To What Extent Does Culture Influence the Effectiveness of Leadership

Home , Leadership style

BSc International Business Administration Bachelor Thesis: Organizations and Strategy Organizational Behavior Supervisor: David Kroon

To what extent does culture influence the effectiveness of leadership

Student: Magdalena Matei ANR: 471102

Word count: 6700 06/11/2010

1. MANAGEMENT SUMMARY

Due to the globalization and technological developments the business world is changing rapidly, the international collaboration has become for many organizations a daily activity. As the leaders’ task is to guide others in order to achieve the goal of the organizations, understanding the values and practices of the others with different cultural background is necessary. The leaders should know which leadership styles are suitable in which environment. This study investigates “To what extent does culture influences the effectiveness of leadership”. Based on the frameworks of Hofstede, Schwartz and House, cultural dimensions have been established and just two of them have been adopted, power distance and individualism/collectivism. The characteristics of five leadership styles have been linked to the characteristics of the two cultural dimensions in order to determine possible congruence’s. Based on the congruence of the leadership attributes and cultural dimensions of the followers’ country the effectiveness of the leaders has been established. Consequently, team oriented and humane-oriented leadership are effective in collectivistic oriented cultures. The participative leadership is effective in individualistic oriented cultures or with low power distance. In contrast to the autonomous leader, which is effective in cultures characterized by high power distance.

CONTENTS

1. Management Summary ...... 2

1. Introduction ...... 4

1.1 The problem background ...... 4

1.2 The problem statement and research questions ...... 5

1.3 Demarcation and definitions ...... 6

1.5 Relevance ...... 7

1.6 Research Design ...... 8

1.7 Data Collection ...... 9

1.8 Outline of the thesis ...... 9

2. Which aspects of the culture are cross-cultural comparable? ...... 11

2.1 Definitions ...... 11

2.2 Emic vs Etic ...... 12

2.3 Cross-cultural frameworks ...... 13

2.4 Hofstede’s framework: ...... 14

2.5 Schwartz’s framework ...... 16

2.6 GLOBE’s framework ...... 17

2.7 Conclusion ...... 17

3. Which leadership styles are cross-cultural comparable? ...... 18

3.1 Leadership styles: ...... 19

3.2 Effective leadership style ...... 21

3.3 Conclusions ...... 21

4. Which cross-cultural comparable leadership styles are effective due to the congruence with the aspects of the culture dimensions ...... 22

Chapter 5: Conclusions ...... 26

References ...... 28

1. INTRODUCTION

The main characteristics of the twenty-first century are the fast technological developments, shifts in boarders and power nations, geopolitical changes and increasing competition (House, 1995; Harris, Moran & Moran, 2004; Ronald & Quatro, 2005). These events and the increasing globalization (Bhagwati & Jagdish, 2004) have led not only to more organizations operating in different countries and continents, but also to a more frequent international collaboration. “The economic borders go down, cultural barriers go up” (House, Hanges, Javidan, Dorfman, Gupta, 2004, p. 5), because of the internationalization the contrast between the individuals’ cultural backgrounds becomes more visible. Leading and managing people with different cultural background are more difficult than, managing domestic operation because of the difference in believes and practices (Hofstede, 2001).

1.1 The problem background

Due to the changes mentioned above, the contemporary leaders face new challenges which are related to the cultural diversity. In order to be effective the leaders should understand and try to adjust their style to congruent values and practices with their followers (House et al., 2004). Thus, particular features of the leaders will be more effective when coincide with certain cultural values and practices. Therefore, research to the leaders’ attributes and followers’ cultural background is essential.

Previous studies which have analyzed not only the leaders’ traits and behaviours establishing leadership styles (Bass, 1990; Bennis, 1997; Burns, 1978; Euwema, Wendt & Emmerik, 2007; House et. al, 2004; Howell & Avolio, 1993; Graham, 1991; Storey, 2004), but also their influence on the organization and its stakeholders (Berkeley, 1988; Jung & Avolio, 1997). However, most of these studies have been done mainly from a Western perspective (House et al., 2004), therefore the established theories may be incomplete and would not apply within cultures where the norms and

value differ from the Western ones. The studies which have been exploring the cross- cultural leadership variation have emphasized just particular leadership styles (Elenkov, 1998; Tuulik and Alas, 2009).

With regard to the cultural values and practices, few research have been made (Hofstede, 2001; House, 2004; Inglehart, 1997; Schwartz, 1992) as these studies are theoretically and practically very complex. The results of these studies have been broadly accepted, but critics have made a strong point with regard to their validity and generalizability (McSweeney, 2002; Smith, Peterson & Schwartz, 2002).

In conclusion, information about cross-cultural leadership is spread over a number of studies, which partially analyze the leadership styles. The information about the cultural values of the follower could be found in famous studies, but criticisms should be taken into account. This thesis will integrate these studies presenting the most important leadership styles and link their attributes to the cultural aspects. The aim of this integration is to offer a reliable guidance for effective cross-cultural leadership styles, as Harris, Moran and Virgi (2004) stated in “Managing Cultural Differences: global leadership strategies for the 21 century” (p.xi): “The world of business demands a repertoire of style, a respect for diversity, and an understanding of the cultures”.

1.2 The problem statement and research questions

The problem described above could be described by the following problem statement:

To what extent does culture influences the effectiveness of leadership?

As this statement implies a certain level of complexity, the following steps and respectively research questions will serve as guidance. First, the leadership style which could be compared among different cultures will be determined and described. Second, the values and practices which are common for all the cultures will be established and explained. Third, the attributes of the leadership styles will be linked to the cultural values and practices in order to establish the extent of congruence which determines the effectiveness of the style.

1) Which aspects of the culture are cross-cultural comparable? 2) Which leadership styles are cross-cultural comparable? 3) Which cross-cultural comparable leadership styles are effective due to the congruence with the aspects of the culture dimensions?

Culture

Leadership Style Effective leader

1.3 Demarcation and definitions

Culture

The definition of the concept culture has been the subject of many studies in the past century, yet without providing one general accepted definition (Matsumoto & Seung, 2006; Rohner, 1984; Smith, Bond & Kagicibasi, 2006), nevertheless, important overlap in the definitions could be identified. For example, Matsumoto and Seung (2006) defined it as “a meaning and information system shared by a group and transmitted across generations” (p.235). Within the field of cross-cultural analysis, House and colleagues (2004) use the definition: “a shared motive, values, believes identities and interpretations of meanings of significant events that result from common experiences of members of collectives that are transmitted across generations” (p.15). Thus, the concept of culture refers to the shared common attributes of a group.

Culture, in this thesis, is the mediator of the relation between leadership style and effective leader, because a leadership style is expected to be effective in one culture but ineffective in another.

Leadership style

Although many studies have explored the matter of leadership, there is no common agreed definition (Bass, 1990). Nevertheless, the main overlaps within the definitions refer to the process which influences and facilitate others in order to achieve the proposed objectives (House et al. 2004; Yukl, 2010). The process of influencing and

facilitating could be done in different ways, dependent on the nature of the situation and the followers. There is no one fit all leadership but there are different styles or prototypes also named leadership styles. Although some studies sustain that leaders and managers are totally different concepts (Nicholls, 1987) p. 21) this study will adopt the vision of the scholars who agree that the two concepts overlap (Winter, 1991). Therefore, manager as leaders will refer to the same construct. The leadership style will be the independent variable as it represent the attributes which could lead or not to effective leadership.

Effective leader

The effectiveness of the leaders will be measured based on the Implicit Theory which sustains that individuals develop cognitive structures for ideal business leadership based on past experiences with leaders ( Lord, 1985). This theory implies that people recognize or match the attributes of a person with characteristics which have been experienced before.

1.5 Relevance

Managerial relevance:

Perhaps it will sound cliché when stating that the economic environment undergoes a shift in power when the United States hands over its powerful economic position to countries as China, India, (The Economist.com, 2010) and when the United Kingdom embraces foreign investments by selling its national factories (The Economist.com, 2010). These shifts imply new economic environments where the countries not only have to collaborate with each other but also to survive each other’s competition. The collaboration and competition are two main reasons to discover, analyze and learn each other’s economic and social practices. The interactions of these behaviours become most visible within organizations where people have direct interaction. Knowledge about how to lead the interaction of persons with different cultural backgrounds becomes a requirement in the contemporary organizations because as Charles Darwin states “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change”. In conclusion, the economic

environment changes through becoming more international, thus leaders should be able to perform within this new environment.

Theoretical relevance:

Next to the obvious managerial needs, from the theoretical perspective a cross- cultural analysis could improve the already established leaderships styles and theories which are mainly determined from a western point of view. What works in the western culture does not necessarily works in another culture, therefore the science should strive to an universal theory or differentiate the theories among the different cultures. Next to the search to a universal theory, cross cultural research could reveal new characteristics of the leadership skills which are specific to only some cultures but could be developed in other cultures as well, as for example the well known Total Quality Management approach. Additionally, a cross-cultural research includes more variables, such as religion, language, ethnic subcultures, therefore it could lead to new insides in leadership skills and improve the existing theories (Yukl, 2010).

The need for academic research in the field of cross cultural leadership skills is also necessary for the increasing amount of education programs within the international field. For example the Royal Netherlands Academy of Sciences mentioned in an article in 2004 that further research in cross-cultural understanding is a priority. Not only the education programs are changing but the culture itself as well, which means that continue cross-cultural research is necessary.

1.6 Research Design

The research will be based on literature review where the main themes will be leadership style, and socio-cultural aspects which are related to the work environment. First, the comparable cross-cultural attributes will be identified and a suitable framework for comparing the leadership styles will be established. Second, the existing leadership styles will be described with the focus on the cross-cultural comparable styles. Based on these two frameworks and previous research hypothesis will be formulated. The thesis will be closed with a discussion about the findings and about possible further research.

1.7 Data Collection

The literature review will have as source top journals articles, such as Academy of Management, Journal of International Business Studies, Organization Science and high quality journals such as The Journal of Management, Strategic Management Journal, The Academy of Management Review, etc. Additionally, the quality of the information will be determined based on the citation frequency within literature. Furthermore, the articles should not be outdated or at least cited in contemporary research. Next to the academic sources, daily media will be used, such as The Economist.

These articles will be accessed via the database of the Library of Tilburg University, especially ABI/Inform, JSTOR, SAGE Journal Online will be used. Additionally ProQuest search engine will be used as search tool, because its function for searching only in particular journals. Finally, the reference list of particular articles will be also a source of useful information.

The most important writers within the field of cross-cultural leadership is House and colleagues who carried out the most important research project, Global Leadership and Organizational Behavior Effectiveness Research (GLOBE). With respect to the cultural values and practices the most important studies are related to Hofstede, Schwarts and House and colleagues. These studies will be the starting point which will be completed with additional studies related to these researches.

1.8 Outline of the thesis

The thesis will be briefly introduced with relevant examples where the importance of the congruence of leadership styles and followers’ cultural values and practice. Thereafter, in chapter two and three the first and respectively second research 9

question will be answered and concluded with a perspective suitable to the thesis. Chapter four will answer the third research question, namely which cultural Chapter five will discuss the findings of this research, its limitation and possible further research.

2. Which aspects of the culture are cross-cultural comparable?

In order to comprehend the concept of culture its definitions will be provided which later, in this chapter, will be useful in the understanding of the attributes comparable cross-cultural. After identifying the cultural attributes or cultural values and practices, the critiques towards the frameworks which enclose these attributes will be discussed. Based on the frameworks and the critics a suitable framework for this thesis will be adopted.

2.1 Definitions

Culture is a complex construct which has been often studied, yet a general definition has not been provided because its analysis can be done form various points of view. Krober and Kluckhohn (1963) classified the provided definitions in six main classes. First, the descriptive definitions where culture is characterized from a broad general point of view, such as the first definition which has been provided by Tylor (1871). He enumerated the main attributes which could be shared by a group, namely “knowledge, belief, art, morals, law, customs and any other capabilities and habits acquired by man as a member of society” (Tylor, 1871, p.1). Second, historically definitions which stress the inheritance aspect, such as the definition provided by Linton (1945) “a culture is a configuration of learned behaviors, and results of behavior whose component elements are shared and transmitted by the members of a particular society" (p. 32). Third are the normative definitions which focus on the aspects behind the activities of the group members. Fourth are the psychological definitions which next to the shared meanings aspects accentuates the fact that the habits within a culture are learned. Research in the field of cross cultural psychology view the culture as “shared meaning found within a given social system” (Smith, Bond & Kagicibasi, 2006, p 54). Fifth group focus on genetic definitions focusing on the origins of the culture and sixth constitute structural definitions emphasizing the observed patterns of a culture.

The most suitable kind of definition for this thesis is the latter, as it identifies the specific cultural attributes without focusing on the process of formation and existence. The identification of these attributes has been done by, for example, Hofstede, who additionally compared cross-cultural these patterns. He defines the culture as “the collective programming of the mind which distinguishes the members of one category of people from another" (Hofstede, 1984, p. 51).

2.2 Emic vs Etic

View which reflects the contrast between cultures by comparing them is known as the etic approach, which stands as the opposite to the emic method of research. The emic approach emphasizes the unique attributes of one culture in contrast to the epic method which stress the comparable aspects of the cultures (Koen, 2005). As this thesis purpose is to analyze the effectiveness of the leaders cross-cultural, the etic approach will be adopted.

When using this approach it is also important to mention its main disadvantage which is its general aspect. The generalizability refers to the fact that particular attributes which are specific just to one culture will not be included in the analysis, as these cannot be compared (Smith, Bond and Kagitcibasi, 2006). Therefore, the cross-cultural study is bounded to the comparable aspects of the culture, excluding eventually unique attributes.

Additionally, the etic approach will encounter difficulties when drawing the borders of a culture and identifying variation within one culture. Most often the borders coincide with the ones of the countries, despite the internal variation as, for example, within Canada it is a difference between the English and the French speaking part (Koen, 2004). Nevertheless, the boarders of a nation imply for example one political and educational system, the same media and symbols, seen as the shared practices and values which determine one culture.

Despite the disadvantages of the etic approach, this method offers the possibility compare the practices and values between cultures, which is the basis of understanding the cross cultural differences.

2.3 Cross-cultural frameworks

Previous etic studies have determined comparable dimensions providing conceptual frameworks suitable for cross-cultural investigations. Six important frameworks which analyze the cultural variability have been established. The first to mention is developed by Hofstede (2001) who has founded five work-related values: collectivism vs. individualism, power distance, masculinity vs. femininity and time orientation. Second, Smith, Dugan and Trompenaars, (1996) developed a different concept based on two main universal values loyal, involvement-utilitarian involvement and conservatism- egalitarian commitment. Third, Inglehart (1997) as a result of a survey through 43 countries have proposed a two dimension concept, namely well-being vs. survival and secular-rational vs. traditional authority. Fourth, Schwartz (1995) has studied the human values and summarized them in three dimensions: embeddedness vs. autonomy, hierarchy vs. egalitarianism and mastery vs. harmony. Fifth, Bond, Leung, Tong, De Carrasquel, Murakami, et al. (2004) developed also a two dimensions concept with dynamic externality and societal cynicism. Sixth important framework have been proposed by House and colleagues (2004) which propose nine dimensions which are directly related to the leadership matter. These dimensions are uncertainty avoidance, power distance, institutional and in- group collectivism, gender egalitarianism, assertiveness, future orientation, performance orientation, humane orientation.

These frameworks differ not only in the approached dimensions but also in the research method, sample and interpretation. The studies of Hofstede, Schwartz and House and colleagues have the most resemblances (and are could be related to the work environment (Koen, 2004). Therefore, these three frameworks will serve as foundation in understanding the cross-cultural variation. In order to establish which framework is the most applicable to the leadership variation, the dimensions will be briefly explained.

2.4 Hofstede’s framework:

Based on a sample of 116000 questionnaires filled out by the IBM employees from over forty countries, Hofstede collected responses about thirty-two values statements (Hofstede, 1984). After data has been interpreted and correlation between the values had been established, four dimensions were obtained (Hofstede, 2001):

Power distance: refers to the extent to which people accept that power in organizations is distributed unequally. The concentration of the authority is related with this dimension. For example, in countries with low power distance the consultative leadership with low supervision are seen as effective, and the ideal leaders are caring and protective (Hofstede, 2001). Furthermore, this dimension moderates the relation between procedural justice – fairness of the allocation process of the resources and the assessment of the supervisors. The low power distance oriented employees, perceive procedural justice has stronger effects on their trust in supervisor (Lee, Pillutla & Law, 2000).

Uncertainty avoidance: is the extent to which individuals feel comfortable with uncertainty and ambiguity. Consequences for the organizations are for example, in countries with high uncertainty avoidance, the leaders are more task oriented

Individualism versus collectivism: the latter refers to the preference of individuals to take care of themselves and their immediate families, in contrast to collectivism which implies individuals who are loyal for a long period to a group which is more extended than the immediate families (Hofstede, 2001). Triandis (1995) summarizes four attributes related to these dimensions: (i) Conceptions of the self which is an autonomous entity in individualism, (ii) goal relationships, in collectivism the group goals have priority, (iii) relative importance of attitudes and norms, individuals within collectivism are more likely to be driven by social norms, (iv) emphasis on relationships, individualists are more oriented toward task achievement, in contrast with the collectivists who emphasize more the harmonious relationships. Furthermore, in countries characterized as individualistic organizations employees perform better when working alone and direct assessment of their performance increases the productivity; for collectivist oriented individuals applies the opposite (Hofstede, 2001) 14

Collectivists will follow more the vision of the organization, identify more with the leaders’ goals and have a higher commitment towards the leader (Jung, Bass & Sosik, 1995).

Masculinity versus femininity: describes the preference for assertiveness, material success, achievement and heroism, in contrast to the femininity, where relationships, modesty, caring for the weak, and quality of life are the favored values (Hofstede, 2001). The consequences for the organizations in masculine oriented countries are that managers are characterized as self-confident, firm, determined and competitive, in contrast to the feminine ones where managers seek consensus using intuition and focus on the feelings.

Hofstede has added a fifth dimension to the framework, as reaction to The Chinese Culture Connection’s (1987) study. This study is similar to the Hofstede’s research, but instead of western standards Chinese values have been used. The values have led to four factors: (i) integration, including for example tolerance and trustworthiness, (ii) Confucian work dynamism, which is among others related positive with persistence, and negative with protecting the “face” and personal steadiness, (iii) human heartedness, which is includes for instance with kindness and patience, (iv) moral discipline, which refers to values such as moderation and having few desires (The Chinese Culture Connection, 1987). The factors, excluding Confucian work dynamism, are correlated with the power distance, masculinity-femininity, and respectively individualism-collectivism. The Confucian work dynamism has been adopted by Hofstede in his framework and named long-term versus short-term orientation (Hofstede, 2001). The consequences for organization of this fifth dimensions are for instance building relationships in long-term oriented countries (Hofstede, 2001).

Critics

The study of The Chinese Culture has reinforced the three dimensions of Hofstede’s framework, as these correlate with the results obtained with Asian instruments. Although, the relation with the dimensions of the organization (Van Oudenhoven, 2001), or with the individuals (Best and Williams, 1998) has been recognized by other studies, many critics have been directed to Hofstede’s culture approach. One of them undermine the validity of the dimensions, due to the low amount of cultures’ sample 15

and the western defined behavior (Smith, Peterson & Schwartz, 2002). Others, state that the framework is based on an outdated method, with poor empirically foundation where too many assumptions are made, such as the extrapolation done from the individual to national level (McSweeney, 2002). In order to weaken these critics, the approaches of Schwartz and GLOBE will be analyzed and linked to Hofstede’s framework with the intention to combine these in one construct with a higher validity.

2.5 Schwartz’s framework

Schwartz’s three dimensions are derived from seven culture level values, which have been chosen as being the most important out of 57 items, by a sample within 20 countries originally (Schwarts, 1994) which later reviews was doubled (Schwartz, and Sagiv, 1995).

Embeddedness versus autonomy: as the name suggest it refers to the extent to which people prefer engagement in social groups, in contrast to individual autonomy (Schwarts, 1994). In contrast to Hofstede’s individualism the autonomy is distinguished in intellectual, who is characterized for example by curiosity and broadmindedness, and affective autonomy related to exciting and varied life (Schwarts, 1994). Despite this difference, a correlation between individualism and autonomy/embeddedness has been found (Smits et al., 2002) which empowers the validity of Hofstede’s dimension of Hofstede.

Hierarchy versus egalitarianism: stands as symbol for the differences between socializing individuals who accept others as morally equal, in contrast to the hierarchy oriented individuals who prefer authority and social power (Schwarts, 1994).

Mastery versus harmony: contrast the groups of individuals who prefer control and change of the environment, with the groups which prefer to avoid change and fit harmoniously in the world (Schwarts, 1994).

2.6 GLOBE’s framework

GLOBE’s framework includes Hofstede’s dimension but adds humane and performance orientation, assertiveness and distinguishes between in-group collectivism and institutional collectivism (Javidan, House, Dorfman, Hanges & de Luque, 2006). The research method applied within GLOBE is significantly improved, as a difference is made between practices or how the things are and values, how the things should be. Nevertheless, correlations between the two frameworks have been established, power distance and individualism/collectivism have the highest coefficients (Javidan, House,

Dorfman, Hanges & de Luque, 2006),

2.7 Conclusion

In conclusion, these three frameworks, although have used different research methods and data analysis, they have two dimensions in common. The correlation between these dimensions strengthen the validity of the concepts, the framework of this thesis will include only these two dimensions.

3. Which leadership styles are cross-cultural comparable?

Leaders are characterized as individuals who influences and facilitate others in order to achieve the proposed objectives (House et al. 2004; Yukl, 2010). Within the society the concept of leadership appears in different settings and have various purposes, for example head of state, military leaders, school principals, religious leaders, opinion leader, organizational leaders, etcetera. This high diversity of specializations makes the definition of the term leadership dependent of its purpose. Bass (1981) have clustered the definitions as: “leadership as the focus of group process, as a matter of personality, as a matter of compliance, as a exercise of influence, as particular behaviours, as a form of persuasion, as a power relation, as an instrument to achieve goals, as initiation of structure, and as many combinations of these definitions” (p.11).

This essay will mainly focus on the organizational leader which’s classification is made base on the management practices, as for example autocratic, democratic, executive and reflective (Burns, 1934) or static, executive, professional leader and group leader (Sanderson and Nafe, 1929). A part of previous research have defined the management and the leadership as being two different concepts, because the mangers focus on how to carry out the activities, in contrast to leaders who concentrate on determining the activities what to do (Bennis & Naus, 1985). Nevertheless, this thesis will adopt the vision of the scholars who state that managers have leaders’ attributes, although there are two different roles (Bass, 1990; House et al., 2004).

Within the project GLOBE House and colleagues (2004) have developed a global leadership styles scale which have started with 21 prototypes and have been reduced to six main styles because of the interrelationship between particular attributes of the prototypes. These six leadership styles have been used in establishing cross-cultural interactions between cultural dimensions and leadership styles. More than seventeen thousands managers form sixty-two societies have filled out questionnaires for this research giving their opinion about the attributes of these leadership styles. These styles have been used in a research on such a gigantic cross-cultural scale and have been revised by so many academics without any critics. Therefore these six styles will form the starting point of leaderships styles analysis within this thesis. Next, to these styles, other studies will be consulted in search of prototypes with similar attributes 18

which could be related to the aspects of the cultural dimensions, individualism/collectivism and power distance. In the previous chapters the consequences of these dimensions towards the organization have been discussed, for example individualism will lead to preference for individual assessment and appraisal (Hofstede, 2001).

3.1 Leadership styles:

Team-Oriented Leadership emphasizes the group work and is defined by five subscales: “collaborative team orientation, team integrator, diplomatic, malevolent (reverse scores) and administratively competent” (House et. al, 2004, p. 675). Although, named supportive leadership, Euwema, Wendt & Emmerik (2007) described this style as having similar attributes, and adding that these leaders promote the initiative of group members through diminishing the fear of criticism.

Participative Leadership has been labelled by House et al. (2004) with the attributes non participative (reverse scored) and autocratic (reverse scored). Although not in a cross-cultural context, Huang, Iun, Liu & Gong (2009) have analyzed the impact of this leadership style on the subordinates’ performance. The mediating attributes were motivation or psychological power, and exchange or trust in supervisor (Huang, Iun, Liu & Gong, 2009). The exchange concept appears also in the transactional leadership style analyzed by Bass (1990). The transactional style is characterized by two main factors (Howell & Avolio, 1993). First the contingent reward leadership which represent recognition towards the follower, such as bonuses. The second factor is the management by exception, when the exchange occurs only when something goes wrong (Howell & Avolio, 1993). The participative leadership prefers a decision making where the followers are consulted and involved. Nevertheless, the persons who are similar to the leader will have a bigger chance to be invited (Somech, 2003).

Charismatic/Value-Based Leadership is described by House et al. (2004) as the leader who has the capability to inspire, and six subscales have been attached to this prototype: “visionary, inspirational, self sacrifice, decisive, integrity performance oriented” (p. 675). Fiedler (1996) sees in the charismatic leader a “unshakeable faith rightness of their mission and their eventual success” (p.242). The effectiveness of 19

these leaders is not guaranteed per definition, but the subordinates are highly loyal (Fiedler, 1996).

Humane-Oriented Leadership is label by House and colleagues (2004) with modesty and humane orientation. The humane orientation could be also expressed through developing relationships with the followers which are based on trust instead of contracts; these practices are identified in literature under the name of transformational leadership (Burns, 1978). These type of leaders emphasize the followers self-confidence and efficacy which increases their motivation and have a positive influence on goal achievement (Gardner & Avolio, 1998). The transformational leadership is developed based on the four elements, which are also the characteristic to the charismatic leader: (i) inspirational motivation, which suggest that the leader offers the followers meaning and challenge in their work; (ii) idealized influence, as the leader is being admired and the subordinates incline to imitate him/her; (iii) intellectual stimulation, emphasizing innovation and development of new practices; (iv) individualized consideration, given by the leader, who plays the role of mentor (De Hoogh, 2004). The transformational leadership have are similar attributes to servant leadership which is also inspirational, moral (Graham, 1991) who centralizes the followers and emphasize spiritual values (Smith, Montagno and Kuzmenko 2004; Stone, Russel and Patterson 2004). Furthermore, the transformational leadership is proven to be predicted by cultural empathy and open-mindedness (Van Woerkoma & De Reuvera, 2009).

Autonomous Leadership is depictured by House et al. (2004) as individual and independent person. Euwema, Wendt & Emmerik (2007) in their study to the effect of culture on the relation between leaders and the members of the organization, have described similar attributes but under the name of directive leadership. This directive leadership is task oriented, supervising the process closely emphasizing the targets (Euwema, Wendt & Emmerik, 2007). Dorfman, Howell, Hibino, Lee., Tate, Bautista (1997) have used the same leadership style in their research to commonalities and differences in effective leadership processes across cultures in Western and Asian countries.

3.2 Effective leadership style

Before studying in which cultures these leadership styles are effective, the concept of effective leadership will be explained. The Implicit Leadership Theory is a developed tool which has been not only assessed within laboratory experiments, (Lord & Mahler, 1993).but also used in practical research (House et al., 2004). This Theory suggests that individuals develop cognitive prototypes of ideal leaders which are based on past experiences (Lord, 1985). Therefore, in this study the effectiveness of the leader increases when the followers’ cultural values and practices, defied as cultural dimensions, coincide with the leadership style characteristic attributes.

How the process of building the cognitive prototypes works is illustrated in the scheme Appendix 1,Figure 1.

3.3 Conclusions

The thesis will use a framework of five leadership styles which are derived from GLOBE’s framework adding other leadership styles which have similar attributes. These, leadership styles will be effective when the attributes are congruent with the expectations of the follower.

4. WHICH CROSS-CULTURAL COMPARABLE LEADERSHIP STYLES ARE EFFECTIVE DUE TO THE CONGRUENC E WITH THE ASPECTS OF THE CULTURE DIMENSIONS

Cross-cultural variation of the leadership has been demonstrated by previous studies, but one of the most important research, namely GLOBE ended with the question “Does culture influence leadership, and, if so, why and how?” (Dorfman, Hanges & Brodbeck, 2004, p. 711).

The fact that culture does influences and shapes the leadership has been demonstrated from many points of view, such as the variation of leadership profiles and the respectively attributes (Javidan & Carl, 2005).

Regarding, how the culture influences the leadership two manners could be distinguished. First, the cultural values shape the believes and behaviour of the leader as this is a member of cultural group or nation (Peterson & Smith, 2000). Second, the cultural dimensions will influence the relation of the leaders with their followers. The cultural values influence not only the personal values, but also the expectations of the followers and the practices within organization (Sagiv & Schwartz, 2000; Schwartz, 1999). The followers will accept the leaders behaviour to a certain extent, which will also determine the effectiveness as the Implicit Theory of Leadership implies (Lord & Maher, 1991), the more overlap between the leader’s attributes and follower’s cultural values, the higher the effectiveness (House et al., 2004). How this process of acceptance of leadership occurs and the variation through the cultures has been extensively analyzed by Shaw (1990).

This chapter will provide reasons why a particular leadership style is effective in certain cultures. Therefore, a link between the attributes of the leader, explained in the previous chapter, and the specific cultural dimensions of the followers’ country, presented in chapter two, will be done.

Team-Oriented Leadership

The team oriented leader is positive related with in-group collectivism (House et al., 2004). For example in Estonia the team-oriented leadership is seen as the most preferable style (Tuulik and Alas, 2009). Also in the Eastern European countries, such

as Albania, Georgia, Hungary, Kazakhstan, Poland and Russia, which are strongly characterized by collectivism, the team oriented leadership appear to be the most preferable type of leaders (Bakacsi, Sandor, Andras, & Viktor, 2002). Latin European countries, Italy, Portugal, Spain, France, French, Switzerland and Israel have similar collectivism level and preferences for team-oriented leadership, as the Eastern Europe (Jesuino, 2002). Outside Europe, the Asia cluster which consists of India, Indonesia, Iran, Malaysia, Philippines, and Thailand, present the same characteristics with regard to the collectivistic orientation and preferred leadership, as Latin and East Europe (Gupta, Surie, Javidan and Chhokar, 2002). The previous researches have proven that the team leadership is preferable in different countries which have a cultural dimension in common, namely collectivistic oriented (Hofstede, 2001). Threfore, the following hypothesis is formulated:

H1 : The team oriented leadership is effective in collectivistic oriented cultures.

Humane-Oriented Leadership

The Humane Oriented Leadership has been described in the previous chapter as having significant resemblances with the transformational leadership. Jung and Avolio, (1999) have analyzed the effects of the transformational and transactional leadership and follower’ cultural orientation on performance. They demonstrated that the collectivist oriented follower produces more ideas with a transformational leader than with a transactional one (Jung and Avolio, 1999). Additionally, collectivist subordinates show more loyalty towards the leader (Jung, Bass, & Sosik, 1995) which is related to one of the basic fundaments of the transformational and charismatic leadership, namely the idealized influence (De Hoogh, 2004). Based on the results of these studies the following hypothesis has been formulated:

H2: The Humane-Oriented leadership is the effective in collectivistic oriented cultures.

Participative Leadership

As described in the previous chapter, the characteristics of participative leadership have significant overlap with the transactional type, namely the exchange process between the leader and the follower. The exchange agreements, such as the personal rewards emphasize and stimulate individual performance, therefore transformational leadership will be more preferable in individualist oriented cultures (Jung and Avolio, 1999). The Germanic Europe, with Austria, Germany (former West), Germany (former East), The Netherlands, and Switzerland, have significant low power distance inclinations and a very low collectivism score (Hofstede, 2001; House et al., 2004) and the preferred leadership is the participative type (Szabo, Brodbeck, Den Hartog, Reber, Weibler and Wunderer, 2002). Based on these studies the following hypothesis will be formulated:

H3a: Participative leadership is effective in individualistic oriented cultures.

H3b: Participative leadership effective in cultures characterized by low power distance

Autonomous Leadership

A negative correlation has been proven between this type of leadership and the institutional collectivism (House et al., 2004). Dastmalchian, Javidan and Alam (2001) in their empirical study to the effective leadership in Iran, country which is typified with high power distance (Hofstede, 2001), have demonstrated that the Iranian leaders are characterized as “supportive, dictatorial, planner, familial, humble, faithful, and receptive” (p. 16). Nevertheless, only the first two characteristics are regarded as etic, the last five are unique to the Iranian culture. As this thesis adopted a etic approach, the Iranian leaders are an example of directive or autonomous leadership. Elenkov (1998) have studied the differences between the American and Russian managerial culture. The Russian concept of leadership is characterized as autonomous in contrast to participative American (Elenkov, 1998). These two cultures differ also in the level of power distance being on the opposite polls, Russia with a high level (Elenkov, 1998 ) and America with a low level (Hofstede, 2001). These findings, which show that countries with high power distance would prefer leaders with the same traits as the Autonomus Leadership, lead to the following hypothesis:

H4: Autonomous leadership is the most effective in cultures characterized by high power distance

C H A P T E R 5: CONCLUSIONS

The problem statement of this thesis, “To what extent does culture influences the effectiveness of the leadership?” had been approached through three research questions. (i) Which aspects of the culture are cross-cultural comparable? The answer to this question summarized the possible cultural dimensions, described the relevant frameworks taking into account their disadvantages and led to a valid two dimensions framework. (ii) Which leadership styles are cross-cultural comparable? Within the second chapter the leadership styles have been derived from the most important cross-cultural leadership research and additional studies. The effectiveness of the leaders have been explained based on the implicit leadership theory. (iii) Which cross- cultural comparable leaderships’ styles are effective due to the congruence with the aspects culture? After the three concepts, culture, leadership and effectiveness of the leaders have been described, the relation between these has been established. Based on the congruence of the leadership attributes and cultural dimensions of the followers’ country the effectiveness of the leaders has been established. Consequently, team oriented and humane-oriented leadership are effective in collectivistic oriented cultures. The participative leadership is effective in individualistic oriented cultures or with low power distance. In contrast to the autonomous leader, which is effective in cultures characterized by high power distance?

Implications for practice

In the first place, these findings could help manager understand why certain leadership styles are more effective than other in certain cultures, namely because of the congruence between the expectations of the followers with the practices of the leader. For example a manager should be aware of the fact that individual reward will disturb the harmony of a group which is mainly collectivistic oriented. Or, trying to attract the followers in the decision making process, in a country with a high level of power distance will not have effective results, as these people are not used with these practices.

Secondly, in general the findings of reliable cross-cultural studies should update the trainings for the mangers and eventually the courses for students.

Limitations

First limitation to mention is the generalizability which has been also discussed in the second chapter. Furthermore, no quantitative data was available for this study, thus the hypothesis have not been tested.

Further research

Firstly, further research could focus also on the dimensional frameworks which are too general and exclude maybe the most important aspects of a particular culture. Maybe a framework, per culture cluster, such as Latin Europe, could be developed more in depth in order to integrate more aspects of the culture.

The cross-cultural leadership practices should be continuously studied because the cultures change and these days it happens very fast. The process of globalization could also lead to a more homogenous culture. For example a male from Japan states in the research done by Fukushige and Spicer (2007) “I don't think the idea of Japanese collectivism is entirely wrong. But these days, we rather try to make the individualist society and therefore in my company, at least, we don't do "making collusive agreements in a group" or "excluding those who stand out from a group" any more” (p. 520). Research using emic approach would be useful in determining the unique attributes or possible homogenization of the culture.

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