Taiwan’s economic landscape is dominated by small to medium-sized, family controlled businesses which are usually dominated by one, older male member of the family.
Thus companies can be said to be run as benevolent dictatorships where the central family member, who both expects and receives loyalty and obedience from the rest of the employees, makes all key decisions. As is typical in Confucian cultures the quid pro quo for this respect and loyalty is that the senior manager has an almost paternal interest in the well-being of his staff – and this interest is expected to extend beyond the work place.
Structures tend to be less rigidly hierarchical than can be found in other Asian countries such as Japan and South Korea, with emphasis placed more on pragmatism and getting the job done than on protocol and procedure. This more flexible approach is obviously helped by the absence of large numbers of major conglomerates. In smaller operations the key decision-maker is able to have direct contact with all functions and at all levels, ensuring quick decision-making and supervised actions.
Another by-product of the generally small nature of many Taiwanese companies is that entry barriers to the market are lower than in other countries where a few key players tightly control many areas. Thus, many younger employees (non-family members) are happy to leave the firm to start their own business or to help foreign investors carve out a market presence.