Background To Business in the USA

As the US tries to drag itself out of the economic malaise triggered by the fall of Lehman Brothers in 2008, it finds itself at defining moment in its history. How can the country maintain its pre-eminence politically in the face of growing pressure from China and India? How can it leverage its intellectual capital so that it continues to be the entrepreneurial world hub and centre of innovation and excellence. US-business ideas and approaches are being scrutinised as never before - is the country ready for the challenge of what many see as the 'Asian' century?

For a century or more the US has led the way in banking and finance, high-tech, computing and pharmaceuticals. US business methodologies have led growth and innovation in a way rarely seen in the history of the world and an understanding of how things work in the States is essential for anybody who works internationally.

More than any other industrialised country, the United States has adopted what could be labelled a 'scientific' approach to business. Every aspect of commercial life is studied and analysed and this scientific approach is both respected and acted upon. Far more resource is available in the US for the study of the methodology of business than in any other country and most new management theory and doctrines have their origins in the States.

In the States everything is quantified and assessed. All processes, even down to such issues as HR and Training are analysed in a detailed manner and the results of this analysis carry weight with decision makers.

This 'scientific' approach - the constant search for better, more effective methods - has led to a business environment typified by the presence of change as a constant factor. The most common response to a changing environment is realignment of the organisation and this, in turn, has produced a work force in a state of constant flux. People leave, are fired or made redundant and then reappear in another organisation. This sense of employee mobility should not, however, be equated with a lack of loyalty to the employer for whom you are currently working. Whilst working for the company you put everything into the job and are totally committed.

American Business Structures

Business structures in the USA are incredibly varied but tend to have several characteristics in common.

Firstly, the company is an entity in its own right and exists independently from its employees. Members come and go, perform necessary tasks at particular points in the life cycle of the company and then leave when no longer required for the wellbeing of the organisation. The relationship between employer and employee is a transactional one — where relationship and sentiment are a luxury which cannot be justified. Current economic conditions and the increasing influence of technology-based communication methodologies have only increased this disconnect between the employee and long-term, stable employment conditions. In a country where job-mobility and virtual working are increasing, transferable skills become the key to future success.

Secondly, the CEO of an American organisation holds great sway within the company. Senior management is more embedded in the personality at the top than in some other countries, such as Germany, where senior management is collegiate in approach. Although the company will have a Board of Directors, the Board is highly unlikely to have any input on the day-to-day running of the company which is left very much in the hands of the CEO who stands or falls on results. This can be seen as a high risk, high reward approach - it can bring great success but also spectacular failure.

Thirdly, accountability within the company tends to be vertical and easily observable. Americans like to know exactly where they stand, what are their responsibilities and to whom they report. If job security is weak, I'd like to understand the extent of my liability on any particular issue.

American Management Style

American management style can be described as individualistic in approach, in so far as managers are accountable for the decisions made within their areas of responsibility. Although important decisions might be discussed in open forum, the ultimate responsibility for the consequences of the decision lies with the boss — support or seeming consensus will evaporate when things go wrong. The up side of this accountability is, of course, the American dream that outstanding success will inevitably bring outstanding rewards.

Therefore, American managers are more likely to disregard the opinions of subordinates than managers in other, more consensus or compromise- oriented cultures. This can obviously lead to frustrations, which can sometimes seem to boil over in meeting situations.

Titles can be very confusing within American organisations with a bewildering array of enormously important-sounding job descriptors on offer (Executive Vice-President etc.). Titles, in any case, tend to be a poor reflection of the relative importance of an individual within a company. Importance is linked to power, which could be determined by a number of factors such as head-count responsibility, profitability of sector or strategic importance to the organisation at that point in time.

A distinction is often made between management style (around organisation and process) and leadership style (more strategic and inspirational.) Great leadership is expected at the top of an organisation rather than competent management but it can be difficult to define what 'great leadership' actually is.

Answer the questions:

1) Is the USA still the centre of business life in the modern world?

2) What are the spheres in which the USA has achieved the leading position?

3) What does a ‘scientific’ approach to business mean?

4) What are the main characteristics of American Business Structures?

5) What does ‘the American dream’ imply? How does it influence American management style?

6) What is told about positions within American organizations?

Discussion

1) What good and bad points can you see in American management style and business structures?

2) Think up and suggest some tips of successful work in American companies (especially for foreigners).

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Business in the UK

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