Leadership Across Cultures Unit # 3 The specific objectives of this chapter are: 1. DESCRIBE the basic philosophic foundation and styles of managerial leadership 2. EXAMINE the attitudes of European managers toward leadership practices 3. COMPARE and CONTRAST leadership styles in Japan with those in the United States Leadership Across Cultures 4. REVIEW leadership approaches in China, the Middle East, and developing countries 5. EXAMINE recent, research and findings regarding leadership across cultures The specific objectives of this chapter are: Leadership Across Cultures 6. DISCUSS the relationship of culture clusters and leader behavior on effective leadership practices including increasing calls for more responsible global leadership The specific objectives of this chapter are: Foundation for Leadership Philosophical Background: Theories X, Y, and Z A manager who believes that people are basically lazy and that coercion and threats of punishment often are necessary to get them to work. Theory X Manager Foundation for Leadership Philosophical Background: Theories X, Y, and Z A manager who believes that under the right conditions people not only will work hard but will seek increased responsibility and challenge. Theory Y Manager Theory X Manager Foundation for Leadership Philosophical Background: Theories X, Y, and Z A manager who believes that workers seek opportunities to participate in management and are motivated by teamwork and responsibility sharing. Theory Z Manager Theory Y Manager Theory X Manager Foundation for Leadership Leadership Behaviors and Styles Participative Leadership Authoritarian Leadership Paternalistic Leadership The use of work-centered behavior designed to ensure task accomplishment. The use of work-centered behavior coupled with a protective employee centered concern. The use of both work- or task- centered and people centered approaches to leading subordinates. LeaderSubordinate Interactions McGraw-Hill/Irwin Adapted from Figure 131: LeaderSubordinate Interactions Authoritarian Leader Subordinate One-way downward flow of information and influence from authoritarian leader to subordinates. LeaderSubordinate Interactions McGraw-Hill/Irwin Adapted from Figure 131: LeaderSubordinate Interactions Paternalistic Leader Subordinate Continual interaction and exchange of information and influence between leader and subordinates. LeaderSubordinate Interactions McGraw-Hill/Irwin Adapted from Figure 131: LeaderSubordinate Interactions Participative Leader Subordinate Continual interaction and exchange of information and influence between leader and subordinates. Likerts Systems or Styles Leadership Adapted from Figure 132: Likerts Systems or Styles Leadership Likerts Systems or Styles Leadership Adapted from Figure 132: Likerts Systems or Styles Leadership Concern for People/Relationships High Low Concern for Production/Task HighLow The Managerial Grid McGraw-Hill/Irwin Adapted from Figure 132: The Managerial Grid 1,1 Management Style Exertion of minimum effort to get required work done is appropriate to sustain organization membership 9,1 Management Style Efficiency in operations results from arranging conditions of work in such a way that human elements interface to a minimum degree 5,5 Management Style Adequate organization performance is possible through balancing the necessity to get out work with maintaining morale of people at a satisfactory level 9,9 Management Style Work accomplishment is from committed people; interdependence through a common stake in organization purpose leads to relationships of trust and respect 1,9 Management Style Thoughtful attention to needs of people for satisfying relationships leads to a comfortable friendly organization atmosphere and work tempo Leadership in the International Context How do leaders in other countries attempt to direct or influence their subordinates? Are their approaches similar to those used in the United States? Research shows that there are both similarities and differences most international research on leadership has focused on Europe, East Asia, the Middle East, and developing countries such as India, Peru, Chile, and Argentina. Leadership in the International Context Attitudes of European Managers Toward Leadership Practices Capacity for Leadership and Initiative European managers tend to use a participative approach. Researchers investigated four areas relevant to leadership. Does the leader believe that employees prefer to be directed and have little ambition? (Theory X) OR Does the leader believe that characteristics such as initiative can be acquired by most people regardless of their inborn traits and abilities? (Theory Y) Leadership in the International Context Attitudes of European Managers Toward Leadership Practices Capacity for Leadership and Initiative Sharing Information and Objectives Sharing Information and Objectives Does the leader believe that detailed, complete instructions should be given to subordinates and that subordinates need only this information to do their jobs? OR Does the leader believe that general directions are sufficient and that subordinates can use their initiative in working out the details? Most evidence indicates European managers tend to use a participative approach. Researchers investigated four areas relevant to leadership. Leadership in the International Context Attitudes of European Managers Toward Leadership Practices Capacity for Leadership and Initiative Sharing Information and Objectives Sharing Information and Objectives Participation Does the leader support participative leadership practices? Most evidence indicates European managers tend to use a participative approach. Researchers investigated four areas relevant to leadership. Leadership in the International Context Attitudes of European Managers Toward Leadership Practices Capacity for Leadership and Initiative Sharing Information and Objectives Sharing Information and Objectives Participation Internal Control Does the leader believe that the most effective way to control employees is through rewards and punishment? OR Does the leader believe that employees respond best to internally generated control? Most evidence indicates European managers tend to use a participative approach. Researchers investigated four areas relevant to leadership. Clusters of Countries in the Haire, Ghiselli, and Porter Study Adapted from Table 133: Clusters of Countries in the Haire, Ghiselli, and Porter Study Leadership in the International Context Higher-level managers tend to express more democratic values than lower-level managers in some countries in other countries, the opposite was true Company size tends to influence the degree of participative- autocratic attitudes Younger managers were more likely to have democratic values when it came to capacity for leadership and initiative and to sharing information and objectives Attitudes of European Managers Toward Leadership Practices The Role of Level, Size, and Age on European Managers Attitudes Toward Leadership Leadership in the International Context Most European managers tend to reflect more participative and democratic attitudes but not in every country Organizational level, company size, and age seem to greatly influence attitudes toward leadership Many of the young people in this study now are middle-aged European managers in general are highly likely to be more participative than their older counterparts of the 1960s and 1970s Attitudes of European Managers Toward Leadership Practices Conclusion About European Leadership Practices Leadership in the International Context Except for internal control, large U.S. firms tend to be more democratic than small ones the profile is quite different in Japan Younger U.S. managers appear to express more democratic attitudes than their older counterparts on all four leadership dimensions U.S. Leadership Styles Leadership in the International Context Japan is well known for its paternalistic and participative approach to leadership Japanese culture promotes a high safety or security need, which is present among home countrybased employees as well as MNC expatriates Japanese managers have much greater belief in the capacity of subordinates for leadership and initiative than do managers in most other countries only managers in Anglo-American countries had stronger feelings in this area Japanese Leadership Approaches Leadership in the International Context Another difference between Japanese and U.S. leadership styles is how senior-level managers process information and learn Differences Between Japanese and U.S. Leadership Styles Variety Amplification Japanese executives are taught and tend to use variety amplification the creation of uncertainty and the analysis of many alternatives regarding future action Variety Reduction U.S. executives are taught and tend to use variety reduction the limiting of uncertainty and the focusing of action on a limited number of alternatives Japanese and U.S. managers have a basically different philosophy of managing people Ouchis Theory Z combines Japanese and U.S. assumptions and approaches providing a comparison of seven key characteristics Leadership in the International Context Importance that the respondents in one study assigned to three areas: Leadership in China Measured by the importance of societal harmony, virtuous interpersonal behavior, and personal and interpersonal harmony ( Confucianism strongly emphsizes:Mercy,Social order And fulfillment of responsibilities Individualism Collectivism Confucianism Measured by willingness to subordinate personal goals to those of the work group with an emphasis on sharing and group harmony Measured by importance of self sufficiency and personal accomplishments Leadership in the International Context The New Generation group scored significantly higher on individualism than did the current and older generation groups They also scored significantly lower than the other two groups on collectivism and Confucianism These values appear to reflect the period of relative openness and freedom, often called the Social Reform Era, in which these new managers grew up They have had greater exposure to Western societal influences may result in leadership styles similar to those of Western managers Leadership in China Leadership in the International Context There may be much greater similarity between Middle Eastern leadership styles and those of Western countries Western management practices are evident in the Arabian Gulf region due to close business ties between the West and this oil-rich area as well as the increasing educational attainment, often in Western universities, of Middle Eastern managers Organizational culture, level of technology, level of education, and management responsibility were good predictors of decision-making styles in the United Arab Emirates There is a tendency toward participative leadership styles among young Arab middle managers, as well as among highly educated managers of all ages Leadership in the Middle East Differences in Middle Eastern and Western Management Adapted from Table 135: Differences in Middle Eastern and Western Management Differences in Middle Eastern and Western Management Adapted from Table 135: Differences in Middle Eastern and Western Management Leadership in the International Context Managerial attitudes in India are similar to Anglo- Americans toward capacity for leadership and initiative, participation, and internal control, but different in sharing information and objectives Leadership styles in Peru may be much closer to those in the United States than previously assumed Developing countries may be moving toward a more participative leadership style Leadership Approaches in Developing Countries Recent Findings and Insights About Leadership Transformational, Transactional, and Charismatic Leadership Transformational leaders are a source of charisma and enjoy the admiration of their followers. They enhance pride, loyalty, and confidence in their people, and align these followers by providing a common purpose or vision that the latter willingly accept Transformational leaders are characterized by four interrelated factors: Idealized Influence Recent Findings and Insights About Leadership Transformational, Transactional, and Charismatic Leadership These leaders are extremely effective in articulating their vision, mission, and beliefs in clear-cut ways, thus providing an easy-to understand sense of purpose regarding what needs to be done Transformational leaders are characterized by four interrelated factors: Idealized Influence Inspirational Motivation Recent Findings and Insights About Leadership Transformational, Transactional, and Charismatic Leadership Transformational leaders are able to get their followers to question old paradigms and to accept new views of the world regarding how things now need to be done Transformational leaders are characterized by four interrelated factors: Idealized Influence Inspirational Motivation Intellectual Stimulation Recent Findings and Insights About Leadership Transformational, Transactional, and Charismatic Leadership Transformational leaders are characterized by four interrelated factors: These leaders are able to diagnose and elevate the needs of each of their followers through individualized consideration, thus furthering the development of these people Individualized Consideration Idealized Influence Inspirational Motivation Intellectual Stimulation Recent Findings and Insights About Leadership Transformational, Transactional, and Charismatic Leadership Four other types of leaders are less effective than transformational leaders Avoids intervening or accepting responsibility for follower actions Laissez-Faire (LF) Leader Contingent Reward (CR) Leader Active Management-by- Exception (MBE-A) Leader Passive Management-by- Exception (MBE-P) Leader Takes action or intervenes in situations only when standards are not met Monitors follower performance and takes corrective action when deviations from standards occurs Clarifies what needs to be done, provides psychic and material rewards to those complying with his or her directives An Optimal Profile of Universal Leadership Behaviors McGraw-Hill/Irwin Adapted from Figure 135: An Optimal Profile of Universal Leadership Behaviors Effective Istransformational CRContingent Reward MBE-AActive Management-by-Exception MBE-PActive Management-by-Exception LFLaissez-Faire Passive Active Frequency Is CR MBE-A MBE-P LF Qualities Most Demanded in Advertisements for European Executives Adapted from Table 136: Qualities Most Demanded in Advertisements for European Executives Qualities Most Demanded in Advertisements for European Executives Adapted from Table 136: Qualities Most Demanded in Advertisements for European Executives Rankings of the Most Important Leadership Attributes Adapted from Table 137: Rankings of the Most Important Leadership Attributes by Region and Country Cluster Rankings of the Most Important Leadership Attributes Adapted from Table 137: Rankings of the Most Important Leadership Attributes by Region and Country Cluster Recent Findings and Insights About Leadership One of the keys to successful global leadership is knowing what style and behavior works best in a given culture and adapting appropriately In affective cultures, such as the United States, leaders tend to exhibit their emotions In neutral cultures, such as Japan and China, leaders do not tend to show their emotions Leader Behavior, Leader Effectiveness, and Leading Teams Leadership Tips for Doing Business in Affective and Neutral Cultures Recent Findings and Insights About Leadership Linking leadership and corporate responsibility through responsible global leadership Values Based Leadership Ethical Decision Making Quality Stakeholder Relationships Ethically Responsible Global Leadership According to this view, global leadership must be based on core values and credos that reflect principled business and leadership practices, high levels of ethical and moral behavior, and a set of shared ideals that advance organizational and societal well-being. Recent Findings and Insights About Leadership Promising start-ups fail for many reasons Lack of capital, absence of clear goals and objectives, and failure to accurately assess market demand and competition Poor personal leadership ability of the entrepreneurial CEO For international new ventures, these factors are significantly complicated by Differences in cultures, national political and economic systems, geographic distance, and shipping, tax, and regulatory costs. Entrepreneurial Leadership and Mindset Recent Findings and Insights About Leadership Appear to be more creative and innovative than non- entrepreneurs Tend to break the rules and do not need structure, support, or an organization to guide their thinking See things differently and add to a product, system, or idea value that amounts to more than an adaptation or linear change Are more willing to take personal and business risks, and to do so in visible and salient ways Entrepreneurial Leadership and Mindset Key personal characteristics of entrepreneurs and strong leaders Recent Findings and Insights About Leadership They are opportunity seekers and are comfortable with failure, rebounding quickly to pursue another opportunity They are characterized as adventurous, ambitious, energetic, domineering, and self-confident Entrepreneurial Leadership and Mindset Key personal characteristics of entrepreneurs and strong leaders Entrepreneurial leaders operating internationally must possess cultural sensitivity, international vision, and global mindset to effectively lead their venture through challenges of doing business in other countries.