Management 88 Questions

Management 88 Read Ahead Notes

While the definition of leadership by Global Leadership and Organizational Effectiveness (GLOBE) project and European Foundation for Quality Management (EFQM) may be slightly different, the former's definition has been widely accepted universally. According to GLOBE, leadership quality is demonstrated when an individual can influence, motivate, and enable others to contribute towards the effectiveness and success of an organization. More important, we need to be mindful of the fact that while domestic leadership has its unique challenges, leadership in the international business environment comes with its own brand of complexities. However, the global leader must have essential skills and abilities to interact with and manage people from diverse cultures. Such persons must possess identifiable characteristics. He or she must possess intercultural communication skills, be flexible in operating in diverse cultures, be able to rapidly acculturate, be adroit at cultural synergy, and must be emotionally intelligent.

A review of the three basic classical models of leadership will help us better understand the vocabulary used in multinational leadership environment. The three models are leadership traits, leader behavior, and contingency leader. The leadership trait theory emanates from discussions regarding whether good leadership is as a result of nature or nurture (i.e., whether leaders are born or made). This leads us to the great person theory which states successful organizational leaders are born with unique characteristics that make them quite different from others, making them exemplary. Based on a number of researches conducted, theorists have concluded that while traits arguments may be valid, behavior of leaders may play a more important role. The behaviors of those leaders place them into four categories. The first, the task-oriented leader, concentrates primarily on assigning subordinates tasks, standards, and schedules with little consideration for their social and emotional needs. Second, the person-centered leader is more interested in the subordinates’ social and emotional needs than in the completion of assigned tasks. Third, the autocratic leader makes decisions solely without allowing subordinate contributions. Last, the democratic leader seeks the input of subordinates in decision making. Following Rensis Likert's study, another leadership behavior, the consultative or participative leadership style, is created. This style falls midpoint of the autocratic and democratic leadership styles.

It would be a disservice if we failed to discuss the Japanese perspectives on leader behaviors, considering the slew of research that has been conducted in that country on leadership and management. One important theory derived from the research efforts is the performance maintenance theory. The two- component performance function (P) asserts that first the leader works collaboratively with subordinates to develop procedures, and second the leader exerts pressure on employees so that they can put in more effort to perform better. The maintenance component of this theory, (similar to the person-centered theory), represents leader behaviors that resultantly promote group stability and social interaction: key identifiers of the Japanese culture.

However, the question is which one of these leadership styles should multinationals use, and what are likely to be the implications? This is where contingency theories come in. The theories assume that certain situations will demand the use of different leaders and styles. In other words, the myriad of inter-related factors (culture, language, business practices, and national context) will be the key determinants of what leadership style will be used. Research work has enlightened us about two North American contingency theories: Fiedler on leadership effectiveness and path-goal theory. The Fiedler on leadership style states with regard to the task- or people-centered leader, his or her success depends largely on relationships between them and the subordinates, the degree to which subordinate tasks are easily and clearly defined, and the officially granted organizational power of the leader. The path-goal theory states that a leader may use a particular leadership style as necessitated by circumstances. Those leadership styles are identified as directive, supportive, participative and achievement-oriented. Nonetheless, we can agree that culture and related social institutions affect leadership practices.

Multinationals can rely on the contingency approach in their leadership styles. The embrace of such an approach requires making necessary adjustments to fit the national context of countries of operation. An initial step may be studying the leadership styles of local managers, which will provide fundamental knowledge on how to modify their leadership styles accordingly. National context aside, there may be a need to use influence tactics (a kaleidoscope of tactical behaviors leaders use to influence subordinates). Examples of such tactics are assertiveness, friendliness, reasoning, bargaining, and collaborations. We know, however, that different cultures would require the use of different tactics.

In discussing the multinational implications for contemporary leadership perspectives, we touch on two very important contemporary approaches to leadership: transformational leadership and attribution approach. Transformational leaders are characterized as those with the ability to articulate a vision, break from the status quo, set attainable goals and plans, take risks, ready to lead, able to build a power base, and demonstrate high ethical and moral standards. However, it is well argued that transformational leaders can only exist when there is need for major transformation, in times of crisis and other undesirable phenomena. Attributional approach to leadership stresses that leaders behave in a certain way in response to what they feel may be responsible for subordinate behaviors. The attributions are classified into external attribution (factors beyond the control of subordinates, e.g., lack of training) or internal attribution (the personal characteristics of the subordinate, .e.g., laziness). Unfortunately, organizational leaders are not perfect, and they can be flatly wrong in their internal attributions! When such errors are made by leaders claiming that internal problems may be responsible for subordinate behavior rather than external factors is called fundamental attribution error.

So, what should multinationals do to prevent this? The answer is to gain a strong knowledge of the culture. More important, the multinationals should try to not import their own culturally biased attributions into the host country of operations.

In this lesson, we have been opportune to review several leadership theories that have shed some light on some of the different kinds of leadership styles. More important, we have been able to determine implications for multinationals and tools they will need to lead internationally. We should be mindful of the fact that leadership styles that are used will depend largely on the national context, local culture, and social institutions of target country and other related variables.

UNIT VIII STUDY GUIDE

Leadership and Management Behavior in Multinationals