Theme 5

Lecture 1
Power Distance
The Power Distance Index (PDI) is one of the five intercultural dimensions developed by
Hofstede. This dimension deals with the fact that all individuals in societies are not equal – it expresses
the attitude of the culture towards these inequalities amongst us. Power distance is defined as the
extent to which the less powerful members of institutions and organisations within a country expect
and accept that power is distributed unequally. In short this cultural dimension looks at how much a
culture does or does not value hierarchical relationships and respect for authority. Put simply, people
in some cultures accept a higher degree of unequally distributed power than do people in other
cultures. When in a high power distance culture the relationship between bosses and subordinates is
one of dependence. When in a low power distance society the relationship between bosses and
subordinates is one of interdependence.
Australia, for example, is a low power distance country while Asian countries such as Hong
Kong are at the high power distance side of the spectrum. People in high distance countries tend to
believe that power and authority are facts of life. Both consciously and unconsciously, these cultures
teach their members that people are not equal in this world and that everybody has a rightful place,
which is clearly marked by countless vertical arrangements. Social hierarchy is prevalent and
institutionalises that inequality. Leaders are therefore expected to resolve disputes as well as make all
the difficult decisions. Subordinates will simply comply with their leader rather than challenge him or
her or try to arrive at their own solutions in dealing with conflict. They seldom challenge their leaders
power.
On the other hand, in lower power distance countries there is a preference for consultation and
subordinates will quite readily approach and contradict their bosses. The parties will openly work
towards resolving any dispute by stating their own points of view. If they cannot come to a satisfactory
conclusion, they may choose to involve a mediator. Leaders actually encourage independent thought
and contributions to problem solving and expect (within reason) to be challenged.
The Czech Republic has a relatively high score on this dimension (57). This means it is a
hierarchical society. This means that people accept a hierarchical order in which everybody has a place
and which needs no further justification. Hierarchy in an organisation is seen as reflecting inherent
inequalities, centralisation is popular, subordinates expect to be told what to do and the ideal boss is a
benevolent autocrat.
With a score of 50, Italy tends to prefer equality and a decentralisation of power and decision-
making. Control and formal supervision is generally disliked among the younger generation, who
demonstrate a preference for teamwork and an open management style.
Turkey scores high on this dimension (score of 66) which means that the following
characterises the Turkish style: Dependent, hierarchical, superiors often inaccessible and the ideal boss
is a father figure. Power is centralized and managers rely on their bosses and on rules. Employees
expect to be told what to do. Control is expected and attitude towards managers is formal.
Communication is indirect and the information flow is selective. The same structure can be observed
in the family unit, where the father is a kind of patriarch to whom others submit.
Russia, scoring 93, is a nation where power is very distant in society. This is underlined by the
fact that the largest country in the world is extremely centralized: 2/3 of all foreign investments go into
Moscow where also 80% of all financial potential is concentrated. The huge discrepancy between the
less and the more powerful people leads to a great importance of status symbols. Behaviour has to
reflect and represent the status roles in all areas of business interactions: be it visits, negotiations or
cooperation; the approach should be top-down and provide clear mandates for any task.
 In different power distance cultures the following may be observed:

High power distance cultures Low power distance cultures

Those in authority openly demonstrate their Superiors treat subordinates with respect and do
rank. not pull rank.

Subordinates are not given important work and Subordinates are entrusted with important
expect clear guidance from above. assignments.

Subordinates are expected to take the blame for Blame is either shared or very often accepted by
things going wrong. the superior due to it being their responsibility to
manage.

The relationship between boss and subordinate Managers may often socialise with subordinates.
is rarely close/personal.

Politics is prone to totalitarianism. Liberal democracies are the norm.

Class divisions within society are accepted. Societies lean more towards egalitarianism.
egalitarianism: 1)  a belief in human equality es pecially with respect to
social, political, and economic affairs;  2) a social philosophy advocating the
removal of inequalities among people
to pu ll rank : to use the power that your position gives you over someone in order to make
them do what you want: He doesn't have the authority to pull rank on me.

Intercultural Business Communication Tips

If you are working with or going to a country with a higher PDI than yours then:
- give clear and explicit directions to those working with you. Deadlines should be highlighted and
stressed.
- do not expect subordinates to take initiative.
- be more authoritarian in your management style. Relationships with staff may be more distant than
you are used to.
- show respect and deference to those higher up the ladder. This is usually reflected through language,
behaviour and protocol.
- expect to encounter more bureaucracy in organizations and government agencies.

If you are working with or going to a country with a lower PDI than yours then:
- don't expect to be treated with the usual respect or deference you may be used to.
- people will want to get to know you in an informal manner with little protocol or etiquette.
- be more inclusive in your management or leadership style as being directive will be poorly
interpreted.
- involve others in decision making.
- do not base judgements of people on appearance, demeanor, privileges or status symbols.
(www.kwintessential.co.uk)
Lecture 2
Democratic and Hierarchical Organizations

Democratic Organization
In a democratic organization every individual communicates with every one else to provide
information that needs to be shared with others. Once this information is shared, all members join in a
making a decision about what to do in response to this data. The decision is taken by consensus and the
participants feel a part of the decision creating a sense of ownership and commitment to the decision.
Some of the key characteristics of a democratic organization include:
Manager’s Job: Work (responsibility) is delegated with the manager coordinating her own
group's work with that of the group in which she is a subordinate. A key responsibility of the manager
is to clear any difficulty or resolve any issue that is hampering the progress of the work performed by
her staff. In such organizations depending on the manager and the management, the work is usually
self-motivating and is voluntarily performed without any fear of punishment.
Decision making: All employees regardless of their level are encouraged to provide input and
be a part of the decision making process.
Management approach: Management believes that individuals are driven by a desire to excel
and are usually self-motivated with a lot of pride in their work. They also believe that people learn not
only to accept, but to seek greater responsibility. Management believes that every individual needs
opportunities to achieve their potential and takes it upon themselves to train and grow their employees
professionally.
Motivation: Management creates motivation by offering reward for exceeding their goals.

Hierarchical Organization
In a completely hierarchical organization, the individuals are organized into a tree structure in
which new information is reported by subordinates to their bosses and new directives flow downward
in the reverse direction. This not only results in inefficiencies with regards to the time spent in
exchanging information to and fro, it also makes the decision process less transparent to the affected
individuals.
Some of the key characteristics of a hierarchical organization are:
Manager's Job: Managers do as they are told and act more like a conduit for transmitting
orders between the senior management and he line staff.
Decision Making: Decisions are made at the top of the organization with little to no input from
the line staff. The decision process is more like in a military type of organization with a 'line and staff'
and 'chain of command'.
Management approach: Management assumes that that people hate work, have to be forced to
do it, and need to be constantly monitored for them to be productive and achieve company's objectives.
Motivation: Management motivates their employees by creating fear.

Case Study
A large European processing company wanted to improve its competitiveness and optimize
production. Apart from technical and logistical changes, the company planned a total work force
reduction of approximately 20%. These changes were to be implemented in the two divisions – dairy
processing (democratic organizational structure) and frozen food processing (hierarchical
organizational structure) simultaneously with a 20% reduction in manpower in both divisions.
The company had been well insulated from changes in the external environment and except
minor technical changes the company had not changed much in the past two decades. Thus, there was
a significant potential in an organizational change to improve the company’s ability to handle existing
and new technology and improve its competitiveness.
While the dairy processing division wanted to run the change process with “open doors” and
encouraged the employees to participate as much as possible the frozen food processing division
conducted change related meetings behind closed doors and did not communicate with the employees
till the day before the change was to be implemented. This created widespread confusion amidst the
employees resulting in spreading of false information and rumors. On the other hand, the employees in
the dairy processing division were excited and motivated to make the change process extremely
smooth and successful as they felt a “part” of the process.
Before the project began, a bench-marking project came up with some possible goals
supplementing the company’s strategic effort to fulfill stakeholders’ demand for profit and return on
investment.
The management of the frozen food processing division recognized the size and complexity of
the change project, and although they formally expressed the goal of total restructuring, their actions
still showed and maintained the previous mode of action. On the other hand the management of the
dairy processing division viewed the process as something new and took extra measures to train
employees.
The senior management of the dairy processing division undertook an interesting activity that
involved the employees and the managers. They introduced a poster workshop wherein the participants
were encouraged to chart the current process in a poster and brainstorm ideas on the pros and cons of
different steps in the current process. When making a poster the participants also could tell what was
good and what was problematic with a specific task. In the beginning, the posters were fairly basic and
stimulated some interesting ideas. A key observation was the energy, commitment and the working
relationship between the employees and the managers. The employees seemed to own the change
process and reacted positively to comments and suggestions proposed by the managers. There seemed
to be complete trust amongst the employees with no concerns whatsoever of the potential layoffs as
every one wanted to change the process for “their own” betterment.
On the other hand, the frozen food processing division was fraught with distrust and frustration
and to make matters worse there were many rumors circulating among the employees. There were
frequent breakouts in which the employees “grouped” together and much time and energy was spent
speculating about the next management action and trying to figure out the management agenda rather
than being a part of the change process. Unfortunately, the discussions were highly influenced by
uncertainties and frustrations connected to the change situation with little to none input to the process.
After four weeks of implementation of the change process, a status check was made in the two
divisions. In the dairy processing division it was found that the process had been 45% successfully
implemented and was on track to completion. There were come areas where the division was
struggling to implement the process as there were opposing views on changing an existing quality
control process. Of the 8 people entrusted with the task of reorganizing the quality control process,
four were not in favor of changing the process and the group had come to a gridlock. This is a classic
problem in democratic organizations where a lot of time and resources can be wasted if there is a
contention on the modus operandi. In the absence of an executive decision making authority, the
discussion gets stalled and if not managed effectively, the individuals can get personal resulting in
antagonistic feelings.
On the other hand, the frozen food processing division had made around 40% progress and was
also on track with its implementation schedule. However, the morale and spirit of the employees was
very low with the senior management making decisions without involving the affected employees. In
one instance, an employee disagreed with the management decision and tried to explain her reason but
she was not listened to and was warned by her colleagues to not ruffle the management. It was noticed
that with the frozen food processing division, limited understanding of the technological system was a
barrier to rethink new organizational benefits. The employees had no visions about their future work
situation and the overall objective of the change process and as such rejected discussing changes that
could have resulted in possible working environmental improvements. The employees needed a much
deeper discussion of possibilities and concerns regarding the actual change process. They also needed
a perspective around which they could assess their own possibilities and future work. They also needed
somebody they could run their ideas and concerns by and to facilitate a constructive discussion to
make it proactive instead of reactive.
The dairy processing division also faced a similar problem associated with the limited
understanding of the technological system. However, through constant dialogue with the management
team, they were able to resolve much of the problems.
At the end, another study was conducted to assess the progress of the implementation of the
change in the two divisions. The results were in sharp contrast to the ones seen in the earlier study. The
change had been successfully implemented at the dairy processing division with two of the four
processes improving productivity by more than 16%. On the other hand, frozen foods division could
complete only 85% of the changes and had extremely low employee morale with three employees
quitting in the process. There was minimal improvement in productivity with one system reverted back
to the original process three weeks after the new process was implemented.

Lecture 3

Cross-Cultural Leadership

It is almost cliché to say that there has been an explosion in the amount of research on
leadership in a cross-cultural context. Dikson et al. have published a great survey on leadership in a
cross-cultural context focusing on the Culture Dimensions theory of Hofstede. Having studied the
existing literature, they analyze the results of a great multinational research called GLOBE (the Global
Leadership and Organizational Behavior Effectiveness research project), done over 62 countries. The
primary definitional question cross-cultural leadership researchers wrestle with is, quite simply,
‘‘What is a ‘crosscultural leader?’’ The term ‘‘cross-cultural leadership research’’ is itself confusing,
because of its ambiguity. It can refer to the study of people from one culture, who find themselves in
leadership situations in other cultures (e.g., the expatriate manager). It can also refer to the comparison
of leadership research findings from one culture to those from a different culture. Graen et al. (1997)
have focused on the former definition, and have written about the type of person needed to conduct
cross-cultural research and to be a cross-cultural leader. Graen et al. argue that the people involved in
both of these endeavors need to be people who are not only open to the differences they encounter
when interacting with other cultures. They must also show respect for cultures very different from their
own, be able to overcome their own enculturation, and recognize what aspects of their personal values
systems are a result of their own cultural experience. In one such article, Graen and Hui (1999) argue
that the perceptions of what it means to be a global leader are changing. No longer will ‘‘geocentric
globetrotters’’ who are transferred from country to country to manage foreign operations be seen as the
exemplars of the global leader. Instead, ‘‘trans-cultural creative leaders’’ will be required. These are
people who can ‘‘learn to (1) transcend their childhood acculturation and respect very different
cultures; (2) build crosscultural partnerships of mutual trust, respect, and obligation; (3) engage in
cross-cultural creative problem solving to resolve conflicts; and (4) help construct third cultures in
various operations.’’
Trying to define a “universal” leader, Lonner identified several types of ‘‘universal’’
relationships, including:
1. The ‘simple universal’, which is a phenomenon that is constant throughout the world. Specifically, a
simple universal occurs when means do not vary across cultures;
2. The ‘variform universal’, which refers to cases in which a general statement or principle holds
across cultures but the enactment of this principle differs across cultures (i.e., culture moderates the
relationship); and
3. The ‘functional universal’, which occurs when the within-group relationship between two variables
is the same across cultures. In other words, within- country correlations between variables are
nonvariant across cultures.
4. Bass (1997) then introduced two other relevant conceptualizations of universality, including:
5. The ‘variform functional universal’, which occurs when the relationship between two variables is
always found, but the relationship’s magnitude changes across cultures; and
6. The ‘systematic behavioral universal’, which is a principle or theory that explains if–then outcomes
across cultures and organizations. Systematic behavioral universals involve theories that claim either a
sequence of behavior is invariant over cultures, or the structure or organization of a behavior or
behavioral cluster is constant over cultures
In the Dickson paper several cases have been mentioned to show that a positive leadership
attribute in one culture is not necessarily positive in other cultures: In the United States, contingent
punishment had positive effects but undesirable effects in the other countries. Directive leadership
behaviors had positive effects in Taiwan and Mexico, while participative leadership behaviors had
positive effects in the United States and South Korea. Thus, simple universality was again only slightly
supported. Several factors have led to a decline in the volume of research focused on identifying
simple universals. In investigating interpersonal acumen factor, another example is that leaders in
Colombia rated cunning as contributing to outstanding leadership, whereas in Switzerland cunning, or
being sly and deceitful, is rated as inhibiting outstanding leadership.
One way to approach the study of culture is through the identification and measurement of
dimensions of culture, and several different typologies of societal cultural value orientations or culture
dimensions have been developed. Regarding to five dimensional model of Hofstede (Power Distance,
Uncertainty Avoidance, Collectivism-Individualism, MasculinityFemininity, Short-term vs. long-term
Orientation), universal rules are derived on the relation of culture and leadership (Dickson et al.,
2003). Hofstede released the measurements for each of his five indicators in several countries in his
website.
Due to his research, autocratic leadership is more acceptable and effective in high Power
Distance societies. Power distance also plays a role in employees’ willingness to accept supervisory
direction, and on their emphasis on gaining support from those in positions of authority. Bu, Craig, and
Peng (2001) compared the willingness to accept supervisory direction among Chinese, Taiwanese and
U.S. employees through a vignette study. Overall, Chinese employees had the strongest tendency to
accept direction and the US employees the least. Chinese employees were most sensitive to the
consistency between the supervisory direction and company policies, and were less responsive to their
own assessment of the merit of the directions they were given. These findings are in line with results
from the more elaborate research on event management.
Discussing on Uncertainty Avoidance factor, Dikson claims that in societies high on UA,
career stability, formal rules and the development of expertise tend to be valued, whereas in low UA
cultures, more flexibility in roles and jobs, an emphasis on general rather than specialized skills and
more job mobility is more typical.
Collectivism positively affects the role of participative leadership and supports transformational
leaders. Hofstede (2001) holds that masculine and feminine cultures create different leader hero types.
The heroic manager in masculine cultures is decisive, assertive, and aggressive. In feminine cultures,
the ‘‘hero’’ is less visible, seeks consensus, and is intuitive and cooperative rather than tough and
decisive. Overall Hofstede explains how societal culture affects the organizational culture in which
leadership plays a significant role.
Conclusion
There are nine key qualities people seek in a successful leader:
- Passion
- Decisiveness
- Conviction
- Integrity
- Adaptability
- Emotional Toughness
- Emotional Resonance
- Self-Knowledge
- Humility
The emotionalism that goes with passion is more common in America than elsewhere.
Europeans see it as a sort of business evangelicalism and are very suspicious of it. Decisiveness is
common to effective executives in all countries: In this regard European and Japanese chief executives
are the most consensus-oriented, and Chinese and American top executives are more likely to make
decisions personally and with their own accountability. Conviction is common to all. Integrity is a
complex characteristic very much determined by national cultures. What is honest in one society is not
in another, and vice versa.
Adaptability is a pronounced characteristic of American leadership generally. It is less common
and less valued in Asia and Europe. It will be needed everywhere soon enough. Emotional toughness is
common to all top executives; Americans spend more time trying not to show it. Emotional resonance,
the ability to grasp what motivates others and appeal effectively to it, is most important in the United
States and Europe at this point in time. It will become more important in Asia as living standards
improve, knowledge workers become more important, professional management gets greater demand,
and CEOs have to compete for managerial talent. Selfknowledge is important in avoiding the sort of
over-reach so common in America; it is less common a virtue in America than in Asia, and is strength
of the Asian executive. Humility is a very uncommon trait in the American CEO. It is sometimes
found in Asia. It is often a trait of the most effective leaders, as it was in the best-respected of all
American political leaders, Abraham Lincoln.
Leadership could be defined as influencing teamwork with the aim of securing certain goals.
Managers endeavor to carry out leadership tasks in a way to affect the employees whom they are in
charge of and to orient their endeavors in the direction of predefined organizational goals. These
managers should motivate their employees in such a way that they voluntarily try to accomplish
organizational goals.
With regard to what was mentioned, leadership styles and management methods have abundant
variety and diversity and are influenced by cultural specifications dominant in the environment.
Certainly due to cultural differences, one cannot talk about special leadership style for the managers of
transnational organizations to behave like it. Such style which has been applied in all cultures and
gives the same answer is not found and it is necessary for leadership behavior to conform to native and
local parameters.
In different researches on test of theories of motivation in international level, this issue is
confirmed and one cannot generalize a theory to the entire world and in many countries these theories
are not applicable. For example, some researchers from different countries in the world have
introduced the theory of hierarchy of Abraham Maslow’s requirements. In some countries it has been
confirmed and in some other countries, it is rejected. The requirements which have been introduced in
this hierarchy are available everywhere but their precedence and subsequences are different in the five
orders considered by Maslow.
Regarding to numerous differences in understandings, needs and demands of the staff in
international dimensions which are the origins of styles, methods and many diverse achievements in
the field of management and leadership in the world’s countries, difficulty and importance of effort
taken by the managers of transnational organizations becomes undeniable in finding suitable ways to
create motivation in the staff. In this regard, art of transnational managers is that they show required
flexibility to cultural differences, know the staff well, are aware of their needs and respect for the
differences, recognize the motivations of the individuals and select a suitable leadership style to an
appropriate level and take action to realize predefined goals.
According to the presented research, the relation between cultures and leadership styles is
confirmed, therefore the managers are recommended to pay attention to cultural differences in the
organizations in order to have more effective and efficient leadership, and to recognize cultures
existing in their work scope correctly to provide a suitable style of leadership.

Leadership Lessons From Nelson Mandela

1) Courage is not the absence of fear - it’s inspiring others to move beyond it.
"Mandela was often afraid during his time underground, during the Rivonia trial that led to his
imprisonment, during his time on Robben Island. ‘Of course I was afraid!’ he would tell me later. It
would have been irrational, he suggested, not to be. ‘I can’t pretend that I’m brave and that I can beat
the whole world.’ But as a leader, you cannot let people know. ‘You must put up a front.’ And that’s
precisely what he learned to do: pretend and, through the act of appearing fearless, inspire others. It
was a pantomime Mandela perfected on Robben Island, where there was much to fear. Prisoners who
were with him said watching Mandela walk across the courtyard, upright and proud, was enough to
keep them going for days. He knew that he was a model for others, and that gave him the strength to
triumph over his own fear."
2) Lead from the front - but don’t leave your base behind.
 "For Mandela, refusing to negotiate was about tactics, not principles. Throughout his life, he
has always made that distinction. His unwavering principle - the overthrow of apartheid and the
achievement of one man, one vote - was immutable, but almost anything that helped him get to that
goal he regarded as a tactic. He is the most pragmatic of idealists."
3) Lead from the back - and let others believe they are in front.
"Mandela loved to reminisce about his boyhood and his lazy afternoons herding cattle. ‘You
know," he would say, "you can only lead them from behind.’ He would then raise his eyebrows to
make sure I got the analogy. As a boy, Mandela was greatly influenced by Jongintaba, the tribal king
who raised him. When Jongintaba had meetings of his court, the men gathered in a circle, and only
after all had spoken did the king begin to speak. The chief’s job, Mandela said, was not to tell people
what to do but to form a consensus. "Don’t enter the debate too early," he used to say. … The trick of
leadership is allowing yourself to be led too. 'It is wise,' he said, 'to persuade people to do things and
make them think it was their own idea.”
4) Know your enemy - and learn about his favorite sport.
"As far back as the 1960s, mandela began studying Afrikaans, the language of the white South
Africans who created apartheid. His comrades in the ANC teased him about it, but he wanted to
understand the Afrikaner’s worldview; he knew that one day he would be fighting them or negotiating
with them, and either way, his destiny was tied to theirs."
5) Keep your friends close - and your rivals even closer.
"Many of the guests mandela invited to the house he built in Qunu were people whom, he
intimated to me, he did not wholly trust. He had them to dinner; he called to consult with them; he
flattered them and gave them gifts. Mandela is a man of invincible charm - and he has often used that
charm to even greater effect on his rivals than on his allies. On Robben Island, Mandela would always
include in his brain trust men he neither liked nor relied on.… Mandela believed that embracing his
rivals was a way of controlling them: they were more dangerous on their own than within his circle of
influence. He cherished loyalty, but he was never obsessed by it. After all, he used to say, ‘people act
in their own interest.’ It was simply a fact of human nature, not a flaw or a defect."
6) Appearances matter - and remember to smile.
"When Mandela was running for the presidency in 1994, he knew that symbols mattered as
much as substance. He was never a great public speaker, and people often tuned out what he was
saying after the first few minutes. But it was the iconography that people understood. When he was on
a platform, he would always do the toyi-toyi, the township dance that was an emblem of the struggle.
But more important was that dazzling, beatific, all-inclusive smile."

7) Nothing is black or white.

"Life is never either/or. Decisions are complex, and there are always competing factors. To
look for simple explanations is the bias of the human brain, but it doesn’t correspond to reality.
Nothing is ever as straightforward as it appears. Mandela is comfortable with contradiction. As a
politician, he was a pragmatist who saw the world as infinitely nuanced. Much of this, I believe, came
from living as a black man under an apartheid system that offered a daily regimen of excruciating and
debilitating moral choices: Do I defer to the white boss to get the job I want and avoid a punishment?
Do I carry my pass? Mandela’s calculus was always, What is the end that I seek, and what is the most
practical way to get there?"
8) Quitting is leading too.
"Knowing how to abandon a failed idea, task or relationship is often the most difficult kind of
decision a leader has to make. In many ways, Mandela’s greatest legacy as President of South Africa is
the way he chose to leave it. When he was elected in 1994, Mandela probably could have pressed to be
President for life - and there were many who felt that in return for his years in prison, that was the least
South Africa could do.…. ‘His job was to set the course,’ says Ramaphosa, ‘not to steer the ship.’ He
knows that leaders lead as much by what they choose not to do as what they do."
(www.theleadershiphub.com)