Leadership Followership and Evolution - Case Study Example

Organizational behaviour Name Institution Date Course SK Telecom Background Information SK Telecom is one of the largest wireless telecommunication companies in South Korea. Established in 1984, the company has grown to great heights with a current market share of over 50%. SKMS is the company’s management system that was established in 1979 and contains systematic management methodology. It reveals the philosophies and doctrines exercised within the company that were aimed at making the management more effective (SK Telecom, 2014). The previous management approach in SK Telecom, just like most Korean companies, the pay, rank and responsibilities of an employee was determined by his title at the work place, and was greatly influenced by the number of years he had been employed in the company. There was great respect for title and lower level employees would never question their seniors. Recent developments, however, have resulted to change in management styles in the company, and throughout South Korea. Executives have realised that the old management styles was an obstacle to the very backbone of survival: innovation and globalization (Sang-Hu, 2008). The change in management style has seen more young employees rise to management roles and the lower level employees getting their voices to discuss and share their opinions. As will be seen in the discussion below, this change in management approach has met several challenges as all the team members come to terms with the new developments. Organizational Behaviour 1. SK Telecom is attempting to distance itself from which South Korean cultural value? What indicators of this value are identified in this case study? What other artefacts of this cultural value would you notice while visiting a South Korean company that upheld this national culture? SK Telecom is changing its cultural values from the traditional strong hierarchical culture to one that supports values that are more egalitarian. Respect for hierarchy is dominant in South Korea citizens and this culture was adopted by organizations in their leadership structure and management style. In several other organizations, it is evident that great emphasis is laid upon seniority and hierarchy. In SK Telecom, this culture was deeply rooted in the way things were run. The case for Hur Jae-hoon is clear indication of how prevalent the practice has been within the company. There was high respect of title within SK Telecom. The 33 year old strategist held the title of ‘Hur Daeri’ and with this, he received plenty of respect from the other employees in lower positions. No one under Hur could question his decisions. While this was negatively affecting innovation and creativity among the lower employees, the national culture was supposed to be respected. Even Hur himself was expected to silently comply with any requests from managers above him. The country’s culture of differing to those in higher positions took centre stage in the company. Since this was a national culture in South Korea, other companies also practiced it. In Samsung South Korea, for example, lower level staff member could not be allowed even to start conversations with any other staff members above their boss. This was hierarchical leadership at its peak. The hierarchical leadership style is common in South Korea and this has been studied by several researchers, including Hargittay and Kleiner (2005). This culture has greatly influenced the organizational structure of these companies; particularly power distance and uncertainty avoidance (Self, Self & Bell-Haynes, 2011). As Self et al (2011) further say, the national culture characterises the organizational structure in many dimensions such as specialization, formalization, departmentalization, decentralization and centralization. Korean companies have been known for placing great importance on functional specialization like finance, human resource management and planning. Korean companies have adopted a combined organization culture that places a vertical concentration of power to make decisions at the higher levels of management with a horizontal concentration of functional control within staff departments. With extensive authority concentrated within top management levels, these companies have established tall hierarchical structures with several hierarchy levels. Hargittay and Kleiner (2005) argued that the structure within these companies has greatly affected the attitudes of subordinates so that the more one goes down the hierarchy, the more passive the employees are; this has resulted to few suggestions from the lower levels and dominance of top management decisions. Again, it has been found that these companies carry out formal communication along vertical hierarchies, which reflects their high score on power distance. The higher level managers issue directives and the subordinate are expected to carry them out. Erdem and Keklik (2013) argue that the hierarchy culture is given shape by a formalised organizational culture with strong internal control that is maintained by centralised decisions. The companies therefore focus on efficiency, stability and predictability. In these cultures, bureaucracy mechanism is highly dominant. This mechanism seems to ask employees to perform not their desires, but the desires of the leaders simply because they are paid for that reason. The result is that the sense of autonomy decreases and purposelessness occur (Self, Self & Bell-Haynes, 2011). Other researchers have also discussed the national culture in South Korea (Lee, Brett & Park, 2012; Chaney & Martin, 2011). The high power distance and hierarchy in the country is so prevalent that the eldest individual in the gathering is the one expected to initiate activities like entering a room, waiting or even greeting. Usually, the individual with lower status bows to the one in higher rank (Lee, Brett & Park, 2012). Just like other traditional societies, those in higher positions and the senior members seat at the centre or the head positions during meals, and must always serve first. 2. In your opinion, why is this hierarchical value so strong in South Korea? What are the advantages and disadvantages of this value in societies? South Koreans are very cultural and this has influenced their social life as well as their leadership systems. As Lee (2012) states, South Korean’s observe several cultural values, most of which have impacted on their way of conducting business. One such aspect of their culture is Kibun, which means a feeling or mood of good behaviour and balance. In this culture, people always strive to maintain the environment of a stable Kibun, in their personal life as well as their business world. South Koreans also care about the feelings of others (Yang, 2006; Southernton, 2008). Their concern about each other and the respect for older people has been one of the contribution factors towards the establishment of hierarchical leadership within the society. Another key aspect of their culture is Inhwa, which means harmony. A collectivist society, as it is, Koreans believe that it is important to establish and maintain consensus so as to promote and maintain harmony. This cultural practice was adopted from Confucian beliefs, and stresses the importance of harmonious living among people, especially among those that are unequal. Koreans are known to prefer giving positive answers and try as much as possible not to give direct refusals (Lee, 2012). They never want to destroy the harmonious environment in any way and would prevent negative answers or refusing to comply. The Inhwaculture usually exists within groups of people with unequal ranks, power or prestige. In the world of business, this culture requires that those in the lower ranks be loyal to those above them and that the superiors should take care of the well-being of their subordinates. In the country, people have the belief that individuals owe total loyalty to their parents, the elderly, authority figures and organizational leaders. Therefore, junior workers feel that they owe the same loyalty to their supervisors and employers as to their parents and other elders. As a result, they show their respect to their seniors and will try as much as possible to avoid conflicts, even if they had different opinions. They see this respect as a sign of loyalty and in return, they expect to achieve satisfaction and confirmation from their supervisors and employers (Lee, 2012). It is therefore easy to conclude that the hierarchical type of leadership in South Korea has been fuelled by the deep cultural beliefs of the citizens and their natural tendency to follow rules and not want to hurt anybody. They are therefore very loyal and readily accept to take instructions from those in senior positions. The hierarchical leadership in the country can also be attributed to the citizens’ respect of inherited leadership where members of the same family could occupy senior positions within the same company. These families are highly respected and no one can directly oppose them. The result has been strict adherence to respect for the highly ranking and great fear for those in power. Advantages of hierarchical structures Many researchers have identified several challenges associated with working in a group or a team. Van Vugt, Hogan & Kaiser (2008) agree with those who believe that group members will often disagree over the work process or the goals of the group, possible solutions to challenges and group problems as well as the strategies that should be pursued to achieve the group goals. The author also argues that with all these challenges facing the group, it is important that teams make collective decisions in a manner that promotes peace, efficiency and forward progress. Willer (2009) also points out that teams should be able to motivate members so that they behave selflessly and positively contribute to the success of the group, even in situations where these behaviours need personal sacrifice and investment. It is also critical that teams are coordinated in a manner that will ensure that team members are able to work in consensus toward achievement of collective success. Teams must allocate responsibilities and tasks, maintain effective communication among the members and also ensure minimal intra-group conflict. With all these challenges facing group performance, several organizations and companies have developed leadership structures that can minimize such challenges and ensure timely and effective decision making. Modern companies are made up of hundreds and in some cases, thousands of team members. These teams require a great amount of team coordination and control before any significant performance efficiency can be achieved. Within these companies, there are several decisions that are made that affect how work is done and what strategies to be pursued on a daily basis. As would be expected, team members may not be better positioned to make these decisions as quickly as it may be required. A central and authoritative management system would best help such organizations and companies overcome many of these challenges.As Anderson & Brown (2010) point out, according to the functionist perspective, hierarchies within companies help teams solve each of the above mentioned problems. Hierarchies help teams overcome the challenges of collective decision making by delegating disproportionate control to some members of the team or to a specific individual. The leaders are allowed to make critical decisions and are empowered to control and direct others’ actions while the lower ranked members are expected to keep their opinions to themselves. Such concentration of control within the top of the leadership structure, therefore, helps teams make decisions in a more efficient way and ensures that they avoid conflict over control (Van Vugt et al, 2008). Hierarchical structures are also known to promote understanding, modularity, as well as adaptability to change, scalability and robustness. According to Willer (2009), hierarchies also provide material; social and psychological incentives that significantly help the teams motivate individual members so that they positively contribute to the group performance. Hierarchies also help the teams reduce conflict and facilitate communication since they promote orderly division of resources and influence by allowing or denying specific members access to company resources as well as the right to perform certain behaviours (Keltner et al, 2008). In effect, hierarchical leadership structures greatly improve organization efficiency and help the organizations ensure unanimous forward thinking in the way its activities are run toward achievement of a common goal. The strong grip on employee behaviour and expectations is a great way to move the organizations forward towards the organizations’ vision. Disadvantages of hierarchical structures Despite the above mentioned advantages hierarchical structures bring several other disadvantages. With this type of leadership, over 80% of authority remains within the top management; the lower level and middle level management have limited authority. The system has been known to influence the attitudes of subordinates. As Hargittay and Kleiner (2005) pointed out, going down the hierarchy, one can realise the increase in passiveness so that very few suggestions can come from the junior staff. The hierarchies also tend to introduce high degrees of formalization so that there is great reliance on rules, regulations and policies. While this helps these organizations reduce uncertainty within their work environments, this system greatly denies the lower level employees the chance to make their point. In fact, as Hargittay & Kleiner (2005) further say, hierarchical structures attach more importance to vertical communication along hierarchical lines as opposed to horizontal communication among different departments. The result is suffocation of innovation and creativity among the lower level employees. There is less exchange of ideas and opinions. Open and direct discussion among the team members is also less frequent in the presence of senior staff. Modern business world is very dynamic and it is critical that organizations encourage information sharing that could help the organizations keep up with global trends. Open discussions are very important since through such engagements, organizations can benefit from the ideas of their junior staff. In fact several other organizations have developed products, services and work processes that were suggested by low level members of the team. Hierarchical structures greatly deny organizations the chance to benefit from the creativity and innovation of their employees. 3. Do you think that SK Telecom will be successful in integrating a more egalitarian culture, even though it contrasts with South Korea’s culture? What are some of the issues that may complicate or support this transition? Segel, Licht & Schwartz (2011), while discussing egalitarian structures and international business, argued that great ancient sociologists proposed that cultural values play significant role in the determination and guidance of business conduct, stressing that differences across different cultural values have direct influence in the conduct of business across these nations. The authors further defined cultural egalitarianism as a belief in the moral equality of a people, one that is nowadays reflected by a given society’s level of intolerance for abuses of economic and political power. Societies have increasingly become interested in their own freedom, even in the work place, and businesses have also realised the need to create conducive environments for employee freedom that will enhance innovation and creativity. Several companies have already changed their management structures and leadership cultures all over the world, as wee as in South Korea. SK Telecom, therefore realises the need to implement this new approach. Realising social change is not easy, especially when the culture to be changed is deeply rooted in the society. However, since companies need to keep up with current leadership trends, they have to develop strategies that will enable them achieve such changes. SK Telecom will succeed in the implementation of the new structure but will have to deal with the challenges presented by the cultural beliefs and the national trends in the country. Implementation of the egalitarian leadership will require that the executives remain focused to the task and enforce an all inclusive plan. It will be important that every member of the team and all employees understand the transition and the requirements as well as expectations required of them. As had been revealed by the survey results mentioned in the case study, 80% of the employees supported the transition. This is indication of their willingness to play part and embrace the new structure, but success will have to come much more slowly. The deep cultural values in the country will most likely retard the progress of the transition as employees will need time to accept the new way that they will interact with their senior managers. 4. You have just been employed at SK Telecom as a graduate. Discuss perceptual process and problems that you may experience as a new employee. Getting newly employed at SK Telecom during this time of transition will present great challenges. During this time, the company is in the middle of a critical transition but there seems to be great confusion. The contradiction of company vision and the beliefs of the employees will present great confusion for new employees. It will be difficult for me to get into the system and know who to report to and what not to share. While I would easily understand the organizations desire to go egalitarian, it would be difficult relating with the subordinate members. It is true that they are still deeply absorbed by their traditional system and the respect for seniority. Also, as seen in the case study, some of the senior leaders have not themselves accepted the new structure. Hur Jae-hoon admits that other times, he prefers the traditional hierarchical culture but again notes that the company’s egalitarian values already give positive results. In a particular incident, he wished he could shut one of his team members when they deferred in opinion. This confusion and lack of a common direction would be one of the biggest challenges for me as a comer. List of References Hargittay, P., & Kleiner, B. (2005). Effectively Managing Korean-American Businesses, Management Research News, 28 (6): 55-65. Lee, CY, 2012, Korean Culture And Its Influence on Business Practice in South Korea, The Journal of International Management Studies, Volume 7, Number 2 Van Vugt, M, Hogan R, & Kaiser, RB, 2008, Leadership, followership, and evolution: Some lessons from the past, American Psychologist, 63,182–196. Willer, R,2009, Groups reward individual sacrifice: The status solution to the collective action problem,American Sociological Review, 74, 23–43. Keltner, D, Van Kleef GA, Chen S, & Kraus MW, 2008, A reciprocal influence model of social power: Emerging principles and lines of inquiry, Advances in Experimental Social Psychology, 40, 151–192. Self, R, Self DR & Bell-Haynes J, 2011, Intercultural Human Resource Management: South Korea And The United States, International Journal of Management & Information Systems – First Quarter,15(1): 41-48 Chaney, LH, & Martin, JS, 2011,Intercultural business communication (5th ed.). Prentice Hall, Upper Saddle River, N.J Lee, S, Brett, J, & Park, JH, 2012, East Asian’s Social Heterogeneity: Differences in Norms among Chinese, Japanese and Korean Negotiators, Negotiation Journal, 28 (4), 429-452. Erdem, R & Keklik B, 2013, Beyond Family-Friendly Organizations: Life-Friendly Organizations –Organizational Culture of Life-Friendly Organizations, International Journal of Humanities and Social Science, Vol. 3 No. 4 Siegel, JI, Licht AN, & Schwarts SH, 2011, Egalitarianism, Cultural Distance, and FDI: A New Approach, retrieved on 10th May 2014 from < www.researchgate.net/publication/228260396_Egalitarianism_Cultural_Distance_and_FDI_A_New_Approach/file/9fcfd5060636218a30.pdf > Anderson, C & Brown CE, 2010, The functions and dysfuctions of hierarchy, Research in organization Behaviour Yang, I, 2006, Jeong Exchange and Collective Leadership in Korean Organizations,Asia Pacific Journal of Management, 23 (3), 283-298. SK Telecom, 2014, SK Telecom is, retrieved on 12th May 2014 from Sang-Hu, C, 2008, South Korea pushes to dissolve ‘the old way’ of business culture, retrieved on 12th May 2014 from < http://www.nytimes.com/2008/10/24/business/worldbusiness/24iht-wbkorea.1.17221156.html?pagewanted=all&_r=0> Read More