Unit VIII 4/18

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Chapter

15 Leadership and Management

Behavior in Multinational

Companies

Learning Objectives (1 of 3)

• Know the characteristics of global business leadership.

• Describe traditional North American models of

leadership, including trait theory, behavioral

approaches, and contingency theory.

• Explain the Japanese performance-maintenance

model.

• Apply the cultural-contingency model of leadership

Learning Objectives (2 of 3)

• Develop sensitivity to national cultural differences in

preferred leadership traits and effective leadership

behaviors.

• Discuss how national culture affects the choice of

leader influence tactics.

• Discuss how national culture influences subordinates’

expectations regarding appropriate behaviors and the

traits of leaders.

Learning Objectives (3 of 3)

• Explain the role of transformational leadership in

multinational settings.

• Understand how national culture affects a leader’s

attributions regarding subordinates’ behaviors.

• Diagnose cultural situations and suggest appropriate

leadership styles to fit them.

Leadership

• The GLOBE’s universal definition of Leadership:

• “the ability of an individual to influence, motivate, and

enable others to contribute toward the effectiveness

and success of the organizations of which they are

members.”

• Effective multinational leadership is more challenging

than being a good domestic leader.

• Widely different leadership styles may be equally

effective in reaching goals in various cultures.

Global Leadership: The New Breed

• The Global Leader must have the skills and abilities to

interact with and manage people from diverse cultural

backgrounds in their multinational organization.

• Characteristics of a global leader:

• Cosmopolitan

• Skilled at intercultural communication

• Culturally sensitive

• Capable of rapid acculturation

Global Leadership: Characteristics

• Characteristics of a global leader: (cont’d)

• A facilitator of subordinates’ intercultural

performance

• A user of cultural synergy

• A promoter and user of the growing world culture

• Emotionally intelligent

Three Classic Models: A Vocabulary of Leadership

• The three basic models of leadership entail:

• Leadership traits

• Leadership behavior

• Contingency leadership

Leadership Traits (1 of 2)

• Are leaders born or made?

• The Great-Person Theory is the idea that leaders are

born with unique characteristics that make them quite

different from ordinary people.

• Contemporary views of leadership traits do not assume

that leaders are born.

• Although leaders are different, aspiring leaders can

achieve this difference by training and experience.

Leadership Traits (2 of 2)

• In the U.S., successful leaders exhibit:

• High intelligence & self-confidence

• Great initiative

• Assertiveness & persistence

• A great desire for responsibility and the opportunity

to influence others

• A high awareness of the needs of others

U.S. Perspectives: Leadership Behaviors (1 of 2)

• Although leaders have different traits than

subordinates, traits alone do not make a leader.

• The behaviors leaders use to manage employees may

be more important.

• Classic U.S. studies of leadership reveal two types:

• A task-centered leader gives specific directions to

subordinates so that they can complete tasks.

• A person-centered leader focuses on meeting the

social and emotional needs of employees.

U.S. Perspectives: Leadership Behaviors (2 of 2)

• The distinction between task-centered and person-

centered also applies to how leaders make decisions:

• Leaders who adopt an autocratic leadership style

make all major decisions themselves.

• Those who employ a democratic leadership style

delegate the decision-making to subordinates.

• The consultative and participative leadership styles

falls midway between the autocratic and democratic

styles.

Exhibit 15.1: Likert’s Four Styles of Management

Japanese Perspectives: Performance Maintenance Theory (1 of 2)

• The Performance-Maintenance (PM) Theory of

leadership represents a Japanese perspective,

balancing task- and person-centered leader

behaviors

• Has two dimensions

• Performance (similar to task-centered)

• Maintenance (similar to person-centered)

Japanese Perspectives: Performance Maintenance Theory (1 of 2)

• There are two components of performance function:

• Planning component: the leader works for or with

subordinates to develop work procedures

• Pressure component: the leader then pressures

employees to put forth more effort and to do good

work

Contingency Theories

• The Contingency Theories assume that the appropriate

style and leader depends on the situation.

• Successful leaders choose leadership style based on

situations.

• There are two North American contingency theories of

leadership:

• Fiedler’s theory of leadership

• Path-goal theory

Fiedler’s Theory of Leadership (1 of 2)

• Fiedler’s Theory of Leadership holds that managers

tend to be either task- or person-centered leaders.

• Success depends on three contingencies or

characteristics of work situation:

• The relationship between leader and subordinates

• The degree to which subordinates’ tasks are clearly

defined

• The officially granted power of the leader

Fiedler’s Theory of Leadership (2 of 2)

• Effective leadership occurs when the leadership style matchs the situation.

• Fiedler’s Theory suggests that task-centered leadership works best in situations that are either favorable or unfavorable for a leader.

• Person-centered leadership works best in situations that are not clearly favorable or unfaborable.

Exhibit 15.2: Predictions of Leader Effectiveness under Different Conditions

Path-Goal Theory

• Using Path-Goal Theory, a leader might adopt one of

four leadership styles, depending on the situation.

These four styles are:

• Directive (give subordinates specific goals)

• Supportive (show concern for their needs)

• Participative (consult with them and encourage)

• Achievement-oriented (set goals and reward goal

accomplishments)

Exhibit 15.3: A Simplified Model of Path-Goal Theory

Path-Goal Theory: Key Suggestions

• When subordinates have high achievement needs,

adopt the achievement-oriented style.

• For subordinates with high social needs, adopt the

supportive leadership style.

• When the job is unstructured, adopt a directive style or

an achievement-oriented style.

Traits, Behaviors & Contingencies

• Leaders have a variety of behaviors they can use to

get the job done.

• Most experts now believe that no one leadership trait

or behavior works best in all situations.

• A successful leader must diagnose the situation, pick

the behaviors and develop the leadership traits that fit

best.

National Context Contingency Model of Leadership (1 of 2)

• Successful leadership in multinational companies

requires that managers adjust their leadership styles to

fit different situations.

• Learn what local managers do to lead successfully

in their own countries.

• Use that knowledge to modify your leadership style

appropriately.

National Context Contingency Model of Leadership (2 of 2)

• In a multinational setting, these components are all

affected by the national context:

• Leader behaviors & traits

• Subordinates characteristics

• Work setting

Exhibit 15.4: National-Context Contingency Model of Leadership

Leadership Traits and Behaviors in the National Context

• People prefer certain traits and behaviors in their

leaders depending on their cultural backgrounds,

though some behaviors & traits are cultural universals.

• GLOBE (Global Leadership and Organizational

Behavior Effectiveness) conducted cross-national

research of 60 nations on differences in leadership.

• Their study contains insights that can help a manager

develop leadership styles to navigate successfully

through a maze of cultural settings.

Exhibit 15.5 Culture-Free Positively and Negatively Regarded Leadership Traits & Behaviors

Exhibit 15.6: GLOBE’s Study Clusters and Countries Included in Each Cluster

Exhibit 15.7: Culturally Contingent Beliefs Regarding Effective Leadership Styles

Exhibit 15.7: (cont’d) Culturally Contingent Beliefs Regarding Effective Leadership Styles

GLOBE Findings

• Leadership styles vary by country.

• Team-oriented leaders preferred in Latin European,

East European and Southern Asian societies.

• Participative leaders are preferred by Anglo, Nordic

European, and Germanic European cultures.

• Humane leaders preferred in Southern Asian cultures.

• All agreed that autonomous leaders and self-protective

leaders universally impeded leadership.

National Context and Preferred Leader Influence Tactics

• Influence Tactics are tactical behaviors leaders use to influence subordinates.

• U.S managers favor seven influence tactics

• Assertiveness

• Friendliness

• Reasoning

• Bargaining

• Sanctioning

• Appeals to a higher authority

• Coalitions

Exhibit 15.8: Preferred Leader Influence Tactics in Four Countries

National Context and Subordinates’ Expectations (1 of 2)

• The national context affects Subordinates’

Expectations: what leaders “should” do and what they

may or may not do.

• Power distance has profound effects on expectations:

• In high power-distance countries, autocratic

leadership is expected.

• In low power-distance countries, the leader should

forego status symbols, & involve subordinates in

decision-making.

Exhibit 15.9: Subordinates’ Expectations under Three Levels of Power Distance

National Context and Subordinates’ Expectations (2 of 2)

• Other cultural values affect subordinates’ expectations:

• Strong masculinity norms lead to the acceptance of

more authoritarian leadership

• Strong uncertainty-avoidance norms lead

subordinates to expect the leader to provide more

detail in directions

Contemporary Leadership Perspectives: Multinational Implications

• There are two contemporary approaches to leadership:

• Transformational Leadership

• Attribution Approach

• The GLOBE study found that Transformational

Leadership was considered superior in almost all

societies.

Transformational Leaders (1 of 2)

• The Transformational Leader:

• Articulates a vision

• Breaks from the status quo

• Provides goals and a plan

• Gives meaning or a purpose to goals

• Takes risks

• Is motivated to lead

• Builds a power base

• Demonstrates high ethical and moral standards

Transformational Leaders (2 of 2)

• Transformational leaders succeed because

subordinates respond to them with high levels of

performance, personal devotion, reverence,

excitement about leader’s ideas, and willingness to

sacrifice for the good of the company

• Transformational Leaders go beyond Transactional

Leadership which uses punishment and rewards.

• The same leadership traits may not lead to

transformational leadership in all countries.

Attributions and Leadership (1 of 2)

• The attributional approach to leadership emphasizes

the leader’s attributions regarding the causes of

subordinates’ behaviors.

• In determining how to respond to a subordinate’s

behavior, the leader makes two key distinctions:

• External attribution: factors outside the person and

beyond the person’s control (illness); or

• Internal attribution: characteristics of the person

(e.g., personality, motivation, low ability, etc.)

Attributions and Leadership (2 of 2)

• Once leader makes an attribution, the leader responds

to the subordinate based on that assumption.

• Internal attribution : behavior corrected or rewarded

• External attribution: modify the work environment

• Fundamental attribution error: an assumption by a

manager that people behave in certain ways because

of internal motivations, rather than outside factors

• Successful leaders make the correct attributions.

Getting the Results: Should You Do What Works at Home?

• The contingency view of leadership suggests that

managers cannot assume that successful home

leadership styles or traits will result in equally

successful leadership in a foreign country.

• Managers need to modify and adapt leadership styles

to be congruent with the cultural setting.

• Without adequate cross-cultural training, expatriates

may continue to apply their previously successful home

style leadership in international settings.

Exhibit 15.10: Leadership Behavior and Job Performance of U.S. Managers in U.S. & Hong Kong

The Cultural Context and Suggested Leadership Styles

• Because of the extreme variability among cultures and

nations, there are few prescriptive theories of

multicultural leadership.

• But there may be some general recommendations

based on research re power distance & uncertainty:

• In high power distance cultures, behave more

autocratically.

• In high uncertainty cultures, remove ambiguity from

the work setting.

Exhibit 15.11: National Culture and Recommended Leadership Styles

Summary

• All multinational managers should strive to become

global leaders.

• Chapter 15 provides important information on the

nature of leadership and understanding of leadership

in the international setting.

• The Chapter also reviews classic leadership theories

and applies them to the international settings.

• Effective leadership is essential for the success of the

multinational company.