1. Chapter Copyright© 2007 Thomson Learning All rights reserved 15 Leadership and Management Behavior in Multinational Companies

2. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

3. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

4. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

5. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

6. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

7. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 - 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

8. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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

9. Copyright© 2007 South-Western/Thomson Learning All rights reserved Three Classic Models: A Vocabulary of Leadership Three basic models of leadership - Leadership traits - Leadership behavior - Contingency leadership Three basic models of leadership - Leadership traits - Leadership behavior - Contingency leadership

10. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

11. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

12. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

13. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

14. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.1: Likert’s Four Styles of Management

15. Copyright© 2007 South-Western/Thomson Learning All rights reserved Japanese Perspectives on Leader Behaviors Performance-maintenance (PM) theory: balancing task- and person-centered leader behaviors

16. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

17. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

18. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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

19. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

20. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

21. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

22. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

23. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.2: Predictions of Leader Effectiveness under Different Conditions

24. Copyright© 2007 South-Western/Thomson Learning All rights reserved Path-Goal Theory Four leadership styles that a manager might choose depending on the situation - Directive - Supportive - Participative - Achievement-oriented Four leadership styles that a manager might choose depending on the situation - Directive - Supportive - Participative - Achievement-oriented

25. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.3: A Simplified Model of Path-Goal Theory

26. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

27. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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. 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.

28. Copyright© 2007 South-Western/Thomson Learning All rights reserved National Context as a Contingency for Leadership Behaviors Successful leadership in multinational companies requires that managers adjust their leadership styles to fit different situations.

29. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

30. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.4: National-Context Contingency Model of Leadership

31. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 Outlines of how leadership behaviors, traits, and contingencies are affected by the national context: - Leader behaviors and traits - Subordinates’ characteristics - Work setting

32. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

33. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.5: Culture Contingent Leadership Traits and Behaviors

34. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.6 Culture Free Positively and Negatively Regarded Leadership Traits and Behaviors from 60 countries

35. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.7: GLOBE’s Study Clusters and Countries Included in Each Cluster

36. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles

37. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles

38. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles

39. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles

40. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles

41. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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. 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.

42. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

43. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.9: Preferred Leader Influence Tactics in Four Countries

44. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

45. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.10: Subordinates’ Expectations under Three Levels of Power Distance

46. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

47. Copyright© 2007 South-Western/Thomson Learning All rights reserved Preference for “Specific” Leader In Thirteen Countries

48. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 Two basic forms of leadership - Transactional leadership: managers use rewards or punishments to influence their subordinates - Most ordinary leaders use transactional leadership

49. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

50. Copyright© 2007 South-Western/Thomson Learning All rights reserved 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 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

51. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.11: GLOBE Study and Charismatic Leadership

52. Copyright© 2007 South-Western/Thomson Learning All rights reserved Attributions and Leadership Emphasis on what leaders believe causes subordinates’ behaviors Two key distinctions in attributions - External attribution: factors outside the person and beyond the person’s control (e.g., natural disasters, illness, faulty equipment, etc.) - Internal attribution: characteristics of the person (e.g., personality, motivation, low ability, etc.) Emphasis on what leaders believe causes subordinates’ behaviors Two key distinctions in attributions - External attribution: factors outside the person and beyond the person’s control (e.g., natural disasters, illness, faulty equipment, etc.) - Internal attribution: characteristics of the person (e.g., personality, motivation, low ability, etc.)

53. Copyright© 2007 South-Western/Thomson Learning All rights reserved Attributions and Leadership Once leader makes attribution, leader responds to subordinate based on that assumption Fundamental attribution error: assumption by managers that people behave in certain ways because of internal motivations, rather than outside factors Successful leaders make the correct attributions. Once leader makes attribution, leader responds to subordinate based on that assumption Fundamental attribution error: assumption by managers that people behave in certain ways because of internal motivations, rather than outside factors Successful leaders make the correct attributions.

54. Copyright© 2007 South-Western/Thomson Learning All rights reserved Global Women Leaders: The Future? Women global leadership: spread of traits or qualities that are associated with women to the process of leading organizations worldwide - “orientation toward more participative, interactional, and relational styles of leading” Women global leadership: spread of traits or qualities that are associated with women to the process of leading organizations worldwide - “orientation toward more participative, interactional, and relational styles of leading”

55. Copyright© 2007 South-Western/Thomson Learning All rights reserved Global Women Leaders Women leaders have skills to develop deep relationship to understand markets More likely to provide unity to accommodate needs of various stakeholders Better ability to understand diversity at global levels Women leaders have skills to develop deep relationship to understand markets More likely to provide unity to accommodate needs of various stakeholders Better ability to understand diversity at global levels

56. Copyright© 2007 South-Western/Thomson Learning All rights reserved Getting the Results: Should You Do What Works at Home? Cannot assume that successful home leadership styles or traits will result in equally successful leadership in a foreign country It is nevertheless difficult to adapt. Cannot assume that successful home leadership styles or traits will result in equally successful leadership in a foreign country It is nevertheless difficult to adapt.

57. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.12: Leadership Behavior and Job Performance of U.S. Managers in the U.S. and in Hong Kong

58. Copyright© 2007 South-Western/Thomson Learning All rights reserved The Cultural Context and Suggested Leadership Styles High power distance – behave more autocratically High uncertainty cultures – remove ambiguity from work setting High power distance – behave more autocratically High uncertainty cultures – remove ambiguity from work setting

59. Copyright© 2007 South-Western/Thomson Learning All rights reserved Exhibit 15.13: National Culture and Recommended Leadership Styles

60. Copyright© 2007 South-Western/Thomson Learning All rights reserved Conclusion All multinational managers should strive to become global leaders Chapter provides important information on the nature of leadership and understanding of leadership in the international setting Chapter reviews classic leadership theories and applies them to the international settings All multinational managers should strive to become global leaders Chapter provides important information on the nature of leadership and understanding of leadership in the international setting Chapter reviews classic leadership theories and applies them to the international settings