Divergent leadership styles practiced by global managers in India.
Abstract:
Studies have emphasised that expatriates' leadership style plays a pivotal role. It has been considered as a prime criterion to be successful and effective in the host country. This study has examined twenty-five Japanese and Twenty-three American expats in India focusing on their leadership styles. In order to determine the leadership styles of these managers from altogether different countries the study has investigated ten leadership components. Furthermore, these results were analysed to identify the differences and similarities. Statistical tests revealed that there were significant differences on four leadership components out of ten and the remaining six leadership components had non-significant differences. The study also sheds light on the implications for expatriates, with regard to leadership effectiveness.

Subject:
Leadership (Analysis)
Leadership styles (Usage)
Leadership styles (Evaluation)
Managers (Management)
Author:
Babu, Vimal
Pub Date:
01/01/2011
Publication:
Name: Indian Journal of Industrial Relations Publisher: Shri Ram Centre for Industrial Relations and Human Resources Audience: Academic Format: Magazine/Journal Subject: Economics Copyright: COPYRIGHT 2011 Shri Ram Centre for Industrial Relations and Human Resources ISSN: 0019-5286
Issue:
Date: Jan, 2011 Source Volume: 46 Source Issue: 3
Topic:
Event Code: 200 Management dynamics Computer Subject: Company business management
Geographic:
Geographic Scope: India; Japan Geographic Code: 9INDI India; 9JAPA Japan
Accession Number:
252553895
Full Text:
Introduction

The demands on the effective expatriate managers have mounted globally. The way these expatriate managers tackle the cultural issues would determine success or otherwise of the business of MNCs in the host country. Increased complexity in the business world also pushed the expatriate managers to understand cultural issues (Schein 1992). Due to globalisation and constantly increasing trend of expatriate managers to manage the business in host countries like India and China (two largest emerging economies of the world), many questions have been raised as to how these expatriate managers lead their subordinates in host nations, their behaviour towards others and most importantly, the style of leadership mostly preferred and practiced.

According to Yukl 2006, there exists no single leadership style that can be confirmed as the perfect one that works well under all conditions. He further states that expatriate managers will have to adopt different leadership styles depending upon different culture in the host countries. Muenjohn and Armstrong (2007a) hold that leadership styles and behaviour cannot be isolated from culture and hence it is one of the core elements that influence leadership style and approach. This view was justified by Hofstede (1984) that US leaders have the tendency to rate the performance of the followers on an individual basis based on his 4 dimension theory. But in the case of Japanese management, leaders prefer to evaluate the performance in group or collectivism.

Japanese subordinates prefer that their leader should praise their efforts and be supportive when needed. Same is expected if the leader is an American and subordinate is Japanese. As American leaders are not used to the cultural differences and peculiarities of a new (Japanese) culture wherein hospitality and admiration takes the centre stage and business matters are considered to be discussed at later stages. Among American leaders, such care is expected to be taken while dealing with Japanese subordinates, but it is ignored often and as a result stiffness in relationship occurs and business gets affected by all means. Considering the global business competition, the aforementioned aspect of dealing with employees due to cultural differences among the expatriate managers are being found to be entrenched more and more these days.

This makes it critical ever to try to understand different cultures and their influence on the ways people do business and view the world (Hall 1995). The costs of not understanding are getting greater and greater. Turnover and absenteeism are often higher. On the other hand, cultural differences can provide tangible benefits and can be used competitively. The potential for management frustration, costly misunderstandings and even business failures increase significantly when dealing with people whose values, beliefs, customs are different from each other (Bass 1990). However, when understood and successfully managed, differences in culture can lead to innovative business practices and sustainable sources of competitive advantage. Success in an increasingly competitive global market depends on the knowledge and sensitivity of managers to cultural differences in leadership styles.

America and Japan are considered to be good examples for studying cross-cultural leadership interaction due to the clear cross-cultural differences between the countries. Four classical cultural dimensions identified by Hofstede (1984) are used to describe the situations in USA and Japan. The US represents a small power distance where subordinates and superior consider each other as more equal; they have a fare amount of autonomy to participate in decision making. On the other hand, Japan represents a moderate power distance where inequalities and hierarchical systems exist. Subordinates are supposed to be told what to do. Japan was ranked high in uncertainty avoidance in which people try to avoid ambiguous situation by establishing formal rules and regulations. Lifetime employment is more common in this country.

America represents low uncertainty avoidance where people have high tolerance for ambiguity and job mobility is more common. As a western society, USA ranked very high in individualism. They concern for themselves as individual rather than concerning the priority and rules of the group. On the other hand, Japanese are well known for the group oriented achievement in which the interests of the group take precedence over of the individual.

The last dimension of Hofstede is Masculinity/femininity. Surprisingly, Japan was ranked very high in masculinity while USA was ranked moderate. Masculinity values concern the extent of emphasis on work goals, earning, and advancement. As a result of this, it is interesting to see how American and Japanese expatriates adopt their leadership styles when they are working for overseas assignments and to differentiate their styles of leadership. This study aimed to: a) examine leadership styles of American and Japanese expatriate managers who are working in India; and b) compare the similarities and differences on leadership styles between the expatriates.

Leadership

There is no universal definition of leadership because leadership is complex and because leadership is studied in different ways that require different definitions (Muenjohn 2008, Achua and Lussier 2000). Leadership has been defined in terms such as traits, styles, influence, interaction patterns, role relationships, and occupation of an administrative position (Yukl 2006). In most definitions, leadership reflects a process whereby intentional influence is exerted by leader over subordinates to guide, structure and facilitate activities and relationships in a group or organization. Each definition differs in many respects and it reflects disagreement about identification of leaders and leadership processes. Researchers use different phenomena to investigate and interpret the results in different ways (Yukl 2006). There have been several studies investigating the relationship between cultures and leaderships. Also, there have been confirmations that leadership styles differ by cultures (Bae et al 1993, Han et al 1996).

Recent literature in the behavioural sciences appears to suggest that culture may play important and different roles in our understanding of the body of knowledge. For example, the place of study (Korea vs the USA) for an MBA degree appears to impact on the decision-maker's managerial style (Bae et al 1993). The literature also appears to imply that students' perceptions of various management issues significantly differ depending on their religious background (Safranski & Kwon 1990). In a recent study, Han et al. (1996) argued that culture plays a significant role in establishing a relationship between leadership and power. For example, American respondents are likely to rate their instructors more favourably in terms of structure than the Korean counterparts. American respondents rated their instructors' expert knowledge much higher than the Korean respondents because of social expectations; instructors in USA are expected to be experts in certain fields while Koreans expect their instructors to know everything. Similar findings were also reported by Favilla et. al (1996).

Some scholars argue that an objectively effective leadership style may be effective precisely because it is perceived by followers as being appropriate for the situation at hand (Campbell, Bommer & Yeo 1993). In other words, leaders should behave in accordance with a given situation. In addition, culture also determines leadership styles. For example, rational persuasion in which meaning and factual reasoning are provided to requests, and explanations of what is to be done and why are furnished; and consultation in which the followers are involved in the process of planning or making a decision are likely to result in target commitment in US culture (Yukl & Falbe 1990, Yukl, Kim & Falbe 1996). In the light of the above findings, leadership styles that work well in one context may not be effective in a different cultural context. Schmidt and Yeh (1992) indicated the prevalence of common leaders influence strategies across Australian, UK, Japanese and Taiwan managers. The Australians were found to be most similar to the USA regarding their emphasis on reasoning and bargaining with subordinates. Due to cultural differences, expatriates transferred to another culture may experience "culture shock". This shock may cause feeling of helplessness, confusion and frustration. It may also include role shock because each role in society involves a certain set of expectations that often differ across cultures (Frederick & Rodrigues 1994, Harris & Moran 1987). This kind of a shock tends to happen with expatriate managers when they have to conduct and manage business abroad. If expatriates are aware of such variations before hand and prepared to adjust their behaviour in relation to different expectations, they could partly avoid misunderstanding and work more effectively from the beginning of the assignment (Black & Porter 1990, Stewart et al 1994).

Japanese & American Leaderships

Japan is the second largest trading partner with the United States. Japan is high in masculinity and uncertainty avoidance and medium on collectivism. Japan's leaders require respect and obedience from their subordinates. Leaders have historically responded with paternalistic attitudes towards their subordinates. Japanese organizations are described as highly hierarchical and are rigidly organized. Japanese managers are expected to care for personal lives of their subordinates (Ouchi & Wilkins 1988). The phrase "I trust you, you can do it" reflects that Japanese managers typically outline general objectives, make unclear group assignments and let subordinates carry out objectives by their own approaches. When it comes to the decision making, Japanese tendency is for collective decision making and extensive consultation. Bass (1990) maintained that Japanese managers emphasize on equality of all group members and support group harmony. Compliments and criticisms are usually directed at the group. Charisma is important for senior managers who establish an overall theme, develop strategy and engage in high-level external relations. Japanese managers also don't like to take risk (Bass 1990). In Japan, the ideal leader should be flexible, fair, a good listener, outgoing and responsible.

Leader contingent reward and punishment are expected to have positive impacts in the U.S. Bass (1990) found that charismatic leadership is important at all levels in U.S. organizations. For the Americans, the ideal leader should be intelligent, honest, understanding, with a good verbal skills and determinant. American managers are medium on paternalism. Supportive leadership shows strong positive relationships with followers' satisfaction and organizational commitment. As the country is high on individualism, supportive and participative leadership therefore have a high degree of impact but directive leadership has no significant impact on the follower. Rewards and punishments are based on individual performance. Therefore, leader contingent reward and punishment are expected to have positive impact in the U.S. The suggestion systems in U.S. look for home run advice but little improvement suggestions are appreciated.

Japanese managers focus on improving the work-process whereas American managers focus on the results. Japanese prefers to criticize among themselves and admit mistakes while American avoids direct criticisms (Pasa 2000). Japanese managers place more importannce on relationship as they believe that bigger deals will result if more time and attention are paid to people. The Japanese businessman usually wants to build personal relationship first while the Westerner usually wants to make a deal first. Japanese managers want a long-term relationship. In contrast, American managers drive for the results because they believe that budgets met or projects completed are more important when it comes to goals and evaluations. American managers place a little attention to a harmony of a group while Japanese managers give extra importance to WA or harmony, because they believe that it will facilitate the work and encourage people to contribute more. Japanese managers are interested in learning more about an individual employee's life because it gives the supervisor a better chance of understanding the needs and capabilities of an employee. For Japanese managing the whole person rather than a person is the best way to get that person engages in his or her job.

Research Methodology

Two nations, Japan and The United States, were chosen because: a) both the countries have clear cultural differences according to Hofstede's 4 dimension model; b) these two countries play major roles in the world's economy; c) managers from these two countries are viewed as effective business leaders; and d) Japan is viewed as the representative from the East and the United States from the West. Two groups of population were selected from a cross-section sample (random stratified) of managers in different companies in India. These companies were chosen because of the approval to collect data from managers of the organization and high level of cooperation was assured. The research population covers 132 foreign-based companies in India; 74 of them were American firms and 58 were Japanese firms. The sample size was 50 companies; 25 of each group. 74 English questionnaires were sent to 74 American firms. As for Japanese firms, English and Indian versions of questionnaire were sent to Japanese translator for translation before distribution among 58 Japanese firms. Returned Japanese questionnaires were sent for translation back in to Indian language then translated into English language by a researcher.

Results

Participants: The number of American respondents was 23. Majority of the American expatriates were aged 45 or older (60.9%) and well-educated (Master degree, 52.2%). Most of them worked and stayed in India for more than 4 years (43.5%). For Japanese, there were 25 expatriate who completed the questionnaire. Most of them were older than 45 years (84%) and had a university qualification (Bachelor degree, 76%). Similar to the American expatriates, 44% of the Japanese respondents worked and lived in India.

Ratings on Leadership Factors

Mean values of ten leadership factors for both the groups (Table 1) showed that both the American and Japanese managers had the highest mean value in achievement orientation (4.46 and 4.29). Visionary ability (4.42) came second for the Americans while for the Japanese it was motivation (4.20). The third factor for American was training succession (4.41) whereas it was visionary ability for the Japanese. Motivation was the fourth factor for the Americans with the mean 4.30 while it was performance feedback for the Japanese (4.12).

Comparisons

The t-test function was employed to compute similarities and differences between the two groups (Table 2). There were four leadership factors in which the American and Japanese managers were significantly different from each other. More specifically, the significant differences between American and Japanese expatriates on their leadership behaviours can be found in regard to Decision Making, Visionary Ability, Training Succession and Supervising, which was lower than the 0.05 which represented significant differences between two groups. The rest of the factors showed non-significant differences between the two groups of managers including Communication Skills, Achievement Orientation, Performance Feedback, Motivation, Leadership and Followers' Performance.

American Expatriates

Several aspects of leadership styles of the American managers were disclosed. American managers, in general, had good communication skills. They communicated well with their Indian subordinates and understood what the Indians communicated to them. They were very high achievement oriented and concerned with the task objectives, set challenging goals and assumed responsibilities for solving task-related problems. Also, the American managers were quite decisive decision makers, often clarified reasons, trained and involved and empowered followers to make efficient decisions. The American managers were highly clear in idealized vision and future oriented and also highly concerned with their subordinates by training their followers for day-today jobs and preparing them for future jobs. In addition, they also trained them to work more effectively and efficiently and intensively provided feedbacks for their followers leading to improvements in their followers' performance. The American managers motivated their subordinates to work harder by stating clearly what the desired performance is and what is not. They often worked with their subordinates to improve followers' performance and provided them training, developed their skills, scheduled their work and set performance goals. Lastly, the American managers viewed their leadership behaviour to be effective and suitable in the Indian context. Their leadership behaviour was well accepted and respected by the Indian followers whose performance was, in general, improved because of their supervision.

Japanese Expatriates

Japanese managers, in general, had good communication skills. They communicated well with their Indian subordinates and well understood what the Indians communicated to them. Japanese managers were also very high achievement oriented and concerned with the task objectives, set challenging goals and assumed responsibilities for solving task-related problems. Also, Japanese managers were a bit above average decision makers, usually clarified reasons and trained, involved and empowered followers to make efficient decisions. Japanese managers were clear in expressing idealized vision and future oriented. Furthermore, Japanese managers also concerned with their subordinates by training their followers for day-today jobs and preparing them for future jobs. In addition, they also trained them to work more effectively and efficiently and regularly provided feedbacks for their followers. Their feedbacks identified ways to improve their followers' performance. Japanese managers often motivated their subordinates to work harder by stating clearly what the desired performance is and what is not. They worked with their subordinates to improve followers' performance and provided training, developed skills, scheduled works and set performance goals for their followers. They viewed their leadership behaviour effective and suitable in the Indian context and their leadership behaviour was accepted and respected by the Indian followers. Their followers' performance, in general, was improved because of their supervision.

Differences in Leadership Styles

The significant differences on the leadership styles of American and Japanese expatriates could be explained by investigating the items representing four leadership styles. On the decision making factor, the first item was "You often clarify reasons for your decisions" in which American managers showed Strongly Agree rate (X = 4.52) while Japanese showed Agree rate (X = 4.2). The second item was "You understand the desires of followers and make decisions that benefit majority" in which American managers showed Agree rate (X = 3.78) while Japanese showed Agree rate (X = 3.72). The third item was "You train, involve and empower followers to make efficient decisions" in which American managers showed Strongly Agree rate (X = 4.39) while Japanese showed Agree rate (X = 4.04). The last item was "You make business decisions without hesitation in an unstructured situation" in which American managers showed Agree rate (X = 4.09) while Japanese showed Agee rate (X = 3.76).

The items that made significant differences between the two groups were the first, the third and the fourth subdimension items. These differences may be because of the different nationalities, education and years in India of two groups of managers. When it comes to the decision making, Japanese has the tendency for collective decision making and extensive consultation (Ouchi 1970). This could be the reason why Japanese were not skilled in making decisions in difficult situations that need quick and effective action. The Americans were more decisive in making decisions because of the highly individualistic norm that enabled them to make quick and effective decision in hard times. In addition, Americans were more familiar in uncertain situations as they had low rate on uncertainty avoidance of Hofstede's 4 dimension theory (Hofstede 1984). This factor also allowed them to have better skills in making difficult decisions particularly under vague circumstances. American managers had more knowledge and skills to transfer and train their subordinates. They also had more tools to analyse the situations and make more precise decisions. Therefore they could have higher mean in this subdimension factor. In addition, Americans tend to know deep in particular things while Japanese knew roughly of many things. This could make the content of knowledge transferred had unequal impact to Indian subordinates. Some Indian workers knew many things but could not get anything out of them while the others can take full advantage in what they knew very well.

The years of expatriate managers' stay in India had effect on the decision making factor; the longer the expatriate managers stay in India, the better the decisions by them because they experienced the Indian environment for sometime. In this case, majority of both American and Japanese managers stayed in India for more than four years. So they have been exposed to the Indian environment equally so they should perform similarly in this factor but because of the nature of American managers, they performed better. American managers were more decisive decision makers according to Hofstede (1984) because they were good at unstructured situations. For visionary ability, the first item was "You always look forward and are future oriented" to which American managers showed Strongly Agree rate (X = 4.43) while Japanese showed Agree rate (X = 3.92).

The second item was "You understand corporate strengths, weaknesses, opportunities and threats before developing company's visions" in which American managers showed Strongly Agree rate (X = 4.48) while Japanese showed Strongly Agee rate (X = 4.28). The last item was "You can express an idealized vision of a future that is significantly better than the present" in which American managers showed Strongly Agree rate (X = 4.35) while Japanese showed Agee rate (X = 4.20). The items that made significant differences between two groups were the first and the third sub-dimension items. These differences may be because of the different age range and education levels of the two groups of managers. American managers' age range spread around 25 to more than 45 years while Japanese managers' age range spread around 36 to more than 45 years. This could be the reason why American managers were more future-oriented than the Japanese counterparts since the environment today forced this generation to be more aggressive and compete relentlessly.

American managers had more analytical tools, knowledge, skills to articulate and develop idealized vision. Therefore they achieved higher mean in this sub-dimension factor. Considering training succession, the first item was "You train your followers for today jobs and prepare them for future jobs" in which American managers showed Strongly Agree rate (X = 4.43) while Japanese showed Agree rate (X = 4.08). The second item was "You train your followers to work more effective and efficient" in which American managers showed Strongly Agree rate (X = 4.39) while Japanese showed Agree rate (X = 4.08). Both the sub dimension items made significant differences between the two groups. The age of managers affected the training factor. People of the same generation tend to understand each other well because the environment they experience is pretty much the same. Therefore, the American managers and their subordinates tend to better perform in this aspect. Based on the research finding, majority of American managers hold Masters degree while majority of Japanese obtained only Bachelors degree. The American managers had more knowledge, skills to train their workers to work more effective and be efficient than Japanese subordinates. Therefore they could achieve higher mean value in this factor.

The last factor of difference was supervising. The first item was "You improve the performance of subordinates by working with them to identify their strengths and weaknesses" to which the American managers showed Strongly Agree rate (X = 4.30) while the Japanese showed Agee rate (X = 3.79). The second item was "You provide training, develop skills, schedule works and set performance goals for your followers" to which the American managers showed Strongly Agree rate (X = 4.30) while their Japanese counterparts showed Agee rate (X = 4.12). Both the items made significant differences between the two groups. These differences may be partly from the different age range, education, years in India and power distance of the two groups of managers. People of similar ages could work far better than people of different ages. They usually experienced the similar environment that built them under the same business framework. Also, they could learn things from each other faster since they spoke the same language.

The longer the expatriate managers stay in India the better would be their collaboration with the Indian subordinates. In this case, majority of both the American managers and their Japanese counterparts stayed in India more than 4 years. Thus they have equal experience in working with the Indian followers and should perform similar in this factor. However since the Americans had more analytical tools and skills to supervise and identify the strengths and weaknesses of their followers they performed better in this dimension. According to Hofstede's (1984) four dimension model, Americans have low value in power distance dimension where followers find it more comfortable to work with their superiors because followers don't need to follow everything their managers ask or command if they have the proper reasons to support their actions. Therefore, American managers and their subordinates could be more collaborative than in the case of Japanese managers and their followers.

Limitations & Conclusions

The current study has used expats' self-assessment on the leadership components which could result in self-inflated rating. Muenjohn and Anona (2007b) cautioned that a leader's self-ratings tended to be less accurate than those by the others. Therefore, further research is recommended to include leadership assessments from other sources, particularly from subordinates which could provide leaders with more accurate information. Also, the population frame in this study was relatively small when compared to the American and Japanese expats working overseas. Subsequent research should try to replicate the present findings by seeking a larger population.

Both the American and Japanese managers did very well in Achievement Orientation dimension. Therefore, under the supervision of both the groups of managers, followers should be expected to work hard to achieve the challenging projects, always look for improvement and also future oriented. Also, the American managers gave considerable attention to the decision making dimension. They often trained, involved and empowered their subordinates in making decisions. They are decisive decision makers in unstructured situations. Therefore, under supervision of the American managers, followers should prepare to take high responsibilities and learn how to make decisions under tension situations. The Japanese managers did fairly in the supervision dimension. They did not often improve the performance of their subordinates by working with them to identify their strengths and weaknesses. They provided less training; developed less skills, scheduled less works and set lower performance goals for their followers than the American managers. Therefore, under supervision of the Japanese managers, followers should not expect their managers to provide frequent training. Rather the followers should rely on themselves to develop skills to improve work quality.

The American managers gave considerable attention to this dimension. They set challenging but realistic goals and deadlines. They are willing to assume responsibilities for solving task-related problems. Therefore, under supervision of the American managers, followers should prepare and learn how to achieve the challenging goals and be able to take more task-related responsibilities.

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Vimal Babu is Assistant Professor (HRM & Entrepreneurship Area), NIILM-Centre for Management Studies, Greater Noida (India). E-mail: vimalsairam@gmail.com
Table 1: Ranking Leadership Factors of American and Japanese Managers

         American                       Japanese

Ranking  Leadership Factors       Mean  Leadership Factors       Mean

1        Achievement orientation  4.46  Achievement orientation  4.29
2        Visionary ability        4.42  Motivation               4.20
3        Training succession      4.41  Visionary ability        4.13
4        Motivation               4.30  Performance feedback     4.12
5        Supervising              4.30  Training succession      4.08
6        Performance feedback     4.21  Followers' performance   3.92
7        Followers' performance   4.21  Communication skills     3.88
8        Decision making          4.19  Supervising              3.88
9        Leadership behaviour     4.13  Leadership behaviour     3.84
10       Communication skills     4.04  Decision making          3.78

Table 2: Comparison of the Results of American
and Japanese Managers on Leadership Factors

                              Mean
                                                       Sig
Leadership Factors         US     Japan   t-Value   (2-tailed)

Communication skills      4.04    3.88      .81        .41
Achievement orientation   4.46    4.29     1.29        .20
Decision making           4.19    3.78     2.53        .01
Visionary ability         4.42    4.13     2.05        .04
Training succession       4.41    4.08     2.15        .03
Performance feedback      4.22    4.12      .67        .50
Motivation                4.30    4.20      .53        .59
Supervising               4.30    3.88     2.41        .02
Leadership behaviour      4.13    3.84     1.24        .21
Followers' performance    4.22    3.92     1.49        .14
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