Chapter 14

Chapter 14
Leadership and Management
Behavior in Multinational
Companies

Copyright© 2007 Thomson Learning All rights reserved

Learning Objectives

•• Know the characteristics of global business leadership
Know the characteristics of global business leadership
•• Understand traditional North American models of
Understand traditional North American models of
leadership
leadership
•• Understand the Japanese performance-maintenance
Understand the Japanese performance-maintenance
model, the Indian nurturant-task-oriented model, and
model, the Indian nurturant-task-oriented model, and
Afro-centric model of leadership
Afro-centric model of leadership
•• Be able to apply the cultural-contingency model of
Be able to apply the cultural-contingency model of
leadership
leadership
Copyright© 2007 South-Western/Thomson Learning All rights reserved

Learning Objectives

•• Develop sensitivity to national cultural differences in
Develop sensitivity to national cultural differences in
preferred leadership traits and behaviors
preferred leadership traits and behaviors
•• Understand how national culture affects the choice of
Understand how national culture affects the choice of
leader influence tactics
leader influence tactics
•• Understand how national culture influences
Understand how national culture influences
subordinates’ expectations
subordinates’ expectations
•• Understand the role of transformational leadership in
Understand the role of transformational leadership in
multinational settings
multinational settings

Learning Objectives

•• Understand how the national culture affects a leader’s
Understand how the national culture affects a leader’s
attributions
attributions
•• Understand the role of women global leaders for
Understand the role of women global leaders for
multinationals
multinationals
•• Develop the ability to diagnose cultural situations and
Develop the ability to diagnose cultural situations and
suggest appropriate leadership style to fit the situation
suggest appropriate leadership style to fit the situation


Leadership

•• Leadership: process of influencing group members to
Leadership: process of influencing group members to
achieve organizational goals
achieve organizational goals
•• Excellent leaders
Excellent leaders
-- Motivate their employees to achieve more than
Motivate their employees to achieve more than
minimal requirements
minimal requirements
•• What makes a great leader?
What makes a great leader?
-- Many formal theories of leadership exist
Many formal theories of leadership exist
-- Most people have their own beliefs
Most people have their own beliefs

Global Leadership: The New
Breed

•• One who has the skills and abilities to interact with and
One who has the skills and abilities to interact with and
manage people from diverse cultural backgrounds
manage people from diverse cultural backgrounds
•• Characteristics of a global leader
Characteristics of a global leader
-- Cosmopolitan
Cosmopolitan
-- Skilled at intercultural communication
Skilled at intercultural communication
-- Culturally sensitive
Culturally sensitive
-- Capable of rapid acculturation
Capable of rapid acculturation


Global Leadership:
Characteristics

-- Knowledgeable about cultural and institutional
Knowledgeable about cultural and institutional
influences on management
influences on management
-- Facilitator of subordinates’ intercultural performance
Facilitator of subordinates’ intercultural performance
-- A user of cultural synergy
A user of cultural synergy
-- A promoter and user of the growing world culture
A promoter and user of the growing world culture
-- A commitment to continuous improvement in self-
A commitment to continuous improvement in self-
awareness and renewal
awareness and renewal


Global Leadership: The New
Breed

•• Emotional intelligence: refers to the ability of the global
Emotional intelligence: refers to the ability of the global
leader to accurately perceive his or her emotions and
leader to accurately perceive his or her emotions and
to use those emotions to solve problems and to relate
to use those emotions to solve problems and to relate
to others
to others


Three Classic Models:
A Vocabulary of Leadership

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


Leadership Traits

•• Are leaders born or made?
Are leaders born or made?
•• Great-person theory: idea that leaders are born with
Great-person theory: idea that leaders are born with
unique characteristics that make them quite different
unique characteristics that make them quite different
from ordinary people
from ordinary people
•• Contemporary views of leadership traits do not assume
Contemporary views of leadership traits do not assume
that leaders are born
that leaders are born


Traits of Successful U.S.
Leaders

•• Higher intelligence and self-confidence
Higher intelligence and self-confidence
•• More initiative
More initiative
•• More assertiveness and persistence
More assertiveness and persistence
•• Greater desire for responsibility and the opportunity to
Greater desire for responsibility and the opportunity to
influence others
influence others
•• A greater awareness of the needs of others
A greater awareness of the needs of others


Leadership Behaviors: U.S.
Perspectives on Leadership
Behaviors
•• Two major types of leadership behaviors
Two major types of leadership behaviors
-- Task-centered leader: focus on completing tasks by
Task-centered leader: focus on completing tasks by
initiating structure
initiating structure
•• Gives subordinates specific standards,
Gives subordinates specific standards,
schedules, and tasks
schedules, and tasks
-- Person-centered leader: focus on meeting the social
Person-centered leader: focus on meeting the social
and emotional needs of employees
and emotional needs of employees


Leader Decision Making
Styles

•• Autocratic leadership: leaders make all major
Autocratic leadership: leaders make all major
decisions themselves
decisions themselves
•• Democratic leadership: leader includes subordinates in
Democratic leadership: leader includes subordinates in
decision making
decision making
•• Consultative or participative leadership: leader’s style
Consultative or participative leadership: leader’s style
falls midway between autocratic and democratic styles
falls midway between autocratic and democratic styles


Exhibit 15.1: Likert’s Four Styles of
Management


Japanese Perspectives on
Leader Behaviors

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


Performance-Maintenance
Theory

•• Performance function (P): similar to task-centered
Performance function (P): similar to task-centered
leadership
leadership
-- Two components of performance function
Two components of performance function
•• Planning component: the leader works for or with
Planning component: the leader works for or with
subordinates to develop work procedures
subordinates to develop work procedures
•• Pressure component: the leader then pressures
Pressure component: the leader then pressures
employees to put forth more effort and to do good
employees to put forth more effort and to do good
work
work

Performance-Maintenance
Theory

•• Maintenance function (M): similar to person-centered
Maintenance function (M): similar to person-centered
-- Presents behaviors that promote group stability and
Presents behaviors that promote group stability and
social interaction
social interaction
•• Difference between the Japanese PM approach and
Difference between the Japanese PM approach and
the U.S. perspective
the U.S. perspective
-- Japanese PM leader focuses on influencing groups
Japanese PM leader focuses on influencing groups
-- U.S. approach focuses on influencing individuals
U.S. approach focuses on influencing individuals


Indian Perspectives on Leader
Behaviors

•• Nurturant-task-oriented leadership (NT) theory:
Nurturant-task-oriented leadership (NT) theory:
combines elements of task behaviors, arguing that the
combines elements of task behaviors, arguing that the
preferred leader in India is both person-centered and
preferred leader in India is both person-centered and
task-centered
task-centered


Afro-Centric Perspectives on
Leader Behaviors

•• Afro-centric model of leadership: emphasizes person-
Afro-centric model of leadership: emphasizes person-
centered leadership, and is based on the concept of
centered leadership, and is based on the concept of
Ubuntu
Ubuntu
-- Ubantu: an African philosophy based on collectivism
Ubantu: an African philosophy based on collectivism
and group-centeredness in contrast to individualism
and group-centeredness in contrast to individualism


Contingency Theory

•• Assumption that different styles and different leaders
Assumption that different styles and different leaders
are more appropriate for different situations
are more appropriate for different situations
•• Two North American contingency theories of
Two North American contingency theories of
leadership
leadership
-- Fiedler’s theory of leadership
Fiedler’s theory of leadership
-- Path-goal theory
Path-goal theory


Fiedler’s Theory of Leadership

•• Proposed that managers tend to be either task- or
Proposed that managers tend to be either task- or
person-centered leaders
person-centered leaders
-- Three successful contingencies of the work situation
Three successful contingencies of the work situation
-- Leader and subordinates relationships
Leader and subordinates relationships
-- Clearly defined subordinates’ tasks
Clearly defined subordinates’ tasks
-- Power of the leader
Power of the leader


Fiedler’s Theory of Leadership

•• Effective leadership occurs when the leadership styles
Effective leadership occurs when the leadership styles
match the situation
match the situation
•• Theory suggests that task-centered leadership works
Theory suggests that task-centered leadership works
best when situation is favorable or not favorable for
best when situation is favorable or not favorable for
leader
leader
-- If favorable, subordinates are positive about their
If favorable, subordinates are positive about their
work—need to be told what to do
work—need to be told what to do
-- In unfavorable situations, job requirements are
In unfavorable situations, job requirements are
unclear, leader need to focus on getting things done
unclear, leader need to focus on getting things done

Exhibit 15.2: Predictions of Leader
Effectiveness under Different
Conditions


Path-Goal Theory

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


Exhibit 15.3: A Simplified Model of
Path-Goal Theory


Path-Goal Theory: Key
Suggestions

•• When subordinates have high achievement needs—
When subordinates have high achievement needs—
adopt the achievement-oriented style
adopt the achievement-oriented style
•• Subordinates with high social needs—adopt the
Subordinates with high social needs—adopt the
supportive leadership style
supportive leadership style
•• When job is unstructured—adopt a directive style or an
When job is unstructured—adopt a directive style or an
achievement-oriented style
achievement-oriented style


Traits, Behaviors, and
Contingencies

•• No consistent leadership trait or behavior that works
No consistent leadership trait or behavior that works
best
best
•• A successful leader must diagnose the situation and
A successful leader must diagnose the situation and
pick the behaviors and/or develop the leadership traits
pick the behaviors and/or develop the leadership traits
that fits best.
that fits best.


National Context as a
Contingency for Leadership
Behaviors
•• Successful leadership in multinational companies
Successful leadership in multinational companies
requires that managers adjust their leadership styles to
requires that managers adjust their leadership styles to
fit different situations.
fit different situations.


National Context as a
Contingency for Leadership
Behaviors
•• Two steps to adjust a leadership to a multination
Two steps to adjust a leadership to a multination
-- Step 1: understanding what local managers do to
Step 1: understanding what local managers do to
lead successfully in their own country
lead successfully in their own country
-- Step 2: using this knowledge to modify one’s
Step 2: using this knowledge to modify one’s
leadership style
leadership style
•• National-context contingency model of leadership:
National-context contingency model of leadership:
shows how culture and related social institutions affect
shows how culture and related social institutions affect
leadership practices
leadership practices

Exhibit 15.4: National-Context
Contingency Model of Leadership


The National-Context
Contingency Model of
Leadership
•• Outlines of how leadership behaviors, traits, and
Outlines of how leadership behaviors, traits, and
contingencies are affected by the national context:
contingencies are affected by the national context:
-- Leader behaviors and traits
Leader behaviors and traits
-- Subordinates’ characteristics
Subordinates’ characteristics
-- Work setting
Work setting


Leadership Traits and
behaviors in the National
Context
•• GLOBE (Global Leadership and Organizational
GLOBE (Global Leadership and Organizational
Behavior Effectiveness)
Behavior Effectiveness)
-- The very latest research on cross-national
The very latest research on cross-national
differences in leadership
differences in leadership
-- Study contains insights regarding crucial leadership
Study contains insights regarding crucial leadership
styles to navigate successfully through a maze of
styles to navigate successfully through a maze of
cultural settings
cultural settings


Exhibit 15.5: Culture Contingent
Leadership Traits and Behaviors


Exhibit 15.6 Culture Free Positively and
Negatively Regarded Leadership Traits
and Behaviors from 60 countries


Exhibit 15.7: GLOBE’s Study Clusters
and Countries Included in Each Cluster


Exhibit 15.8: Culturally Contingent
Beliefs Regarding Effective Leadership
Styles


GLOBE findings

•• Leadership styles vary by countries.
Leadership styles vary by countries.
•• Team-oriented leaders are preferred in Latin European
Team-oriented leaders are preferred in Latin European
and Southern Asian countries.
and Southern Asian countries.
•• Anglo and Germanic cultures prefer participative
Anglo and Germanic cultures prefer participative
leaders.
leaders.
•• South Asian cultures prefer humane leader.
South Asian cultures prefer humane leader.
•• All countries agree that autonomous leaders and self-
All countries agree that autonomous leaders and self-
protective leaders universally impeded leadership.
protective leaders universally impeded leadership.

National Context and
Preferred Leader-Influence
Tactics
•• Influence tactics: tactical behaviors leaders use to influence
Influence tactics: tactical behaviors leaders use to influence
subordinates
subordinates
--U.S managers favor seven influence tactics
U.S managers favor seven influence tactics
•• Assertiveness
Assertiveness
•• Friendliness
Friendliness
•• Reasoning
Reasoning
•• Bargaining
Bargaining
•• Sanctioning
Sanctioning
•• Appeals to a higher authority
Appeals to a higher authority
•• Coalitions
Coalitions


Exhibit 15.9: Preferred Leader
Influence Tactics in Four Countries


Subordinates’ Expectations

•• Subordinates’ expectations: expectations regarding
Subordinates’ expectations: expectations regarding
what leaders “should” do and what they may or may
what leaders “should” do and what they may or may
not do
not do
•• High power-distance – autocratic leadership
High power-distance – autocratic leadership
-- E.g., many of the Latin and Asian countries
E.g., many of the Latin and Asian countries
•• Low power-distance – leader be more like them
Low power-distance – leader be more like them
-- E.g., Sweden and Norway
E.g., Sweden and Norway


Exhibit 15.10: Subordinates’
Expectations under Three Levels of
Power Distance


Subordinates’ Expectation

•• Strong masculinity norms
Strong masculinity norms
-- Lead to the acceptance of more authoritarian
Lead to the acceptance of more authoritarian
leadership
leadership
•• Strong uncertainty-avoidance norms
Strong uncertainty-avoidance norms
-- Subordinates to expect the leader to provide more
Subordinates to expect the leader to provide more
detail in directions
detail in directions


Preference for “Specific” Leader In
Thirteen Countries


Contemporary Leadership
Perspectives: Multinational
Implications
•• Two basic forms of leadership
Two basic forms of leadership
-- Transactional leadership: managers use rewards or
Transactional leadership: managers use rewards or
punishments to influence their subordinates
punishments to influence their subordinates
-- Most ordinary leaders use transactional leadership
Most ordinary leaders use transactional leadership


Transformational Leadership

•• Managers go beyond transactional leadership by
Managers go beyond transactional leadership by
-- Articulating a vision
Articulating a vision
-- Breaking from the status quo
Breaking from the status quo
-- Providing goals and a plan
Providing goals and a plan
-- Giving meaning or a purpose to goals
Giving meaning or a purpose to goals
-- Taking risks
Taking risks
-- Being motivated to lead
Being motivated to lead
-- Building a power base
Building a power base
-- Demonstrating high ethical and moral standards
Demonstrating high ethical and moral standards

Transformational Leaders

•• Succeed because subordinates respond to them with
Succeed because subordinates respond to them with
high levels of performance, devotion and willingness to
high levels of performance, devotion and willingness to
sacrifice
sacrifice
•• Same leadership traits may not lead to
Same leadership traits may not lead to
transformational leadership in all countries
transformational leadership in all countries


Exhibit 15.11: GLOBE Study and
Charismatic Leadership


Attributions and Leadership

•• Emphasis on what leaders believe causes
Emphasis on what leaders believe causes
subordinates’ behaviors
subordinates’ behaviors
•• Two key distinctions in attributions
Two key distinctions in attributions
-- External attribution: factors outside the person and
External attribution: factors outside the person and
beyond the person’s control (e.g., natural disasters,
beyond the person’s control (e.g., natural disasters,
illness, faulty equipment, etc.)
illness, faulty equipment, etc.)
-- Internal attribution: characteristics of the person
Internal attribution: characteristics of the person
(e.g., personality, motivation, low ability, etc.)
(e.g., personality, motivation, low ability, etc.)

Attributions and Leadership

•• Once leader makes attribution, leader responds to
Once leader makes attribution, leader responds to
subordinate based on that assumption
subordinate based on that assumption
•• Fundamental attribution error: assumption by
Fundamental attribution error: assumption by
managers that people behave in certain ways because
managers that people behave in certain ways because
of internal motivations, rather than outside factors
of internal motivations, rather than outside factors
•• Successful leaders make the correct attributions.
Successful leaders make the correct attributions.


Global Women Leaders:
The Future?

•• Women global leadership: spread of traits or qualities
Women global leadership: spread of traits or qualities
that are associated with women to the process of
that are associated with women to the process of
leading organizations worldwide
leading organizations worldwide
-- “orientation toward more participative, interactional,
“orientation toward more participative, interactional,
and relational styles of leading”
and relational styles of leading”


Global Women Leaders

•• Women leaders have skills to develop deep
Women leaders have skills to develop deep
relationship to understand markets
relationship to understand markets
•• More likely to provide unity to accommodate needs of
More likely to provide unity to accommodate needs of
various stakeholders
various stakeholders
•• Better ability to understand diversity at global levels
Better ability to understand diversity at global levels


Getting the Results: Should
You Do What Works at Home?

•• Cannot assume that successful home leadership
Cannot assume that successful home leadership
styles or traits will result in equally successful
styles or traits will result in equally successful
leadership in a foreign country
leadership in a foreign country
•• It is nevertheless difficult to adapt.
It is nevertheless difficult to adapt.


Exhibit 15.12: 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 power distance – behave more autocratically
•• High uncertainty cultures – remove ambiguity from
High uncertainty cultures – remove ambiguity from
work setting
work setting


Exhibit 15.13: National Culture and
Recommended Leadership Styles


Conclusion

•• All multinational managers should strive to become
All multinational managers should strive to become
global leaders
global leaders
•• Chapter provides important information on the nature
Chapter provides important information on the nature
of leadership and understanding of leadership in the
of leadership and understanding of leadership in the
international setting
international setting
•• Chapter reviews classic leadership theories and
Chapter reviews classic leadership theories and
applies them to the international settings
applies them to the international settings


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