A synergistic approach of cross-cultural management and leadership style, H Mihaela

Tags: cultural dimensions, cross-cultural management, leadership style, Hofstede, synergistic approach, national culture, Journal of International Business Studies, cross-cultural, national cultural dimensions, leadership theories, Japan, business opportunities, performance, pp, International business, similarities, Russia, cross cultural management, power distance, organizational culture, Leadership & Organization Development Journal, International Journal of Cross Cultural Management, cross-cultural challenges, cultural relativity, Journal of Business Research, International Management, International, Business Studies, Global Leadership, GLOBE Project, LFR 1HWKHUODQGV 3RODQG 3RUWXJDO 5XVVLD 6LQJDSRUH 6ORYHQLD 6SDLQ 6ZHGHQ 7KDLODQG 7XUNH, Herciu Mihaela, Journal of International Studies, business environment, Finland, Brazil, participative style, Indonesia, Venezuela, cultural stereotypes, conceptual model, cultural regions, knowledge asset, Holden, leadership styles, Journal of International Studies Hofstede, Understanding culture, Herciu Mihaela Lucian Blaga University of Sibiu Romania [email protected] Journal of International Studies � Foundation of International Studies, performance orientation
Content: Scientic Papers
Herciu Mihaela "A synergistic approach of cross-cultural management and leadership style", Journal of International Studies, Vol. 7, No 2, 2014, pp. 106-115. DOI: 10.14254/2071-8330.2014/7-2/9 A synergistic approach of cross-cultural management and leadership style Herciu Mihaela Lucian Blaga University of Sibiu Romania [email protected]
Journal of International Studies © Foundation of International Studies, 2014 © CSR, 2014
Abstract. e ongoing growth of international business brings with it increasing demands associated with managing culturally diverse workforces. e cultural challenges that multinational companies must cope involve the synergistic approach of national cultural dimensions and leadership style. e present paper aims to evaluate the impact of these cultural challenges on international business by identifying the similarities and di erences between cultural dimensions and leadership style based on correlation of Hofstede results and GLOBE scores. Keywords: Cross-cultural management, cultural dimensions, leadership style, Hofstede, GLOBE. JEL Classi cation: F23, M14, O57
Received: May, 2014 1st Revision: September, 2014 Accepted: October, 2014 DOI: 10.14254/20718330.2014/7-2/9
INTRODUCTION e stakes for managers have never been higher. e ongoing growth of international business brings with it increasing demands associated with managing culturally diverse workforces. Understanding culture is an asset, is has to be the rst step in business internationalization process. In this context, multinationals have to understand workers (individuals) from various parts of the world which means to understand their culture. According to McFarlin and Sweeney (2011) the international managers have to: "approach other culture with the idea of testing sophisticated stereotypes; nd cultural informants and mentors to help; carefully assess information that seems inconsistent with cultural stereotypes; learn mental maps that will increase e ectiveness in di erent culture". More than that, they will need core cross-cultural competences to navigate the business through this increasingly complex and interconnected world of individuals, groups, nations, religious and civilizations (Slawomir, 2005). Over the time, the impact of culture on business environment rose steadily. In the literature the concept of culture is related to: human resources management, leadership, change management, con ict management, and decision-making process, work attitude, individual/organizational behavior (Kirkman, 2006). Some authors asserting that national culture can explain the di erences in Economic Growth between the countries. ey also have identi ed some similar characteristics of cultural dimensions (Koen, 2005) and leadership style in order to create/develop cultural clusters. But, the practice of appropriated leadership style can transform cross-cultural di erences into business opportunities. 106
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CONCEPTUAL FRAMEWORK International business environment is very di erent from national business environment because countries, societies and cultures are di erent. It is not enough to be aware that cultural di erences exist; you have to evaluate and transform them into business opportunities (Hill, 2007). Furthermore, there will be need to discover di erent ways to develop the global mindset of managers or leaders who act in international environment, such as: culture adaptability; bridging the gap; building global mentality; approach the cultural problems with caution. (Wild, Wild, Han, 2008). e studies about culture and its impact on economic and business environment at national and international level have been developed from decades. Hofstede (1983), the well-known specialist in the eld of national cultural dimensions, emphasized that "the national and regional di erences are not disappearing; they are here to stay. In fact, these di erences may become one of the most crucial problems for management ­ in particular for the management of multinational, multicultural organizations, whether public or private". In the same context, Negandhi (1983, p. 17) asserted that "the emerging eld of Cross-Cultural Studies on organizational functioning is largely a result of partial integration between the cross-cultural comparative management eld and organization theory areas". e types of cross-cultural management research vary from parochial research as a single Culture Studies to synergistic research as intercultural Management Studies (Adler, 1983). But in order to manage a corporation across culture manager must balance the similarities and di erences. More than that, global managers sometimes cater to parochialism or simpli cation to manage these similarities and di erences. According to Som (2009, p. 41), "parochialism is a way of looking the world through one`s own lens, background and perspectives...while, simpli cation is a way of understanding that human beings who come from di erent cultures are still similar in their basic nature, relationship, modes of behavior and activities in time and space". is means that managers have to develop the ability to integrate diversity across culture, on one hand, and have to be open to diversity across culture, on the other hand. If both integration and openness are high it is about global mindset. But if one is high and other is low we deal with parochial mindset (integration high and openness low) and with di used mindset (integration low and openness high). In our opinion, the most important analysis of national culture and cultural dimensions has been developed and conducted by Hofstede since 1980. e new Hofstede dimensions refer to (Hofstede, Hofstede, Minkov, 2010): Power Distance high/low; individualism/collectivism; masculinity/feminity; uncertainty avoidance high/low; long/short term orientation; pragmatism/normatism; indulgence/restraint.
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Vol. 7, No.2, 2014 Table 1
CROSS-CULTURAL RESEARCH has been developed recently by Holden et al. (2002) through the GLOBE Project (Global Leadership and Organizational Behavior E ectiveness Research). e approach of cross-cultural management is a systemic one and is focus on: participation across culture; maintaining equivalence across culture, knowledge sharing; learning from experience. Also, they have developed a conceptual model that shows the in uence of societal culture (with norms and practices) on both leader acceptance and e ectiveness (Figure 1).
Figure 1: e GLOBE conceptual model Source: (House, Javidan, Hanges, Dorfman, 2002, p. 8). By GLOBE Project has been identi ed six leadership styles based on some cultural dimensions such as: power distance, uncertainty avoidance, human orientation, collectivism (institutional and in-group), assertiveness, gender equalitarianism, future orientation, performance orientation. Some of these are similar with Hofstede`s cultural dimensions. e characteristics of every leadership style are presented in the Table 2 (House, 2002, p. 3). 108
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GLOBE Leadership style
Table 2
THE IMPACT OF CULTURAL CLASH ON LEADERSHIP STYLE AND INTERNATIONAL BUSINESS When talking about two di erent culture and multinationals we talk about cultural clash. (Soderberg, Holden, 2002). Cultural di erences can lead to a breakdown but also can provide some opportunities based on the diversity (Das, Kumar, 2010). In order to reduce this clash, managers or leaders have to: change their behavior in di erent culture, for example, if they activate in a collectivistic and high power distance culture, they have to adapt their style when is about individualist or low power distance culture (Varela, Salgado, Lasio, 2010); share within the multinational company knowledge, experiences, behaviors (Boyle, Nicholas, Mitchell, 2012); o er trainings and supportive actions to employees (Molinsky, 2007). In this turbulent international environment, the management of culture represents an important organizational knowledge asset for multinational companies (Pauleen, Rooney, Holden, 2010). e model of transforming cross-cultural management into business opportunities through conversion of culture into a knowledge asset is presented in Figure 2. Recently, some authors considered that in-country cultural regions are also very important. In order to identify business opportunities maybe is better to look inside of a country, to evaluate clusters from incountry regions (Minkov, Hofstede, 2012) because "even in highly individualistic societies, established rms are frequently not especially entrepreneurial... due to the intervening of corporate culture" (Morris, Davis, Allen, 1994, p. 66). e understanding of cultural di erences will help individuals to work more e ective (Husted, Allen, 2008) and will help companies to identify business opportunities terms of entry mode, performance, employees approach (Shenkar, 2001). 109
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Figure 2: e model of Cross-Cultural Knowledge Management Source: (Pauleen, Rooney, Holden, 2010)
e present study aims to analysis the synergy between Hofstede`s cultural dimensions and GLOBE leadership style in order to evaluate the impact of cultural clash on leadership style. We have collected data for 31 countries (Annex 1), from di erent cultures: Latin America, Latin Europa, Confucianism, Eastern Europe, Anglo, Germanic, Nordic, and Southern Asia. Based on their results for cultural dimensions and leadership style we calculate the correlation index (CORREL) in order to identify the interrelations between them.
CORRELy x
n xy x y Ўўn x x Ї°± Ўўn y y Ї°±
Where, n ­ the number of the elements/index/variable x, y ­ elements/indexes/variables to be considered if, CORRELy/x is positive and tends to 1, there is a strong direct connection between variables CORRELy/x is close to zero, may it come from 1 or -1, than the connection between variables is weak CORRELy/x is negative and tends to -1 there is a strong inverted connection between variables
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A synergistic approach of cross-cultural management and leadership style
1. Argentina; 2. Australia; 3. Austria; 4. Brazil; 5. China; 6. Denmark; 7. Finland; 8. Germany; 9. Greece; 10. Hong Kong; 11. Hungary; 12. India; 13. Indonesia; 14. Ireland; 15. Italy; 16. Japan; 17. Korea, Rep.; 18. Mexico; 19. Netherlands; 20. Poland; 21. Portugal; 22. Russia; 23. Singapore; 24. Slovenia; 25. Spain; 26. Sweden; 27. ailand; 28. Turkey; 29. UK; 30. US; 31. Venezuela. Figure 3: Hofstede`s cultural dimensions Source: (own representation based on Hofstede`s results) According to Hofstede results the maximum and minimum levels for cultural dimensions are: Russia 93/Austria 11 for power distance; US 91/Venezuela 11 for individualism; Japan 95/Sweden 5 for masculinity; Greece 112/Singapore 8 for uncertainty avoidance; Korea Rep. 100/Venezuela 16 for pragmatism; Venezuela 100/Hong Kong 17 for indulgence.
1. Argentina; 2. Australia; 3. Austria; 4. Brazil; 5. China; 6. Denmark; 7. Finland; 8. Germany; 9. Greece; 10. Hong Kong; 11. Hungary; 12. India; 13. Indonesia; 14. Ireland; 15. Italy; 16. Japan; 17. Korea, Rep.; 18. Mexico; 19. Netherlands; 20. Poland; 21. Portugal; 22. Russia; 23. Singapore; 24. Slovenia; 25. Spain; 26. Sweden; 27. ailand; 28. Turkey; 29. UK; 30. US; 31. Venezuela. Figure 4: GLOBE Leadership style Source: (own representation based on GLOBE results) 111
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Based on House (GLOBE) results the maximum and minimum levels for leadership style are: Indonesia 6.15/Japan 5.49 for performance oriented style; Brazil 6.17/Japan 5.46 for team oriented style; Indonesia 4.13/Finland 2.55 for self-oriented style; Brazil 6.06/Indonesia 4.61 for participative style; Indonesia 5.43/ Russia 4.67 for humane style; Russia 4.63/Brazil 2.27 for autonomous style. To evaluate the synergy between cultural dimensions and leadership style we calculate the correlation indexes (CORREL) for all six dimensions with all 6 styles.
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According to correlation indexes (CORREL) in some cases Hofstede`s cultural dimensions are strongly correlated with GLOBE leadership style, both directly and indirectly, such as: power distance with selfprotective style (directly), with performance oriented style and participative style (indirectly); individualism with performance oriented style and participative style (directly), with self-protective style (indirectly); pragmatism with performance oriented style and team oriented style (indirectly). ese mean that: performance oriented style of leadership is practice on companies with a low power distance, less concentration of authority and direct appraisal of performance; team oriented style is based on personal stability and is focus on achieving group results; humane style and autonomous style are very di erent but they are present in every country drive by the managerial behaviour. In order to sustain our results we mention other studies/articles that re ect and emphasize the link between culture (national culture with its dimensions) and leadership style. For example, Jung and Avolio (1999) examine the e ects of leadership style and owers` cultural orientation on performance; Den Hartog et al. (1999) and Dickson, Den Hartog and Mitchelson (2003) identify that speci c aspects of charismatic leadership are strongly and universally endorsed across cultures. Bryne and Bradley (2007) conclude that cultural levels values in uence on leadership style generates new strategies for management of international and global rms. Also, if we consider the micro-level, leadership and culture are fundamentally connected. Leadership style is strongly related to the organizational culture (Block, 2003) because leaders are the main architects of organizational culture and they in uence the leadership style (Schein, 2010).
CONCLUSION e capacity of understanding the importance of culture on business development and the capacity of transforming culture into knowledge asset represent major core competences for managers or leaders across the world. e cultural clash and the cultural challenges that multinational companies must cope involve the synergistic approach of national cultural dimensions and leadership. Even if some of cultural dimensions and leadership style are not directly or indirectly connected, there are some conclusions that have to be emphasized. Russia is the country with the highest score for both power distance index and autonomous style (the self-centric approach of leadership). Despite the fact that Japan is the most masculine country based on our analysis, she had the lowest score for performance oriented style 112
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A synergistic approach of cross-cultural management and leadership style
and team oriented style. In the Nordic countries, those are recognized as the most feminist one, the leaders are less self-oriented, they are not self-centered, con ict inducers or procedural. e leaders from Confucian and Southern Asian countries are in the same time performance and humane oriented. In conclusion, national culture has a huge impact on leadership style but also the leadership style in uence the organizational culture of a company; it is about cross-cultural challenges and know-how managerial transfer.
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