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TROY UNIVERSITY
MGT 6615
Ethical Leadership & Management in a
Global Economy
John M. Mankelwicz
Assignment: Final Term Paper
Topic: Cross-cultural leadership
Student: Chuong Quang Nguyen
ID : 1314316
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Abstract
This paper gives a clear definition of cross-cultural leadership with the view that globalization
has given rise to a single economy. It examines the different leadership styles and seeks to
establish how these leadership styles are applied differently in different cultures. In order to
achieve this, it studies the concept of authentic leadership in length by exploring various
dimensions including: balanced processing, ethical/moral, transparency and self-awareness.
Under the authentic leadership concept, Hofstede’s ideas on culture are also mentioned to give a
wider conceptualization on cross-cultural leadership. We believe that organizations must see
developing countries, emerging markets, and different cultures as sources of innovation and
diversity, not something to be homogenized or conquered (Lawler, E., & Worley, C., 2011). The
paper aims at empowering leaders with insights about cultural diversity, so that they can
formulate appropriate strategies of adjusting their leadership styles to fit into different cultural
contexts. Besides, it will also ascertain whether servant, transformational and transactional
leadership can be applied in a cross-cultural context or not.
Keywords: cross-cultural leadership, authentic model, Hofstede, leadership styles
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Introduction
As we shall examine in this paper, the aspect of cultural context plays a major role when
it comes to leadership (Bass & Avolio, 2004). Therefore, organizations need to develop
leadership styles that understands cultural context at the local and international level. The human
resource being very important in any given context, they need to be managed in a way that brings
out the best in them. As such, organizations endeavor to manage people in the best way possible
and often support theories of leadership whose approaches are specific to various cultural
contexts. Research on cross-cultural leadership helps in the understanding of cultural
eventualities under which some leadership styles can perform better as compared to others (Hall
& Hall, 2000). Furthermore, studying cross-cultural issues uncovers new trends through the
investigation of a variety of variables such as language, ethnicity, religion and political systems.
This paper will examine the various leadership styles such as transformational,
transactional and servant leadership, and their application in a cross-cultural context. Also an
examination of the styles will be done using the authentic leadership concept in order to establish
the effectiveness of every style under different cultural context. Finally, a discussion will be done
on the overall concept of leadership to enable the readers have a clear understanding on how
every cultural organization appraises and engages in different leadership styles.
Literature Review
Even though studies relating to leadership have been going on for decades, it is only in
recent times that focus has shifted to how leadership is affected by cultural context. With almost
90% of organizations today intending to expand internationally, it is important that they
understand the concept of cross-cultural leadership before they do so. A study which was
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conducted by Hunt (2001) found out that the cross-cultural competence concept enabled leaders
to perform well under any culture unlike the understanding of language which only applies in
specific cultures. Understanding, respecting and accepting cultural differences is a necessary tool
for leadership effectiveness. He outlined some of the traits that define a cross-cultural leader
which include having a general intelligence, excellent interpersonal skills, courage, commitment,
business knowledge and above all skills of dealing with cross-cultural issues. In addition to that,
Avolio, Gardner & Walumbwa (2005) came up with three cross-cultural components: cultural
awareness, knowledge and cognition and cognitive complexity. They emphasized that when
work, personal and interpersonal domains converge, a leader is likely to be successful.
In the contemporary society, globalization has offered numerous cross-border
opportunities for multinational organizations which can only be realized with proper leadership
styles (Bass, 2000). Businesses are being globalized each day which requires leaders to have a
wider conceptualization of different cultures for their leadership to be effective under different
environments. Globalization has shifted focus from just leadership to cross-cultural leadership.
In the past, a lot of research was being done on leadership to try to determine the qualities that
constitute effective leadership. However, in the recent past, the importance of understanding
cultures has been incorporated into leadership. For instance, a leader who is used to one style of
leadership needs to adjust it to fit into different cultural contexts (Hall & Hall, 2000). As such,
cross-cultural leadership is studied using related theories that examine how leadership styles can
be altered so as to maintain their relevance in different environments.
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Analysis
What is Cross-Cultural Leadership?
Even though there is no single definition of the term “cross-cultural leadership”, the term
can be said to refer to the way leaders behave when exposed to different cultures. It is the extent
to which leaders understand and respect people’s norms, beliefs and perceptions especially when
working in global environments (Shane, 1993). While leadership only refers to being in
possession of leading qualities, cross-cultural leadership adds the element of culture to
leadership. Understanding cultures is very important for any leadership, since the organizations
that they manage do not operate in a vacuum. Nonetheless, cross-cultural leadership does not
merely mean leadership across countries; it means leadership across cultures (Hall & Hall,
2000). Sometimes you might find two different countries having similar belief systems, thus not
requiring cross-cultural leadership. A successful leader with no cross-cultural leadership skills
may not be successful when exposed to a cross-cultural context.
Authentic Leadership Model
Authentic leadership represents one of the newest areas of leadership research. It focuses
on whether leadership is genuine and “real.” (Northouse, P. G, 2016). With a lot of studies being
done in the field of leadership and culture, an up-to-date leadership dimension has been brought
forth referred to as authentic leadership. This concept draws a lot of its reference to the
humanistic psychology and puts together several fields such as ethics and morality, positive
psychology and transformational leadership. Bass & Avolio (2004) define authentic leadership as
“a process that draws from both positive psychological capacities and a highly developed
organizational context, which results in both greater self-awareness and self regulated positive
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behaviors on the part of leaders and associates, fostering positive self-development”. Authentic
leaders are individuals who know their values as well as those of their followers and act
consistently according to them. They communicate openly with a priority of developing growing
and developing positive emotions within other people. The concept of authentic leadership helps
leaders to manage people drawn from different cultures by focusing on their emotional and belief
system (Avolio, Gardner & Walumbwa, 2005). There are four dimensions of the authentic
concept that we shall use to study cross-cultural leadership.
To start with is the aspect of transparency. This can be considered to be openness in
communication as you share your intentions with the intended population. During
communication, a leader is expected to be clear and direct to the point on what he expects from
his followers as well as what results are expected. Give people a chance to trust you by avoiding
any hidden agendas (Bass, 2000). This is very crucial in a cross-cultural context, since foreigners
are likely to receive resistance from the local population. Locals are likely to view a foreigner as
an intruder, thus, transparency promotes trust and builds close relationship between a leader and
his followers. Moreover, such leaders should avoid relativism in different situations by treating
everyone equally despite their multiple differences.
Secondly, is the idea of self-awareness where individuals continually understand and
appreciate uniqueness, core values, beliefs, strengths, weaknesses and desires. Individuals were
created differently and none is similar to the other. These differences may arise from cultural
diversity or from within individuals, thus it is important for leaders to be aware of themselves as
well as their followers (Avolio, Gardner & Walumbwa, 2005). Uniqueness based on cultural
diversity defines people’s norms and belief system while uniqueness based on individual defines
strengths and weaknesses. By understanding this, it will be easier for leaders to manage their
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followers in different situations. Furthermore, self-awareness fosters respect and understanding
as people feel appreciated and motivated in whatever they engage in.
The concept of balanced processing is also important in cross-cultural leadership because
it focuses on listening. People of different cultures have different ways of thinking and look at
things differently. Hence, it is important for a leader to give such people a chance to share their
ideas as they may widen his views on particular subjects (Seligman, 2002). For instance, a leader
in a new country may lack the best way to implement policies, but by sharing his intentions with
the locals, he will have an idea on how to go about it. Communication should always flow in two
ways and never in one way. Too much domineering in a new set up will make locals to feel left
out and even come up with resistance strategies. Two-way communication promotes satisfaction
and collaboration among the locals.
The last dimension is the ethical/moral concept which emphasizes on leaders to act in a
widely accepted manner. Morality is upheld when individuals act according to ethical standards.
Leaders should at all times try to uphold their integrity standards in order for their followers to
have confidence in them (Avolio, Gardner & Walumbwa, 2005). Many multinational companies
have failed as a result of violation of cultural ethical standards. Some cultures may promote
practices that do not seem to make sense to you. As an authentic leader, one should not overlook
these practices, but rather try to act within them in order to avoid conflicts. Leaders should
ensure their organizations take part in social-cultural responsibilities. Leaders with good moral
standards are likely to receive worldwide positive recognition; an example of such a leader is
Nelson Mandela.
Authentic leadership model recognizes that the most important thing in leadership is the
follower’s success and the attainment of organizational goals. Leaders who believe in this
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concept strive to bring out the best in their followers through delegation of authority, power and
responsibility (Lowe, 2003). They focus on growing trust, attitudes, commitment and motivation
by making followers to identify with their vision. They recognize the role of culture in an
organization and are able to lead differently in different cultural contexts. Therefore, they have
made Hofstede’s ideas on cross-cultural leadership part and parcel of their lives. Although these
ideas have received considerable criticism regarding sample selection procedures and the
universal usage of Hofstede’s cultural dimension, they still remain the most popular in cross-
cultural study. Hofstede’s work has been the benchmark for much of the research on world
cultures (Northouse, P. G, 2016). Through these dimensions, a comparative analysis on values of
different cultures can be conducted. There are four major dimensions that were identified by the
survey which discuss culture-leadership relations.
To start with is power distance which refers to the degree to which members of a group
expect and agree that power should be shared unequally (Northouse, P. G, 2016). Power distance
has a great impact on leadership style in various organizations as well as cultures. A research
carried out by GLOBE suggests that in cultures where this kind of dimension is experienced,
participative leadership model should be endorsed to avoid conflicts. Through this each and
every member will feel important by participating in the decision making process.
Secondly, is the individualistic vs collectivism dimension in which cultures with either of
the two exhibit different characteristics that require different leadership styles. In individualized
societies people are considered to be self centered where they are only concerned about personal
interests and those of close family members only. Collectivism on the other hand, refers to
societies that have strong unified in-groups forming firm social frameworks (Seligman, 2002).
Individualized societies are likely to embrace any leadership style as long as it supports their
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individual interests. On the contrary, societies that believe in collectivism are more loyal to their
in-groups, thus would oppose any new idea as they consider it a threat to their stability. Leaders
need to study cultures in this perspective so that they will be in a position to determine the most
suitable leadership style to employ.
The third dimension is the idea of uncertainty avoidance which refers to the extent to
which a society, an organization, or a group relies on established social norms, rituals, and
procedures to avoid uncertainty (Northouse, P. G, 2016). It is a situation of over-reliance on
cultural norms and procedures to do away with uncertain situations. From research, societies that
embrace uncertainty have been found out to be more innovative than those that avoid it.
Consequently, leaders in uncertainty avoidance cultures need to plan and come out with detailed
agreements on how things shall be done. By so doing, the local people will familiarize
themselves with those procedures before they are implemented.
Culture is a great determinant of leadership style in an organization whether in an
international or local level. A particular leadership style can be able to survive in various cultures
if it is modified to fit into those environmental conditions (Avolio, Gardner & Walumbwa,
2005). Although culture is general to the whole organization, leaders play a great role in creating
the culture within an organization. Dimensions of authentic leadership model can be closely
linked to dimensions of culture discussed by Hofstede. The interaction of the two perspectives
allows for the emergence of the best leadership style in a specific organizational culture.
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Culture and the Authentic Leadership – The model
Culture The Authentic Leadership
Power Distance Transparency
Avoiding Uncertainty Self-Awareness
Individualism vs Collectivism Ethical/Moral
Balanced Processing
The Optimal Leadership Style
For Particular
Organizational Structure
Cross-Cultural Leadership Styles
Cross-cultural leadership refers to the leadership styles that are able to withstand
differences in cultures by proving their effectiveness. Every organization has a unique structure
under which it operates, thus managers have to amend their leadership styles to fit into new
organizations. A similar case is experienced in international companies which are established
under a cross-cultural context. Hall & Hall (2000) explain that since managers in multinational
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companies can be transferred to new cultures across the world, they need to have knowledge on
how to alter their leadership styles so that they still remain effective. Sufficient studies have not
been done on all cultures to determine their appropriate leadership styles. More light has been
shed on the following leadership styles to examine their effectiveness in a cross-cultural context.
Transformational leadership is a leadership style where leaders inspire their followers
through their willingness to forgo self interests and support those of others. Bass & Avolio
(2004) assert that transformational leaders act under a moral obligation of encouraging their
followers to bring out the best in them. These leaders are able to move poor performing
organizations to high performance levels by supporting subordinates. Transformational leaders
are considered to be charismatic due to their ability to develop individual capabilities as well as
influencing their thoughts. There are four concepts that have been identified under this type of
leadership.
The first one is individualized consideration in which individual needs are identified and
dealt with uniquely. Here individual growth is encouraged through provision of opportunities
and development of supportive organizational culture (Bass, 2000). Intellectual stimulation is
another approach used by transformational leaders. Under this, the leaders are able to handle old
problems in new ways. They encourage their followers to ask enquire more about situations,
something that will enable them to acquire extra knowledge on handling similar situations in the
future. Thirdly, is the idealized influence concept considered to be a leader’s Charisma. Through
this they are able to sway their followers into believing in their vision. The followers develop
strong emotions with the leaders and always want to identify with them. This allows the leaders
to gain much power and control over their followers (Yukl, 2006). Lastly, is the idea of
inspirational motivation which the leaders use to study the important needs of individuals and
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promote positive potential from within them. The leaders are known to promote mutual
understanding by articulating common goals.
The transactional leadership style uses well defined structures that define the reward-
punishment system to the employees (Bass, 2000). It spells out what is expected of the
subordinates, those who meet expectations are rewarded while those who fail to meet the
expectations are punished. Punishments are meant to restrain the doers from repeating a similar
act in the future, while rewards are for motivation and satisfaction. In most cases, punishments
are not stressed, however, they are well spelt out in the formal systems and are well understood
by the subordinates. Under this leadership a contract is signed which outlines what is expected
from each party. When transactional leaders assign duties to their followers, the followers
assume full responsibility of them and are expected to perform them completely failure to which
attracts punishment (Bass & Avolio, 2004). Transactional leaders apply the expectation
management model where not much attention is given to things since they are operating as
defined. It takes a “telling style” after the signing of the contract where leaders only concentrate
on ensuring that things are being done according to the terms of the contract.
Unlike the earlier discussed forms of leadership, situational leadership suggests that
leaders should change the degree to which they are directive or supportive to meet the changing
needs of followers (Northouse, P. G, 2016). This style recognizes three forces that determine the
action the leader will take: the forces within the leader himself, the forces driving the followers
and the forces within the situation. This type of leadership accepts that leadership should be
variable taking into consideration the possibility of followers supporting an idea. According to
Stogdill (2004), these leaders tend to be directive in order to get things done in a particular way
to avoid failure. It focuses on external coordination so as to avoid conflicts that may emerge
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from the external forces which may render the whole leadership exercise as a failure. In addition,
it promotes subordinate motivation by matching roles with abilities and ensuring individuals
understand what is expected of them.
Despite the advantages that may be demonstrated by every leadership style, each one of
them has its own share of disadvantages. It is thus important for leaders to understand that no
single style can hold in the different cultures (Hunt, 2001). Leaders should have a clear
understanding of each style as well as its appropriate situation of application. For instance,
transactional leadership may work well in individualistic societies, but it may not be the case in
collective societies. Nonetheless, situational leadership has been found to be more effective in a
cross-cultural context. This is because it allows leaders to study the cultural environment, and
then decide on the best course of action.
Conclusion
In conclusion, this paper has expounded on the term cross-cultural leadership by using
the authentic leadership model. This model explains some of the dimensions of leadership that
will make any style of leadership to attain maximum effectiveness across cultures (Avolio,
Gardner & Walumbwa, 2005). The model further integrates Hofstede’s ideas of cross-cultural
leadership into its application, coming up an optimal leadership style. A few leadership styles
have also been discussed here with the aim of trying to establish how each style can be made
effective when applied in different cultures. It is suggested that no single leadership style can be
appropriate in all cultures; leaders need to establish which leadership style is appropriate under
particular cultural conditions.
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