mgt 6615- final paper- chuong nguyen

CROSS-CULTURAL LEADERSHIP 1

TROY UNIVERSITY

MGT 6615

Ethical Leadership & Management in a

Global Economy

John M. Mankelwicz

Assignment: Final Term Paper

Topic: Cross-cultural leadership

Student: Chuong Quang Nguyen

ID : 1314316


ContentsAbstract............................................................................................................................................2

Introduction......................................................................................................................................3

Literature Review............................................................................................................................4

Analysis...........................................................................................................................................5

What is Cross-Cultural Leadership?............................................................................................5

Authentic Leadership Model........................................................................................................5

Culture and the Authentic Leadership – The model..................................................................10

Cross-Cultural Leadership Styles...............................................................................................10

Conclusion.....................................................................................................................................13

References......................................................................................................................................15


Abstract

This paper gives a clear definition of cross-cultural leadership with the view that globalization

has given rise to a single economy. It examines the different leadership styles and seeks to

establish how these leadership styles are applied differently in different cultures. In order to

achieve this, it studies the concept of authentic leadership in length by exploring various

dimensions including: balanced processing, ethical/moral, transparency and self-awareness.

Under the authentic leadership concept, Hofstede’s ideas on culture are also mentioned to give a

wider conceptualization on cross-cultural leadership. We believe that organizations must see

developing countries, emerging markets, and different cultures as sources of innovation and

diversity, not something to be homogenized or conquered (Lawler, E., & Worley, C., 2011). The

paper aims at empowering leaders with insights about cultural diversity, so that they can

formulate appropriate strategies of adjusting their leadership styles to fit into different cultural

contexts. Besides, it will also ascertain whether servant, transformational and transactional

leadership can be applied in a cross-cultural context or not.

Keywords : cross-cultural leadership, authentic model, Hofstede, leadership styles


Introduction

As we shall examine in this paper, the aspect of cultural context plays a major role when

it comes to leadership (Bass & Avolio, 2004). Therefore, organizations need to develop

leadership styles that understands cultural context at the local and international level. The human

resource being very important in any given context, they need to be managed in a way that brings

out the best in them. As such, organizations endeavor to manage people in the best way possible

and often support theories of leadership whose approaches are specific to various cultural

contexts. Research on cross-cultural leadership helps in the understanding of cultural

eventualities under which some leadership styles can perform better as compared to others (Hall

& Hall, 2000). Furthermore, studying cross-cultural issues uncovers new trends through the

investigation of a variety of variables such as language, ethnicity, religion and political systems.

This paper will examine the various leadership styles such as transformational,

transactional and servant leadership, and their application in a cross-cultural context. Also an

examination of the styles will be done using the authentic leadership concept in order to establish

the effectiveness of every style under different cultural context. Finally, a discussion will be done

on the overall concept of leadership to enable the readers have a clear understanding on how

every cultural organization appraises and engages in different leadership styles.

Literature Review

Even though studies relating to leadership have been going on for decades, it is only in

recent times that focus has shifted to how leadership is affected by cultural context. With almost

90% of organizations today intending to expand internationally, it is important that they

understand the concept of cross-cultural leadership before they do so. A study which was


conducted by Hunt (2001) found out that the cross-cultural competence concept enabled leaders

to perform well under any culture unlike the understanding of language which only applies in

specific cultures. Understanding, respecting and accepting cultural differences is a necessary tool

for leadership effectiveness. He outlined some of the traits that define a cross-cultural leader

which include having a general intelligence, excellent interpersonal skills, courage, commitment,

business knowledge and above all skills of dealing with cross-cultural issues. In addition to that,

Avolio, Gardner & Walumbwa (2005) came up with three cross-cultural components: cultural

awareness, knowledge and cognition and cognitive complexity. They emphasized that when

work, personal and interpersonal domains converge, a leader is likely to be successful.

In the contemporary society, globalization has offered numerous cross-border

opportunities for multinational organizations which can only be realized with proper leadership

styles (Bass, 2000). Businesses are being globalized each day which requires leaders to have a

wider conceptualization of different cultures for their leadership to be effective under different

environments. Globalization has shifted focus from just leadership to cross-cultural leadership.

In the past, a lot of research was being done on leadership to try to determine the qualities that

constitute effective leadership. However, in the recent past, the importance of understanding

cultures has been incorporated into leadership. For instance, a leader who is used to one style of

leadership needs to adjust it to fit into different cultural contexts (Hall & Hall, 2000). As such,

cross-cultural leadership is studied using related theories that examine how leadership styles can

be altered so as to maintain their relevance in different environments.


Analysis

What is Cross-Cultural Leadership?

Even though there is no single definition of the term “cross-cultural leadership”, the term

can be said to refer to the way leaders behave when exposed to different cultures. It is the extent

to which leaders understand and respect people’s norms, beliefs and perceptions especially when

working in global environments (Shane, 1993). While leadership only refers to being in

possession of leading qualities, cross-cultural leadership adds the element of culture to

leadership. Understanding cultures is very important for any leadership, since the organizations

that they manage do not operate in a vacuum. Nonetheless, cross-cultural leadership does not

merely mean leadership across countries; it means leadership across cultures (Hall & Hall,

2000). Sometimes you might find two different countries having similar belief systems, thus not

requiring cross-cultural leadership. A successful leader with no cross-cultural leadership skills

may not be successful when exposed to a cross-cultural context.

Authentic Leadership Model

Authentic leadership represents one of the newest areas of leadership research. It focuses

on whether leadership is genuine and “real.” (Northouse, P. G, 2016). With a lot of studies being

done in the field of leadership and culture, an up-to-date leadership dimension has been brought

forth referred to as authentic leadership. This concept draws a lot of its reference to the

humanistic psychology and puts together several fields such as ethics and morality, positive

psychology and transformational leadership. Bass & Avolio (2004) define authentic leadership as

“a process that draws from both positive psychological capacities and a highly developed

organizational context, which results in both greater self-awareness and self regulated positive


behaviors on the part of leaders and associates, fostering positive self-development”. Authentic

leaders are individuals who know their values as well as those of their followers and act

consistently according to them. They communicate openly with a priority of developing growing

and developing positive emotions within other people. The concept of authentic leadership helps

leaders to manage people drawn from different cultures by focusing on their emotional and belief

system (Avolio, Gardner & Walumbwa, 2005). There are four dimensions of the authentic

concept that we shall use to study cross-cultural leadership.

To start with is the aspect of transparency. This can be considered to be openness in

communication as you share your intentions with the intended population. During

communication, a leader is expected to be clear and direct to the point on what he expects from

his followers as well as what results are expected. Give people a chance to trust you by avoiding

any hidden agendas (Bass, 2000). This is very crucial in a cross-cultural context, since foreigners

are likely to receive resistance from the local population. Locals are likely to view a foreigner as

an intruder, thus, transparency promotes trust and builds close relationship between a leader and

his followers. Moreover, such leaders should avoid relativism in different situations by treating

everyone equally despite their multiple differences.

Secondly, is the idea of self-awareness where individuals continually understand and

appreciate uniqueness, core values, beliefs, strengths, weaknesses and desires. Individuals were

created differently and none is similar to the other. These differences may arise from cultural

diversity or from within individuals, thus it is important for leaders to be aware of themselves as

well as their followers (Avolio, Gardner & Walumbwa, 2005). Uniqueness based on cultural

diversity defines people’s norms and belief system while uniqueness based on individual defines

strengths and weaknesses. By understanding this, it will be easier for leaders to manage their


followers in different situations. Furthermore, self-awareness fosters respect and understanding

as people feel appreciated and motivated in whatever they engage in.

The concept of balanced processing is also important in cross-cultural leadership because

it focuses on listening. People of different cultures have different ways of thinking and look at

things differently. Hence, it is important for a leader to give such people a chance to share their

ideas as they may widen his views on particular subjects (Seligman, 2002). For instance, a leader

in a new country may lack the best way to implement policies, but by sharing his intentions with

the locals, he will have an idea on how to go about it. Communication should always flow in two

ways and never in one way. Too much domineering in a new set up will make locals to feel left

out and even come up with resistance strategies. Two-way communication promotes satisfaction

and collaboration among the locals.

The last dimension is the ethical/moral concept which emphasizes on leaders to act in a

widely accepted manner. Morality is upheld when individuals act according to ethical standards.

Leaders should at all times try to uphold their integrity standards in order for their followers to

have confidence in them (Avolio, Gardner & Walumbwa, 2005). Many multinational companies

have failed as a result of violation of cultural ethical standards. Some cultures may promote

practices that do not seem to make sense to you. As an authentic leader, one should not overlook

these practices, but rather try to act within them in order to avoid conflicts. Leaders should

ensure their organizations take part in social-cultural responsibilities. Leaders with good moral

standards are likely to receive worldwide positive recognition; an example of such a leader is

Nelson Mandela.

Authentic leadership model recognizes that the most important thing in leadership is the

follower’s success and the attainment of organizational goals. Leaders who believe in this


concept strive to bring out the best in their followers through delegation of authority, power and

responsibility (Lowe, 2003). They focus on growing trust, attitudes, commitment and motivation

by making followers to identify with their vision. They recognize the role of culture in an

organization and are able to lead differently in different cultural contexts. Therefore, they have

made Hofstede’s ideas on cross-cultural leadership part and parcel of their lives. Although these

ideas have received considerable criticism regarding sample selection procedures and the

universal usage of Hofstede’s cultural dimension, they still remain the most popular in cross-

cultural study. Hofstede’s work has been the benchmark for much of the research on world

cultures (Northouse, P. G, 2016). Through these dimensions, a comparative analysis on values of

different cultures can be conducted. There are four major dimensions that were identified by the

survey which discuss culture-leadership relations.

To start with is power distance which refers to the degree to which members of a group

expect and agree that power should be shared unequally (Northouse, P. G, 2016). Power distance

has a great impact on leadership style in various organizations as well as cultures. A research

carried out by GLOBE suggests that in cultures where this kind of dimension is experienced,

participative leadership model should be endorsed to avoid conflicts. Through this each and

every member will feel important by participating in the decision making process.

Secondly, is the individualistic vs collectivism dimension in which cultures with either of

the two exhibit different characteristics that require different leadership styles. In individualized

societies people are considered to be self centered where they are only concerned about personal

interests and those of close family members only. Collectivism on the other hand, refers to

societies that have strong unified in-groups forming firm social frameworks (Seligman, 2002).

Individualized societies are likely to embrace any leadership style as long as it supports their


individual interests. On the contrary, societies that believe in collectivism are more loyal to their

in-groups, thus would oppose any new idea as they consider it a threat to their stability. Leaders

need to study cultures in this perspective so that they will be in a position to determine the most

suitable leadership style to employ.

The third dimension is the idea of uncertainty avoidance which refers to the extent to

which a society, an organization, or a group relies on established social norms, rituals, and

procedures to avoid uncertainty (Northouse, P. G, 2016). It is a situation of over-reliance on

cultural norms and procedures to do away with uncertain situations. From research, societies that

embrace uncertainty have been found out to be more innovative than those that avoid it.

Consequently, leaders in uncertainty avoidance cultures need to plan and come out with detailed

agreements on how things shall be done. By so doing, the local people will familiarize

themselves with those procedures before they are implemented.

Culture is a great determinant of leadership style in an organization whether in an

international or local level. A particular leadership style can be able to survive in various cultures

if it is modified to fit into those environmental conditions (Avolio, Gardner & Walumbwa,

2005). Although culture is general to the whole organization, leaders play a great role in creating

the culture within an organization. Dimensions of authentic leadership model can be closely

linked to dimensions of culture discussed by Hofstede. The interaction of the two perspectives

allows for the emergence of the best leadership style in a specific organizational culture.


Culture and the Authentic Leadership – The model

Culture The Authentic Leadership

Power Distance Transparency

Avoiding Uncertainty Self-Awareness

Individualism vs Collectivism Ethical/Moral

Balanced Processing

The Optimal Leadership Style

For Particular

Organizational Structure

Cross-Cultural Leadership Styles

Cross-cultural leadership refers to the leadership styles that are able to withstand

differences in cultures by proving their effectiveness. Every organization has a unique structure

under which it operates, thus managers have to amend their leadership styles to fit into new

organizations. A similar case is experienced in international companies which are established

under a cross-cultural context. Hall & Hall (2000) explain that since managers in multinational


companies can be transferred to new cultures across the world, they need to have knowledge on

how to alter their leadership styles so that they still remain effective. Sufficient studies have not

been done on all cultures to determine their appropriate leadership styles. More light has been

shed on the following leadership styles to examine their effectiveness in a cross-cultural context.

Transformational leadership is a leadership style where leaders inspire their followers

through their willingness to forgo self interests and support those of others. Bass & Avolio

(2004) assert that transformational leaders act under a moral obligation of encouraging their

followers to bring out the best in them. These leaders are able to move poor performing

organizations to high performance levels by supporting subordinates. Transformational leaders

are considered to be charismatic due to their ability to develop individual capabilities as well as

influencing their thoughts. There are four concepts that have been identified under this type of

leadership.

The first one is individualized consideration in which individual needs are identified and

dealt with uniquely. Here individual growth is encouraged through provision of opportunities

and development of supportive organizational culture (Bass, 2000). Intellectual stimulation is

another approach used by transformational leaders. Under this, the leaders are able to handle old

problems in new ways. They encourage their followers to ask enquire more about situations,

something that will enable them to acquire extra knowledge on handling similar situations in the

future. Thirdly, is the idealized influence concept considered to be a leader’s Charisma. Through

this they are able to sway their followers into believing in their vision. The followers develop

strong emotions with the leaders and always want to identify with them. This allows the leaders

to gain much power and control over their followers (Yukl, 2006). Lastly, is the idea of

inspirational motivation which the leaders use to study the important needs of individuals and


promote positive potential from within them. The leaders are known to promote mutual

understanding by articulating common goals.

The transactional leadership style uses well defined structures that define the reward-

punishment system to the employees (Bass, 2000). It spells out what is expected of the

subordinates, those who meet expectations are rewarded while those who fail to meet the

expectations are punished. Punishments are meant to restrain the doers from repeating a similar

act in the future, while rewards are for motivation and satisfaction. In most cases, punishments

are not stressed, however, they are well spelt out in the formal systems and are well understood

by the subordinates. Under this leadership a contract is signed which outlines what is expected

from each party. When transactional leaders assign duties to their followers, the followers

assume full responsibility of them and are expected to perform them completely failure to which

attracts punishment (Bass & Avolio, 2004). Transactional leaders apply the expectation

management model where not much attention is given to things since they are operating as

defined. It takes a “telling style” after the signing of the contract where leaders only concentrate

on ensuring that things are being done according to the terms of the contract.

Unlike the earlier discussed forms of leadership, situational leadership suggests that

leaders should change the degree to which they are directive or supportive to meet the changing

needs of followers (Northouse, P. G, 2016). This style recognizes three forces that determine the

action the leader will take: the forces within the leader himself, the forces driving the followers

and the forces within the situation. This type of leadership accepts that leadership should be

variable taking into consideration the possibility of followers supporting an idea. According to

Stogdill (2004), these leaders tend to be directive in order to get things done in a particular way

to avoid failure. It focuses on external coordination so as to avoid conflicts that may emerge


from the external forces which may render the whole leadership exercise as a failure. In addition,

it promotes subordinate motivation by matching roles with abilities and ensuring individuals

understand what is expected of them.

Despite the advantages that may be demonstrated by every leadership style, each one of

them has its own share of disadvantages. It is thus important for leaders to understand that no

single style can hold in the different cultures (Hunt, 2001). Leaders should have a clear

understanding of each style as well as its appropriate situation of application. For instance,

transactional leadership may work well in individualistic societies, but it may not be the case in

collective societies. Nonetheless, situational leadership has been found to be more effective in a

cross-cultural context. This is because it allows leaders to study the cultural environment, and

then decide on the best course of action.

Conclusion

In conclusion, this paper has expounded on the term cross-cultural leadership by using

the authentic leadership model. This model explains some of the dimensions of leadership that

will make any style of leadership to attain maximum effectiveness across cultures (Avolio,

Gardner & Walumbwa, 2005). The model further integrates Hofstede’s ideas of cross-cultural

leadership into its application, coming up an optimal leadership style. A few leadership styles

have also been discussed here with the aim of trying to establish how each style can be made

effective when applied in different cultures. It is suggested that no single leadership style can be

appropriate in all cultures; leaders need to establish which leadership style is appropriate under

particular cultural conditions.


References

Lawler, III, E. E. & Worley, C. G. (2011). Management Reset: Organizing for sustainable

effectiveness. San Francisco: John Wiley & Sons, 4 .

Avolio, B.J., Gardner W.L., & Walumbwa F.O. (2005). Authentic leadership theory and practice:

Origins, effects and development. CA: Elsevier, San Francisco.

Bass, B.M., & Avolio, B.J. (2004). Improving organizational effectiveness through

transformational leadership. Thousand Oaks: Sage.

Bass, B.M. (2000). From transactional to transformational leadership: Learning to share the

vision. Organizational Dynamics, Winter.

Northouse, P. G. (2016). Leadership: Theory and practice (7th ed.). Thousand Oaks, CA: SAGE

Publications, 93, 195, 431, 496.

Hall, E.T., & Hall, M.R. (2000). Understanding cultural differences. New York: Intercultural

Press.

Hunt, J.W. (2001). Applying American behavioral science: Some cross-cultural problems.

Organizational Dynamics, Summer.

Lowe, E.A. (2003). Culture’s consequences: International differences in work-related values.

Journal of Enterprise Management, 3(3).

Seligman, M.E. (2002). Authentic happiness: Using the new positive psychology to realize your

potential for lasting fulfilment. New York: The Free Press.

Shane, S.A. (1993). Cultural influences on rates of innovation. Journal of Business Venturing, 7.

Stogdill, R.M. (2004). Handbook of leadership: A survey of the literature. New York: Free Press.

Yukl, G.A. (2006). Leadership in organizations. Upper Saddle River. New York: Prentice-Hall.

mgt 6615- final paper- chuong nguyen

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