Leadership from a cross-cultural perspective

INTERNATIONAL MANAGEMENT

‘LEADERSHIP FROM A CROSS-CULTURAL PERSPECTIVE’

LEADERSHIP FROM A CROSS-CULTURAL PERSPECTIVE

Section 1: Introduction

The concept of leadership is an essential element of conceptualising the management of organisational behaviour. Mullins (2005) argues that activities such as guiding other people to follow can be simply seen as an interpreted form of leadership in practice. However due to the changing environment which modern organisations are operating in leadership principles have been joined by new capabilities including managing organisational changes in terms of evolutionary as well as revolutionary periods of growth or adaptation to environmental factors. Thus Useem (2001) suggests that leadership is not only an element at strategic levels but is also about operational degrees where the tangible implication of leadership as a result of corporate cultures plays a vital role in an organisation’s developmental process. From this point of view individual leaders who display positive personal qualities and knowledge in terms of interpersonal management in business are often admired by their followers from which significant motivational effects can be generated throughout the organisation. An example of this type of strong leadership personality can be seen with Jack Welch who as CEO of one of the most famous multinational companies General Electric had significant influences through his leadership and management style in shaping the organisational behaviour of the company over twenty five years.

Leadership as a process as an ability to influence behaviours among a group of people is highly linked to the environmental context in which leadership is exerted, (Northouse, 1997). Particularly leadership practises have evolved as a result of changes and the dynamics of the global environment in which companies now increasingly operate in as a result of rapid globalisation, technological developments and internationalisation of business functions. The impact of technology for example has contributed to the development of world economies at different levels with the emergence of new communication technologies such as the Internet allowing businesses access to and abilities for the exchange of information in a global context. Additionally one of the major applications of technology is for the production of goods and services globally in a shorter period of time, (Rugman & Hodgetts, 2003). The sum of these trends has been then for companies to engage in internationalisation as a result of globalisation in order to benefit from these developments and the new markets which continue to open as a result. However management in terms of leadership in such organisational contexts is to a large extent strongly linked with cultural concerns and sensibilities. Joynt and Warner (1996) seek to define culture as the acquired knowledge which people use to interpret personal or collective experiences and which provide guides for performance within the social environment. As a result critical challenges are generated for the practice of leadership within a cross cultural environment such as those common for many multinational operations.

As such then a CEO of a multi-national company can no longer, as Jack Welch states, ‘spend an entire career in the United States’ or by extension in any single country. Globalization has penetrated business activities and ways of life in even the most conservative business models from Korea and Japan to Germany, Britain and the US. The challenges to competitiveness engendered by globalisation and the plethora of choices available to the modern consumer mean that international businesses and the managers who run them must reposition their organisations accordingly to allow them to survive the new hostile conditions of doing modern international business. Globalisation similarly has brought to prominence new economies such as Japan, Korea and China. If international managers seek to succeed in winning contracts and successful entry into the markets Korea and China or other countries they must have both an awareness of cultural sensibilities and be able to resolve national differences in effective way for their companies exerted in a primary way through adaptive and responsive leadership styles.

Section 2: Sources

This literature review makes particular use of general works on the nature of international business and management, as well as more specific works discussing these themes within a cross-cultural context. Repetitive of the latter is Schneider’s and Barsoux’s seminal book Managing Across Cultures which was first published in 1997. Schneider’s and Barsoux’s aims for the book were to determine and then illustrate the extent to which culture is an influential force on the nature, role and functions of international business operations. Schneider and Barsoux sought to demonstrate that an international manager should not limit his knowledge of a client’s country’s culture to simple hospitality related issues. Much more important from their observations was that an international manager should understand how the business practices of a particular country are intimately tied to and evolve out of that culture itself. Synthesising these ideas they state

“Managers who readily accept the cuisine, the literature, the music and the art of other countries run parallel to one another, must also learn to accept the fact that the art of management differs in other countries.” (Schneider & Barsoux, 1997: p1)

The structure of Managing Across Cultures reflects this emphasis upon culture as the foundational layers of national business activities and organisational forms that a particular country is characterised by. Part 1 is titled ‘The Meaning of Culture’ (1997: 1-73), Part 2 Culture and Management Practice’ (1997, 73-128) and Part 3 ‘Managing Cultural Differences’ (1997: 155-263). The ‘undertow of culture’ is a major theme that is repeatedly emphasised throughout the work, and it is a theme that has led to a succession of other international management books that explore the influence of culture upon a country’s business structures and organisations. As such for this review this text was a useful starting point for the review.

An example of a work which followed in terms of informing this review from that just discussed was Deresky’s International Management: Managing Across Borders and Cultures (2005). This proved to be a useful in-depth study of the question of how international managers can proceed in increasing their knowledge and awareness of the varied business cultures of client countries in which they do business. Deresky collates theory with case-study information from a range of major international business locations, including: Russia, China, Indonesia, Korea, Canada and Mexico. Her suggestions are that

‘The hyper-competitive arena of the twenty-first century mandates that managers develop the necessary skills to design and implement global strategies, to conduct effective cross- national interactions and to manage daily operations in foreign subsidiaries. Global companies are faced with varied and dynamic environments in which they must assess the political, legal, technological, competitive, and cultural factors that shape their strategies and operations’ (Deresky, 2005: Preface)

This quotation meshes with a key theme discovered during the review in that there is a consistent acknowledgement in the literature that international mangers must develop a host of new skills that will enable them to survive in the new ‘hyper-competitive’ international business environment. These skills must take into account many factors such as politics, technology, and legal issues and above all they must consider the cultural foundations which inform all these other factors. To understand international management as practised in different contexts this literature review also consulted several sources dealing specifically with the business cultures of particular countries. Chen’s (1995) Asian Management Systems: Chinese, Japanese and Korean Styles of Business and Reeder’s (1987) When West Meets East: Cultural Aspects of Doing Business in Asia were thorough and comprehensive examinations of the general cultural business contexts of South East Asia. Sheng’s (2000) Outsiders Perceptions of the Chinese illustrated the substantial differences between what foreigners perceive to be the business culture of China and what that culture is in actuality.

In dealing in general terms with concepts of international management or in other words with no specific focus on cultural contexts other works were invaluable for forming the base from which investigations into cultural contexts could be built. Hill’s International Business: Competing in the Global Marketplace (2003) and Daniels International Business (2001) were useful in establishing and revealing some of the basic principles of international business management and for providing theoretical clues as to how these principles might be extended later to the investigation of particular business cultures. Useful also for this purpose were Holt’s and Wiggington’s International Management (2002), Pugh’s (2002) International Business and Management and Morrison’s (2001) The International Business Environment. Each of these books offered different perspectives on international management as filtered through the particular business experiences of the different authors; they added to and strengthened the theoretical base provided by Daniel’s International Business and Hill’s work.

Section 3: Main Themes

Leadership

Leadership is a topic which is viewed with growing interest in management literature and practice. This is particularly true in the international business environment since it is believed to be closely linked with motivation and the guiding of interpersonal behaviour which themselves are vital in managing human resources effectively, (Mullins, 2005). It is obvious that leadership is a two-way process involving effective delegation and empowerment between leaders and followers, (Sieff, 1991). Therefore leadership can be significantly useful in building team work and assist in the integration of individual and group goals which are fundamental activities in organisations.

Management it is argued can be viewed in terms of planning, organisation and controlling the behaviour of staff. However developments in human resource management literature and practice both suggest that communicating, motivating and maintaining employee have become significant for companies in creating and obtaining competitive positions for organisations in the modern business world, (Torrington et al, 2002). However there are major differences between leadership and management since management is concerned more with adopting appropriate management policies in achieving corporate goals while leaders generally deploy a more personal attitude towards tasks and influencing other people, (Mullins, 2005). Additionally there is a tendency to emphasise the relationship between management and leadership in that researchers have argued that both the implementation of corporate goals through people as well as the creation of enjoyable work experiences are linked through leadership, (Fullan, 2001). It is obvious that leadership has become a vital aspect then in looking at corporate behaviour particularly after the successes of Japanese companies who have exploited leadership as an essential part of their organisational cultures.

According to the traits approach leaders are born and not made, for example, Drucker (1989) suggests that leadership can not be created or promoted or trained which is an outlook based on the Great Person theory of leadership. The characteristics of leaders can be seen in terms of personality, physical and mental attributes in that better qualities in these are the major contributor to leadership success. However it is reasonable to say that the Great Person theory involves subjective judgements namely in that due to different people’s point of views the definition of better qualities regarding to a good leader is debatable. The development of a functional approach towards leadership, instead, focuses on the content of leadership, (Whitehead, 2002). Here the view is that the skills needed by leaders can be learnt within the social context with companies now spending on training programs in order to improve management performance as well as building organisational cultural impacts in terms of promoting and fostering leadership qualities. The theory of action-centred leadership developed by Adair (1984) defines the task functions of leaders as including abilities to achieve corporate objectives through good planning of work, allocation of resources as objectives and meeting and mediating individual and team needs within organisations. Leaders appear when they can see those tasks more clearly than others yet the generation of leadership is a complex process which will be influenced by a range of factors despite a focus on the recognition on needs alone.

It is clear that effective leadership is influenced by both external and internal factors such as leaders, follower groups and the business environment, (Mullins, 2005). As mentioned before the characteristics of leaders including personality, value system and attitude to a large extent determines the efficiency of leadership. It is useful to mention that in new economies the ability to learn from and manage change is significant since the external business environment is more complex now than it was in the past. Particularly due to globalization not only business level but also human resources is a more complex affair under different cultural environments and backgrounds. For example the team focused Japanese culture is to a large extent affected by the leadership style under this cultural setting while in the US multinational corporate free communication and individualism tends to be vital features in organisations with corresponding leadership qualities being emphasised. Bennis (2003) argues that leaders in today’s business environment are involved in cross functional and cross cultural teams and networks which require them to understand cultural differences and diversity in order to achieve long term survival and success for their organisations.

Globalisation is a particular aspect of these new environments. In Deresky’s words globalisation is

“characterised by networks of international linkages that bind countries, institutions and people in an interdependent global economy. The invisible hand of global competition is being propelled by the phenomenon of an increasingly borderless world” (Deresky, 2005: p3).

As Rodriquez (2001) points out globalization has a paradoxical effect upon the international manager. In that the extreme complexity of international economic forces or being buffeted by events such as oil price surges and natural disasters require managers to be an expert in observing the broader picture and of understanding how these complex forces are inter-related. Only with such a broad awareness can he anticipate future trends and events that will give him vital competitive edges over competitors. At the same time as drawing on this awareness the international manager must also be acquainted and be familiar with the particularities and idiosyncrasies of the individual countries with which his company does business. The most successful international manager and leader then will be the one who perceives the relationship between the global and the local.

The second phenomenon faced by modern international management is that of the rise of information technology. Individuals and organisations today are conscious of the pervasive influence of information technology; the Internet, digital television and radio, mobile phone advances and so on are dominant features of the modern cultural landscape. As Schneider and Barsoux (2002) point out, it is tempting to assume in this rise of IT that global barriers and frontiers are no longer relevant to the conduct of international business since computer-systems are more or less the same everywhere and one can access the same information from the internet in all countries. Schneider and Barsoux (2002) argue that such a general statement is unwise and fails to take account of the fact that IT development is still at very different levels in many cultures, in India it is less advanced by far than the United States at present. Different cultures also have different attitudes towards the use and distribution of IT practices in their business environments. This sensitivity for the different paces of technological change is a vital part of modern international management.

Section 4: Conclusion

The very best international managers and business leaders will be those who combine an acute perception of global movements and trends in international marketplaces with a reflexive awareness of the idiosyncrasies and particularities of different business cultures. The attitude the leader has to information technology will be nearly as equally important as his attitude to globalisation. From the literature it is clear that the leader who excels in managing technology, change and human resources will succeed where his rivals founder in growing internationally diverse organisations.

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