Cross-cultural Leadership in Asian: Neighbors and Strangers


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Applied research on the cross-cultural leadership of International Assignees in China and Indonesia.

Our study shows that doing business with fellow Asians is just as culturally challenging as trading with the West. Based on more than 100 comprehensive interviews with Chinese, Indonesian and Singaporean business leaders and their co-workers, we found striking differences in leadership and communication styles.

While both cultures are extremely hierarchical, in which employees are prepared to submit to powerful figures, there are major differences in work values and leadership expectations. More significantly, we found that failure to understand such differences can result in damaged relationships and impaired performance.

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Cross-cultural Leadership in Asian: Neighbors and Strangers

  1. 1. 49 CEO SuCCESSiOn in aSia: a KEY TO LOnG-TERM GROWTH 55 india: SuSTaininG GROWTH THROuGH HuMan CapiTaL 82 REFLECTiOnS OnREDEFINING BUSINESS LEADERSHIP LEadERSHip Sunny Verghese, Group MD & CEO of Olam, shares insights. iSSuE 01/2011 WWW.HCLi.ORG 08 | The Business Case for Human Capital Asias transformative economic growth is challenging companies and governments to find urgent solutions to skills shortages, education bottlenecks and building leader- ship pipelines. The Business Case for Human Capital 1
  2. 2. Issue 01/2011 www.HClI.orgcontentsIntroductIon LeadershIP In actIonFrom the Editor-in-Chief 4 Seizing Opportunities in a Fluid World 95Foreword from the Executive Director 6 My Journey From Success to Significance 99Facts and Figures on Human Capital in Asia 7The Business Case for Human Capital 8LeadIng In gLobaL asIaWho is Taking Your Business Across Borders? 16 08 Roundtable on the key issues of human capital in AsiaStrategy to be the "Global Asia" Talent Hub 24How the World of Work is Changing 28LeadIng In busInessAdapting Organisations for A Volatile World 34Corporate Leaders: More Different Than Similar 40Building the Corporate Mosaic 44Building Effective CEO Succession in Asia 49LeadIng PeoPLeDriving Sustainable Growth in India ThroughHuman CapitalA Human Capital of Excellence 55 60 71 Are Chinese managers ready for global corporate leadership?Cultivating Leaders in Asia: The GE Experience 66Growing Chinese Managers for Global Leadership 71LeadIng seLfBecoming a Global Leader: Melding the Best ofEast and West 77Reflections on Leadership 82Cultural Intelligence and Your Bottomline 84 HCLI seeks to help organisations accelerate humanresearch revIew capital and leadership development in Asia.Asian Expats in Asia: Neighbours and Strangers 88 All Rights Reserved. No part of this publicationDoes Human Capital Really Matter? 91 may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without written permission.
  3. 3. research revIew 01 | Asian expats in Asia: Neighbours and strangers In pioneering research on the distinctly different experiences of leadership in China and Indonesia, Hori Tjitra, Hana Panggabean and Zheng Jiewei explain that it can be as challenging for an Asian to adapt to another Asian country as it is for an Asian to operate in another continent. T he signing of the China-ASEAN Free Trade Agreement last year created the third largest free-trade ures, there are major differences in work values and leadership expecta- tions. More significantly, we found zone and the world’s biggest pool of that failure to understand such dif- consumers. By removing or harmonis- ferences can result in damaged rela- ing economic barriers such as tariffs, tionships and impaired performance. trade and investment is expected to grow. Anticipating the benefits, former Philippines President Gloria Macapa- chInese vs gal-Arroyo hailed it as a “formidable IndonesIan regional grouping” to rival the Unit- LeadershIPDr Hora Tjitra is ed States and the European Union.currently Associate Yet our research in China and In- Based on our research, work is ofProfessor at ZhejiangUniversity in applied donesia shows that trading with fel- central importance to the Chinese.psychology low Asians is just as culturally chal- Achieving goals or targets is criticalDr Hana Panggabean lenging as trading with the West. to career advancement and financialis postgraduatestudies Director at Based on 57 comprehensive inter- reward. Chinese leaders typically setAtma Jaya Indonesia views with Chinese and Indonesian long-term goals and avoid uncertaintyCatholic University business leaders and their co-workers, and risks. They tend to work hard,Zheng Jiewei is we found striking differences in lead- sacrificing short-term interests for fu-Project Manager andConsultant at Tjitra & ership and communication styles. ture gains. They seldom celebrate smallAssociates, China. While both cultures are extremely successes while routinely investigating hierarchical, in which employees are failures, meting out tough sanctions prepared to submit to powerful fig- against those deemed to be at fault,88 Asian Expats in Asia
  4. 4. If I don’t have a good job, I cannot be happy. I will not go out to meet my friends, as I will lose face. a chinese respondent’s view on work Work is work. Life is Life. It is ok if my salary is not high – I can still enjoy life with my family. an Indonesian respondent’s view on workusually by cutting wages. Dissatisfac- extremely long hours. And when they Chinese leaders tend to retreat, frus-tion with poor performance is often fail to meet their targets, they expect to trated at the supposed poor work ethicexpressed directly through direct con- be punished. Indeed, the ideal Chinese of the Indonesians. Rarely do theyfrontation. They are highly directive leader is the polar opposite of the ideal understand that their own “Chinese”when dealing with staff whose opinions Indonesian leader. leadership style has demotivated theirthey rarely consult. Indonesians expect their leaders to staff. By contrast, our data suggest that be “halus” or soft, rather like a domi- While their Indonesian staff of-Indonesians view work as but one as- nant yet emotionally distant father. ten admire Chinese working valuespect of their life and are much less Those who behave like the archetypal as “hardworking”, “disciplined” andtask-focused. They are more likely to “strong” Chinese leader are deemed “entrepreneurial”, recognising thatcultivate a comfortable working atmos- “kasar” or rough and are perceived as such attitudes “get the job done”phere. Rather than viewing failure as an weak, uncivilised and uneducated. In- they object to their harsh managerialegregious error, they tend to view it as donesian workers often characterise the style. Indeed, Indonesian staff, un-a “lesson” to be evaluated. Their toler- ideal relationship with their managers like Chinese staff, are more likely toance of mistakes makes them reluctant as being like ‘kekeluargaan’, or fam- rebel against a manager who fails toto apply strong sanctions on others. ily, in which there is unconditional ac- meet cultural expectations.Mild rebukes in the form of “jokes” are ceptance and trust. Highly controllingmore likely to be used to convey dissat- managerial behaviour is viewed as a signisfaction. They often seek the opinions of mistrust. The importance of good MethodoLogyof their staff, although their questions relations with immediate supervisors istend to embody the answer they are typically emphasised by Indonesians.seeking. Still, their staff perceive that This researchthey are appreciated and listened to. project adopts chInese Leaders the “grounded theory” In IndonesIa, approach. “GroundedchInese vs IndonesIan Theory” emphasises the generationIndonesIan Leaders In chIna of theory from data, and generallyeMPLoyees adopts a four-step approach In our study, Chinese managers in involving 1) data collection, 2) Chinese employees in our sample ex- Indonesia struggle to motivate their data categorisation, 3) grouping ofpect their managers to be authoritarian staff and as a result are typically dissat- categories, and 4) theory creation.and to possess deep technical mastery. isfied. When they belatedly realise that Increasingly, data analyses softwareLike their managers they are strongly emotional outbursts and controlling like “ATLAS.ti” are used to help codeoutput oriented. As long as they feel behaviour undermine their authority, and group data.fairly compensated, they willingly work Asian Expats in Asia 89
  5. 5. research revIew They are more inclined to resign from a job, even if it means unemployment, if they dislike brIdgIng dIfferences the manager. Even when Chinese companies pay higher salaries than Indonesian companies, Indo- Do not underestimate the cultural challenges of nesian workers will prefer remaining with their In- Asians operating in other Asian countries. We donesian employers. As a result, in a nation where may be neighbors, but we - all too often – are the employees are renowned for their loyalty, Chi- also strangers to each other. nese leaders often experience the unusual problem of high staff turnover. Our interviews suggest that Indonesian managers in China tend to be facilitative, typi- • Leaders should invest in learning the language of the country in which they are working. cally coaching and mentoring their staff. Chinese workers typically appreciate this familial and car- ing managerial style. However, they are even more appreciative when Indonesian managers try to un- • It is important to strike the right bal- ance between authoritarian and par- ticipative leadership styles. Indonesian leaders might need to become morechinese leaders operating in Indonesia decisive and firm while Chinese lead- ers might focus on increasing the par-need to understand the principle: ticipative domain.“to move fast, you need to start slow” derstand Chinese regulation and corporate prac- tices, particularly regarding remuneration. • Both sets of leaders need to under- stand the different values that each culture places on the nature of work. Still, Indonesian managers struggle in China The two quotes below illustrate accu- to win recognition as leaders. They are often per- rately the different views that Chinese ceived as ‘soft’ and ‘indecisive’ by Chinese workers, and Indonesians have regarding work: due to their facilitative approach, failing to earn -Chinese participant: “If I don’t have Chinese workers’ respect and trust. Indonesian a good job, I cannot be happy. I will cautiousness and reluctance to intervene in busi- not go out to meet my friends, as I will ness details is often perceived by Chinese workers lose face.” as deficient technical expertise. Chinese workers -Indonesian participant: “Work is also demand equal treatment, especially regarding work. Life is life. It is ok if my salary is pay, and are quick to express their dissatisfaction, not high – I can still enjoy life with my especially if they perceive that Indonesian staff are family.” paid more. Such dissatisfaction can undermine a manager’s credibility. Chinese leaders operating in Indonesia need to To bridge the cultural gap, Indonesian manag- understand the principle: “to move fast, you need ers learned Mandarin prior to arriving in China. to start slow”. It is critical for Chinese leaders to However, many fail to master the language suf- first build strong relationships with the Indone- ficiently for daily working situations. As a result, sian employees as that will set the foundation for communication is difficult, instructions are not strong results subsequently. fully understood, messages are not conveyed, etc Indonesian leaders operating in China need toThis research projectis supported by and processes break down. Targets are attained, understand the principle: “to be kind, you mustHCLI. The full but not done in the way Indonesian leaders be tough”. It is essential for Indonesian leaders toreport and researchfindings are available have expected. For instance, an Indonesian vice be seen as strong and results-focused. This willat HCLIs website. president working in the chemical industry said help win the respect and good-will of their Chi- he struggled to make his workers comply with nese employees. health and safety procedures.90 Asian Expats in Asia