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Making U.S. Management Ideas Work Elsewhere
posted by admin on 21/06/06
The challenge was to help the company bridge the gap between strategy and implementation.
Five years ago, management adviser Kim Tae Woo got a call to help a struggling Japanese plastics business.
The company had just formulated a bold strategy that called for big changes in corporate structure to centralize its operations. The plan had been drawn up with another consultant well-versed in Western management principles, and the executives agreed it was needed, in theory. But they balked at implementing it because it called for actions -- such as trimming management -- that are unusual in Japan.
Mr. Kim's challenge was to help the company bridge the gap between strategy and implementation. It's a common problem. A lot of management thinking is "completely divorced from what's going on, on the ground," says Henry Mintzberg, a management professor at Montreal's McGill University.
What's more, because much management theory comes from the U.S., the gap between theory and practice can be especially large in countries like Japan and South Korea, where the business cultures are very different from the West. Says Mr. Kim, who specializes in helping Japanese and Korean companies link management strategy with local practice: "American management principles may be accepted throughout the world, but the Anglo-Saxon business customs and practices [on which they are based] may not be."
Mr. Kim and other consultants who work globally say it's important to take a good look at the country's business culture, as well as the company's history, personnel and corporate practices, before trying to set or implement strategy.
"The more you get into behavioral issues," the greater the influence of local cultures, says Jay Galbraith, a consultant and researcher in Breckenridge, Colo., who specializes in helping companies put strategies into action, often across borders.
Cultural differences can lead to subtle variations in the way managers react to strategic initiatives. Consider how companies from different countries handle the creation of a new executive post to oversee global sales accounts. That is a step often urged by consultants these days, but very unpopular with regional sales heads, Mr. Galbraith says. U.S. managers will tend to "make the tough call" and create the post, while more consensus-minded European managers will delay or compromise, he says.
Other cultural differences may be harder to navigate. Mr. Mintzberg argues that American management theory places too much emphasis on individual leadership, which is jarring in countries where management is a more communal venture. Americans "want somebody to take charge," he says.
By contrast, Mr. Kim says, Japanese and Korean managers are more likely to wait for directions, consult peers in making decisions and have less rigidly defined areas of responsibility.
In Japan, the gap between Western management theory and local corporate practice is so great that executives sometimes draw up plans they can't bring themselves to implement, says Shigeru Yajima, a Japanese consultant.
Take supply-chain management. Most Western companies think nothing of switching parts suppliers to cut costs, says Mr. Kim, who has worked with clients from a unit of Sony Corp. to Japanese prefabricated housing maker Sekisui Heim Tokai Co. That is a tougher sell in Japan, where executives often have longstanding or personal relationships with their counterparts at suppliers, he says.
Mr. Kim, 59 years old, is a native of South Korea who spent more than 20 years working in Japan, much of it for Sony. He has studied traditional Western management styles, and in the 1980s peddled Japanese management principles when he helped market a management game developed by Sony.
At the plastics company, Mr. Kim worked with Mr. Yajima, who had helped develop the initial strategic plan. Mr. Kim says the two consultants decided that the company's aging executives -- many of whom had retired from jobs as bankers or bureaucrats -- wouldn't fully back the new corporate strategy unless they had worked through it again on their own.
Mr. Kim arranged monthly study sessions for all 32 of the top brass, starting with workshops in which the executives examined a range of financial projections for the company. During the process, the executives concluded the company would collapse within five years if it kept on its current course, Mr. Kim says.
Mr. Kim's workshops then focused on what steps to take in order to keep the company afloat. After nearly two years -- a long time by Western standards -- the executives decided on a course of action nearly the same as what Mr. Yajima had recommended initially. They reorganized the company, eliminating six of 16 units in the corporate group.
Five of the 32 executives agreed to retire and not be replaced; 18 followed within the next year, Mr. Kim says.
Only toward the end did Mr. Kim sum up the steps the executives had decided to take and dub it a "strategy."
"We did it all backwards," he says.
Theory & Practice is a weekly look at people and ideas influencing managers. Send
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