difficulties in implementing level three leadership in cross-cultural management

Difficulties in Implementing Level Three Leadership in Cross-Cultural

Management“Examining Data from Japanese and American Subsidiaries in Thailand”

Timothy Dean KeeleyProfessor International Management

Kyushu Sangyo UniversityFukuoka, Japan

A quick view of

Level Three Leadership

James G . S . ClawsonProfessor of Business Administration

The Darden Graduate School of Business

University of Virginia

Developed by:

Level Three Leadership : Getting Below the Surface Third Edition (James G. Clawson, P

- rentice Hall, 2005)

Leadership is about affecting human activity,

which can be thought of as occurring at three levels:

Level 1: Behavior

Level 2: Thoughts

Level 3: VABEs

Leadership is also about managing energy, first in

yourself and then in others.

Targeting Level 1, 2 or 3 is about managing energy.

If your force at Level 1, you will get passive resistance.

Level 1: Behavior

simply what people do, that which we can observe

tries to manage behavior in isolation

Level 1 Leadership

The tradition of scientific management Frederick Taylor’s time motion studies assigned little importance to employees’ inner thinking

Level One Leadership does not seek input

Level 2: Thoughts

That which we are immediately aware of in ourselves, our conscious processes

Focuses on employee thinking, "Here's your job; here are the outcomes I expect . What do you think is the best way to achieve them? "

Level 2 Leadership

Level 3: VABEs

Is aware of and influences people’s values and basic assumptions, it has the potential of being far more powerful than level-one

leadership.

At this level people hold a set of values, assumptions, beliefs, and expectations

(VABEs). Level 3 Leadership

Societal Culture:CustomsLanguage

Organizational Culture

EconomicalTechnological

Setting

PoliticalLegal

Setting

EthnicBackground

Religion

Personal –Values

AssumptionsBeliefs

Expectations

OrganizationalBehavior

Level 3 Leadership Understands and Affects

Cultural Influence on Organizational Behavior (VABEs)

Leaders should be skilled in recognizing and clarifying VABEs in those they work

with.

The challenge is greatest in an international setting.

Cultural differences usually lead to much greater differences in VABEs.

Behavior cues may vary greatly across cultures.

The assessment of work-related VABEs of members from a different

culture based on observed behavior may lead to erroneous conclusions.

Assertion: Japanese managers in Japanese subsidiaries in Thailand appear

to have particular difficulties in understanding the VABEs of their Thai

employees.

This appears to be a factor in the low integration of locals in formal

leadership positions of Japanese foreign subsidiaries.

Communication

Business Culture

IHRM HCN Integration

35

33

42

Keeley (2001) empirically demonstrated a low-level of integration of HCN (host country

national) managers in a multi-country study involving 83 Japanese subsidiaries in

Thailand, Malaysia, Singapore and Australia.

Formal Leadersh

ip Positions

Understanding VABEs

HCN Integration

Respondents were asked who mainly made decisions, local managers or Japanese

managers (16 items). (List)

Likert scale: one = ‘completely Japanese’ and five = ‘completely local’ (3 = equally

Japanese/Local)The Japanese data yielded a mean of 2.38,

while that for the local data was 2.64.

Business Culture

Eight-item scale: issues related to business practices and culture (1 = lowest, 5= highest).

Focused on local understanding of Japanese business practices and culture as well as Japanese understanding of local business

practices and culture.

The Japanese data yielded a mean of 2.83, while that for the local data was 2.82.

(List)

Values, Assumptions, Beliefs, Expectations and Behavior at Japanese and American Firms

in Thailand

Data gathered in July 2002 for the Japanese firms and May 2003 for the American firms in Thailand.

For Japanese firms, 1 questionnaire in Japanese with 88 questions. One in Thai with 84 questions.

For American firms the same questionnaires were used, however, the questionnaire for expatriates was

in English rather than Japanese.

Japanese firms: 95 subsidiaries yielding a response rate of 19%. 136 responses from Japanese managers

and 175 responses from Thai managers.

American firms: 26 subsidiaries yielding a response rate of 17%. 27 responses from American managers

and of 22 responses from Thai managers.

Positive Work-Related Habits, Attitudes and Behavior Scale

The following questions were in both the Thai and expatriate (Japanese and American) questionnaires.

Questions are based on a 7-point Likert scale (7 is strongly agree and 1 is strongly disagree.)

Thai and Japanese (American) managers were asked to give their impression of Thai and Japanese (American)

employees for each item.

Questions are preceded with the words “Thai employees” for one set of these questions and

“Japanese (American) employees” for another set of the same questions:

(1) “Tend to arrive to work on time.”(2) “Think that company responsibilities are more

important than personal matters.”(3) “Tend to meet deadlines.”

(4) “Think that they should work overtime to finish their work when necessary.”

(5) “Are quite willing to help with tasks that they are not directly responsible for.”

(6) “Share information freely with other people in the company.”

(7) “Feel responsible only for their own assigned work” (reverse-coded in the analysis).

Data Sets Mean N Std. Dev. Std. Error % 3.9 or below % 4.14 or above

Thai (TH data) 4.6902 175 .9220 6.970E-02 24% 68%

Thai (JP data) 3.3697 133 .7530 6.530E-02 77.9% 14%

Japanese (TH data) 5.2831 174 .6603 5.006E-02 3.4% 93.7%

Japanese (JP data) 5.1944 133 .5674 4.920E-02 2.3% 96.2%

Table 1a: Positive Work-Related Habits, Attitudes and Behavior Scale Japanese Subsidiaries

Data Sets Mean N Std. Dev. Std. Error % 3.9 or below % 4.14 or above

Thai (TH data) 5.0563 22 .6005 .1280 4.5% 95.0%

Thai (AM data) 4.3668 27 .8737 .1681 25.9% 59.3%

American (TH data) 4.5682 22 .6895 .1470 27.3% 63.6%

American (AM data) 5.1429 27 .5850 .1126 0% 100%

Table 1b: Positive Work-Related Habits, Attitudes and Behavior Scale American Subsidiaries

About T Difference: - 1.3205

About J Difference: + 0.0887


About A Difference: - 0.5747

Total diff. = - 1.4092

Total Diff. = - 0.1148

The data begs the questions about:

The big difference between J view of T and T view of J …:

The difference between T and A view of each other is not so far apart for

these same items…

T and J ratings of J are so close together for some items in which T and J ratings of T

are so far apart!

Examine the items of large differences and propose explanations:

Data Sets Mean N Std. Dev. Std. Error % 3 or below % 5 or above

Thai (TH data) 4.71 173 1.41 0.11 22.5% 59.0%

Thai (JP data) 2.98 136 1.26 0.11 69.1% 9.6%

Japanese (TH data) 5.41 173 0.98 8.53E-02 1.7% 93.1%

Japanese (JP data) 5.86 136 1.06 9.32E-02 4.5% 82.6%

Table 2a: “Think that company responsibilities are more important than personal matters.” (JP)


Thai (TH data) 4.76 21 1.04 .23 14.3% 66.7%

Thai (AM data) 4.15 27 1.56 .30 34.6% 42.3%

American (TH data) 4.67 21 1.24 .27 14.3% 42.4%

American (AM data) 4.81 27 .96 .19 11.1% 66.7%

Table 2b: “Think that company responsibilities are more important than personal matters.” (AM)

About T Difference: - 1. 73

About J Difference: - 0.45



“Think that company responsibilities are more important than personal matters.”

Japanese stay late when boss stays late sacrificing personal life (even if no work

to do).Japanese expect employees to stay with the group even when an individual cannot contribute.

To demonstrate commitment

And other irrational overt behavioral signals

Leads to high scores on the scale for J by T

Viewed from US and Thai cultural norms

Japanese tend to live to work while Thais mainly work to live.

Japanese and Thai measuring sticks (behavioral cues) are very different.

Thais expect work to be sanuk (fun).

American and Thai expectations and behavioral cues seem closer together.


Thai (TH data) 5.17 175 1.23 9.31E-02 9.7% 72.6%

Thai (JP data) 3.17 133 1.33 .12 66.9% 20.6%


Japanese (JP data) 5.52 133 .87 7.52E-02 .8% 87.2%

Table 3a: “Tend to meet deadlines.” (JP)


Thai (TH data) 5.36 22 .95 .20 9.1% 59.1%

Thai (AM data) 4.22 27 1.45 .28 34.6% 42.3%

American (TH data) 5.82 22 .80 .17 0% 90.9%

American (AM data) 5.78 27 .80 .15 7.4% 77.8%

Table 3b: “Tend to meet deadlines.” (AM)





Differences between J and T national culture in relation to time and uncertainty avoidance.

T think J managers set deadlines earlier than they need be.

“Tend to meet deadlines.”

T meet real implicit (honne) deadline even when they miss the explicit (tatemae)

deadline.

For Japanese Difference

Work is treated in the West as a continuous series of interrelated activities; one segment leads to the next step, and so forth. The preferred work pattern is

steady, even relentless.

For American Difference (and Japanese)

Thais do not always perceive the same connection between certain individual

tasks. Projects are often completed in a flurry of last minute effort.

Holmes, H. and Tangtongtavy, S. (1997). Working with the Thais: A Guide to Managing in Thailand. Bangkok: White Lotus.


Thai (TH data) 5.29 175 1.21 9.13E-02 9.1% 77.1%

Thai (JP data) 4.15 133 1.56 .14 32.4% 22.1%

Japanese (TH data) 6.21 174 .79 6.02E-02 .6% 96.0%

Japanese (JP data) 6.01 133 .74 6.45E-02 0% 94.7%

Table 4a: “Think they should work overtime to finish their work when necessary.” (JP)


Thai (TH data) 5.86 22 .77 .17 0% 95.5%

Thai (AM data) 5.63 27 1.01 .19 33.3% 51.9%

American (TH data) 5.00 22 1.41 .30 18.2% 63.6%

American (AM data) 4.81 28 .96 .19 0% 92.6%

Table 4b: “Think they should work overtime to finish their work when necessary.” (AM)




About A Difference: + 0.19

Working overtime is very common in Japan

Expectations are that subordinates stay late when their boss stays late.

The Japanese Supreme Court has upheld a ruling that a company can sack any member

of staff if they refuse to work overtime!

Over 50% of unionized workers in Japan work overtime without pay on an average of 29.6 hours per month, a survey conducted by the Japanese Trade Union Confederation (Rengo)

2003

Table 5a: “Think that it is important to have a friendly and pleasant work environment .” (JP)

Table 5b: “Think that it is important to have a friendly and pleasant work environment .” (AM)

Both Data Sets Mean N Std. Dev. Std. Error % 3 or below % 5 or above

Thai (TH data) 5.56 174 1.16 E8.76-02 5.1% 81.7%

Thai (JP data) 5.24 136 1.17 .10 8.8% 53.7%

Japanese (TH data) 4.40 174 1.35 .10 19.0% 50.0%

Japanese (JP data) 5.14 133 1.04 9.00E-02 4.5% 69.9%


Thai (TH data) 5.95 22 .65 .14 0% 100%

Thai (AM data) 6.19 27 .88 .17 0% 92.6%

American (TH data) 4.23 22 1.27 .27 31.8% 26.4%

American (AM data) 4.63 27 1.01 .19 7.4% 51.9%



About T Difference: + 0.24


The Americans are saying yes! We see Thais think work should be fun + 0.24.

Thais do not think it is as important to Americans as Americans think it is -

0.40.

Japanese do not think it is as important to Thais as Thais think it is - 0.40.

Thais do not think it is as important to Japanese as Japanese think it is - 0.74.

Different concepts of what constitutes a “friendly and pleasant” work

environment.Different concepts of what constitutes

a “proper and productive” work environment.

Table 6a: “Think that it is important to maintain harmony in the office.” (JP)

Table 6b: “Think that it is important to maintain harmony in the office.” (AM)


Thai (TH data) 5.36 173 1.22 9.31E-02 8.0% 77.0%

Thai (JP data) 5.14 133 1.25 .11 4.4% 72.8%




Thai (TH data) 6.00 22 .82 .17 0% 90.9%

Thai (AM data) 6.37 27 .56 .11 0% 100%

American (TH data) 3.68 22 1.09 .23 45.5% 22.7%

American (AM data) 4.19 27 1.11 .21 22.2% 33.3%



About T Difference: + 0.37


Maintaining harmony is very important in both Japanese and Thai society. Interview opinions of Japanese managers indicate it is even more important in Thai society.

Both Thai and Americans realize the big difference here between Thai (6.00/6.37)

and American (3.68/4.19) culture.

Both Japanese and American managers give higher overall ratings to Thai

managers for “ability to maintain harmony in the workplace.”

0

10

20

30

40

50

1 2 3 4 5 6 7

J apnese DataAmerican Data

1 = “Expatriate much better,” 2 = Expatriate better,” 3 = Expatriate somewhat better,” 4 = “ same,” 5 = “Thai somewhat better,”6 = “Thai better,” 7 = “Thai much better.” (% of Responses)

Mean Std. Error Std. Deviation N % 3.9 or below % 5 or above

American 5.37 .25 1.28 27 7.4% 77.8%

Japanese 4.16 8.49E-02 .98 134 19.4% 33.6%

Graph/Table 1: Ability to Maintain Harmony in the Workplace

* Opinions of Japanese and American ManagersA Thai strength


Thai (TH data) 4.87 175 1.25 9.47E-02 10.9% 58.3%

Thai (JP data) 3.31 133 1.21 .11 54.4% 13.2%

Japanese (TH data) 6.09 174 .89 6.73E-02 0.6% 93.1%


Table 7a: “Tend to be loyal to the company.” (JP)

Table 7a: “Tend to be loyal to the company.” (AM)


Thai (TH data) 5.55 22 1.01 .22 4.5% 81.8%

Thai (AM data) 4.96 26 1.61 .32 23.1% 69.2%

American (TH data) 4.36 22 .67 .29 31.8% 40.9%

American (AM data) 4.67 27 .88 .17 7.4% 55.6%







Japanese express loyalty and commitment though exaggerated

behavior:Staying with the group even when they cannot contribute to work being done.Sacrificing their private time (life)

even when it is not really that necessary.

Staying late at work

Not taking their full vacation


Thai (TH data) 4.80 175 1.20 9.10E-02 12.0% 58.3%

Thai (JP data) 3.41 133 1.21 .10 50.0% 16.2%



Table 8a: “Show a lot of commitment to the company.” (JP)

Table 8b: “Show a lot of commitment to the company.” (AM)


Thai (TH data) 5.50 22 .67 .14 0% 99.9%

Thai (AM data) 5.19 27 .96 .19 23.1% 69.2%

American (TH data) 3.77 22 1.02 .22 40.9% 22.7%

American (AM data) 4.67 .27 .88 .17 7.4% 70.4%





The following questions were only included in the Thai questionnaires for Japanese and American subsidiaries.

The data gives and indication of Thai employees’ view of the expatriates’ understanding of Thai culture and the

Thai’s understanding of Japanese (American) culture.

Graph/Table 3: You understand Japanese (American) culture.


Thai (JP Co.) 3.97 174 1.53 .12 33.9% 43.7%

Thai (AM Co) 5.32 22 .99 .21 4.5% 81.8%

Graph/Table 2: Japanese (American) culture is difficult to understand.


Thai (JP Co.) 3.91 173 1.60 .12 38.7% 32.9%

Thai (AM Co) 3.36 22 1.36 .29 54.5% 22.7%

AM culture seems better

understood by Thais

Graph/Table 4: You understand Japanese (English) well.


Thai (JP Co.) 3.21 174 1.94 .15 55.2% 30.5%

Thai (AM Co) 6.23 22 .53 .11 0% 100%

Graph 5: Differences between Thai and Japanese (American) culture make communication with your Japanese (American) bosses difficult.


Thai (JP Co.) 3.96 175 1.69 .13 39.4% 37.7%

Thai (AM Co) 3.05 22 1.81 .39 59.1% 27.3%

Smaller languag

e barriers at AM

Graph/Table 6: You understand the Japanese (American) way of management.


Thai (JP Co.) 4.41 174 1.41 .11 23.6% 53.4%

Thai (AM Co) 5.64 22 .73 .15 0% 95.5%

The scores are much higher for Thais working at American companies.

Graph/Table 7: Your Japanese (American) boss understands Thai language well.

Graph/Table 8: Your Japanese (American) boss understands Thai culture well.


Thai (JP Co.) 3.87 175 1.46 .11 40% 34.9%

Thai (AM Co) 4.67 21 1.35 .30 14.3% 47.6%


Thai (JP Co.) 3.24 175 1.51 .11 59.4% 21.7%

Thai (AM Co) 2.57 21 1.86 .41 71.4% 19.0%

About 1 out of 5

Less than half

Graph/Table 9: Your Japanese (American) boss understands Bunkhun


Thai (JP Co.) 3.78 174 1.44 .11 32.8% 28.2%

Thai (AM Co) 3.29 21 1.38 .30 47.6% 14.3%

Bunkhun, or indebted goodness, is a psychological bond between someone who, out of sheer kindness and sincerity, renders another person the needed help of favor, and the latter’s remembering the

goodness done and his ever-readiness to reciprocate the kindness.

Suntaree Komkin, “Psychology of Thai People”

1 out of 3

1 out of 6

Graph/Table 10: You feel Katanyoo Rookhun towards Japanese (American) boss.


Thai (JP Co.) 5.07 175 1.19 9.01E-02 5.7% 57.4%

Thai (AM Co) 4.50 22 1.92 .41 27.3% 59.1%

The feeling of “gratitude and indebtedness.”

The first aspect of bunkhun.

Engendered in slightly over half the

Thais

Graph/Table 11: Your Japanese (American) boss practices Mettaa Karunaa towards his subordinates.


Thai (JP Co.) 4.75 175 1.32 9.97E-02 12.6% 57.7%

Thai (AM Co) 4.81 21 1.54 .34 23.8% 52.4%

The second aspect of bunkhun.

The quality of being “merciful and kind.”

Rendered by slightly over half of the expatriate bosses.

Graph/Table 12: Your Japanese (American) boss shows Henjai to his subordinates


Thai (JP Co.) 4.66 172 1.32 .10 13.7% 57.1%

Thai (AM Co) 5.29 22 1.38 .30 9.5% 66.7%

“To see into the heart.”Showing and understanding and empathy for the subordinate, his/her duties and burdens.

Done by slightly over half of the expatriate bosses.

Graph/Table 13: Your Japanese (American) boss understands

(is sensitive to) the needs of his subordinates.


Thai (JP Co.) 4.49 175 1.41 .11 19.4% 53.1%

Thai (AM Co) 5.05 21 1.36 .30 14.3% 66.7%

Likewise, describes slightly over half of the expatriate bosses.

Graph/Table 14: Your Japanese (American) acts like Phu Phadetkan


Thai (JP Co.) 3.53 175 1.60 .12 48% 26.9%

Thai (AM Co) 2.62 21 1.66 .36 71.4% 13..3%

A “dictatorial” manager, who makes decisions without consulting anyone.

Results more favorable towards for Americans. Japanese consensus

management?


Thai (JP Co.) 4.15 175 1.46 .11 28.6% 47.4%

Thai (AM Co) 4.95 21 1.43 .31 19% 66.7%

Graph/Table 15: Your Japanese (American) boss sufficiently consults with you before making

decisions.

Japanese tend to practice consensus management mainly with other Japanese expatriates and those at the head office.

Setting deadlines earlier than the actual deadline may be in line with Japanese

VABEs but for the Thais it appears to be focusing on behavior only (Level 1).

Conclusions and Implications

The difficulty of understanding VABEs and managing them leads to Level 1 leadership.

A somewhat negative view of Thai managers’ work-related behavior by

Japanese managers is most likely a factor in the low degree of integration of the

former group.

Assessment of VABEs based on observed behavior may lead to erroneous

conclusions.Even though Japanese and Thai culture share many similarities, there does not

seem to be any greater understand between these two groups than there is

between Thai and Americans.Differences in VABEs are more apparent in

a cross-cultural setting.

It allows an opportunity for expatriates to examine their own VABEs.

In order to fairly judge the local managers it is necessary to sometimes let go of one’s

own VABEs.

Many people struggle across-cultural boundaries since they cannot let go of their

own VABEs.They try to manage solely from their own

cultural perspective (with their VABEs unchanged).

Optimal leadership will come from:

Expatriate leaders greater understand of the local VABEs and seeking to influence

them.

Expatriate leaders examining their own VABEs and modifying those that lead to a

dysfunctional work environment.

Local employees better understanding their own VABEs and those of the

expatriates.

Integration ScaleDecisions concerning:

1. the hiring of new employees2. promotion of employees and wage/salary increases.3. employee benefits such as vacation time, etc.4. borrowing funds from local banks or financial institutions.5. production schedules.6. purchase of production inputs.7. local advertising.8. future products or services offered by the local subsidiary.9. investment in new facilities.10. Decisions concerning pricing of products and services.11. production goals.12. sales goals.13. personnel training for local managers at the subsidiary.14. layoffs (dismissal) of employees at the subsidiary.15. most minor decisions such as those concerning day-to-day

operational issues.16. most major decisions such as those concerning strategic of

long-term issues.

Business Culture Scale1. There is an ‘Us versus Them’ mentality between the local

managers and the Japanese managers. (reverse-coded)2. The Japanese managers have a sufficient understanding of local

business practices.3. The Japanese managers have a sufficient understanding of the

local culture.4. Differences between local values and culture and those of Japan

often lead to conflicts. (reverse-coded)5. Japanese culture is so unique that it is impossible for non-Japanese

to fully understand it. (reverse-coded) 6. It seems individualism is stronger in this country than in Japan.

(reverse-coded)7. Our company has made a sufficient effort to teach local managers

about Japanese culture and business practices.8. Our company has made a sufficient effort to teach Japanese

managers about local culture and business practices.

difficulties in implementing level three leadership in cross-cultural management

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