Power distance (organizational theory)

The operation of a manager in an environment with a Power Distance norm lower than his or her own is more problematic. U.S. managers tend to find it difficult to collaborate wholeheartedly in the “industrial democracy” processes of such countries as Sweden, Germany, and even the Netherlands. U.S. citizens tend to consider their country as the example of democracy, and find it difficult to accept that other countries might wish to develop forms of democracy for which they feel no need and that make major inroads upon managers' (or leaders') prerogatives. However, the very idea of management prerogatives is not accepted in very low Power Distance countries. This is, perhaps, best illustrated by a remark a Scandinavian social scientist is supposed to have made to Herzberg in a seminar: “You are against participation for the very reason we are in favour of it-one doesn't know where it will stop. We think that is good.” Let us now take the case of Germany, a below-average Power Distance country. Here, the dialogue element in MBO should present no problem. However, since Germany scores considerably higher on Uncertainty Avoidance, the tendency toward accepting risk and ambiguity will not exist to the same extent.
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The idea of replacing the arbitrary authority of the boss with the impersonal authority of mutually agreed-upon objectives, however, fits the small Power Distance/strong Uncertainty Avoidance cultural cluster very well. The objectives become the subordinates' “superego.” In a book of case studies about MBO in Germany, Ian R.G. Ferguson states that “MBO has acquired a different flavour in the German-speaking area, not least because in these countries the societal and political pressure towards increasing the value of man in the organization on the right to co-determination has become quite clear. Thence, MBO has been transliterated into management by Joint Goal Setting (Führung durch Zielvereinbarung).” Ferguson's view of MBO fits the ideological needs of the German-speaking countries of the moment. The case studies in his book show elaborate formal systems with extensive ideological justification; the stress on, team objectives is quite strong, which is in line with the lower individualism in these countries.