East Asia: the Korean and Japanese Management Styles

This week subject is East Asia is the first region we are going to review in the course, the countries that are I this region are: China, Hong Kong, Japan, Macau, Mongolia, North Korea, South Korea and Taiwan. As you may be wandering is a vast region with many study possibilities, but this blog section will focus on the Japanese and Korean Management Styles. For this purpose explaining the concepts of divergence, homogenization and convergence are of topmost importance. 

Source: Own creation, based on the class explanations

The previous graphic concepts let us form an idea on what is convergence and divergence, and what sets the first one apart from homogenization. Convergence, as defined by the text What Makes Management Style Similar and Distinct Across Borders? Growth, Experience and Culture in Korean and Japanese Firms, written by Lee, Thomas & Choe, is a theory that states that as countries develop management styles will tend to become more similar to those found in developed nations. Divergence states that the individual characteristics and cultural norms are a powerful source from making management styles different. Meanwhile homogenization is defined as the melt of the management styles into a single one.

Getting into the subject of East Asia lets now introduce what is the Japanese management style? At first it must be said that not all companies era alike within a country, region or even city. The aspects to be studied are only those common aspects that can be generalized enough to describe this group.

The Japanese management style is defined to have: a Market Share Strategy; which means that the growth is attained this way. Value maximization; create value by optimization. Supplier relationship; Close cooperation and coordination with the supplier allows fast and flexible product development. Participation of workers is highly valued. The customers are as important as the competitors when scanning the business environment. Product design is linked to production, which generates value to the company.

The Korean Management Styles are somewhat different, despite they were inspired by their Japanese counterparts. For the Koreans the main characteristic is the close relation of the companies with the government which was copied from the Japanese. The chaebol structure was also applied from the Japanese Zaibatsu model. The Koreans then to be more individualistic and their culture, despite stressing the concept of group harmony, it does no include the loyalty and consensus found in Japan. The family business in Korea is a very strong figure based in blood lines.

So taking advantage on the question proposed for our blogs from the lecturer, which is “List the main similarities and differences of Japanese and Korean management styles”, I will continue the analysis and also answer this question.

In order to answer the question I will once more recur to the “Lee et al.” document in which the study they conducted revealed the convergence in the management style among the Korean and Japanese firms, specifically analyzing it on the presence of two factors growth and internationalization of the Korean firm:

Factors	Korea	Japan
Strategic Goals	Emphasize in market share and profit maximization, even more then the Japanese do, when they start to grow and internationalize.	They are characterized for their concern on Market Share and profit Maximization.
Environmental Analysis	Less active monitoring the substitutes than Japanese when the Korean company is large, but as they internationalize they become as active as the Japanese.	Intensive monitoring of the substitutes and rivals.
Technology development and manufacturing	As they grow they emphasize on technology and is very important to develop economies of scale.	Emphasize more on flexible manufacturing, meaning that they prefer to be able to adapt fast to the changes in the market.
Supplier Relationship	As they grow and internationalize tend to be more Japanese-like.	Cooperate with suppliers in new product development and long term relations.
Closeness with customers	They tend to have a weak convergence with the Japanese but it gets stronger as they internationalize.	The closeness with the customer is an important characteristic.
Marketing	No significant difference is presented. But as the Koran company internationalizes it converges.	Emphasize on corporate brand/trademark.
Human resource Management	As they become more internationalized they are forced to converge to the Japanese style.	Employee involvement in the organization is fundamental and they value the information sharing and suggestions.
International Orientation	Convergence is presented when the firms grow and/or internationalize.	They conduct customer analysis on a global basis and get highly involved on international marketing.

Made by the author with information from Lee et al. 2000

So what can we observe from the chart? The main thing is that both internationalization and growth are driving forces for the Korean firms to converge to the Japanese models. Being internationalization the main driving force, mainly because the Korean firms have to face the same international competition as their Japanese counterparts, thus facilitating he implementation of similar managerial structures.

This convergence can be associated to the increase on managerial sophistication of the Korean firms as they grow and that many times they benchmark their options, thus learning from the Japanese firms. Another factor which may be contributing is the similarity of the business environment in Korea and in Japan; meaning that they face similar conditions domestically, thus allowing Korean firms to imitate their Japanese peers. Nevertheless there are still divergence forces that differentiate the management styles.

The main differences between the two management styles can be explained because of the hierarchy orientation of the Koreans as opposed to the Japanese group orientation. Another factor for divergence is the economic environment which domestically forces firms to create their own structures to deal with it. Here lies the explanation on why internationalized firms tend to converge more that the firms that grow domestically: because they have to face the same conditions and adopt similar structures to face the international arena.


For Further references check:

Lee, Jangho, Thomas W. Roehl, & Soonkyoo Choe. 2000. What Makes Management Style Similar and Distinct Across Borders? Growth, Experience and Culture in Korean and Japanese Firms. Journal of International Business Studies, 31(4): 631-52.