Chapter Leadership Across Cultures The specific objectives of

Chapter Leadership Across Cultures The specific objectives of this chapter are: 1. DESCRIBE the basic philosophic foundation and styles of managerial leadership 2. EXAMINE the attitudes of European managers toward leadership practices 3. COMPARE and CONTRAST leadership styles in Japan with those in the United States 13

Chapter Leadership Across Cultures The specific objectives of this chapter are: 4. REVIEW leadership approaches in China, the Middle East, and developing countries 5. EXAMINE recent, research and findings regarding leadership across cultures 13

Chapter 13 Leadership Across Cultures The specific objectives of this chapter are: 6. DISCUSS the relationship of culture clusters and leader behavior on effective leadership practices including increasing calls for more responsible global leadership

4 Foundation for Leadership Philosophical Background: Theories X, Y, and Z Theory X Manager n A manager who believes that people are basically lazy and that coercion and threats of punishment often are necessary to get them to work.

5 Foundation for Leadership Philosophical Background: Theories X, Y, and Z Theory X Manager Theory Y Manager n A manager who believes that under the right conditions people not only will work hard but will seek increased responsibility and challenge.

6 Foundation for Leadership Philosophical Background: Theories X, Y, and Z Theory X Manager Theory Y Manager Theory Z Manager n A manager who believes that workers seek opportunities to participate in management and are motivated by teamwork and responsibility sharing.

7 Foundation for Leadership Behaviors and Styles Authoritarian Leadership The use of work-centered behavior designed to ensure task accomplishment. Paternalistic Leadership The use of work-centered behavior coupled with a protective employee centered concern. Participative Leadership The use of both work- or taskcentered and people centered approaches to leading subordinates.

8 Leader–Subordinate Interactions Authoritarian Leader Subordinate One-way downward flow of information and influence from authoritarian leader to subordinates. Adapted from Figure 13– 1: Leader–Subordinate Interactions Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

9 Leader–Subordinate Interactions Paternalistic Leader Subordinate Continual interaction and exchange of information and influence between leader and subordinates. Adapted from Figure 13– 1: Leader–Subordinate Interactions Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

10 Leader–Subordinate Interactions Participative Leader Subordinate Continual interaction and exchange of information and influence between leader and subordinates. Adapted from Figure 13– 1: Leader–Subordinate Interactions Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

11 Likert’s Systems or Styles Leadership Adapted from Figure 13– 2: Likert’s Systems or Styles Leadership

12 Likert’s Systems or Styles Leadership Adapted from Figure 13– 2: Likert’s Systems or Styles Leadership

13 Low 8 9, 9 Management Style Work accomplishment is from committed people; interdependence through a “common stake” in organization purpose leads to relationships of trust and respect 5, 5 Management Style Adequate organization performance is possible through balancing the necessity to get out work with maintaining morale of people at a satisfactory level 5 6 7 1, 9 Management Style Thoughtful attention to needs of people for satisfying relationships leads to a comfortable friendly organization atmosphere and work tempo 4 3 2 1 Concern for People/Relationships High 9 The Managerial Grid 1, 1 Management Style Exertion of minimum effort to get required work done is appropriate to sustain organization membership 1 Low 2 3 4 9, 1 Management Style Efficiency in operations results from arranging conditions of work in such a way that human elements interface to a minimum degree 5 6 Concern for Production/Task 7 8 9 High Adapted from Figure 13– 2: The Managerial Grid Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

14 Leadership in the International Context How do leaders in other countries attempt to direct or influence their subordinates? Are their approaches similar to those used in the United States? Research shows that there are both similarities and differences – most international research on leadership has focused on Europe, East Asia, the Middle East, and developing countries such as India, Peru, Chile, and Argentina.

15 Leadership in the International Context Attitudes of European Managers Toward Leadership Practices Capacity for Leadership and Initiative European managers tend to use a participative approach. Researchers investigated four areas relevant to leadership. Does the leader believe that employees prefer to be directed and have little ambition? (Theory X) OR Does the leader believe that characteristics such as initiative can be acquired by most people regardless of their inborn traits and abilities? (Theory Y)

16 Leadership in the International Context Attitudes of European Managers Toward Leadership Practices Capacity for Leadership and Initiative Sharing Information and Objectives Most evidence indicates European managers tend to use a participative approach. Researchers investigated four areas relevant to leadership. Does the leader believe that detailed, complete instructions should be given to subordinates and that subordinates need only this information to do their jobs? OR Does the leader believe that general directions are sufficient and that subordinates can use their initiative in working out the details?

17 Leadership in the International Context Attitudes of European Managers Toward Leadership Practices Capacity for Leadership and Initiative Sharing Information and Objectives Participation Most evidence indicates European managers tend to use a participative approach. Researchers investigated four areas relevant to leadership. Does the leader support participative leadership practices?

18 Leadership in the International Context Attitudes of European Managers Toward Leadership Practices Capacity for Leadership and Initiative Sharing Information and Objectives Participation Internal Control Most evidence indicates European managers tend to use a participative approach. Researchers investigated four areas relevant to leadership. Does the leader believe that the most effective way to control employees is through rewards and punishment? OR Does the leader believe that employees respond best to internally generated control?

19 Clusters of Countries in the Haire, Ghiselli, and Porter Study (Believe workers have more initiative, more autocratic, more external rewards) Adapted from Table 13– 3: Clusters of Countries in the Haire, Ghiselli, and Porter Study

20 Leadership in the International Context Attitudes of European Managers Toward Leadership Practices The Role of Level, Size, and Age on European Managers’ Attitudes Toward Leadership n Higher-level managers tend to express more democratic values than lower-level managers in some countries – in other countries, the opposite was true n Company size tends to influence the degree of participative- autocratic attitudes n Younger managers were more likely to have democratic values when it came to capacity for leadership and initiative and to sharing information and objectives

21 Leadership in the International Context Attitudes of European Managers Toward Leadership Practices Conclusion About European Leadership Practices n Most European managers tend to reflect more participative and democratic attitudes – but not in every country n Organizational level, company size, and age seem to greatly influence attitudes toward leadership n Many of the young people in this study now are middle-aged – European managers in general are highly likely to be more participative than their older counterparts of the 1960 s and 1970 s

22 Leadership in the International Context Japanese Leadership Approaches n Japan is well known for its paternalistic approach to leadership n Japanese culture promotes a high safety or security need, which is present among home country–based employees as well as MNC expatriates n Japanese managers have much greater belief in the capacity of subordinates for leadership and initiative than do managers in most other countries – only managers in Anglo-American countries had stronger feelings in this area

23 Leadership in the International Context Differences Between Japanese and U. S. Leadership Styles n n n Except for internal control, large U. S. firms tend to be more democratic than small ones – the profile is quite different in Japan Younger U. S. managers appear to express more democratic attitudes than their older counterparts on all four leadership dimensions Japanese and U. S. managers have a basically different philosophy of managing people – Ouchi’s Theory Z combines Japanese and U. S. assumptions and approaches providing a comparison of seven key characteristics

24 Leadership in the International Context Differences Between Japanese and U. S. Leadership Styles Another difference between Japanese and U. S. leadership styles is how senior-level managers process information and learn n Variety Amplification Japanese executives are taught and tend to use variety amplification – the creation of uncertainty and the analysis of many alternatives regarding future action n Variety Reduction U. S. executives are taught and tend to use variety reduction – the limiting of uncertainty and the focusing of action on a limited number of alternatives

25 Productivity of Japanese Groups with High-Achievement Motivation under Different Leadership Styles —— PM Leadership Style 9, 9 (high task, high people) —— M Leadership Style 1, 9 (low task, high people) —— P Leadership Style 9, 1 (high task, low people) —— PM Leadership Style 1, 1 (low task, low people) Productivity 80 50 0 1 2 3 4 5 6 7 Sessions Adapted from Figure 13– 3: Productivity of Japanese Groups with High-Achievement Motivation under Different Leadership Styles Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

26 Productivity of Japanese Groups with Low-Achievement Motivation under Different Leadership Styles —— P Leadership Style 9, 1 (high task, low people) —— PM Leadership Style 9, 9 (high task, high people) Productivity 80 50 25 —— PM Leadership Style 1, 1 (low task, low people) —— M Leadership Style 1, 9 (low task, high people) 01 2 3 4 5 6 7 Sessions Adapted from Figure 13– 4: Productivity of Japanese Groups with Low-Achievement Motivation under Different Leadership Styles Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

27 Leadership in the International Context Leadership in China n Importance that the respondents in one study assigned to three areas: Individualism Measured by importance of self sufficiency and personal accomplishments Collectivism Measured by willingness to subordinate personal goals to those of the work group with an emphasis on sharing and group harmony Confucianism Measured by the importance of societal harmony, virtuous interpersonal behavior, and personal and interpersonal harmony

28 Leadership in the International Context Leadership in China n The “New Generation” group scored significantly higher on individualism than did the current and older generation groups n They also scored significantly lower than the other two groups on collectivism and Confucianism n These values appear to reflect the period of relative openness and freedom, often called the “Social Reform Era, ” in which these new managers grew up n They have had greater exposure to Western societal influences may result in leadership styles similar to those of Western managers

29 Leadership in the International Context Leadership in the Middle East n There may be much greater similarity between Middle Eastern leadership styles and those of Western countries n Western management practices are evident in the Arabian Gulf region due to close business ties between the West and this oil-rich area as well as the increasing educational attainment, often in Western universities, of Middle Eastern managers n Organizational culture, level of technology, level of education, and management responsibility were good predictors of decision-making styles in the United Arab Emirates n There is a tendency toward participative leadership styles among young Arab middle managers, as well as among highly educated managers of all ages

Differences in Middle Eastern and Western Management Adapted from Table 13– 5: Differences in Middle Eastern and Western Management 30

Differences in Middle Eastern and Western Management Adapted from Table 13– 5: Differences in Middle Eastern and Western Management 31

32 Leadership in the International Context Leadership Approaches in Developing Countries n Managerial attitudes in India are similar to Anglo- Americans toward capacity for leadership and initiative, participation, and internal control, but different in sharing information and objectives n Leadership styles in Peru may be much closer to those in the United States than previously assumed n Developing countries may be moving toward a more participative leadership style

33 Recent Findings and Insights About Leadership Transformational, Transactional, and Charismatic Leadership Transformational leaders are characterized by four interrelated factors: n Transformational leaders are a Idealized Influence source of charisma and enjoy the admiration of their followers. n They enhance pride, loyalty, and confidence in their people, and align these followers by providing a common purpose or vision that the latter willingly accept

34 Recent Findings and Insights About Leadership Transformational, Transactional, and Charismatic Leadership Transformational leaders are characterized by four interrelated factors: n These leaders are extremely Idealized Influence effective in articulating their vision, mission, and beliefs in clear-cut Inspirational Motivation ways, thus providing an easy-to understand sense of purpose regarding what needs to be done

35 Recent Findings and Insights About Leadership Transformational, Transactional, and Charismatic Leadership Transformational leaders are characterized by four interrelated factors: n Transformational leaders are able Idealized Influence to get their followers to question old paradigms and to accept new Inspirational Motivation views of the world regarding how things now need to be done Intellectual Stimulation

36 Recent Findings and Insights About Leadership Transformational, Transactional, and Charismatic Leadership Transformational leaders are characterized by four interrelated factors: n These leaders are able to diagnose Idealized Influence and elevate the needs of each of their followers through Inspirational Motivation individualized consideration, thus furthering the development of these people Intellectual Stimulation Individualized Consideration

37 Recent Findings and Insights About Leadership Transformational, Transactional, and Charismatic Leadership Four other types of leaders are less effective than transformational leaders Clarifies what needs to be done, provides Contingent Reward (CR) psychic and material rewards to those Leader Active Management-by. Exception (MBE-A) Leader complying with his or her directives Monitors follower performance and takes corrective action when deviations from standards occurs Passive Management-by. Exception (MBE-P) Leader Takes action or intervenes in situations only when standards are not met Laissez-Faire (LF) Leader Avoids intervening or accepting responsibility for follower actions

38 An Optimal Profile of Universal Leadership Behaviors I’s–transformational Effective CR–Contingent Reward MBE-A–Active Management-by-Exception MBE-P–Active Management-by-Exception LF–Laissez-Faire I’s CR MBE-A LF cy Fr MBE-P Active eq ue n Passive Effective Adapted from Figure 13– 5: An Optimal Profile of Universal Leadership Behaviors Mc. Graw-Hill/Irwin © 2006 The Mc. Graw-Hill Companies, Inc. All rights reserved.

39 Qualities Most Demanded in Advertisements for European Executives Adapted from Table 13– 6: Qualities Most Demanded in Advertisements for European Executives

40 Qualities Most Demanded in Advertisements for European Executives Adapted from Table 13– 6: Qualities Most Demanded in Advertisements for European Executives

41 Rankings of the Most Important Leadership Attributes Adapted from Table 13– 7: Rankings of the Most Important Leadership Attributes by Region and Country Cluster

42 Rankings of the Most Important Leadership Attributes Adapted from Table 13– 7: Rankings of the Most Important Leadership Attributes by Region and Country Cluster

43 Recent Findings and Insights About Leadership Leader Behavior, Leader Effectiveness, and Leading Teams n One of the keys to successful global leadership is knowing what style and behavior works best in a given culture and adapting appropriately n In affective cultures, such as the United States, leaders tend to exhibit their emotions n In neutral cultures, such as Japan and China, leaders do not tend to show their emotions

44 Leadership Tips for Doing Business in Affective and Neutral Cultures

45 Leadership Tips for Doing Business in Affective and Neutral Cultures

46 Leadership Tips for Doing Business in Affective and Neutral Cultures

47 Recent Findings and Insights About Leadership Ethically Responsible Global Leadership Linking leadership and corporate responsibility through “responsible global leadership” n Values Based Leadership n Ethical Decision Making n Quality Stakeholder Relationships According to this view, global leadership must be based on core values and credos that reflect principled business and leadership practices, high levels of ethical and moral behavior, and a set of shared ideals that advance organizational and societal well-being.

48 Recent Findings and Insights About Leadership Entrepreneurial Leadership and Mindset n Promising start-ups fail for many reasons n Lack of capital, absence of clear goals and objectives, and failure to accurately assess market demand competition n Poor personal leadership ability of the entrepreneurial CEO n For international new ventures, these factors are significantly complicated by n Differences in cultures, national political and economic systems, geographic distance, and shipping, tax, and regulatory costs.

49 Recent Findings and Insights About Leadership Entrepreneurial Leadership and Mindset Key personal characteristics of entrepreneurs and strong leaders n Appear to be more creative and innovative than nonentrepreneurs n Tend to break the rules and do not need structure, support, or an organization to guide their thinking n See things differently and add to a product, system, or idea value that amounts to more than an adaptation or linear change n Are more willing to take personal and business risks, and to do so in visible and salient ways

50 Recent Findings and Insights About Leadership Entrepreneurial Leadership and Mindset Key personal characteristics of entrepreneurs and strong leaders n They are opportunity seekers and are comfortable with failure, rebounding quickly to pursue another opportunity n They are characterized as adventurous, ambitious, energetic, domineering, and self-confident Entrepreneurial leaders operating internationally must possess cultural sensitivity, international vision, and global mindset to effectively lead their venture through challenges of doing business in other countries.

51 Case n Road to Hell