Mar 17, 2015

Korean vs. Japanese vs. Chinese Management Styles Explained

We too often read of comparisons among Korean, Japanese and Chinese companies. But less frequently, we come across contrasts in management styles among Asia’s big three. Occasionally we can find on this page insightful analyses between Korea and Japan by Tokyo-based William Pesek. His last such analysis between Sony and Samsung was, of course, yet another comparison of Japan with Korea.

Considering how things are actually managed - or should I say, dictated - in Korea, Pesek may have given Korea some undeserved credit in terms of business acumen compared with that of Japan. Still, Pesek got it right in noting how constipated Japanese group thinking can hold so many things back, compared to with how the clearly rambunctious Korean way of often making decisions first, then considering the consequences later, is proving to be more successful. (I’m exaggerating about the Koreans, but only slightly.)

 At the same time, with the pace of events yet ever escalating, the once highly admired Japanese consensus management with its incredibly thought-out decision-making process is looking, in spite of its many merits, antiquated. When I managed a Japanese marketing team, I was amazed with the degree of detailed planning, along with equally detailed contingency planning. The Japanese really hate surprises - even more than the Koreans.

So they go to great lengths to minimize the need to do things on the fly. Ironically, too often much of the planning has to be discarded when actual events defy primary, secondary and even tertiary case planning. Nonetheless, there is a great deal of psychological preparation in what seems to many Westerners to be anal retentive preparation. Should matters take a turn for the worse, Japanese tails are covered for at least having tried to anticipate various probabilities. But all of this requires extra resources and time prior to execution.

In contrast, the Korean off-the-cuff, ad hoc process of muddling along, often sans real management, could prove to be the more effective operational paradigm in this rapidly changing world. In this sense, the heavily criticized, family-centric, dictatorial methods of Korean companies may, in spite of all of their distasteful ways, be the way of the future. It’s one thing to make a bad decision. But unlike in the past, it’s too often far worse to make an untimely decision. The willingness to risk bad decisions only works, of course, if the individual or organization is capable of quickly making remedial decisions upon recognizing wrong decisions and/or deteriorating situations.

While the Japanese have long been revered for their long-term strategic perspectives and planning, the Koreans have been recognized by their seat-of-the-pants tactical brilliance. With time horizons being more and more compressed, perhaps yesterday’s tactics will increasingly look like tomorrow’s strategies given the brevity of time lines. Should that be the case, the Koreans may have a brighter future than their neighbor to the east. Meanwhile, there is looming China.

To date, one is lucky to find more than one or two books on Chinese management - at least in English. Most analysis has been pretty much limited to low-cost economic inputs leading to globally competitive exports. But that is all changing. In spite of increases in inputs’ costs, exports continue to boom. So, it may be a matter time before authors will be trying to write the next business best-seller on the Chinese school of management. But there is a good chance that writers may have to concoct something worth emulating.

So far this has been the case with academics trying to study Korean management practices. For example, a marketing professor from my business school took a year off to study the “secret of Korean management” as a chaebol’s in-house consultant. Upon him informing me of this plans, I found the notion a bit amusing. At an alumnae meeting almost a year later, I was able to catch up with him.

I naturally asked what he had learned. He mumbled something vague and quickly changed the subject. In other words, there is a reasonable chance much of what we learned in business school is becoming irrelevant unless we are capable of infusing the appropriate technology that enables business processes, including decisions, to be done at or near Internet speed. Even Korean dictatorial methods may soon fail.

In Japan, there seems to be a reactive and building morose sentiment to get back to the older ways, including justifying some of their cruder actions of pre- and during WWII Japan. If Japan continues its hard swing to the right, it may be setting itself up for more than simply disappoint. It could be putting itself into needless conflict with its two closest neighbors while making itself less economically competitive.

A shrinking Japanese economy may cause a downward spiral into a xenophobic view of the world that could lead to clashes. As much as the Koreans and the Chinese may wish such a development to be simply a Japanese problem, it will not be the case. The economies are too integrated. But old ways once more have to give way to new thinking modes.

Those managers, regardless of nationality, who hold on to traditional methods will increasingly be taking on greater risks for themselves, their companies and even their nations.

*The Tom is a long-term resident of Korea and author of two books on doing business, including “Doing Business in Korea: An Expanded Guide.” Tom is, also, a Senior Advisor to IPG.

by Tom Coyner