Leadership Across Cultures chapter thirteen Leadership Across Cultures McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.

Chapter Outline Management theories: Theories X, Y, and Z Leadership styles: authoritarian, paternalistic, participative, laissez-faire The managerial grid Motivating Japanese and U.S. workers Japanese vs. U.S. Leadership Styles Overview Theory Z in detail

Chapter Outline (2) Leadership in China Transformational leadership vs. other leadership styles Transactional Management-by-exception (active and passive) Laissez faire The GLOBE study of international leadership Characteristics of successful global entrepreneurs

Theory X and Theory Y Managers Theory X Manager: 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 Y Manager: A manager who believes that under the right conditions people will work hard and will seek increased responsibility and challenge.

Theory Z Managers Theory Z Manager: A manager who believes that workers seek opportunities to participate in management and are motivated by teamwork and responsibility sharing. Combination of Theory Y and Japanese management techniques Emphasizes mutual commitment between the organization and the employee Theory developed by William Ouchi

Leadership Styles Leadership Behaviors and Styles: Authoritarian: use of work-centered behavior designed to ensure task accomplishment. Paternalistic: use of work-centered behavior coupled with protective employee centered concern Participative: use of both work or task centered and people centered approaches to leading subordinates. Laissez-faire: The manager avoids taking action and does not accept responsibility for the actions of subordinates

Leader-Subordinate Relations Authoritarian Leaders

Leader-Subordinate Relations Paternalistic Leaders

Leader-Subordinate Relations Participative Leaders Continued interaction and exchange of information between leader and subordinates and among subordinates.

Managerial Grid 9, 5 Management Style = Paternalistic Participative Authoritarian Laissez-faire

The Managerial Grid Motivating Japanese Workers Japanese workers with high achievement motivation performed best when a participative leadership style was used. Japanese workers with low achievement motivation Performed best when an authoritarian leadership style was used By the end of the study, a participative leadership style was the second most effective style A laissez-faire leadership style was not effective with either type of workers. Results for U. S. workers have been similar.

Leadership in Japan Japanese managers and employees have a high need for safety and security Japanese managers also have a strong belief in the ability of subordinates to take initiative and exercise leadership Managers in English-speaking countries have an even stronger belief in the ability of subordinates to take initiative Japanese executives often give ambiguous instructions and expect subordinates to fill in the details

Leadership in Japan (2) Japanese managers focus more on problems. U.S. managers focus more on opportunities. The percentage of employees in Japan who have lifetime employment is 30% or less, and declining Lifetime employment is restricted to permanent, full-time employees of large companies. These employees are usually male. Ouchi’s Theory Z (Table 13.4, page 443)

Leadership in Japan (3) How senior managers process information and learn: 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 tend to use variety reduction—limiting uncertainty and focusing action on a limited number of alternatives.

Leadership in China Three factors used in a leadership study Individualism: The importance of self-sufficiency and personal accomplishments Collectivism: willingness to subordinate personal goals to those of the work group with an emphasis on sharing and group harmony Confucianism: Measured by the importance of societal harmony, virtuous interpersonal behavior, and personal and interpersonal harmony

Leadership in China (2) A new generation of Chinese managers is emerging whose work values differ from those of former managers Younger managers are more individualistic than older managers less committed to collectivism and Confucianism than older managers

Transactional and Transformational Leadership Transactional leaders exchange rewards for effort and performance and work on a “something for something” basis (also called contingent reward) Transformational leaders are visionary agents with a sense of mission who are capable of motivating their followers to accept new goals and new ways of doing things

Characteristics of Transformational Leaders Idealized influence – charisma. Ability to get their followers to accept a common purpose or vision Inspirational motivation – an easy-to-understand sense of purpose regarding what should be done. Intellectual stimulation – giving people a new paradigm or world view Individualized consideration – identify development needs and see that they are met.

Management by Exception Management-by-Exception - Active: The manager monitors performance and takes corrective action when deviations from standards occur Management-by-Exception - Passive: The manager intervenes in situations only when a problem is called to his attention

Universal Leader Behaviors

Leader Behaviors in Decreasing Order of Effectiveness Transformational Transactional (contingent reward) Management by exception – active Management by exception – passive Laissez faire This list is based on research in 8 countries. The way a leadership style is applied varies according to a country’s culture.

Recent Findings about Leadership Ads for management positions in western Europe Great differences among countries regarding their leadership requirements All countries expected executive applicants to have good social and personal qualities Culture clusters and leader effectiveness Effective leader behaviors tend to vary by cultural cluster Post-Communist countries put greater emphasis on administrative skills than other countries.

Rankings of Leadership Attributes

Styles of International Leadership (GLOBE study) Charismatic/Value-Based leadership captures the ability of leaders to inspire, motivate, and encourage high performance outcomes from others based on a foundation of core values. Team-Oriented leadership places emphasis on effective team building and implementation of a common goal among team members

Styles of International Leadership (2) Participative leadership reflects the extent to which leaders involve others in decisions and their implementation. Humane-Oriented leadership comprises supportive and considerate leadership. Autonomous leadership refers to independent and individualistic leadership behaviors. Self-Protective leadership “focuses on ensuring the safety and security of the individual and group through status-enhancement and face-saving.”

Leadership Attributes that Work in Most Cultures (universal) Integrity: being trustworthy, just, honest Having foresight and planning ahead Being positive, dynamic, motivating, encouraging, and building confidence Communicating and being informed Being a coordinator and team integrator

Differences in Leadership Attributes across Cultures Most other leadership attributes work well in some cultures but not in others. Two different collectivist approaches Nordic and Scandinavian countries: Participative and self-protective leadership are valued most highly. East Asia: Charismatic/values-based and team-oriented leadership are valued most highly.

Cross-Cultural Comparison

Why Start-up Businesses Fail 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.

Key Personal Characteristics Of Entrepreneurs Are more creative and innovative than non-entrepreneurs Do not need structure, support, or an organization to guide their thinking See things differently and add value to products in new ways Are willing to take personal and business risks, and to do so in visible ways

Key Personal Characteristics Of Entrepreneurs (2) 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 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.