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Bachelor thesis

The influence of national culture on the relation

between leadership styles and team performance

Supervisor: Astrid Kramer

Date: June 11, 2010

Words: 7602

Joost Martens 208594

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Management summary

Working in teams is becoming more important in the modern business world. Also, as more

companies expand their business to other countries, dealing with other cultures is an

important issue nowadays. This thesis looks at how national culture influences the relation

between leadership styles and team performance. The leadership styles examined in this

research are transformational leadership and transactional leadership.

Results of this research are that especially transformational leadership has a positive influence

on team performance. For transactional leadership this is questionable, as evidence for both

negative and positive effects were found.

Hofstede‟s cultural dimensions were found to have an influence on whether transactional- or

transformational leadership is preferred. Furthermore, several characteristics of

transformational leadership were found to be universally endorsed as contributing to

outstanding leadership.

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Table of contents

Chapter 1: Introduction .............................................................................................................. 4

1.1 Problem Indication ............................................................................................................... 4

1.2 Problem statement ................................................................................................................ 5

1.3 Research Questions .............................................................................................................. 6

1.4 Research Design and Data Collection .................................................................................. 6

1.5 Structure ............................................................................................................................... 7

Chapter 2: Team Leadership ...................................................................................................... 8

2.1 Leadership theories .............................................................................................................. 8

2.1.1 Trait Theories .................................................................................................................... 8

2.1.2 Behavioral Theories .......................................................................................................... 9

2.2 Situational Leadership Theories. ........................................................................................ 10

2.3 Transactional and Transformational leadership ................................................................. 11

2.4 Team leadership and team functioning .............................................................................. 13

2.7 Conclusion .......................................................................................................................... 14

Chapter 3: The relationship between leadership style and team performance. ........................ 15

3.1 Transformational leadership and team performance. ......................................................... 15

3.2 Transactional leadership and team performance. ............................................................... 17

3.3 Conclusion .......................................................................................................................... 18

Chapter 4: The influence of national culture on leadership styles. .......................................... 19

Introduction .............................................................................................................................. 19

4.1 Research on leadership across cultures .............................................................................. 19

4.2 Hofstede‟s cultural dimensions .......................................................................................... 20

4.2.1 Power Distance ................................................................................................................ 20

4.2.2 Uncertainty Avoidance .................................................................................................... 21

4.2.3 Individualism-Collectivism ............................................................................................. 21

4.2.4 Masculinity-Femininity ................................................................................................... 22

4.3 Conclusion. ......................................................................................................................... 22

Chapter 5 Conclusion, discussion, recommendations and limitations. .................................... 24

5.1 Introduction ........................................................................................................................ 24

5.2 Conclusion .......................................................................................................................... 24

5.3 Discussion .......................................................................................................................... 26

5.4 Recommendations for further research .............................................................................. 26

5.5 Limitations ......................................................................................................................... 27

References ................................................................................................................................ 28

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Chapter 1: Introduction

1.1 Problem Indication

The most influential people within teams and organizations are its leaders. According to

Mosley, Pietri and Megginson (1996), ‘leadership is a process of influencing individual and

group activities toward goal setting and goal achievement; in the final analysis the successful

leader is the one who succeeds in getting others to follow.’ From this quote, it can be derived

that for people within teams to do their jobs well, they have to be directed and motivated by a

leader. Teams will function better when a good morale exists and when everyone works

together towards the same goal (Morgeson, DeRue & Karam, 2010). Hence, achieving this is

one of the most important tasks of a good leader.

Leadership requires working with different people and different situations (Vroom and Jago,

2007). This means that a great variety in leadership styles exists. Every style of leadership

should carefully be chosen in order to have a positive impact on the morale of the team

members and, in this way, on the performance of the team as a whole. But is there a certain

leadership style preferable over another? This is an important question in research on

leadership styles.

Much research has been done on leadership styles and its‟ effect op team performance. As the

use of teams has increased in organizations, research has begun to focus on the role of

leadership in increasing team performance (Morgeson, DeRue & Karam, 2010). A possible

explanation for this development can be found in a recent survey by Martin & Bal (2006).

They found that 91% of the high-level managers they questioned in their research agreed that

“teams are central to organizational success”. This thesis will try to find a relation between

team performance and different leadership styles.

Burns (1978) first articulated the idea that leadership styles can be roughly divided into two

categories; transformational and transactional leadership. In transformational leadership,

leaders elicit greater motivation and positive emotions from their followers by creating and

representing an inspiring vision of the future (Bass, 1997). In contrast, „transactional leaders

cater to the self-interests of their constituencies by means of contingent reinforcement,

positive in the case of constructive rewards, praise and promises for constituents‟ success in

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meeting commitments to the leader and organization. Or, the reinforcement is aversive in the

case of follower failure to meet commitments (Bass, 2000)

An important factor that might have an influence on the relationship between leadership style

and team performance is national culture (Dickson et al, 2003). One of main focuses of this

research is whether leadership styles differ among cultures, and, more importantly, whether a

certain style of leadership has a different effect in one culture compared to another. If this is

true, culture is a mediating variable in the relation between leadership style and team

efficiency.

The emphasis on national culture when performing research on the subject of leadership

emerged in the years 1996 and 1997, when important papers on the subject matter were

published. Dorfman (1996) published the first important research on differences in leadership

styles across cultures. In 1997, House, Wright and Aditya released their view on this subject.

The goal of this research is to describe the relationship between different leadership styles and

team performance, and to investigate the (mediating) effect of culture on this relationship.

1.2 Problem statement

The problem indication written above can be translated into a single problem statement. This

main question to be answered in this paper is;

How does national culture influence the relationship between leadership style and team

performance?

This problem statement is divided into two sub-questions. The first one concerns the

relationship between different styles of leadership and the performance of the team on which

this leadership is practised. The second sub-question deals with the role that national culture

plays in the relationship. Certain styles of leadership may have different effects across

cultures, or leadership styles might only exist within a certain culture. Combining the answers

to these questions will answer the problem statement as it is stated above.

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1.3 Research Questions

In this section, the research questions are presented. The research questions are the questions

that are subsequently answered in order to solve the problem as it was presented in the

previous section. Below, an overview of the research questions is given;

1. What is team leadership?

2. How does leadership style influence team performance?

3. How does national culture affect leadership styles?

1.4 Research Design and Data Collection

For this thesis descriptive research will be conducted. This means that it „aids in defining and

clarifying the nature of the problem, in addition to setting a basis for future research‟

(Sekaran, 2003). For this research existing data and theories will be used. The type of research

for this thesis will be a literature review. A literature review is a summary of the current state

of knowledge on a research topic as found in academic books and journal articles (Sekaran,

2003). According to Sekaran (2003), secondary data is data that has already been gathered by

researchers. This is a qualitative research. The main concepts of this research are leadership

styles, team performance and national culture. Culture is thought to have a mediating impact

on the relation between leadership style and team performance.

For the data collection for this thesis various search engines are used, like the general

database for journal articles from Tilburg University. Other search engines, like LexisNexis

Academic and Science Direct, are also used as it is important to keep the research broad,

especially in a literature review, where all high quality publications on the subject matter

should be taken into account when performing the research. Keywords when searching in

these databases will be, amongst others; leadership, leadership styles, culture, team

performance and leadership theory.

Because the topic of this research lies within the field of organizational behaviour, The

Journal of Organizational Behaviour will be an important source for this thesis. Also, as team

leadership is a management issue, The Journal of Management will be another important

source of publications for this thesis. Furthermore, The Leadership Quarterly will provide

highly relevant articles for this research.

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1.5 Structure

The structure of this thesis will be as follows. The first research question will provide a

theoretical framework on the subject of leadership. The second research question will discuss

the relationship on which this research concentrates itself; the relation between leadership

style and team performance. The third and final research question will show which role

culture plays in the relationship between leadership style and team performance. Common

leadership styles in certain cultures will be discussed, and explanations for these varieties will

be presented. Furthermore, the differences in the effects of certain styles of leadership across

cultures will be presented. In this way, it can be shown that culture acts as a mediating

variable in the relation between leadership style and the performance of a team of

organization.

By answering these research questions, this thesis will be able to come up with a detailed

answer to the problem statement of this research.

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Chapter 2: Team Leadership

Ciulla (2002) describes leadership as the ability to impress the will of the leader on those led

and induce obedience, respect, loyalty and cooperation. She adds that leadership is an

influence on the relationship between leaders and followers who intend real changes that

reflect their mutual purposes. House, Javidan, Hanges and Dorfman (2002) describe

leadership as 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. Comparing these definitions shows that leaders need to be able to influence

followers and make them work in the organizations‟ best interest. In this chapter, the interest

is in leadership itself, as well as theories concerning it and different styles of practising

leadership. As in the literature no different definitions of team leadership and leadership can

be found, this thesis will assume that findings of research on leadership are applicable on

team leadership.

2.1 Leadership theories

For many years, research has been done on the subject of leadership. Many scientists,

sociologists, psychologists, etc., have shed their light on this phenomenon. This paragraph

will discuss the important theories and findings concerning leadership.

Leadership theories have become of particular interest in the recent years, as researchers

wanted to be able to identify why certain people have been successful leaders in the history of

mankind. The first question that comes to mind is: „What makes a person a leader?‟ In other

words, is a person born to be a leader or is it possible that the required skills to be successful

in leadership are achieved during someone‟s life by studying the subject of leadership. This

brings us to the first distinction in leadership theories: Trait theories and Behavioural theories.

2.1.1 Trait Theories

The main idea of the trait theory of leadership is that leaders have certain traits (people‟s

general characteristics) that make them leaders. The fundament for trait theories on leadership

can be traced back as far as the ancient Greeks, Plato to be exact. In his early works, Plato

firmly believed that the wisest and most virtuous men would make the best leaders (Ciulla,

2002).

In 1902, Thomas Carlyle introduced the Great Man Theory, which was based on this same

idea: leaders are born and not made. Carlyle said that we had to look for the „ablest‟ man to be

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our leader and then submit to him for our own good. He further argued that „the history of the

world is but the biography of great men‟ (Ciulla, 2002). This “Great Man Theory” has

evolved during the 20th

century into trait theories. The focus on „leaders are born and not

made‟ made place for a theory in which it was assumed that leaders‟ characteristics are

different from non-leaders. In a more recent research on this theory, Kirkpatrick and Locke

(1991) stated this as follows: “It would be a profound disservice to leaders to suggest that they

are ordinary people who happened to be in the right place at the right time. Maybe the place

matters, but it takes a special kind of person to master the challenges of opportunity.”

In other words, they suggest that leaders are recognized on the grounds of certain character

traits. When a leader is recognized on the grounds of certain character traits which person

possesses, use is made of trait theory.

Critics of the trait theory raised the question whether the leadership traits can be learned to

someone, and whether universal leadership traits exist (Northouse, 2004). Another criticism is

that „while personality may reveal whether an individual is perceived as leader-like,

personality is less than successful in identifying whether those leaders are successful in an

objective sense‟ (Judge, Piccolo & Kosalka, 2009). Furthermore, there is much doubt about

whether the correlation between certain character traits and leadership performance is a valid

one (Judge, Piccolo & Kosalka, 2009).

2.1.2 Behavioral Theories

After the criticism on the trait theory stated above, behavioural theories became more popular

in leadership research. While trait theory focuses on the right person to be a leader,

behavioural theory approaches leadership by looking at the desired behaviour for a leader.

Kahn and Katz (1960) distinguished two types of leadership behaviour, employee-oriented

and production-oriented. An employee oriented leader focuses himself on the people he is

leading and the interpersonal relations. A production oriented leaders‟ main concern is

production and accomplishment of tasks. Kahn and Katz (1960) concluded that employee-

oriented leaders have better results on both production and job satisfaction.

An important implication of the behavioural theory is that, because of its‟ focus on behaviour

rather than character, leadership is assumed to be teachable. Hence, studying successful

leaders‟ behaviour would be the key to successful teams and organizations. However, the

question arose which behaviour was needed in which situation.

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2.2 Situational Leadership Theories.

Although behavioural theory gives certain insights into leadership behaviour, the situational

component has still not been given attention to. Hence situational theories, also called

contingency theories, were developed to indicate that the style to be used is dependent on

factors like the situation, the organization, the task, the people, and other environmental

variables (Vroom & Jago, 2007).

Situational leadership theory assumes that different leadership styles have to be used in

different situations. Vroom and Jago (2007) argue that while a leader might be successful in

one situation, he might be unsuccessful in another. In other words, there is no perfect,

universal leadership style or type of leader. In their study: The Role of the Situation, Vroom

and Jago (2007) identified three roles in which the situation affects leadership. The first role is

that situations occurring outside of the leaders control might affect the effectiveness of the

overall organization. The second role is that situations shape leaders‟ behaviour. According to

Vroom and Jago (2007) „situation accounts for about three times as much variance as do

individual differences‟. In other words, situations determine for a large part the way a leader

behaves, even more than individual differences between leaders. The third role is that

situations influence the consequence of the behaviour of a leader. They state that „a leadership

style that is effective in one situation may prove completely ineffective in a different

situation‟ (Vroom & Jago, 2007).

Fiedler (1967) was the first to conduct research that included both situational variables and

character traits. In his contingency model, he made a distinction between two types of leaders:

relationship-oriented and task-oriented. Relationship oriented leaders tend to accomplish the

task by developing good relations with the group, while task oriented leaders‟ prime concern

is carrying out the task itself (Fiedler, 1967). Both of them can be equally effective,

depending on the situation. This dependence on the situation implies that Fiedlers‟ theory also

belongs to situational leadership theories. When there is a good leader-member relation, a

high leader position power (strong hierarchy) and a highly structured task, a situation is

considered to be „favourable‟. When the opposite is true, it is considered an „unfavourable

situation‟. Fiedler found that task oriented leaders are more effective in extremely favourable

or unfavourable situations, while relationship-oriented leaders do a better job in moderately

favourable situations.

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Another research on situational leadership is done by Hersey and Blanchard (1974). They

included the situational component in their research by arguing that different situations within

an organization exist, all depending on the levels of ability and willingness of followers to act

as the leader tell them to. Hersey and Blanchard called this the Situational Leadership Theory.

Another theory within the field of situational leadership theories is the Path-Goal Theory. The

path-goal theory of leadership by Robert House (1971) states that “leaders, to be effective,

engage in behaviours that complement subordinates‟ environments and abilities in a manner

that compensates for deficiencies and is instrumental to subordinate satisfaction and

individual and work unit performance.” Thus, an effective leader provides comforting paths

for subordinates, which will eventually lead to satisfaction of organizations‟ objectives. The

theory was worked out in more detail by House and Mitchell (1974), as they added a

situational component to the theory. They made a distinction between four different kinds of

leader behaviour, as the satisfaction of subordinated will differ from case to case. These four

kinds of behaviour are directive, supportive, participative, and achievement oriented

behaviour.

2.3 Transactional and Transformational leadership

The final distinction in leadership styles is between transactional and transformational

leadership. Burns (1978) and Bass (1985) created a new view on leadership by introducing the

concept of transactional and transformational leadership styles.

Transactional relationships are exchange processes in which followers‟ needs can be met if

their performance is adequate (Wofford & Goodwin, 1994). According to Bass and Avolio

(1990), „transactional leaders motivate subordinates through the use of contingent rewards,

corrective actions, and rule enforcement‟. Bono and Judge (2004) state that „transactional

leadership behaviors are aimed at monitoring and controlling employees through rational or

economic means‟. Hence, this kind of leadership aims at accomplishing goals. Task

orientation is more important than the relation between leader and followers

„Transformational leadership behaviours are intended to motivate followers to work for

transcendent goals or organizational visions and to attain self-actualizing needs using self-

reinforcement as the basis of control‟ (Wofford & Goodwin, 1994). Bass and Avolio (1990)

stated that „transformational leaders encourage followers to view problems from new

perspectives; provide support and encouragement; communicate a vision; and engender

emotion and identification‟. Transformational leaders inspire and excite their employees with

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the idea that they may be able to accomplish great things with extra effort. They act as

mentors to those who need help to grow and develop (Bass, 1990). Hence, transformational

leaders are more concerned with their followers than transactional leaders. They want their

followers to reach their full potential and stimulate them to be innovative. They are less task-

oriented, and more focused on the big picture; the organization as a whole. In figure 1 the

most important differences between transformational and transactional leaders are presented.

Figure 1; differences between transformational and transactional leaders, by Bass (1990).

In the figure above, the most important concepts of both leadership styles can be seen. For

transformational leaders, these are charisma, inspiration, intellectual stimulation, and

individual consideration. On the other hand, the important concepts for transactional leaders

are contingent reward, active- and passive management by exception, and laissez-faire. These

concepts will be discussed more detailed in the next chapter.

An important difference between transformational and transactional leadership is that

transformational leadership is person-oriented based on mutual trust and respect, and

transactional leadership is task-oriented based on a (contractual) agreement. The relation

between followers and leader is much more present in the case of transformational leadership.

Instead of just monitoring and controlling, the transformational leader tries to make its

followers reach their full potential.

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2.4 Team leadership and team functioning

As this thesis aims to apply leadership theories on team settings, it is useful to take a closer

look on teams. This paragraph will discuss the way in which teams function, and why teams

are in need of a leader.

The subject of team leadership has been discussed in several researches. In their study on

team leadership, Zaccaro, Rittman and Marks (2001) focused on functional leadership in

teams. They argue that „effective leaders are those who take on whatever role function is

required in the team‟. Furthermore, Day, Gronn and Salas (2004) state that an effective team

leader will create a climate that encourages mutual performance monitoring, supportive

behavior, and adaptability.

In order to understand team leadership, one has to understand the nature of team functioning.

With this understanding, it is easier to describe the role of leadership models in improving

team performance. Team work is characterized by recurring cycles of mutually dependent

interaction. These cycles of goal-directed activity can be divided into two distinctive phases;

the transition- and action phase (Morgeson, DeRue & Karam, 2010). In the transition phase

teams plan and evaluate their activities, while in the action phase teams perform the activities

that contribute to achieving their goals.

As teams work across these phases, they will encounter numerous challenges and problems

arising from the organization, from the external environment, and from within the team.

These challenges might make it difficult for teams to achieve their goals, as existing plans and

strategies have to be changed or even abandoned. In effect, the challenges create distinctive

needs within teams that must be satisfied for them to be successful (Morgeson, DeRue &

Karam, 2010). These needs might arise in the two phases mentioned earlier, the transition-

and action phase.

Needs that might arise during the transition phase include outlining the overall objectives,

setting goals, developing positive team norms, deciding on a task performance strategy,

developing shared understanding within the team, and becoming clear on the distribution of

knowledge within the team. Needs arising during the action phase include monitoring output

as the team makes progress towards its goals; monitoring systems (people, resources,

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stakeholders, conditions) inside and outside the team; engaging in high quality

communication; coordinating team actions; maintaining boundaries so that teams effectively

interface with groups outside the team; and monitoring team behaviour and coaching to team

members. Besides the needs mentioned above, interpersonal needs also have to be taken into

account. They include the motivation of team members, promoting a sense of psychological

safety, and managing emotions and conflicts that might occur within the team (Morgeson,

DeRue & Karam, 2010).

As these needs are of great importance to team performance, one can argue that in order to

successfully lead a team all the needs have to be satisfied. Hence, the person taking on this

responsibility can be viewed as team leader. This explanation of team leadership is rather

similar to the functional leadership theory by McGrath (1962). This theory argues that the

role of a leader is „to do, or get done, whatever is not being adequately handled for group

needs‟. In other words, team leadership requires satisfying a team‟s critical needs.

2.7 Conclusion

In this chapter, team leadership and leadership itself have been discussed. The development of

leadership theories has begun with trait theories. The main idea of the trait theory of

leadership is that leaders have certain traits that make them leaders. When the question arose

whether these traits could also be developed or learned, behavioural theories of leadership

became more popular. This theory focused on desired behaviour for leaders, and it became

clear that different situations demand different leadership behaviours. This was an important

understanding in leadership research, and it led to situational leadership theories, such as

Fiedlers‟ theory and the Path-Goal theory. The most recent research on leadership only deals

with one distinction when investigating leadership, namely transformational and transactional

leadership. Transformational leadership is person-oriented based on mutual trust and respect.

The transformational leader tries to make its followers reach their full potential, and motivate

them to be innovative. On the other hand, transactional leadership is task-oriented based on a

(contractual) agreement. It aims at accomplishing goals, and motivates followers to achieve

them by making use of punishments and rewards. As modern research on the subject of

leadership uses this distinction in leadership styles, the next chapter will also consider the

effect on team performance of these two styles.

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Chapter 3: The relationship between leadership style and team performance.

Since their introduction, transformational and transactional leadership have been investigated

in many studies. Research has even shown that there have been more studies on

transformational- and transactional leadership than on all other popular theories of leadership

(Judge & Piccolo, 2004). This chapter will discuss the effect of these two leadership styles,

transformational and transactional leadership, on team performance because of two reasons.

First of all, as stated above, research has shown that transactional and transformational

leadership theories are the most investigated and accepted theories on leadership. Secondly,

according to Bass & Avolio (1993), transformational leadership adds to the effect of

transactional leadership. In other words, transformational leadership is built on the foundation

of transactional leadership (Judge & Piccolo, 2004). Hence, these theories are related to each

other in such a strong way that discussing just one of them is not appropriate.

3.1 Transformational leadership and team performance.

Transformational leadership is seen when leaders broaden and elevate the interests of their

subordinates, when they generate awareness and acceptance among subordinates of the

purpose and mission of the group, and when they move their subordinates to go beyond their

own self-interests for the good of the group (Burns, 1978). This increases motivation amongst

their followers, and this increase is linked to three conceptual and empirically derived factors

of transformational leadership (Bass & Avolio, 1989).

First, transformational leaders are more charismatic and inspiring in the eyes of their

followers. They have great influence on subordinates, command respect and inspire loyalty to

the organization. Followers have great trust and confidence in them. The second factor of

transformational leadership is individualized consideration. This individual consideration

contributes to subordinates reaching their full potential. A transformational leader pays

attention to individual differences in subordinates‟ needs for growth and development, and

elevates their needs and abilities to higher levels. The third component is intellectual

stimulation. Transformational leaders stimulate followers to become aware of problems, of

their own thoughts and imagination, and to recognize their values and believes (Bass,

Spangler & Yammarino; 1993).

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Most research on transformational leadership has been done on individual performance, rather

than in team context. Empirical evidence supports the hypothesis that transformational

leadership positively influences performance. Little research on the exact relation between

transformational leadership and team performance has been done, despite that fact that

transformational leadership clearly positively influences team outcomes (Burke et al, 2006).

An in detail definition of team performance has not been articulated in research on leadership

in teams and related subjects. A way to look at team performance is presented by Burke et al

(2006). In their research on effective leadership in teams, Burke et al (2006) measure team

performance by looking at team effectiveness, team productivity, and team learning. They

argue that the combination of these three components is sufficient to measure team

performance.

Two important studies on the relation between transformational leadership and team

performance were done in military settings. Bass et al. (2003) found that transformational

leadership ratings of platoon leaders and sergeants in the U.S. army predicted unit

performance in combat simulations. In addition, Lim and Ployhart (2004) found that team

members‟ ratings of their commanding officers‟ transformational leadership were positively

related to team performance.

While most work on transformational leadership has been conducted outside of team contexts,

theoretical arguments can be made to support that behaviours of transformational leaders

should be positively related to team performance. Two of the most apparent areas in which

transformational leadership would facilitate team performance outcomes are individual

consideration and intellectual stimulation. Looking at individual consideration, probably the

largest impact of this on team performance is the provision of expert coaching. The provision

of expert coaching has been argued to be an important way in which leaders can influence

team performance, because it is the means via which team coherence is often developed and

maintained (Burke et al, 2006). Intellectual stimulation, theoretically, has been argued to

facilitate team performance outcomes through the promotion of team learning and adaptation,

as it refers to leader actions that emphasize the development of follower self-management and

self-leadership skills (Burke et al, 2006).

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Burke et al. (2006) conducted a research on the relationship between both transformational

and transactional leadership on team performance. They measured team performance by

looking at team effectiveness, team productivity, and team learning/growth. They found that

transformational leadership had a positive influence on all these three factors. Therefore,

transformational leadership and team performance are argued to have a positive relation.

Cha, Lam & Schaubroeck (2007) stated in their research that „transformational research is

associated with superior team performance. Transformational leadership influenced team

potency and, consequently, team performance.‟

3.2 Transactional leadership and team performance.

Transactional leadership behaviours are built on exchanges between to parties whereby the

leader provides praise, reward, or withholds punishment from a subordinate who complies

with role expectations (Burns, 1978). Transactional leaders recognize subordinates‟ needs and

desires and then clarify how those needs and desires will be met in exchange for enactment of

subordinates‟ work role. They are able to build confidence in followers to exert the necessary

effort to achieve expected levels of performance (Bass, Spangler & Yammarino; 1993).

Transactional leadership consists of three dimensions, active management by exception,

passive management by exception, and contingent reward. „Contingent reward is the degree to

which the leader sets up constructive transactions or exchanges with followers: the leader

clarifies expectations and establishes the rewards for meeting these expectations‟ (Judge &

Piccolo, 2004). The difference between active- and passive management by exception lies in

the timing of the leaders‟ intervention. Active leaders monitor followers‟ behaviour, anticipate

problems, and take corrective actions before the behaviour creates serious difficulties. Passive

leaders wait until the behaviour creates serious problems before taking action (Judge &

Piccolo. 2004).

In a research by Podsakoff & Schriesheim (1985), they stated that „transactional leadership

behaviour based on contingent rewards positively affects subordinate satisfaction and

performance.‟ Furthermore, Judge & Piccolo (2004) found a small, but positive correlation

between transactional leadership and team performance in their research on the topic. Howell

& Avolio (1993) argue the opposite. In their research on leadership and business unit

performance, they found that transactional leadership was negatively related to business unit

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performance. Bass et al (2003) performed a study in the U.S. navy on the effect of leadership

style on team performance, and they found a positive relation between these two.

Results on the relation between transactional leadership and team performance have been

mixed. While some have found a, sometimes modest, positive relation between the two

(Podsakoff & Schriesheim, 1985; Judge & Piccolo, 2004; Bass et al, 2003), other have found

no relation or a negative one (Howell & Avolio, 1993).

3.3 Conclusion

This chapter has discussed the relation between transactional- and transformational leadership

and team performance. Although not much research has been conducted on this subject, some

important findings were presented in this chapter. Both theoretical and empirical research has

shown that there is a clear positive relation between transformational leadership and team

performance. Transformational leaders positively influence team performance by individual

consideration and intellectual stimulation of their followers. Furthermore, their influence on

team effectiveness, team productivity, and team learning/growth increases team performance.

Evidence on a positive relation between transactional leadership and team performance is less

obvious. Some research shows a positive relation, while others found a negative relation.

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Chapter 4: The influence of national culture on leadership styles.

Introduction

Research on leadership in different cultures is expanding rapidly across the world, trying to

explain the differences in leadership behaviour between countries and cultures (Wendt et al,

2009). As Hofstede (2001) argues, „ideas about leadership reflect the dominant culture of a

country. Asking people to describe the qualities of a good leader is in fact another way of

asking them to describe their culture.‟ This implies that national culture and leadership are

strongly connected with each other. This chapter begins by discussing different studies on the

influence of culture on leadership styles. Then a cultural framework that can be used to

explain differences in leadership styles across different cultures will be presented.

4.1 Research on leadership across cultures

Research on the topic of leadership across different cultures has evolved into a more

important and recognized subject of research throughout the years (Dickson, Den Hartog &

Mitchelston, 2003). In this section, a closer look will be taken at publications on this topic,

and its‟ findings.

The first research to discuss is Project GLOBE, which stands for Global Leadership and

Organizational Behaviour Effectiveness Research Project. It is a long-term, multiphase, and

multi-method project directed toward the development of systematic knowledge concerning

how societal and organizational cultures affect leadership and organizational characteristics

(Dickson, Den Hartog & Mitchelston, 2003). An important outcome of this research was that

several attributes reflecting charismatic/transformational leadership, including motive arouser,

foresight, encouraging, communicative, trustworthy, dynamic, positive, confidence builder,

and motivational, are universally endorsed as contributing to outstanding leadership (Den

Hartog et al., 1999). In other words, research has shown that transformational leadership in

teams and organizations is regarded to be an outstanding leadership style in all cultures

examined. However, several other transformational attributes, including enthusiastic, risk

taking, ambitious, self-sacrificial, sensitive, and wilful, are perceived as culturally contingent.

Whether these attributes are regarded as contributing to outstanding leadership depends on

cultural dimensions (Den Hartog et al., 1999), such as the four dimensions by Hofstede,

which will be discussed in the next paragraph.

Bass (1997) also performed research on leadership in different cultures. He argues that

transformational leadership may be universal, as he found that transformational leadership

20

correlates more positively with various positive outcomes than transactional leadership in a

wide variety of countries. Bass (1997) also found evidence that transformational leadership is

preferred in different cultures.

Keeping in mind the conclusions of the GLOBE project and looking at the findings stated

above, it can be concluded that transformational leadership can be regarded as an outstanding

leadership style (Den Hartog et al., 1999).

4.2 Hofstede’s cultural dimensions

The most well known cultural dimensions are undoubtedly Hofstede‟s (2001) four cultural

dimensions. Hofstede‟s four dimensions are power distance, uncertainty avoidance,

individualism-collectivism, and masculinity-femininity. In this paragraph these dimensions of

culture will be discussed.

4.2.1 Power Distance

The first dimension to discuss is power distance. Leadership involves disproportionate

influence, and all over the world, the leadership role is associated with power and status

(Dickson, Den Hartog & Mitchelson, 2003). Hofstede (2001) defines power distance as „the

extent to which a society accepts the fact that power in institutions and organizations is

distributed unequally‟. Thus, the higher the power distance in a certain culture, the higher the

difference in power between individuals within organizations. Power distance within society

is directly related to leadership. An example is that subordinates in high power distance

societies are less likely to challenge their leaders and will not easily express disagreement

with them. Power distance has an impact on subordinates‟ expectations and preferences

regarding leadership (Dickson, Den Hartog & Mitchelston, 2003).

An interest finding by Dorfman et al. (1997) is that directive (transactional) leadership only

had positive outcomes in terms of satisfaction and commitment in cultures relatively high on

power distance. On the other hand, participative (transformational) leadership only had

positive effects in cultures relatively low on power distance. In the same research, Dorfman et

al. (1997) found that in cultures with a higher power distance only directive and supportive

leadership were positively related to job performance. In contrast, within cultures lower on

power distance only participative leadership had a direct and positive relationship with

performance. Furthermore, research by Bu, Craig and Peng (2001) showed that the higher the

power distance, the higher the willingness to accept supervisory direction. Recent research

has also started to suggest that power distance may also play a role in the enactment of

21

transformational leadership in different cultures. In cultures with relatively low power

distance, transformational leadership has been suggested to be more effective than within

cultures with a higher power distance, where directive leadership has shown to be more

effective (Dickson, Den Hartog & Mitchelston, 2003). Summarizing, in cultures with a high

power distance, leadership tends to be more directive and less participative. Within cultures

with low power distance, the opposite is true.

4.2.2 Uncertainty Avoidance

The second dimension of Hofstede‟s model on culture is uncertainty avoidance. Uncertainty

avoidance refers to the degree to which members in a society feel uncomfortable with

ambiguous and uncertain situations, and take steps to avoid them (Dickson, Den Hartog &

Mitchelston, 2003). Hofstede (1980) defined uncertainty avoidance as the extent to which a

society feels threatened by uncertain and ambiguous situations and tries to avoid these

situations by believing in absolute truths and the attainment of expertise, providing greater

stability, establishing more formal rules, and rejecting deviant ideas and behaviours. In a

study by Offermann and Hellmann (1997), they found that managers from high uncertainty

avoidance cultures, compared to those from low uncertainty avoidance cultures, tended to be

more controlling, less delegating and less approachable. In addition, Shane (1995) found

lower preferences for innovation championing roles (including transformational leadership) in

high uncertainty avoidance societies (Dickson, Den Hartog & Mitchelston, 2003).

Concluding, in cultures with high uncertainty avoidance transactional leadership seems to be a

better fit.

4.2.3 Individualism-Collectivism

The next dimension to discuss is individualism-collectivism. „Cultures characterized by

individualism can be seen as loosely knit social frameworks in which people are supposed to

take care of themselves and look after their own interests and those of their close family only.

A tight social framework with strong and cohesive in-groups that are opposed to out-groups is

a key characteristic of high collectivism‟ (Hofstede, 2001). In other words, collectivist

cultures form more a group, while individualist cultures are a collection of different

individuals. Research has shown that collectivism seems to fit well with some of the processes

central to transformational leadership, such as the central role of the group and identification

processes (Jung & Avolio, 1999). In their study, Jung & Avolio (1999) found that collectivists

with a transformational leader generated more ideas, whereas individualist generated more

22

ideas with a transactional leader. In a study performed by Pillai & Meindl (1998), they found

that collectivism was positively related to supervisory ratings of work unit performance, job

satisfaction, satisfaction with the leader, and leader effectiveness.

4.2.4 Masculinity-Femininity

The final dimension to discuss is masculinity-femininity. According to Hofstede (2001),

masculinity implies dominant values in a society that stress assertiveness and being tough, the

acquisition of money and material objects, and not caring for others, the quality of life or

people. In feminine cultures, values such as warm social relationships, quality of life, and care

of the weak are stressed. Hofstede (2001) stated that „masculine and feminine cultures create

different leader hero types. The heroic manager in masculine cultures is decisive, assertive,

and aggressive. In feminine cultures, the “hero” is less visible, seeks consensus, and is

intuitive and cooperative rather than tough and decisive‟. Triandis (1994) argues that

achievement motivation and an acceptance of „macho style‟ leadership should be higher in

countries high on masculinity than in those high on femininity.

This dimension is often criticized, as critics state that this dimension is not well measured and

that it includes too many very different topics that are not necessarily related. These topics

include gender egalitarianism, the extent to which genders are perceived as equal in a certain

culture, and assertiveness, the degree to which individuals are assertive, tough, dominant and

aggressive (Dickson, Den Hartog & Mitchelston, 2003). Looking at the relation between

gender egalitarianism and leadership styles shows that more gender egalitarian cultures

endorse charismatic/transformational leadership (Dickson, Den Hartog & Mitchelston, 2003).

4.3 Conclusion.

This chapter has discussed the influence of national culture on leadership styles. In the first

section, Hofstede‟s four cultural dimensions (power distance, uncertainty avoidance,

individualism-collectivism, and masculinity-femininity) were related to leadership styles.

Findings were that in cultures scoring low on power distance, transformational leadership is

more effective. In cultures with a high power distance, transactional leadership is more

effective. Furthermore, cultures with high uncertainty avoidance preferred transactional

leadership, and vice versa. The conclusion for the individualism-collectivism dimension were

that within collectivist cultures transformational leadership is a better fit, while in

individualist cultures this was the case with transactional leadership. Finally, in masculine

23

cultures transactional leadership is more effective, while in feminine cultures transformational

leaders are preferred.

The GLOBE project on leadership across cultures found that several attributes reflecting

charismatic/transformational leadership are universally endorsed as contributing to

outstanding leadership. Research by Bass (1997) has similar conclusions. He found that

transformational leadership correlates more positively with various positive outcomes than

transactional leadership in multiple countries.

The conclusion of this chapter is therefore that the different dimensions of cultures all have

their influence on the positive of negative outcome of a certain leadership style. However,

several characteristics of transformational leaders seem to have universal positive outcomes.

24

Chapter 5 Conclusion, discussion, recommendations and limitations.

5.1 Introduction

This thesis discussed the influence of national culture on the relation between leadership

styles and team performance. In this chapter this problem statement will be answered, by

answering the different research question discussed in the earlier chapters. Furthermore,

points of discussion, recommendations and limitations will be presented.

5.2 Conclusion

The first research question explained what team leadership is, and discussed the different

theories on leadership. As no differences in approaches to- or definitions of- team leadership

en leadership were found in the literature, the assumption was made that findings on

leadership are also applicable on team leadership. Leadership itself was defined as „the ability

of an individual to influence, motivate, and enable other to contribute toward the effectiveness

and success of the organizations of which they are members. The development of leadership

theories has begun with trait theories. The main idea of the trait theory of leadership is that

leaders have certain traits that make them leaders. When the question arose whether these

traits could also be developed or learned, behavioral theories of leadership became more

popular. These theories focus on desired behavior for leaders, and it became clear that

different situations demand different leadership behaviors. This was an important

understanding in leadership research, and it led to situational leadership theories, such as

Fiedlers‟ theory and the Path-Goal theory. The most recent research on leadership only deals

with one distinction when investigating leadership, namely transformational and transactional

leadership. Transformational leadership is person-oriented based on mutual trust and respect.

The transformational leader tries to make its followers reach their full potential, and motivate

them to be innovative. On the other hand, transactional leadership is task-oriented based on a

(contractual) agreement. It aims at accomplishing goals, and motivates followers to achieve

them by making use of punishments and rewards.

The second research question discussed the relation between both transactional- and

transformational leadership and team performance. Both theoretical and empirical research

has shown that there is a clear positive relation between transformational leadership and team

performance. Transformational leaders positively influence team performance by individual

consideration and intellectual stimulation of their followers. Furthermore, their influence on

25

team effectiveness, team productivity, and team learning/growth increases team performance.

Evidence on a positive relation between transactional leadership and team performance is less

obvious. Some research has shown a positive relation, while others found a negative relation.

In the last research question the influence of national culture on leadership styles was

discussed. First, research on the topic of leadership across different cultures was discussed.

The GLOBE project on leadership across cultures found that several attributes reflecting

charismatic/transformational leadership are universally endorsed as contributing to

outstanding leadership. Research by Bass (1997) has similar conclusions. He found that

transformational leadership correlates more positively with various positive outcomes than

transactional leadership in multiple countries.

Also, Hofstede‟s four cultural dimensions (power distance, uncertainty avoidance,

individualism-collectivism, and masculinity-femininity) were related to leadership styles.

Findings were that in cultures scoring low on power distance, transformational leadership is

more effective. In cultures with a high power distance, transactional leadership is more

effective, as the directive character of this leadership style fits better in this (hierarchal)

culture. Furthermore, cultures with high uncertainty avoidance preferred transactional

leadership, and vice versa. The conclusions for the individualism-collectivism dimension

were that within collectivist cultures transformational leadership is a better fit, while in

individualist cultures this was the case with transactional leadership. Finally, in masculine

cultures transactional leadership is more effective, while in feminine cultures transformational

leaders are preferred.

The conclusion of this chapter therefore was that the different dimensions of cultures all have

their influence on the positive of negative outcome of a certain leadership style. However,

several characteristics of transformational leaders seem to have universal positive outcomes.

Combining the conclusions of the different chapters provides an answer to the very fundament

of this research, what the influence of national culture on the relation between leadership

styles and team performance is. Distinguishing between transactional leadership and

transformational leadership, this research has shown that there is evidence for a positive effect

of both styles on team performance. However, evidence for a positive effect of transactional

leadership on team performance is much thinner, and there is even evidence to the contrary.

For transformational leadership, however, research agrees that it has a positive influence on

team performance. Taking into account the influence of culture, research has shown that the

26

positive effect of transformational leadership can be argued to be universal. Several

characteristics of transformational leaders are universally endorsed as contributing to

outstanding leadership. However, when looking at the different dimensions of culture as they

were presented by Hofstede, some cultures may prefer transactional leadership as it is more in

line with crucial values, like a high power distance, of their culture.

5.3 Discussion

This thesis has focused on leadership in team settings. The literature on leadership in teams is

rather limited. Therefore, the assumption was made, both in the literature discussed in this

research as in this thesis itself, that theories and findings on the subject of leadership are also

useful when conducting research on team leadership. A point of discussion might be whether

this assumption is valid, or a new area in leadership should be investigated in the coming

years.

Furthermore, the influence of national culture on leadership styles has been investigated by

using Hofstede‟s four dimensions of culture. This might be a second point of discussion, as

more cultural dimensions have been published in later research, and may be argued to

measure national culture more accurate.

5.4 Recommendations for further research

Future research could aim at performing a new large scale research, comparable to project

GLOBE. This project has provided many insights in research on leadership across different

cultures. Since the modern world is changing rapidly in all kinds of areas, national cultures,

leadership styles, and work in team settings might also undergo changes. If this is true,

interesting findings might come from a new large scale, worldwide, research on leadership in

different cultures.

Furthermore, future research could aim at conducting research on leadership in teams.

Although teamwork within organizations is becoming more important nowadays, the

literature is still rather limited.

27

5.5 Limitations

There are two obvious limitations to this thesis. First, this research has been performed in a

rather limited timeframe. Secondly, this thesis is a literature review and therefore no empirical

research was performed. This means that conclusions of this research are based on earlier

publications, and not on self collected data. Furthermore, this thesis aimed at team leadership,

but literature on specific team leadership seemed rather limited.

28

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