International MBA

Contemporary Strategic Management in Global Contexts

Learning Objectives
◆ Identify and Analyse leadership theories
◆ Analyse the influence of an organisation’s culture on its strategy using the
cultural web
 Leadership (1)
Leadership
Lack a grand unifying theory, a tested leadership paradigm that identifies the source
code or essence of leaders and a definition of conditions that produce leadership.

Some working definitions of Leadership (Allio, 2013)

• The early simplistic paradigm (leadership is good management)
• The semantic description (leadership is the process of leading)
• The transactional definition (leadership is a social exchange between leaders and
followers)
• The situational notion (leadership is a phenomenon that precedes and facilitates
decisions and actions)
• The esthetic concept (leadership is an art or a craft)
Leadership (2)
The concept of leadership can be traced to the Anglo – Saxon lad or laedan which means a
path, a way, to lead or give a sense of direction.

On this basis, leadership can be said to imply “the one who shows others the way”

Leadership, therefore, can be defined comprehensively and comprehensibly as:

“an art or process by which a member of a group or organization persuades, inspires,

influences the attitudes, behaviour and actions of others and directs their activities so
that the group or organization members work willingly, cooperatively and
enthusiastically toward the accomplishment of set goals and a new and improved
position”.

Source: Peretomode (2012, pp-10)

Is Leadership and Management the same?
Management
Use of authority inherent in designated
formal rank to obtain compliance from
organizational members

Leadership
The ability to influence a
group toward the
achievement of goals
Leadership Vs Management
Activity Management Leadership
Creating an Planning and Budgeting Establishing direction
Establish Detailed steps and timelines for achieving Developing a vision of future, often the
Agenda needed results; allocating resources distant future, and strategies for producing
the changes needed to achieve the vision

Developing a Organising and staffing. Aligning people.

Staffing, plan requirements, delegating Communicating the direction by words and
human network responsibility and authority for carrying the plan deeds to all those whose cooperation may be
for achieving needed to influence the creation of teams
the agenda coalitions that understand the vision and
strategies and accept their validity
Executing plans Controlling and problem solving Motivating and inspiring
Monitoring results vs plans Energising people to overcome barriers,
political or bureaucratic to change by
satisfying very basic, but often unfulfilled,
human needs

Outcomes Produces a degree of predictability and order and Produces change, often to a dramatic degree,
has the potential to consistently produce major and has the potential produce extremely
results expected by various stakeholders useful change.

Source: Griffin and Pustay (2010)

Leadership styles

Based on authority

Leadership styles
retained

Based on task vs
people emphasis

Likert’s four styles

Entrepreneurship
leadership style

Based on assumptions
about people
The “Big Five” Personality Traits
Leadership in International Business Context

“Leadership is the use of no coercive influence to shape the goals

of an organisation, to motivate behaviour toward reaching the goal,
and to help determine organisational culture”
Source: Griffin and Pustay (2010, pp. 457-458)

In International context – increased complexity due in part to more

diverse workforces.

Factors more likely to affect appropriate leader behaviour –

Individual differences amongst subordinates
Characteristics of the group, the organisation, and the leader; and
subordinates’ desire to participate.
Basic Approaches to Leadership
◆ Trait Theory of Leadership - During the time period of 1904-1947,
researchers Smith and Kruger (1933) and Jenkins (1947) contributed
the most significant material on trait theory. Smith and Kruger surveyed
the literature on leadership while Jenkins reviewed leadership
methodology as applied to military situations. Ralph M. Stogdill compiled
their findings, as well as numerous other leadership surveys, and
summarized the results in “Personal Factors Associated with Leadership”
within the Journal of Psychology in 1948.
◆ Behavioural Theories - Theories proposing that specific behaviors
differentiate leaders from non-leaders
◆ Contingency Theories – In contingency theory leadership, styles are
broadly described as falling into two categories: task motivated and
relationship motivated.
Trait Theories
Traits Theories of Leadership
Theories that consider personality, social, physical, or intellectual traits to
differentiate leaders from non-leaders
Leaders and Followers vary by:
• Intelligence
• Dominance
• Self-confidence
• Level of energy and activity
• Task-relevant knowledge
Trait Theories

Limitations
• No universal traits found that predict leadership in all
situations
• Unclear evidence of the cause and effect of relationship of
leadership and traits
• Better predictor of the appearance of leadership than
distinguishing effective and ineffective leaders
Behavioural Theories

Behavioural Theories of Leadership

Theories proposing that specific behaviors differentiate leaders from non-
leaders – Ohio State Studies and Michigan Studies; Managerial Grid
Behavioural Theory
Leadership behaviors can be taught. Describes leadership in terms
of what leaders do
vs.
Trait Theory
Leaders are born, not made. Explains leaderships on basis of what
leaders are.
Behavioural Theory – Managerial Grid
(A nine-by-nine matrix outlining 81 different styles)

Source: Blake and Mouton (1964)

Behavioural Theory – Managerial Grid
(A nine-by-nine matrix outlining 81 different styles)
(1,9) Country club (9,9) Team management
management Thoughtful Work accomplishment is
attention to needs of from committed people;
people for satisfying interdependence through
relationships leads to a a “common stake” in
comfortable, friendly (5,5) Organization management organization purpose
organization atmosphere Adequate organization performance leads to relationships of
and work tempo. is possible through balancing the trust and respect.
necessity to get out work with
maintaining morale of people at a
satisfactory level.
(9,1) Authority-
(1,1) Impoverished
obedience management
management Exertion of
Efficiency in operation
minimum effort to get
results from arranging
required work done is
conditions of working in
appropriate to sustain
such a way that human
organization
elements interfere to a
membership
minimum degree.
Contingency Theories

➢ While trait and behaviour theories help understand leadership , an important

component is missing: the environment in which the leader exist.

➢ Contingency Theory deals with this additional aspect of leadership

effectiveness studies.

➢ Theory focuses on how situational variables interact with leader personality

and behaviour.

➢ E.g. Fiedler Theory, Hersey & Blanchard’s situational leadership

Fiedler’s Contingency Theory of Leadership
Effectiveness
Leader effectiveness is dependent on the interaction of the leader‟s style and
characteristics of the situation defined as leader-member relations, task – structure and
leader – position power.
Three characteristics in a situation when combined will permit classification of three
situations namely:
1. Very Favourable Situation: when all three critical elements are high.
2. Intermediate Favourableness: a condition when some of the situational characteristics
are poor / low and others are good / or high.
3. Unfavourable Situation: a situation where all three situational components are low or
poor. Fiedler recognized two types of leadership style namely task – oriented (TO) and
relationship Oriented (RO).
Both type of leaders effective, each given
the right situation.
Best way to accomplish results:
–Select leader to fit situation, or
–Change situation to fit leader
Hersey & Blanchard’s situational leadership model (1)
◆ Rejected the idea that there is one ideal leadership style, since research showed that
productive and satisfied groups exists in relation to all kinds of managerial behaviour

◆ The more a manager adapts his leadership style to the actual situation and the needs
of the employees, the more effective will he/she be in achieving personal and
organizational goals

◆ Two dimensions of leader behavior: task and/or relationship orientation.

Hersey & Blanchard’s situational leadership model (2)

◆ 4 basic leadership styles

◆ Whether a leadership style is going to be effective, depends
on the relative task readiness of the leader’s subordinates
◆ Task readiness (or maturity) is defined in relation to a given
task, that the individual/group is facing
◆ both a reference to job maturity (technical ability)
◆ and psychological maturity (confidence, and the ability to set high
goals and take responsibility)
◆ The greater maturity, the greater the need for a employee-
oriented and participative leadership style.
Hersey & Blanchard’s situational leadership model (3)
• Readiness is defined in
terms of subordinates:
− Level of
achievement
motivation
− Willingness and
ability to assume
responsibility
− Task-relevant
education and
experience
• A leadership pattern
can emerge (or be
developed over time)
Hersey & Blanchard’s situational leadership model (4)
The basics of the theory:
1. If the task readiness is low, the manager should focus on the task and
focus less on the employees, in order to help the group achieve some
succes and begin to learn
2. As the task readiness increases, the manager should reduce his focus on
the task and increase focus on the employee behaviour in order to help
the group grow
3. As the readiness continues to increase, the manager should reduce both
task- and relational behaviour, because the group is developing
confidence and the ability to work on its own
4. As the group achieves top readiness, the manager can continue to reduce
task- as relational behaviour, and can delegate all tasks to the group and
expect them to be solved.
The Leadership Continuum- Tannenbaum and Schmidt

Leader

Source: Tannenbaum and Schmidt (1973)

The Path-Goal Model of Leadership
Source: House & Mitchell (1974)
Leaders might have to tailor
their behavior to the needs,
abilities, and personalities of
individual employees.
Effective leaders should take
advantage of the motivating
and satisfying aspects of
jobs while offsetting or
compensating for those job
aspects that de-motivate or
dissatisfy
Leader Behaviour or Styles

The four path-goal types of leader behaviours defined by House and Mitchell (1974)
are:
•Directive: The leader informs followers on what is expected of them, such as telling them
what to do, how to perform a task, and scheduling and coordinating work. It is most effective
when people are unsure about the task or when there is a lot of uncertainty within the
environment.
•Supportive: The leader makes work pleasant for the workers by showing concern for them
and by being friendly and approachable. It is most effective in situations in which tasks and
relationships are physically or psychologically challenging.
The leaders' behaviour is not set in stone, as there are
•Participative: The leader consults with followers before
other making
leadershipa decision on how
styles that maytobe used depending
proceed. It is most effective when subordinates areuponhighlythe
trained and involved in their
situation. For example, House work.
(1996) defined
•Achievement: The leader sets challenging goals forfourfollowers, expects them to perform at
other behaviours:
their highest level, and shows confidence in their ability to meet this expectation. It is most
effective in professional work environments, such as• technical, scientific; or achievement
Work Facilitation
environments, such as sales. • Group Oriented Decision Process
• Work Group Representation and Networking
• Value Based
Criticism of leadership theories
▪ Trait theories
• Too simplistic
• Inconsistent evidence
▪ Behavioral theories
• ’One best style’ not always the best
• Lack of focus on situational aspects
▪ Contingency theories
• Assumption of homogeneous employees
• Can managers change their style?
Individual Behavior

Individual Individual
Differences Behavior
Personality Differences Across Cultures
Biologically Inherited
(“Nature” Argument)

Personality Attributes
“Nature vs. Nurture”

Nurtured
(“Nurture” Argument)
Perceptions across cultures

Perceptual Process
• Stereotyping
• Cultural Background

International
Business
The Cultural Web of an Organisation (1)

Stories Symbols

Power
Rituals/ Paradigm structures
routines

Control Structures
systems

Source: Johnson and Scholes (2008)

 The Cultural Web of an Organisation(2)
Organisational
Paradigm Rituals and Routines Stories Symbols Power Control Systems
Structures
•Set of assumptions •Repetitive nature of •The stories told by •Objects, events acts •Power structures - •Roles, •Formal and informal
held in common and organisational existing staff to each or people that distributions of responsibilities and ways of monitoring
taken for granted in culture other, to outsiders, convey, maintain or power to groups of reporting and supporting
an organisation •Routines – the way to new recruits create meaning over people in an relationships in people within and
•Technological we do things around •May act to embed their functional organisation organisation around and
companies focus on here the present in its purpose. organisation and
technological •For e.g. technical organisational tend to emphasise
excellence of sales people tell history and flag up what is seen to be
products rather than customers what important events important in an
customer-perceived they need rather and personalities. organisation
needs. than listening to
•Health services its their needs.
about curing illness •Rituals – particular
activities or special
events that
emphasise, highlight
or reinforce
organisational
culture.
•E.g. training
programmes,
interview panels,
promotion and
assessment
procedures, sales
conferences and so
on.

Source: Johnson and Scholes (2008)

Culture’s influence on Strategy Development

Source: Johnson and Scholes (2008)

REFERENCES
◆ Allio, R. J. (2013). Leader and Leadership – many theories, but what advice is reliable? Strategy and Leadership, Vol 41, No. 1, pp. 4-14.
◆ House, R.J. (1971). A Path-Goal Theory of Leader Effectiveness. Administrative Science Quarterly. 16, 321-328.
◆ House, R.J., Mitchell, T.R. (1974). Path-goal theory of leadership. Journal of Contemporary Business. 3: l–97.
◆ House, R.J. (1996). Path-goal theory of leadership: Lessons, legacy, and a reformulated theory. Leadership Quarterly. 7 (3): 323–352.
◆ Vroom, V.H. (1964). Work and motivation. New York: Wiley.
◆ Tannenbaum, R and Schmnidt, W. H. (1973). How to Choose a Leadership Pattern. Harvard Business Review, May-June.
◆ Stogdill, R. M. Handbook of Leadership. New York: Free Press, 1974.
◆ Smith, H. L., & Krueger, L. M. 1933. A brief summary of literature on leadership. Bloomington: Indiana University, School of Education Bulletin
◆ Jenkins WO. (1947). A review of leadership studies with particular reference to military problems. Psychological Bulletin, 44, 54–79
◆ Blake, R. R., & Mouton, J. S. (1964). The managerial grid: The key to leadership excellence. Houston, TX: Gulf.
◆ Peretomode, O. (2012). Situational And Contingency Theories Of Leadership: Are They The Same? IOSR Journal of Business and
Management. Volume 4, Issue 3 (Sep-Oct. 2012), PP 13-17.
C h a n g i n g L i ve s, C h a n g i n g O rg a n i s a t i o n s