INDIAN INSTITUTE OF TECHNOLOGY ROORKEE

Management Practices in BRICS Countries:

Comparative Analysis

Presented by: Under the supervision of:

Nairitee Sil (19918007) Dr. S. Rangnekar
Department of Management Studies Department of Management Studies
I.I.T. Roorkee I.I.T. Roorkee
Academic Profile of the presenter

NAIRITEE SIL
Research Scholar
Department of Management Studies (DoMS)
I.I.T. Roorkee

GRADUATION MASTERS PhD

B.A. (Hons) English, Social Work, Area of Interest: OB
Miranda House Department of Social Work DoMS
University of Delhi (DU) University of Delhi I.I.T. Roorkee

2
Technical profile of the presenter

WORK EXPERIENCE (25 months)

1. L&D Coordinator- L&D calendar, Competency Mapping, Training Effectiveness

2. TQBM & IATF Coordinator- Internal and external benchmarking systems, periodic KPI
reviews, alignment with goals and objectives of Company as well as Department
3. CSR SPOC-
a. Adopted 35 Government (Primary & Middle) schools in and around Rudrapur and
Gadarpur block, and committed to provide infrastructural and educational facilities
in all of them.
b. Engaged in Project Jal Nivaran, committed to rejuvenation of river Hathyari and
Kheri flowing outside the premises of Ashok Leyland Plant; thereby recharging the
ground water level
c. Engaged in project of solid and liquid waste management, in and around the water
bank, cleaning legacy waste and thereby purification of water
4. Shrishti Club SPOC- Club for female employees initiated in the Plant, so as to give a
platform to them to come forward and speak up on otherwise neglected issues.

3
Technical profile of the presenter

Intern (2015-16) Intern (2016-17) Summer Intern (2016) Freelance

1. Rejuvenation of 1. Bridge course for 1. Working with Mock test
SEWA Shakti school drop outs notified and de- papers for Bank
Kendras (SSKs) (female students) notified tribes PO examination
2. Vocational 2. Initiated a (NT and DNT)
training of project for 2. Analyzing Govt.
women and empowerment of policies, and
adolescent girls women, and presenting our
3. Capturing made it take on them as
narratives of sustainable civil society
women of Delhi (Earring making)
slums to
understand
issues faced

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Table of Contents

1. What is BRICS?
 Definition
 Map of BRICS
 Why was BRICS formed?
 Indicators of BRICS
 Major Focus Areas of BRICS
 What makes BRICS special?
 Profile of BRICS leaders
 Details of BRICS Summits

2. Details about BRICS countries

 Brazil
 Russia
 India
 China
 South Africa
(parameters discussed are strengths, weakness,
culture, business styles, management styles)

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Table of Contents
3. Management & Management Practices
 Definition
 Chanakya Niti & Management Practices
 National culture and Management Practices
 Management Practices in BRICS Countries

4. Comparative Analysis of BRICS countries

5. Book -1 review

6. Book – 2 review

7. Research Paper -1

8. Research Paper – 2

9. Meta-analysis

10. References

6
What is BRICS?

B BRAZIL
R RUSSIA
I INDIA
C CHINA
S SOUTH AFRICA
7
What is BRICS?
 Brazil, Russia, India, China and South Africa (BRICS) is an acronym for the combined
economies of Brazil, Russia, India, China and South Africa.
 Economists at Goldman Sachs originally coined the term BRIC (without South Africa) in
2003. Analysts speculated that, by 2050, these four economies would be the most
dominant.
 South Africa was added to the list on April 13, 2011 creating "BRICS".

https://www.youtube.co
m/watch?v=vj1d1YzuTRg

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Map of BRICS

9
Why was BRICS formed?

1. To be an alternative to World Bank and IMF to challenge US supremacy.

2. To provide self owned and self managed organization to carry out developmental and
economical plans in member nations without being dependent on any foreign agency.
3. To achieve regional development
4. The BRICS group also acts as a bridge between developed and developing countries.
For example, in the WTO, the BRICS countries are trying to promote a fair order
regarding agricultural practices.
5. The BRICS group plays an important role in assisting developing countries in gaining an
advantage in trade and climate change negotiations.
6. BRICS formed an information-sharing and exchange platform that expands beyond
economic cooperation to involve educational, cultural and environmental engagement.
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Indicators on the BRICS

11
Major Focus areas of BRICS

1. To establish a development bank to

balance the influence of World Bank
and IMF, as well as creating a joint
foreign exchange reserve
2. Governance & Leadership
3. Science & Technology
4. Poverty
5. Private Sector & Prevention of
corruption
6. Investment landscape
7. Innovation in building infrastructure
8. Trade
9. Healthcare

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Why is BRICS special?

It represents 5 most emerging economies of the world

These countries represent 40% of world’s total population

These countries are developing and recently industrialized nations.

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Profile of the BRICS leaders

Jade Bolsonaro (President)

38th President of Brazil, since 1st

B Jan 2019
Brazil

Vladimir Putin (President)

President of Russia, since 2012

R (previously from 2000-2008 also);
Russia holds post till 2024

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Profile of the BRICS leaders

Narendra Modi (Prime Minister)

I 14th and current Prime Minister of

India since 2014
India

Xi Jinping (President)

Xi has been Paramount Leader, the

highest ranking official in China, since
C 2012 and he officially received the title of
China "core leader" from the CPC in 2016.

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Profile of the BRICS leaders

Cyril Ramaphosa (President)

Fifth and current President of South

S Africa, He is also the former Chairman of
the National Planning Commission, which
South is responsible for strategic planning for
Africa the future of the country

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Details of BRICS Summits

17
18
BRAZIL

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BRAZIL
1. One of the fastest growing economies in the last centuries
2. Less dependent on imports
3. Extremely rich in resources such as coffee, sugarcane, crude oil, iron etc.
4. Focus on equitable development has resulted in significant poverty reduction

1. Overburdened and ineffective judicial system

2. Industrial output is weak

Roman Catholicism
• Roman Catholicism is the most prevalent religious faith in Brazil,
dropping from 95 percent in 1950 to 73 percent today, but Brazil
remains the largest Catholic country in the world.
• Church and state are separate in Brazil, and the Constitution of 1988
affords all citizens the freedom of religious belief and
expression. Nevertheless, a tight-knit relationship exists between the
Catholic Church and the state, as it has for most of the country’s
history.
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Business Culture in BRAZIL
1. Relationships are of key importance in this Latin culture and the boss and
subordinates work hard to foster a relationship based on trust and respect for
personal dignity.

2. Managers are expected to manage. The boss is expected to give direct

instructions and it is expected that these instructions will be carried out
without too much discussion or debate (if there is debate it should be done in
private to avoid showing public disrespect to the hierarchy).

3. If giving instructions to Brazilian subordinates, try to be as clear, precise and

comprehensive as possible. If tasks remain undone after having asked for
them to be done, start by questioning yourself. ‘Were my instructions given
clearly? Was I too vague?’ If you only give partial instructions, only part of the
task will be performed.

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Management Styles in BRAZIL

Creativity Hard work

Quick
Innovation
Turnaround

Eye on the
Flexibility
future

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RUSSIA

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RUSSIA
1. Capability in high technology sectors
2. Accounts for around 20% of the world’s oil and gas reserves
3. Fall in the number of people living below the poverty line
4. Third largest exporter of steel and aluminum

1. Labour shortages and poorly developed infrastructure

2. Corruption

Orthodox Church
• Religion has always been a primary component of Russian life, even
during times of oppression
• There are nearly 5,000 registered religious associations in Russia.
More than half follow the Russian Orthodox Church, according to
the Ministry of Foreign Affairs of the Russian Federation. Islam is the
second largest religion; about 10 percent to 15 percent of Russians
practice Islam.

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Business Practices in RUSSIA
1. Management tends to be centralised and directive. The boss – especially the big boss –
is expected to issue direct instructions for subordinates to follow. Little consultation will
be expected from people lower down the company hierarchy. Indeed too much
consultation from a senior manager could be seen as a sign of weakness and lack of
decisiveness.
2. Middle managers have little power over strategy or input in significant strategic
decisions. The most powerful middle managers are the ones who have the most
immediate entree to the decision-maker at the top of the organisation. The most
significant reason for delay in reaching a decision in Russia is that the decision has not
been put in front of the real decision-maker.
3. Delegation is usually in terms of managers giving precise instructions to subordinates
who are expected to perform their allocated tasks with little or no discussion. Many
westerners complain of a lack of initiative from local Russian staff, whilst Russian staff
will often bemoan the lack of clear, unambiguous advice from expatriate managers.
4. It is also important to take age into consideration – younger managers, who have
developed in the post-Soviet era, may be much more heavily influenced by western
management theory than their older counterparts.

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INDIA

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INDIA
1. 1.15 billion people
2. One of the fastest growing economies
3. 2nd largest labour force
4. Natural resources

1. Improving basic educational achievement

2. Improving infrastructure and electrical capacity
3. Expanding technology industry

Secularism
Secularism, is defined as the "indifference to, or rejection or
exclusion of, religion and religious considerations". In certain
context, the word can refer to anticlericalism, atheism, desire to
exclude religion from social activities or civic affairs, banishment of
religious symbols from the public sphere, state neutrality toward
religion, the separation of religion from state,
or disestablishment (separation of church and state).
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Management Practices in the Ancient Vedas

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Management Practices in the Ancient Vedas

The Indian culture intertwines several philosophical viewpoints and thus represents a
collection of human values such as:

NISHTHA (sincerity)
SAMAPARNA (commitment)
KARTAVYA-PARAYANTA (responsibility)
JIGYASA (curiosity to learn)
KAUSLAM (efficiency)
VIVIDHA (innovation)

that are relevant for corporate governance, productivity and corporate social responsibility.

Acknowledging the holistic approach to modern management, one can also consider the
holistic approach of Indian wisdom from the aspect of integrating matter and spirit; skills and
values; object and subject. Also, there is focus on developing the inner mind. The unique
contribution of the Indian ethos can be expressed through the position that management
with a proper combination of values and skills can assure harmony and progress of the
organization, as well as of the society.

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Management Practices in the Ancient Vedas

Each soul is a potential Equal importance to

Holistic Approach
God subjectivity/objectivity

Yoga Karmasu
Karma Yoga Co-operation
Kaushalam

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Management Practices (Ramayana)

1. Provide a concrete vision to followers

2. Believe in the ability of subordinates to achieve an aim and inspire them to do so
3. Treat all people equally https://www.youtube.com/watch?v=
4. Stand courageously in the face of great adversity 9sbK3EV2cSE
5. Stand for morality but do not engage in judgemental posturing
6. Consult subordinates on important matters and allow them to give their opinions freely
7. Follow a code of ethics and be ready to sacrifice to follow it
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Management Practices (Mahabharata)

1. Work on your weakness, improve your skills and constantly learn

2. Share responsibility https://www.youtube.com/watch?v=
3. Teamwork succeeds A7vJ31N_aT0
4. Commitment and competence
5. Take calculated risks, but always have dynamic strategies
6. Women Empowerment
7. Lord Krishna : the best crisis manager in the world
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Business Practices in INDIA
1. India is an enormously hierarchical society and this, obviously, has an impact on
management style.

2. It is imperative that there is a boss and that the manager acts like a boss. The position
of manager demands a certain amount of role-playing from the boss and a certain
amount of deferential behaviour from his subordinates. Anglo-Saxon concepts of
egalitarianism where the boss is the first amongst equals are virtually
incomprehensible in a society still dominated by the historical conventions of the caste
system. Therefore, the boss is expected to give explicit instructions which will be
followed to the letter – even if everybody knows full well that the instruction is
incorrect. Vague requests for action, with the expectation that staff will show the
necessary level of initiative are likely to end in inaction, as staff will be left confused as
to the wishes of the manager.

3. Managing people in India requires a level of micro-management which many western

business people feel extremely uncomfortable with but which is likely to bring the best
results.

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Management Style in INDIA

Business Management Structural

Culture Maturity empowerment

Accelerated Employee
Long
resource welfare
Terminism
development emphasis

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CHINA

35
CHINA
1. Broad expansion of educational achievement
2. Rapid economic growth
3. Third largest country in land size
4. Biggest of all BRICS nation GDP wise
5. Largest exporter/importer for 32 and 34 countries respectively
6. Cheap labour work force

1. Support to rural areas and less developed region

2. Bank of China sees inflation as a bigger risk
3. Need to improve the investment

The Chinese Communist Party that rules the nation is officially

atheist, though it is gradually becoming more tolerant of religions,
according to the Council on Foreign Relations. Currently, there are
only five official religions. Any religion other than Buddhism,
Taoism, Islam, Catholicism and Protestantism are illegal, even
though the Chinese constitution states that people are allowed
freedom of religion.
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Business Practices in CHINA
1. In Confucian philosophy, all relationships are deemed to be unequal. Ethical behaviour
demands that these inequalities are respected. The older person should automatically
receive respect from the younger, the senior from the subordinate.
2. It should be borne in mind that many people in China – as well as in many other Asian
countries – see the lack of observance of hierarchical values as the root cause of the
problems of the West.
3. In China, management style tends towards the directive, with the senior manager giving
instructions to their direct reports who in turn pass on the instructions down the line. It is
not expected that subordinates will question the decisions of superiors – that would be to
show disrespect and be the direct cause of loss of face for all concerned.
4. The manager should be seen as a type of father figure who expects and receives loyalty
and obedience from colleagues. In return, the manager is expected to take an holistic
interest in the well-being of those colleagues. It is a mutually beneficial two-way
relationship.

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SOUTH AFRICA

38
SOUTH AFRICA
1. Economy is now 23rd largest in the world
2. Inflation is now below 5% and falling
3. 25% of goods produced in South Africa are for exports
4. Richest in terms of mineral reserves

1. Economy is growing, but not fast enough

2. Lack of skills, particularly IT
3. 48% population living below poverty line

South Africa has a population of approximately 55 million

people comprising of diverse culture, religion, origin, and
languages. Africans or South Africans and Bantu-speaking
people form the major part of the population
(approximately 35 million). Some ethnic groups are
unique to South Africa while others like Basotho crossed
the border into the country.

39
Business Practices in SOUTH AFRICA
1. Arrive on time. South Africans are especially punctual.
2. You are expected to greet everyone in the room individually – even if the group is large.
3. Expect a South African to be well prepared with a plan and structure of how they want
the meeting to go. An Afrikaner’s approach to business negotiations and their
expectations of what will be achieved can be perceived as quite stubborn to an
Australian. Keep in mind that this is simply a different business communication style;
they appreciate and value directness for the sake of clarity and mutual understanding.
4. During discussions, give your full attention to the person speaking and listen
courteously. Respect is paramount.
5. Reaching a win-win result is the ideal outcome of a meeting for a South African.
6. It should be considered that in South Africa, people do not instinctively trust each other
upon first meeting one another. Therefore, it is important that you establish healthy
business relationships with South Africans in order to build trust.
7. Any ambiguity or vagueness on your behalf may be interpreted as a sign of
untrustworthiness, dishonesty or lack of commitment. Furthermore, contracts and terms
should be explicitly detailed to assure them that the deal is transparent.

40
Business Practices in SOUTH AFRICA
8. Workplaces are hierarchical in South Africa, and those in the higher positions make the
final decisions after consensus with subordinates.
9. South Africans are generally very loyal to their companies and job as employment is so
scarce in Africa and often stay in one company for the duration of their working life.
Strategies based on short-term solutions for quick gain are not preferred as South
Africans would rather see a durable business approach that may take more time and
patience.
10. South Africans aim to avoid confrontations in business as much as possible, so do not
press them on areas they are visibly uncomfortable with or intentionally provoke them.
High-pressure tactics are generally unsuccessful.
11. The unemployment rate is very high in South Africa, so your South African counterpart
may ask for personal favours that entail employment for their family members. You do
not need to feel obliged to do this if it puts you in an awkward position. Refusing should
not damage your business relationship with them.

41
Management & Management Practices
Management refers to the art of getting things done through the
efforts of other people.

Planning The principles of Management, then, are the means by which you
actually manage, that is, get things done through others—
individually, in groups, or in organizations. Formally defined, the
principles of management are the activities that “plan, organize,
Organizing and control the operations of the basic elements of [people],
materials, machines, methods, money and markets, providing
direction and coordination, and giving leadership to human efforts,
Directing so as to achieve the sought objectives of the enterprise.
Management practices, thus, refers to the working methods and
innovations that managers use to improve the effectiveness of
Coordinating work systems.

The fundamental notion of principles of management was

Controlling developed by French management theorist Henri Fayol (1841–
1925). He is credited with the original planning-organizing-leading-
controlling framework (P-O-L-C).

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Management & Management Practices (contd.)

Until recently, the dominance of American management theory led to the belief that "one
size fits all,“ that a good manager in one country will also be a good manager in other
countries, and that effective management practices of one country will be effective
anywhere in the world. This view is now being supplanted with the knowledge that
managerial attitudes, values, behaviors, and efficacy differ across national cultures. There is
no one best way to manage a business. Differences in national cultures call for differences in
management practices.

The move towards globalization makes it harder, as globalization means standardization. Big
Macs are the same around the world, but McDonald's management practices should not be.
Just as Big Macs in Moscow are status and luxury while Big Macs in New York are utilitarian,
requisite management practices differ across cultures even when products do not.

Work units that are managed consistent with national cultural expectations will be better
performing than work units whose management practices do not fit the national culture.
The message to managers is thus clear: Adapt your management practices away from the
home country standard toward the host country culture - When in Rome, do as the Romans
do.

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Chanakya Niti and Management Practices

 Chanakya, known for writing Arthashastra – the epic, the Bible for Corporate
strategy and Management in ancient India, and hence can be aptly referred to
as Management Guru of ancient India.

 His concepts in Corporate Chanakya are:

 Effective communication
 Decision Making
 Addressing the needs of the Organization and keeping employees happy
 Accountability

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National culture and management practices?

 National culture is defined as the values, beliefs and assumptions learned in early
childhood that distinguish one group of people from another. National culture is
embedded deeply in everyday life and is relatively impervious to change.

 National culture is a central organizing principle of employees' understanding of work,

their approach to it, and the way in which they expect to be treated. National culture
implies that one way of acting or one set of outcomes is preferable to another. When
management practices are inconsistent with these deeply held values, employees are
likely to feel dissatisfied, distracted, un-comfortable, and uncommitted. As a result, they
may be less able or willing to perform well. Management practices that reinforce
national cultural values are more likely to yield predictable behavior, self-efficacy and
high performance because congruent management practices are consistent with existing
behavioral expectations and routines that transcend the workplace. Employees are not
distracted from work performance by management practices that ask them to behave in
ways that are consistent with extant national cultural values.

45
Management Practices in BRICS countries

 HRM policies and practices are generally influenced by contextual factors, such as
political, legal, technological, institutional and social frameworks.
 Resource availability and dynamic nature of environment and its level of complexity
are recognized as having an influence on management practices and, consequently, on
company performance. So, the way organizations manage their human resources is
institutionally rooted in national contexts and socially incorporated.

 As Paauwe (2004) argues, it is the way standard practices (as defined by legislation and
institutional norms) are implemented and the use of additional distinctive practices that
give rise to competitive advantage to firms.
 Management in emerging countries is ineffective and outdated and this denotes a
barrier to good organizational results. These analyses can be applied to the BRICS group
of emerging countries (Brazil, Russia, India, China and South Africa); but there are very
few academic publications comparing these regions.

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Comparative Analysis of BRICS nations

Function vs South
Country Brazil (B) Russia (R) India (I) China (C)
Africa (S)
Planning
Planning Technocratic Gosplan NDRC DPME
Commission

Clear and Precise Strong, with

Organizing unquestioned directions to Weak high respect to Strong
instructions juniors structure
Boss is Driven
expected to mostly by Boss is the
take major boss, but final
Boss is seen as
decisions subordinates approving
father figure,
without are expected authority,
Directing Top down and all his
little/no to take after
decisions are
consultation certain consensus
abided by.
from lower decisions by from the
level themselves juniors
employees also
47
Comparative Analysis of BRICS nations

Function vs South
Country Brazil (B) Russia (R) India (I) China (C)
Africa (S)
Weak, Employees to
because manage Strong,
Good,
identification among employees Strong
between boss
Coordinating of key person themselves, accept and coordination,
and
might be and not respect the clarity
employee
improper question the hierarchy
boss further
Directive, top
Centralized
boss
Controlling Top down and directive Top down Top down
commands
respect

48
Book - 1

The book discusses the essential elements of

management with a sound balance of theory and
practice. It encapsulates a comprehensive
approach to managing situations with an aim to
achieve goals on time, within budget and as per
specified standards, and presents a
comprehensive body of knowledge on this subject
having theoretical, research based as well as
application oriented elements. With a good
number of real-world examples from Indian
businesses, this book serves as a good text book
for the students of business management.

Author Name: K Aswathappa, Karminder Ghuman

Year: 2010
Publisher: McGraw Hill
ISBN: 9780070682184, 0070682186

49
Book - 2

This exciting new offering engages students with

its exceptional storytelling and great examples
to aid them in seeing the big picture/
interconnectivity among the four functions of
management, i.e., planning, organizing,
directing and controlling. A unique
"Management Portfolio Project" rounds out the
student experience, by introducing evolution of
management thought, organization and
environmental factors, etc.

Author Name: Charles WL Hill, Steven L

McShane
Year: 2017
Publisher: McGraw Hill Education
ISBN: 9780070667693, 978-0070667693

50
Research Paper - 1

Name of the paper:

Human Resource Management in the BRICS countries: a comparative study

Abstract:
The objective of the study is to investigate the contextual characteristics of BRICS countries
on Human Resource Management (HRM) policies and practices. For that we used secondary
data analysis, such as reports, journals, and newspapers. Data is organized in order to
provide logical support for the arguments presented. The main findings relate institutional
environment characteristics from the education system and labour market with: (i)
recruitment and selection practices; (ii) remuneration systems; (iii) training and
development practices.

Introduction:
Human Resource Management (HRM) policy and practices are influenced by contextual
factors, such as political, legal, technological, institutional and social frameworks. The
contextual approach takes a fresh look at the relationship between HRM, by considering the
importance of environmental factors as the influence of public administration, trade unions,
and the incidence of social and institutional influences in people management.
51
Research Paper - 1

Resource availability and the dynamic nature of the environment and its level of complexity
are recognized as having an influence on management practices and, consequently, on
company performance. So the way organizations manage their human resources is
institutionally rooted in national contexts and socially incorporated. There is no global
consensus of best practices in the human resources area, although there is some similarity
between such practices. Conversely, the working policies and practices organizations adopt
may boost their competitive advantage and this consequently has an impact on nations
themselves, because this may, or may not contribute to more competitive companies. This
becomes especially relevant for emerging countries in order to face up to their development
challenges.

Methodology & Data Collection:

This study uses a qualitative, descriptive, exploratory and integrative approach and accesses
secondary sources for contextually composing HRM information about the BRICS group. To
carry out the contextual analysis, World Economic Forum Global Competitiveness Index
indicators was used, and data from the BRICS Joint Statistical Publications on (BRICS, 2014),
because they integrate several managerial elements of the micro and macro environment.
decision-makers.

52
Research Paper - 1

Findings & Analysis

The countries in which there has been a great change in their context, especially as far as
concerns economic and political aspects, such as China and Russia, show that their HRM
practices are considerably influenced and modified as a result of contextual
transformations. Divergent points occur in the global-local dilemma; despite the fact that
nations are influenced by the Anglo-American management standards introduced by
multinationals, they till preserve HRM practices whose structures are strongly based on
cultural aspects, such as Brazil, India and South Africa.
These findings are in line with the discussions about the convergent and divergent forces
operating in the globalization process. On the one hand, management is influenced by the
characteristics of the institutional environment (size, ownership status, industry,
competitiveness of the market and resource availability) and, on the other, it is also
influenced by the assumptions of the competitive international market.

53
Research Paper - 1

Discussion & Conclusion:

It is believed that the discussion about preparing the labour force within the context of the
BRICS labour market has been expended. Considering that the competitiveness of a nation
depends on its production and innovation capacity, the challenge is to develop and create
its human capital in such a way as to serve the requirements of international markets. So it
is possible that the developers of public policies that deal with the institutional aspects
discussed can make use of the analytical path we travelled down. Company managers now
have access to analyses and interpretations that can help them when taking decisions that
involve the way in which people are managed in different regions in the world.

54
Research Paper - 2

Name of the paper:

Culture and Congruence: The Fit between Management Practices and National Culture

Abstract:
The financial performance of European and Asian work units of one multinational company
is examined as a function of the congruence between management practices and national
culture. Using Hofstede's five national culture dimensions and analogous management
practices, we find that work unit financial performance is higher when management
practices in the work unit are congruent with the national culture.

Introduction:
The very belief of ‘one size fits all’ is displaced through the paper, stating that effective
management practices of one country are not necessarily effective for another country. This
can be attributed to the fact that there are stark differences between the culture of
different countries which in turn change the way in which people perceive certain things.
There is no one standard way to manage a business. Differences in national cultures call for
differences in management practices.

55
Research Paper - 2

Methodology and Data collection:

• Data for this study come from 176 work units of one large U.S.-based corporation.
• The work units are located in eighteen European and Asian countries. Most work units
have between ten and one hundred employees, with a mean size of fifty-five.
• The functions of the work units are sales, service and support; there are no
manufacturing units.
• Product lines range from high-technology computers and integrated systems to routine
office products.
• Customers range from large banks and government agencies to small retail shops. Some
employees are marketing representatives who call on customers to sell products, some
employees are technical specialists who provide service and repairs to customers at
their place of business, and others are systems engineers who create solutions to
potential customers' problems.
• No employees in staff functions such as finance or human resources are in the study.
• Nearly all of the employees are citizens of the country in which they work, not
expatriates from the U.S. The only position routinely held by U.S. expatriates, and only in
large countries, is Director of Finance (not included in this study).

56
Research Paper - 2

Discussions & Conclusions:

We find support for the thesis that business performance is better when management
practices are congruent with national culture. Work units that are managed consistent with
the values of the external culture are more profitable than work units in which the fit is less
well achieved. These results contribute to the small body of empirical evidence supporting
the importance of congruence between management practices and national culture. The
findings have an important implication for managers: management practices should be
adapted to the local culture to be most effective. Managers‘ efforts to encourage employee
participation might improve the profitability of work units in countries with a culture of low
power distance, such as the U.S., but more employee participation is likely to worsen
profitability, not improve it, in countries with high power distance, such as Latin European
and East Asian countries.

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Meta-analysis

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THANK YOU!
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