1. Chapter Copyright© 2004 Thomson Learning All rights reserved 14 Leadership and Management Behavior in Multinational Companies

2. Copyright© 2005 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 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 of leadership Be able to apply the cultural-contingency model of leadership

3. Copyright© 2005 South-Western/Thomson Learning All rights reserved Learning Objectives Develop sensitivity to national cultural differences 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 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© 2005 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© 2005 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© 2005 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© 2005 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© 2005 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

9. Copyright© 2005 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

10. Copyright© 2005 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

11. Copyright© 2005 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 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

12. Copyright© 2005 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

13. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.1: Likert’s Four Styles of Management

14. Copyright© 2005 South-Western/Thomson Learning All rights reserved Japanese Perspectives on Leader Behaviors Performance-maintenance (PM) theory: balancing task- and person-centered leader behaviors

15. Copyright© 2005 South-Western/Thomson Learning All rights reserved Performance-Maintenance Theory Two dimensions of PM 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 Two dimensions of PM 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

16. Copyright© 2005 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

17. Copyright© 2005 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

18. Copyright© 2005 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

19. Copyright© 2005 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

20. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.2: Predictions of Leader Effectiveness under Different Conditions

21. Copyright© 2005 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

22. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.3: A Simplified Model of Path-Goal Theory

23. Copyright© 2005 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

24. Copyright© 2005 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.

25. Copyright© 2005 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.

26. Copyright© 2005 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

27. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.5: National-Context Contingency Model of Leadership

28. Copyright© 2005 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

29. Copyright© 2005 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

30. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.5: Culture Contingent Leadership Traits and Behaviors

31. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.6 Culture Free Positively and Negatively Regarded Leadership Traits and Behaviors from 60 countries

32. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.7: GLOBE’s Study Clusters and Countries Included in Each Cluster

33. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles

34. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles

35. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles

36. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles

37. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.8: Culturally Contingent Beliefs Regarding Effective Leadership Styles

38. Copyright© 2005 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.

39. Copyright© 2005 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

40. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.9: Preferred Leader Influence Tactics in Four Countries

41. Copyright© 2005 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

42. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.10: Subordinates’ Expectations under Three Levels of Power Distance

43. Copyright© 2005 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

44. Copyright© 2005 South-Western/Thomson Learning All rights reserved Preference for “Specific” Leader In Thirteen Countries

45. Copyright© 2005 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

46. Copyright© 2005 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

47. Copyright© 2005 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

48. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.11: GLOBE Study and Charismatic Leadership

49. Copyright© 2005 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.)

50. Copyright© 2005 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.

51. Copyright© 2005 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”

52. Copyright© 2005 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

53. Copyright© 2005 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.

54. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.12: Leadership Behavior and Job Performance of U.S. Managers in the U.S. and in Hong Kong

55. Copyright© 2005 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

56. Copyright© 2005 South-Western/Thomson Learning All rights reserved Exhibit 14.13: National Culture and Recommended Leadership Styles