Manager  –  employee  relation

In the present thesis I connect the manager – employee relation aspect to power distance and job vs. employee orientation. The BENC questionnaire researches the relation through various

The impact of national culture on business efficiency

questions, as presented in Chapter 4.4.1, analyzing those questions where the two samples show statistically relevant differences.

Among all the exposed questions, presented in the third chapter, not all have proven relevant for the interpretation of differences shown by our sample of Danish and Slovenian managers, unlike it was expected. As presented in the introduction, it was on me to determine whether the differences are the consequence of the sample disparity, crisis situation or method of research (the method does not know how to annul the basic differences so that the managers would be analyzed from the same starting position).

Under manager – employee relation I include knowledge transmission, decision making and supervision. Differences in the responses on the freedom to make decisions without consulting the managers, respect for managers, following orders, inclusion of employees in important decision making and general work supervision have not shown statistical evidence for the zero hypothesis to be rejected and to say there are differences between the samples.

The reason probably lays also in the fact that the questions were posed to managers and not employees.

However, the question regarding knowledge flow and the question on how the increase of respect for managers in times of crisis is perceived are areas where the two samples provided the information that makes it possible to state that managers in Slovenia and Denmark proved to be different according to the relevant tests (ANOVA) as seen in Table 7.

Table 7: Manager – Employee relation parameters

The graphs are divided into three parts: one showing disagreement with the exposed question (dark to light blue), one showing neutral statement (grey) and one showing agreement (light to dark pink). Only 5.5 % of the Danish managers agree with the statement that the increase of respect for managers is during a crisis considered a good thing. Among the 77.8 % of those who disagree with the statement, a half fully disagrees. Slovenian managers on the other hand show a different situation with a large percentage of 42.2 % agreeing with the statement and only 26.5 % disagreeing. Compared to the 17 % of the neutral responses from the Danish sample, 31 % of Slovenian managers neither agrees nor disagrees with the statement. The results are presented in Figure 8.

Figure 8: Increase of respect for managers

Beside the respect for managers, the relation among the leadership and the employees can be understood in the perception of how knowledge is flowing within the company. In the BENC questionnaire I asked managers in Slovenia and Denmark whether knowledge in their company is flowing one way: from managers to employees; or two ways: from managers to employees and from employees to managers.

There is a difference in the perception of knowledge flow (Figure 9) in Danish and Slovenian companies, which confirms that managers see knowledge more equally flowing in Denmark, as almost all of the managers answered that knowledge is flowing both ways from managers to employees and from employees to managers (94 %), while in Slovenia, the ratio was lower, meaning that more managers believe knowledge is flowing only from managers to employees (29 %) rather than both ways (71 %).

Figure 9: Knowledge flow between managers and employees

The impact of national culture on business efficiency

The success of a company depends on the way valuable knowledge is distributed within the organization (Gulev 2006, 52). The distribution of knowledge is connected to the efficiency of a company in two ways. One is feeling included: the employees feel part of the company when they are contributing with their knowledge and not only operational work; the other is the actual inclusion: contribution of the employees in all stages in the company’s existence. In a company where knowledge comes from managers and employees it means that everyone is included and represented at all stages.

Similar can be said about the perception on whether managers’ decisions can be questioned in times of an economic crisis. In BENC questionnaire I allowed open answers to the exposed question where the majority of Danish managers (13 out of 18) claimed that their decisions should be questioned because managers also make mistakes, but mostly because the crisis needs new solutions and employees can bring fresh ideas. On the other hand, the majority (49 out of 69) of Slovenian managers answered that the crisis was also the consequence of bad managerial decisions (young incompetent top managers who are not always right), that managers have no good solutions (employees might have better suggestions), that managers lost contact with reality and especially that their private interests and bad leadership led to the current situation.

The second part under this chapter presents differences in work supervision. If we compare work supervision among our sample, Danish managers tend to use performance targets, informal communication and regular meetings with the boss while Slovenian managers selected goal achievement, informal communication, meeting with the boss and personal supervision as presented in Figure 10.

Figure 10: Monitoring employees work

However, only the difference in work being monitored through performance targets (as shown in Figure 11) turns out to be significant on the basis of relevant statistical tests (ANOVA).

According to Gulev (2006, 48), personal relationships, informal communication and meetings with the boss are considered informal control mechanisms whereas reporting system, goal achievement and performance targets are considered formal control. At the same time, reporting systems and work supervision are more common in hierarchical organizational structures while monitoring the work through performance targets and informal communication are typical for flat organizational structures. Compared to other methods, performance targets were selected by every forth manager in Denmark and less than 14 % of the managers in Slovenia. 21.66 % of the managers in Slovenia selected goal achievement as a method of monitoring the work of the employees, while in Denmark work is mostly monitored through performance targets (25.42 %).

Figure 11: Work monitored through performance targets

The perception of how much the employees are included in important decision making does not allow us to reject the zero hypothesis of the equality of the two means (ANOVA > 0.05) but the information and analyzed interviews’ data support the tendencies of the questionnaire analysis.³² The statements from the interviews³³ show that within Slovenian companies the distribution of power is still linked to the understanding of management as deciding over crucial issues. In the statements of the Slovenian managers we can see that they tend to describe the supervision under which their employees are put in order to do their job under relative terms. The statement by Manager A: “Only at the beginning there is constant supervision, but later constant supervision is not needed anymore”, can be interpreted in accordance with Hofstede’s (2009) description of cultures scoring high on the PDI, namely

32 The order of the sentence might appear totally wrong as usually the quantitative research aims to support the data from the qualitative analysis, but in this case both analyses abstain from abstract generalizing and introduce possible qualitative explanations that are yet to be confirmed by more quantitative data.

The impact of national culture on business efficiency

the teacher-centred education or obedience taught by parents to their children. The supervision at the beginning is to make sure that the employees understand the way the company works and get the feeling that they will always be supervised, implicating that hierarchy should always be respected.

On the other hand, the stress experienced by a Danish manager in regard to the clear division between the roles in the company and employees’ need to report everything to the managers is supported by Denmark’s extremely small PDI. This can be seen in his statement: “It can be frustrating to have to explain step by step to somebody just because he needs to know everything. You do your job and I will do mine and we would both be much more efficient.”

According to Hofstede (ibid.) countries with small PDI support equality within the working environment and understand hierarchy as inequality of roles, having been established only for convenience. The statement of the interviewed Danish manager C: “The managers’ decision at the end can destroy all the work done so far. The results are expected and are already determined by the one who is requesting it” proves their rare corruption and non-understanding of illegitimate use of power based on no real criteria.

At the end, we can see that in accordance with the data from EVS,³⁴ also less Slovenians (21.1

%) than Danes (37.5 %) think that greater respect for authority is a bad thing. This tendency is shown also in the BENC responses and interviews. Besides, the EVS shows that the Danes feel much more freedom in making decisions at their jobs than Slovenians. These results are not evidently supported by the BENC questionnaire but nevertheless they also show a certain trend. The EVS also indicates that Danes follow their boss’ orders in the majority of the times (43.9 % of the Danes always follow boss’ orders), even to a larger extent than Slovenians (41.6 % of the Slovenians always follow boss’ orders), which was also suggested by the results of the questionnaire. The reason for this is explained by the fact that the employees are involved in the decision-making process from the beginning and have no real need to question something they had been also consulted upon.

Work supervision is an important aspect of leadership methods in connection to Power Distance, as explained in the previous chapters. Considering this, different types of supervision result from differences in Power Distance. A nation with smaller PDI will use methods as informal communication, performance targets and meetings rather than goal achievement, reporting system and hierarchical supervision, which are typical for managers from a large PDI environment. Based on our results managers in Denmark generally supervise employees through performance targets, while in Slovenia through goal achievement.

34 Data from EVS is presented in appendix 5.