As more and more Western companies invest in the ‘Asian miracle’ and develop pan-Asian operations, they are attempting to marry their business and leadership practices with those of the East.

But the big question is whether those attempting to expand in Asia have the leadership skills that are required.

 

Are there any significant differences, for example, between the leadership styles of Asian executives and those that we are familiar with in the West.  Or are they simply the result of Asian companies operating in a different culture or at a less mature stage of corporate development?

Leadership at its best is transformational. It means having a vision of the future, a strategy to reach that mission, and the ability to inspire others to reach that goal.

With the widespread adoption of the MBA standard in management education throughout the world, and the rapid transfer of management techniques through the Web and international business schools, this style of leadership and its ability to transform does not differentiate the West from the East.

It differentiates mediocre companies from highly successful companies all over the world.

CULTURAL DIFFERENCES

Yes, there are cultural differences between Asian and Western companies but they should not be exaggerated. For example, there are still enterprises led by family patriarchs in Western countries but they are not as common as they are in Asia.

There are founder’s descendants at the helm of some of America’s and Europe’s largest public and private companies, just as there are family dynasties heading up conglomerates in Hong Kong. Singapore, China and Malaysia.

However, there are many more of them in Asia and in this sense there are some important differences in leadership style between East and West.

PROFESSIONAL VERSUS FAMILY-RUN

Professional senior managers and not family members run most Western companies. Well-managed companies have programmes for developing leaders and sophisticated succession plans. Many future leaders rise to the top through such internal programmes.

However, Western companies are usually reliant on capital markets for their equity and debt capital (rather than directly or indirectly on government or on family wealth) and so their leaders pay more attention to stock markets than their counterparts in Asia.

These stock markets tend to impose strict regulations about executive behaviour, performance and succession.

This contrast with Asian business leadership is gradually changing as Asian governments tighten their regulatory regimes and corporate governance requirements, but generally speaking, there is less freedom of action for executives and boards in the West than in Asia.

It may be that Asian family firms will eventually follow the evolutionary path of Western companies towards mainly professional management and capital obtained almost entirely from the capital markets.

Several Asian countries, such as Japan, are showing progress in this direction. In the meantime, Asian companies’ political and family connections continue to play a role that is far less evident or common in the West, although there are exceptions.

LEADERSHIP STYLES

The leadership styles evident in Asia are also less varied than in the West. The authoritarian leader that gives out the firm’s direction by fiat is more common in the East, whereas the leader that relies on teamwork and participation is common in both the West and in some Asian countries like Japan.

The leader that empowers and delegates to others, particularly large autonomous divisions, is gradually becoming more evident in Asia but this leadership style is far more common in Western companies. Overall, adaptability is less common and less valued in Asia than in the West.

These are important points to bear in mind. But as you develop your business strategy for Asia, this apparent ‘conservatism’ should not deter you.

Information technology and the internet are bringing out a type of leadership that is becoming rapi[...]