The Morning Risk Report: How Asian Management Culture Affects Risk

Wall Street – street sign with building and charts in the background

By Ben DiPietro

A report this week of more than two dozen executives in South Korea offering to resign in the wake of a data breach that could put the personal information of more than 100 million cardholders at risk points to a difference in eastern and western business cultures—as there have been no offers of mass resignations following the Target Corp. breach that exposed information of 110 million cardholders.

Both David Clive Price, an expert on Asian business culture, and Gayle Cotton, an author and president of the corporate training company Circles of Excellence, say the differences in culture are based on the importance Asian nations place on the team over the individual and on saving face, or “preserving the surface of things,” as Mr. Price put it.  “The result is that ‘shame’ in the sense of an executive falling on his or her sword is felt more acutely, and more as a gesture to the collective spirit than in the West,” he said. “Also, many Asia companies are family-owned and –run with less attention paid to shareholders. So there is a complete set of comparatively different values and priorities at work.”

Ms. Cotton said the Asian way of doing things is not necessarily better than the western way, and can lead to problems if an entire team of executives resigns and leaves the company without the experience and knowledge to handle and move on from a crisis. It also may lead to executives trying to keep problems hidden to avoid the shame they will bring on the team and the company if they are made public. “I wouldn’t say they are necessarily any more responsible than we are, they just relate to that responsibility differently,” she said. “Here we are eager we take responsibility and the risk that comes with that responsibility. But we take it in stride, it’s part of the job: you win some, you lose some. There, it’s not that way…the way they look at failure prohibits them from being able to do that. You need to win and you need to win fairly and you need to protect the team you’re winning with, that will give the entire organization face.”

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Coming on my blog

Cross-cultural article: Culural Clues, Do’s & Taboos on JAPAN

Coming on the Circles Of Excellence blog

Cross-cultural article: Cultural Clues, Do’s and Taboos on SAUDI ARABIA

Check out the Articles Archive ‘Cultural Clues, Do’s and Taboos’  for countries you may have missed!

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