East-west cultural differences can significantly affect firm performance

There are many cultural issues which can affect the success of an international law firm’s Asia practice.

Leadership

Generally speaking, there is a growing body of evidence in the professional services sector that participative, supportive and transformational leadership styles are the most effective in motivating professionals and enhancing firm performance. In the Asian context, there are other considerations to take into account.

The most common framework for considering differences in culture is that of Geert Hofstede. The basic leadership implications of Hofstede’s dimensions are:

• Power distance – in high power-distance cultures (such as Hong Kong and China), workplaces tend to be leader centric. Those in positions of authority are expected to make decisions and followers tend to relinquish authority to those in charge.

• Uncertainty avoidance – in low uncertainty-avoidance cultures (such as Singapore and Hong Kong) staff are less likely to need formal policies and procedures. By contrast, those in high uncertainty-avoidance cultures (which includes other Asian countries) would feel more comfortable in structured working environments.

• Individualism vs. collectivism – in collectivist cultures (which many Asian countries are) group relations, harmony and teamwork are very important aspects of work culture.

• Masculinity vs. femininity – masculine countries (which a number of Western cultures are, as well as some Asian cultures) exhibit a preference for material wealth and hard work, compared to feminine countries, which tend to favour quality of life.

 Knowledge sharing

The importance of knowledge sharing within the law firm context has grown increasingly visible as firms attempt to leverage their intellectual capital in order to create a competitive advantage.

One of the very few useful guides for law firms looking at motivating knowledge workers to share in different cultures comes out of a study by Ingo Forstenlechner and Fiona Lettice.¹

The authors found that motivations for knowledge sharing across a global law firm had differing levels of importance according to culture. Overall, they found that authority or direction from a partner was the most effective method for getting lawyers to share knowledge in Asia and the US.

Locus of control

Another consideration that extends the concept of culture to KM is that of personality. Locus of control (LOC) is essentially an evaluation of a person’s perception of the amount of control they have in their actions and over their destiny.

People who believe that external forces and luck have a major influence on outcomes are known as externals, while those who perceive it is their own actions which determine outcomes are known as internals.

Generally speaking, research shows that Asians tend to have an external locus of control, whereas those from the west exhibit an internal locus of control. The application of this concept to management and organisational behaviour is quite common, but rare in the domain of KM.

A study by Karkoulian and Mahseredjian shows that those with an internal LOC exhibited significantly higher degrees of knowledge acquisition, sharing, and utilisation than those with an external locus of control.²

 This suggests that, in addition to looking at national cultural variables, one should also consider key personality constructs which are associated with culture and take these into account when designing KM systems.

Endnotes

1. See ‘Cultural differences in motivating global knowledge workers’, Ingo Forstenlechner & Fiona Lettice, Equal Opportunities International, Vol. 26, Issue 8, 2007

2. See ‘Prediction of knowledge acquisition, knowledge sharing and knowledge utilization from locus of control: an empirical investigation’, Silva Karkoulian, Jaisy-Angela Mahseredjian, Academy of Information and Management Sciences Journal, Vol. 13, Issue 2, 2009