chapter copyright© 2004 thomson learning all rights reserved 14 leadership and management behavior...

Chapter

Copyright© 2004 Thomson Learning All rights reserved

14Leadership and Management Behavior in Multinational Companies

Copyright© 2005 South-Western/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

• 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


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

• 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


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

• 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


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

• 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


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

• 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


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 self-

awareness and renewal

• 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

• Three basic models of leadership• Leadership traits• Leadership behavior• Contingency leadership

• Three basic models of leadership• Leadership traits• Leadership behavior• Contingency leadership


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

• 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

• 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

• 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

• 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

• 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


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

• 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

• Performance-maintenance (PM) theory: balancing task- and person-centered leader behaviors

• Performance-maintenance (PM) theory: balancing task- and person-centered leader behaviors


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

• 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


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

• 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


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

• 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


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

• 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


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

• 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


Exhibit 14.2: Predictions of Leader Effectiveness under Different Conditions


Path-Goal Theory

• Four leadership styles that a manager might choose depending on the situation• Directive • Supportive • Participative • Achievement-oriented

• Four leadership styles that a manager might choose depending on the situation• Directive • Supportive • Participative • Achievement-oriented


Exhibit 14.3: A Simplified Model of Path-Goal Theory


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

• 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


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.

• 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.


National Context as a Contingency for Leadership Behaviors

• Successful leadership in multinational companies requires that managers adjust their leadership styles to fit different situations.

• Successful leadership in multinational companies requires that managers adjust their leadership styles to fit different situations.


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

• 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


Exhibit 14.5: National-Context Contingency Model of Leadership


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

• Outlines of how leadership behaviors, traits, and contingencies are affected by the national context:• Leader behaviors and traits• Subordinates’ characteristics• Work setting


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

• 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


Exhibit 14.5: Culture Contingent Leadership Traits and Behaviors


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


Exhibit 14.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles


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 self-

protective leaders universally impeded leadership.

• 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 self-

protective leaders universally impeded leadership.


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

• 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


Exhibit 14.9: Preferred Leader Influence Tactics in Four Countries


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

• 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


Exhibit 14.10: Subordinates’ Expectations under Three Levels of Power Distance


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

• 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


Preference for “Specific” Leader In Thirteen Countries


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

• Two basic forms of leadership• Transactional leadership: managers use rewards or

punishments to influence their subordinates• Most ordinary leaders use transactional leadership


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

• 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


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

• 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


Exhibit 14.11: GLOBE Study and Charismatic Leadership


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.)

• 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.)


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.

• 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.


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”

• 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”


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

• 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


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.

• 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.


Exhibit 14.12: Leadership Behavior and Job Performance of U.S. Managers in the U.S. and in Hong Kong


The Cultural Context and Suggested Leadership Styles

• High power distance – behave more autocratically• High uncertainty cultures – remove ambiguity from

work setting

• High power distance – behave more autocratically• High uncertainty cultures – remove ambiguity from

work setting


Exhibit 14.13: National Culture and Recommended Leadership Styles

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