A Study of Korean & Islamic Management Practices

Korean Flag

A Study of Korean & Islamic Management Practices


Over the years there has been a very drastic change in the ways most of the countries organize their organizations. It has emerged as an established fact that the most important factor that contributes towards the progress and prosperity of  any nation is the management philosophy of the country. It all depends on how effectively the matter are being tackled to the utmost benefit of the concern.


There have been observable changes in the management philosophies; maturing and improving with time. The conventional style of management has been very much discarded in most of the countries and newer and better policies have been acquired in this concern. The key to success, however, in all the cases for any proven system is the adaptation of the philosophy rather than following it blindfoldly. It has always worked, if the practices have first been tailored to the needs of the environment and then practiced.


In this concern we have studied this course where we not only looked into various management schools of thought in detail, yet also compared them for the purpose of identifying the strengths and weaknesses of each system as compared to others.

In this particular research paper I have tried to evaluate two different management philosophies, namely Korean and German management styles with each other to identify their salient features, and thus analyze their applicability in Pakistan. I have in this regard addresses both the schools in detail, one by one, to understand their various aspects.

Below I have tried to explain the outcomes of the study in a very simple manner for the purpose of easy comprehension and listing only the relevant features.

The Korean Management Philosophy

Looking into the Korean exercises first, I have given an overview of the cultural aspects and then a rundown over the other salient features to view the management school in detail.


Cultural Features

When one looks at cross-cultural factors, perhaps what may be called cultural distance is important. For example, form the standpoint of cultural distance, Europe lies quite close to the United States. European languages are fairly closely related to English; European religions are practically the same; and indeed, the ancestors of many Americans came to the United States from Europe. While there are many aspects of American culture that differ from its European counterparts, such as the emphasis placed on tradition. European culture is quite understandable to the Americans. This is one of the reasons why American business has been relatively more successful in the European marketplace than in the Far East, which is culturally more distant from the United States than is Europe.


Korea and Taiwan are two newly industrializing economies and I would rate as being yet culturally further from the United States than Hong Kong and Singapore. Taiwan became a separate nation in 1949 and carries many of the traditions that are an integral part of the Chinese culture. Korea, although sovereign for a much longer period, is a homogenous society that, like Taiwan, believes strongly in Oriental culture. These two countries are heavily influenced by Confucianism and Buddhism- Christianity came into Korea only quite recently. However, Korea has been exposed to foreign influence on a multitude of occasions, and its effects still are visible today.


Business Environment


Individualism a Natural Phenomena

To anyone who has worked with both Korean and Japanese businessmen, it is quite natural to believe that the Koreans tend to be more individualistic than the Japanese. Despite this appearance, one cannot honestly fault the Koreans for poor teamwork.


In Confucianism, the family-community occupies a very important place in the society. Both the Koreans and the Japanese are family-community oriented. But instability drives the Koreans to behave very differently in this regard. Imagine that just as one starts to make friends with people in one’s community, instability disorients the community. It isn’t surprising that in this type of climate one looks out for number one and the family. In addition, in the quest for a sense of belonging, Koreans tend to associate themselves with those who come form their home province, and those with whom they went to school. Thus a Korean organization is made up of a heterogeneous network of family, school, and home-province ties.


In Korea, job-hopping is more acceptable, but it can be afforded only by those who are skilled. For those who aren’t the cost is even higher than in Japan. While different countries have different conventions for counting unemployment the Japanese have been screaming that their unemployment rate has passed 3 percent. The official Korean unemployment rate is said to be around 4 percent, but in reality it is common knowledge that this number is too conservative. In Korea there are still some people who go to work to save face socially and with their families. They are grateful for the job they have and will suppress their personal inclinations to keep it. This is the glue that holds the top-down driven firms together despite the individuality of the people.


Religious influence on business values

At the risk of oversimplification- since there is much that differentiates Korea from Japan- I will give only a brief introductory description of religious influences here. On the surface, both countries have practices Confucianism and Buddhism. Shintoism is a uniquely Japanese religion, and needless to say, Korea has much more Christian influence today than Japan does.


The concept of family is relevant to the organizational philosophy of the Oriental firm and is probably the origin of the paternalistic aspects of many firms. The familial structure has a clear pecking order. The father is the head of the household, as the president of the company is to the firm. The first son is clearly in line; the people higher on the totem pole and higher in age deserve respect. Clearly, the value placed on experience and job titles reflects this tendency.


Another important aspect of Confucianism is the emphasis placed on effort. Working hard is valued immensely, meaning that the actual process of being industrious is as important as the result. Although there are many regions of the United States in which hard work is valued, my experience is that American firms tend to be much more results-oriented. In many Oriental firms, effort is a very important part of the performance-appraisal process, and poor results despite best effort draw certain sympathy from the organization. Obviously, there is much more to Confucianism, but this gives us a base from which to begin to consider some of the more specific differences between Korean and Japanese business practices.

Salient Features Korean Environment


The Emotional factor.

When looking at Korean clothes or temples, one notices vibrant colors and outward beauty. In Japan the most valued form of beauty lies in subtlety that usually exists below the surface.


This issue of whether or not to overtly emotional has become a significant one in international relations. We hear countless times from American businesspeople that they feel uncomfortable because the Japanese often have little emotional reaction to proposals made to them. A Japanese businessperson who doesn’t display emotion is considered to be shrewd in the sense that he or she is hard to read, and composed in the sense that he or she is not biased and avoids coming to premature conclusion. Foreigners, on the other hand, tend to interpret this as clever game playing- a strategic use of the poker face.


In an outward manner, the Koreans in general tend to be fairly true to their emotions. While they tend to value composure and maturity as well, they seem to be more open to expressing reactions. This is probably one of the more important reasons why Western businesspeople are more comfortable dealing with the Koreans than the Japanese.


The Political factors.

Certain fundamental political factors have influenced the nature of the Korean people and industry.

The first of these is clearly controversial: the trade-off between authoritarianism and democracy. There is no doubt in anyone’s mind that freedom is desirable. However, in a country such as the United States, where freedom is an essential part of the value system, it is difficult if not taboo even to broach the subject of the costs of unlimited freedom in the industrial arena.


First and foremost, in order for a democratic nation to be effective, the populace must be well educated. When the Koreans were recovering from the Korean war, they simply were not in a situation in which the people could optimally decide what industrial trade-off were appropriate for the nation. And even if there had been representation at that time, it wouldn’t have been very competent.


Second, as is the case with Japan, a resource-poor-country must navigate through very narrow straits of tolerance in order even to have a chance to develop economically. This would mean precise and coordinated execution of a government policy at a given point in time and consistency in the implementation of that policy over a certain period of time. This is particularly important for a country like Korea, where the historical context has tended to be quite turbulent and uncoordinated endeavors would end in utter chaos.


Negotiating from a position of weakness

Even in the west, many scholars have studied the phenomenon called the power of the weak negotiating party. Korea, I would say, has been a master at this, and I credit both the private and public sectors for this. Traditional wisdom says that in a negotiation, the side that has the least value to give will wind up with a bad final position. Empirically this is not always the case. The Koreans have, for example, walked into countless negotiations with little of apparent value and in the end, came out with a good deal.

What reinforces this is pure negotiating skill. One should not forget at the outset that the Koreans are very serious when they negotiate- it is a matter of executing well the very limited number of options available to them, and the cost is often survival. They will know or learn by rote to use every negotiating skill there is. Slow and infrequent concession patterns are a way of life in Korea, if only because they are so poor and their resources so limited. Companies from more affluent countries tend to yield here. The Koreans also know exceedingly well the value of information in a negotiation and will spare no effort to get critical information.

Ability to turn change to one’s favor

Luck is inevitable in business, and that some who may not appear to be so bright or experienced will get ahead because of luck. In the long term, being successful in business requires that one be positioned to leverage luck when it strikes. The Koreans have been quite good at this.


Being positioned for luck requires that one have an organization that can shift directions and execute very rapidly. Large Japanese firms and some American firms have either become so bureaucratic or so consensus-driven that they watch as opportunity passes them by.


No plan dealing with industrial development has been officially formulated in Korea. Economic development is as important for Korea as for any other country in Asia. As a result of the division of the country into North and South Korea after 1945, the country’s economy was left seriously unbalanced. Since districts with major mineral deposits such as iron, zinc, lead, copper and heavy industrial districts were mainly located in the north, the south remained in the agricultural and light industrial area with modest mineral resources.


In terms of human resources, Korea has one of the highest growth rates in Asia. However, as regards to other natural resources Korea is quite dependent on imported raw materials and so the emphasis in the manufacturing industries is on cost cutting and reducing wastage. As described above that most of the policies adopted by Korea were influenced by the Japanese policies of economic development. Hence most of the measures taken by Korea in the way of economic prosperity are quite similar to those of Japan. Even the ministries that formulate the policies and regulations are practically mirror images of those in Japan.


Economic planning Board is the central planning agency for economic affairs in the government. In the early stages of economic development the government considered foreign capital incentives to be of primary importance and priority was given to attracting foreign capital. This was due to weak financial position of the government and low savings rate of the Korean people.


In the early years of economic development, there was no feasibility surveys carried out due to which the resource allocation was not effective. But in the later years the government carried out extensive survey programs and hence the resource allocation was brought into lines of the governmental plans. After partition, Korea was left with little infrastructure and hence the government had to spend a lot of resources for the development of the infrastructure. The main areas in which infrastructural development took pace was:


  • Electric power.
  • Export industry centers for the promotion of exports.


In the investment policies the major emphasis was on attracting foreign capital and several laws were enacted to guarantee payment of foreign loans and law concerning introduction of capital goods on a long-term settlement basis. There are no investment regulations that distinguish legally between fields of investment open to foreign and domestic investment. To mobilize resources for industrial development the government first improved the capital market by encouraging new banks and other financial institutions to come up. Besides this the stock and bond markets were developed. One major development was the establishment of trusts and insurance companies, which boosted the confidence of the investors both local and foreign.


Several measures were also taken to promote savings and increase the domestic saving rate. Besides encouraging personal savings, business savings were encouraged by such measures as provision of tax holiday, exemption and reduction in Corporation Tax Law and Business Tax Law. There is also the asset Revaluation Law that enables business to accumulate sufficient funds to replace worn-out businesses. One of the important measures taken to mobilize private capital was to mobilize domestic savings into banking institutions from the unorganized money market.


To attract more and more foreign investment and to encourage new industries the government had no regulations governing the procedure for establishment of new industries financed by local currency or domestic resources.


Islamic Management Philosophy



The Basics

Islam right form the time of its emergence in this universe gave a complete set of instructions to the leaders and the ruling authorities as to how should they treat, rule, and manage their subjects. Islam strongly believe in the protection of the rights of all the stakeholders to a particular decision but at the same time also emphasize that the responsible person should make the decision in such a manner that is most suitable to the concerned in his best opinion.


Islam has this system where the ruling or decision making person is not only responsible and accountable for the decisions he make, yet he is also competent to make decisions as the process through which he has been promoted to this position or has been screened out is very careful and sensible


The Islamic Philosophy

Islam is not only a religion but also a complete code of activities. It not provides us with the guidelines of living a pious life but also a complete set of activities while dealing with other individuals. Islam is the religion of peace and justice and preaches its followers to practice the same. These are some of the fundamentals on which the building of Islamic principles are built. Islamic management style has re-surged as a major management style over the years. The need for an alternative management style as compared to the capitalistic and communist system was considered because of some of the failures of these systems; which has been demonstrated over the years with certain events. These events include the disintegration of Soviet Union and the collapse of the East Asian Economies that plagued their economies.


In Islam, State action mixes freely with private initiative, maximization of output with ethical distribution, and enjoyment of worldly things within self-bound limit. Private gains or profits in Islam flourishes side by side with sacrifice. A religion that closes the gap between these extremes can not be merely a value system or a transient social system. Unfortunately most of us disregard the Islamic teachings on this subject and  prefer to follow the western rules of distribution of wealth which largely emanate from capitalism, and which are not based on justice and moderation,( Miyana Rawi ) but on the possession of and lust for getting more and more leading to a further widening of the gap between the rich and the poor.


Whereas, the Quran stresses on  the endowment of natural resources blessed on us for our well-being, the proponents of capitalism point to the scarcity of resources as the main cause of economic activity, and emphasize not on the whole conduct of man in society but instead consider man as a being who desires to possess wealth by finding out selfish alternative uses of these scarce means to meet ends. The concept of “economic man” who is completely involved in the production of wealth, and that of the “invisible hand” given by Adam Smith are denounced in clear terms in Islam. Man’s ultimate well-being rather than the manipulation of resources  for selfish ends is the main concern of Islam.


While Islam allows free trade in most items except those which are harmful to mankind, capitalism encourages one to trade in anything and hardly any restrictions are placed. Capitalism encourages the formation of companies such as multinationals to reap profits from the poorer nations through the creation of artificial shortages. This is totally against the Islamic principles and is stated by the Holy Prophet in the following words: “Whoever withholds cereals that they may become scarce and dear is a sinner”.


Given that in today’s society, economic achievement is judged by the living standards of the society, the desire for materialism has resulted in a race to maximize one’s ownership of economic resources. Whereas, the socio-economic system in Quraan is not wealth-centered but man-centered,  falsifying the belief of modern economics that unless a man acts selfishly he cannot act economically. According to the Quraan, man has been endowed with unlimited natural resources- as compared to scarce resources as suggested by capitalism—for the good of  mankind and not for manipulation for the purpose of individual self-interest. These endowments are to be used in accordance with the principles of justice, balance and proportion . History has shown that natural resources such as water and power have never really been scarce. To create artificial shortages in order to manipulate higher prices is considered  absolutely immoral in Islam, since according to the teachings of Islam, resources are meant to be used strictly in accordance with Allah’s will and not otherwise. Those who squander or misuse natural resources are held to be ungrateful to Allah. Islam prohibits both Israf (wastefulness) and Tabzir  (prodigality)which can result in disorder in the society.


In such scenario the emergence of a new management style is imperative; which must be able to answer the problems being posed to the world because of the present imbalances management styles. The Islamic management style seems to be the answer to the present problems of the changing world.


Some of the Islamic principals that are the foundations of the Islamic management styles are discussed in detail over here to give us a better understanding of Islamic management style.




The Basis for all Decision Making “Equality of Rights”

Islam promotes the equality of all human beings. Islam doesn’t promote that preferential treatment being meted out to individuals because of their family, stature in the political system or the influence they pose because of their wealth. Islam  propose a system based on equality and justice. In this way Islam gives the roles to the merit system that the present democratic system has now come to understand and praise. Islam has given this system to the mankind for the last fourteen centuries. There have a lot of cases in the Islamic history when the ordinary citizen of the state or a non-Muslim has been given an equal trial or treatment despite of the fact that the other party consisted of citizen of higher stature or a Muslim. Thus Islam has given us a model of equality for each and every individual of the society where everyone has got equal rights. This system on the face of it seems to be quite unconventional and seems to be unpractical but has got a long-term implication. The long-term implication of such a situation is that the lower segment hasn’t got grievances against the authorities or rich segment of the society. This helps in controlling the social upheavals that may occur in a society because of the unrest that might be promoted because of the unjust treatment being meted out to the individuals.


Islam promotes the equality of the even those who have conquered upon by the Muslims. Even then if there is a conflict between the Muslims and Non-Muslims even then the Muslims are not supposed to cross the limits are bound to do their acts with in the limits of the law.


Islamic management style has got a definite role in the business life of the Muslim

Businessmen who in actuality practice the Islamic values. He doesn’t really differentiate between the employees of managerial level or the staff level. He prefers to mingle with each and every worker of the organization. Such a structure not only reduces the cost for the employer but also reduces the managerial problems being faced by the employer in the handling of large number of employees. This sort of an attitude on part of the employer instills a wave of  motivation in the employees which leads to higher productivity and more profits. Thus in the end Islamic system also takes care of the considerations of the entrepreneur but in a different way and in a perspective that is normally ignored by most of the people but one which is highly profitable and is also compatible with the modern needs of time.


The Decision Making Model

The process of decision making in the Islamic society is quite different from what is being practiced these days across the globe. The Islamic management style doesn’t promote the same method of decision making of using the show of hands and making decision on the number of people on who are in the favor of having their thing done. Rather in Islam the thing that is emphasized is the long-term benefits of the people not just the short sighted approach that the masses choose for so often in the process of getting to a decision.


It is not like that in Islam people don’t have the right raise their voice in the process in which they are going to take part. Each and every participant is allowed to be part of the forum that is going to decide on the future of the path that they are going to follow.


In the process of decision making one individual who is head(Ameer) of the team tries to get the opinion of the individuals who are going to be affected by the decision making. The head or the Ameer first presents the problem to team that he is heading such a problem is then put to the thought process of the individuals present over the place. Then each and every individual is asked one by one to give his view on how to tackle the issue.


Once the issue has been propounded by each and every individual then the head or the Ameer gives his own verdict; which might be one of the solutions presented by the people or the one that the head or the Ameer himself considers the best for the whole party. Once the decision is made by the head then it is imperative for the people to follow the decision taken by the Ameer in its totality and spare no effort in the implementation of the decision. In Islam the masses are not given the right to do whatever they want to do to themselves because Islam is a complete code of conduct and controls the activities of its followers in the way that is most suitable for the long-term benefit of the organization. Thus Islam promotes the best of the decision made by the people in the light of the wisdom of the head or Ameer of the organization.


The Working Enviornment


The Relationships at Workplace & Incentive System

In Islam the employer and employee have got a very delicate relationship. Islam gives a wide array of duties and responsibilities to both the employer and the employee. Both the employer and the employee have defined duties and responsibilities for each other and once they have agreed upon a given contract they are obliged to honor it until and unless the other party forgives him the responsibility. Islam has given due rights to the employee (Ajeer) in the form of the payment of the fee at the right time but at the same he has got to fulfill his commitments that he has made to the employer (Aajir). According to the Islamic values the employer (Aajir) is supposed to pay the employee(Ajeer) the money before his sweat from the job gets evaporated. In this Islam has kept a balance upon the delaying tactics of the employers that the employers of this age employ and  make the laborers suffer the difficulties.


However, Islam doesn’t give the unlimited right to the people who are employed by an individual and until and unless the employee delivers what he has promised to deliver he is not supposed to earn the money that he has been promised to receive. In this way Islamic management style gives us a comprehensive method of determining the rights and duties and obligations of one party on the other. Such a system is bound to increase the cooperation between the employer and employee and to increase the efficiency of the organization as a whole.


Islam promotes continuous development and growth of the human beings not only in the spiritual world but also in the material world. But this growth must not be on the expense of others as Islam prohibits exploitation and use of unfair means for the purpose of personal development.


Islam promotes personal efficiency and in turn the efficiency of the organization by promoting healthy competition between the individuals working for the organization. In Islamic management style the participants are encouraged to perform to their best. The Islamic management system promotes highest output from the workers by giving them the reward in term of compensation and also rewarding them by the process of promotion in the ranks of the organization.


The Islamic management style has the touch of the market mechanism in that it promotes competition and efficiency but it prohibits the practices that are normally conducted in today’s market place. Such a situation is bound to increase the productivity of the system and society in the largest interest of the human beings without hurting the interests of the people who are involved in the system.


The Islamic management style also tries to promote the efficiency in the system by increasing the motivation in the system as the people are encouraged in the open environment in front of every individual so that others are also encouraged to their best in order to be one of the people who would be rewarded next time in the same manner. Such a reward and compensation system takes into view both the markets as well as the moralistic point that Islam preaches to its followers. Thus we have a system that is quite effective and promotes social harmony among the various classes of society.


Special Case Study

An Overview of he Upcoming Trends in Management Practices Some of the Major Countries


Below is an overview of some of the major countries as ton how the trends are changing and what are the aspects they are trying to revise in their systems. This comparison would help in looking at the international picture and would thus help in relating and rectifying our model for better understanding of concepts that relate the most.

The American Mindset Regarding Human Differences

American culture is marked by the ideal of fairness. One of our core ideals is that the same opportunities, rights, and obligations apply to everyone. The “level playing field” concept captures the notion that people of roughly similar abilities should have an equal opportunity to get ahead in the game of life. One’s demographic characteristics — age, gender, ethnicity, parental status, sexual orientation, and others — should not present a barrier.


Another feature of our American mindset is our strong tendency to evaluate others on the basis of what they actually accomplish in life. We are unparalleled in our determination to base status as much as possible on personal achievements and as little as possible on demographic, or “ascribed,” characteristics such as gender, ethnicity, age, and national origin.


Americans assume that achievement is a property of individuals, not of groups. We are more highly individualistic than the people of any other culture and therefore identify less strongly with our groups (family, friends, work groups) than people in other cultures. For example, we become upset when someone is hired or promoted due to family connections.


The DIAD project convinced us that a significant difference between the U.S. and the other four nations is the relative weight given to achievement and ascription in evaluating people and assigning them status. In the U.S. the balance is tipped toward achievement. In Japan and Mexico the balance is tipped toward ascription. Germany and the U.K. are in between.


Japan: Learning to Be Discriminating

In Japan, youngsters grow up learning that they cannot exist on their own as an individual but only as a member of a group. They learn the overriding importance of fitting in and maintaining harmonious relationships in all aspects of life, including life at work. They learn not to distinguish themselves from their fellows: “The nail that sticks up gets hammered down.”


Because of the overwhelming emphasis on fitting in and preserving group harmony (wa), the Japanese make most of their judgements about their fellow Japanese on the basis of ascribed characteristics such as family background, place of birth, education (especially where one attended university), gender, and age. The overriding question about another is “Will he or she comfortably fit into our group?”


The kind of groups we have in mind include families, circles of friends, and close colleagues at work. A Japanese person feels an intense sense of obligation and loyalty to, and identity with, the important groups to which he or she belongs. Japanese groups almost always exhibit a high degree of homogeneity because people who are different in a significant way wouldn’t become group members in the first place.


We Americans — especially American men — talk about building relationships as if this were a technique for attaining a goal or completing a task. This is not the case in Japan. Since the identity and survival of individuals is linked to being part of a group, relationships become the cement that binds people together and preserves their humanness. An individual is a thread in the tightly woven fabric of his or her in-groups and of society. During our interviews with English-speaking Japanese, we soon became aware that they were using the word “discrimination” in a positive sense — the way Americans use the word “discriminating,” as in “discriminating taste.” From the Japanese point of view, making distinctions among people is completely appropriate and socially useful. And those distinctions are based very largely on ascribed characteristics such as age, gender, family, place of birth, and education.


As one of our interviewees cogently stated, “the wellsprings of the Japanese mindset are at a disconnect with values such as achievement, individualism, and egalitarianism that propel diversity initiatives and programs here in the United States.”

In a society where ascription plays a potent role in enabling people to evaluate one another in social as well as business life, how can the concept of equal opportunity have the significance it has for us Americans? How can diversity, which says that companies should harness fully the perspectives and talents of people from every background, have the same appeal?

Mexico: Modeling Companies on the Family

The Mexican upper class is small but controls a high proportion of the country’s wealth. Members of the upper class emphasize their European heritage. Their class status is also based on family ties, education, social upbringing, and the network of connections one inherits by the accident of birth. It is extremely difficult for someone not born into the upper class to enter it via hard work or marriage.


Most Mexicans are indigenous Indios. Their appearance and social bearing set them apart from members of the upper and middle classes. In large Mexican and foreign companies, one is extremely unlikely to find an indigenous Mexican in the ranks of managers or professionals. Inequalities based on ascribed characteristics are the norm. The fact that indigenous peoples are rarely found above a certain level is not regarded as a social ill that needs correction. In the Mexican family, power resides with the parents, especially the father. The seeds for what Mexicans call respeto are sown within the family. Parents know what should be done, and the child respects their authority. Respeto also characterizes relationships between Mexicans who have unequal power and influence. An example is patrón-peón (or patron-client) relationships which do not include even a hint of egalitarianism.


The Mexican view of family is their model for business organizations: We are like a family. We have enduring links with each other based on trust and loyalty. We take care of and do not embarrass each other. We show decorum and respeto toward each other by following authority. There is another way in which familialism impacts Mexican business. What Americans refer to as “nepotism” is common. In Mexico, loyalty and trust are far more important criteria for hiring than achievement. People with the power to hire are expected to prefer their kinfolk.

Mexican women are expected to remain at home after marriage. Most women who work are in teaching and nursing, though some are in academia, the professions, and the arts. Women who have career opportunities are from the upper and middle classes; they have the proper connections, social graces, and physical appearance. It is not acceptable to turn over extensive responsibilities for one’s children to servants, so the vast majority of working women are either pre-marriage or post-children.


Relationships in Mexico are formed far more often because of one’s ascribed status than because of achievement. Relationships lead to achievements (or opportunities to achieve), not the other way around. We suspect that Mexicans’ disinclination to pay attention to achievements would mean that diversity initiatives will receive a muted response in Mexico.

Germany: Preferring Ordnung and Blood Ties

Germany is an orderly country. Rank, authority, and power still command respect, and tradition remains important. Germans prefer and expect clear directives from above and the absence of ambiguity. These tendencies, which we will collect under the German word ordnung, are reflected in the management of German companies. Employees and managers alike are expected to fit in, to conform, to take orders and follow established procedures.


There is a burgeoning presence in Germany of people who are different from the German mainstream. So far, Germans have not demonstrated any concerted drive to fold non-traditional workers such as the Turks into the economic and social mainstream. There are extremely few Turks in management, for example, but among the Germans very little concern is shown about this state of affairs. (Some Turks have been successful economically in non-corporate careers.) German citizenship is acquired by heredity — by blood — not by one’s having been born on German soil. The notion of the German nation is one that transcends the political boundaries of Germany. Someone with German parents who never lived in Germany can arrive there and become a citizen instantly, whereas a third-generation Turkish worker might face significant hurdles.

With respect to women, the traditional expectation was, and is, that their primary role in life is to raise the children. The number of native Germans is diminishing, so there is a feeling that “we must support women so they can have children.” Families are given money for bearing children. German women seem less enamored than American women of trying to have it all. Germans tend to view wage-earning as a time-out from a woman’s proper role: in the home.


In comparison with Japan and Mexico, however, the German tendency to evaluate others on the basis of ascribed characteristics (gender, age, family background, national origin) is moderate. Educational achievement — not merely attending the “right” schools — carries much weight. German schools “track” students, but a student’s ultimate track seems to depend as much on achievement as on background. Educational attainments are deeply respected.


The German perspective on human differences tends to apply an assimilationist model. As we said earlier, employees and managers alike are expected to fit in, conform, and take orders. This approach to human differences does not supply particularly fertile ground for “diversity.”


The manner in which diversity is introduced in Germany is important. If change is going to come, it will come slowly, via established pathways and with minimal disturbance to ordnung. People at the top must be convinced, through logical reasoning, that diversity initiatives and programs make sense. Until they nod their assent, those below are unlikely to change.

United Kingdom: Emphasizing Self-Containment

When Americans think of the United Kingdom, many imagine sharp class distinctions like those depicted on public television’s Upstairs, Downstairs. Our British interviewees indicated, however, that class background matters far less today than it did even a generation ago. We did gain insight into the effect of class today through our interview with a native of the U.K. whose parents were both from Trinidad and Tobago. He reported that his background seems not to have influenced business counterparts’ judgements about him. His “cultured British accent” (acquired by attending a boarding school) smoothes his path to easier acceptance.


The British shy away from banding into groups and networks of like-minded people who proactively and collectively proceed to protect and advance their own self-interest. Thinking of oneself as a member of a distinct demographic group is regarded as peculiarly American. In Britain, each individual is expected to create his or her career opportunities alone, without the collective support of people sharing similar demographic characteristics.


In the U.K. today, there is high unemployment. As companies downsize, their tendency has been to make “redundant” employees over 40 rather than those who are younger. Former executives write letters to the editor complaining that they cannot get jobs even though they are highly qualified. However, there seems not to be any groundswell of concern about this.


Our interviewees admitted that they themselves use age as a criterion for hiring because (1) they believe that older people will not fit into their younger work teams, and (2) they worry that an experienced candidate would know how to do the job so well that he or she would no longer be “hungry” and capable of growth and development.

While there are laws in the U.K. protecting various groups of people such as women or the disabled, these separate laws do not get lumped together under the rubric of “diversity”. This means that “managing diversity” is not conceived of or addressed in any cohesive fashion. People in the U.K. do not to share our American preoccupation with the rights and opportunities of non-traditional workers. The British virtue of self-containment is likely to hamper the development of collective awareness and action by the non-traditional workforce. Here in the U.S., we protect our rights by banding together. In the U.K., people protect their individuality by emphasizing privacy and self-restraint.

Of the four countries we studied, the U.K. seems the most receptive to diversity initiatives. The British case is not so much a matter of hostility to diversity as a matter of style. Germany, we think, is less receptive than the U.K.: the Germans’ respect for academic achievement is counterbalanced by their likely concern that diversity would undermine ordnung. The most overwhelming cultural clashes occur in the cases of Japan and Mexico, where our American penchant for judging people by their achievements collides with their long-standing traditions of judging people by ascribed characteristics.

What we discovered is that people in other cultures aren’t enamored with “level playing fields.” Most don’t recognize our meaning of “diversity.” They don’t necessarily admire us for sharing our diversity-related objectives with them. Quite possibly, they’ll think something like, “Why do those Americans always think they know what’s best for everyone?

American Diversity Initiatives: Do They Travel Well?

We emerged from DIAD with a sense of the caveats and cautions a company should observe when it contemplates exporting its Made-in-America personnel policies and diversity initiatives.

Selection of New Employees People in certain demographic categories might need to be introduced into certain positions with enormous care. Hiring someone who does not socially “fit” into an existing work group could prove disruptive. If such a person is highly qualified, well thought-out efforts should be made to pave the way for his or her social acceptance.

Setting Goals for the Workforce Profile Plans to adjust the demographic profile of the workforce might best be based on a customer-service rationale. An ethical rationale or one stating that productivity or creativity will be increased will be met by blank stares.

Promotions and Performance Appraisals Candidates’ ascribed characteristics — most often, age and seniority — might need to play an important role in promotion decisions. Jumping the queue can upset everyone. . .including the person promoted out of turn. During performance appraisals in group-oriented cultures, the employee should feel warmly regarded. Fitting in should be explicitly taken into account, and the employee should never feel separated from coworkers.

Mentoring and Coaching Mentoring is a fine way to develop employees abroad, but exceptional care needs to be taken when selecting the individuals to be paired. The risk occurs when people with dissimilar ethnic or national-origin backgrounds are paired; both may feel uncomfortable. Pairs involving two women also need careful inquiry to determine whether the older woman (probably traditional) is a willing and acceptable role model for the younger one.

Compensation, Benefits, and Rewards Compensation and benefits might better be thought of in group-oriented terms, not individual terms. Some employees might prefer compensation that strengthens relationships with family members or that promote the interests of their community or religious group. Rewards are tricky in group-oriented cultures: Even when an individual appears responsible for the success of a team, it might be advisable to reward the team. Rewarding the individual sets him or her apart from the others, which is resented.

Policies Regarding Sexual Orientation and Harassment Mention of sexual orientation is best excluded from widely disseminated media and personnel policies. A sharp distinction is drawn in many cultures between private and public, so open reference to sexual orientation is likely to be viewed as utterly perplexing or in poor taste. Sexual harassment is a minefield. Harassment policies need to be formulated with input from local legal counsel and opinion leaders. Harassment inquiries must be highly sensitive and private. Keep in mind that what is viewed as harassment in one culture might be an acceptable compliment in another.

Diversity Training Programs Diversity training programs probably need to be redesigned and/or delayed. Training that raises social and moral issues about the value of human differences is questionable abroad. Approaches that highlight the uniqueness of individuals or disparage ascription as a way of sorting people out are fairly dripping with American values and therefore bound to cut against the grain of trainees in many other cultures.

Work-Family Initiatives Family-oriented initiatives such as on-site childcare might be welcomed and popular in some countries, but merely tolerated in others. These initiatives need to be adapted so as to be culturally and legally appropriate. For example, in countries where women or members of the extended family routinely care for young children, provision of on-site childcare is probably a wasted effort.

Networks of Non-Traditional Employees The impetus for the formation of any demographically defined employee network should come from the employees, not from the company. Management should determine whether formation of a network will entangle it counterproductively in local political issues, and should make inquiries about the reaction of other employees before providing support to any such group.

Preferring Non-Traditional Vendors The question of whether to seek out and prefer non-traditional vendors should be addressed in terms of relationships with others in the community. The value of existing vendor and community relationships needs to be balanced against the value of favoring non-traditional enterprises in the name of “diversity.”

Recommendations for Companies That Want to Export Diversity

Is it simply a bad idea to export American diversity initiatives and personnel policies? That’s not what we ended up believing. Instead, DIAD lead us to this three-part recommendation:

  1. Choose modest diversity objectives and prefer lengthy timetables.
  2. Know the local culture; recognize its limits of tolerance for the changes you propose.
  3. Use local methods for building agreement in favor of change.










You may also like...