African Management Style – a hot development issue
The three globally dominating economic powers – US-America, German-speaking Europe and China – lead and manage in different ways. While the US and German-speaking Europe have developed their ways of doing during centuries, China is new in the club and still has to adapt its approach and its style. (See the very interesting blog post of Nathan Richter and Stephan Richter in the Harvard Business Review). Nevertheless, all three ways of managing are influencing the current boom in quite a number of African countries, the way how the future African management style will evolve and therewith to a great extent the development of the continent.
US Management approaches are worldwide renown, well studied and disseminated, and particularly trained and learned by millions of people in their MBA courses. American Businesses are famous for products penetrating global markets and for their global brands. According to Nathan and Stephan Richter the big advantage of the US management approach is their long tradition in risk taking and their ability to manage innovations and new product launches much quicker than anyone else. This is made possible by traditional top-down structures, without a need to involve too many people in decision taking. Short-term orientation is key for any business and business thinking not at last because risk taking often involves big shares of risk capital and capital markets are driving the US economy.
Contrarily, businesses in German-speaking Europe base their structure on horizontally broad layers with many organs involved in general decision taking. Particularly, companies traditionally based their financings on credits from their “Hausbank”. This brought in another “stakeholder” who had to be involved in important decision taking which again slowed down the process. Germans could never react quickly on upcoming new technologies or disruptive market changes and Germans were never good in establishing globally well-known consumer brands. But decisions could be taken for the long run and companies of German-speaking Europe have become famous for product quality, particularly in engineering and related b2b businesses. Thousands of European companies are now world market leaders with their highly sophisticated products.
Looking at the Chinese in Africa, certainly they have already established an own approach and style. Interestingly, they seem to combine an American “quickness to market”, based of course on even much stricter top-down structures and decision taking, with the ability of a German-like long term thinking and acting. And all this in a very big scale. In the last two decades Chinese businesses have changed the rules of the game in almost all African countries, have penetrated the forthcoming huge African consumer market and have substantially changed the general conditions and life of many Africans.
Of course, the big difference lies at the political side. The Chinese model of an authoritarian state-capitalism seems to be particularly successful at embedding archaic rural structures in the globalized economic system. Up to now, Chinese businesses have been good in copying technologies and innovations and in making them more efficient specifically by cost cutting. But they are not really identified for long-term product quality (as opposed to long-term business strategy), nor did they bring up real new and indigenous innovations.
In the moment, many African economies are booming and governments and African people have the choice. Should they go more for a rapid and highly innovative US-American business approach? Or more for the quality-oriented but slower German-European way of doing? Or should they mainly take the political and economical quick wins of a Chinese partnership? Or will it be possible for a number of African countries to combine the three ways of doing with their own history and develop a viable African management style? In any case, many decisions on political level will still shape and influence the way Africans will manage their institutions and their environment in the future.