Chapter 14 Leadership and Management Behavior in Multinational Companies Copyright© 2004 Thomson Learning All rights reserved Learning Objectives • Know the characteristics of global business leadership • Understand traditional North American models of leadership • Understand the Japanese performance-maintenance model of leadership • Be able to apply the cultural-contingency model of leadership Copyright© 2005 South-Western/Thomson Learning All rights reserved Learning Objectives • Develop sensitivity to national cultural differences • Understand how national culture affects the choice of leader influence tactics • Understand how national culture influences subordinates’ expectations • Understand the role of transformational leadership in multinational settings Copyright© 2005 South-Western/Thomson Learning All rights reserved Learning Objectives • Understand how the national culture affects a leader’s attributions • Understand the role of women global leaders for multinationals • Develop the ability to diagnose cultural situations and suggest appropriate leadership style to fit the situation Copyright© 2005 South-Western/Thomson Learning All rights reserved Leadership • Leadership: process of influencing group members to achieve organizational goals • Excellent leaders • Motivate their employees to achieve more than minimal requirements • What makes a great leader? • Many formal theories of leadership exist • Most people have their own beliefs Copyright© 2005 South-Western/Thomson Learning All rights reserved Global Leadership: The New Breed • One who has the skills and abilities to interact with and manage people from diverse cultural backgrounds • Characteristics of a global leader • Cosmopolitan • Skilled at intercultural communication • Culturally sensitive • Capable of rapid acculturation Copyright© 2005 South-Western/Thomson Learning All rights reserved Global Leadership: Characteristics • 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 selfawareness and renewal Copyright© 2005 South-Western/Thomson Learning All rights reserved Three Classic Models: A Vocabulary of Leadership • Three basic models of leadership • Leadership traits • Leadership behavior • Contingency leadership Copyright© 2005 South-Western/Thomson Learning All rights reserved Leadership Traits • 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 Copyright© 2005 South-Western/Thomson Learning All rights reserved Traits of Successful U.S. Leaders • • • • 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 Copyright© 2005 South-Western/Thomson Learning All rights reserved Leadership Behaviors • U.S. perspectives on leadership behaviors • Two major types of leadership behaviors • Task-centered leader: focus on completing tasks by initiating structure • Gives subordinates specific standards, schedules, and tasks • Person-centered leader: focus on meeting the social and emotional needs of employees Copyright© 2005 South-Western/Thomson Learning All rights reserved Leader Decision Making Styles • 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 Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.1: Likert’s Four Styles of Management Copyright© 2005 South-Western/Thomson Learning All rights reserved Japanese Perspectives on Leader Behaviors • Performance-maintenance (PM) theory: balancing task- and person-centered leader behaviors Copyright© 2005 South-Western/Thomson Learning All rights reserved Performance-Maintenance Theory • Two dimensions of PM theory • Performance function (P): similar to task-centered leadership • 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 Copyright© 2005 South-Western/Thomson Learning All rights reserved Performance-Maintenance Theory • Maintenance function (M): similar to person-centered • Presents behaviors that promote group stability and social interaction • Difference between the Japanese PM approach and the U.S. perspective • Japanese PM leader focuses on influencing groups • U.S. approach focuses on influencing individuals Copyright© 2005 South-Western/Thomson Learning All rights reserved Contingency Theory • Assumption that different styles and different leaders are more appropriate for different situations • Two North American contingency theories of leadership • Fiedler’s theory of leadership • Path-goal theory Copyright© 2005 South-Western/Thomson Learning All rights reserved Fiedler’s Theory of Leadership • Proposed that managers tend to be either task- or person-centered leaders • Three successful contingencies of the work situation • Leader and subordinates relationships • Clearly defined subordinates’ tasks • Power of the leader Copyright© 2005 South-Western/Thomson Learning All rights reserved Fiedler’s Theory of Leadership • Effective leadership occurs when the leadership styles match the situation • Theory suggests that task-centered leadership works best when situation is favorable or not favorable for leader • If favorable, subordinates are positive about their work—need to be told what to do • In unfavorable situations, job requirements are unclear, leader need to focus on getting things done Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.2: Predictions of Leader Effectiveness under Different Conditions Copyright© 2005 South-Western/Thomson Learning All rights reserved Path-Goal Theory • Four leadership styles that a manager might choose depending on the situation • Directive • Supportive • Participative • Achievement-oriented Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.3: A Simplified Model of Path-Goal Theory Copyright© 2005 South-Western/Thomson Learning All rights reserved Path-Goal Theory: Key Suggestions • When subordinates have high achievement needs— adopt the achievement-oriented style • Subordinates with high social needs—adopt the supportive leadership style • When job is unstructured—adopt a directive style or an achievement-oriented style Copyright© 2005 South-Western/Thomson Learning All rights reserved Traits, Behaviors, and Contingencies • No consistent leadership trait or behavior that works best • A successful leader must diagnose the situation and pick the behaviors and/or develop the leadership traits that fits best. Copyright© 2005 South-Western/Thomson Learning All rights reserved National Context as a Contingency for Leadership Behaviors • Successful leadership in multinational companies requires that managers adjust their leadership styles to fit different situations. Copyright© 2005 South-Western/Thomson Learning All rights reserved National Context as a Contingency for Leadership Behaviors • Two steps to adjust a leadership to a multination • Step 1: understanding what local managers do to lead successfully in their own country • Step 2: using this knowledge to modify one’s leadership style • National-context contingency model of leadership: shows how culture and related social institutions affect leadership practices Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.5: National-Context Contingency Model of Leadership Copyright© 2005 South-Western/Thomson Learning All rights reserved The National-Context Contingency Model of Leadership • Outlines of how leadership behaviors, traits, and contingencies are affected by the national context: • Leader behaviors and traits • Subordinates’ characteristics • Work setting Copyright© 2005 South-Western/Thomson Learning All rights reserved Leadership Traits and behaviors in the National Context • GLOBE (Global Leadership and Organizational Behavior Effectiveness) • 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 Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.5: Culture Contingent Leadership Traits and Behaviors Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.6 Culture Free Positively and Negatively Regarded Leadership Traits and Behaviors from 60 countries Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.7: GLOBE’s Study Clusters and Countries Included in Each Cluster Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles Copyright© 2005 South-Western/Thomson Learning All rights reserved GLOBE findings • Leadership styles vary by countries. • Team-oriented leaders are preferred in Latin European and Southern Asian countries. • Anglo and Germanic cultures prefer participative leaders. • South Asian cultures prefer humane leader. • All countries agree that autonomous leaders and selfprotective leaders universally impeded leadership. Copyright© 2005 South-Western/Thomson Learning All rights reserved National Context and Preferred Leader-Influence Tactics • Influence tactics: 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 Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.9: Preferred Leader Influence Tactics in Four Countries Copyright© 2005 South-Western/Thomson Learning All rights reserved National Context and Subordinates’ Expectations • Subordinates’ expectations: expectations regarding what leaders “should” do and what they may or may not do • High power-distance – autocratic leadership • E.g., many of the Latin and Asian countries • Low power-distance – leader be more like them • E.g., Sweden and Norway Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.10: Subordinates’ Expectations under Three Levels of Power Distance Copyright© 2005 South-Western/Thomson Learning All rights reserved National Context and Subordinates’ Expectation • Strong masculinity norms • Lead to the acceptance of more authoritarian leadership • Strong uncertainty-avoidance norms • Subordinates to expect the leader to provide more detail in directions Copyright© 2005 South-Western/Thomson Learning All rights reserved Preference for “Specific” Leader In Thirteen Countries Copyright© 2005 South-Western/Thomson Learning All rights reserved Contemporary Leadership Perspectives: Multinational Implications • Two basic forms of leadership • Transactional leadership: managers use rewards or punishments to influence their subordinates • Most ordinary leaders use transactional leadership Copyright© 2005 South-Western/Thomson Learning All rights reserved Transformational Leadership • Managers go beyond transactional leadership by • 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 Copyright© 2005 South-Western/Thomson Learning All rights reserved Transformational Leaders • 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 Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.11: GLOBE Study and Charismatic Leadership Copyright© 2005 South-Western/Thomson Learning All rights reserved Attributions and Leadership • Emphasis on what leaders believe causes subordinates’ behaviors • Two key distinctions in attributions • External attribution: factors outside the person and beyond the person’s control (e.g., natural disasters, illness, faulty equipment, etc.) • Internal attribution: characteristics of the person (e.g., personality, motivation, low ability, etc.) Copyright© 2005 South-Western/Thomson Learning All rights reserved Attributions and Leadership • Once leader makes attribution, leader responds to subordinate based on that assumption • Fundamental attribution error: assumption by managers that people behave in certain ways because of internal motivations, rather than outside factors • Successful leaders make the correct attributions. Copyright© 2005 South-Western/Thomson Learning All rights reserved Global Women Leaders: The Future? • Women global leadership: spread of traits or qualities that are associated with women to the process of leading organizations worldwide • “orientation toward more participative, interactional, and relational styles of leading” Copyright© 2005 South-Western/Thomson Learning All rights reserved Global Women Leaders • Women leaders have skills to develop deep relationship to understand markets • More likely to provide unity to accommodate needs of various stakeholders • Better ability to understand diversity at global levels Copyright© 2005 South-Western/Thomson Learning All rights reserved Getting the Results: Should You Do What Works at Home? • Cannot assume that successful home leadership styles or traits will result in equally successful leadership in a foreign country • It is nevertheless difficult to adapt. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.12: Leadership Behavior and Job Performance of U.S. Managers in the U.S. and in Hong Kong Copyright© 2005 South-Western/Thomson Learning All rights reserved The Cultural Context and Suggested Leadership Styles • High power distance – behave more autocratically • High uncertainty cultures – remove ambiguity from work setting Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.13: National Culture and Recommended Leadership Styles Copyright© 2005 South-Western/Thomson Learning All rights reserved