Asian and American Leadership Styles: How Are They Unique?

From HBS Working Knowledge - by Professor D. Quinn Mills

"The rapid economic development of Asia in recent decades is one of the most important events in history. This development continues today and there is every reason to anticipate that it will continue indefinitely unless derailed by possible but unlikely international conflicts. At the core of Asian economic development is its business leadership - managers and entrepreneurs who sustain and create Asian companies. Do they exhibit the same leadership styles as top executives in the West?

There are important differences. Are differences attributable to different cultures or to different stages of corporate development?

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Family and political connections

Cultural differences are important, but primarily as a matter of emphasis. For example, family leadership of business enterprises, including large companies, occurs in very similar ways in both [regions], but is more common in Asia.

Li Ka-shing [of the Hong Kong-based Hutchison Whampoa and Cheung Kong holding group], for example, runs his companies closely and is planning to pass the leadership of his firms to his two sons. Similarly, the heads of some of America's largest firms, both publicly held and private, are the scions of the families that founded the firms.

There is less freedom of action for executives and boards in America than in Asia. But more common in America are firms that are run by professional managers who are replaced by other professional managers, either as a consequence of retirement or of replacement by the board of directors of the firm. The better companies have sophisticated programs for developing executives within the firm, and ordinarily choose a next chief executive officer from among them. American CEOs average about thirty years with their firms and own less than 4 percent of its shares."

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