Topic # 3
Leadership & Cross-Cultural Management

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References

Blake, R.S., Mouton, J.S. (1967). The Managerial Grid In Three Dimensions in Training & Development Journal, Vol. 21, Issue 1, pp. 2-6.

Blake, R.S., Mouton, J.S.(1975). An Overview of the Grid.Training & Development Journal, Vol. 29 Issue 5, pp. 29-38.

Blake, R.S., Mouton, J.S.(1982). A Comparative Analysis of Situationalism and 9,9 Management by Principle in Organizational Dynamics, Vol. 10 Issue 4, pp. 20-43.

C. Voynnet Fourboul & Frank Bournois (1999). Strategic Communication with Employees in Large European Companies: A Typology. European Management Journal, 03-04, pp. 204-217.

Wikipedia: article on Fons Trompenaars

Chapter 5: Managing across culture, pp132

Riding the waves of Culture: Understanding diversity in Global Business, Fons Trompenaars, New York: Irwin, 1994

http://www.12manage.com

Edward T. Hall The Hidden Dimension, p. 159

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What we propose :

Leadership

Theories X, Y

Leadership Behaviors and Styles

Managerial Grid

2. Cross-cultural management issues

HQ Subsidiary attitudes

Cultural dimensions : the right message for the

right context

Differences and similarities

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Leadership

The process of influencing people to direct their efforts toward the achievement of some particular goal or goals.

So far, little effort has been made to systematically study and compare leadership approaches.

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Defining leadership has been a real challenge for a long time. Today, this term has been described as the process of social influence in which one person is able to enlist the aid and support of others in the accomplishment of a common task (according to R. E. Riggio, S. E. Murphy and F. J. Pirozzol in their work Cognitive, social, and emotional intelligence of transformational leadership). Put even more simply, the leader is the inspiration and director of the action. He or she is the person in the group that possesses the combination of personality and skills that makes others want to follow his or her direction.

KevinBerchelmann, an important business man and leader of a successful English company, developed a Leadership Skills Training Survival Kit for New & Experienced Managers. We can find in closed 5 key rules that a manager has to mind for in order to achieve his goal:

Never delay a decision that must be madeWhen you want something specific done, say so specifically, using clear, plain languageNever answer every employee's every questionMake your expectations clear, then back up a bit and give employees room to do their jobEmployees need their managers to be leaders.

These 5 key rules show us the complexity of being a successful leader today. However, the same business man does not give any advice regarding the method to use in order to fulfill successfully all of these key rules.

Overview of Leadership Theories

Great Man theories

Trait theory

Situational theory

Hersey and Blanchard

Management theories

Relationship theories

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There are many theories trying to explain this term under different aspects.

Great Man theories assume that the capacity for leadership is inherent that great leaders are born, not made. These theories often portray great leaders as heroic, mythic, and destined to rise to leadership when needed. The term Great Man was used because, at the time, leadership was thought of primarily as a male quality, especially in terms of military leadership.

2. According to Wikipedia.org, Trait theory is the first academic theory of leadership. Closely linked to the Great Man theory, this one describes the types of behavior and personality tendencies associated with effective leadership. Thomas Carlyle can be considered one of the pioneers of the trait theory. But in the 19th Century this theory was highly criticised as difficulties in proving some of its caracteristics arosen.

3. Situational theory appeared then as an alternative. This theory assumes that there is no psichological profile of a leader as people react differently under different contexts. The theory developped by Fred Fiedler is also known as contingecy theory. Fiedler assumes that there are 3 important situational dimesions that can influence the leaders effectiveness. These are leader-member relations, task structure and position power.

4. These 3 points make us think of another leadership theory developped by Hersey and Blanchard who also have a 3 dimensional approach for assessing leadership effectiveness. According to them leaders exhibit task behaviour and relantionship behaviour; The effectiveness of the leader depends on how his or her leadership style interrelates with the situation and The willingness and ability (readiness) of an employee to do a particular task is an important situational factor.

5. Management Theories (also known as Transactional theories) focus on the role of supervision, organization, and group performance. These theories base leadership on a system of reward and punishment. Managerial theories are often used in business; when employees are successful, they are rewarded; when they fail, they are reprimanded or punished.

6. Relationship Theories (also known as Transformational theories) focus upon the connections formed between leaders and followers. These leaders motivate and inspire people by helping group members see the importance and higher good of the task. Transformational leaders are focused on the performance of group members, but also want each person to fulfill his or her potential. These leaders often have high ethical and moral standards.

Leadership Theories X, Y, Z

1. 'authoritarian management' style

the person dislikes work and will avoid it

most people must be forced with the threat of punishment to work

the person prefers to be directed, to avoid responsibility; is relatively unambitious

2. 'participative management'

style

Effort in work

self-control and

self-direction without external

control or the threat of

punishment

seek responsibility; high

degree of imagination,

creativity in solving

organizational problems

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These theories are more and more seldom put into practice in todays business world. However, they are still important as they provide us with basic assumptions that we can start from in order to make them evolve and adapt to the todays context. The first theory is still used in Manufacturing field and production workers. As for the Participative management style, it is used in professional services, and managers world.

From a manager point of view:

Theory X Manager is a manager who believes that people are basically lazy and the coercion and threats of punishment often are necessary to get them to work.

Theory Y manager is a manager who believes that under the right conditions people not only will work hard but will seek increased responsibility and challenge.

William Ouchi, professor of management at UCLA, Los Angeles, and a board member of several large US organisations, proposed an additional perspective, wich he called Theory Z, often referred to as the 'Japanese' management style .

Theory Z manager believes that workers seek opportunities to participate in management and are motivated by teamwork and responsibility sharing.

Leadership Theories X, Y, Z

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Source : http://www.businessballs.com/mcgregor.htm

Tool that helps us understand beter the application of the McGerogors Theories.

Leadership Behavior and Styles

Authoritarian leadership

It is the use of work-centered behavior that is designed to ensure task accomplishment.

Parternalistic leadership

It uses work-centered behavior coupled with protective employee-centered concern.

Participative leadership

It is the use of both work centered-behavior and people-centered approaches

Authoritarian leader

Subordinate

Subordinate

Subordinate

Paternalistic leader

Subordinate

Subordinate

Subordinate

Participative leader

Subordinate

Subordinate

Subordinate

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Managerial Grid
by Blake & Mouton (1962)

simple framework defines 5 basic management styles that characterize workplace behavior and the resulting relationshipsmanagerial styles are based on how two fundamental concerns (concern for people & concern for tasks) are manifested at varying levels whenever people interact

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The work of Blake and Mouton is an essential one. They have been one of the leaders and avantgardes of their age to investigate further the topic of Leadership. They both died already, Mouton in 1987 and Blake in 2004, they were both very highly acknowledged professors from the Ohio State University. They work has been fundamental for future investigations on that topic.

The Managerial Grid is a simple scientific framework but may be easily applied in various contexts.
Two basic assumptions can be made: Managerial style bases on two concerns: One for the people and the other one for tasks.

In this context, tasks can be seen as projects that needs to be finished or responsibilities that come of the employees might deal with. The managers either has high or low concern for those tasks to be finished. The concern for people includes the employees a managers has in his team as well as their needs & concerns.

Managerial Grid

Initially two axes were suggested Scores may range from 1 (lowest score) to 9 (highest) 9,9 = soundest basis for human relationship in context of production, relationship of trust and respect 1,9 = love conquers all, high concern for people, friendly organizational climate & work temp 5,5 = balancing work and people at satisfactory level, give some, but not all 9,1 = people are a used as machines, the only thing that counts are tasks. 1,1 = Manager has neither concern for people nor for production.

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Please note, that in this graphic the x-axis of the grid should be renamed concern for tasks.

The given five different profiles can be evaluated differently.

The score 9,9 is seen as the most successful profile a manager can achieve .It is a sound basis for human relationship in the context of productiveness as well as relationship of trust and respect. The 9,9 manager cares about people as well as about tasks.

Obviously, the 1,1 profile is not so successful or achievable since the manager neither cares for his people nor for their tasks.

One must also take the personalities of the team members into account to decide which profile would be successful. Other influencing factors could be the nationality of the team members, the country in which the managerial style is practiced, the task which needs to be completed and environmental factors such as time, geographical obstacles (not every team member is in the same country) or corporate restrictions (certain corporate regulations).

Managerial Grid

Each managerial style can be found to some extent in every personOne style might be more dominant/ more characteristic than others. Its a preference! Depending on managerial style managers take actions in a certain style:A 1,9 oriented boss who wants to please subordinates may be inventive in finding ways to show personal warmthThrough his style one may predict / foresee actions and results which can be derived from his actions.

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Having a certain managerial style can be compared to hand writing. For example, writing with your right hand (being right-handed) is intuitional, it is like a reflex. It is your first preference to use this hand. Writing with it is easy, it doesnt take a lot of enery or thinking. In contrast to that writing with your left hand is more difficult. It doesnt happen naturally, it takes a lot of effort. It is rather uneasy and requires concentration and precision. Therefore, it is all about your preference! We prefer to write with a certain hand. Equally, we prefer to have a certain managerial style.

In 1967 a third dimension was addedThickness or depth of managerial styleTo what extent is the managerial style resistant to change under pressure?The thicker the style, the better it withstands pressureA thin style changes easily in times of pressure.

Managerial Grid

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The third dimension is a very important one. Depending on the pressure which is put on the manager from the outside and the thickness the managerial style might change or remain stable. As external pressuring factors one could define: requirements which are set by the managers own superior, corporate restriction, timing & deadlines, stress, difficulties within his team, uneasy work atmosphere or private problems that affect the professional work of a manager. The higher a manager scores on the thickness dimension the more resistant will his style be to change due external pressuring factors. If the manager scores low on thickness, he will probably change his managerial style when external factors put pressure on him.

Managerial Grid

Why can it be used universally?

It addresses & defines management dilemmas such as guiding people in an effective manner.

Concept of grid is culture free, has been accepted & used by various cultures

Powerful vehicle for increasing individual effectiveness

Simplicity: the grid is very easy to understand.

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The managerial grid is widely used because it is a simple and easy approach. Additionally, it is culture free and has therefore be widely accepted. To increase individual effectiveness, each manager can check him or herself on the grid and see what his score is. Consequently, he or she may change or improve his/her managerial styles to a more successful one. It is a good tool to have an external perception on a very personal topic.

Leadership

Theories X, Y

Leadership Behaviors and Styles

Managerial Grid

2. Cross-cultural management issues

HQ Subsidiary attitudes

Cultural dimensions : the right message for the

right context

Differences and similarities

Cross-cultural management issues

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HQ Subsidiary attitudes

Perlmutter (1985): proposed certain orientations which help to develop a company and the establishment of its international subsidiariesFour different dispositions:Ethnocentric: values & interests of parent company guide strategic decisionsPolycentric: strategic decisions are tailored to suit cultures of subsidiaries Regiocentric: company blends its own interests with those of regional subsidiariesGeocentric: integration of global approach to include a little bit of everything

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The geocentric approach could also be understood as a global network in which the headquarter is only a tiny knot. That means, the headquarters are treated just as any other subsidiary. They are all treated equally with no special or authoritarian treatment of the HQ. That allows the global company to integrate best practices from all around the world equipping the corporate policy with more facets.

Graphical Overview of Approaches

Source: C. Voynnet Fourboul & F. Bournois, Strategic Communication with Employees in Large European Companies: A Typology in European Management Journal, 03-04/ 1999, pp. 204-217

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In real life, companies seldom just fit one model, but they are found to be hybrids (C. Voynnet Fourboul & Frank Bournois, Strategic Communication with Employees in Large European Companies: A Typology in European Management Journal, 03-04/ 1999, pp. 204-217). That means, they can be ethnocentric, geocentric, polycentric or regiocentric at the same time but to different extents. Even within different departments different approaches towards a certain corporate decision or problem can be made. E.g. HR decisions concerning HR policies could be made in an polycentric view giving much freedom to decisions of subsidiaries. Whereas the general approach of the company could be very ethnocentric, that means giving little power to the subsidiaries but deciding everything in the headquarters.

Different actions depending on orientation of company

EthnocentricPolycentric RegiocentricGeocentricDominating CultureHome countryHost countryRegionalGlobal cultureStrategyGlobal integrationNational ResponsivenessRegional integration and national responsivenessGlobal integration and national responsivenessGovernanceTop downBottom up (each subsidiary decides on local objectives)Mutually negotiated between region and its subsidiariesMutually negotiated at all levels of the corperationPersonnel DevelopmentPeople of home country are developed to occupy key positions anywhere in the worldPeople of local nationality are developed for key positions in their own countryRegional people are developed for key positions anywhere in the regionBest people around the world are developed for any position around the worldDistribution of profitsRepatriation of profits to home countryRetention of profits in host countryRedistribution within regionRedistribution globally

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If one takes into consideration the topic of EXPATRIATION, one can easily apply this multi-centric approach.

1. Home Country Nationals, so expatriates from the headquarter who are citizens of this country of headquarters and are then sent abroad would be considered as an ethnocentric approach. As a home grown citizen, the manager is placed in another country of the world.

2. Host Country Nationals are local managers who are hired by the MNC subsidiary would be considered to be a polycentric approach. Because the manager as local person is chosen for a key position in his country.

3. Third Country Nationals are citizens of countries other than the home or host country. They could be considered either regiocentric or geocentric. A person from a third country might be placed anywhere in his region or anywhere in the world.

4. Inpatriates are managers from a host country or third country who are assigned to work in the home country. This approach could be considered truly geocentric because the global vision is clearly stressed here.

Where the writer is concerned with what he
puts into his writing,
the communicator is
concerned with what the reader gets out of it.
Bill Berbach
He was one of the three founders of Doyle Dane Bernbach (DDB)

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Adjusting the message for local meaning
A cup of tea

Indian chai

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This slide and the next one are examples that are meant to indirectly hint the benefits of cross-cultural training.

Cross cultural training has many benefits:

People Learn About Themselves: Through cross cultural training, people are exposed to facts and information about their own cultures, preconceptions, mentalities and worldviews that they may otherwise not have contemplated.

Break Down Barriers: All of us have certain barriers such as preconceptions, prejudices and stereotypes that obstruct our understanding of other people. Learning about other cultures, barriers are slowly chipped away thus allowing for more open relationships and dialogue.

Build Trust: When peoples barriers are lowered, trust is established and altruistic tendencies naturally manifest allowing for greater co-operation and a more productive workplace.

Open Horizons: Cross cultural training addresses problems in the workplace at a very different angle to traditional methods. Its an innovative, alternative and motivating way of analysing and resolving problems.

Develop Interpersonal Skills: Through cross cultural training participants develop great people skills that can be applied in all walks of life.

Develop Listening Skills

People Use Common Ground: Cross cultural training assists in developing a sense of mutual understanding between people by highlighting common ground. Once spaces of mutual understanding are established, people begin to use them to overcome culturally challenging situations.

Pepsi

In Taiwan, the translation of the Pepsi slogan

"Come alive with the Pepsi Generation" came

out as "Pepsi will bring your ancestors back from the dead."

The Coca-Cola name in China was first read as "Kekoukela", meaning "Bite the wax tadpole" or "female horse stuffed with wax",

depending on the dialect. Coke then researched 40,000 characters to find a phonetic equivalent "kokou kole", translating into "happiness in the mouth."

French label of foreign-produced goods

"Fabriqu en Dinde" (Made in Turkey)

Turkey (the bird) is "dinde," whereas the country is called "la Turquie".

Marketing bloopers

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Trompenaarss 7 Cultural dimensions

Fons Trompenaars is the author of the book 'Riding the Waves of Culture

Understanding Cultural Diversity in Business'.

Trompenaars is also the managing director of THT Intercultural Management Consulting, an international management and training consultancy and KPMG Network affiliate that lists Motorola, Mars, Shell, Bombardier, and Heineken among its clients.

Particularism vs. Universalism Collectivism vs. Individualism Affective vs. Neutral Relationships Diffuse vs. Specific Relationships Ascription vs. Achievement Relationship to Time Relationship to Nature

The 7 dimensions represent how societies develop approaches to managing problems and difficult situations.

Over a 14 year period, data collected from over 46,000 managers representing more than 40 national cultures

The 7 dimensions:

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Universalistic vs Particularistic: what is more important - Rules or relationships?

Individualism vs Collectivism: do we function in a group or as an individual?

Collectivism

In China, the group is very important: family, colleagues

Individualism

The United States is an individualistic country

Achievement vs Ascription: do we have to prove ourselves to receive status or is it given to us?

Sending a young manager to run a subsidiary in a traditional

culture such as India will involve difficulty.

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Particularist

Circumstances and relationships influence judgments of what is good or true

Relationships, personal systems, interpersonal trust, duty to friends, family

Universal

Judgment of what is good or true applies to every situation

Rules, legal systems, contracts, higher obligations, one right way

Collectivism

Emphasizes group membership, social, responsibility, harmonious relationships, and cooperation

Group reference, shared responsibility, fitting in desirable

Individualism

Focus on self, personal freedom, and competitiveness

Individual achievement, personal responsibility, standing out as individual desirable

Ascription

Believe people are born into influence, and who you are, your potential, and your connections are all important

Status based on position, age, schooling or other criteria, more homogenous workforce, primarily male

Achievement

Emphasize attainment of position and influence through a demonstration of expertise

Status based on competency and achievements, women and minorities visible at more levels in workplace

Specific vs Diffuse: How far do we get involved?

In Denmark, people are much more prone to criticize subordinates directly and

openly without regarding their criticism as a personal matter.

In Russia, this may constitute an unacceptable loss of face.

Neutral vs Emotional: Do we display our emotions?

Multinational teams consisting of individuals from highly neutral and highly affective

cultures need careful management and considerable inter-cultural understanding.

Otherwise, the affective persons will view the neutral persons as ice-cold, and the

affective persons will be viewed as out of control by the neutrals.

Sequential vs Synchronic: Do we do things one at a time or several things at once?Inner direction vs Outer direction

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Specific

Objective, break things down into small parts, Large public spaces and smaller private spaces.

Direct, Confrontational, Open: extravert, separate work and private life

Diffuse

Focus on conceptual wholeness and relationships of all kinds are valued. Small public spaces and larger private

spaces

Indirect, Avoids direct confrontation, more closed: introvert, link private and work life

Neutral

Physical contact reserved for close friends and family

Subtle communication, hard to read

Emotional

Physical contact more open and free

Expressive: vocal, strong body language

Synchronic

Do several activities simultaneously, the time for appointments is approximate, and interpersonal relationships are

more important than schedules

Sequential

Do one thing at a time, make appointments and arrive on time, and generally stick to schedules.

Cross cultural differences and similarities

Six Basic Cultural variations

What is the nature of people? Good (changeable / unchangeable)

A mixture of good and evil

Evil (changeable / unchangeable)

What is the persons relationshipLineal (hierarchic)

to other people?Collateral (collectivist)

Individualist

What is the temporal focus ofFuture

human activity?Present

Past

What is the conception of space?Private

Mixed

Public

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This table provides an example of the aspects that we need to take into account when dealing with different cultures. For example, U.S. cultural values are not the same as those of managers from Japan.

Cultural Clusters

Power Individualism Masculinity Uncertainty

Distance Avoidance

France, Spain + + - +

Italy, Belgium + + + +

Portugal + - - +

Denmark - + + -

Germany - + + +

UK, US, Ireland - + + -

Japan + - + +

South Korea + - - +

Philippines + - + -

+ indicates high or strong

- Indicates low or weak

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Cultural Clusters the way that Americans do business in the U.S. is very similar to the way that British do business in England.

The consequences of the cultural clusters are shown in an article published by George Barnett, professor of communication at the University of Buffalo. According to the study:

...the decades-long tendency toward Internet dominance by the United States, Canada and Western Europe may be changing as the regions of the world begin to cluster into mutual-interest groups.

As these regional clusters become more self sufficient, companies that sit outside of these clusters will have to work much harder to remain relevant. For instance, as companies in Asia begin looking less toward the West and more toward their neighbors for business opportunities, Western companies will need to work a little harder to grow (or maintain) business within Asian markets.

Source : http://www.buffalo.edu

Concrete cultural differences in the business world

China

technical competence

time : punctuality

strong relationships

belong to a group

less animated : avoid displays

of affection

Russia

personal relationships

key rule : patience

different conceptions of

written contracts

exclusivity (exclusive

arrangements and negotiations)

France

social class & consequences

on the social interactions

accustomed to conflict

highly centralized and rigid

structures

work / personal life balance

(the quality of life)

Arab countries

Time issue

Tomorrow if God wills

the strong vs. the weak

perceptions

public space

status and rank

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Debate question

How to prepare managers to often distant leading?

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Subquestions:

Is it enough to communicate? Do you have to go on site?How to improve drawbacks of new technologies?

Ideas to help answer the debate question:

-Teach managers to have tight control on suppliers

-There needs to be tight cooperation with local managers and employees, a relationship of trust

- Communicate a lot, use new technologies: telephone, internet, blackberry, SMS, fax, skype, videoconferences..

- Establish a participative management culture

- Make sure the manager selects the right people: they have to fit to the culture of distant management, be autonomous..

THANK YOU FOR YOUR ATTENTION!!!

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