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