Why Asian Managers Display Short Term Thinking

This report show case an insight of Asian managers in context to India, who display short term thinking by operating unethically. It is also highlighting how cultural values, behaviours and attitudes along with organisational, political, economical and social factors influence Asian managers to operate or behave unethically. This report is also providing recommendations to help managers overcome the challenges in order to perform fairly and ethically.

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Ethics, by its dictionary meaning, is known as a branch of philosophy dealing with values relating to human conduct, with respect to the rightness and wrongness of certain actions and to the goodness and badness of the motives and ends of such actions. From this definition we can derive that Ethics is something that is instilled in us from our childhood in terms of good thing or a bad thing. However, good and bad is also further influenced with cultures and values. There is a possibility that something good for one culture perhaps not considered good for other culture.

Ethical behaviour is derived from Ethics and perceived as any action to perform a task in a right way (as per Culture, Value and other factors). In our daily routine, we always try to display ethical behaviour; however, in some situations we tend to take decisions that are unethical. In a corporate environment, an unethical decision, affects various stakeholders of the business and can lead to a big trouble for organisation, brand and business. To avoid any immediate financial, social, legal impact, we try to get into shell and look for short term solutions to the issue.

As a Manager, we need to understand ethical issue and how to deal with it. There is a perception, that Asian Managers display short term thinking by operating unethically. I will be discussing underlying reasons and recommendations to avoid them in the future. 2. 0 What is Business Ethics? In all the organisations, there are numerous employees who came with their own cultural values and attitudes. This sometimes leads to conflict among employees, thus creating an unpleasant environment in the organisation. Therefore, to avoid cultural conflicts and inverse affect of the same on business, employers should develop business ethics.

These ethics are clear guidelines of discipline for employees. The employers can include dress code, technology usage codes, code of conduct etc. to establish an effective business ethics. Business ethics lay a foundation for an organisation to work ethically and decide what is wrong and what is right in a business situation considering cultural values and behaviours. 3. 0 What is short term thinking? Before we proceed further, it is very important to understand what is short term thinking and Long term thinking?

Short term thinking (less than one year) is looking at the immediate gain or loss, however, in a long term thinking as a manager, a person is responsible to analyse the situation and identify long term (Tenure of more than a year) gains or losses and its impact on the stakeholders. 4. 0 Why Asian Managers operates unethically? The Managers, as per general definition, is someone who gets things done from others. Asian values and culture are basically different from Western values and cultures. Asian culture and ethics are dominated by Hinduism, Islam, and Buddhism.

These religions basically emphasize more on collectivism instead of individualism. These cultures have described man as a head of the family, hence prefers Masculinity. Asians are high on context and consider relationships over responsibilities. They also follow a high power distance in organisations. There are many organisations which are being run by families. These values were being used for ages unless the Multicultural environment developed with advancement of technology. Many Western companies started establishing their businesses in Asia, and India was no exception to this.

India is second highest populated country and has scarce resources. It is also facing challenge of unemployment and poverty. These factors are majorly encouraging Corruption in all sectors of the economy. Corruption starts from the high levels in the ministry to a peon in an organisation. Everybody is striving to earn as much as possible and don’t let go any opportunity to earn profits. People are taking advantage of their position, status and resources and hence getting involved in unethical practices. In India, there are 2 types of organisations i. e.

Domestic organisations (Purely Indian) and International organisations (MNCs) and they both have different cultures and ethics. I got an opportunity to serve for both cultures and could easily differentiate them in terms of work culture, organisational ethics and values. I have observed that, Domestic sector in India is following a high power distance and has a hierarchal structure where all the business decisions are taken by the owners of the business. There’s no power with any other person in the organisation to take decision as they consider that ‘Boss is always right’.

All the employees are following the instructions of the boss and try to be as obedient as possible. They never stand up for anything wrong done by the Boss. Many a times, they are afraid of losing their jobs and being a high population country there’s a lack of jobs. I would like to mention here an example of Chartered accountant of my previous employer. A Chartered accountant is someone who is responsible to report any misinterpretation of the records by a company to government and shareholders.

He’s also responsible for encouraging business owners to report their income fairly to government. But, this is all bookish statements. In reality, Chartered accountants are helping organisations to hide their income or misinterpret their records to draw attention of more shareholders for profit. Our Chartered accountant used to come to office and modify the records in order to show a loss to the organisation. Sometime they used to misinterpret the records. Being an assistant accountant, I used to be part of the system due to the value of loyalty (loyal towards employer) and fear of job loss.

We could never raise our voice against our employer or the chartered accountant but basic fear of job loss and our values were stopping me and my colleagues. There was also a mindset that everybody is doing this and has been a general practice. Everybody does this, so why bother. India is masculinity oriented country and creates fear among the girls to go against the waves. There’s high crime rate against women in India. Therefore, generally girls follow what others are doing and continue to practice unethically.

Indian employees employed in a domestic sector; do not try to change the organisation as everybody is following the same practices. The Manager is also a part of the system and has the same fears and values. Hence, they also get involved implicitly. The domestic sector is generally, run by the families and their sole interest is to earn profits. Everybody is working towards maximising its profits. Managers are getting high rewards in terms of big bonuses, percentage in profits, extra benefits in return of getting more and more business to the organisation.

This rewarding practice makes them greedy and pushes them towards unethical activities to gain more and more profit. Being in a high context culture, people hesitate to report anything wrong to the management and instead prefer to handle the situation at their own end by bribing, hiding the defect or imposing the fault on someone else. They make sure their relationship with management is not affected. When management get aware of the issue they appreciate the manager for handling the issue without having an impact on the business and in return give him rewards. The bottom line is there should be profit by hook or crook.

There are no code of conduct, no policies and no regulations for anybody in the organisation. The employees come to office to earn their salaries and have no power to interfere management decisions or acts. Now, I would like to discuss about the International organisations (MNCs). In India, there is more US and UK based organisations which have clear code of conduct, policies and guidelines. These companies for the first time introduced flat organisational structure as they belong to low power distance. These organisations introduced performance evaluation, high targets oriented tasks, incentives culture in India.

This was very encouraging and exciting for Indians specially youth as a new dimension to work and earn their livelihood. With development of this sector, many new problems developed. Being a flat structure, managers started gaining and enjoy power. Top management started setting higher goals for the middle level management and middle management started imposing them on the junior staff. They started influencing associates by the way of incentives for higher performance, rewards for extra initiatives etc. They also had direct terminations for poor performance.

Managers started using termination as a tool to gain more productivity from the team. Team members used to be stressful and under pressure due to this policy. Although, it has a mechanism behind and complete procedures before a manager terminates someone. However, Team members in the fear of loss of job used to perform as much as they can. Also, the incentive policy wasn’t very much transparent. The managers used to penalise team members who try to oppose them or speak against them by not giving them enough recognition and rewards and used to satisfy their personal ego.

Managers were provided power to work in an ethical manner to achieve targets, but since they basically belong to a high power culture, they tried to follow old system by implementing that they feel is right. Managers used to favour who work according to them. Performance based appraisals is a very effective concept and can motivate team members to work with accuracy and Quality, as this is backed-up with data. High performance data, higher Customer satisfaction scores leads to higher rating with high increase in salary and higher bonus.

This concept is very effective in western organisations, but it brought many ethical issues in Indian context. Managers started manipulating data to gain higher bonuses without considering long term impact on overall business by reporting wrong data. The top management formulates policies depending on the data provided by the managers about performance and quantitative records. Incorrect data leads to inadequate targets and undue pressure to the team members leading to dissatisfaction in the organisation and low employee retention rate.

In India, there’s one more factor that influences managers to work unethically i. e. politics and power. I would like to share an example here. In Mumbai, there’s a political party that influences all the decisions in all the sectors in order to promote one society of Maharashtrians. This party started interfering in business and influencing business decisions. An MNC was operating from it Mumbai branch and was well known for quality staff and its delivery. This party enforced a rule that no MNC will hire people from other regions and community.

They will be hiring only Maharashtrians (A community in Mumbai). Due to political influence, companies had to follow the rule. They hired all Maharashtrians, disregard to their education and capabilities. The company’s performance went down badly and ultimately company had to shift its office to some other region. In this scenario, Managers were not in a position to stand by their organisations culture. People in power (Rich people) don’t care for anything and can influence business decisions to be in their favour by bribing huge amount and benefits to the organisations/managers.

In a nutshell, Managers are getting involved in unethical practices implicitly and explicitly due to the culture, attitude and values along with political and economic factors. They prefer to take short term decisions as it saves them from any immediate sufferings. In India, people change jobs very frequently, so they feel that we will play safe for the time being and then will change the organisation. The organisation will later face or manage the after impacts of his decisions. 5. 0 Recommendations Formulation of policies, code of conduct etc. is quite easy.

However, their implementation involves intentions and dedication of the top management in building a business culture of respect, appreciation and fair practices. Top Management plays a major role in successfully implementing policies and making team member and middle management comfortable and make them believe that Yes – We are there to support your decision. They should also be displaying the values and behaviours of the organisation. Below are the recommendations for the managers to promote ethical behaviour and encourage them to develop attitude for long term perspectives. 6. 1 Orientation at the time of Recruitment

Managers should conduct orientation for new hires where they are explaining about organisational values, mission and vision. They should also introduce some online surveys to measure the understanding of the values, mission and vision among associates. They can also put values, mission and vision on each associate’s workstation to remind them time and again. This way associates will start living the culture, vision and values of the organisation. 6. 2 Introduction of Unethical issue reporting system An organisation should have an ethical mailbox or some mechanism in the organisation where associates can report, an unethical issues secretly.

This will help them to overcome the fear and stand for the unethical issues. This mechanism should be directed to Top management so that they can take strict action against these practices. Every associate should have knowledge of such a mechanism so that this can be used effectively Managers should also every time discuss about this mechanism to retain awareness of the same. 6. 3 Informal meeting and workshops Managers should be trained by way of workshops and informal meeting with higher management to develop sense of understanding the business, managers and relating to business.

This is also a very effective tool to develop freedom to speech and association with the management. Managers will be better able to discuss operational challenges in an open and friendly environment. They should discuss long term plans. This will broaden the perspective of managers, thus motivate managers to also think in same direction and work for long term sustainability with a sense of association with organisation. Management will have to create a trust among employees. This way they can prevent managers from indulging in any unethical practice

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