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CHAPTER 5
EFFECTIVE LEADERSHIP IN A MULTICULTURAL
ENVIRONMENT
CHAPTER INTRODUCTION
All of the great leaders have had one characteristic in common: it was the willingness to
confront unequivocally the major anxiety of their people in their time. This, and not much
else, is the essence of leadership. — John Kenneth Galbraith
Fortunately, in the last decade, attention to cultural influences on leadership behavior has
expanded greatly. This attention might be at the most opportune time. The impact of
globalization on world economies, and all that comes with it (e.g., demographic patterns; flows
of capital and goods, expanding supply chains), presents daunting challenges for today’s leaders.
Whether it is coordinating virtual teams from 10,000 miles away to leading a foreign subsidiary
Current thinking about leadership in general, its applicability across cultures, and how this
thinking can be used by practicing managers is presented in this chapter.
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CHAPTER REVIEW OUTLINE
EFFECTIVE LEADERSHIP IN AN INTERNATIONAL CONTEXT
Do managers behave differently across cultures in leadership roles? Do certain situations require
similar leadership behaviors, regardless of culture? Can corporate culture override or weaken
other cross-cultural effects with respect to leadership? Leaders help set things in motion in their
organizations—they guide the development of the firm’s vision and they enable employees to
I. Leader Behavior across Cultures and Time
Leadership concepts, values, and styles continue to evolve around the world – especially in
global business circles. Leaders cannot assume that what was a valued leader attribute 20
A. How do leaders behave?
A common distinction drawn by Western researchers is that two basic types of leader
behavior exist. Leaders engage in task-oriented behavior when they work to clarify
performance expectations and specific procedures to be followed. Other task-related
Leaders in collectivistic cultures (e.g., Chile) may tend to use relationship-oriented
behaviors more than leaders in individualistic cultures (e.g., Australia).When
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B. Alternative views of leader behavior
Non-Western experts have proposed interesting alternatives to simplistic distinctions
between task- and relationship-oriented leader behaviors. Take India as an example—it
presents a challenging leadership environment. In the Culture Clash feature, what might
be an emerging, indigenous leadership style, done the Indian way, is described.
Combining everything into two behavioral dimensions can mask important cross-cultural
differences. A “paternalistic version” of relationship-oriented behavior may produce
positive reactions from employees in places like India, the Middle East, and parts of Latin
America. Consequently, international managers may get themselves into trouble if they
limit leadership to Western versions of “task–oriented” and “relationship–oriented”
behaviors.
C. Culture and the impact of leader behavior
Culture may also be a driving force for the impact of leader behavior on employee
commitment and performance. In collectivist, high-power-distance cultures such as
Taiwan or Thailand, task-oriented behaviors may have a stronger positive impact on
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According to experts testing Likert’s “System 4” model there are leader behaviors that
produce the same positive effects across cultural contexts. Likert argued that there are
four basic systems of leadership.
1. In an exploitative authoritative organization (System 1), decision making is reserved
by upper management, communication is top-down, and punishments are used to
motivate.
Likert suggested that all companies should move toward the more participative System 3
and System 4 approaches because those tend to result in better employee performance
and morale. This suggestion is supported by research done by scholars studying
American companies. Participative approaches (Systems 3 and 4) appear to be a good
match for low-power-distance cultures such as the U.S. Would a paternalistic, autocratic
leadership approach fit better, and result in more productive workers, in a high-power-
distance culture? The answer seems to be “yes” according to a study comparing managers
in production plants in Mexico and the U.S., owned by the same American firm and
producing the same product.
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D. Aligning leadership behavior with the cultural context
Global managers may need to alter and adapt their leadership style to expectations in
II. Transformational Leadership: Does It Work across Cultures?
In this section we consider transformational leadership, a recent and increasing popular
perspective in the U.S. A transformational leader is said to be able to galvanize employees,
even turning poorly performing companies into winners in a relatively short time. This
happens when the transformational leader creates an emotional bond with employees—
something that inspires intense loyalty and outstanding performance. This bond is the result
of four features about a leader:
• Charisma – arouses intense emotions among followers based on faith in and
identification with the leader.
A large scale study of leadership and its effects in many different countries found that
behaviors associated with transformational leaders, such as charisma, confidence, and trust,
are widely accepted as key leader attributes. It is important to note that this finding cuts
across cultures widely viewed as very different, including some in Asia and the West.
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to be one of the benefits of transformational leadership—something that does not
seem to be the case in the Middle East or India.
• Other research suggests that the behavior of transformational leaders can actually
have negative effects on innovation in an international management context, as it did
for research and development alliances between American and Japanese firms.
III. Cross-Cultural Leadership Effectiveness: Pulling Everything Together
International managers are busy people who already have a tougher road to travel than
domestic-only mangers. So, while they may appreciate the processes by which effective
A. The GLOBE approach
The GLOBE project uncovered six basic leadership dimensions, pinpointed because they
are potential drivers of leadership effectiveness. The study also suggested where these
leadership features would be most and least likely to be displayed. Table 5.3 summarizes
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B. The Path-Goal Leadership approach
The path-goal leadership approach is one that is arguably the most prescriptive of all,
and one that has been tailored to include cultural variables. It predicts that leadership
effectiveness is contingent on matching leadership style to a particular business situation.
So a research and development division might require a different leader style than one in
which customer service is queen or king. There are four basic leadership styles in this
approach:
1. Directive – This is a common leader style that occurs when leaders provides clear
procedures and rules for subordinates to follow when doing their jobs.
A key prediction of the model is that leaders are most effective when they use the style
that best fits the demands of a particular situation. Several elements may shape which
style produces the highest motivation and performance among employees. Some experts
have factored in consideration of cultural dimensions (see discussion of Hofstede in
Chapter 3) into the path-goal approach. These become other situational elements that
should be considered when adopting a more effective leader style.
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IV. Leadership Development in Multinationals
The leadership challenges discussed in this chapter are daunting and add to an already
difficult job as leaders are not always welcomed warmly or showered with positive feedback
in their own countries or while working in a foreign culture. Presented in Table 5.5 are the
results of a 2011 study of nearly 30,000 employees who rated their senior management on
five attributes. Ratings included the leader’s ability to deal with company challenges and
Many multinationals undoubtedly hope that the increasing similarity of companies around
the world in terms of structure, technology, and strategy will weaken or overcome cross-
cultural differences and make their job a little easier. But these convergent forces may be
offset by factors that continue to maintain, or even accentuate cultural differences. A safe
assumption is that a manager’s effectiveness will continue to depend, at least in part, on how
well he or she adapts approaches to the cultural circumstances.
Building a global workforce with a common set of values is very difficult. Simply working
for a multinational may accentuate local cultural values. Italians acted more “Italian” when
they worked for foreign firms than when they worked for an Italian one. Resistance is also
likely when multinationals push foreign employees to embrace corporate values that
explicitly conflict with local values.
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V. Developing International Leadership Skills
Regardless of how they acquire it, international managers should have a perspective on
cultural issues that is not limited to a particular country or region. The continuing
globalization of business is increasing the variety of cross-cultural relationships with which
managers must contend. As a result, a country-based or regional set of experiences and skills
is insufficient over the long haul. Table 5.6 lists suggestions for leadership development
programs that could help close this suggested gap. Ultimately, managers need transnational
leadership skills to be effective—some examples of these are presented in Table 5.7.
CHAPTER SUMMARY
This chapter presented the challenge of leading across cultural boundaries. A key feature of this
review is that most leadership research was done by Americans with all their accompanying
cultural baggage. If managers need to know which approaches and techniques work well
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Reviewing different approaches to leadership indicates leadership behavior can vary across
cultures and that a manager’s international effectiveness can be increased by awareness of this
fact. What constitutes effective leadership behavior and style also differs across cultures to some
degree. Leadership frameworks that may help guide international managers were discussed and
DISCUSSION QUESTIONS
1. How might a typical Western style of leadership differ from one used in Asia or the
Middle East?
• See Table 5.1 for examples of leader attributes that are positive in most
2. What difficulties might managers encounter as they lead in another culture? What
problems might emerge when expatriate mangers use their common leader style in a
foreign country?
• Problems altering and adapting their existing leadership style to match
expectations in specific countries
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3. Describe Likert’s System 4 approach. How can it explain why different leader
behaviors can have the same positive effects across cultures?
• See I.C. above for description of Likert’s System 4
4. How can corporations identify and develop managers with transnational leadership
skills?
• See Table 5.7
• Create training and development programs aimed at building international
leadership skills throughout the corporation
ADDITIONAL ACTIVITIES
DEVELOPING YOUR INTERNATIONAL CAREER – Thick as a BRIC: Leadership
Mindsets in the New Economic Powerhouses
BOXED FEATURES
CULTURE CLASH – Vineet Nayar: Changing the Leadership Culture, 1.2 Billion at a
Time
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ADDITIONAL RESOURCES
Table 5.1 –
Table 5.2 –
Table 5.3 –