Startups and founders from Asian countries need to re-think some of their assumptions they may have about management before searching out new partners in Western markets
For many Asian startup founders, it’s typical to assume that many of the core leadership and management practices found across Asia are also common in the United States. After all, many of these founders may have briefly studied in the United States for college or for their MBA and may think they have a good sense of what it’s like to expand into the large American market.
However, management gurus from the top U.S. business schools say that there are still many differences in the two styles of management. First and foremost, American-style leadership tends to emphasize the individual, while Asian-style leadership (especially within China) tends to emphasize the collective or group. This plays itself out in various ways, having a real impact on the style of management.
Individual vs. organisation
For example, consider the difference in the way managers evaluate talent. Within Asia, there’s much more emphasis on the performance of the collective. In America, it’s a completely different story, because top individual performers are highly prized. In fact, the entire myth of the great solo American entrepreneur is based on the notion that a single supremely talented individual – think Steve Jobs, Mark Zuckerberg, or Bill Gates – can create value where others can not.
Relationships vs. transactions
Secondly, Asian-style management tends to be much more based around relationships, long-term commitments and subtle negotiating tactics aimed at protecting one’s honour (which, in the U.S., is typically referred to as “saving face.”) In contrast, American-style management is much more transactional, based on short-term commitments and much more based on using the rule of law as a way of keeping parties of a deal to honour their commitments.
For example, think about the process of investing in a new startup. In the U.S. market, there is often a rush to invest in attractive new deals. Then, once the financing has been agreed upon, the lawyers enter the scene, drawing up long contracts and offer sheets that must be signed. From an Asian (and especially Chinese) point of view, the process of investing into a company is based much more on having and developing a relationship than on the strict transactional details of the deal.
Leadership and empowerment
Finally, one other management change between Asia and the United States to keep in mind is how workers perceive the top leadership of a company. Within Asia, the leader (i.e. founder or CEO) is viewed as a “benevolent father” who takes care of the workers and has final authority over what happens. In the U.S., the focus is much more on empowering others to take control of their own business functions. If anything, the founder is viewed as someone who can help to allocate resources and build relationships, but not as the ultimate paternal authority.
It’s these differences in management approaches between Asia and the United States that can sometimes make entry into Western markets – especially those of the United States or Western Europe – more challenging than originally supposed. Thus, the best advice for startups and founders from Asian countries is to re-think some of their assumptions they may have about management before searching out new partners in Western markets.
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