What does « committing » mean in the business world ? Arguably, every company across the globe wants managers that fully support its goals. However, approaches to commitment vary greatly from a country to another…
Without commitment from managers, business initiatives often fail. Today, companies must reduce their costs, strengthen customer relations while improving safety standards. If management doesn’t support the company’s goals, the chances of success are slim. Although few companies across the world would argue that commitment from managers is necessary, the definition of commitment may not be the same from one continent to another, nor are the reasons why managers commit. To us French people, or Europeans, there is perhaps one territory where the notion of commitment is furthest from ours : Asia.
In Korea and China, where many large companies are family-owned, the commitment from managers tends to stem from a loyalty to family members and colleagues, according to Professor John Benson, Head of the School of Business at Monash University, in Malaysia. “ The owner, and subsequently their children, appoint family members as managers. In addition, managers working in these companies are often from the same town or city, or the same school that the founder attended. As such there is a strong trust and cultural link between the most senior company personnel and managers. I suspect that if one was to study all of Asia, you would see similar systems in some form or another.”
Many companies and managers are now realising that the responsibilities of corporations should be much larger than their disposition to make profit and to enrich the managers and shareholders
Eddy Souffrant, Professor of philosophy and applied ethics at the University of North Carolina at Charlotte.
This sense of commitment to family or to colleagues is perhaps even stronger in Japan. “The major underpinning of employment in companies is the internal labour market. People join a company straight from school. Over the years, they’re rotated through different departments, gain a more holistic understanding of the company, and gain increases in salary. So, by the time they become a manager, they know many of their cohort, and the company becomes like a family. The difference in pay between a senior executive and the lowest paid employee is a lot less than what you’d find in the U.S., Australia or the U.K. So, they take on these jobs with a great sense of obligation and loyalty to their fellow workers. They feel they have a responsibility to contribute back,” adds Mr Benson. He believes that in Japan, and to an extent the rest of Asia, the lack of competitive wage rates for senior managers suggests that managers are committed to the company for other reasons that purely financial gain. “There appears to be a very strong management commitment that is a product of a range of factors. Certainly in Japan, the reliance on the internal labour market means that by the time an employee becomes a manager, he or she has invested a lot in the company. And for those wanting to move, the options are quite limited.”
Beyond profits above all
While in Asia, commitment appears to stem sorely from a sense of duty to colleagues or family, on the other side of the spectrum, the U.S. seems to place a strong emphasis on rewarding commitment financially. “ In the U.S. there is a sense of duty as well. However the sense of duty is not necessarily seen as a duty to employees, or to the society at large, apart from ensuring the employees’ basic welfare so that they can best do their work. The sense of duty consists in primarily making sure that the organization maintains its profitability,” notes Eddy Souffrant, Professor of philosophy and applied ethics at the University of North Carolina, in Charlotte.
Mr Souffrant cites the work of Robert Reich, the former labor secretary for Bill Clinton, who believes that the large wealth gap between workers and CEOs currently observed in the U.S. is partly due to the fact that corporations increasingly minimized their responsibilities to society. “The decrease in corporate social responsibility, according to Mr Reich, was triggered when it became clear that lobbyists and moneyed individuals could influence politicians to support laws that would allow corporations to seek as much profits as possible,” explains Eddy Souffrant. However, he notes that increasingly, there has been an attempt to balance the needs of shareholders and the needs of society. “Many companies and managers are now realising that the responsibilities of corporations should be much larger than their disposition to make profit and to enrich the managers and shareholders. This is a different sense of duty and commitment.
In Japan, the reliance on the internal labour market means that by the time an employee becomes a manager, they have a lot invested in the company
John Benson, Head of the School of Business at Monash University, Malaysia.
It is one that moves away from the pursuit of profits above all and instead promotes an expansive sense of corporate social responsibility.” As a result, many american businesses have started to institute a sense of ethics by way of training, or have adopted environmentally friendly processes.
In Latin America, there are parallels with the situation in the U.S.: “ the world has increased communication, all countries in the world are influenced by others. Management is also influenced by the currents of countries that we consider successful: new ways of working, technology and even ways of life including ethics and morals,” explains Ricardo Varela, Doctor of philosophy in management at the UNAM university in Mexico. However, commitment from managers tend to originate from authority and a strong vertical management structure. “ The difference with the U.S. and elsewhere, is that in Latin America, management styles are oriented towards autocracy. Our history has common features; we were conquered and subdued ”, he explains. Despite these differences, all three professors agree on one point: universities have a key role to play in training ethical managers that will commit to the success of their company, as much as to their responsibilities to society.