Cultural differences can play an important role in how we deal with business. How Asian executives and managers make decisions regarding their business differ from how Western businessmen do it. So what gives? Is the reason as simple as having different cultures? Or is it simply an overused excuse to cover for poor management practices?
Cultural differences are real. A person’s principles, beliefs, practices, and the values he upholds can be traced to his cultural upbringing. However, what is truly meant when we say, the Asian way of doing business? Learn how the most successful Asian organizations such as the SMRT is managed effectively by the SMRT chairman and his Board of Directors.
What Does Asian Culture Mean?
Asia refers to a continent that is composed of 48 countries. Strictly speaking, there is no single Asian culture. The culture of Asia is a diverse collection of customs, traditions, architecture, art, literature, music, philosophy, religion, and lifestyle. These are practiced by a wide range of people and ethnicities all throughout Asia. For instance, Japan, Singapore, India, and China are all Asian countries that have differing business cultures.
In Japan, for example, the Daoist principle of passing the business to the first-born child is still practiced in some companies. Most Japanese firms started as family businesses which eventually grew and evolved as big conglomerates.
Meanwhile, China, Hong Kong, and Singapore businesses follow the Confucian way of life, which prohibits primogeniture. However, some companies are starting to break away from the banning of primogeniture in these countries as well.
Asian culture in the Western countries would usually refer to the Chinese since they make up the biggest Asian ethnic group in the U.S.
How Do Asians Conduct Business?
When taking your business to a new country, it is important to know how businesses are done in that place to succeed. Understanding your new business environment is part of good business governance and management, especially if you will be hiring local people.
Whether you are expanding in Asia or you just got hired in an Asian company, here are some characteristics that are commonly inherent in Asian businesses.
1. The managers have hands-on experience
Senior Asian managers need relevant hands-on experience to be able to make decisions quickly and decisively. They must have a clear and firm understanding of the company’s processes, work routines, work environment, and standards. Most Asian managers stay active in the day to day operations of their business. It allows them to make timely and correct decisions, even without data analysis.
2. There is a diversity of knowledge
A manager cannot make effective decisions in a new industry if he has no knowledge or past experience to base his decisions on. Managers must diversify, and they must go beyond their core business if they want to be relevant and effective.
3. Managers base their decisions on qualitative information
Unlike western executives, most Asian managers do not base their decisions on published data. They may seem reckless in making big decisions, but this is not true. Asian managers often base their decisions on qualitative information. They get this information from their business colleagues, government officials, friends, and other people whose judgment they fully trust. They believe that these data are more reliable and accurate than traditional research.
This is where strategic relations come into work. Asian businessmen build a network of people they feel that can have valuable contributions to their line of work.
4. Managers apply a holistic approach to information processing
Asian managers, without any available data, take a holistic approach to solve their problems. They define parameters based on their intuition and experience, as well as explore solutions in a holistic manner. It may not be as systematic as conventional analytical problem-solving approaches, but they work well if done correctly.
5. Asian managers prefer action
Most Asian managers will not waste their time in meetings that last for hours, even the whole day at worse. Speed is one of the main characteristics of Asian businesses. They want immediate action with results. There is no room for long meetings and debates in conference rooms. This reflects the Asian executive’s power in decision making, as well as his or her accountability and authority.
So if you are used to debating for long hours just to get one decision made, you can throw that out of the window when you deal with Asian executives.
The characteristics discussed above are just some of the ones commonly found in successful Asian businesses. However, regardless of culture, good governance, commitment, transparency, and respect are always important for an organization to flourish.