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Y^K 334.726
LEADERSHIP EFFECTIVENESS IN CROSS-CULTURAL BUSINESS ENVIRONMENT
Vladlena Gostroushko
student
of the Krasnoyarsk State Agrarian University Achinsk branch Russia, Achinsk
Abstract: Businesses are operating in an increasingly global environment, which requires careful consideration of cultural differences when marketing goods and services worldwide. Whether you are dealing with international partners or setting up an office in an overseas location, understanding typical leadership styles in that country can be extremely beneficial to bolstering smooth-running relationships.
Key words: Culture, leadership style, multinational business environment.
With the rise of new technologies, geographical and political boundaries between companies are disappearing. One of the biggest issues facing business executives today is the need to build a global leadership pipeline. Building a global leadership pipeline is complex. Companies have to assess their current leaders, develop a succession pipeline, and actively move leaders around the business to develop growth. There are critical differences in leadership characteristics around the world that can dramatically affect this pipeline.
In order not to become confused one should distinguish among leadership, management, and administration. Briefly, leadership is about a vision of the future and the ability to energize others to pursue it. Management is about getting results and doing so efficiently so that a financial profit or surplus is created. Administration is about rules and procedures and whether or not they are being followed. Although, leadership was regarded as an inherent ability to influence others by controlling the behaviour of other members of a group, leadership styles have evolved and extended beyond influence, to include motivation and enabling of others to help achieve organizational goals
Managers within multinational organizations are faced with the challenge of adapting to new paradigms of leadership while leading employees who may share different backgrounds. With businesses becoming more globalized, it is important to know and understand how to lead and interact with people from other cultures. As ways of doing business change significantly, the demand for managers who can perform effectively in cross-national environment increases.
But what is effectiveness in the global sense? Researchers have probed expensively to the answer to this question. One particularly important area that has been investigated by Hofstede [1] and Trompenaars [2] is the impact that differences in values held by individuals across cultures has on their abilities to work together effectively. For instance, how would individuals from a culture that values individualism work out business problems with individuals from a society that values collectivism?
Leadership theories traditionally developed in individualistic societies represent effective leadership as an action of producing greater and better financial results, which encompasses the outcome from a leader's behaviour rather than a particular type of behaviour. These theories are drawn on manifestations of self-interest such as mentoring, networking and other personal initiatives which prevail in individualistic cultures. However, it is anticipated that leaders in collectivist cultures will view leadership effectiveness as a long-term goal resulting from subordinate loyalty, extra effort and satisfaction with the leader. Furthermore, collectivist cultures prioritise the needs of the group, family and overall community when engaging in leadership actions. Therefore, values of mutual obligations require leaders to give followers protection and direction in exchange for loyalty and commitment.
Increasing numbers of studies also reveal that different leader behaviours and actions are interpreted and evaluated differently depending on their cultural environment, and are due to variations in people's ideas of the ideal leader, with some approaches being favoured and others perceived as less effective.
These variations exist because the meaning and importance given to the concept of leadership appears to vary across cultures. With globalisation and the expansion of organisations across borders, numerous challenges and opportunities exist for leadership. With differing cultural beliefs and values, there is a greater necessity for understanding and acknowledging culturally-linked leadership styles. Being receptive towards cultural sensitivities which may be radically different from one's own values and beliefs is crucial for leadership effectiveness.
Effective leaders recognize that choosing the right leadership style for the current situation tends to improve the likelihood of success. Typically though, most leaders use a primary style in their management approach. Cultural traditions and values play a role in a leader's style. According to the "International Journal of Cross Cultural Management," [3] leadership traits result partly from cultural norms and partly from the needs of the leadership job. Cultures differ regarding the use of power. People who act to maximize their personal gain behave as individualists. Collectivists, on the other hand, are expected to act to help the community. By acknowledging these differences, leaders improve their ability to function while conducting global business.
British linguist Richard D. Lewis charted these cultural differences in his book "When Cultures Collide." [4] Here is a summary of some of the common characteristics outlined in the book.
British managers are diplomatic, casual, helpful, willing to compromise, and seeking to be fair, though they can be ruthless when necessary. Unfortunately, their adherence to tradition can result in a failure to comprehend differing values in others.
American managers are assertive, aggressive, goal and action oriented, confident, vigorous, optimistic, and ready for change. They are capable of teamwork and corporate spirit, but they value individual freedom and their first interest is furthering their own career.
German managers strive to create a perfect system. There is a clear chain of command in each department and information and instructions are passed down from the top. Nonetheless, considerable value is placed on consensus.
East Asian countries tend to have a Confucian hierarchy, where the group is sacred and leaders are seen as benevolent.
Consensus is generally highly valued in China. In companies controlled by the state, a leadership group will decide policy. In the developing expansion of capitalist-style companies, leaders are emerging with reputations of competence; also, locally elected officials are becoming influential in the business sphere and may have only loose ties with Beijing.
In Latin and Arab countries, authority is concentrated in the chief executive, and family relations are very important, with ubiquitous nepotism. Nepotism is also rife in traditional Indian companies. Family members hold key positions and work in close unison. Policy is also dictated by the trade group, e.g. fruit merchants, jewelers, etc. These groups work in concert, often develop close personal relations and come to each other's support in difficult times.
Efforts made by Russian managers to promote business through official channels may founder on the rocks of bureaucracy and Russian apathy. Using key people and personal alliances, the "system" is often bypassed and a good result achieved.
Thus, highly successful leadership traits vary widely, and predictably, from country to country. And RichardD. Lewis acknowledges the risks of dealing in stereotypes: "Determining national characteristics is treading a minefield of inaccurate assessment and surprising exception. There is, however, such a thing as a national norm."
He argues that these patterns will not change any time soon: "Even in countries where political and economic change is currently rapid or sweeping, deeply rooted attitudes and beliefs will resist a sudden transformation of values when pressured by reformists, governments or multinational conglomerates."
It should be noted that successful leaders in developed economies are different from successful leaders in emerging economies. Emerging market leaders (India, China in particular) have a very strong focus and skillset on operational execution. These individuals focus heavily on hands-on management, operational process, and a focus on managing individual performance. It is believed to be caused by both cultural and economic issues. In a fast-growing country, businesses succeed by getting to market quickly and effectively. While they need clearly defined market strategies, their success and failure is often driven by
their ability to hire, train, and manage individuals quickly. Their organizations are less interested in long-term vision or sustainability initiatives.
Thus, leadership styles are culturally-contingent and cultural expectations constrain the role of leadership, making it culture-specific. A modern manager should be aware that cultural norms and beliefs exert an influence on the views and expectations of individuals in a given society with respect to the way things ought to be done. Consequently, what is thought to be effective leadership varies widely from culture to culture. Managers of international organizations should obtain enough knowledge of these cultural characteristics and differences and should have the utmost versatility while executing their leadership tasks.
References:
1. Hofstede Geert Hofstede, Gert Jan Hofstede, Michael Minkov. Cultures and Organizations: Software of the Mind. 3rd Edition, McGraw-Hill USA, 2010. Available at: http://www.novsu.ru/file/1092483 (дата обращения: 10.12.15).
2. Trompenaars, Fon, Charles Hampden-Turner. Riding the Waves of Culture: Understanding Cultural Diversity in Global Business, New York: McGraw-Hill, 1998. Available at: http://www.goodreads.com/book/show/85627.Riding_the_Waves_of_Culture (дата обращения: 10.12.15).
3. International Journal of Cross Cultural Management. Available at: http://ccm.sagepub.com (дата обращения: 08.12.15).
4. Lewis, Richard D. When cultures collide: leading across cultures / Richard D. Lewis. - 3rd ed. Available at: http://wh.agh.edu.pl/other/materialy/672_2014_05_05_12_05_16_When-Cultures-Collide-libre.pdf (дата обращения: 01.12.15).
