1. Comparative management compares various management systems from one cultural context to another, typically using different countries to frame the cultural contexts (Chen, 1995, p. 1). Comparisons can be made for profit and nonprofit organizations, large and small organizations, or across various other characteristics which the analyst chooses. Several different approaches can be taken to comparative management, including the universalist approach, the economic cluster and the cultural cluster. The universalist approach argues that there are few differences in management styles and that management principles can be applied universally, with few adaptations, throughout the world. The economic cluster holds that economic differences from country to country will necessitate some adaptation of management principles, and the cultural cluster holds that cultural differences among nations greatly influences the management styles which are successful in any particular nation (Chen, 1995, p. 2).
Farmer and Richman built on the cultural cluster in their work, and suggested that external environmental factors play an important role in determining management effectiveness in a particular organization. According to Farmer and Richman, external constraints, such as education and political influences, affect elements of the management process and thus managerial effectiveness. Managerial effectiveness determines the company's efficiency and contribute to the economic system's overall efficiency. There are defects in the work of Farmer and Richman; most notably, the researchers do not take into consideration the internal organizational dynamics of a particular company and they also tend to overlook the impact of industrialization (Chen, 1995, p. 13).
Fundamental to the idea of comparative management are the concepts of transferability and universality as applied to management. The concept of management transferability holds that manage...