Culturally Provoked Issues. The Influence of Cultural Differences on the Effectiveness of GLOBE’s Leadership Styles in China and Germany

Table of Content

List of Abbreviations

List of Tables

1. Introduction

2. The Scope of Cultural Dimensions
2.1 The Development of Cultural Dimensions since the 1990s
2.2 The Nine Cultural Dimensions of the GLOBE Project

3. Leadership and GLOBE’s Culturally Endorsed Leadership Theory
3.1 Definition of Leadership in an Organizational and Intercultural Context
3.2 GLOBE’s Six Leadership Dimensions

4. The Relationship Between Culture and Leadership: Comparing and Contrasting China and Germany
4.1 Application of GLOBE on China
4.2 Application of GLOBE on Germany

5. Issues of Cross-Cultural Leadership in China and Germany and their Impact on Individuals, Teams, and Organizational Performance
5.1 Participative Leadership
5.2 Humane-Oriented Leadership
5.3 Team-Oriented Leadership

6. Conclusion and Implications for Future Research

References

Appendix

List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

List of Tables

Table 1: The Nine Cultural Dimensions of GLOBE

Table 2: GLOBE's Leadership Styles and Components

Table 4: GLOBE in China

Table 5: GLOBE in Germany (West)

1. Introduction

As “[t]he leader can either make or break a business” (Richardson et al., 2014, p. 263), leaders must understand the differences of cultures and learn how to successfully adapt and chose adequate leadership styles since ideas of leadership differ across cultures. It is getting even more critical due to the boosted global integration and the evolving challenges of international corporation and collaboration. (Abyad, 2011; Grow & Armstrong, 2017; House et al., 2014; Koopman et al., 1999) If international businesses ignore culturally specific needs, corporations fail because of intercultural misinterpretations (Stahl & Javidan, 2009). The challenges of international collaboration can be solved by addressing culturally necessary actions and managing cross-cultural relationships with suitable sets of behavioral and emotional approaches (Gehrke & Claes, 2017).

Since China is now one of the most influential economic players, on the one hand, Western leaders must learn how to address their special leadership requirements, and on the other hand, Chinese leaders must learn how to adapt their leadership styles to Western societies, such as Germany, as Chinese companies take over more and more German firms. (Der Informationsdienst des Instituts der deutschen Wirtschaften, 2020; King & Wei, 2014; Lin et al., 2018; Richardson et al., 2014; Shalhoop & Sanger, 2012).

Because of that, this paper focuses on the scope of leadership in China and Germany. As “GLOBE set out to explore the fascinating and complex effects of culture on leadership and organizational effectiveness” (Dorfman et al., 2012), this intensive investigation will be used in this paper to research Chinese and German¹ leadership preferences and challenges that may occur when working cross-culturally in one of the two countries. Therefore, this paper will firstly focus on different approaches and models that compare cultures. The Global Leadership and Organizational Behavior Effectiveness (GLOBE) Project and its specific cultural dimensions will be introduced afterward. Secondly, leadership will be defined and viewed from the perspective of GLOBE. Thirdly, the cultural dimensions and leadership styles of GLOBE, will be applied to China and Germany. Possible issues when working in these countries, as well as proposals to prevent these obstacles, will be discussed lastly.

2. The Scope of Cultural Dimensions

To categorize and compare cultures, sociologists and anthropologists developed different cultural models. Different cultural dimensions will be explained in this chapter, to understand Chinese and German culture.

2.1 The Development of Cultural Dimensions since the 1990s

Culture is a construct that differs widely across countries and societies. It is based on specific “beliefs, values and behaviours [sic!]” (Littrell, 2002, p. 15), which determine the mindset and attitudes of individuals and groups. House et al. define culture as "shared motives, values, beliefs, identities, and interpretations of meanings of significant events that result from common experiences of members of collectives that are transmitted across generations." (2014, p. 11) Numerous studies have been conducted to investigate cultural differences across the globe to understand culturally induced behavior and how to address these dissimilarities (Hofstede, 2011).

The concept of cultural dimensions is based on the fundamental idea, that there are universal categories or themes that all cultures of the world must deal with and develop answers to. Based on this thesis, the US American sociologists Parsons and Shils (1951) and the anthropologists Kluckhohn and Strodtbeck (1961) developed cultural dimensions for the first time to make cultures comparable. (Thomas & Utler, 2013) Later, other scientists followed, such as Mary Douglas (1973) as well as Inkeles and Levinson's (1969), who set up similar cultural models (Hofstede, 2011).

One of the primary theories to assess national cultures and their differences was published in the 1990s by Geert Hofstede, a cultural scientist (Dickson et al., 2003). He suggested that specific cultural behaviors exist that are based on fundamental cultural values and vary across countries and cultures (Hofstede, 1998b; Schwartz, 1999). These “values are abstract ideals about what a society believes to be good, right and desirable.” (Littrell, 2002, p. 14) In his early studies, he investigated four different cultural dimensions by surveying IBM’s employees from various subsidiaries all over the world (Hofstede, 1998a, 2011).

Power Distance (PD) measures the degree of subordinate’s tolerance of unequally distributed power. Hence this dimension determines the egalitarianism between followers and leaders and the willingness to accept the imbalance. On the one hand, in a large PD culture, hierarchies are found at the workplace, and autocratic leaders obtain unquestionable respect. Employees do not participate in decision making and follow duties delegated by their superior. On the other hand, small PD cultures accept power only if it is genuine and justifiable. (Hofstede, 2011)

Uncertainty Avoidance (UA) evaluates the degree to which societies can deal with obscurities and new situations without priorly established rules and processes. Strong UA societies are afraid of unknown circumstances and need clear guidance. On the contrary, weak UA describes the ability to handle chaotic situations and the openness towards innovations. (Hofstede, 2011)

Individualism and Collectivism measure to what extent people are part of a firmly bound group setting. In Collectivism, relationships between one another are essential, which is why the focus is on the group’s achievements and beliefs. In individualistic societies, however, the person’s interests are at the center of all efforts, personal opinions are appreciated and requested. (Hofstede, 2011)

Masculinity and Femininity assess the allocation of values and rights between genders. Later, a fifth dimension, Long-Term versus Short-Term Orientation, was added . Long-Term Orientation emphasizes the alignment towards the future when the present is used to prepare for future developments. In Short-Term Orientation, the present life is more important, as well as personal relationships, customs, and pride. The sixth dimension, Indulgence and Restrains, expresses the degree of loving life by following or prohibiting human desires. Indulgence sets little norms and regulations, whereas restraining cultures try to limit the satisfaction of individual desires by establishing social rules. (Hofstede, 2011)

Hofstede’s research results and cultural dimensions are extensively used in today’s studies on intercultural diversities. However, other academics criticize his approach because of high data homogeneity and the static investigation without considering dynamic changes in cultural values over time. (Dickson et al., 2003; Thomas & Utler, 2013)

Nevertheless, Hofstede’s cultural dimensions formed the base for further research, such as Trompenaars and Hampden-Turner’s Seven Dimensions of Culture Model, which was developed in 1993 to emphasize how culture affects management and leadership practices in organizations (Trompenaars, 1993). Furthermore, the Culture Model of Schwartz receives much recognition among sociologists and anthropologists because it tries to overcome critical aspects of Hofstede’s methodology (Thomas & Utler, 2013). Like Hofstede, Schwartz also focuses on the national culture; however, with increased complexity. (Schwartz, 1999; Thomas & Utler, 2013)

As most reviewed cultural dimensions assess national cultures only, the GLOBE project will be introduced in the following to present cultural dimensions reflecting leadership behavior.

2.2 The Nine Cultural Dimensions of the GLOBE Project

The GLOBE project is the most significant study on culture and leadership. More than “150 researchers from 61 countries from all major regions of the world participate in it, probably making it the most extensive investigation of cross-cultural aspects of leadership to date.” (Dickson et al., 2003, p. 751) It was first set up in 1991, focusing mainly on leadership and has advanced ever since (Hofstede, 2011). Today, 353 researchers investigate managers in 152 countries, which implies that 95 percent of the world’s population is indirectly being studied (GLOBE, 2020).

GLOBE’s objective was primarily to overcome critical aspects of prior cultural models by setting up a new methodology and study design (Dickson et al., 2003). Nowadays, the main aims of GLOBE are to differentiate cultures, to identify consistent patterns, and to offer insights facilitating the adoption of leadership styles to individual cultural clusters (Javidan et al., 2006; Koopman et al., 1999). Overall, GLOBE tries to understand how culture influences the performance of an organization (House et al., 2014).

Since Hofstede’s cultural model is nevertheless highly relevant in cross-cultural science, the GLOBE project is fundamentally based on the dimensions of Hofstede, but changes were made. Furthermore, GLOBE was influenced by Kluckhohn and Strodtbeck's (1961) Values Orientation Theory, Triandis’ (1986) research on individualism and collectivism, and McClelland’s (1961) Three Need Model (Khurana & Joshi, 2017).

After collecting and analyzing data, GLOBE generated nine different cultural dimensions which not only asses values and practices “as they are” (Dickson et al., 2003, p. 752) but also how they “should be” (Dickson et al., 2003, p. 752). Table 1 shows the nine cultural dimensions of GLOBE whereby deviating dimensions of Hofstede are marked in bold²:

Table 1: The Nine Cultural Dimensions of GLOBE

Source: (House et al., 2014, pp. 12–13)

Abbildung in dieser Leseprobe nicht enthalten

As this paper focuses on the impact of culture on leadership, the following chapter will introduce GLOBE’s findings regarding desired leadership.

3. Leadership and GLOBE’s Culturally Endorsed Leadership Theory

Since the expectations of leadership differ across countries, it is essential to know about cultural values and how to address them. This chapter will first define and explain the importance of intercultural competencies in leadership, and afterward introduce GLOBE’s culturally endorsed leadership theory.

3.1 Definition of Leadership in an Organizational and Intercultural Context

There is no universally consistent definition of leadership, as the perceptions and associations vary across cultures . Nevertheless, leadership is perceived as “an influence process that assists groups of individuals towards some common goal attainment” . More specifically, it is, according to GLOBE, “the ability of an individual to influence, motivate, and enable others to contribute towards the effectiveness and success of the organizations in which they are members” To do so, building trust and communicating is essential as well as “decision-making” .

In the last few decades, studies on leadership became more and more critical among academic researchers . Overall, great leadership is considered to compromise inspiration, vision, and a common goal . However, perceived leadership quality depends on the followers’ values, and needs as expectations towards a leader differ . Therefore, leaders must have all necessary leadership skills to adjust their behavior towards culturally accepted and expected values to manage and influence employees successfully. For instance, a visionary mindset is universally needed to motivate followers, as well as charisma, veracity, and resoluteness. However, specific characteristics, such as risk affinity, self-restraint, selflessness, and empathy, are not universally desired . That is why it is crucial to comprehend the expectations of followers on leaders and adapt to them in cross-cultural leadership . Hence, a fundamental requirement is to obtain knowledge about different leadership styles and behaviors, which are preferred or rejected in other cultures which must then be used according to the cultural values and perceptions about effective leadership .

3.2 GLOBE’s Six Leadership Dimensions

As the cultural dimension, explained in chapter 2, mainly focus on explaining national cultures, more research was conducted to assess managers’ behavioral patterns. GLOBE undertook further research to investigate the impact of culture on leadership. The study with a sample of a few thousand chief executive officers across the world was meant to measure and compare desired leadership attributes and behaviors. Those were strongly influenced by the cultural dimensions and followers’ expectations of leaders. The researchers generated a so-called, Culturally Endorsed Implicit Leadership Theory, that revealed six global leadership dimensions after analyzing and extracting all leadership attributes. (Cheng et al., 2004; Dorfman et al., 2012; House et al., 2014) Table 2 summarizes the GLOBE’s six leadership dimensions with their behavioral components:

Table 2: GLOBE's Leadership Styles and Components

Source: (House et al., 2014)

Abbildung in dieser Leseprobe nicht enthalten

The data analysis revealed that C harismatic/Value-Based Leadership (C/VBL) is favored as it drives motivation, inspiration, and eventually performance. Furthermore, it includes a visionary mindset with selfless, honest, and determined intentions (Dorfman et al., 2012). Leaders know precisely how the organization should be like in a few years and communicate this goal continuously. Therefore, goals are set high, and followers are motivated to work hard to reach a common goal. To reach this goal, leaders set aside their interests. (Dorfman et al., 2012; House et al., 2014)

Team-Oriented Leadership (TOL) focuses on organizational success through effective teams and a shared objective (Dorfman et al., 2012). The leader makes sure that collaboration works well and distributes tasks to team members according to their strengths and weaknesses. Furthermore, targets are set, and the leader controls the outcome. The leader is part of the team and strengthens relationships among members. TOL is successful because of a leader’s managerial and social competences. (Dorfman et al., 2012; House et al., 2014)

Participation or abstention in leadership is summarized in Participative Leadership (PL). The degree of collaboration of subordinates in business decisions rates the allocation towards participation or autocracy. On the one hand, it measures the employees’ ability to take part in the decision by giving advice, ideas, or expressing concerns. On the other hand, it stresses the likelihood of commanding employees and rejecting critical feedback. (Dorfman et al., 2012; House et al., 2014) PL is considered to drive performance (Javidan et al., 2006).

Humane-Orientated Leadership (HOL) describes the degree of putting the followers’ interests and concerns in the center of all actions. The leader is empathic and authentically cares for employees. Problems are solved with the help of the leader to ensure employees’ satisfaction. (Dorfman et al., 2012; House et al., 2014)

Selfishness and addressing personal needs only are described by Autonomous Leadership (AL). Performance is perceived better when working alone, and leaders disclaim ideas, experiences, or skills of subordinates. (Dorfman et al., 2012; House et al., 2014)

Self-Protective Leadership (SPL) emphasizes the self-centered and status focusing behavior of a leader. The leader likes to be superior and retains information to create disadvantages for subordinates or colleges. However, as status is important, the leader does not address problems directly and avoids embarrassing people as the relationship shall not be hurt. Furthermore, rules are always followed to keep the outer appearance. (Dorfman et al., 2012; House et al., 2014)

As the GLOBE dimensions emphasize, societies have different preferences for leadership; hence, the success of applied leadership styles varies across cultures (Morschett et al., 2015). Because cultural variations can cause problems when communicating, motivating, coordinating, and working in teams, there must be a match between leadership styles and culturally demanded behaviors which will be demonstrated in the following (Den Hartog et al., 1999; Morschett et al., 2015).

4. The Relationship Between Culture and Leadership: Comparing and Contrasting China and Germany

Although some academics deny the influence of culture on desired leadership behavior, research has shown, that leadership styles are induced by the cultural orientations of a country based on culturally provoked values and beliefs (according to Appendix 1) Therefore, the following sections will address the specific characteristics of culture in China and Germany which induce the preferred leadership styles.

4.1 Application of GLOBE on China

Overall, traditions, such as Confucianism, influence China’s values and beliefs which is why leaders must educate, support, and develop followers (King & Wei, 2014; Lin et al., 2018). Additionally, through its long history full of dynasties and dictatorships, China has developed some unique values and behaviors, such as the concept of guanxi which, in a simplistic perspective, describes the relationship between individuals to receive social, economic, or political benefits from one another (X.-a. Zhang, 2017). Guanxi affects many parts of life, which is why leadership is influenced by this idea too (House et al., 2014).

Regarding GLOBE, the findings of the GLOBE studies in 2004 and 2014 revealed the following cultural orientation and preferences of leadership styles in China (whereas 1 is the lowest orientation score and 7 the highest):

Table 4: GLOBE in China

Source: Own illustration based on (House et al., 2014; Javidan et al., 2004)

Abbildung in dieser Leseprobe nicht enthalten

As table 4 suggests, the Chinese firstly desire TOL as they have a strong emphasis on Collectivism (Dickson et al., 2003). They understand its opportunities, and leaders must focus on setting up collaborative teams and successfully managing administrative tasks (House et al., 2014). Furthermore, In-group Collectivism shows that harmony in relationships is crucial, which is why conflicts are not directly addressed, and the leader’s task is to ensure the positive atmosphere within the team (Javidan et al., 2006). Moreover, “Chinese organizations are more likely to share results and benefits in the collective” (Kleijn et al., 2018, p. 53) rather than cherishing individual achievements. However, young Chinese people, who are about to enter the workforce and become followers or leaders themselves, focus on their individual development and reject high levels of Collectivism (Z.-X. Zhang et al., 2014).

Chinese require C/VBL almost equally and specify the need for integrity and inspiration . Transformational leadership, which is sometimes synonymous with C/VBL, works well in China even though it is not commonly used .

HOL ranks third, which is why people’ interests should be the core of all decision-making in China (King & Wei, 2014). Therefore, leaders should be more concerned about the followers’ wellbeing (Chen & Lee, 2008). Managers shall additionally care about employees’ families, and relatives, thus, HOL strengthens effectiveness (House et al., 2014; Z.-X. Zhang et al., 2014).

PL is less accepted in China because of its high PD and their expectations for strict guidance (Fatehi & Choi, 2019). “PL consists of three important elements: authoritarianism, benevolence, and moral leadership” (Cheng et al., 2004, p. 91). Because of the large PD, followers need clear instructions to fulfill tasks and authority is accepted and desired (Den Hartog et al., 1999; Dickson et al., 2003). Moreover, “[t]he superior in a company is expected to lead morally by example, maintain authority and control, provide guidance, protection and care to the subordinate” (Kleijn et al., 2018, p. 53). Hence, employees obey instructions without scrutinizing, and paternalistic leadership is still effectively usable by organizational leaders (Cheng et al., 2004; Lin et al., 2018). However, Chinese citizens have been changing over the last few decades, which is why, authoritative behavior of a leader becomes less accepted, whereas kind and ethical leading becomes more effective (Cheng et al., 2004). Nevertheless, working internationally, Chinese managers often struggle in societies with lower PD because other cultures might not suppress dissatisfaction about leader’s decisions (Fatehi & Choi, 2019; San Lam & O’Higgins, 2013).

The second least desired leadership style is AL because independent working without defined instructions is stressful for Chinese employees, and it contradicts the Collectivistic Orientation.

Even though SPL ranks last, it is still an vital part of Chinese culture, as Chinese people are very concerned about their reputation (Shalhoop & Sanger, 2012). They approve, and expect status consciousness but dislike self-centrism; hence, it is not considered the key for effective leadership (Dorfman et al., 2012; House et al., 2014). The influence of PD leads to a higher significance of status consciousness, bureaucracy, and internal competition (Dorfman et al., 2012).

Overall, due to the opening of China into the global market and international cooperation and education, Western values, beliefs, attitudes, norms, and the preference are being adopted by younger generations, and thus, China’s culture is changing very fast (Chen & Lee, 2008; House et al., 2014; King & Wei, 2014; Solansky et al., 2017; Z.-X. Zhang et al., 2014)

4.2 Application of GLOBE on Germany

Many family-run businesses characterize the landscape of German businesses with comparably low hierarchical structures, and a strong emphasis on participation (Nagel, 2018). Therefore, this landscape influences desired leadership styles, and the GLOBE study of 2004 revealed the following:

Table 5: GLOBE in Germany (West)

Source: Own illustration based on (House et al., 2014; Javidan et al., 2004)

Abbildung in dieser Leseprobe nicht enthalten

Germany does cherish integrity and inspiration in C/VBL since Performance Orientation is an crucial aspect of German culture, and the two dimensions correlate as Appendix 1 shows . Furthermore, C/VBL or transformational leadership works well, as Germany has gender inequality, a weak orientation towards the interests of employees, and a strong orientation towards rules and processes to avoid unforeseen incidents in the future. Nevertheless, some cultural values contradict, for instance, because Germany is seeking individualism, which does not work well in C/VBL.³

[...]

¹ Side note by the author: From now on “Chinese” and “Germans” are not bound to nationalities but rather to individuals that share the same cultural orientations that are primarily found in China or Germany.

² It is essential to note that results reflect the desired characteristics of effective leadership instead of concrete and real behavioral patterns Dickson et al. (2003).

³ Side note by the author: Other sources contradict the high score of Power Distance. The reason why data from GLOBE 2004 and other sources differ might be because as of 2019 13,3 percent of German citizens are foreign, mainly from Turkey and Eastern Europe, and therefore have different expectations on leadership because of their distinct cultural values (House et al., 2014; Statistisches Bundesamt [Destatis], 2020).