Leadership and Management Behavior in Multinational Companies

15 Leadership and Management Behavior in Multinational Companies

Learning Objectives • Know the characteristics of global business leadership • Understand traditional North American models of leadership • Understand the Japanese performance-maintenance model, the Indian nurturant-task-oriented model, and Afro-centric model of leadership • Be able to apply the cultural-contingency model of leadership

Learning Objectives • Develop sensitivity to national cultural differences in preferred leadership traits and behaviors • 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

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

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

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

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

Three Classic Models: A Vocabulary of 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

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

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

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

Exhibit 15.1: Likert’s Four Styles of Management

Japanese Perspectives on Leader Behaviors • Performance-maintenance (PM) theory: balancing task- and person-centered leader behaviors

Performance-Maintenance 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

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

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

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

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

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

Exhibit 15.2: 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

Exhibit 15.3: 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

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.

National Context as a Contingency for Leadership Behaviors • 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

Exhibit 15.4: 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

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

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. • 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

Exhibit 15.9: 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

Exhibit 15.10: 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

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

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

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

Leadership and Management Behavior in Multinational Companies