Management Styles in the European Union Essay
The United Kingdom has forged a cultural path which has moved it away from its European neighbors (Hofstede 201). Personal relationships count for a lot in Germany. Business is frequently based on trust and this tends to be from the basis of negotiation. The British on the other hand place value on sociability and, generally, they only like to work with people they like. The difference between these two perspectives is that the Germans are more prepared to work at relationships than the British who tend to withdraw form dealing with people they do not get along with.
This has important ramifications for the way people behave and interact at work. The Germans will persevere with colleagues and will attempt to build bridges and long term relationships. This leads to stability in organizations and a less turnover rate of staff between business functions. Conversely, the Germans will shop around for new products, new customers, new suppliers, new relationships. Because of the highly individualistic culture, the United Kingdom managers can usually deal with the individual client.
They have the authority to make decisions and secure deals. By contrast, as much as German decision making is centrally determined, it is harder to negotiate with
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The German management system is steeped in rules and regulations. Everything is boiled down to specifications, contracts, documentations and the minutiae of small print (Daniels 461-462). ” This can slow down the process of negotiation, and is frustrating for those intent on building relationships and mutual cooperation. For example, a United Kingdom company tried to enter into an inward licensing deal with a German chemical manufacturer. The United Kingdom company were eager to develop a relationship which would allow them to add value for customers.
Their focus was to talk to a variety of people in the German organization and get to know them on a personal level – particularly marketing and sales people who would be charged with the responsibility of getting the product into the market and thus developing the new product’s potential. The German company, on the other hand, was keen to finalize the specifications and technical details and continued to send financial and legal representatives to the meetings.
They believed there was little point in their potential partner in talking to their sales staff until they had finalized the legal transfer of the technology and the financial targets. They also couldn’t see the point of introducing more people into the meetings until the existing team had achieved its purpose. The result was a lack of trust, a failure to fully communicate and, ultimately, the failure of the venture (Case in Hofstede). “German managers tend to favor ‘structured learning situations with precise objectives, detailed assignments strict timetables’ (Hill, 1994).
” Most British participants despise too much structure. They like open-ended learning situations with vague objectives, broad assignments, and no timetables at all (Hill119). German managers often receive compensation, such as housing allowances and partial payment of salary outside Germany, neither of which is taxable. In Germany, workers elect representatives to serve on the company’s works’ council. This council makes decision on social matters (such as employee conduct, hours of work, and safety), and when disputes arise between the council and the company’s labor director, they are settled by arbitration.
In economic and financial matters, the council is provided information and consulted in decisions (Hofstede 893). The unions are barred by law from negotiating at the company or plant level; this is the task of the works’ council, whose members are mostly union members (894). In Germany and other European countries, a two-tier board of directors is the norm. A supervisory board holds the ultimate authority for major decisions, while a management board is the ‘engine of management’ (Charkham, 1994).
The supervisory board in the German system encompasses not just shareholder interests, but also includes employee and trade union representatives. The German management system is a collegiate system where members bear collective responsibility for the company. The supervisory board appoints and dismisses top managers, supervises their activity, and may actively participate in, or dominate, key decision making. In Great Britain, however, the board acts as counsellor or can actively be involved in strategic policy making.
The board is considered more influential in relation to top management than is the case in German companies. “Although there is no collegiate management in British companies and the chief executive or managing director has ultimate responsibility for the conduct of company affairs, delegation of responsibility to other managers is extensive. The chief executive is elected and can be dismissed by the board (Daniels 33). ” Germany commonly, characterized as the Eiffel Tower Culture, uses management styles that involves the accumulation of skills necessary to fit a role.
“Eiffel Tower Culture is characterized by a strong emphasis on the hierarchy and orientation to the task ( Hodgetts 163). ” These types of managers seldom create off the job relationships with their people, because they believe this could affect their rational judgment. When changes need to be made the Eiffel Tower culture often is ill-equipped to handle things. Manuals must be rewritten, procedures changed, job descriptions altered, promotions reconsidered, and qualifications reassessed. Carefully designed rules and policies are relied on, and things are done “by the book.
” Conflicts are viewed as irrational and offenses against efficiency; criticisms and complaints are handled through channels ( Hodgetts 164). Guided missile culture is characterized by a strong emphasis on equality in the work place and orientation to the task. This organizational culture is oriented to work, which typically is undertaken by teams or project groups. Unlike the Eiffel Tower culture, where job assignments are fixed and limited, personnel in the guided missile culture do whatever it takes to get the job done.
This organizational culture fits well with the cultures of the United Kingdom and the United States. Germans and Swiss typically spend little time getting to know each other; they find out the nature of the task and set about pursuing it on their own without first building trust and cohesion (175). British managers tend to use a highly participative leadership approach because most top British managers are not highly involved in the day to day affairs of the business, they prefer to delegate authority and let much of the decision making be handled by middle and lower level managers.
This preference contrast sharply with that of the Germans, who prefer a more work centered, authoritarian approach (370). Germany and the United Kingdom show very different behavior patterns in the way they manage their business which have the potential of complicating the way in which people from outside of the nations deal with them. “The world of international management is changing rapidly, and one primary reason is because increased foreign investment and trade are bringing managers from one country into ongoing contact with those in others.
The European Union is now on its way to creating a unified market through the emergence of the ‘Euro-manager. ‘ Euro-mangers are portrayed as managers unencumbered with the values or identities associated with their country of origin, and able to operate with equal effectiveness in whatever location may be (Hodgens 371). ” However, there has speculation rather the management styles are actually converging. Therefore, I believe that there is substantial evidence to support that the euro-managers are becoming globalize in their attitudes and behaviors.
For example, in Europe Colgate-Palmolive, a global producer of consumer products, is developing ‘Euro-managers’ in an extensive management training program. The managers are removed from their home country and forced to train with managers from several different countries. Colgate-Palmolive, like many other multinationals, strongly believes that giving international trainings to managers is important for spreading the corporate culture and practices around foreign subsidiaries and training its top managers (colgate.
com). In addition, in the United Kingdom, the Competency based development was introduced to aim at improving the overall effectiveness of United Kingdom managers. In Great Britain and Germany there is a linked demographic change to reintegrate women into the labour market. Women managers are meeting a growing demand for international assignments; organizations are recognizing that women managers may have personality and communication skills that are better suited to international assignments (392).
Management development is often viewed as a separate, discrete and heavily individualized activity, aimed at correcting identified weaknesses in skills and knowledge or deviances in individual attitudes and behavior (393). Despite their relatively weak tradition and the problem of cultural insularity in terms of management development, France, Germany and other European countries are beginning to establish institutions specifically aimed at developing managers.
In major German companies such as Siemens and in France there is a belated emergence of US-style business schools (Hill, 1994; Kumar and Usunier, 2001. Conversely, there is evidence that states that management styles are not converging to result in the emergence of the ‘Euro-managers. ‘ “United Kingdom managers, for example, continue to lag far behind their Continental counterparts in their ability to speak other languages. And this problem is not restricted to middle managers; a recent survey shows that nearly 80 per cent of United Kingdom top Euro Manager did not speak a second language.
‘ Despite the fact that the samples in different countries varied in their demographic characteristics, consistent relations are found with Hofstede’s dimensions of individualism, power distance and masculinity. This outcome implies that the cultural differences which he sampled from within a single organization are still readily detectable within a varied range of European and other organizations nearly thirty years later and must therefore be relatively stable and widely spread within the countries sampled (Hofsted,378).
In conclusion, it is evident that Hofstede’s view that cultural differences in Europe as much as elsewhere are deeply rooted and not readily susceptible to short term change. Despite this Hofstede also showed that some values concerning effective styles of management do transcend current European national boundaries, thus giving some substance to the emerging identity of the Euro-managers. Charkham also stated that the Principles of Corporate Governance state that there is no single model that suits all companies.
However, there are general principles generally recognized as good practice. Increasingly, firms are finding that they must develop international management expertise. Cultural sensitivity is critical to ensuring that such differences do not pose problems and result in a failure to consolidate contracts and relationships. Today’s managers must learn to work effectively with those firms from many different countries to cultivate the emergence of the ‘Euro-manager’ in the European Union.