast and assertive and can be seen to live up to the old crack about the Americans trying something to see if it will work whereas the British won't try it until they're sure it works. The result in America is a successful economy born of successful decisions.

Contrast this with Japan which, while having problems now, can't be dismissed given its extraordinary successes over the last 100 years. The Japanese approach decisions in a way which is thorough and ensures the support of everybody involved. Compare this to the American approach - they make decisions fast, without time to fully consider problems of implementation which, consequently, can be slow and troublesome. Meanwhile slow and thorough Japanese decision making means implementation, when it comes, is fast because everyone by then is committed.

The Swedes are different again. They are even slower than the Japanese in how long it takes to reach a decision but they are even more decentralized and consultative in a very open, typically Scandinavian way which minimizes hierarchy.

So three very successful economies are led by decision making styles which differ considerably. The fast and assertive, the slowish but thorough, the very slow but very democratic and open - but they all work. Hence it is not possible to say that any one style would be the best worldwide - what suits an American will certainly not suit, say, an Indonesian. There is no universal best way. What does seem to happen though is that certain periods are marked by a particular cultural approach that comes to the fore because it suits the economic and social circumstances of the day.

Spotlight: Do you see the spread of US management theory and practice as promoting a move towards a greater degree of convergence in management structures and behaviour, i.e. a global management culture?

David Hickson: Yes I do. In my academic field for example, I cannot avoid being influenced by the Americans because they are predominant in numbers and often in quality of what they do. And yes, American management training encourages everybody towards the same way of thinking. The spread of the English language worldwide as the main language for international communication does the same because a language has inherent in it a way of thinking which is different to that in another language.

In our research at Bradford into decision making we discovered that British subsidiaries of American corporations make decisions in a way which is faster and more informal than the British norm. Here we are talking of British firms with no Americans in them, but owned by American corporations. They are effectively swayed towards an American style of decision making. The influence is noticeable and this means ownership must be a factor. Given widespread American ownership of big multinational corporations there is bound to be widespread influence.

This said, despite the convergences, there remain irreducible cultural differences everywhere, which do not disappear. As a result not everything in a foreign subsidiary is influenced by the owning country. Take the contrast between Germany and Brazil. The German style of decision-making is careful, very orderly. The Brazilian style, by contrast, is highly personal, fairly spontaneous and fast - it won't wait for tomorrow. Where you have a Brazilian subsidiary of a German company, nothing will turn the Brazilians into Germans in operational terms - it will sway them towards that way but it won't change them that much.

Spotlight: Given the spread of international exchange and study programmes for students and growing numbers of internationally focused management courses, is there any lessening of the impact of national cultures on ways of doing business, i.e. are young people becoming more internationally focused before they embark on their careers?

David Hickson: Yes, but the question is: to what degree? Young people have been influenced by what is usually the management teaching of the West, i.e. management teaching generally based on American practice, standards and ideals. But, while studying in another country certainly gives you an insight into that country's education and thinking, it also teaches you who you are. You may not realize just how British, Hungarian or French, for example, you are until you leave your country and are subject to a completely different culture.

Young students studying abroad undoubtedly have their rational minds, their cognition, broadened by the experience. Their minds opened to other ideas and possibilities. Yet they remain emotionally and culturally French, Burmese, Japanese or whatever their origins. One can hope that they will eventually go back to their countries enriched by the experience - particularly if they are from developing countries where their contribution is so valuable - and more open to other ideas. Though often they revert to traditional ways of doing things when on their home soil.

The extent to which people can change is limited. I'm not saying change is impossible, however I am cautioning against over optimism - change in behaviour as opposed to technological change, comes slowly. The way people think and act can be modified but real change will only become evident over generations. The new generation in any country will be influenced by more open minded, more experienced parents - and the difference will be more pronounced.

This said, early exposure to other cultures is a huge asset to those working in an international environment. It keeps the learning experience alive, reinforcing it day by day. Knowledge of other countries and cultures is extremely useful, particularly for senior managers in organizations who are influential. It helps them to work successfully with others, avoiding social and business blunders.

Spotlight: How relevant are cultural stereotypes in comprehending our differences?

David Hickson: A stereotype can be useful if you are visiting a country and have had no orientation at all to its culture. A stereotype is in effect an over simplification - a 'cartoon' image of what people are like. But it is nevertheless a start... In my experience most stereotypes have a good deal of truth behind them.

There is some evidence that managers who are posted to an entirely different cultural setting and who carry with them an over simplified view of the people there will nevertheless stand a good chance of succeeding if they 'use' that view cautiously and flexibly. They could store the image in the back of their minds yet study carefully the people they meet, what they do and how, learning from these experiences and adapting the stereotypical view they hold.

Meanwhile, someone who sets out with that same broad stereotypical cartoon image, but maintains it rigidly with no adaptation to their actual experiences, has prejudged the situation and will reach conclusions based on prejudice. Consequently they are less likely to be successful in their mission.

Spotlight: In multicultural organizations, does the recognition of cultural diversity improve the prospects of successful collaboration?

David Hickson: As I understand it, the multinational corporations which are most successful balance an inculcation of loyalty to corporation headquarters and training in concepts and procedures which, for efficiency's sake, need to be the same everywhere, with recognition of the differences between the nationalities and the benefits that can derive from this. The cultural differences are not ignored. Such a company is accustomed to having employees of different nationalities and takes advantage of this.

Managers are well aware that a Japanese member, for example, will have by far the best insight into how their sales training should be adapted to the Asian market. They also recognize different behaviour patterns in different cultures and they take these into account in their relations with staff, checking what people really think, holding discussions with people individually when necessary to ensure there is understanding. Successful companies neither see cultural diversity as a problem nor ignore it - they consider it an advantage.

Spotlight: The Americans continue in the forefront in economic terms. The 20th century saw the Japanese economic miracle. Which nation do you think will be the next to achieve such prominence?

David Hickson: History shows that fortunes and civilizations rise and fall. Take Britain, a nation which like many others had its day but has fallen back relatively speaking. We may be as good as we were but others have forged ahead of us. So, who is going to supplant the Americans and Japanese over the next 100 or 200 years? Nobody can predict the future but it is commonly believed that it will be the Chinese. President George W. Bush is said already to have directed foreign policy to pay more attention to the Chinese. And I believe he is right to do so.

One fifth of the world's population is Chinese and as a nation they have very effective capabilities in management. They are particularly adept at running small firms as has been seen in Hong Kong and among the overseas Chinese, particularly those in the South Pacific and Central Pacific Islands. They take the lead in business in all these areas.

While they are adept at this, when they run larger organizations, e.g. hospitals, manufacturing or mining businesses etc., they usually adopt a centralized style. Decisions are referred upwards for approval, and decision making below the top of organizations operates on a network of personal understandings and deals. This highly personalized style applies everywhere. It all comes down to a question of: who knows whom? But we need to ask: will this work so well as the Chinese economy goes further into the stage where it needs large organizations, large volume manufacture, extensive, diverse networks of say electronic or communications firms? Will it be as successful? While it looks very much as if it will, we can't be certain.

Spotlight: There has been research at Bradford Management Centre for more than a quarter of a century on how the bigger, more strategic decisions are made? How can students and managers best get at its findings?

David Hickson: Later this year will see publication of The Bradford Studies of Strategic Decision Making, a book which encompasses much of our work over the last quarter of a century on how major decisions are made. This is the latest in a series of books brought out by the publishers Ashgate, each of which brings together work published by a British-based programme of research lasting numbers of years. Previously publication of such research was dispersed between a number of research journals so the idea was that the work should be brought together in a single volume.

Our book begins with a discussion of whether it makes sense to study decisions at all - a controversial area of research. Is there such a thing as a decision? During people's working day they form opinions on what their company should or should not do and they subsequently discuss their ideas - but they already know most of the 'ingredients' of that decision. We are talking here of what I earlier termed a 'quasi-decision'. They all know what the outcome is going to be - so where was the decision? Did it occur when a minute was appended to the directors' board minutes? Or was it when a regional manager was thinking while waiting in some airport departure lounge? Or did it come from someone else, at some other time? At Bradford we believe that you can identify periods in which managers concentrate on decisions and that they are well worth studying. The first section of our book discusses this problem.

There then follows a selection of papers comparing decision making processes. Here we discern three main patterns: sporadic, fluid and constricted. Sporadic means jerky, fluid means smooth and constricted conveys the idea of tight control. There are many variations in development of these patterns in different situations and we have also included discussion of such issues as the influence of trade unions on decision making.

Another section of the book looks at organizational features and the variations between public sector, private sector and voluntary organizations. We then go on to discuss national features in decision making. Finally, I have contributed a paper reflecting on the field as a whole, including the work of others outside the Bradford group who have contributed to this area of research.

The Bradford Studies of Strategic Decision Making edited by David J Hickson, Richard J Butler, David C Wilson, published by Ashgate, Dartmouth, is due for publication later this year. A second edition of his popular Management Worldwide (Penguin) will be published next year.