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Intercultural Management. Leadership styles in Germany, USA and India

Term Paper 2012 20 Pages

Business economics - Business Management, Corporate Governance

Excerpt

Structuring

List of abbreviations

List of figures

List of tables

1. Introduction
1.1 Problem definition and relevance of the topic
1.2 Scope of work and methodology

2. Definition of culture and leadership styles

3. Convergence vs. divergence theory

4. Reference model for deriving appropriate leadership styles

5. Globe Study
5.1 Research objectives
5.2 Methodology and major findings for Germany, USA and India

6. Summary and Conclusion

Bibliography

List of abbreviations

illustration not visible in this excerpt

List of figures

Figure 1: Country Clusters according to GLOBE

List of tables

Table 1: Cultural Dimensions and Sample Questionnaire Items

Table 2: Universal Leader Characteristics:

Table 3: Leadership CLT Scores for Societal Clusters

Table 4: Ranking of Societal Clusters Using Relative CLT Scores

1. Introduction

1.1 Problem definition and relevance of the topic

Today’s business environment is more global than ever. The multinational and cross-cultural business activities have increased tremendously over the last decades, a trend that is about to continue. “Global Village” is a term often used in this context. Due to the fact that people’s consume and buying preferences increasingly converge throughout the globe (manifested by the worldwide success of brands such as Apple, BMW, Coca Cola but also the entertainment industry – Holly-/Bollywood, Pop music etc.), one might get the impression that differentiation in regard to cultural differences becomes less important. The question is to what extent and in which areas this mindset is valid in business life. Is it reasonable to assume that successful leadership styles can be universally applied, no matter in which country and cultural setting the leader fulfills his/her job?

1.2 Scope of work and methodology

The objective of this paper is to discuss, depict and elaborate on the question of appropriate leadership styles in the three different countries: USA, Germany and India. The aim is to examine – based on an analysis of the cultural differences – if and how leadership styles need to be adapted in order to be successful in each of the three countries.

Specific theories about leadership such as trait theory vs. behavioral theory or the question of whether effective leaders are rather born or made are out of scope and will not be considered in this paper.

Finally, it is important to note, that an explicit distinction between leadership and management will not be made throughout this paper, as they are not mutually exclusive but rather tend to overlap.

2. Definition of culture and leadership styles

There are many definitions of culture that, depending on the context, differ more or less marginally from each other. Within this paper culture shall be defined as shared motives, values, beliefs, identities and interpretations or meanings of significant events that result from common experiences of members of collectives that are transmitted across generations (House et al. 2004, p. 15). Cultures should not be considered as static but rather as fluid and dynamic (Collard / Normore 2009, p. 17). Culture is also created through the learning and adaptation of individuals and groups as they adapt to changes (Schein 1985).

Leadership styles can be defined as the combination of traits, skills and behaviors leaders use as they interact with followers (Achua / Lussier 2009, p. 70). As the pattern of behavior that characterizes a leader is relatively consistent, the authors perceive the behavioral part as the most important aspect of a leadership style. Clark (2012) further specifies a leadership style as the manner and approach of providing direction, implementing plans, and motivating people.

There is no common opinion on number and range of leadership styles. Widely known is the distinction between an autocratic and a democratic leadership style. While the first one aims at total control and close supervision of the workers, the latter one (which Clark further splits up in participative and democratic style) is focused more on involvement of the employees, own decision making and in its most extreme form hardly any control by the superior (Walker 2011). Achua and Lussier (2009) point out that a leader’s style usually falls somewhere in between, however, with the shift in paradigm from management to leadership, the leadership styles of effective managers tend to be no longer autocratic, but rather democratic.

This statement is consistent with the content of most contemporary Western management and leadership literature, but how about countries with other cultural settings, such as India?

3. Convergence vs. divergence theory

Is it legitimate to assume that different countries and cultures demand for different leadership styles? Although most readers would probably tend to answer this question with “yes”, there is no common opinion on that. Branine (2011) distinguishes in his book between the convergence theorists and the divergence theorists. Convergence theorists argue that management is culture free because societies, norms and values increasingly converge throughout the globe. The Western Culture is spreading all over the world, not only in regard to consumerism but also in regard to education. People are exposed to similar knowledge and skills, and aspire to similar academic qualifications. The management and leadership theories taught in MBA programs, for example, in Indian universities are likely to be the same as those that are being taught in other countries. American and British textbooks, which rarely make references to non-Western management practices, are adopted in universities, colleges and business schools throughout the whole world in a uniform manner. International conferences, exchange programs, internet access etc. further contribute to shorten the gap between management and leadership practices (Branine 2011).

To sum it up, convergence theorists believe that management is just a function or a technique that can be learnt by anyone and implemented anywhere in the world regardless of the culture.

Vice Versa, divergence theorists claim that the practice of management and leadership is culture-specific as situational factors, such as a country’s industrial relations, employment policies, cultural norms and values definitely need to be taken into consideration. Management and leadership styles are not just technical skills but they have to reflect human behavior, which is to a great extent culturally bound and influenced (Branine 2011). Even cultures that share similar Western beliefs about organizational structures still operate differently based on their unique cultural contexts (Moua 2010).

To sum it up, divergence theorists are convinced that leadership styles must be adapted to the cultural setting.

While both theories of convergence and divergence appear somehow plausible and include well-founded aspects, there is no doubt that – in spite of increasing convergence in many fields – cultural differences still prevail, also among Western countries. The attempts to simply apply the technical methods of management and leadership that have proven to be suitable in the home country seem to have failed quite often, not only ending the career of many expatriates but also resulting in reduced financial performance of the companies (Rupprecht 2007). Therefore, the topic of this paper, to analyze appropriate leadership styles in the US, Germany and India, based on cultural differences, is legitimate and has a high practical relevance.

4. Reference model for deriving appropriate leadership styles

There have been various studies in the past striving to answer the question of how to adapt leadership styles to different cultural settings. One of the most well-known contributions to the analysis of cultures and their impact on leadership and management are the studies conducted by Geert Hofstede (1980, 1991, and 2001) . His first book, “Culture’s Consequences” (1980), in which he defined four main dimensions of culture, based on the analysis of more than 116.000 questionnaires of IBM managers in 48 countries, is still highly appreciated and well-known nowadays. Despite strong criticism about the research methodology, which was – according to McSweeney (2002) – resulting in invalid and misleading cultural descriptions, Hofstede’s works provided the impetus for the development of other well-known studies such as the ones of Trompenaars (1993) , who defined 7 cultural dimensions.

Research is still about to continue as all studies mentioned above are subject to certain criticism. One of the recent major undertakings is the GLOBE[1] project, according to Branine (2011) , the most comprehensive study of cultural differences that has been developed so far. 170 investigators from 62 cultures worked on this “Manhattan” Project and collected data from more than 17.000 middle managers in 951 organizations. The GLOBE project has tested the validity of some of the previous studies, responded to criticism of previous research and provided an opportunity for further research to test and revise its findings with the aim of establishing a generally acceptable framework (Branine 2011).

As the GLOBE study is considered to be highly sophisticated and the most up-to-date in the cultural leadership context so far, its findings shall be used for this paper to elaborate on potential differences of appropriate leadership styles in the USA, Germany and India.

5. Globe Study

GLOBE is a worldwide, multiphase, multi-method project. Considering the scope and extent of the paper, a detailed description of the full research objective, the theoretical background and functionality of the Globe Study is not feasible. Only the relevant aspects for the specific task at hand will be described as far as necessary.

[...]


[1] Global Leadership and Organizational Behaviour Effectiveness Research Program

Details

Pages
20
Year
2012
ISBN (eBook)
9783656400325
ISBN (Book)
9783656401049
File size
588 KB
Language
English
Catalog Number
v212414
Institution / College
University of Applied Sciences Frankfurt am Main
Grade
1,3
Tags
intercultural management leadership germany india

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Title: Intercultural Management. Leadership styles in Germany, USA and India