Modern world business decisions

People from many geographical places must make business judgments in the modern world.

The process of developing ideas differs among cultures since there are various aspects that affect and influence decision making. Germany and Japan have considerable variations in management, leadership, and communication competencies (Schwartz, 1999).

The working environments in different nations differ due to differences in cultural customs and norms.

Leadership is primarily responsible for decision-making. Germany, for example, is seen as a country that employs a systematic approach to administration and governance (Sweeney & Hardaker, 1994). Therefore, major decisions call for direct consultation and assessment. However, it is possible to have a parallel drawn with Japan on the same line. Nevertheless, Japan is country where the leadership focuses on the performance of the entire group. Japanese companies do not reward individuals for their performance but the entire group.


The concept of culture refers to the lifestyle and customs of a certain group including their living practices, the language of a community, values, beliefs and behavior of social members (Inglehart, 1997). The notion comprises the implicit and explicit rules that help in the interpretation of experience. The understanding of culture assists in establishing a relationship and interaction among individuals in international business. Therefore, cultural background, practices and rituals of a country have to be taken into consideration on the global business platform. Thus, it becomes possible to interact and transact effectively in this market environment.

Intercultural Competence

Intercultural competence relates to the ability to appropriately and effectively communicate with individuals that belong to other cultural backgrounds (Schwartz, 1999). Effective cultural interaction entails focusing on the norms, rules, rewards, goals and expectation of the relationships that are created. An individual who is competent in intercultural communication is the one able to comprehend the concepts of acting, feeling, thinking and perception of people from other cultural backgrounds. The concept consists of three elements, which include skills, knowledge and attitudes (McCall & Hollenbeck, 2002). The last one entails discovery, respect, openness, and curiosity. Knowledge comprises cultural self awareness, grasp of the global trends and issues, and socio-linguistic awareness. Respectively, the skills include observing, listening, and evaluating while utilizing perseverance and patience when considering the world from the perspective of others.

Four parts have to be balanced in intercultural competence.

These are empathy, knowledge, cultural identity, and self-confidence (Kieser, 1990). Cultural competency is essential in different areas that include law enforcement, public service, health care, customer service, and education. Such depicts that an individual is able to manage the diversity that exists within the surrounding environment.

Leadership Competence

Leadership competencies relate to the behaviors and skills which assist in the attainment of a superior performance in the organization. When organizations utilize the approach of competency in their leadership management, they get a promising opportunity to achieve success and increase the number of leaders in their next generation (Lincoln, 1990). However, not all the capabilities of leadership are vital in firms. Therefore, the firms have to define its attributes, which could be distinct, as well as try to contribute to the attainment of a competitive advantage.

In cases of global firms, the competencies include skills on cross-cultural communication, global mindset, stable personal life, ability to handle complexity, cultural sensitivity and interest, integrity and honesty, business or value-added technical skills, and respect for the cultural diversity (Brownwell, 2006).

These are vital in ensuring that a firm is able to achieve its desired success within the international workplace.

Leadership Competence in Japan: Characteristics, Challenges and Opportunities

Japan society is founded on Confucian hierarchy. The top management and leaders in all companies follow this social structure. However, they have minimal involvement in the daily activities of the company. The leadership management gets to the initiation of polices that are passed to the middle managers who file and rank them (Brownwell, 2006). Such situation occurs due to the fact that it is the subordinate employees who assist in brainstorming ideas. The next step consists in collecting workers' signatures for middle managers' suggestions, and, eventually, the inventions are ready to move up to consideration of the higher ranks of the company. Hence, the Japanese management style involves groups of employees in the decision-making process and that can be considered as its significant advantage.

The Japanese system is also known to offer life employment guarantee as a reward for the workers who show loyalty and commitment to the group interests (Schwartz, 1999). Therefore, employees are not able to leave their job positions in spite of the fact that officially they have the choice to do it. The population in Japan can be considered homogeneous, as far as it is closely connected by social values and the same language (Kieser, 1990). This quality facilitates the process of closed social systems establishment in relationships among groups, companies, and political interests. The decision-making involves the participation of all workers in a bottom-up approach. The challenge is that decision-making process becomes lengthy, which is not comparable to the short process experienced in Germany.

The embraced decision-making strategy entails empowering and involving employees while avoiding confrontations (Inglehart, 1997). Thus, leadership has to focus on groups so that they could have the potential of attaining common objectives and get an equal reward for the same achievements. Generally in Japan, individuals are rarely rewarded, and promotions are aimed at enhancing harmony in the group. This aspect of a working process is also dependent on the managers' attribution. In fact, they have to use all their intellectual experience and capabilities to ensure that all team members have the ability to work effectively in order to achieve their potential goal (Schwartz, 1999). This convention depicts that the system of leadership in Japan is based on group responsibilities and participative methods. Therefore, managers from Germany have to comprehend the expectations of workers on team processes and leadership.

Management Styles in Japan

Japanese firms have a hierarchical way of organization where individuals in the business firms are aware of their positions in relation to each other and the group to which they belong (Hofstede, 1993). Thus, life time employment is a common practice in this community. In this case, a management style includes collective decision making, collective responsibility, high level of self-discipline, implicit mechanisms of control, and holistic concerns on an individual.

It is the focus of the Japanese management that the information starts to flow from the lower levels of the company to the upper levels (Brownwell, 2006). Considering this fact, the senior board team in these organizations has a supervisory role instead of hands-on approach. This fact makes it possible to generate the policies for the company from the middle-levels prior to being passed to the upper sectors for ratification. The leader has to adhere to the existing structure in order to ensure that there is no conflict between the organization and its employees. Such a structure also makes workers feel as a part of the organization as far as they are provided with the opportunity to participate in the process of formulating company policies.

A Japanese manager is required to focus on establishing the environment in which the whole group will be able to work effectively. Such a state could be achieved in case when the manager could be accessed 24/7 and is always willing to share knowledge and information with the group (Inglehart, 1997). In addition, this approach helps to ensure that team members have the potential of keeping the manager updated on the milestones, which are experienced or could be expected to arise in the company. Among the Germans, the instructions provided by Japanese managers could cause frustration and confusion (Kieser, 1990). Such difficulty emerges due to the variation and diverse tendencies in their communication styles.

Therefore, the Japanese are always concerned about collective interests and work primarily in order to realize the goals and objectives of the organization effectively, instead of achieving individual goals and objectives.

Similarly, the groups are focused on accomplishing specific aims of the company as well. It is the role of the company leaders to focus on creating team synergy in order to improve on the output level. Achieving this result is vital since Japanese rarely focus on individual performance, but on that of the entire group.

The Role of Authority in Japan

In Japan, business hierarchies are considered to be an essential part of the work environment. Therefore, they play a significant role the way how different organizations in this country are controlled and managed (Hofstede, 1993). The Japanese have a strong belief that a person should not try doing anything below or beyond their status. Such a perception is common for the entire corporate culture of the country. There also exist certain strict lines, which are drawn to define the scope and functionalities of the different positions and designations in the organizations. Such social systems are based on the consensus and cooperation among the Japanese people.

In addition, the Japanese focus greatly on saving their face. That means that they prefer not exposing personal problems and challenges in the business world to other people. Thus, the common practice among Japanese people is to use polite methods of communication with foreign businessmen instead of making them lose their face (Inglehart, 1997). The community believes that rejecting the request of another person contributes to embarrassment. Therefore, when it is impossible for the Japanese to agree to the offered requests, they normally say something like "it is under consideration" or "it is inconvenient."

By "face" they mean a person's dignity. The most tactic and proper behavior and appearance symbolize high status among the peers. Thus, the Japanese focus on making the deals that provide a stiff opportunity to maintain a tolerant interaction and never lose the face (Lincoln, 1990). This custom illustrates the reason why the society rarely engages in criticizing or insulting or even putting an individual on-the-spot. When the individual is forced to lose their reputation and respect, the Japanese primary goal will be to return them this right. Therefore, saving the face is a very critical issue in Japan.

Leadership Competence in Germany: Characteristics, Challenges and Opportunities

Germany is a country that has achieved significant results in terms of its leadership styles in the work environment management. That can be concluded from the fact that there exists a clear command chain on departments such that instructions and information regularly flow from the seniors to juniors (Brownwell, 2006). Thus, a vertical structure exists in the department, but the general consensus is highly valued as well. Hence, a leader has to adhere to this and motivate their staff by insisting on the fair play, obeying rules and working long hours.

Germany leadership emphasizes the process of decision-making in order to achieve the desired success in society. The involved people have a great chance of ensuring that the final outcome is obtained in the process of formulating the ideas. Egalitarian and informal organizational environments create a relaxed atmosphere. Hence, the leadership should focus on avoiding conflict, respecting the feelings of other people, and providing the opportunities for free decision-making (Hofstede, 1993). While the Germans have great value for their leisure time, the Japanese have another way of understanding how it should be utilized by the leaders.

The embraced leadership competency focuses on ensuring that there is an open dialogue in addressing different aspects of the organization. Such includes having self-discipline on all the activities, embracing consensual decision making strategy, and emphasizing on team effort and participation. The open dialogue ascertains that all leaders have a chance of making the employees become productive within their work environment.

Management style in Germany

Managers in Germany have a demand of exhibiting higher levels of technical capabilities in their areas of work, as well as show clear and strong leadership qualities. The subordinate's employees focus on respecting their superiors ((Brownwell, 2006). The outcome of such respect is that these juniors have a low willingness level to engage in the implementation of different instructions within their work environment. Further, the manager has to delegate responsibility to a team member who has a high level of technical competency in execution of a given task. Such an individual then completes the task without supervision and interference in their work (McCall & Hollenbeck, 2002). Such a situation can only be only achieved when the instructions that are provided are unambiguous, precise, and clear.

Further, a manager in Germany is required to focus on achieving two objectives, which are the service and quality of the product.The aim is to ensure that the company is the best one and the  products are the highly preferred ones in the market team (Inglehart, 1997). Such managers also take into consideration customers' satisfaction with the product and the service. Hence, responsiveness, quality, follow-up, and dedication are vital elements of consideration when focusing on the management style common for Germany.

Comparison: Differences and Similarities

Japan and Germany are two countries, which have developed excellent skills in engineering and leadership in craftsmanship and manufacturing (Brownwell, 2006). Generally, employees in these nations are always serious with their work responsibilities, therefore, they can be defined as reliable and trustworthy. The two countries have a similarity which is related to participative leadership. The decision-making process here is based on group majority and participation from behalf both of the leaders and their subordinates. Further, Japan and Germany have a similarity in ensuring a proper good separation between professional and private life of the leaders (McCall & Hollenbeck, 2002). It is also the focus of the leadership in these countries to ensure that confrontations and conflicts do not occur among the people who are working in the company. Therefore, the performance of the companies is significantly improved in all these sectors.

However, Germany has a systematic approach in administration and governance when it comes to making decisions. Thus, direct consultation and assessment with the executive or the leader is required before a decision is made. On the other hand, Japan does not have a systematic approach in making decisions (Lincoln, 1990). Those are made from a bottom-up approach, but a strong respect for the hierarchical order in society and organizations should be noted.

In Japan, professional life is highly valued as compared to private life while Germany values personal way of living rather than professional work. The responsibilities of the leaders are focused on an individual in Germany while they are focused on the entire group in Japan (Inglehart, 1997). The reward, which are offered for the achievement at work in Japan are based on the entire group while in Germany they are primarily related to the individual successes. In Germany the rejection of an individual due to the system hierarchy is unacceptable while the Japanese ranking structure is based on age and gender of a person, and no individualism at all is allowed among the leaders.

German managers are effective in decision-making while the Japanese leadership is rather slow when it comes to deciding. Such a situation is due to the fact that the Japanese often take a lot of time gathering information and engaging in consultation with individuals from different levels of the hierarchy in the organization (Hofstede, 1993). Further, the leadership in Germany does not care about the existing or possible personal relationships when making decisions or doing business. In contrast, the Japanese leadership is more concerned with individual interaction in the entire process of idea generation in the organizations (Sweeney & Hardaker, 1994). It is expected that decisions should contribute to establishing and maintaining strong personal relationships. The greatest emphasis is made on the fact that relationships in Japanese companies have to be established in the business environment in order to achieve the desired collective success.

Hofstede's cultural dimensions help in distinguishing the leadership competencies between Germany and Japan. Japanese have a high power distance in comparison with the Germans. The high power distance in Japan is deeply rooted in the tradition and culture of their society. And first of all, this trait is experienced in the working environment where employees are required to obey and respect their bosses with no objections (Brownwell, 2006). The response of the leaders is that they have paternalistic attitudes, which result in rigid and hierarchical organizational environment. On the other hand, Germans have a low power distance, which indicates that the society is decentralized with flatter organizational structures (Sweeney & Hardaker, 1994). Thus, employees are loyal to the firms according to their sense of organizational confidentiality. Leaders focus on teamwork and involve themselves in the group projects to contribute to the attainment of high-quality products and services in society.

Based on individualism dimension, Germans have a higher individualism index as compared to the Japanese (Hofstede, 1993). In Japan, the leaders establish mentor relationships with subordinates. This includes being involved in the entire personal life of the team members. One should note a strong emphasis on group harmony in this society, which helps in the attainment of equality among individuals. By contrast, Germans have a great tendency of people being themselves and not looking at what is happening in society (Sweeney & Hardaker, 1994). The leaders are independent and aim at achieving individual job goals, and in case any negotiations emerge, they are directed to the committees.

In fact, Japan is considered as a highly masculine society (Brownwell, 2006). There is a community belief in expansion, achievement, and survival for the fittest. Thus, leaders focus on successive businesses characterized by longer working hours. In contrast, German leaders belong to a rather feminine society. Hence, leadership has great value for their recognition, earnings, challenges, and advancement in society. The differences in the cultural practices help international firms find their way to overcome the possible problem of cultural shock when their employees are placed in such environments.


In conclusion, decision-making and leadership in different cultures influence how the business processes and activities are carried out. Therefore, it is paramount for individuals who are focused on conducting business in such regions to understand the cultural practices. Germany and Japan are very different in terms of cultural approaches and expectations in the leadership sector. Thus, a leader engaging in international management of a firm should comprehend the cultural practices of the community.

Currently, a leader in an international environment has to consider addressing several dynamically changing factors which include legal, economic, political, ecological, and technological ones. Leadership skills and competence have to value and recognize the foreign culture. Considering the cross-cultural management challenges, leadership at international levels has to aim at operating and designing systems, strategies, and ways of working with people in order to establish a competitive advantage. Such a competitive advantage in the multinational environment should be supported with impeccable cultural and communication skills.


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Inglehart, R. (1997). Modernization and Post-Modernization: Cultural, Economic, and Political

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Kieser, A. (1990). Organizational culture. Handbook of German Business Management, pp. 1576-81. Berlin, Germany: Springer.

Lincoln, J. (1990). Japanese management in the U.S.: A qualified success. Journal on International Trade and Automotive Issues, 8, pp. 14-18.

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international experience. Boston, MA: Harvard Business School Publishing.

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