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7/29/2019 Leadership in an International Environment
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Contents
Abstract ............................................................................................................................................ 3
Introduction...................................................................................................................................... 4
Globalization ................................................................................................................................ 4
The Hofstede Framework ................................................................................................................ 5
Power Distance Index .................................................................................................................. 5
Individualism ................................................................................................................................ 6
Masculinity .................................................................................................................................. 7
Uncertainty Avoidance Index ...................................................................................................... 9
Long Term Orientation ............................................................................................................... 10
When Cultures Clash ..................................................................................................................... 11
References ..................................................................................................................................... 14
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Abstract
Today the business world continually grows smaller with even small companies
beginning to have global factors playing into successful operations. Because of this, to be a truly
high-performing leader today, one must be able to lead across the cultural boundaries that
typically divide those of different nationalities and backgrounds. Be it managing teams in
overseas offices or operations, working for a foreign national company or simply getting along
with peers from a different cultural background, differences can affect every level of the
leadership structure.
This paper will first examine common cultural factors and the general characteristics of
various nationalities to define a framework of traits which can have a strong effect on leadership.
Second, it will examine common problems which can arise in an international environment
which a leader will have to deal with to be successful. Finally, this paper will outline some basic
strategies and best practices for the prospective international leader to follow. Cross-culture
management presents its own unique challenges and problems. Being prepared for and able to
deal with such situation not only allows a leader to gain the great rewards and satisfaction of
leading across cultures, but also has our world continues to get smaller this ability will become
more and more a necessity.
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Introduction
Globalization
Globalization is a buzz word that seems to be getting thrown around more and more these
days. Business schools have discussions, if not entire classes, devoted to it and dozens of writers,
pundits and politicians have taken turns both deriding it as the root cause of all the bad in the
world today and as savior that will bring peace and prosperity to the planet. The questions are,
however, do we really understand what globalization is and are we prepared to handle it?
According to a recent article in Fortune Magazine online, the answer may be no. According to
the author, a common conversation between CEOs and business school deans could be going
something like this;
"A recent grad we hired got up to give a presentation to our senior management and had simply
no appreciation for the challenges of globalization: no feel for the country or region; no
anticipation of corruption or socialism in-country; no grasp of the supply chain difficulties; no
appreciation for the differences in rule of law and property rights; and the proposed brand name
translated into an unmentionable body part. The pitch was an embarrassment."
While this imaginary quote itself may be somewhat overly dramatic to prove a point,
recent research is backing up the point the author is trying to make, that todays business school
grads coming out unable to cope with the challenges presented by globalization. This is
especially important considering that most graduates with advanced business degrees are brought
into organizations to be the future leaders and in the opinion of many, the problems of a global
business environment are the primary issues successful leaders will have to manage in the future.
While the end results of these issues can be varied, typically the root cause will come down to
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people and culture. Therefore it is of key importance that leaders understand the cultural
differences and issues facing the world today. With that in mind, this paper will first look at the
cultural differences across nationalities as defined by the Geert Hofstede Cultural Dimensions.
The Hofstede Framework
In the late 1970s Geert Hofstede, a Dutch organizational sociologist, in articles such as
The Poverty of Management Control Philosophy in the Academy of Management Review and
books such as Beyond Culture, began to state that within national and cultural groupings, there
are factors that can strongly affect the behavior of the behavior of societies and organizations.
Over time he developed these factors into the five Hofstede Cultural Dimensions. The
dimensions include the Power Distance Index (POI), Individualism (IDV), Masculinity (MAS),
Uncertainty Avoidance Index (UAI), and Long-Term Orientation (LTO). These cultural
differences describe the averages and tendencies within a nationality or cultural group and can be
compared to another cultural norm to discover what problems may occur within an
organizational relationship. Such knowledge is important for a leader as is may help them
understand the root of cross-cultural issues and perhaps prevent them before they can begin. To
that end, we will now take a closer look at each of the dimensions and the problems they can
cause.
Power Distance Index
Hofstefe described Power Distance as follows;
Power Distance Index (PDI) that is the extent to which the less powerful members of
organizations and institutions (like the family) accept and expect that power is distributed
unequally. This represents inequality (more versus less), but defined from below, not from above.
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It suggests that a society's level of inequality is endorsed by the followers as much as by the
leaders. Power and inequality, of course, are extremely fundamental facts of any society and
anybody with some international experience will be aware that 'all societies are unequal, but
some are more unequal than others'.
In other words, this factor can
greatly affect how a person from a certain
culture perceives power within an
organization and how willing they are to
accept the control of a higher power position.
This can be of strong importance to how a
leader derives their power and how to
present that power to their followers. As we can see in the map above, cultures from South
American, Asian and Middle-Eastern countries tend to have moderate to high power distance.
This can suggest that Legitimate Leaders, or those who have their position appointed from
above, stand the best chance to have their power recognized within such a culture and perhaps is
how they should display their power to be best considered a leader. In addition, this cultural
factor can indicate how cultures will respond to inequalities in things such as work, pay and
benefits as well as expectations within a culture.
Individualism
In the Hofstefe Dimensions, Individualism, and its opposite Collectivism, looks at the
degree to which individuals integrate into groups. In highly individualistic cultures, one is
expected to more or less look after oneself and immediate connections or family. In more
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collective cultures, the ties of connections are extended further and tightened to broaden the
number of people one is expected to protect or take care of. Beyond the extent of connections,
individualism vs. collectivism also
determines the strength to which one is held
to their group and the expectation of
conformity to the procedures and practices
of that group. In a highly individualistic
society, such as the United States, it can be
seen that those who take initiative for themselves and make effort to stand out are the ones most
often rewarded for their achievements and these rewards are kept for the most part to themselves.
Compare this to a country such as South Korea, where from birth people are integrated into
strong in-groups and are highly accepting of placement into groups within an organization. Here,
a thought process can be seen of The nail that stands out is the one that is hit type where efforts
are to maintain the status quo and cohesion within the group. Success extends beyond the
individual to all those surrounding them and rewards also.
Masculinity
The Hofstefe Dimension of Masculinity measures the strength of traditionally male or
female values, from a Western sense, within a culture. In the more masculine cultures, high
value is placed on such things as competitiveness, assertiveness and ambition as well as the
accumulation of wealth and material possessions. On the opposite, in so-called feminine
cultures, the emphasis is relationships and quality of life factors such as happiness and a sense of
fulfillment. To better describe this aspect of culture, some researchers have reclassified this
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dimension as Quantity of Life vs. Quality of Life, to separate the values from specific genders as
both males and females within a culture can exhibit these traits.
To the left, we can see the dimensional
scores for Japan. Immediately we can notice a
high peak in Masculinity which, at 95, is
actually among the highest in the world. This
carries the meaning that within the Japanese
culture, the norm is to place high values on
defined and quantifiable success measured in
such things as wealth and power. Many stages within life and organizations are seen as a
competition and therefore the expectation is to put in a great deal of time and sacrifice in order to
win. To this end, it is considered a cultural norm for those within Japanese organizations to put
in longer hours and less vacation time than Western counterparts. In exchange, greater financial
reward is expected to come eventually to allow individuals to view themselves as a success.
While it is true that masculine and feminine traits can be displayed by both genders
within a culture, it is also important to note that the level existing within a culture can have
bearing on the on gender roles traditionally assigned to females, which in turn can have a great
affect on organizational structure. We will discuss this further later in common problems that can
arise in cross-cultural leadership.
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Uncertainty Avoidance Index
From Geert Hofstede, Uncertainty Avoidance deals with a society's tolerance for
uncertainty and ambiguity; it ultimately refers to man's search for Truth. It indicates to what
extent a culture programs its members to feel either uncomfortable or comfortable in
unstructured situations. Unstructured situations are novel, unknown, surprising, and different
from usual. Uncertainty avoiding cultures try to minimize the possibility of such situations by
strict laws and rules, safety and security measures, and on the philosophical and religious level
by a belief in absolute Truth; 'there can only be one Truth and we have it'. People in uncertainty
avoiding countries are also more emotional, and motivated by inner nervous energy. The
opposite type, uncertainty accepting cultures, are more tolerant of opinions different from what
they are used to; they try to have as few rules as possible, and on the philosophical and religious
level they are relativist and allow many currents to flow side by side. People within these
cultures are more phlegmatic and contemplative, and not expected by their environment to
express emotions.
From an organizational point of view, uncertainty avoidance can help describe how one
may respond to an out of the norm situation or sudden change in operation. Additionally it can
greatly affect how likely one is to accept change itself within the organization. Generally
speaking those within this culture may respond to such situations negatively and emotionally.
Therefore the emphasis is on the society to control the situation and tends to be very adverse to
change and risk which may lead to an out of control situation.
By the numbers, Greece had the highest score in UAI. Last year, the world saw great
change and uncertainty within the country as its financial systems collapsed and the response of
the populace to government efforts. It seemed that the only way the populace could respond to
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the uncertain times was through anger. While many factors played into what happened within the
country, it isnt going too far to say that on the whole the issues were not very well dealt with on
all levels and the cultural significance of uncertainty avoidance may have played a part.
Long Term Orientation
After the establishment of the initial four dimensions, studies in primary Buddhist, Taoist
and Confucian cultures in Asia lead to the inclusion of a fifth dimension looking at a groups time
horizon, or the importance of the future
as opposed to the past or present. In
such long-term societies, people value
that which has the greatest affect on the
future, such as persistence, thrift and
shame. It is thought that time more than
anything else can overcome obstacles.
In contrast, short term cultures tend to look at normative statements, a judgment of how things
ought to be, immediate stability, saving face and reciprocation of gifts and favors. Within the
twenty-three countries surveyed to make up this dimension, these factors combined to create a
unique profile for each country, however, in general long-term orientation tended to be stronger
as compared to Western cultures.
The bellwether of LTO in Asian cultures is China, which while officially atheist by state,
is strongly influenced by the teachings of Confucius, an ancient Chinese scholar. In high LTO
cultures such as China, the trust between two parties is paramount and this is something that is
expected to be developed over time.
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When Cultures Clash
As we can see there is a wide variety of cultural differences between various nationalities
and despite the world growing smaller, these cultural dimensions have remained quite stable over
time. As cross-cultural business continues to grow, however, issues can and will arise due to
these cultural differences. An article in the Feb. 2005 edition of Business Mexico took a look at
the cultural affect on an American manager working in Mexico, focusing specifically on power
distance.
Bob is a distribution manager for a U.S. automobile manufacturer in Mexico City. His boss,Juan, is Mexican, as are most of his peers and all of his subordinates.
Bob has been in the big city for only a few months and he has a problem, actually a bunch of
problems. He recalls that only a few weeks ago he felt he could have taken on the world and won.Now, he questions his ability to sell peanuts to passing motorists.
So what was the primary cause of Bobs breakdown and loss of confidence? His
assumption that the management style successful for him in the US would apply equally in
Mexico. In the US, many managers have found success in a democratic leadership style,
encouraging ideas and inputs from subordinates where as in Mexico, higher power distance has
led to the expectations of followers that the manager take a stronger lead and direct from a
position of authority. In Bobs case this caused him to be viewed as weak and indecisive by his
subordinates when he was trying to involve them and disrespectful and insubordinate by his boss
for disagreeing with his position in front of others. Being aware of these differences beforehand
and adjusting his leadership style somewhat to fit expectations could have saved Bob a lot of
frustration during his transition.
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Outside of a manager/employee relationship, cultural differences can also have a strong
affect on an organizational leaders ability to conduct business with the leadership ofanother
organization from another country. Examples of such clashes can be found in the bookChanging
Face of Japanese Managementby Jackson and Tomioka. In a meeting between a Japanese
negotiation team and UK managers, the Brits were constantly frustrated by the seemingly
inability to get contracts down on paper and consistent silence during formal meetings. Such
issues can be explained in terms of the Hofstede Dimensions. First, with the Japanese managers,
very high Masculinity scores meant that they feared appearing weak in front of others. Their
silence was not out of disrespect, but rather because the meetings were being conducted in
English, they felt making mistakes would make them appear weak and therefore it was better to
not speak at all. In addition, high Uncertainty Avoidance made the Japanese team less willing to
jump into agreements without full understanding of what effect and changes this would have on
their organization. Finally, the general long-term orientation held by many Asian cultures made
hard contracts difficult to get signed until the managers felt strongly about the relationship and
connection between themselves and the Western counterparts. By approaching negotiations with
this knowledge before hand, the process could have been a less frustrating experience and lead to
more positive results.
So what can a leader really do to be successful in a cross-cultural situation? The most
simple answer is that they have to adapt. Adaptation to a specific situation is always a requisite
for success in any leadership scenario, but gains even greater importance when different cultures
are involved. By understanding the cultural norms an organization holds, the leader can then
select and incorporate a leadership style that best fits with that organization. We can see in the
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chart below a quick glance at four different styles, the cultural dimensions controlling them and
the counties where they may best be used.
By no means is this an end all be all solution and one cannot simply take the cultural
assumptions at face value and feel all within that culture will operate the same way. However, by
having a greater understanding of the cultural averages, a leader can approach possible cultural
differences with better understanding of the situation and possible solutions to produce the best
outcomes.
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ReferencesBruner, Robert. (2011, February 25). B-schools: it's time to globalize. Fortune, Retrieved
from http://management.fortune.cnn.com/2011/02/25/b-schools-its-time-to-globalize/
Rutherford, Don. (2005, February). Whos in charge? Cultural value differences. Entrepeneur,
Retrieved fromhttp://www.entrepreneur.com/tradejournals/article/129814158.html
Jackson, K, & Tomioka, M. (2004). The changing face of japanese management. Psychology Press.
Sungmin, Ryu. (2005). The effect of lto culture on international supply chain contracts. The
Journal of Applied Business Research, 21(4), Retrieved fromhttp://www.cluteinstitute-
onlinejournals.com/PDFs/2005258.pdf
Clark, Don. (n.d.). Long-term vs short-term orientation. Retrieved from
http://www.nwlink.com/~donclark/leader/culture2.html
Hostede, Geert. (2009). Hofstede cultural dimensions. Retrieved fromhttp://www.geert-hofstede.com/
Cross cultural communications.. (n.d.). Retrieved fromwww.clearlycultural.com
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