Comparison of Business Management in India and America Research Paper

Introduction

Table of Contents

Studies show that the effectiveness of any organization is determined by the way the organization is structured and the way employees in the organization relate with each other in the workplace, how they cooperate with the management of the organization and the community as a whole. Certainly, the level of their dedication to their organization depends on the management style of the organization. In the current modern world, industrialization, and technological advancement have created a highly competitive global business environment that calls for close working relations from different experts who come from diverse cultural backgrounds. To Lodge (1995) management styles of an organization will highly depend on the size of the organization and the culture of the organization which is highly dependant on the country’s culture.

Management style in India

The fast economic development of India in the recent past is among significant events in world history. This economic development continues even currently and there is the very reason to believe that it will continue. At the base of India’s development is its business management style. Entrepreneurs and managers do they have the same management styles as those in America? Of course, there are some significant differences, probably these differences can to attributed to the different cultures between the two countries or can be due to the different stages in which the corporate are at. In India, many organizations are family businesses and the management stresses authoritarian kind or management style. General the relationship between the management and employees does not foster a democratic management style. Therefore the main management style in India is authoritarian. (Lodge, 1995).

Authoritarian (Autocratic)

This is also called a formal type of management. In this type of management, the manager simply orders employees how he or she wants the work done and what he wants employees to do without getting their views. This management style is effective when the manager has all the information that is important or necessary to solve the problem. The authoritarian style of management is not all about threatening employees or using abusive power. It does not also involve the use of demeaning language. When this is done, it can be termed as bossing around. A manager’s repertoire need not include this. (Thomson and Rampton, 2003).In autocratic management, there is a high level of supervision. It follows policies very strictly and is characterized by authority motivation. There is instilling fear in employees when this type of leadership is used. This also creates a culture of dependency on the leader. According to research, when this leadership style is used, there is very low efficiency. However, there are various instances when autocratic leadership can be used in an organization. For example, it can be used on an employee who is new in an organization and is still learning more about the job. (Thomson and Rampton, 2003).This management style dominates; the results are normally not the best. When the management style has command and control, it always drains off the employees’ ambition. They simply become less motivated. This makes employees perceive the manager as being bossy. This management style is used when managers in an organization want to have full power in decision making. This management style may be essential especially when the time at hand is very minimal to incorporate employees’ views. Authoritarian leadership also includes managers making all decisions. (Thomson and Rampton, 2003).

Management style in America

In America which is a democratic country, we find a different variation of organizations styles ranging from those that are slightly participative to those that are completely participative. The authorities in the country value participation most, for example, the Taft-Harty Act gives limitation to strike, thus shifting the task for declaring workers strike from the organization to the labor union head office. On many occasions, a cooling-off period is prearranged which delays the strike giving both the management and the workers some time to negotiate and reach an amicable solution. Management styles in America are much more varied than in India, organization styles in America are mainly five; Directive, participative, empowering, and charismatic, and celebrity. All these styles have one common aspect which is democratic leadership. (Newstrom, 1997).

Participative (Democratic)

Participative management style involves other people in the decision-making process. The manager in this case can include the employees when making decisions for the organization. This involves making decisions concerning what should be done and how the tasks should be done in the organization. This does not mean that the employees make the final decision. It means that the manager considers the contributions of the employees but comes up with a final decision. Research shows that using this style doesn’t mean that the manager is weak. In most cases, employees prefer this management style. (Handy, 1985).In participative leadership, there are involved stakeholders like investors, superiors, peers, and even subordinates. This mostly depends on the manager concerning whom to consult in the specific decision-making. Different people can be consulted at different times. The degree of influence on the decision-making is mostly influenced by the manager himself. Sometimes a manager can give the employees full delegation of decision-making depending on the situation at hand. (Handy, 1985).Handy (1985), states that participative leadership can involve the manager simply selling the idea to the employees in the organization. For instance, the goals of an organization can be elaborated to the employees. They in return help in giving tentative solutions on how the goals can be implemented. Participative leadership has got very many benefits as compared to autocratic leadership. When managers ask for views from employees they should not just do it for the sake of it, then fail to work upon it. This is because it can lead employees to feel that their views are not valued. It can also perpetuate feelings of betrayal on the employees’ side. This type of leadership has its disadvantages. This is very evident when there is a wide range of opinions to be considered. In this case, coming up with the final decision becomes quite hard and takes a lot of time to arrive at a decision. (Handy, 1985).Research shows that this management style always has better results or effects on an organization. This style of leadership normally comes along with mutual benefits. This is because it allows the employees in an organization to be part of the team. On the other hand, the manager is in a position to make better decisions. In such a case the manager feels he did the best at hand having had employees’ contributions and hence there is little room for frictions from the employees. (Handy, 1985).

Comparisons

In India, many organizations are also family businesses thus run by the family. The leadership of the organization is passed to the family members even if in a case where they lack professional management knowledge. In the same way presidents of some of America’s big organizations are the sons of the founders of the family. However, there is a lot of freedom for managers working in America than in India. In addition in America, firms are managed by specialized managers who in many cases are replaced through other specialized managers, when they retire or as a directive by the board of directors. Other organizations with a good management structure and leadership ladder simply select replacements within the organizations. In many cases, the CEOs of these organizations have vast experience with the organization spanning for over 20 years in some cases. (Hill, 2005).Hill (2005) states that in America as opposed to India many organizations are at a later stage of development and mainly depend on capital markets. Whereas, in India, many organizations depend on getting capital from the government. This aspect has created the management of organizations in India to have a bigger say than those in America. It is also clear that the American management style is more democratic than the management of India which is in most cases autocratic. (Hill, 2005).

Conclusion

Management styles in an organization differ following the culture of the organization. Another influencing aspect of the management style is the size and ownership of the organizations. In India, most organizations have adopted an autocratic management style which gives the management a lot of power in running the organization. However, in America, most organizations are more democratic in their management styles and uphold participative management styles. Hill (2005) observes that over the last years, globalization has had a remarkable and extensive impact on the Indian management style, policies, and leadership culture. Thus, currently, there are emerging changes that are occurring in Indian management style both on the micro and macro scale.