How cultural and personality differences impact on leadership in organizations - Essay Example

of Xxxxx Business Department How cultural and personality differences impact on leadership in organizations Undergraduate Student Department of Business London United Kingdom YourEmail@xxx.uk October 26, 2006 To be presented on .., 2006 In the subject of XXXXX Directed by: XXXXX, (Ph D. or M.S or anything) Table of contents Chapter 1: Introduction 3 Chapter 2: Transactional and transformational leadership 4 Chapter 3: Culture and Leadership 6 Chapter 4: Personality and Leadership 7 Chapter 5: Conclusion 10 References 12 Chapter 1: Introduction Traditional organizational forms reflect the concepts of differentiation, rationalization, and specialization and are characterized by hierarchy, division of labour, and managerial control. These structures promote clear boundaries for individual and group identities, which allow social environments to be easily controlled through departmentalization and the rational acceptance of who governs and who obeys. In short, these structures help people to understand who they are and how they are "supposed" to relate in organizational settings. In contrast, new organizational forms, emerging in response to the fast-changing nature of today's business environments, are defined as having organically orientated structures and operations designed to facilitate a more fluid relationship between the organization and its environment. This in turn is supposed to improve the organization's operational flexibility and thus the ability to deal with change. For the study of leadership, the above mentioned changes have led to the widespread adoption of empowerment strategies. Such an adoption is understandable: if one flattens an organization's structure, there is little choice but to empower the organisations lower-level workers with broader decision-making responsibilities. As a result, the traditional "limits to power" once designated by boundaries of hierarchy and rational authority are blurring [1]. This paper deals with the questions of leadership and how it is affected by culture and personality differences. The paper consists of three major parts, related respectively to leadership, culture and leadership, as well as personality and leadership, each chapter discussing theoretical concepts and empirical research. Chapter 2: Transactional and transformational leadership The New Leadership paradigm incorporated three main categories of theory - transactional leadership, transformational leadership, and culture-based leadership. The transactional leadership theorists, including those theorists who explored the concept of leadership through the eyes of followers, explained leadership as contingent on a condition of transaction or exchange between leaders and followers. Alternatively, transformational leadership theory argues that "good" leadership is achieved through more than just tangible inducements. It suggested that leadership can be conceptually organized along a number of charismatic and situationally correlated dimensions [2]: charismatic leadership, inspirational leadership, intellectual stimulation, and individual consideration (See Table 1). The culture-based theorists viewed leadership as being culturally specific, where "good" leadership, among other things, primarily depends on whether or not a leader's style is in synchronization with his or her organization's culture [1]. The transformational leader has been characterized as one who articulates a vision of the future that can be shared with peers and subordinates, intellectually stimulates subordinates, and pays high attention to individual differences among people. This transformational leader was posited as a contrast to the transactional leader who exchanges rewards contingent upon a display of desired behaviours [3]. Burns considered the transformational leader to be distinct from the transactional leader, where the latter is viewed as a leader who initiates contact with subordinates in an effort to exchange something of value, such as rewards for performance, mutual support, or bilateral disclosure. At the other pole of the leadership style dimension, Burns viewed the transformational leader as one who engages with others in such a way that the leader and the follower raise one another to a higher level of motivation and morality. Higher aspirations or goals of the collective group are expected to transcend the individual and result in the achievement of significant change in work unit effectiveness. Burns believed that all managers could be classified by leadership style according to their propensity for transactions with versus transformation of subordinates. Table 1: Dimensions of Transformational Leadership Dimensions of Transformational Leadership Approaches Idealized Influence Its charisma or idealized influence is envisioning, confident, and sets high standards for emulation. Transformational leadership lies in the values for which they are idealized. For instance, the authentic leader calls for universal brotherhood; the non-transformational leader highlights fictitious "we-they" differences in values and argues that "we" have inherently good values and "they" do not. Inspirational Motivation The inspirational motivation of transformational leadership provides followers with challenges and meaning for engaging in shared goals and undertakings. The inspirational appeals of the authentic transformational leader tend to focus on the best in people-on harmony, charity and good works. Kanungo and Mendonca have linked this to an empowerment process [4]. For them, empowerment is more than broadening the scope of participation by followers. It is motivational and enabling, highlighting a new realization and transformation of the person. Intellectual Stimulation The intellectual stimulation of transformational leadership incorporates an open architecture dynamic into processes of situation evaluation, vision formulation and patterns of implementation. Such openness has a transcendent and spiritual dimension and helps followers to question assumptions and to generate more creative solutions to problems. It is especially suited to the normative side of ethics, where human probing of the ground of being is both fathomless and endless. To the point, this dynamic breaks the bonds of organizational and leadership cultures that ignore fundamental questions such as altruism [4]. Individualized Consideration The individualized consideration component of transformational leadership underscores the necessity of altruism if leadership is to be anything more than authoritarian control [4]. The transformational leader treats each follower as an individual and provides coaching, mentoring and growth opportunities [3]. While true transformational leaders are concerned about developing their followers into leaders, non-transformational leaders are more concerned about maintaining the dependence of their followers. Transactional leadership models are grounded in a worldview of self-interest. But the exclusive pursuit of self-interest is found wanting by most ethicists [2, 3]. Authentic transformational leadership provides a more reasonable and realistic concept of self-a self that is connected to friends, family, and community whose welfare may be more important to oneself than one's own. One's moral obligations to them are grounded in a broader conception of individuals within community and related social norms and cultural beliefs. Chapter 3: Culture and Leadership Although crosscultural research emphasizes that different cultural groups likely have different conceptions of what leadership should entail, the attributes associated with charismatic/transformational leadership could be universally endorsed as contributing to outstanding leadership. Cultural groups may vary in their conceptions of the most important characteristics of effective leadership. As such, different leadership prototypes would be expected to occur naturally in societies that have differing cultural profiles [5]. In some cultures, one might need to take strong decisive action in order to be seen as a leader, whereas in other cultures consultation and a democratic approach may be a prerequisite. Furthermore, following from such different conceptions, the evaluation and meaning of many leader behaviors and characteristics may also strongly vary in different cultures. For instance, in a culture that endorses an authoritarian style, leader sensitivity might be interpreted as weak, whereas in cultures endorsing a more nurturing style, the same sensitivity is likely to prove essential for effective leadership. The way in which the social environment is interpreted is strongly influenced by the cultural background of the perceiver. This implies that the attributes that are seen as characteristic or prototypical for leaders may also strongly vary in different cultures. Hunt et al propose that societal culture has an important impact on the development of super-ordinate category prototypes and implicit leadership theories [6]. They hold that values and ideologies act as a determinant of culture specific super-ordinate prototypes, dependent on their strength. In strong or uniform cultures super-ordinate prototypes will be widely shared, whereas in a country with a weak culture or multiple subcultures, a wider variance among individual super-ordinate prototypes is expected. The boundary between the superordinate categories of leaders and non-leaders is sometimes difficult to draw. Like other categories used to classify people, leadership can probably be seen as a 'fuzzy category' [7].A category is "fuzzy" when there are no signs that differentiate all members from all nonmembers. Rosch holds that in cases where this clear-cut boundary in stimuli does not exist, people will use abstract categorizations learned and transmitted through culture rather than rely fully on stimulus characteristics [8]. Shaw emphasizes the relevance of cognitive categorization in the context of cross-cultural management and suggests that much comparative management research can be interpreted as showing culturally influenced differences in leadership prototypes [9]. Chapter 4: Personality and Leadership With respect to personality traits and transformational leadership behavior, Bass remarked, "When it comes to predicting transformational leadership and its components, there is no shortage of personality expectations [10]. However, the empirical support has been spotty". One possible explanation for this mottled support may be the employment of multiple personality frameworks within transformational leadership behavior research. Utilizing the well-known five-factor model (FFM) as a framework for examining personality and transformational leadership behavior may reduce the inconsistent findings. Ployhart et al. noted this: "Organizing this literature (on transformational leadership behavior) around the FFM of personality provides some structure to this process" [12]. Although the jury is still out, a growing consensus that the FFM traits encapsulate many of the important aspects of personality exists [13]. Recent research has demonstrated that certain traits of the FFM may be more relevant than others. Specifically, Judge and Bono found that of the five traits, only agreeableness was a strong and consistent predictor of transformational leadership behavior [13]. Extraversion and openness to experience did show a significant correlation with the focal behavior, and extraversion was marginally predictive. In another recent study, Ployhart and colleagues found a strong relationship between extraversion and transformational leadership behavior in both typical and maximum performance situations [12], however, Shao and Weber found a negative relationship between extraversion and transformational leadership in China [11]. Conscientiousness, though predictive of leader emergence and in some cases leader effectiveness, does not seem to be predictive of transformational leadership behavior [13]. Similarly, mixed results for the trait of openness exist [12, 13] and non-signifcance relationship between openness and transformational leadership as well [11]. Bass noted, for instance, that emotional stability is often shown to be more predictive of lower forms of leader behavior, such as laissez-faire leadership [10]. The extant studies indicate that narrowing the FFM to agreeableness and extraversion may be most useful, while other FFM traits may play a less important role. We do not mean to imply however, that other FFM traits are unequivocally unimportant for transformational leadership behavior, but rather, that agreeableness and extraversion seem to be traits that play a unique role in transformational leadership behavior. Extraversion and agreeableness are viewed as key traits enabling an individual to engage others and to allow for others to engage him or her. For example, behaviors often identified as being "transformational" (e.g., articulating a vision, providing intellectual stimulation) all require a leader to communicate values and ideas and to engage followers in social interactions. Extraversion allows for the requisite assertiveness and gregariousness needed to perform such transformational leadership behavior. Transformational leadership behavior also requires leaders to build trusting, warm relationships with employees through honest engagement, the hallmark of an agreeable personality. Keller found that agreeableness was significantly related to ratings of leader sensitivity and as significant predictor of transformational leadership behavior [14]. Another important personality trait likely to strongly influence transformational leadership behavior is positive affectivity (PA). Individuals with high PA are likely to experience positive emotion and moods. George [15] commented that these individuals "tend to have an overall sense of well-being and to be positively engaged in the world around them, in terms of both achievement and interpersonal relations" Positive affectivity has been associated with prosocial behavior, performance, work achievement, indicators of leader effectiveness, and the ability to develop and maintain workplace relationships [16]. These findings are in line with the view that PA could be an antecedent of transformational leadership behavior. Transformational leaders are described as champions of change and as likely to manifest important social values [2]. These leaders are also likely to utilize emotion to communicate vision and motivation to followers. Individuals with high PA search for and get pleasure from social relations [15]. Since affect may be strongly tied to social perceptions in organizations [17], it follows that PA would be an important component of eliciting positive social interaction and change. Further, individuals considered high in PA often perceive positive events as more likely to occur [18]. Thus, leaders who are characterized by a high degree of PA may be more willing to perform transformational leadership behavior as a change mechanism since they are likely to believe change is possible. Some research has supported this link. For example, Howell and Frost found that effective visions are tied to emotional expression and nonverbal communication [19]. Chapter 5: Conclusion Meta-analytical evidence supports the generalizeable findings that transformational leadership is more effective, productive, innovative, and satisfying to followers than is transactional leadership [16]. People's implicit theories of leadership are likely to be more transformational than transactional. To date, the qualities and motives that define charismatic leadership have been as elusive as those defining entrepreneurship. For decades, researchers have tried to identify the personality and characteristics that predispose individuals to be effective agents of social change. The emphasis has been on leader motives and personality characteristics as well as leader behaviors and their effects. Nevertheless, the culture of a nation where a company is operating will significantly affect the leadership behaviour [11]; therefore, it has to be considered the cultural influence when dealing with international businesses. References [1] Gordon, R. (2002) Conceptualizing leadership with respect to its historical-contextual antecedents to power. The Leadership Quarterly, 13 (2 ): 151-167. [2] Bass, B. M., Avolio, B. J., Jung, D. I., & Berson, Y. (2003) Predicting unit performance by assessing transformational and transactional leadership. Journal of Applied Psychology, 88: 207-218. [3] Bass, B.M. (1985). Leadership and performance beyond expectations. New York: The Free Press. [4] Kanungo, R. N., & Mendonca, M. (1996) Ethical dimensions in leadership. Beverly Hills, CA: Sage Publications [5] Hofstede G. (1993) Cultural constraints in management theories. Academy of Management Executive, 7 (1), 81-94. [6] Hunt, J. G., Boal, K. B., & Sorensen, R. L. (1990) Top management leadership: Inside the black box. Leadership Quarterly, 1, 41-65. [7] Cantor, N., & Mischel, W. (1979). Prototypes in person perception. In L. Berkowitz (Ed.), Advances in experimental social psychology (pp. 3-52). New York: Academic Press. [8] Rosch, E. (1978) Principles of categorization. In E. Rosch & B. B. Lloyd (Eds.) Cognition and categorization (pp. 27-48). Hillsdale, NJ: Erlbaum. [9] Shaw, J. B. (1990) A cognitive categorization model for the study of intercultural management. Academy of Management Review, 10, 435-454. [10] Bass, B. M. (1998) Transformational leadership: Industrial, military, and educational impact. Mahwah, NJ: Lawrence Erlbaum Associates. [11] Shao, L. & Webber, S. (2006) A cross-cultural test of the 'five-factor model of personality and transformational leadership'. Journal of Business Research, 59: 936-944 [12] Ployhart, R. E., Lim, B. C., & Chan, K. Y. (2001) Exploring relations between typical and maximum performance ratings and the five factor model of personality. Personnel Psychology, 54: 809-843. [13] Judge, T. A., & Bono, J. E. (2000) Five-factor model of personality and transformational leadership. Journal of Applied Psychology, 85: 751-765. [14] Keller, T. (1999) Images of the familiar: Individual differences and implicit leadership theories. Leadership Quarterly, 10: 589-607. [15] George, J. M. (1996) Trait and state affect. In K. R. Murphy (Ed.). Individual differences and behavior in organizations: 145-171. San Francisco: Jossey-Bass. [16] Lowe, K. B., Kroeck, K. G., & Sivasubramaniam, N. (1996) Effectiveness correlates of transformational and transactional leadership: A meta-analytic review of the MLQ literature. Leadership Quarterly, 7: 385-425. [17] Lord, R. G., & Maher, K. J. (1991) Leadership and information processing: Linking perceptions and performance. Boston: Unwin Hyman. [18] Mayer, J. D., & Salovey, P. (1993) The intelligence of emotional intelligence. Intelligence, 17: 433-442. [19] Howell, J. M., & Frost, P. J. (1989) A laboratory study of charismatic leadership. Organizational Behavior and Human Decision Processes, 43: 243-269. Read More