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3. Globalization and Leadership

History, Globalization, and Values-Based Leadership 1

3.2 Ancient History: Management Through the 1990s

  • 1888: The most influential early management principles were set forth by Henri Fayol (a French mining engineer) with 14 principles of management:
    1. Specialization/Division of Labor: workers are more efficient when they specialize and perform a limited set of activities.
    2. Authority/Responsibility: managers have the right to give orders and the power to enforce obedience.
    3. Discipline: workers must obey and respect the rules that govern the organization, but effective management must provide good leadership and penalties for violations of company rules.
    4. Unity of Command: each worker should report to only one boss to avoid conflicting instructions.
    5. Unity of Direction: each unit or group has only one boss and follows one plan.
    6. Subordination of Individual Interests: the interests of the company are above all the interests of any one individual employee.
    7. Remuneration: workers must be paid a fair wage for their services.
    8. Centralization: companies are decentralized when decision-making is pushed down to lower levels of the organization, and centralized when decision-making is reserved for top management. The degree of centralization or decentralization depends on the company’s situation.
    9. Line of Authority: a clear line of authority is hierarchical, and goes from the top to the bottom of the organization. Communications can go within the same level of authority as long as the manager is informed. The line should not be overextended or have too many levels.
    10. Order: People and materials should be in the right place at the right time.
    11. Equity: fairness, dignity, respect, kindness, and justice should be shown to all employees.
    12. Stability of Tenure: tenure (the amount of time a person holds a job) is a good thing for the company and the worker. people need time to learn jobs and stability promotes loyalty and good performance.
    13. Initiative: workers who are allowed to originate and carry out plans will exert high levels of effort.
    14. Esprit de Corps: Harmony, cohesion, and unity within the organization build morale and unity.
  • 1911: The Principles of Scientific Management were written by Frederick Winslow Taylor where he described how productivity could be greatly improved by applying the scientific method to management.
    • Taylor is most famous for his time studies, in which he used a stopwatch to time how long it took a worker to perform a task, such as shoveling coal or moving heavy loads. Then he experimented with different ways to do the tasks to save time.
    • Taylor provided workers with the optimal shovel (21 pounds per round) for each density of materials, like coal, dirt, snow, and so on. With these optimal shovels, workers became three or four times more productive, and they were rewarded with pay increases.
  • 1950: The motion and time studies were done by Frank and Lillian Moller Gilbreth:
    • They put lights on the hands of workers to see how they moved.
    • Applying time and motion studies to bricklaying, for example, the Gilbreths devised a way for workers to lay bricks that eliminated wasted motion and raised their productivity from 1,000 bricks per day to 2,700 bricks per day.
  • Limitations of the Early Views:
    • The studies only focused on the physical aspects of work.
    • These principles became outdated as work required more knowledge and less manual labor.
    • Managers can’t see inside the head of a software engineer to devise the fastest way to write code. Effective software programming depends on knowledge work, not typing speed.
    • Services-based economy requires interactions between employees and customers; thus, workers need to be motivated and happy to provide good and friendly service.
    • Early views of management were heavily oriented toward efficiency, at the expense of attention to the manager-as-leader.

Management Ideas of the 1990s

  • Peter Drucker was the first scholar to write about how to manage knowledge workers, with his earliest work appearing in 1969.
  • 1982: Tom Peters and Robert Waterman wrote In Search of Excellence, which became an international best-seller and ushered a business revolution by changing the way managers viewed their relationships with employees and customers.
  • Based on the authors’ research focusing on 43 of America’s most successful companies in six major industries, the book introduced nine principles of management that are embodied in excellent organizations:
    1. Managing ambiguity and paradox: managers should still be able to function effectively in ambiguous situations.
    2. Bias for action: managers should be willing to take risks and act quickly.
    3. Close to the customer: managers should know their customers well.
    4. Autonomy and entrepreneurship: managers should encourage employees to take risks and innovate.
    5. Productivity through people: managers should treat employees as assets.
    6. Hands-on, value-driven: managers should be involved in the day-to-day operations of the company.
    7. Stick to the knitting: managers should focus on what the company does best.
    8. Simple form, lean staff: managers should keep the company’s structure simple.
    9. Simultaneous loose-tight properties: managers should balance the need for control with the need for flexibility.

3.3 Contemporary Principles of Management

  • Corporations as Social Movements:
    • Traditionally, we’ve thought of corporations as organizations that had clear boundaries, formal procedures, and well-defined authority structures.
    • In contrast, social movements are seen as more spontaneous and fluid.
    • Leaders of social movements depend on charisma rather than authority to motivate participants to action.
    • Contemporary management theory, however, is showing that the lines between the two are blurring: corporations are becoming more like social movements, and social movements are taking on more permanence.
    • Just as companies are outsourcing specific jobs, so social movements can contract out tasks like lobbying and fundraising.
  • Social Networking:
    • Social networking refers to systems that allow members of a specific site to learn about other members’ skills, talents, knowledge, or preferences. Companies use these systems internally to help identify experts.
    • In the world, at large, social networks are groups of individuals who share a common interest or passion.
    • In the corporate world, a social network is made up of individuals who share an employer and, potentially, other interests as well.
    • Social networks fueled by passion can help managers retain, motivate, and educate staff.
  • Learning Organizations:
    • It is an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights.
    • 5 building blocks of a learning organization:
      1. Systematic problem solving: the company must have a consistent method for solving problems using data and statistical tools rather than intuition or assumptions.
      2. Experimentation: test new ideas in small steps and learn from the results.
      3. Learning from past experiences: companies must have a system for collecting, storing, and analyzing data from past experiences.
      4. Learning from others: good ideas can come from anywhere, inside or outside the company.
      5. Transferring knowledge: companies must have a system for sharing knowledge throughout the organization.
  • Virtual Organizations:
    • A virtual organization is one in which employees work remotely—sometimes within the same city, but more often across a country and across national borders.
    • Communication in a commons area is preferable to one-on-one communication because it keeps everyone up to speed and promotes learning across the organization.
  • Wikis cut the need for e-mail by 75% and the need for meetings by 50%.
  • Top 5 challenges trends:
    • Increasing concern for the environment.
    • Greater personalization and customization.
    • A fast pace of innovation.
    • Increasing complexity.
    • Increasing competition for talent.
  • Top 5 solutions:
    • Becoming more connected.
    • Becoming more global.
    • Becoming more Mobile.
    • Rise of the creative class.
    • Increasing collaboration.

3.5 Globalization and Principles of Management

  • Despite the growing importance of global business, Fortune 500 companies have reported a shortage of global managers with the necessary skills.
  • In its 2006 report, GLOBE identified nine dimensions of culture and tried to create and validate a theory of the relationship between culture and societal, organizational, and leadership effectiveness.

Leadership Ethics 2

  • Ethics are the principles that govern §person’s behavior.
  • Leaders need to have self-understanding and others-understanding.
  • Followers’ needs (from the leader):
    • Trust.
    • Care.
    • Stability.
    • Hope.
  • The golden rule: Treat others as you would like to be treated.
  • The platinum rule: Treat others as they would like to be treated, as not everyone wants to be treated the same way.
  • Greg’s leadership brand model:
    • Leadership values: What you stand for.
    • Leadership competencies: How you lead.
    • Leadership mission: why your leadership matters.
  • Since 2002, when the Sarbanes-Oxley Act was passed, companies have been required to write a code of ethics. The act sought to reform corporate governance practices in large U.S. public companies.

Introduction to the GLOBE Research Project on Leadership Worldwide 3

  • GLOBE is the acronym for “Global Leadership and Organizational Behavior Effectiveness”.
  • Leadership is the ability of an individual to influence, motivate, and enable others to contribute toward the effectiveness and success of the organizations of which they are members.
  • The GLOBE project:
    • Started in 1991 with Robert J. House as lead investigator.
    • 170 researchers from 62 countries were involved.
    • 17,300 managers in 951 organizations were studied.
    • 27 research hypotheses were tested.
    • The project has three phases:
      • Phase 1: the development of the research instrument.
      • Phase 2: assessed nine fundamental attributes, or cultural dimensions, of both societal and organizational cultures, and explored how these impact leadership in 62 societal cultures.
      • Phase 3: studying the effectiveness of specific leader behaviors (including that of CEOs) on subordinates’ attitudes and performance.
  • The team identified nine cultural dimensions that would serve as their units of measurement (independent variables):
    • Performance orientation:
      • the extent to which an organization or society encourages and rewards group members for performance improvement and excellence.
      • high: United States, Singapore.
      • low: Russia, Greece.
    • Institutional collectivism:
      • it refers to the extent to which people act predominantly as members of a lifelong group or organization.
      • Should you reward groups rather than individuals?
      • high: groups should be rewarded as opposed to individuals. Sweden.
      • low: emphasis on individualism. United States.
    • Gender egalitarianism:
      • the extent to which an organization or society accepts women in charge.
      • low: societies are male-dominated. Egypt, South Korea.
      • high: societies are more equal. Sweden, Norway, Germany, Netherlands.
    • Uncertainty avoidance:
      • the degree to which people in a society feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid these.
      • Should you establish rules, procedures, and social norms to help your employees deal with uncertainty?
      • high: people want strict rules, laws, and policies to eliminate or control the unexpected. Brazil, Switzerland.
      • low: people are less rule-oriented, tolerate opinions, open to change and taking risks. Hong Kong, Malaysia.
    • In-group collectivism.
    • Future orientation:
      • the extent to which people in a society engage in future-oriented behaviors such as planning, investing in the future, and delaying gratification.
      • Will your employees favor activities that involve planning and investing in the future for long-term payoff? Or do they want to see short-term results?
      • high: companies have more systematic and long-term plans. China, Singapore.
      • low: Russia, Argentina.
    • Humane orientation:
      • the degree to which a society encourages and rewards individuals for being fair, altruistic, generous, caring, and kind to others.
      • Should you reward people for being fair, altruistic, generous, and kind to others?
      • high: people are more caring and kind. Malaysia.
      • low: people are more self-centered. Germany.
    • Assertiveness:
      • the degree to which people in a society are assertive, confrontational, and aggressive in social relationships.
      • high: people are competitive. United States, Austria.
      • low: people are in more harmony with others. Sweden, New Zealand.
    • Power distance:
      • the degree to which people in a society accept that power in institutions and organizations is distributed unequally.
      • high: organizations are hierarchical and centralized; people in power expect obedience and have authority over others. Thailand, Brazil, France.
      • low: people are more cooperative and give opportunities to everyone. Australia.
  • The project used 7-point scales to measure the cultural dimensions (1 = strongly negative, 7 = strongly positive).
  • The project has two scores for each cultural dimension:
    • Practices score: how people in a society actually behave (as is).
    • Values score: how people in a society say they should behave (as should be).
  • The project also probed each of the nine cultural dimensions concerning the two scores:
    • Societal culture.
    • Organizational culture.
  • So each cultural dimension has four scores:
    • Societal practices: Actual behavior in society.
    • Societal values: Ideal behavior in society.
    • Organizational practices: Actual behavior in your organization.
    • Organizational values: Ideal behavior in your organization.
  • The Primary Leadership Dimensions (also called First Order Factors), 21 factors that contribute to the leader’s effectiveness:
    1. Administratively Competent.
    2. Autocratic.
    3. Autonomous.
    4. Charismatic/Visionary.
    5. Charismatic/Inspirational.
    6. Charismatic/Self-Sacrificial.
    7. Conflict Inducer.
    8. Decisive.
    9. Diplomatic.
    10. Face Saver.
    11. Humane Oriented.
    12. Integrity.
    13. Malevolent.
    14. Modesty.
    15. Non-Participative.
    16. Performance Oriented.
    17. Procedural.
    18. Self-Centered.
    19. Status Conscious.
    20. Team Collaborator.
    21. Team Integrator.
  • Each of the 21 leadership dimensions has 2-4 attributes that describe the dimension.
  • A principal outcome of this huge research effort was the development of six universally shared conceptions of leadership, known most often as culturally endorsed leadership theory dimensions or global leadership dimensions; with each including a few of the 21 leadership dimensions:
    1. Charismatic/Value-Based: Charismatic/Visionary, Charismatic/Inspirational, Charismatic/Self-Sacrificial, Integrity, Decisive, and Performance Oriented.
    2. Participative: Autocratic(-), and Non-Participative(-).
    3. Team-Oriented: Team Collaborator, Team Integrator, Diplomatic, Administrative Competent, and Malevolent(-).
    4. Humane-Oriented: Humane-Oriented and Modesty.
    5. Self-Protective: Self-Centered, Status Conscious, Conflict Inducer, Face Saver, and Procedural.
    6. Autonomous: Autonomous.

Leadership Dimensions: Culture and Leadership 4

References

  1. Carpenter, M., Bauer, T., & Erdogan, B. (2010). Management principles, v. 1.1. Chapter 3: History, Globalization, and Values-Based Leadership. https://2012books.lardbucket.org/books/management-principles-v1.1/s07-history-globalization-and-valu.html ↩

  2. Gregg Learning. (2017, July 10). Leadership ethics [Video]. YouTube. https://youtu.be/FxrMso4g2yw ↩

  3. Grove, C. N. (n.d.). Introduction to the GLOBE research project on leadership worldwide. Grovewell, LLC. https://my.uopeople.edu/pluginfile.php/1842348/mod_book/chapter/493115/introduction-to-the-globe-research-project-on-leadership.pdf ↩

  4. Virkus, S. (2009). Leadership dimensions: Culture and leadership. GLOBE Project. https://www.tlu.ee/~sirvir/IKM/Leadership%20Dimensions/globe_project.html ↩