Leadership and Management in
Multinational Companies
Chapter 14
Presentation Outline
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What is leadership?
Global leadership
Models of leadership
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Leadership traits
Leadership behaviors: U. S. and Japanese views
Contingency theories of leadership
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The path-goal model
National context model of leadership
Presentation Outline (2)
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Leadership in a global context
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Styles of international leadership (GLOBE study)
National context and subordinates' expectations
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Effects of power distance
Transactional and transformational leadership
Effective leadership behaviors
Attribution and leadership
Should you do what works at home?
Leadership
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Leadership: process of influencing group
members to achieve organizational goals
Excellent leaders
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Motivate their employees to achieve more than
minimal requirements
What makes a great leader?
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Many formal theories of leadership exist
Most people have their own beliefs
Global Leadership: The New Breed
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One who has the skills and abilities to interact
with and manage people from diverse cultural
backgrounds
Characteristics of a global leader
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Cosmopolitan
Skilled at intercultural communication
Culturally sensitive
Capable of rapid acculturation
Global Leadership: Characteristics
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Knowledgeable about cultural and institutional
influences on management
Facilitator of subordinates’ intercultural
performance
A user of cultural synergy
A promoter and user of the growing world
culture
A commitment to continuous improvement in
self-awareness and renewal
Three Classic Models:
A Vocabulary of Leadership
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Three basic models of leadership
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Leadership traits
Leadership behavior
Contingency leadership
Leadership Traits
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Are leaders born or made?
Great-person theory: 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
Traits of Successful U.S. Leaders
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Higher intelligence and self-confidence
More initiative
More assertiveness and persistence
Greater desire for responsibility and the
opportunity to influence others
A greater awareness of the needs of others
Leadership Behaviors
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U.S. perspectives on leadership behaviors
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Two major types of leadership behaviors
Task-centered leader: focus on completing tasks
by initiating structure
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Gives subordinates specific standards, schedules, and
tasks
Person-centered leader: focus on meeting the
social and emotional needs of employees
Leader Decision Making Styles
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Autocratic leadership: leaders make all major
decisions themselves
Democratic leadership: leader includes
subordinates in decision making
Consultative or participative leadership:
leader’s style falls midway between autocratic
and democratic styles
Exhibit 14.1: Likert’s Four Styles of
Management
Japanese Perspectives on Leader
Behaviors
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Performance-maintenance (PM) theory:
balancing task- and person-centered leader
behaviors
Performance-Maintenance Theory
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Two dimensions of PM theory
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Performance function (P): similar to task-centered
leadership
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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
Performance-Maintenance Theory
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Maintenance function (M): similar to personcentered
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Presents behaviors that promote group stability
and social interaction
Difference between the Japanese PM
approach and the U.S. perspective
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Japanese PM leader focuses on influencing groups
U.S. approach focuses on influencing individuals
Path-Goal Theory
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A contingency theory of leadership
Four leadership styles that a manager might choose
depending on the situation
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Directive: give subordinates specific goals, structures,
schedules
Supportive: show a concern for satisfying subordinates'
needs and establish good relationships
Participative: consult with subordinates, take suggestions,
encourage participation in decision making
Achievement-oriented: set goals and reward goal
accomplishments
Exhibit 14.3: A Simplified Model of Path-Goal
Theory
Path-Goal Theory: Key Suggestions
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When subordinates have high achievement
needs, use the achievement-oriented style
When subordinates have high social needs,
use the supportive leadership style
When job is unstructured, use a directive
style or an achievement-oriented style
National Context as a Contingency
for Leadership Behaviors
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Successful leadership in multinational
companies requires that managers adjust
their leadership styles to fit different
situations.
National Context as a Contingency
for Leadership Behaviors
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Two steps to adjust a leadership to a
multination
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Step 1: understanding what local managers do to
lead successfully in their own country
Step 2: using this knowledge to modify your
leadership style
National-context contingency model of
leadership: shows how culture and related
social institutions affect leadership practices
Exhibit 14.5: National-Context Contingency
Model of Leadership
The National-Context Contingency
Model of Leadership
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Outlines of how leadership behaviors, traits,
and contingencies are affected by the
national context:
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Leader behaviors and traits
Subordinates’ characteristics
Work setting
Leadership Traits and Behaviors in
the National Context
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GLOBE (Global Leadership and Organizational
Behavior Effectiveness)
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The very latest research on cross-national
differences in leadership
Study contains insights regarding crucial
leadership styles to navigate successfully through
a maze of cultural settings
Exhibit 14.6 Culture Free Positively and
Negatively Regarded Leadership Traits and
Behaviors from 60 countries
Exhibit 14.7: GLOBE’s Study Clusters and
Countries Included in Each Cluster
Styles of International Leadership
(GLOBE study)
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Charismatic/Value-Based leadership captures the ability
of leaders to inspire, motivate, and encourage high
performance outcomes from others based on a
foundation of core values.
Team-Oriented leadership places emphasis on effective
team building and implementation of a common goal
among team members
Styles of International Leadership (2)
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Participative leadership reflects the extent to which
leaders involve others in decisions and their
implementation.
Humane-oriented leadership comprises supportive and
considerate leadership.
Autonomous leadership refers to independent and
individualistic leadership behaviors.
Self-protective leadership “focuses on ensuring the
safety and security of the individual and group through
status-enhancement and face-saving.”
GLOBE findings
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Team-oriented leaders are preferred in Latin
European and Southern Asian countries.
Anglo and Germanic cultures prefer participative
leaders.
South Asian cultures prefer humane leaders.
East Asia: Charismatic/values-based and teamoriented leadership are valued most highly (Japan,
Korea)
Self-protective and autonomous leaders are generally
seen as ineffective
National Context and Subordinates’
Expectations
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Subordinates’ expectations: expectations
regarding what leaders “should” do and what
they may or may not do
High power-distance – autocratic leadership
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E.g., many of the Latin and Asian countries
Low power-distance – the leader be more like
them
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E.g., Sweden and Norway
Comments on Exhibit 14.10
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Great Britain ranks low in power distance.
In 1980, the U.S. was near the middle of the power
distance scale. Exhibit 14.10 is based on 1980 data
for specific countries.
 Later studies suggest that the U. S. is now
moderately low in power distance.
Mexico is a high power distance country.
Exhibit 14.10 still provides useful information about
how power distance affects employee expectations.
Exhibit 14.10: Subordinates’ Expectations
under Three Levels of Power Distance
Transactional and Transformational
Leaders
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Transactional leadership: managers use rewards
or punishments to influence their subordinates
Most ordinary leaders use transactional
leadership
Requires adjustments in different countries
Transformational Leadership
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Managers go beyond transactional leadership
by
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Articulating a vision
Breaking from the status quo
Providing goals and a plan
Giving meaning or a purpose to goals
Taking risks
Being motivated to lead
Building a power base
Demonstrating high ethical and moral standards
Transformational Leaders
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Succeed because subordinates respond to
them with high levels of performance,
devotion and willingness to sacrifice
Same leadership traits may not lead to
transformational leadership in all countries
The best leaders use both transactional and
transformational leadership
Exhibit 14.11: GLOBE Study and Charismatic
Leadership
Another Description of
Transformational Leaders
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Idealized influence – charisma. Ability to get their followers to
accept a common purpose or vision
Inspirational motivation – an easy-to-understand sense of purpose
regarding what should be done.
Intellectual stimulation – giving people a new paradigm or world
view (similar to breaking from the status quo)
Individualized consideration – identify development needs and see
that they are met.
Leadership Behaviors in Decreasing
Order of Effectiveness
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Transformational leaders
Transactional leaders
Management by exception – active – looks for
problems and sees that they are resolved
Management by exception – passive – deals
with problems when they are called to his/her
attention
Laissez-faire (managers who do very little)
Attribution and Leadership
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Emphasis on what leaders believe causes
subordinates’ behaviors
A key distinction in attribution
 External attribution: factors outside the person
and beyond the person’s control (e.g., natural
disasters, illness, faulty equipment, etc.)
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The leader corrects the work situation if possible.
Internal attribution: characteristics of the person
(e.g., personality, motivation, low ability, etc.)
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The leader rewards or punishes the person.
Attribution and Leadership
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Fundamental attribution error: assumption by
managers that people behave in certain ways
because of internal motivations, rather than outside
factors
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Common error for Western managers to make in other
countries
Successful leaders make the correct attributions.
Getting Results: Should You Do
What Works at Home?
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Cannot assume that successful home
leadership styles or traits will result in equally
successful leadership in a foreign country
It is difficult to adapt.
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Cross-cultural training is important.