Advances in Global Leadership

ADVANCES IN GLOBAL LEADERSHIP ADVANCES IN GLOBAL LEADERSHIP Series Editor: William H. Mobley Previous Volumes: Volume...

Author: William Mobley

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ADVANCES IN GLOBAL LEADERSHIP

ADVANCES IN GLOBAL LEADERSHIP Series Editor: William H. Mobley Previous Volumes: Volume 1:

Volume 2: Volume 3: Volume 4:

Advances in Global Leadership – Edited by William H. Mobley, M. Joycelyne Gessner, and Val Arnold Advances in Global Leadership – Edited by William H. Mobley and Morgan W. McCall, Jr. Advances in Global Leadership – Edited by William H. Mobley and Peter W. Dorfman Advances in Global Leadership – Edited by William H. Mobley and Elizabeth Weldon

ADVANCES IN GLOBAL LEADERSHIP VOLUME 5

ADVANCES IN GLOBAL LEADERSHIP EDITED BY

WILLIAM H. MOBLEY China Europe International Business School and Mobley Group Pacific Limited, Shanghai, P. R .China

YING WANG Institute of Work Psychology, The University of Sheffield, Sheffield, UK

MING LI The Michael Smurfit Graduate School of Business, University of Dublin, Dublin, Ireland; and Mobley Group Pacific Limited, Shanghai, P. R .China

United Kingdom – North America – Japan India – Malaysia – China

Emerald Group Publishing Limited Howard House, Wagon Lane, Bingley BD16 1WA, UK First edition 2009 Copyright r 2009 Emerald Group Publishing Limited Reprints and permission service Contact: [email protected] No part of this book may be reproduced, stored in a retrieval system, transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without either the prior written permission of the publisher or a licence permitting restricted copying issued in the UK by The Copyright Licensing Agency and in the USA by The Copyright Clearance Center. No responsibility is accepted for the accuracy of information contained in the text, illustrations or advertisements. The opinions expressed in these chapters are not necessarily those of the Editor or the publisher. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN: 978-1-84855-256-2 ISSN: 1535-1203 (Series)

Awarded in recognition of Emerald’s production department’s adherence to quality systems and processes when preparing scholarly journals for print

Dedicated to the administrative, faculty and student leadership at China Europe International Business School (CEIBS) on the occasion of your 15th anniversary.

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CONTENTS PREFACE

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INTRODUCTION – GLOBAL LEADERSHIP IN TIMES OF CRISIS AND DOWNTURN: A LEOPARD IN UNCHARTED DEEP WOODS Ying Wang, Ming Li and William H. Mobley

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PERSONALITY, LEADERSHIP, AND GLOBALIZATION: LINKING PERSONALITY TO GLOBAL ORGANIZATIONAL EFFECTIVENESS Robert Hogan and Michael J. Benson

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LEADERSHIP COMPETENCIES: DIFFERENCES IN PATTERNS OF POTENTIAL ACROSS ELEVEN EUROPEAN COUNTRIES AS A FUNCTION OF GENDER AND MANAGERIAL EXPERIENCE Dave Bartram

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RECONCEPTUALIZING EXECUTIVE ENVIRONMENTAL SCANNING AND SEARCH: IMPLICATIONS FOR INTERNATIONAL LEADERSHIP RESEARCH AND PRACTICE Ciaran Heavey, Richard T. Mowday, Aidan Kelly and Frank Roche FROM ERROR PREVENTION TO ERROR LEARNING: THE ROLE OF ERROR MANAGEMENT IN GLOBAL LEADERSHIP Marcos Alonso Rodriguez and Mark A. Griffin vii

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CULTURE, CORRUPTION, AND THE ENDORSEMENT OF ETHICAL LEADERSHIP Christian J. Resick, Jacqueline K. Mitchelson, Marcus W. Dickson and Paul J. Hanges

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DEVELOPING BALANCED LEADERSHIP TEAM – AN ULTIMATE CHALLENGE IN GLOBAL COMPANIES SUCCEEDING IN A HYPER-COMPETITIVE GLOBAL ECONOMY Zenglo Chen

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THE MEANING AND IMPORTANCE OF LEADERSHIP IN STRATEGIC ALLIANCES William Reinfeld

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AN INTEGRATED FRAMEWORK FOR ASSESSING, COACHING AND DEVELOPING GLOBAL LEADERS David H. Oliver, Allan H. Church, Rob Lewis and Erica I. Desrosiers

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DEVELOPING GLOBAL LEADERS: THE ROLE OF INTERNATIONAL EXPERIENCE AND CULTURAL INTELLIGENCE Kok-Yee Ng, Linn Van Dyne and Soon Ang

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AN EXAMINATION OF THE ROLE OF EXPERIENTIAL LEARNING IN THE DEVELOPMENT OF CULTURAL INTELLIGENCE IN GLOBAL LEADERS Ming Li

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LEADERSHIP ASSESSMENT AND DEVELOPMENT IN THE MID-EAST Val J. Arnold

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ASSUMPTIONS IN KOREAN ORGANIZATIONS AND THEIR IMPLICATIONS IN A CROSS-CULTURAL SETTING Inju Yang and Aidan Kelly

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SERVANT LEADERSHIP IN CHINA: CONCEPTUALIZATION AND MEASUREMENT Jian-Min Sun and Biying Wang

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CONCLUSIONS Ming Li, Ying Wang and William H. Mobley

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ABOUT THE EDITORS

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ABOUT THE CONTRIBUTORS

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TABLE OF CONTENTS FROM VOL. 1

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PREFACE Welcome to Volume 5 of Advances in Global Leadership. Our objectives in this volume remain the same as in Volumes 1, 2, 3, and 4 of this series (Mobley, Gessner, & Arnold, 1999; Mobley & McCall, 2001; Mobley & Dorfman, 2003; Mobley & Weldon, 2006). We seek to advance the definition, conceptualization, and understanding of global leadership processes and the development of international and global leaders. The relative dearth of leadership talent, the continuing high-profile examples of lack of moral leadership, the inadequacy of global leadership development processes, and the continued derailment of international executives continue to be challenges for both multinational and indigenous organizations in many parts of the world. Thomas Friedman, author of The World is Flat, recently noted on a January 2009 CNN interview that ‘‘The world is even flatter than I had realized.’’ Witness, for example, the speed with which the U.S. inspired sub-prime mortgage debacle spun out of control around the world and the lack of financial services or government leadership to effectively control, let alone prevent the global economic meltdown. Witness, for example, the continued demonstration of lack of integrity and greed among leaders in multiple sectors. Witness the continued challenges in multicultural M&A’s and expatriate failure rates. These realities require better-developed models, definitions, measures, and processes for understanding and developing leaders in the global economy. This deeper understanding of multinational and global leadership requires, among other things, the following: Understanding the interplay among country and company cultures, corporate strategy, and stage of company and business unit development, as well as individual differences among leaders, followers, and other stakeholders; Evaluating the generalizability of leadership and leadership development models from Western and non-Western cultures; Addressing virtual/distance leadership challenges of multinational organizations and teams and how new technologies bear on leadership and influence across time, distance, and multiple borders; xi

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Deeper understanding of the role of experience and the dynamics of the inter-cultural learning process in performing effectively as a leader across multiple boundaries; Understanding multicultural and global leadership across national boundaries in non-traditional organizational structures, for example, alliances and cross-cultural joint ventures; Encouraging greater communication among executives, leadership development professionals, consultants, and academics dealing with global leadership and leadership development; ‘‘Giving voice’’ to authors from, or working in, non-Western as well as Western cultures and from emerging as well as mature markets. This biennial series of high-quality original papers seeks to address these and other issues. Our intent is to provide a series that will be of interest and value to: Those leading in multinational settings; Those aspiring to lead in multinational settings; Academics teaching and researching in areas related to multinational and global leadership; Executive coaches and consultants working in the international leadership arena; Those responsible for developing multinational and global leaders; Those providing consulting and other services in support of the development of global leadership and global leadership processes. Based on feedback received from Volumes 1, 2, 3, and 4, we are reaching these multiple audiences and we believe Volume 5 continues to follow that path. The risk of our broad and eclectic approach is that there will be something of interest for everyone, but not everything will interest everyone. Our hope is that the selection of manuscripts will stimulate, pollinate, and challenge practitioners and academics, Westerners and non-Westerners, students, and leaders. We encourage you to read and reflect on the chapters that are out of your current comfort zone. It is an honor and pleasure to join with Ying (Lena) Wang and Ming (Lily) Li as my co-editors for Volume 5. I have had the pleasure of working with both of these talented young professionals earlier. Both served earlier as my Research Assistant at China Europe International Business School in Shanghai and both served as valued colleagues at Mobley Group Pacific Limited. It has been a wonderful experience teaming with them again on this volume. Their biographical summaries are included in the last section of this

Preface

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volume. Ying (Lena) Wang has lived, studied, and worked in China and the UK and traveled extensively to the United States. She has presented multiple papers on personality measurement at Society for Industrial and Organizational Psychology (SIOP) and other major forums. She brings great insight into individual and organizational models and measures as well as intercultural processes. Ming (Lily) Li also has lived and worked in China and Ireland and has presented multiple papers at International Congress of Applied Psychology (ICAP), International Association for Cross-Cultural Psychology (IACCP), International Congress of Psychology (ICP), and Society for Industrial and Organizational Psychology (SIOP) in the United States and Europe. She brings particular depth to our team in the conceptualization and measurement of intercultural competencies. Both have contributed significantly to this volume and I am so thankful for their contributions. Particular thanks to each of the authors for contributing their insights, time, and energy to this Volume 5. The biographical summaries of the authors are included in the last section of this volume. As with past volumes, we have authors from multiple parts of the world – from academic, corporate, and consulting settings – and focusing on multiple issues and regions of the world. Indeed, this is a talented and insightful group of authors. This volume is several months later in coming to press than we anticipated. Our previous publisher, Elsevier Science, sold all its continuing series to Emerald Group Publishing and it took us awhile to work through this transition. Also, the three co-editors being on several continents tested our virtual teaming skills y a definite learning experience. Our apologies to the chapter authors and to our readers for the delay. We trust the outcome will be worthy of your patience. Thanks also to our colleagues at China Europe International Business School (CEIBS); Mobley Group Pacific Limited (MGP); Institute of Work Psychology, The University of Sheffield; and the Smurfit Graduate School of Business, University College Dublin for their support. We also appreciate the support and patience of Cristina Irving, Rachel Brown, and Rebecca Marsh on the editorial and publishing teams at Emerald Group Publishing as well as Nisha S and the staff at Macmillan Publishing Solutions. Finally, we dedicate this volume to the administrative, faculty, and student leadership at China Europe International Business School (CEIBS) as well as their corporate and government sponsors in China, Europe, and globally. All three of the co-editors have benefitted from our time and association with CEIBS. In its brief 15-year history, CEIBS has earned EQUIS and AACSB accreditation; risen to number 8 in the FT MBA

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rankings; and is developing research insights, cases, and impactful leadership talent for China and the world. These outcomes are a tribute to the effective global leadership of all those associated with CEIBS. We trust that the chapters that follow will be of interest and value to you. We welcome your feedback and suggestions on this volume and for future volumes.

REFERENCES Mobley, W. H., & Dorfman, P. W. (Eds). (2003). Advances in global leadership (Vol. III). Oxford, England: JAI Press/Elsevier Science. Mobley, W. H., Gessner, J., & Arnold, V. (Eds). (1999). Advances in global leadership (Vol. I). Oxford: JAI Press/Elsevier Science. Mobley, W. H., & McCall, M. W., Jr. (Eds). (2001). Advances in global leadership (Vol. II). Oxford, England: JAI Press/Elsevier Science. Mobley, W. H., & Weldon, E. (Eds). (2006). Advances in global leadership (Vol. IV). Oxford, England: JAI Press/Elsevier Science.

William H. Mobley Shanghai, AGL Series Executive Editor

INTRODUCTION – GLOBAL LEADERSHIP IN TIMES OF CRISIS AND DOWNTURN: A LEOPARD IN UNCHARTED DEEP WOODS Ying Wang, Ming Li and William H. Mobley The year 2008 was a year of turmoil, uncertainty and disturbance that is unprecedented in recent decades. Since late 2008, we have seen a continuation of the global economic downturn, and the prospect remains unclear and worrying. This is a special moment when every individual, every organization and every country are raising their heads up and longing for leaders who can firmly and clearly step out and lead their people out of the uncharted woods. This is a moment when competent leaders are urgently needed to provide vision and confidence, values and integrity, and a global- as well as localmindset. It is the time when organizations need leaders who can bring forward rational and down-to-earth strategies that will induce both immediate and longer term positive outcomes. In this turbulent state, the traditional definitions of leadership need more than ever before to be more clearly conceptualized and many of the disparate individual, contextual and outcome dots connected. For many years, researchers and practitioners have been involved in the journey of defining and connecting the spots on the global leadership ‘leopard’ in the dark woods (McCall, 2001; Mobley & McCall, 2001). This journey has become even more difficult with the leopard being trapped in an

Advances in Global Leadership, Volume 5, 1–10 Copyright r 2009 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1535-1203/doi:10.1108/S1535-1203(2009)0000005004

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uncharted deep forest and its spots even more difficult to define and connect. It is a good time for our academic and practitioner thinkers to take a step back and reflect on our mutual hunting exploits. Have we targeted well? What have we missed? Are we connecting the spots validly in the increasingly complex contexts of leadership? In this new round of leopard hunting represented in Volume 5 of this series, we are pleased to have a group of diverse scholars, consultants, and corporate executives from different continents to share their understanding of global leadership. We organized the 13 chapters of this volume into several themes, though we note that many chapters cut across multiple categories. The first theme is the continuous search for the desired qualities and characteristics of global leaders. The second theme is to develop leaders to be effective across boundaries and contexts globally. The last section is a gathering of leadership studies in several non-Western cultures. We recognize that these themes are far from complete and encompass numerous foci and perspectives in global leadership studies, but we hope this selection of chapters will be one of many endeavours that might move our understanding one step further.

CHARACTERISTICS OF GLOBAL LEADERS The first section of this volume deals with leadership qualities in the global environment. In particular, we are pleased to have scholars share their leading-edge research in terms of the following leadership characteristics and qualities: personality, competency, the ability to scan environment in search of useful information, the ability to anticipate and manage errors, and integrity and ethical leadership. Personality has long been considered by many, but not all, as an important antecedent for leadership and performance effectiveness. Hollenbeck (2009) proposed in his recent review of executive assessment that the character (i.e. personality) of leaders should be given primary consideration over and above competencies and competence. The resurgence of personality research over the past decade has advanced the understanding of individual leadership qualities. In the opening chapter of this volume, Robert Hogan and Michael Benson guide us through the recent theoretical advances in personality, leadership, and organizational effectiveness. They specify two sides of personality – the bright and the dark side – and then go on to explain how various personality dimensions translate into leadership skills and with one further stride affect team and organizational performance. Hogan and

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Benson also share lessons on the impact of executives’ personalities on corporate culture and organizational behaviour, resulting in a significant impact on business success or failure. Hogan and Benson argue that personality translates into leadership through competencies. The competency model has become such a commonplace in corporate HR strategies that it pervades virtually every stage of every employee’s career life cycle. Addressing leadership from the competency perspective continues to attract academic and practitioners’ interests, as can be seen in previous volumes of this series (see, e.g., Fulkerson, 1999; Campbell, 2006). However, the competency-based approach to understanding and developing leaders is not without its critics (see, e.g., Hollenbeck & McCall, 2003). In this volume, the competency theme is revisited by Dave Bartram who puts forward a recently constructed framework – the Great Eight Universal Competency Framework. Designed to represent the most fundamental structure in the competency arena, in a similar sense to the Big Five model in personality, this framework appears to well accommodate many existing leadership theories and integrates most, if not all, of the other competency models in current use. This framework also delineates how each generic competency dimension relates to different personalities, motivations and cognitive ability factors. In the chapter presented in this volume, Bartram conducts a cross-cultural comparison on the competencies among managers in 11 European countries and also sheds lights on the influence of gender differences and the effect of managerial experiences on leadership behaviors. We consider this framework having potential to unite various competency models under an overarching umbrella, and extensive implications for future empirical research. In the subsequent chapter of this volume, Ciaran Heavey, Richard Mowday, Aidan Kelly and Frank Roche analyze the environmental scanning behaviours of executives. They argue that most scanning research focuses primarily on how executives receive information and has overlooked how people actively reach out to search for useful information. They propose a refocusing on the active searching behavior and have identified six types of such behaviours. What’s more, they have integrated the searching behaviour into a comprehensive framework, with considerations of individual, organizational and environmental influences. This paves the way for further empirical research. One of the important purposes of effective environmental scanning and monitoring is to prevent risks and crises. Leaders, like human beings, are not free from error. Good leaders differ not only in the way they manage their daily operations and generate new businesses but also in the way they

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anticipate potential problems and take effective strategies to prevent them from happening, or prevent them from deteriorating when their occurrence is inevitable. Traditional leadership theories, however, frequently overlook the importance of risk prevention and error management and may be missing an important leadership characteristic. Arguably, the current worldwide financial crisis is in part due to inadequate scanning and lack of risk-prevention awareness among the corporate executives in the banking industry as well as government regulatory leaders. We believe that the chapter by Marcos Alonso-Rodriguez and Mark Griffin in this volume begins to fill in a critical void in leadership theory. They explore and delineate the psychological process of error prevention behaviour and link error management behaviour more broadly to leadership styles, organizational learning and organizational culture. They also provide suggestions as to how to prevent and rectify errors and how to turn errors into learning opportunities. This error management perspective and the recommendations offered by this chapter may be particularly useful for leaders in current global economic environment. Another reminder that the current crisis dramatically illustrates is the importance of ethics and integrity in business transactions and among leaders in all sectors. Previous chapters in this series have dealt with moral and ethical issues (see, e.g., Hui & Tan, 1999; Morrison, 2006). In the global context, the definition and people’s perception of ethical behaviour can vary across nations. Effective leaders need to know how to deal with ethical issues, not only in their native culture but also when they encounter business transactions and competitions from other cultures. In the chapter by Christian Resick, Jacqueline Mitchelson, Marcus Dickson and Paul Hanges in this volume, the influence of several contextual factors is considered on the endorsement of ethical leadership. Using data from the GLOBE project (that has been the subject of previous chapters in this series (see, e.g., House et al., 1999), Resick and colleagues test a series of hypotheses that investigate the relationships among organizational and societal culture, national level of corruption and the endorsement of ethical leadership. Their findings suggest various cultural factors and societal corruption provide important contextual cues to people’s perceptions of ethical leadership. These abovementioned chapters in this volume add several additional conceptual and empirical dots to the global leadership leopard, including: multifaceted personality and competency, scanning behavior, risk management, and integrity, all of which are important in defining and refining leadership characteristics that will lead to long-term success in the current global context. We hope these chapters will add to our progress in


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understanding leaders’ personalities, characters, competencies and behaviours and in attaining a more integrative leadership profile. However, this journey in search of distinguishing leadership is never-ending given the increasingly complex contexts leaders are leading today. We believe the concepts, theories and empirical research on leadership characteristics and the contexts in which they lead need to be continuously explored to both tackle the current crisis and guide the next decade.

MANAGING AND DEVELOPING GLOBAL LEADERS Having perused a series of desired leadership qualities, we also present in this volume insights, lessons and implications with regard to the management and development of global talents. Here, we included chapters from several seasoned practitioners and academics who shared their experiences in developing leaders at the individual and team levels, managing strategic alliances, and developing cross-cultural capability of global leaders. Zenglo Chen draws on his extensive corporate and consulting experiences, arguing for the need to develop a balanced leadership team. While organizations have invested considerable expense and effort in developing individual leaders, endeavouring to stretch them to become well-rounded and versatile, a more time-efficient and cost-effective strategy is to develop a balanced leadership team. By maximizing individual leader’s strengths and compensating each other’s shortcomings, a balanced leadership team could expand its capacities for greater accomplishment. Chen brings in various leadership and culture theories to demonstrate how balance can be struck and stipulates a process with which to successfully develop desired leadership teams. As predicted by Isabella and Spekman (2001) among others, we have witnessed numerous global organizations engaging in strategic alliances to access more resource, technology, markets and other critical elements. While strategies and approaches for developing these alliances have been made widely available, much less attention has been given to studying the leadership requirements in ensuring successful establishing and maintaining strategic alliances. William Reinfeld, in his chapter, identifies a series of qualities that are critical for managing strategic alliances, at both organizational and individual levels. He then elaborates the specific features in each stage of an alliance relationship and the associated requirements on leadership. Alongside the progress involved in setting up an alliance relationship, that is, from making up the decision to engage in an alliance to the stage of identifying

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partners, negotiating, and managing and maintaining the relationship, the associated leadership qualities evolve accordingly and, thus, need to be redefined and updated. Reinfeld’s summary presents a very sound guideline for organizations to consider in deciding over, planning and managing strategic alliances. Organizations could evaluate themselves against this checklist to decide whether or not to form a strategic alliance relationship, and if so, how to select capable executives to manage it. David Oliver, Allen Church, Rob Lewis and Erica Desrosiers from PepsiCo International share their experiences in planning and executing leadership selection and development in multinational corporations. Oliver et al. give a comprehensive overview of the talent management cycle from identifying high potentials, developing them through a bundled learning system, including on-the-job experience learning, coaching and mentoring, and formal training programs, and eventually moving them up, provided an appropriate level of stretch and support. Their illustration vividly exemplifies how theories and tools in I/O psychology can best be incorporated into corporate HR practices. The current and future generation of global leaders must be those who are able to function effectively in culturally diverse settings. We have already witnessed a massive growth of job migration across borders; moving forward, the demands of global mobility and jobs offshore are likely to gain increased momentum (Tucker, Kao, & Verma, 2005). However, the adjustment and effectiveness of expatriates working and living in a nonnative culture has been recognized as one of the major concerns among multinational organizations (Bird & Dunbar, 1991; Dowling & Welch, 2004; Selmer, 1995). Although international assignments are frequently believed to be a powerful strategy to develop global leaders, it is unclear who would make the best of these assignments and how these assignments take effect at the cognitive, motivational and behavioral level of expatriates. Ng, Van Dyne and Ang in this volume draws on Kolb’s (1984) experiential learning theory and integrates it with their newly established construct of cultural intelligence. Cultural intelligence tackles the individual’s capability at metacognitive, cognitive, motivational and behavioural levels to function effectively in diverse cultural settings. Ng, Van Dyne and Ang explore how their four cultural intelligence levels interact with each stage in the experiential learning cycle, the outcome of which subsequently affects the effectiveness of executives’ learning from international assignment. Ng et al.’s model provides a solid foundation for disentangling the puzzling process of individual’s adaptation in foreign countries. Moving one step further, Ming Li’s chapter expands the theoretical framework of cultural


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intelligence. She proposes that cultural intelligence is developed in part from international experience and that learning styles moderate the relationship between international experience and cultural intelligence. Her framework delineates the antecedents and the developmental process of cultural intelligence and gives rise to a set of hypotheses that are open to further empirical investigations. Taken together, these two chapters drive forward our understanding of expatriates’ learning process in cross-cultural contexts. Further to this, they provide immense implications for identifying culturally intelligent executives, who are more likely to succeed in diverse cultural settings, as well as implications for developing the cultural intelligence of executives whose various learning styles can be accommodated.

LEADERSHIP IN NON-WESTERN CULTURES In the last three chapters, the invited authors share with us studies and management experiences derived from non-Western cultures. As an important feature of each volume in AGL series, though relatively indigenous, their implications are by no means restricted to the regions where they were generated. In the process of globalization, the economic interdependency between nations has increasingly been recognized and emphasized, and every state is contributing to the overall economic growth. In addition, emerging markets such as Asia and Middle East have become important part of global economy and trade (Bo¨hme, Chiarella, & Lemerle, 2008; Dunning & Hamdani, 1997; Farrell, Fo¨lster, & Lund, 2008); a better understanding of these increasingly visible cultures would help multinational organizations develop better strategies in these markets. Val Arnold presents a personal account of his experience living and working in the Arabic culture. His stories vividly delineate the highly contextual, high shame and mistake avoidance, external locus of control (Allah’s will overrides individual effort and striving), loyal and obedient tribal culture. Coupled with these cultural elements, Arnold narrates the major concerns associated with, and provides recommendations for, assessing and developing Arabic managers. As Arnold recognizes himself, this account is based on an American perspective, and it does not represent all Arabic countries. However, we believe, with particular attention to not overgeneralizing, his experience informed perspective is valuable in better understanding the cultures in the Middle East. It offers great insight to improve the effectiveness of collaborations between the West and the Middle East.

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Inju Yang and Aidan Kelly’s chapter in this volume observes the ineffective communication between Korean managers and non-Korean subordinates in overseas Korean organizations. They suggest that such an issue is due to the absence of informal communication, which is frequently used as a primary mechanism to maintain relationships and exchange information in local Korean organizations. Their comprehensive review of the value systems and beliefs that underpin Korean culture helps explain the necessity of informal and subtle social exchange mechanisms among social members. In oversea Korean organizations, however, such communication is rarely established and thus leads to poor affective connection, inadequate information sharing and cross-cultural conflict between Korean managers and non-Korean subordinates. Yang and Kelly’s observations sheds light on East Asian management style and provide insightful recommendations for Asian-based organizations to expand abroad, especially into Western countries. With the burgeoning trend of Asian organizations moving to the West and starting to play important roles in global business, we anticipate that a wider and more frequent interaction between the Eastern and the Western management styles is yet to come, and we believe reviews in similar subjects can be very meaningful in facilitating such cultural encountering. The last indigenous study comes from China. Jian-Min Sun and Biying Wang test the applicability of the servant leadership construct in China. The concept of leaders as steward of organizational resources and as servants to their people has been investigated broadly in the West since 1970. Although arguably taking its roots from the East, this construct of servant leadership has rarely been examined in Eastern cultures. Sun and Wang’s work fills in this void by developing a Chinese version of servant leadership scale, validating the construct and testing its prediction of performance criteria. Their study confirms the structural similarity of the servant leadership construct in China and in the United States and finds that this construct predicts supervisor-rated performance, employee satisfaction and perceived organizational support with a medium to high validity. Research as such that validates West-derived measures in a different cultural context is continuously urged and we look for more chapters in the future that tackle the generality and specificity of psychological constructs across cultures. In sum, the 13 chapters in this volume continue the quest in the earlier volumes of this series to identify the leopard’s spots and connect these spots into a clearly charted entity. Despite the current crisis that we are going through, we believe smart, vigilant and adaptable leopards will not be easily trapped by temporal setbacks; instead, they will capitalize on these difficulties and turn them into surviving and thriving opportunities. We


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hope the chapters in this volume will provide some useful and usable insights for those who study, research and practice leadership in various aspects of work and life.

REFERENCES Bird, A., & Dunbar, R. (1991). Getting the job done over there: Improving expatriate productivity. National Productivity Review, 10(2), 145–156. Bo¨hme, M., Chiarella, D., & Lemerle, M. (2008). The growing opportunity for investment banks in emerging markets. Mckinsey on Corporate & Investment Banking, No. 7, pp. 3–9. Campbell, D. P. (2006). Globalization: The basic principles of leadership are universal and timeless. In: W. H. Mobley & E. Weldon (Eds), Advances in global leadership (Vol. IV). Oxford, England: JAI Press/Elsevier Science. Dowling, P. J., & Welch, D. E. (2004). International human resource management: Managing people in a multinational context (4th Edn). London: Thomson. Dunning, J. H., & Hamdani, K. A. (1997). The new globalism and developing countries. New York, NY: United Nations University Press. Farrell, D., Fo¨lster, C. S., & Lund, S. (2008). Long-term trends in the global capital markets. The Mckinsey Quarterly, Issue 2, pp. 8–11. Fulkerson, J. R. (1999). Global leadership competencies for the 21st century: More of the same or a new paradigm for what leaders really do? In: W. H. Mobley, J. Gessner & V. Arnold (Eds), Advances in global leadership (Vol. I). Oxford: JAI Press/Elsevier Science. Hollenbeck, G. P. (2009). Executive selection – What’s rightyand what’s wrong? Industrial and Organizational Psychology, 2(2), 130–143. Hollenbeck, G. P., & McCall, M. W., Jr. (2003). Competence not competencies: Making global executive development work. In: W. H. Mobley & P. W. Dorfman (Eds), Advances in global leadership (Vol. III). Oxford, England: JAI Press/Elsevier Science. House, R. J., Hanges, P. J., Ruiz-Quintanilla, S. A., Dorfman, P. W., Javidan, M., Dickson, M., et al. (1999). Cultural influences on leadership and organizations: Project Globe. In: W. H. Mobley, M. J. Gessner & V. Arnold (Eds), Advances in global leadership (Vol. 1). Oxford: JAI Press/Elsevier Science. Hui, C. H., & Tan, G. C. (1999). The moral component leadership: The Chinese case. In: W. H. Mobley, J. Gessner & V. Arnold (Eds), Advances in global leadership (Vol. I). Oxford: JAI Press/Elsevier Science. Isabella, L. A., & Spekman, R. E. (2001). Alliance leadership: Template for the future. In: W. H. Mobley & M. W. McCall, Jr. (Eds), Advances in global leadership (Vol. II). Oxford, England: JAI Press/Elsevier Science. Kolb, D. A. (1984). Experiential learning: Experience as the source of learning and development. Englewood Cliffs, NJ: Prentice-Hall. McCall, M. W., Jr. (2001). Introduction: International perspectives on leadership: A leopard in the dark woods. In: W. H. Mobley & M. W. McCall, Jr. (Eds), Advances in global leadership (Vol. II). Oxford, England: JAI Press/Elsevier Science. Mobley, W. H., & McCall, M. W., Jr. (Eds). (2001). Advances in global leadership (Vol. II). Oxford, England: JAI Press/Elsevier Science.

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Morrison, A. (2006). Ethical standards and global leadership. In: W. H. Mobley & E. Weldon (Eds), Advances in global leadership (Vol. IV). Oxford, England: JAI Press/Elsevier Science. Selmer, J. (1995). Expatriate management: New ideas for international business. Westport, CT: Quorum Books. Tucker, E., Kao, I., & Verma, N. (2005). Next-generation talent management: Insights on how workforce trends are changing the face of talent management. Available at www.hewitt.com. Retrieved on February 27, 2009.

PERSONALITY, LEADERSHIP, AND GLOBALIZATION: LINKING PERSONALITY TO GLOBAL ORGANIZATIONAL EFFECTIVENESS Robert Hogan and Michael J. Benson ABSTRACT As we move deeper into the 21st century and organizations continue to expand globally, the need for talented leaders and enhanced leadership development programs will grow. In fact, rapid economic growth in parts of the world coupled with the number of experienced leaders retiring in other parts of the world point to a global leadership imperative – we need to understand better how to select and develop leaders who can deliver organizational results. This chapter makes four principal assertions: (1) leadership is a function of personality; (2) leadership is a determinant of organizational effectiveness; (3) principles of leadership are formal; and (4) using the leadership value chain, one can trace the links from personality to leadership to organizational effectiveness. We conclude by offering some suggestions to help understand and guide future, global leadership development.


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ROBERT HOGAN AND MICHAEL J. BENSON It is instructive that an individual as ideally suited to a job as Pitt (former Securities and Exchange Commission (SEC) chairman) could ultimately fail. Too often, we assume that someone’s professional background is a perfect fit for a job – who has the ideal combination of intellectual acumen, experience, and expertise – cannot fail. The lesson: Never underestimate the power of personality in undermining the success of even the most brilliant and well-suited leader. (Dotlich & Cairo, 2003, p. 62)

INTRODUCTION This chapter makes four claims, all of which are subject to lively debate among modern organizational researchers but which are also subject to empirical verification. First, we argue that leadership is a function of personality – who people are determines how they will lead (Hogan & Kaiser, 2005). Second, we propose that leadership is a fundamental determinant of organizational effectiveness – it really matters who is in charge. Third, we suggest that the principles of leadership are formal – they apply to any organization anywhere at any time. Fourth, through the device of ‘‘the leadership value chain,’’ we trace the empirical links between personality, leadership, and organizational effectiveness. We conclude by noting several themes that can help guide global leadership development practice and research; we also provide practical examples to support our fundamental assertions. As an indication of our general perspective, consider the case of Carlos Ghosn, the CEO of Renault and Nissan motors. Ghosn was born in Porto Velho, Brazil, grew up in Beirut, Lebanon, attended L’Ecole Polytechnique in Paris, and then joined Michelin Tires as a plant manager. He worked his way up to Chairman and CEO of Michelin North America. He then joined Renault, becoming executive vice president of the Renault Group in 1996. In 1999, he became CEO of the badly struggling Nissan Motors, one of Japan’s largest companies, which he turned around in one year, and gained world wide fame as a result. He is now CEO of both Nissan and Renault. Ghosn, born in Brazil with Lebanese heritage, educated in France, worked in the U.S., and then resurrected a major Japanese firm, is a poster boy for the view that the principles of leadership are formal and not culture specific (cf. Bass, 1997; Campbell, 2006).

PERSONALITY The word ‘‘personality’’ is defined in two ways: from the perspective of (1) the actor and (2) the observer. Personality from the actor’s perspective

Personality, Leadership, and Globalization

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concerns how people view themselves – this is their identity. In contrast, personality from the observer’s perspective concerns how other people regard the actor – this is their reputation. The personality literature focuses on identity, but after 100 years, we can make few useful generalizations about identity. We prefer to focus on reputation because it is easy to study, it has a well-defined structure (the so-called Five-Factor Model [FFM]), and the content and structure of reputation are well-replicated across cultures (Costa & McCrae, 1992; Digman, 1990; Goldberg, 1999). Most importantly, however, the best predictor of future behavior is past behavior; reputation is a summary of past behavior, therefore, it is the best possible data we have for predicting future performance. Reputation can also be viewed from two perspectives, which we call ‘‘the bright side’’ and ‘‘the dark side’’ (Hogan, Curphy, & Hogan, 1994). The bright side concerns individual differences in the ability to form social bonds and to advance one’s career agenda (i.e., individual differences in the ability to ‘‘get along and get ahead’’). Table 1 presents the structure of the bright side of personality, often called the FFM. The bright side is what we see when people are at their best – during job interviews and other public performances – and is associated with career success. The dark side is what we see when people are careless, lazy, or let down their guard. The dark side concerns factors associated with career derailment and managerial incompetence. Bentz (1985) pioneered the study of managerial derailment and the major findings of this literature can be summarized as follows. First, in samples of new managers who are hired for their attractive bright side characteristics, more than 50% will fail or leave the organization. Second, managers fail for personality-based reasons. And third, these personality-based reasons for failure fall into 11 categories that form a taxonomy of the dark side. Table 2 presents the taxonomy of the dark side of personality (Hogan & Hogan, 1997). To summarize, personality can be defined in terms of reputation, and reputation can be described in terms of five bright side and eleven dark side factors. Moreover, the evidence clearly supports the view that these dimensions of personality predict leadership performance (Benson, 2006; Benson & Campbell, 2007; Judge, Bono, Ilies, & Gerhardt, 2002). For example, Judge and colleagues meta-analyzed 222 correlations from 73 samples and found significant overlap between bright side personality traits and leadership outcomes. Using the bright side traits to predict leadership emergence (i.e., being perceived as ‘‘leader-like’’) and effectiveness (i.e., subordinate or supervisor ratings of effectiveness), the Multiple Rs

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ROBERT HOGAN AND MICHAEL J. BENSON

Table 1. Bright Side Dimension Adjustment

The Structure of the Bright Side of Personality.

Related FFM Dimension

Definition

Emotional stability

Self-confidence and resilience versus guilt and self-doubt Ambition Extraversion/ Competitiveness and surgency drive versus laziness and apathy Sociability Extraversion/ Approachable and surgency outgoing versus shy and retiring Interpersonal Agreeableness Charming and sensitivity attractive versus tough and confrontational Prudence Conscientiousness Cautious, discrete, and conforming versus reckless and defiant Inquisitive Openness to Curious and open experience minded versus unimaginative Learning style Openness to Smart and up to date experience versus poorly informed

As a Strength

As a Shortcoming

Calm under pressure

No sense of urgency

Takes initiative

Always competing

Social selfconfidence

Won’t listen

Likeable

Avoids conflict

Conscientious

Inflexible

Creative

Eccentric

Knowledgeable Know it all

were 0.53 and 0.39, respectively (Judge et al., 2002). Specifically, extraversion was the strongest correlate of leadership (r ¼ 0.31), followed by conscientiousness (r ¼ 0.28), and openness to experience and neuroticism (r ¼ 0.24 and –0.24, respectively; Judge, et al., 2002). With respect to dark side traits and leader performance, Benson (2006) and Benson and Campbell (2007) show that dark side characteristics account for significant variance above and beyond the effects of bright side characteristics when predicting overall leadership performance across a wide range of settings and outcome measures.

LEADERSHIP Kaiser, Hogan, and Craig (2008) show that researchers almost always define leadership in terms of the persons who are in charge. But given the base rate

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Table 2. Dark Side Dimension Excitable Skeptical

Cautious

Reserved

Leisurely

Bold

Mischievous

Colorful

Imaginative

Diligent

Dutiful

The Structure of the Dark Side Personality. Definition

Mood swings, emotional outbursts, and inability to persist on projects Mistrusting others, questioning their motives, and challenging their integrity Fearful of making mistakes, avoid making decisions, resisting change, using only proven solutions to problems, and alienating their staffs Remaining aloof, communicating poorly, and ignoring the welfare of their staffs Procrastinating, pursuing their own agendas, and failing to set clear expectations for, or following through with commitments to, their staffs Feeling entitled, not sharing credit for success, blaming their mistakes on others, and not learning from experience, but are fearless about pursuing grand goals Lying and breaking rules to test the limits, ignoring commitments, and thinking they can talk their way out of any problem Needing to be the center of attention, so that others can admire them, preoccupied with being noticed, unable to maintain focus, and resist sharing credit Thinking in eccentric ways, often changing their minds, and making strange decisions Frustrating and disempowering their staffs with micro-management, poor prioritization, and an inability to delegate Sucking up to supervisors, unable to deny unrealistic requests, won’t stand up for their staffs and burn them out as a result

As a Strength

As a Shortcoming

Empathy and concern Social and political insight Evaluates risks appropriately

Emotional explosiveness Excessive suspicion

Emotionally unflappable

Insensitive and poor communicator Passive aggression

Good social skills

Indecisiveness and risk aversion

Courage and energy

Overbearing and manipulative

Unafraid of risk

Reckless and deceitful

Celebrations and entertainment

Impulsive and distractible

Creativity and vision

Bad ideas

Hard work and high standards

Micromanagement

Corporate citizenship

Indecisiveness

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of failure for managers and CEOs, this makes no sense. In our view (cf. Van Vugt, Hogan, & Kaiser, 2008), leadership is more usefully conceptualized as a resource for organizations or groups in achieving their goals. Specifically, we believe leadership should be defined in terms of the ability to build and maintain a high-performing team, as compared with the competition. Moreover, in the standard literature, leadership is typically evaluated in terms of ratings provided by persons senior to the leader in question, and these people typically have a vested interest in their chosen person doing well. In contrast, Kaiser et al. (2008) argue that leadership should be evaluated in terms of the performance of the team for which the leader is responsible. This is an important change of emphasis.

HOW PERSONALITY TRANSLATES INTO LEADERSHIP Personality translates into leadership through the concept of competencies. McClelland and his colleagues (e.g., Boyatzis, 1982) introduced the concept of competency, which has become widely popular in the HR community. We believe every competency model can be classified in terms of four performance domains (cf. Bartram, 2005; Hogan & Warrenfeltz, 2003). These performance domains, in turn, lead directly to assessments. Hence, if we know the competency needed by a person, we also know how to measure it. The structure of our model appears in Table 3. This domain model provides a systematic account of the links between bright side personality, competencies, and occupational performance (the link between dark side personality dimensions and leadership is discussed in the later section). The four competency domains concern (a) intrapersonal skills, (b) interpersonal skills, (c) technical skills, and (d) leadership skills. These four domains form an overlapping developmental sequence, with the later skills depending on the appropriate development of the earlier skills. The domains also form a hierarchy of trainability, in which the earlier skills are harder, and the later skills are easier to train (Hogan & Warrenfeltz, 2003). Intrapersonal Skills Two components underlie the domain of intrapersonal skills. The first is core self-esteem (Erez & Judge, 2001; Judge & Bono, 2001), emotional

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Table 3. Metaconcept Getting ahead

Getting along

Domain Model of Job Performance, Example Competencies, and Personality Measures. Domain

Example Competency

FFM Measurement

Leadership

Achievement Building teams Business acumen Decision making Delegation Employee development Initiative Leadership Managing performance Resource management

Surgency/extraversion

Technical

Analysis Creating knowledge Decision making Political awareness Presentation skills Problem solving Safety Technical skill Training performance Written communication

Openness to experience

Interpersonal

Building relationships Communication Consultative skills Cooperating Influence Interpersonal skill Organizational citizenship Service orientation Teamwork Trustworthiness

Agreeableness Surgency/extraversion

Intrapersonal

Dependability Detail orientation Flexibility Following procedures Integrity Planning Respect Risk taking Stress tolerance Work attitude

Conscientiousness Emotional stability

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security, or resiliency. Core self-esteem is easily assessed using any wellvalidated measure of emotional stability from the FFM, and these measures predict a wide variety of positive career outcomes, including job satisfaction and performance evaluations (Judge & Bono, 2001). The second component of intrapersonal skills concerns self-control, which is easily assessed using well-validated personality measures of FFM emotional stability and conscientiousness (Hogan & Hogan, 1989), which predict a wide variety of career outcomes, including supervisors’ ratings of satisfactoriness (Hogan & Holland, 2003). Intrapersonal skill is the foundation on which careers develop. Persons with good intrapersonal skills project integrity – i.e., they are selfdisciplined, mannerly, and follow rules and procedures seamlessly; integrity is perhaps the most important characteristic leaders need if they are to be perceived as credible both inside and outside the organization.

Interpersonal Skills Interpersonal skill concerns building and maintaining relationships with various different people; it is easily measured using well-validated personality measures of FFM extraversion and agreeableness (Bartram, 2005), and these measures predict a wide range of occupational outcomes, including supervisory performance (cf. Hogan & Hogan, 2001). These skills are the foundation for forming and sustaining the relationships needed to build a team. For example, Duffy, Ganster, and Pagon (2002) studied the links between social undermining, social support, and relevant outcomes in the workplace. Social undermining involves behaviors that erode relationships and reputations, and social support concerns behaviors that enhance interpersonal relations. Both undermining and support predict a range of outcomes including organizational commitment and counterproductive work behaviors. The surprising finding, however, concerns the interaction between undermining and support; leaders who treat subordinates with high levels of both undermining and support create the highest levels of counterproductive work behavior. Simply put, inconsistent leaders make their subordinates anxious, and they then respond with negative performance. Unpredictable leaders alienate their followers and jeopardize their ability to build and maintain high-performing teams and achieve positive organizational results.


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Technical Skills The domain of technical skills differs from the preceding two domains in several ways. Technical skills can be taught and they are the least dependent on social skill. Technical skills involve comparing, compiling, analyzing, coordinating, innovating, synthesizing, and so on (Peterson, Mumford, Borman, Jeanneret, & Fleishman, 1999). They can be assessed using work simulations, assessment center exercises, and content-valid tests; the best predictors of individual differences in technical skills, however, are measures of cognitive ability (Hunter & Hunter, 1984; Ree & Earles, 1992; Schmidt & Hunter, 1998). These measures predict supervisor ratings of judgment, market savvy, training progress, and job knowledge (Hogan & Holland, 2003). Technical skills are important for leadership because leaders need to seem knowledgeable, competent, and a resource for the performance of their group.

Leadership Skills Leadership skills concern building and maintaining effective teams; they can be analyzed in terms of five components, which depend on intrapersonal, interpersonal, and technical skills. The first component is recruiting talented people to a team. The second component involves retaining talented people once they have been recruited. The third component concerns motivating the team. Recruiting, retaining, and motivating team members depend on building positive relationships with each member, which in turn depends on the interpersonal skills described earlier. The fourth component concerns articulating a vision for the team; the vision legitimizes the team enterprise. Technical competence is needed to develop the vision, and interpersonal skills are needed to sell it. The final component of leadership skill is being persistent and hard to discourage. Persistence probably depends on core self-esteem and conscientiousness, although there is little research on the topic. Leadership skill can be assessed using any number of well-validated procedures, although the most effective assessment uses a combination of methods. Recent meta-analyses indicate that measures of cognitive ability and personality substantially predict leadership emergence and effectiveness (Ilies, Gerhardt, & Le, 2004; Judge, Colbert, & Ilies, 2004; Judge, et al., 2002) and

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leadership role occupancy (Arvey, Rotundo, Johnson, Zhang, & McGue, 2006).

Dark Side Dimensions and Domain Model As noted earlier, dark side personality tendencies are often related to managerial derailment, and researchers have begun to study leadership failure (Benson, 2006; Hogan & Hogan, 2001). Bennis (1999) argues that the two key leadership competencies are creating and sustaining trust and ensuring the leader and the led are intimate allies, because the lack of a critical mass of committed followers leads to the inability to achieve organizational results through other people (cf. George, 2003; Kelley, 1988; Kouzes & Posner, 2003). In terms of the domain model, dark side personality tendencies primarily impact the intrapersonal and interpersonal domains (Table 3), causing leaders to alienate their subordinates and destroy teams. Although leaders can (and do) use dark side behaviors to achieve short-term success, these tendencies ultimately disrupt their ability to achieve organizational goals through the collective effort of the group.

ORGANIZATIONAL EFFECTIVENESS In our view, organizational effectiveness should be the primary focus of all organizational research. Despite the obvious importance of the topic, one searches the literature in vain for pertinent discussions or even definitions. The reason for this may be that it is difficult to define any single index of effectiveness. Katz and Kahn (1976) suggest defining organizational effectiveness in an ipsative manner, in terms of how efficiently an organization translates its inputs into outputs. We think this definition decontextualizes the problem. We also think the concept needs to be defined explicitly and below we offer such a definition. Like people, organizations compete, and some compete more effectively than others. This seems to be the starting point for a definition: effective organizations outcompete ineffective organizations. Toyota is more effective than General Motors, the Singapore economy is more robust than the Romanian economy, and Manchester United is a better football team than


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the Tottenham Hotspurs. This seems to be a useful preliminary definition of organizational effectiveness – outperforming the competition. Given this starting point, we think organizational effectiveness can be defined in terms of five components, as follows: 1. Talented Team Members. Other factors being equal, more talented teams will outperform less talented teams. Talented team members are found using valid selection procedures and retained by maintaining robust interpersonal relationships and providing challenging assignments as significant development opportunities. 2. Talented Managers. Other factors being equal, well-coached teams will outperform poorly coached teams. Good managers are much like good coaches – they recruit good players, assign the right people to the right positions, devise good game plans, teach relevant skills, and provide useful feedback on performance. We identify good managers using valid selection methods. 3. Motivated Team Members. The performance of any team will be moderated by its aggregate level of motivation. Good managers enhance the motivation of their players; bad managers demotivate their players. Motivation is a function of good management. 4. An Effective Strategy. Peter Drucker observed that businesses typically get in trouble because they have the wrong theory of their business. This is a common problem for three reasons. First, most managers are operational thinkers who are concerned about issues of implementation, efficiency, and cost control, rather than strategic thinkers who are concerned with finding ways to outperform the competition. Second, strategic planning in business is a lot like research – a good plan depends on sifting and weighting reams of data. But most managers are actionoriented, pragmatic, and dislike research. However, as organizations become more global, strategic thinking becomes more crucial, because there are increasingly more variables to consider. Finally, strategies have limited life spans; changes in market and competitors’ behavior require constantly evaluating the theory of the business, a process that most managers find uncongenial. In short, effective strategies require accurate decisions based on mountains of data while maintaining a delicate balance of the short- and long-term requirements. 5. Monitoring Systems to Keep Track of the Foregoing. Organizations need to monitor, systematically, how talented their players are, how talented their managers are, the state of staff morale, and how well their strategy is working. In a global environment characterized by changing demographics,

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managing, developing, and monitoring leadership talent might be the difference between organizational success and failure – the ultimate criterion. We close this discussion of organizational effectiveness by making three points. The first is that organizational effectiveness can be evaluated and defined in terms of the foregoing five categories of analysis. Our second point is that the majority of organizations have problems with most of these categories of performance. Our third and most important point is that it is the responsibility of senior management (leadership) to attend to the organization’s performance across these categories. As Hollenbeck and McCall (2003) eloquently pointed out in an earlier version of the Advances in Global Leadership series, ‘‘[I]t has been a mistake asking senior management to support development when what is really needed is their leadership of it’’ (p. 116; emphasis original) – a point we revisit in the final portion of this chapter.

LEADERSHIP AND ORGANIZATIONAL EFFECTIVENESS Most business people take the importance of leadership for granted, but many academics disagree. Some argue that the effects of leadership are minimal compared to historical, organizational, and environmental forces (Lieberson & O’Connor, 1972; Pfeffer, 1977; Salancik & Pfeffer, 1977). Others suggest that it is a romantic fallacy to attribute organizational outcomes to individual leaders (Meindl & Ehrlich, 1987; Meindl, Ehrlich, & Dukerich, 1985). These views are contradicted by the empirical facts. Research on managerial succession over the past twenty years shows that changes in leadership are followed by changes in firm performance (e.g., Barrick, Day, Lord, & Alexander, 1991; Barney, 1991; Bertrand & Schoar, 2003; Collins, 2001; Day & Lord, 1988; Joyce, Nohria, & Roberson, 2003; Thomas, 1988). Bertrand and Schoar (2003), for example, show that CEOs account for about 14 percent of the variance in a firm’s financial results. Other studies estimate the effect of executive leaders to be 20–45 percent, depending on the measure of organizational performance (Day & Lord, 1988; Thomas, 1988). To put these figures in perspective, the industry in which a firm competes accounts for about 19 percent of variation in financial performance (McGahan & Porter, 1997). Two economists (Bloom & Van Reenen, 2006, 2007) evaluated management practices in over 700 manufacturing firms in the United States, Great


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Britain, France, and Germany, using four categories: operations (e.g., process improvements, internal communication), targets (goals, rigor, and transparency of setting goals), monitoring (tracking and following up on individual performance), and incentives (links between pay and performance). They assessed company performance using several metrics (e.g., firm-level productivity, profitability, sales growth, survival rates). Country and industry effects accounted for about half of the variance in company performance, but the remaining variance was a function of the four categories of management practices. The firm’s leaders decided whether these management practices were used, but the quality of management within the organization mattered more than the senior executives by themselves. The large number of firms that were poorly managed produced the weakest results, again demonstrating that good leaders enhance firm performance and bad leaders degrade it. Although organizational effectiveness depends on more than leadership, the data clearly show that leaders have a substantial influence on it. Given that leaders affect organizational performance, the next question concerns how?

THE LEADERSHIP VALUE CHAIN Fig. 1 presents our ‘‘leadership value chain’’ (cf. Kaiser et al., 2008). The model proposes that (1) leaders affect organizational performance in three ways; (2) the leaders’ inputs are mediated by the reactions of the work force; (3) if the work force reacts positively, then positive results emerge and vice versa; and (4) this results in group (or organization) performance. Leadership style is manifested in three ways. The first (seen in the top loop of the Leadership Value Chain) concerns leader behavior – i.e., how they treat their staff. This behavior affects staff morale, and staff morale predicts unit performance (cf. Harter, Schmidt, & Hayes, 2002). The second manifestation of leadership style is in terms of leaders’ values – what they pay attention to, what they reward, and what they sanction. This, in turn, creates the culture of the team, work group, or organization, and determines what gets emphasized. For example, an individual leader who is motivated by (i.e., values) success, productivity (power), and making profits (commerce) will cultivate an organizational culture that is very different from a leader who values data-driven analysis (science) and a predictable, structured environment (security) (cf. Hogan & Hogan, 1996). In short, some cultures are productive in an economic

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ROBERT HOGAN AND MICHAEL J. BENSON Individual Leader Characteristics

Personality

Group Processes/ Performance Context

Leadership style

Fig. 1.

Behaviors

Morale

Values

Culture

Decision Making

Strategy & Staffing

Outcomes

Team/ Organization Effectiveness

The Leadership Value Chain.

sense – they emphasize results, profitability, or quality; other cultures are less so – they emphasize short-term profitability and ignore long-term costs. The third manifestation of leadership is in terms of leaders’ decisionmaking style. In our view, decision making can be organized by two dimensions. Tactical reasoning focuses on day-to-day and short-term decisions and outcomes and characterizes leaders who can derive solutions from a specific set of data and information quickly and efficiently. Strategic reasoning, on the other hand, is characterized by a focus on the long-term success and survivability and emphasizes being able to see how current trends and events will impact the organization in the future. A leader’s standing on these two reasoning dimensions drives decisions about staffing and strategy; some staffing decisions are better than others, some strategies are better than others. The combination has fateful implications for organizational effectiveness.

LESSONS FOR GLOBAL LEADERSHIP Successful Global Leadership: Nine Enduring Themes from Toyota Obviously cultures differ across the world. But cultures are not all equal from the perspective of economic development or organizational effectiveness.


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Some version of modern management practice is essential for success. Perhaps the best single example of this is Toyota, a Japanese automobile manufacturer. Many people think Toyota is the best-run organization in the world. By the end of 2006, Toyota’s market capitalization was 240 billion dollars – which is larger than the market capitalization of General Motors, Ford, Daimler–Chrysler, Honda, and Nissan combined. Toyota has 295,000 employees world wide. The industry metric for product desirability is something called ‘‘retail turn rate’’ – how long does a new car sit on a dealer’s lot? The retail turn rate for Toyota is 29 days; for BMW, it is 31 days; for Daimler–Chrysler, it is 107 days. Even Bill Gates, the founder of Microsoft, asks ‘‘What can we learn from Toyota?’’ We think that nine themes characterize the Toyota model and offer insight regarding global leadership. The first theme concerns Toyota’s long term perspective, which contrasts dramatically with the ‘‘pump and dump’’ mentality of many U.S. organizations. Toyota plans to be in business 100 years from now. Toyota started working on Prius, their hybrid car, in 1991 – because they understood that the world will inevitably run out of oil. They do not focus on quick returns on investment; they focus on long-lasting returns on investment. The second theme concerns kaizen. Kaizen refers to continuous, steady improvement in processes as well as products; it means never being satisfied. Kaizen is a way of life at Toyota – it is valued and embraced; it is not a passing fad. If a company pursues kaizen, it will be able to produce higherquality products for less money – in Toyota’s case, better quality cars for less money than comparable models from their competitors. How high is the quality of Toyota’s cars? In Tulsa, there is a famous, skilled, and eccentric mechanic whom Ferrari hired to build their last entry in the annual Mexican Road Race; he is the best mechanic we know, and he says Toyota is the bestbuilt car in the world. For Toyota, however, being able to build cars more efficiently does not necessarily mean more profitability. In their view, savings on the assembly line means better cars without making customers pay more for them. As they note, ‘‘If you are efficient in the things the client doesn’t see, then you can put money into things the customer does see’’ and this is all part of kaizen. Ultimately, kaizen is the antithesis of complacency; it means never being satisfied with processes, products, or performance. The third theme concerns the effort Toyota puts into Research and Development (R&D). They understand that they must plough profits back into R&D. Toyota spends $20,000,000 per day on R&D, a great deal more than General Motors. One American industry economist noted that, if this

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trend continues, the U.S. car industry is dead. Suppose, he asked, that GM could make a car as good as Toyota this year, that means that GM has finally gotten into the game, but the problem is to get ahead of the game. R&D is part of kaizen. The fourth theme concerns organization-wide teamwork. At Toyota, there are no silos. The marketing department drives R&D, R&D drives marketing; R&D drives production, and production feeds back into R&D; production shapes the sales effort and the sales effort shapes production. Teamwork is a self-conscious value: the goal is to eliminate turf wars and fiefdoms and let the teamwork culture return value to the organization in the form of better performance (i.e., lower cost, high efficiency, better value). It is much easier to create new products such as Apple’s iPod or Toyota’s Prius than to develop a new manufacturing process. The former involves a few individuals; the latter involves the entire organization. Toyota practices teamwork better than almost anyone. The fifth theme is customer service. Customer service is more than being nice to people in a showroom. It means taking the customer into account during the product design phase; it means not assuming that if you build it, they will come. At the February (2007) Detroit Auto Show, Toyota introduced its new pickup truck, the Tundra. Their preparation for this roll out was extraordinary. They developed an empirical taxonomy of pickup users, which contained five buckets or categories: hunter/fishermen, home builders, NASCAR fans, motorcycle lovers, and country music lovers. They went to specific locations and watched people in these buckets drive their pickups. They then designed specific Tundras for 31 different types of users. Construction workers, for example, wear gloves while operating their trucks, so Toyota made the dashboard buttons bigger for those users. But Toyota is far more than a pickup truck manufacturer. Their strategy and business model support the belief that they should serve every kind of customer, so they have pickups, entry level cars, mid-range cars, and luxury cars. The customer experience is the primary focus for the business, from product design to car manufacturing to follow up maintenance. The sixth theme is an extension of the notion that Toyota should serve every kind of customer. They believe in customization in short runs. Henry Ford once said that Ford customers could have cars in any color they wanted as long as it was black. Toyota is the antithesis. There are 21 versions of the Tundra pickup. This is a hard problem – how to customize profitably. The seventh theme concerns organic growth. Toyota wants to grow organically but steadily – they talk about moving jojo, the Japanese term for


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step by step, getting more efficient all the time. When a plant changes production to a new model, production slows down while parts, processes, and systems are updated. In 2001, their huge Georgetown, Kentucky plant needed 59 days to complete the conversion to the new model of Camry. In 2006, the transition took 16 days. The extra cars they produced yielded $100,000,000 in additional revenue – just by improving processes incrementally. Toyota says it does not want GM to collapse, it wants GM to go away slowly so that Toyota can fill in behind in a high quality way. The eighth theme concerns how Toyota handles mistakes. It is human nature to cover up mistakes rather than call attention to them. Toyota has deemed it a virtue and an achievement to identify problems, because that is the only way they can be fixed. Obviously identifying problems publicly is a corollary of kaizen. At the risk of stating the obvious, we would like to note some links between the eight themes just discussed and the Leadership Value Chain in Fig. 1. Looking at the bottom loop of the Value chain, Toyota’s core business strategy emphasizes the long-term perspective, short-term profitable customization, and organic growth – a conservative but flexible strategy. Their emphasis on kaizen, research and development, teamwork, customer service, and openness about mistakes are the core of their values and culture – a culture that emphasizes quality, customer focus, and respect for the staff. Toyota is very clear about its strategy and values. The longterm focus and investment in R&D drive a culture of continuous learning and process improvement; the process improvement, in turn, drives excellent customer service (including profitable customization); the excellent customer service drives sales, profitability, and customer satisfaction, which establishes the basis for a long-term competitive advantage and brings us back to the organizational success enjoyed by Toyota. The final theme from Toyota concerns leadership and, to some degree, represents the sum of the previous eight themes. Economists, unlike psychologists, have always been interested in the performance of organizations and what accounts for the differences in their performance. In the early 20th century, Alfred Chandler argued that professional management was the key to the rise of U.S. industry relative to France or the U.K; however, he was largely ignored. Historically, economists have explained differences in companies’ performance in terms of workers’ skills, investment in technology, and the quality of capital markets. They called the variance in performance that is unexplained by these factors ‘‘fixed effects,’’ which is a basket category.

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The work of economists Bloom and Van Reenen (2006) shows that the largest part of the variance in companies’ performance can be explained in terms of the quality of their management. They conclude, and we agree, that Toyota is the best-led firm in the world. The principles of good leadership are formal.

The Subprime Mortgage Crisis: Three Examples of Failed Global Leadership Although the full extent of the subprime mortgage crisis will not be known for some time, the current estimate (November 2007) exceeds $240 billion in market value lost across the 12 largest Wall Street firms and commercial banks (Tully, 2007).1 A number of senior leaders have been removed from these organizations for performance-based reasons. Consider three of these failed executives: Stanley O’Neal, former CEO of Merrill Lynch; Zoe Cruz, former co-president of Morgan Stanley; and Charles Prince, former CEO at Citigroup. Although similar in some ways, the fall of each of these three executives illustrates unique lessons in the context of global leadership. The first major casualty in the subprime mortgage crisis was Stanley O’Neal. His early performance at General Motors as an analyst and ‘‘numbers guy’’ brought him recognition and advancement. Riding his technical skills and knowledge, by 1998, he became the CFO at Merrill Lynch, where he further solidified his reputation as a disciplined analyst with the talent to be the chief executive. In 2002, O’Neal became CEO with a mandate to reduce cost and reenergize growth to match the performance of Merrill’s key competitors. O’Neal reduced costs quickly while ruthlessly purging the firm’s most senior executives (who were his potential competitors). He then recruited executives (and board members) who were more supportive of his plans, while losing expertise in risk management (Lucchetti & Langley, 2007; Tully, 2007). With respect to the Domain Model and the Leadership Value Chain (Table 3 and Fig. 1), the O’Neal example supports two conclusions. First, choosing leaders based on technical skills without considering their intrapersonal and interpersonal skills is dangerous. O’Neal was cold, critical, capricious, and remote. Second, tracing this leadership style through the Leadership Value Chain shows that he (negatively) influenced morale, culture, and strategy, which led to billions of dollars of write-downs and his demise at Merrill Lynch. He treated people abruptly, he created a culture of indifference to personal feelings, and he made and encouraged risky investment decisions.


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The case of Zoe Cruz at Morgan Stanley also shows how leader personality affects organizational performance. Many people thought that Cruz, a co-president at Morgan Stanley, would be the next CEO, primarily based on her close relationship with her mentor, Phil Purcell. The Wall Street Journal reported that, although Cruz was responsible for a unit that lost $3.7 billion, she seemed to have survived until Purcell retired and her leadership style came under criticism (Smith & Davis, 2007). Some claimed that she lacked charisma and relationship skills; others, including the board, were frustrated with the way she handled questions regarding her financial losses; still others were annoyed by her unwillingness to accept responsibility for her problems and her tendency to lash out at other employees in public forums. Ultimately, Morgan’s CEO lost confidence in Cruz and she was removed (Smith, Raghavan, & Davis, 2007). This example supports two assertions. First, who you are (personality) determines how you will lead (leadership style). Second, how you lead determines how the organization performs (Hogan & Kaiser, 2005; Kaiser, et al., 2008). Our final example concerns Charles Prince, former CEO at Citigroup, and our point can be summarized in terms of two observations. First, Mr. Prince became CEO of Citigroup in 2003 amid a great deal of ethical turmoil. By many accounts, he was hired because of his reputation as a lawyer, a decision based almost entirely on one technical skill. Early in his tenure, people were concerned about his lack of expertise in banking, in particular risk management (McDonald, 2007; Pearlstein, 2007). A recent interview with Prince Alwaleed, Citigroup’s largest shareholder, is informative. Citigroup initially announced a $6.4 billion write-off. Minutes after the announcement, Prince called Prince Alwaleed to assure him that there would be no further write-offs. However, three weeks later, Citigroup announced an additional write-off of $8 to $11 billion (Serwer & Gimbel, 2007), suggesting that the Citigroup leadership team had no handle on the situation. Second, at a time when leadership was at a premium, the world’s largest bank had no coherent succession plan and needed over six weeks to find Prince’s replacement – the lack of leadership during that critical period undoubtedly made matters worse for Citigroup. Earlier in this chapter, we noted that leaders must not merely support executive development – they need to ‘‘lead’’ the effort (Hollenbeck & McCall, 2003). The Citigroup example suggests two conclusions. First, executive selection must pay attention to both technical skills and leadership skills, while understanding that these skills depend on the intrapersonal and interpersonal domains. Second, successful global leadership requires executive leadership, a fundamental component of which should be succession planning.

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CONCLUSION: GLOBAL LEADERSHIP AND THE LEADERSHIP VALUE CHAIN Leadership is important. Why it is important is the critical issue in the study of global leadership. We argue that leadership is a function of personality – who you are determines how you lead. Second, leadership is a key determinant of organizational effectiveness. The domain model of leadership competencies and the leadership value chain clarify the mechanisms by which leadership impacts an organization for good or ill. Third, the principles of leadership are formal: they apply to any organization, anywhere, any time. Taking Toyota as an example, we identified nine themes that drive its success, the most important of which is leadership. The subprime mortgage crisis, on the other hand, one of the largest financial setbacks in history, can also be understood in terms of the leadership principles presented in the chapter. Thus, the principles of leadership are formal and apply to all parts of the global environment. The volumes in the Advances in Global Leadership series have substantially enhanced our knowledge base. Some authors focus on specific requirements or styles for successful global leadership (e.g., Hitt, Keats, & Yucel, 2003), whereas others focus on a broader level of competence (Hollenbeck & McCall, 2003) and the timeless and universal nature of basic leadership principles (Campbell, 2006). In this chapter, the Leadership Value Chain offers a systematic, end-to-end view of leadership. Specifically it points out the importance of evaluating leadership in terms of the performance of the team, business unit, or organizational level for which a person is responsible. We believe that the study of local and global leadership is a crucial undertaking. We hope that our chapter will inspire lively debate and further energize leadership researchers and practitioners to join us in this important endeavor.

NOTE 1. The full extent of the current financial crisis is yet to be fully understood and determined; however, since the initial estimates cited here, it is worth noting that the cost and implications continue to multiply. For instance, Bears Stearns and Lehman Brothers have collapsed; Merrill Lynch was acquired by Bank of America; the Troubled Asset Relief Program has a $700 Billion price tag; pledged monetary backing for Wall Street banks exceeds $3 Trillion and that does not include the current economic stimulus package currently being developed in the US Congress (February, 2009).


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Thomas, A. (1988). Does leadership make a difference to organizational performance? Administrative Science Quarterly, 33, 388–400. Tully, S. (2007, November 26). Wall Street’s money machine breaks down: The subprime mortgage crisis keeps getting worse—and claiming more victims. Fortune, 65–78. Van Vugt, M., Hogan, R., & Kaiser, R. B. (2008). Leadership, followership, and evolution. American Psychologist, 63, 182–196.

LEADERSHIP COMPETENCIES: DIFFERENCES IN PATTERNS OF POTENTIAL ACROSS ELEVEN EUROPEAN COUNTRIES AS A FUNCTION OF GENDER AND MANAGERIAL EXPERIENCE Dave Bartram ABSTRACT The chapter describes the SHL Corporate leadership model (Bartram, 2002) and the results of an investigation of leadership competency potential in 11 different European countries (39,354 people). The measures of potential used are eight competency factors known as the ‘Great Eight’ (Bartram, 2005) derived from Occupational Personality Questionnaire (OPQ32) scale scores. The results show some very clear trends in terms of effects of managerial experience and effects of gender on competency potential profiles. While there are differences in patterns of results between countries, these tend to be relatively small and nonsystematic. The gender and experience effects, on the contrary, are consistent across countries. Overall, we find that transactional competencies decrease and transformational competencies increase with increases in level of managerial experience and that females show Advances in Global Leadership, Volume 5, 35–64 Copyright r 2009 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1535-1203/doi:10.1108/S1535-1203(2009)0000005006

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generally lower levels of transformational competencies and higher levels of transactional competencies than males. These findings are discussed in relation to the literature on gender differences in leadership.

INTRODUCTION This chapter presents an outline of the SHL approach to leadership and then goes on to report findings from a large European set of data on leadership competency potential. This data explored effects of country, age and gender on leadership competencies through comparisons of people who have been in management positions for varying lengths of time. Leadership is about influencing people such that they come to share common goals, values and attitudes and work more effectively towards the achievement of the organization’s vision. To get to grips with the concept of leadership, we need to clarify what sort of ‘influences’ we are talking about, and who is ‘influenced’. The SHL approach to Leadership covers four main types of variable: 1. Key goals and outcomes. What are the consequences of leadership? What impacts do leaders have? What are the focus, level and breadth of these impacts? 2. Key competencies. What are the desirable leadership behaviours, what are the key competencies? 3. Individual antecedents of those competencies: What are the individual dispositional factors that lead to such behaviours? 4. Context: Situational and cultural variables. These include the various ‘drivers of’ and ‘barriers to’ success. The approach also considers the role of risk factors, in terms of both individual characteristics and contextual contingencies.

Key Goals and Outcomes For organizations, primary goals reflect their raison d’eˆtre and generally will be described in commercial terms (market share, profit levels, etc.). Secondary goals are about how to achieve the primary goal and often focus on internal organizational criteria (levels of job satisfaction, developing the ‘right’ culture, effective internal communication, etc.).

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Leadership Competencies

For leadership, we should consider the primary outcome to be improvements in the effectiveness of performance of the whole organization (for high-level corporate leadership) or for small subgroups within the organization. These improvements are ones that help the organization achieve its primary goals. Secondary outcomes of effective leadership will include subordinate satisfaction, increased motivation, positive attitudes, sharing of values and so on. These in turn may act as intervening outcomes that influence organizational success. It is worth noting that most current approaches to leadership assessment focus on secondary measures and not on impacts or assessments of primary outcomes. There is a distinction to be made between outcomes and impacts. Outcomes are measurable changes in the organization. These may be financial (e.g. changes in earning per share), commercial (e.g. increase in percentage market share), technological, social or more commonly some mix of all four (see later). The outcome is generally the result of the actions of the leader together with a lot of other people. Impacts are the measurable effects a leader has on people. In a sense, they are the personal outcomes of leadership performance. An effective leader, by definition, needs to define the direction for change, demonstrate that they have made an impact and that the impact has either directly or indirectly moved the organization in the direction it needed to go to achieve the desired outcomes. The extent to which a leader can have impact is defined in terms of the following three parameters: 1. Goal focus: Is the key outcome area economic, technological, social or commercial? 2. Organizational level: Does the leader operate at board level or is the role at some other level (e.g. project team leader)? 3. Stakeholder impact: Who is going to be impacted by the leader’s actions? How broad or far-reaching is the leader’s impact going to be? This relates to issues of extent within the organization and outside. Key Competencies Desirable leadership behaviours or competencies have been classified and labelled in many different ways. Some approaches from the literature are summarised below. ‘Initiating structure’ and ‘consideration’ behaviours (from the 1940s) are sometimes termed ‘task-centred’ and ‘person-centred’, covering planning,

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organizing, target-setting and so on, and fairness, sympathy, concern and so on, respectively. It is possible to view and measure each one in overall terms or through several sub-components. In addition, ‘laissez-faire’ leadership (taking little action) was identified in early writings and is still examined in the literature. It seems to represent the ‘low’ end of the above behaviours. More recent emphasis has been on ‘transformational’, ‘innovative’ or ‘charismatic’ leadership versus ‘transactional’ or ‘maintenance’ leadership. There is some alignment between person-centred and transformational concepts on the one hand and task-centred and transactional on the other. The large-scale analysis by Avolio, Bass, and Jung (1999) of the most recent Multifactor Leadership Questionnaire (MLQ) version (MLQ5X) supported a six-factor solution for 36 items and also a three-factor higher order account. The six factors were labelled Charismatic/Inspirational (CI)1 leadership, Intellectual Stimulation (IS), Individualised Consideration (IC), Contingent Reward (CR), Active Management by Exception (MA) and Passive-Avoidant (PA)2 leadership. It has been conventional to view ‘transformational’ leadership as including CI, IS and IC and ‘transactional’ leadership as including CR, MA and the Management-by Exception (Passive) part of PA. The three-factor account suggested by Avolio et al. (1999) adds to that dichotomy: Transformational leadership (CI and IS), DevelopmentalTransactional leadership (IC and CR) and Corrective Avoidant leadership (MA, PA and laissez-faire). Similar components are covered in the Transformational Leadership Questionnaire (Alimo-Metcalfe & Alban-Metcalfe, 2001). Several authors have set out lists of leaders’ (or at least managers’) behaviour. For example, Yukl and Van Fleet (1992, p. 156) propose 16 key practices.

Much of the confusion in the approaches to leadership competencies arise from the failure to differentiate on the one hand between leadership and management and on the other between individual and contingent factors.

Individual Antecedents These are the ‘disposition and attainment characteristics’ (Kurz & Bartram, 2002) that underlie or are pre-requisites for leadership behaviours. They include aspects of cognitive ability, relevant knowledge, certain personality dispositions and forms of motivation. It is useful to view the antecedents


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of all behaviours (not necessarily those of leadership) in two broad categories: dispositions and attainments. Leadership behaviours can be viewed as specific instances that manifest these underlying characteristics in a particular situation. Dispositions Aptitudes and abilities. A general need in organizations is for fluid cognitive ability as well as for specific psychomotor abilities or processes of creative thinking or complex thinking. Such variables are important in studies of managers. Style or personality. Self-reports of personal styles are in effect a person’s descriptions of his or her typical behaviours, so necessarily link to the key competencies. Recent research has confirmed not only the importance of links between personality traits and leadership but also shown how the pattern of relationships depends on context. A meta-analysis carried out by Judge, Bono, Ilies, and Gerhardt (2002) showed, for example, that while Extraversion, Openness to Experience and Emotional Stability are predictive of leadership in business settings, for more bureaucratic settings (government and military), the predictors are Emotional Stability, Conscientiousness and Extraversion. Overall, the correlation (multiple regression) of the ‘Big Five’ personality factors and leadership effectiveness was 0.39. Motives and values. Less common is the examination of leaders’ and managers’ motives, values or attitudes. For example, what motives underlie certain behaviours in a particular setting: a desire for power, for money or to achieve ethical goals? Motives, values and personality overlap and relate to corporate culture when aggregated across individuals. In general, motives may be viewed as more localised in time and space while values are deeply internalised and set the rank ordering of importance and the prioritisation given to potentially competing demands: making money or treating people well; creating a stable working environment or ensuring innovation and change can flourish. Examination of motives and values may be particularly important in assessing risk factors in leadership and get to the bottom of socalled personality clashes. It is also worth noting that when Judge et al. (2002) examined a broader range of traits than just the Big Five, they found some even stronger relationships with leadership. In particular, traits with a strong motivational component (dominance, achievement, locus of control) all had substantial correlations with leadership. Managers who are successful tend to have energy, stamina, hardiness and continuing good health. These attributes underpin the persistence of

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motivation and effective behaviour across years, but they rarely appear in the literature. Interests. The sphere of an individual’s interests will influence their choices of work setting and the extent to which they will get satisfaction from working in one function or context rather than another. Interest categories are useful for capturing expertise, that is, profession, function or industry specific, and are likely to be good predictors of ‘overall performance’ in closely related jobs or closely related competencies. Attainments Knowledge and skills. Despite theoretical suggestions and empirical evidence about the crucial role of knowledge in the determination of effective behaviour (e.g., Schmidt & Hunter, 1992), this is under-emphasised in the leadership literature. We need to consider knowledge both about job tasks and about organizational functioning. The former (labelled as ‘task expertise’) covers both declarative and procedural knowledge (and thus ‘skills’), and the latter (‘organizational wisdom’, ‘tacit knowledge’) includes wider practical understanding. Experiences and qualifications. McCall (1998) emphasises the need to put high potential talent into developmental situations where they can gain the experiences necessary to perform successfully at later career stages. Qualifications (e.g. MBA or DBAs, qualifications gained on leadership training programmes): Formally attest to knowledge, skill and experience. The value of different types of qualifications on leadership performance has received little attention in the literature. However, if it is possible to ‘develop’ or train leaders, it should be possible to break down some aspects of leadership expertise into relatively discrete sets of knowledge and skills that can be taught at practical and theoretical levels. Context: Situational Variables and Culture Although it is clearly established that desired leader behaviours can differ between situations, there is little agreement about the nature of the contingencies and almost no research evidence about effectiveness in different situations. Published suggestions include the following: Fiedler (1967) argued that the most effective leadership style was a function of three variables: his or her power relative to subordinates, the degree of task structure and the quality of leader-member relations. In situations favourable to a leader (e.g. high power, high task structure and good relations) and in situations unfavourable to him or her (e.g. low


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power, low structure and poor relations), a task-oriented style was advocated, but otherwise a person-centred approach was recommended. Evidence has not been very supportive, and the model has faded away (rather than being explicitly rejected). One problem is that even with only three dichotomised situational factors, analyses have to cover eight settings, and comprehensive tests of predictions in all those settings are difficult to carry out and interpret. House’s (1971) path-goal theory drew attention to the importance of a leader identifying goals valued by individual subordinates and setting up paths to those goals. Aspects of the situation such as the nature of the task and subordinate attributes were said to determine the optimal approach. The number of variations in goals and paths between settings and individuals is clearly considerable, and, despite plausibility and general acceptance as a partial account (emphasizing employee motivation), empirical evidence is slim. Hersey and Blanchard (1982) extended the idea in their model of situational leadership to suggest that leaders’ emphasis on setting up paths to goals should depend on two aspects of subordinate maturity (job maturity and psychological maturity). While again plausible, this has rarely been examined or demonstrated. The multiple linkage model (Yukl, 1981) assumed that situational influences arise from variables such as subordinate effort, subordinate ability, type of work organization and other task-related features. Vroom and Yetton (1973) presented a prescriptive decision-making theory to identify the appropriate leadership behaviours in different situations. The effectiveness of a given procedure was said to depend on a large number of variables such as the amount of information possessed by a leader or by subordinates, the likelihood of subordinate acceptance of a particular decision and the complexity or importance of the decision. The model was presented as a set of flow charts of such complexity that the measurement and observation of all combinations has never been achieved. Relevant aspects of organizational values and culture are important factors in either facilitating or hindering a leader’s impact. For our current model, we distinguish two aspects of culture: Norms regarding behaviour – how we do things and how we treat people in this organization. Values – what we care about and what we regard as important.

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Sitting around these are the visible outward signs of culture – organizational ‘artefacts’ such as house styles and logos – and the often unconscious basic beliefs on which the values depend. It is well known that norms and values are hard to change, probably because they are built on beliefs. It is easy to change the outward signs of a culture, the artefacts, and there is a danger that people may think that by changing the overt manifestations of a culture, the norms, values and beliefs will follow. While it is vital in assessing any leadership situation to know what the current culture is and how it needs to change to be consistent with the new vision, the approach we take is that culture change follows organizational change rather than driving it. Culture changes as new behaviours become ‘bedded’ in and accepted as more effective than the old one. Value change probably follows even more slowly on the back of changes in norms, as new priorities become internalised as values and shifts occur in people’s beliefs. Bringing in new talent whose values are congruent with the new vision, and losing staff whose values are out of touch or incompatible with the desired culture will speed up the culture change process.

THE SHL MODEL OF CORPORATE LEADERSHIP In the introduction, it was stated that leadership was ‘about influencing people such that they come to share common goals, values, attitudes and work more effectively towards the achievement of the organizations vision’. An initial problem is to establish the boundary between those behaviours that are narrowly ‘leadership’ and those that are broadly desirable in managers but are not explicitly ‘leader like’. If we are over-inclusive in our definition of leadership, we run the risk of devaluing the concept of leadership and confusing it with effective management (which arguably is what has happened in the debate around transactional and transformational leadership concepts). The definition we have provided, in terms of influencing other people, forms the focus for the proposed framework. It also needs to consider the competencies required for effective management, as leaders need to be complete people: we cannot consider disembodied qualities in isolation anymore than we can consider the impact of people in isolation from the situation they operate in. A framework of specifically leadership behaviours thus needs to sit above a broader framework of other competencies, with the latter applicable to both leaders and non-leaders.


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We distinguish between competencies that define leadership and those that are supportive of or necessary for effective leadership. Leadership competencies. The model considers leadership from the viewpoint of process. What do leaders do? In general terms, they provide the vision and set the strategy, they share that vision with others, define goals and gain buy-in and support, and they either deliver the vision themselves or set in place the mechanisms to ensure that it is delivered. Supporting competencies. These are behaviours that are desirable in general, and may be necessary in practice, but do not directly involve influencing people (e.g., Written Communication, Specialist Knowledge). The competencies are considered within a context specified in terms of the situational variables, culture and intended impact.

Outline Description of the SHL Model of Corporate Leadership The SHL Corporate Leadership model (Bartram, 2002) combines the currently fashionable ‘transformational’ and ‘transactional’ themes into four main functions, each with its own characteristic types of behaviour. They are listed here in terms of their relationship to the SHL Great Eight competency factors (Bartram, 2005; Bartram et al., 2002; Kurz & Bartram, 2002; Table 1a). These factors form the most general level of a hierarchical competency framework, which has 112 components, above which sit 20 dimensions of competency, which in turn map on to eight broad factors describing the domain of desirable behaviours at work (see Bartram, 2005, Appendix A for further details of the 20 dimensions and 112 components). Research has shown that these eight factors not only provide a parsimonious but complete account of work behaviours, but they also provide a structure that relates well to the ‘predictor domain’. The latter includes all those instruments (personality, ability, motivation, etc.) that we use to predict people’s potential for success at work. It is important to note that the terms ‘transformational’ and ‘transactional’ are not used as synonyms for person-centred and task-centred. Rather they focus on the behaviours that drive change (i.e. transformation) as opposed to those behaviours that deliver to agreed goals (i.e. transaction). For each pair of the eight factors, one emphasises the transformational (or change-focused) aspects of leadership and the other the more transactional (or delivery-focused) functions. As each of the Great Eight is a very broad collection of competencies, it is important to note that they

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Table 1a. Factor

Titles and High-Level Definitions of the Great Eight Competencies.

Competency Domain Title

1

Leading & Deciding

2

Supporting & Co-operating

3

Interacting & Presenting

4

Analyzing & Interpreting

5

Creating & Conceptualizing

6

Organizing & Executing

Competency Domain Definition

Hypothesized Big Five, Motivation and Ability Relationships

Takes control and exercises leadership. Initiates action, gives direction and takes responsibility. Supports others and shows respect and positive regard for them in social situations. Puts people first, working effectively with individuals and teams, clients and staff. Behaves consistently with clear personal values that complement those of the organization. Communicates and networks effectively. Successfully persuades and influences others. Relates to others in a confident and relaxed manner. Shows evidence of clear analytical thinking. Gets to the heart of complex problems and issues. Applies own expertise effectively. Quickly takes on new technology. Communicates well in writing. Works well in situations requiring openness to new ideas and experiences. Seeks out learning opportunities. Handles situations and problems with innovation and creativity. Thinks broadly and strategically. Supports and drives organizational change. Plans ahead and works in a systematic and organized way. Follows directions and procedures. Focuses on customer satisfaction and delivers a quality service or product to the agreed standards.

Need for Power and Control, Extraversion

Agreeableness

Extraversion, General mental ability

General mental ability, Openness to experience

Openness to Experience, General mental ability

Conscientiousness General mental ability

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Table 1a. (Continued ) Factor

Competency Domain Title

7

Adapting & Coping

8

Enterprising & Performing

Competency Domain Definition

Hypothesized Big Five, Motivation and Ability Relationships

Adapts and responds well to Emotional Stability change. Manages pressure effectively and copes well with setbacks. Focuses on results and achieving Need for Achievement, personal work objectives. Negative Agreeableness Works best when work is related closely to results and the impact of personal efforts is obvious. Shows an understanding of business, commerce and finance. Seeks opportunities for selfdevelopment and career advancement.

Source: The titles and definitions in this table are taken from the SHL Universal Competency FrameworkTM Profiler Cards (copyright r 2004 by SHL Group plc, reproduced with permission of the copyright holder). These titles and definitions may be freely used for research purposes subject to due acknowledgement of the copyright holder. Note: More detailed definitions of each of the Great Eight are provided by the competency component level of the SHL Universal Competency FrameworkTM. The final column shows the hypothesized relationships between the Big Five, General Mental Ability and Motivation for the Great Eight. Where more than one predictor is shown, the second is expected to be of lesser importance than the first.

are not purely transactional or purely transformational. For example, the factor ‘Interacting and Presenting’ includes competency components associated with persuasion and influence that are potentially transformational. Outline definitions of the Great Eight are presented in Table 1a and their mapping to the leadership functions in Table 1b. Table 1a includes information on the relationships between the competency factors and underlying personality, motivation and ability factors. In the following discussion, measures based on individual attributes, like personality, that are directly related to and can be expressed through competencies, are referred to as measures of competency potential. Thus, one can measure a person’s potential for developing Analysing and Interpreting competencies through levels of general mental ability and

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Table 1b.

Relating the Great Eight Competencies to Leadership Functions and Focus.

Leadership Functions 1 2 3 4

Developing the Vision: The strategy domain Sharing the Goals: The communication domain Gaining Support: The people domain Delivering Success: The operational domain

Transactional

Transformational

Analysing and Interpreting

Creating and Conceptualising

Interacting and Presenting

Leading and Deciding

Supporting and Cooperating Adapting and Coping Organizing and Executing

Enterprising and Performing

some personality attributes (like the ‘data rational’ scale on the OPQ32). However, actual competencies are best measured through the judgements of others who know the person and their work (e.g. through 360 degree assessments). Developing the Vision: The Strategy Domain Developing a vision and strategy is a core function of leadership. The vision defines where the organization or group is going and the strategy sets out how it will get there. As a precursor to defining the vision and setting the strategy, the leader has to engender a shared sense of need. There needs to be a good reason for the vision and a case made for it defining a more desirable state of affairs than the current one. For this reason, effective leaders need to be able to understand the market and competitor realities and engender in others a sense of the urgency with which change is needed. Developing the vision is not just about a lone leader having an idea, it is about that person bringing together the necessary ‘forces’ within the organization, to lead the change implied by the vision. Getting the buy-in of that team, or subgroup, is a critical part of getting the strategy to the point at which it becomes a realistic vehicle for organizational change. This function is closely related to the competencies in Creating & Conceptualising and in Analysing & Interpreting in the SHL Competency Framework’s Great Eight Factors. Sharing the Goals: The Communication Domain Once the vision and strategy have been developed and the leader has built the core support team needed to drive the change process, the next step is to communicate the new goals to the rest of the organization or group affected


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by the change. Ensuring that everyone has a shared understanding of what the new goals are is a critical part of the change process. This not only requires the effective use of all modes of intra-organizational communication (small and large meetings, emails, workshops, notices, etc.) but also ensuring that the change leaders themselves model the new behaviours – that is, they ‘walk the walk’ as well as ‘talking the talk’. Effectively serving the group’s needs in interaction with others and creating a positive impression of the group are essential aspects of leadership that are not well covered in published models. This function is closely related to the competencies in Leading & Deciding and in Interacting & Presenting in the SHL Competency Framework’s Great Eight Factors. Gaining Support: The People Domain Gaining support for any change process involves motivating and empowering others to become part of the guiding team. It also involves the identification and removal of barriers to change – whether these are physical, organizational, social or personal. The tactics of gaining support will need to include a plan for ensuring sufficient ‘quick wins’ to demonstrate the benefits of change as well as putting in place processes for handling the problems arising from the downside of change – increased stress and uncertainty, feelings of isolation or lack of involvement and so on. This function is related to the competencies in Supporting & Co-operating and in Adapting & Coping in the SHL Competency Framework’s Great Eight Factors. Delivering Success: The Operational Domain The delivery of success is about consolidating gains and keeping the change process going until the goals have been achieved. It also entails the management of culture change. This means clarifying for people what the relationships are between their behaviours, the organization’s ‘reward structures’ and organizational success. Arguably, shifts in culture are not something imposed on organizations by leaders from above, rather they are a consequence of the behavioural changes and changes in priorities required to effect change. In other words, leaders do not change behaviour by issuing a ‘dictat’ that the organization’s culture has changed, they do so by changing the structures within the organization that impact on people’s behaviour (the drivers and the barriers). Delivering success is the function most clearly requiring a fine balance between leadership and management skills. It is also the function within

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which barriers to success can act to hinder progress. Such barrier can include the following: Formal structures that are no longer appropriate. A lack of the necessary knowledge and skills in the workforce. Managers or others failing to support behaviours aimed at realising the new vision. Inappropriate or ineffective communication systems. This function is related to the competencies in Organizing & Executing and in Enterprising & Performing in the SHL Competency Framework’s Great Eight Factors.

Managers in 11 Different European Countries: Leadership Potential Research has established clear links between measures of competency potential based on personality scales from the OPQ32 and line manager ratings of competencies using the above Great Eight factor model (Bartram, 2005). In the present chapter, we look at how a number of demographic variables impact on competency potential in each of these eight areas. The main demographics we have to consider are gender, country and degree of managerial experience. The data set we have covers large samples from 11 different European countries. For each country, we have people with no managerial experience and those with varying degrees of experience. As we also have information on people’s ages, we can control for confounding effects of age on experience. What is of interest is to see whether, controlling for age, those with most managerial experience have relatively stronger transformational competency potential than those who have little or none. Furthermore, if this is the case, is it the same in every country and is it the same for men and women? What is important to emphasise here is that we are not looking at measures of managerial or leadership performance. We are looking at measures of potential (which may or may not be reflected in current performance), which are indicative of the capability to demonstrate managerial and leadership qualities. The Instrument The Occupational Personality Questionnaire (OPQ32i) measures 32 workrelated personality scales. It consists of 104 ‘quads’ of items, where each quad


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contains four items from four different scales. Respondents have to choose one item that is ‘most like me’ and one that is ‘least like me’ from each of the quads. Full details of the OPQ32i and the normative form OPQ32n are contained in the technical manual (SHL, 2006). All presentation was online and the instrument typically takes around 40 minutes to complete. A subset of the 32 OPQ scale scores were aggregated to provide measures of the Great Eight competencies. Full details of this aggregation process and the basis for mapping scales to competencies are described in the work by Bartram (2005). The Great Eight scores were then aggregated (see Table 1b) to provide measures of the four leadership functions (one pair of competencies for each function) and the overall transactional and transformational leadership potential scales (four competencies for each). All scale scores were then standardized using the full sample as the reference population (n ¼ 39,354; Table 2). The standard scale used was the sten scale (mean ¼ 5.5, SD ¼ 2) as this is the scale always used for reporting OPQ32 scores. The Sample OPQ32 data was obtained from a total of 39,354 people assessed in highstake conditions from 11 different countries, together with information about their gender, age and degree of managerial experience (see Table 2 for details of the sample). Taken across countries, we can see that there is a fairly even split of males and females among the non-managers (Table 3). As the years of managerial increase, so the percentage of females decreases, from 38% for ‘up to 2 years’, 34% for ‘2–4 years’ to 24% for ‘5 and more years’. There are approximately equal numbers of females with and without managerial experience (7,404 and 7,306, respectively). Approximately the same number of males also had no managerial experience (7,500). However, the number of males with managerial experience was larger (17,144). Method of Analysis Because a major factor relating to managerial experience is age, it was necessary to control for age effects in the data. Analysis of covariance was used, with age as the covariate, to produce mean scores for each competency by country by gender by level of managerial experience combination. The effect of this is to equate everyone to an age of 38.33 years. Thus, differences in mean competency scores between people with a lot of managerial experience, and those with none cannot be attributed to the fact that the latter tend also to be older than the former.

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Table 2. Gender

Country

The Data Sample.

Degree of Managerial Experience

Total

None

Up to 2 years

2–4 years

5 and more years

Male

Belgium Denmark Finland France Germany Italy Netherlands Norway Portugal Sweden UK Total

377 1,607 259 380 730 333 911 1,048 146 1,543 166 7,500

63 973 176 174 232 161 311 654 85 715 112 3,656

83 982 163 196 496 196 317 677 85 728 123 4,046

152 1,849 274 436 895 470 808 2,181 142 1,722 513 9,442

675 5,411 872 1,186 2,353 1,160 2,347 4,560 458 4,708 914 24,644

Female

Belgium Denmark Finland France Germany Italy Netherlands Norway Portugal Sweden UK Total

511 1,466 403 282 524 193 930 1,057 174 1,755 109 7,404

63 471 134 108 104 93 183 431 74 521 57 2,239

64 408 111 82 142 78 151 399 85 541 47 2,108

62 456 126 163 184 136 263 691 70 697 111 2,959

700 2,801 774 635 954 500 1,527 2,578 403 3,514 324 14,710

Table 3.

Percentage of Sample by Gender.

Managerial Experience:

Male

Female

None Up to 2 years 2–4 years 5 and more years Total

50.32 62.02 65.75 76.14 62.62

49.68 37.98 34.25 23.86 37.38

Results Fig. 1 clearly shows that while transformational competency potential scores increase with level of managerial experience, transactional decrease. This is consistent with the view that as one enters more senior positions, the


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Fig. 1. Average Transactional (Transact) and Transformational (Transform) Competency Potential Sten Scores as a Function of Gender and Length of Managerial Experience (n ¼ 39,354).

balance between the demand on transactional and transformational competencies shifts. What is more surprising in the data is the large and consistent gender difference. Both sexes show the same rates of increase and decrease across levels; however, for females, this is reflected in a move towards transactional and transformational balance while for males it is reflected in transformational competencies coming to dominate transactional ones. If we break this down into the eight competency areas, we see how some show higher scores for females, some for males and others little or no difference (Fig. 2). Both areas of competency associated with the function ‘developing the vision’ show an interaction between gender and managerial experience, with their being little difference between men and women for those with 5 or more years experience, but higher scores for men in the lower levels of experience. Given, the reduction in percentage of females as one moves up the experience scale, this could reflect the effects of selective attrition. For ‘interacting and presenting’, there is no gender effect, while for ‘leading and deciding’, males score higher than females, with some indication of a reduction in the differences with increasing managerial experience. For the function ‘gaining support’, we see a clear advantage for females in the supporting and cooperating competencies with a much smaller

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Fig. 2.

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Effects of Managerial Experience on Competency Potential by Gender for Each of the Great Eight.

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Fig. 2.

(Continued).

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difference in favour of males on adapting and coping competencies. It is the differences association with this competency area that are most strongly reflected in other research on gender differences in leadership that tend to align strong relational competencies with transformational performance. Finally, for the function ‘delivering success’, we see females scoring higher than males on ‘organizing and executing’ and males higher than females on ‘enterprising and performing’. Only the former difference shows signs of reducing with increases in managerial experience. Each of the 11 countries shows a similar pattern of results: increasing transformational scores with degree of managerial experience and decreasing transactional (Fig. 3). There is some variation in the degree to which transactional scores decrease, with the functions relatively flat in some countries and quite steep for others. All show the same pattern of gender difference: females having higher transactional and lower transformational score than males at all levels of managerial experience. Further research is needed to identify whether there are cultural factors systematically associated with the differences in patterns between countries.

CONCLUSIONS The findings presented here need to be interpreted carefully. The measures of competency are based on self-report and focus on potential. They are not independent measures of performance. In other words, they indicate the degree to which people are likely to find the relevant behaviours ‘easy’ or ‘natural’. However, we know from meta-analysis research (Bartram, 2005) that these self-reported potential competencies correlate well with line manager ratings of performance in these areas. Nevertheless, for most competencies, ‘potential’ sets constraints within which behaviours can develop. Potential does not determine behaviour directly. Behaviour is a result of potential, of situational demands and constraints and of motivation. Thus, it is quite possible that people with low potential in one area will display relatively strong levels of performance in that same area due to their strength of motivation and demands of the situation. There are probably two key findings from this research. The first is that there is relatively little systematic difference in competency potential profiles between countries (at least for the European countries considered in this


Fig. 3.

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Gender by Experience Plots for Each Country for Transactional and Transformational Competency Potential.

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Fig. 3.

(Continued).

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Fig. 3.

(Continued).

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Fig. 3.

(Continued).

data set). What effects there are, are small in comparison to the effects of managerial experience or the effects of gender. While age effects were controlled for in the analyses presented here, the effects of age on scores were actually very small. Again far less than the sort of effects associated with experience and gender. The effects of gender are in many ways the most interesting as they appear to run counter to literature that has asserted females are more transformational than males. In a recent meta-analysis of 45 leadership studies using the MLQ (Eagly, Johannesen-Schmidt, & van Engen, 2003), males and females were compared in terms of Bass’s (1985, 1998) model of leadership (which distinguishes between Transformational, Transactional and LaissezFaire leadership styles). They found small (less than 0.2 SD) differences in favour of females on the transformational measures and similarly small differences in favour of males on most of the transactional scales (‘contingent reward’ being the one exception). This would appear to


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contradict the present results, where females are found to be higher on transactional and males higher on transformational competencies. This apparent contradiction between the earlier literature (which asserts females are more transformational than males) and the present findings (which appear to say the opposite) may be largely accounted for by differences in the ways these terms have been used. What we find in the present study is that women are generally higher on ‘supporting and cooperating’ competencies and on ‘organizing and executing’. Men on the contrary tend to be higher on ‘enterprising and performing’ and ‘leading and deciding’ competencies. Within the SHL framework, the latter are classified as transformational as they are instrumental in driving change, while the former are described as transactional as they relate more strongly to strong and effective management. This is quite consistent with the results of an earlier meta-analytic review (Eagly & Johnson, 1990) covering 162 studies that had examined leadership styles across gender. They concluded that ‘the strongest evidence we obtained for sex difference in leadership style occurred in the tendency for women to adopt a more democratic or participative style and for men to adopt a more autocratic or directive style’. This is in line with the present results where the gender differences relating to ‘supporting and cooperating’ and ‘organizing and executing’ reflect a potential for a participative style on the one hand and ‘leading and deciding’ and ‘enterprising and performing’ on the other reflect potential for a style of behaviour that is more directive. Note also that within the present model, we are looking for combinations of transactional and transformational competencies for effective performance in relation to each of four quite different functions. Other approaches tend to (e.g. Bass, 1998) provide general characterizations of management or leadership styles as being either transformational or transactional. Bass and Avolio (1997) describe the ‘Full Range Leadership model’ as covering nine scales: Transformational (Active, Effective) IA [Idealized Influence: Idealized Attributes] Builds Trust. IB [Idealized Influence: Idealized Behaviours] Acts with Integrity. IM [Inspirational Motivation] Inspires Others. IS [Intellectual Stimulation] Encourages Innovation. IC [Individual Consideration] Coaches People. Transactional CR [Contingent Reward] Rewards Achievement. MBEA [Management by Exception Active] Monitors Mistakes.

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Passive/Avoidant MBEP [Management by Exception Passive] Fights Fires. LF [Laissez-Fair] Avoids Involvement. However, recent research (Heinitz, Liepmann, & Felfe, 2005) has shown that these nine scales tend to form three factors. The main factors, which Heinitz et al. label ‘Charismatic goal orientation’, covers all the transformational scales as well as some aspects of CR. While Passive/Avoidant attributes may make sense in terms of style measures, they do not as competencies – as competencies tend to be conceptualised in terms of positive attributes not negative ones. Mapping of the MLQ 5X items to the 112 components of the SHL UCF provides a way of seeing how the content of the nine MLQ scale might fit into the SHL model. This exercise yields the pattern presented in Table 4. It suggests that much of what MLQ describes as transformational in terms of style is classified as transactional in terms of function within the SHL model. What is more, the majority of ‘transformational’ items map onto components that sit within the transactional ‘Sharing the Goals’ and ‘Gaining Support’ functions, with the transactional MLQ items fitting the transactional aspects of the ‘Delivering Success’ function. In short, there may be no real contradiction between the present results and those of earlier gender-related studies. Rather, there is a difference in how the concept ‘transformational’ has been construed in relation to style of behaviour on the hand and function on the other. In relation to cross-country comparisons, Gibson’s (1995) results are compatible with the present findings. She examined differences in leadership Table 4. Relating the Full-Scale Leadership Model to the Leadership Functions. Leadership Functions 1

Transactional

Transformational

Developing the Vision: The strategy domain Sharing the Goals: The communication domain

Intellectual Stimulation

Intellectual Stimulation

Idealized Attributes Inspirational Motivation

Individual Consideration

3

Gaining Support: The people domain

Idealized Behaviours Contingent Reward

4

Delivering Success: The operational domain

MBE Active

2

Note: Those in italics indicate strong associations.


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styles and behaviours across four countries (Norway, Sweden, Australia and the United States). She found significant gender and country effects but no interactions (with a sample size of just 209). Analyses suggested that while males emphasized goal setting, females emphasized social interaction facilitation dimensions of leadership. Eagly (1987) has suggested that it is useful to think of gender differences in terms of two types of qualities: Agentic and Communal. Bakan (1966) first described these factors as Agency and Communion. They also clearly relate to task (Agency) and contextual (Communion) factors in the performance domain. They also relate to the higher order two-factor structure of the Big Five personality model (Boies, Lee, Ashton, Pascal, & Nicol, 2001; Digman, 1997; Paulhus & John, 1998; Saucier, 1997), where the first factor relates to positive dynamic attributes and individual ascendancy and the second relates to social propriety and community cohesion. The Communal dimension reflects a basic concern with the welfare of other people while the Agency dimension is primarily goal-directed, controlling and assertive. Males are more often characterised by Agency (e.g. Rosner, 1990; Werner & LaRussa, 1985; Spence & Helmreich, 1978; Bem, 1974) while females are more often characterised by Community (e.g. Rosner, 1990; Werner & LaRussa, 1985; Deaux & Lewis, 1983; Spence & Helmreich, 1978; Bem, 1974). For example, Rosner (1990), based on selfreports, found that female leadership was characterised by attempts to encourage participation, share power, energize and enhance the self worth of others. Male leaders were more likely to describe their jobs as a series of transactions with their subordinates. Other work has also supported the idea of women being more interactive as leaders (Bass, 1990), a finding strongly supported by the present findings of higher scores on ‘supporting and cooperating’ competencies. Adler and Izreali (1988) argued that there are two views of gender differences in management. One is an ‘equity’ view, which seeks to define equal roles for men and women and strives for equal access and identical norms of behaviour. The contrary view is that of the ‘complementarity’, which assumes differences between men and women and strives to recognize and value those differences. The present results strongly support the latter view in terms of differences in patterns of potential. It is the combination of transactional and transformational potential that drives the level of leadership performance, as behaviour driven purely by transformational competencies without transactional ‘controls’ may be seen as ineffective or even dangerous (e.g. developing a new vision for an organization without paying any attention to the analysis of the market

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data). Just as male managers may have to move outside their ‘comfort zone’ in terms of meeting demands on the relational aspects of leadership, females also may have to do the same in relation to the task-related aspects. The SHL model is intended to provide a more extended framework within which to consider managerial and leadership competencies and how they relate to the performance of various different functions associated with effective leadership. While the present chapter has talked a lot about overall trends in terms of transactional and transformational competencies, in practice, it is far more useful to look at the detail of individual profiles across the individual competencies to identify areas of strength and development needs. Indeed, we would usually work at a level of detail greater than that of the Great Eight competencies, by looking at the 20-dimension competency model that sits below this. Finally, it is important to remember that while effects of gender or experience might be greater than effects associated with country or language differences, none of these demographic effects are anything like as large as the residual differences between individuals.

NOTES 1. Charismatic/Inspirational leadership combines three scales previously viewed as distinct (but correlated): Idealised Influence (Attributed), Idealised Influence (Behaviour) and Inspirational Motivation. 2. Passive-Avoidant leadership combines the scales of Management by Exception (Passive) and Laissez-Faire.

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Saucier, G. (1997). Effects of variable selection on the factor structure of person descriptors. Journal of Personality and Social Psychology, 73, 1296–1312. Schmidt, F. L., & Hunter, J. E. (1992). Development of a causal model of processes determining job performance. Current Directions in Psychological Science, 1, 89–92. SHL. (2006). The OPQ technical manual. Thames Ditton: SHL Group Ltd. Spence, J. T., & Helmreich, R. L. (1978). Masculinity and femininity: Their psychological dimensions, correlates and antecedents. Austin, TX: University of Texas Press. Vroom, V. H., & Yetton, P. W. (1973). Leadership and decision-making. Pittsburgh: Pittsburgh University Press. Werner, P. D., & LaRussa, G. W. (1985). Persistence and change in sex-role stereotypes. Sex Roles, 12, 1089–1110. Yukl, G. (1981). Leadership in organizations. Englewood Cliffs, NJ: Prentice-Hall. Yukl, G., & Van Fleet, D. D. (1992). Theory and research on leadership in organizations. In: M. D. Dunnette & L. M Hough (Eds), Handbook of industrial and organizational psychology (Vol. 3). Palo Alto, CA: Consulting Psychologists Press.

RECONCEPTUALIZING EXECUTIVE ENVIRONMENTAL SCANNING AND SEARCH: IMPLICATIONS FOR INTERNATIONAL LEADERSHIP RESEARCH AND PRACTICE Ciaran Heavey, Richard T. Mowday, Aidan Kelly and Frank Roche ABSTRACT This chapter attempts to reinvigorate scholarly interest in executive scanning by outlining a model to guide future research on executive search within the context of international strategy. Executive scanning has received considerable empirical attention but only limited theoretical attention. Most of this research has studied scanning as the receipt rather than the search for information. Based on the application of learning theory, we outline a model advancing two broad categories of executive search exploitative and explorative, consisting of six specific search behaviors. We advance search as integral to managerial decisions relating to the various aspects of internationalization, notably choice of location,


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corporate strategy, and mode of entry. The implications for future research are presented.

Internationalization has become a critical imperative for the corporate growth of modern-day organizations. Driven by increasingly competitive capital market conditions, growing institutional activism, and the rapid erosion of domestic-based competitive advantage, corporations are turning to international markets for growth and innovation, as evidenced by the rising proportion of cross-border mergers, acquisitions, and alliances – cross-border acquisitions have recently comprised more than 45% of all acquisitions completed worldwide (Hitt, Harrison, & Ireland, 2001). At the same time, the pace of globalization remains unabated, driven by growing acceptance of free market ideology, technological advances, ongoing shifts in the economic center of gravity from developed to developing industries (e.g., the construction industry), and the opening of borders (Gupta & Govindarajan, 2004). Traditionally indigenous-based corporations are increasingly turning to international markets as a source of renewed growth; for example, in 1993 Wal-Mart generated only 1% of sales outside the United States whereas in 2002 Wal-Mart generated 27% of sales from international operations (Gupta & Govindarajan, 2004). Even those corporations choosing to remain domestic-based must be cognizant of the dynamics of the global competitive marketplace and impending global trends and developments. The opportunities afforded by internationalization are indeed immense but so too, correspondingly, are the challenges and risks. The decision to internationalize should be predicated on a thoughtful, carefully researched assessment of the opportunities as well the threats of international expansion. All too often, however, corporations hastily enter international marketplaces without an adequate understanding of local environmental and competitive conditions, and without a fully articulated international strategy. Attesting to this is the very recent exit of Wal-Mart from Germany after eight years of international expansion; commenting on the decision, CEO Lee Scott said ‘‘it is clearly a very challenging market for us that we have not figured out’’ (Zimmerman & Nelson, 2006). An integral, though less well understood, element of the internationalization process is that of executive search that must inform aspects of the internationalization process, most notably managerial decisions concerning location of operations, international corporatelevel strategy, and mode of entry. Moreover, the process of search not only

Reconceptualizing Executive Environmental Scanning and Search

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serves to inform internationalization, but may also be a direct source of international-based competitive advantage. Indeed, as remarked by Bartlett and Ghoshal (1991), some time ago, many corporations ‘‘have recognized the important competitive advantage represented by the global scanning capability of their operations’’ (p. 102). It seems, therefore, that one-way executives can reap the benefits of internationalization, whereas offsetting the difficulties, is to conduct a carefully oriented search of the international environment. Currently, however, we know relatively little about how international executives can conduct an informative search. The purpose of this chapter is to help develop a better understanding of how executives search the international environment, in a context increasingly marked by the ascendance of globalization. Environmental scanning has received considerable empirical attention but only limited theoretical attention from management scholars. As a result, scanning is a construct in need of theoretical development and elaboration; the extant literature, largely focused on passive, unsolicited scanning, offers little guidance to global executives, charged with the responsibility for the identification and assessment international market opportunities. A goal of this chapter is to increase our conceptual understanding of scanning behavior by focusing on the neglected area of executive search. The process of search is of particular relevance to executives of global corporations in their assessment of international market opportunities and threats. Following a brief review of the literature, we propose that scanning consists of two modes: viewing and search. Most scholars have defined and measured scanning as information received rather than information sought, or have left the distinction unclear. Consequently, the notion that executives search for information, first proposed by Aguilar (1967), has remained largely unexplored, yet remains critical to the success of international strategy. This chapter represents an attempt to redress this void, and advance theoretical and practical insights on search in an international context, by outlining a model of executive search partially based on Huber’s (1991) knowledge acquisition process in organizational learning. Drawing on March’s (1991) distinction between exploitation and exploration, we identify six different types of search: experiential, organizational, affiliative, vicarious, grafting, and experimental. Finally, we identify several factors that can influence executive search behavior. This conceptual exposition offers the potential for not only advancing theoretical understanding of executive search, but of elucidating a framework of search behaviors to guide the process of internationalization.

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LITERATURE REVIEW Environmental scanning was first defined by Aguilar (1967) as the act of acquiring information about events and relationships in the environment that have importance for charting the organization’s strategic direction. Environmental scanning supports numerous critical strategic processes, including planning (Rhyne, 1985), decision-making (Eisenhardt, 1989), innovation (Miller & Friesen, 1983), and organizational design (Tushman & Nadler, 1978). The importance of scanning to the survival and success of organizations suggests it is imperative for executives to regularly monitor the environment (Pavett & Lau, 1983), an assertion reinforced by the observed relationship between scanning frequency and breadth and company performance (Daft, Sormunen, & Parks, 1988). Huber (2004) has argued that the importance of scanning will increase because ‘‘the level and growth of environmental complexity, dynamism, and competitiveness will be significantly greater in the future than in the past’’ (p. 50). Often this increasing level of dynamism, complexity, and competitiveness is driven by global forces, notably global market drivers (global customers, global channels, and transferable marketing), global cost drivers (economies of scale and scope, learning and experience, and product development), global governmental drivers (trade policies, technical standards, and marketing regulations), and global competitive drivers (globalized competitors) (Gupta & Westney, 2003). According to Aguilar, scanning consists of four modes: undirected and conditioned viewing, and informal and formal search. Scanning has been most often studied in terms of the frequency of attention toward task and general sectors of the environment (Daft et al., 1988; Elenkov, 1997) and the utilization of different information sources (May, Stewart, & Sweo, 2000; Sawyerr, Ebrahimi, & Thibodaux, 2000). Executives have been found to be most concerned with market, competitive, and technological sectors of the environment (Aguilar, 1967; Ghoshal, 1988). The information sources used by executives to scan sub-sectors of the environment differ across two dimensions, internal vs. external and personal vs. impersonal. External information is favored over internal information, and personal sources over impersonal/documentary sources (Aguilar, 1967; Ghoshal, 1988; Keegan, 1974; Mintzberg, 1973). The scanning behavior of executives has been studied across a variety of research settings. The findings from these investigations suggest that scanning behavior varies both within and across contexts, particularly across national and cultural borders. This research suggests differential scanning behaviors across cultural contexts; for example, Elenkov’s (1997) work showed that executives in Bulgaria scanned the political/legal sector of the


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environment intensely because of the importance of managing governmental relations. That said our paper hopes to provide a framework of search behaviors, broad enough for usage across national and cultural boundaries. Table 1 provides a summary overview of the research on scanning to date.

Clarifying the Scanning Construct The most significant limitation of scanning research is the lack of attention to search behavior. The primary focus of the last four decades of research Table 1.

Overview of Environmental Scanning Research.

Level of Analysis

Independent Contextual Variable

Individual

Functional background Hierarchical level.

Organization

Tenure, motivation, & education. Role threat & role uncertainty. Personality characteristics Functional diversity Information processing structure Strategy

Size - Multinational corporations - Small companies Environment

Perceived strategic uncertainty

Strategic importance Environmental complexity

Institutional isomorphism National culture

Representative Studies

Aguilar (1967), Hambrick (1981) and Keegan (1974). Aguilar (1967), Hambrick (1981) and Keegan (1974). Nelson (1987) and O’ Reilly (1982). Boynton, Gales, and Blackburn (1993). Welsch and Young (1982). Sutcliffe (1994). Thomas and McDaniel (1990) Garg et al. (2003), Hagen and Amin (1995), Hambrick (1982) and Jennings and Lumpkin (1992). Aguilar (1967). Preble, Rau, and Reichel (1988). Johnson and Kuehn (1987), Pearce II, Chapman and David (1982) and Smeltzer, Fann, and Nikolaisen (1988). Daft et al. (1988), Ebrahimi (2000), Ebrahimi, Subramanian, and Sawyerr (2002), Elenkov (1997), May et al. (2000) and Sawyerr (1993). Boyd and Fulk (1996), Ebrahimi (2000) and May et al. (2000). Boyd and Fulk (1996), Ebrahimi (2000), Miller and Friesen (1983) and May et al. (2000). Ghoshal (1988). Ebrahimi, Subramanian, and Sawyerr (2002).

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has been on how frequently executives view information received from different sources and about how factors at three different levels of analysis (see Table 1) determine how frequently and with what level of interest that viewing takes place. How frequently executives view information is only one part of the scanning process. Empirical researchers seem to have lost sight of Aguilar’s (1967) suggestion that executives both passively receive (look at) and actively search (look for) for information. In fact, among the executives he studied, Aguilar found that information was solicited in 43% of instances when all sources were considered and in 58% of instances when personal sources were considered. Although subsequent researchers have followed Aguilar’s (1967) methodology very closely by asking executives about information they have received, they have not investigated whether the information received was solicited or unsolicited.1 Thus, the question of how executives actively search for information has been largely ignored in research conducted over the past four decades since Aguilar’s (1967) pioneering study. To refocus the efforts of researchers interested in environmental scanning, we suggest there are two scanning modes: viewing and search. Although this is a departure from Aguilar’s (1967) definition, we believe that a twopronged dichotomy is more parsimonious and a more accurate reflection of the process. In Aguilar’s scheme, for example, it is difficult to distinguish between undirected and conditioned viewing. As Hambrick and Mason (1984) and Starbuck and Milliken (1988) have argued, viewing is rarely undirected because underlying subconscious processes that limit the executive’s field of vision are always at work. In a similar vein, the formality of the search procedure (informal vs. formal) is likely to be confounded by bounded rationality (Cyert & March, 1963), subject to satisfying, and not always guided by economic cost-benefit considerations, as suggested by Aguilar. Therefore, we have reconceptualized scanning as a dual mode process. The two modes entail very different behaviors and are compelled by different motivations. The first mode, viewing, involves selectively attending to the information received about various environmental sectors from a multitude of sources, both internally and externally. Because most of the previous research summarized in Table 1 has investigated the influence that different factors have on the frequency with which information is received from different sources and about different sectors of the environment, we have chosen to focus our conceptual attention on the search mode of scanning. The search mode of scanning, often instigated as a consequence of viewing (i.e., noticing), has been less often studied and thus holds the


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greatest promise of expanding our understanding of the environmental scanning process.

A Framework of Executive Search Executive search is limited by both resources and bounded rationality. Garg, Walters, and Priem (2003) noted that owing to time constraints and environmental complexity, chief executives must ‘‘focus on what they perceive to be key subsets of the available data, and by necessity exclude some other, potentially important data sources’’ (p. 725). Executives are, therefore, limited in both the time and attention they can devote to search. In accordance with limited rationality and studies of organizational learning, we advance that executives can engage in two alternative patterns of search behavior: exploitative search and explorative search. Although the distinction between exploitation and exploration was originally proposed by March (1991) as a way to understand adaptive organizational behavior, we believe it can also help identify distinct executive search patterns. Although March (1991) used a variety of terms to illustrate exploitation (e.g., refinement, choice, etc.) and exploration (e.g., play, discovery, etc.), the fundamental distinction in terms of executive search is whether the information already exists and is accessible within the organization or whether it needs to be gathered outside the organization or even created (cf., Levinthal & March, 1993). Exploitative search utilizes information already gathered or created. It can involve searching one’s own experience for feedback (experiential search), querying information systems (organizational search), or liaising with boundary spanners (internal affiliative search). In an international context, exploitative search means leveraging the knowledge, experience, and insights gained from current or previous international activities. So, Wal-Mart executives can engage in exploitative search by revisiting their failed operations in Germany to reveal important lessons for future international expansion. Explorative search gathers or creates new information beyond the current scope of operations, outside the organization. It involves consulting with associates outside the organization (external affiliative search), examining competitors (vicarious search), acquiring specialized knowledge (grafting), or experimentation. Again, in internationalization, explorative search may involve learning from other companies that have adopted a successful international approach, hiring seasoned international managers, test-marketing in international locations, acquiring

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international subsidiaries, establishing alliances, or even setting up an international greenfield venture. This chapter identifies six types of search behaviors that can be distinguished in terms of exploitation or exploration, and that are influenced by a variety of factors. These behaviors are partially derived from Huber’s (1991) knowledge acquisition framework. We have also drawn on other literatures, including network theory, competitive intelligence, and learning theory. Experiential Search Executives can distill important lessons and pertinent information from direct experience (Herriott, Levinthal, & March, 1985; Huber, 1991). Huber (1991) noted that ‘‘experiential learning is enhanced by the availability and analysis of feedback’’ and that one approach to gaining insights in this way is to ‘‘increase the accuracy of feedback about cause–effect relationships between organizational actions and outcomes’’ (p. 91). Aguilar (1967) earlier remarked that this feedback facilitates the evaluation of corporate policy effectiveness. Experiential search is retrospective in nature (analyzing events in the past) and is, therefore, a form of exploitative search. The quality and usefulness of experience is determined by the speed of feedback and the pace of learning (Sitkin, 1992). For international search, the lessons learned from prior international experience are an important source of information embedded in organizational memory (Walsh & Ungson, 1991). The case of Wal-Mart’s failed operations in Germany has allowed the company, as remarked by Mike Duke of Wal-Mart’s International Division, to ‘‘become more strategic over time in assessing the growth and market development opportunities in foreign countries’’ (Zimmerman & Nelson, 2006). Although bounded by certain market-based idiosyncrasies, the general lessons learned from one internationalization approach can be transferred and used to guide subsequent expansion; Wal-Mart should learn the lesson of the importance of more closely understanding local regulatory and marketing conditions before pursuing expansion. Another example is that of American International Group; AIG established a strong domestic management team in parts of Asia that then helped in expansion to countries with similar backgrounds (Meyerhans & Lu, 2006). Leveraging the lessons of experience is an important capability for executives of international corporations that serves as a costly-to-imitate capability, a potential source of sustainable competitive advantage (Barney, 1991). Experiential search, however, is fraught with difficulties. Many international corporations have failed to learn from their international experience.


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To distill the lessons of experience, executives must step outside that stream of experience (Weick, 1995), no easy task in today’s fast paced environment. Even then, the lessons learned from experience tend to be drawn from a limited range of observations (Levitt & March, 1988). Further, the cognitive limitations of executives relating to perception (see Starbuck & Milliken, 1988) and memory (Levinthal & March, 1993), particularly when drawing inferences, can act to distort the lessons learned from experience. Notable is the self-serving attribution bias (Wagner & Gooding, 1997), in which failure is blamed on external conditions and consequently underplayed in experiential evaluations. Another difficulty is that negative information – relating to failures in international operations – is rarely channeled upwards in the hierarchy (Aguilar, 1967). Huber (1991) noted the confounding effect of ‘‘inaccurate learning’’ and ‘‘incomplete recall’’ on memory (p. 105). Nisbett and Ross (1980) observed that individuals rely on a set of heuristics in managing experience that often lead to biased assessments of situations. Recently, Bazerman (1998) identified 13 biases that occur frequently in decision-making associated with the use of just three heuristics. Additionally, Levitt and March (1988) noted the fallacy of superstitious learning when drawing lessons from experience. Therefore, an executive’s understanding of his or her experience is likely to be tainted by his or her very management of that experience. (For a discussion of how to improve the process of learning from experience see Levitt & March, 1988, pp. 333–335). Certainly, for international executives, a systematic and rigorous evaluation of international successes and failures should help learning from experience, perhaps facilitated by the use of after-action-reviews following major international assignments. Organizational Search Organizations are information-processing systems that generate, process, and store information about the environment (Daft & Weick, 1984; Tushman & Nadler, 1978; Walsh & Ungson, 1991). This information is dynamic in substance, imbued with different meanings across different subunits (Tushman & Scanlan, 1981). Though the information is plentiful in organizations, it often is not neatly packaged or organized, timely, or accurate. Information in organizations is frequently dispersed, disaggregated, and disorganized. It is encapsulated in a variety of different forms (explicit and codified vs. tacit and implicit) and conveyed by different media. Owing to technological advancements, however, much of this information has become embedded in computerized information systems (Huber, 1991), that often span global networks. For example, many global consulting

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corporations – the like of McKinsey, Boston Consulting Group, and Accenture – utilize information systems globally to codify disparate experience distilled from consulting assignments. Corporations such as Amazon have advanced information systems capable of tracking demand and consumer habits on a global scale. Most notably, however, international corporations, especially multinational corporations, are well-suited to channeling information and transferring best practices across national borders. As an example, many American multinationals located in Ireland throughout the 1990s were responsible for the spread of human resource practices. The employment of localized management and staff, alongside some expatriates, can promote understanding of local market conditions; AIG’s reliance on localized management helped executives gained familiarity with the Chinese marketplace. The key, of course, is recognizing the existence of information (see Huber, 1991, p. 89). In the first instance, executives can search the range of different information systems that exist within their organization to acquire information. Executives typically approach information systems with a specific question, not for the purpose of general viewing (Vandenbosch & Huff, 1997). Traditionally information derived from these systems was typically low in richness and provided aggregated, often historical, data about stable, recurring, and predictable events (Daft & Lengel, 1987), although improvements in technology have increased the speed with which real-time information is available. A prime example is customer information systems that provide dynamic real-time information on consumer behavior and market segmentation and have been used by companies such as American Airlines, J. P. Reynolds, Fingerhut and many others to position themselves profitably in their respective markets, facilitate new product development, and establish competitive advantage (see Benson, 1993). The utilization of information systems for search is conditioned by the performance expectancy of using the system, the ease associated with the use of the system, and the normative beliefs of important others (Venkatesh, Morris, Davis, & Davis, 2003) Affiliative Search Executives can gain information through their network of contacts and affiliative ties, inside (internal affiliative search) and outside (external affiliative search) the organization, with various colleagues, stakeholder constituencies, professional associations, and alumni. Network contacts can be either a source of direct or second hand information. Networks are a product of the interaction among a group of individuals (Tolbert, Salancik,


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Krackhardt, & Andrews, 1995) that serve to absorb, reduce, and suppress environmental uncertainty (Geletkanycz & Hambrick, 1997). Both internal and external ties accrue significant informational benefits (Adler & Kwon, 2002; Burt, 1997; Hansen, 1999). Executives do vary, however, in the extent to which they leverage their network contacts, in accordance with intraorganizational search capability (Leifer & Delbecq, 1978), network size, need for cognition, perceived environmental uncertainty (Anderson, 2002), and motivation, opportunity and ability (Adler & Kwon, 2002). Affiliative search provides the benefits of early and filtered information (Burt, 1997). The information benefit gained from tapping networks is a function of three interrelated factors: the substance, locus, and configuration of ties. The substance of ties refers to whether the information being transferred is codified and explicit or noncodified and tacit (Hansen, 1999). The locus of network ties pertains to whether ties are in the industry or outside the industry (Geletkanycz & Hambrick, 1997). Finally, networks vary, considerably, in their strength or weakness (Granovetter, 1973), sparseness or density (Adler & Kwon, 2002), and degree of closure (Coleman, 1988). Although some commentators maintain that weak sparse ties offer novel, diverse, high quality, and nonredundant information (e.g., Burt, 1997; Granovetter, 1973), others note that these information benefits are unlikely to be realized from weak ties due to a lack of cohesiveness, trust and, therefore, cooperation (Coleman, 1988). However, advocates of the strength of weak ties hypothesis (Granovetter, 1973) suggest that strong ties lead to the receipt of redundant information (Burt, 1997). Indeed, this logic is supported by Geletkanycz and Hambrick’s (1997) assertion that social interaction among industry incumbents tends to homogenize perspectives. This has been verified in a study of the environmental scanning behaviors of Korean executives (Ghoshal, 1988) and a case study of the Scottish knitwear industry (Porac, Thomas, & Baden-Fuller, 1989). Nonetheless, the benefits offered by weak ties apply only to highly codified knowledge and do not extend to tacit knowledge; rather, research has demonstrated that strong ties, perhaps among intraindustry constituencies, are most effective for the transfer of noncodified tacit knowledge (Hansen, 1999). In the context of internationalization, affiliative search may be especially helpful. Establishing contacts with regulators, competitors, customers, and colleagues in the host country provides critical information regarding local environmental, industry, and competitive conditions, facilitating competitive positioning and regulatory maneuvering. A prime example is that of Maurice Greenberg, former chairman of AIG, whose political relations were instrumental to the acquisition of a license to operate in China, and the

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subsequent positioning of AIG in China. AIG, aided largely by Greenberg, undertook several affiliative initiatives to enhance its positioning: Greenberg served as Chair of the US–China Business Council and maintained a healthy relationship with the mayor of Shanghai; AIG has many political connections on its board of directors, and AIG invested in the construction of the Shanghai Center office-residential complex. In addition, Greenberg lobbied the Clinton administration with a view to renew China’s mostfavored-trade-nation status. Establishing these political connections no doubt provided AIG with an important informational advantage that guided competitive positioning. Of particular benefit to executives are networks of boundary spanners within the organization. Boundary spanners link the organization to the external environment and regulate the flow of information between the organization and environment (Leifer & Delbecq, 1978). Executives are most likely to consult those boundary spanners with linkages both internally and externally who have access to information relevant to the issue at hand (see Leifer & Delbecq, 1978 for an overview of boundary spanning activity). Executives of international operations and subsidiaries can serve as important boundary spanners, channeling timely information to the top executive team on local or regional conditions. According to Gupta and Westney (2003) international subsidiaries can engage in two types of initiatives: external initiatives directed toward the identification of opportunities by virtue of interaction with customers, suppliers, and governmental entities in the subsidiary’s marketplace; and internal initiatives, involving new business opportunities within the boundaries of the corporation. Those subsidiaries primarily engaged in external initiatives are in a prime position for boundary spanning, and can serve as a rich reservoir of knowledge on local or regional conditions, facilitating executive search. Vicarious Search We have already described how executives acquire information through direct experience. Executives also acquire information and gain valuable insights by observing the experiences of others (Levitt & March, 1988). Executives often learn from the strategies, policies, and actions of other organizations (Adler & Kwon, 2002; Huber, 1991). Huber (1991) termed learning from the experience and behavior of others vicarious learning, consistent with Wood and Bandura’s (1989) social cognition theory definition. Vicarious search behavior can produce two types of information: codifiable information about competitors and competitive interaction and tacit knowledge related to competitor’s practices (Levitt & March, 1988).


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The predominant forms of vicarious search behavior are general competitive intelligence activity and more targeted benchmarking of best practices. An important strategy for gaining information, particularly information about competitors, is the formation of a competitive intelligence unit. Although, for the most part, intelligence units are staffed with analysts and aligned with the planning function (Lenz & Engledow, 1986), intelligence activity exists at different levels in the organization (see Ghoshal & Westney, 1991) and is conducted both formally and informally (Gibbons & Prescott, 1996). Competitive intelligence activity involves monitoring the competitive environment (Gilad, 1989), gathering useful information about the activities of competitors (Babbar & Rai, 1993; Kahaner, 1996), and identifying information (Ghoshal & Westney, 1991). The information generated by competitive intelligence is usually action-oriented (Bernhardt, 1994) and serves to restore executives’ central vision, alleviating blind spots and enhancing planning (Gilad, Gordon, & Sudit, 1993). Intelligence units can produce information about the implications of competitors’ moves, strategic actions, and growth patterns (Porter, 1980) and information about the past, present, and future behavior of competitors (Bernhardt, 1994; McCrohan, 1998). Further, competitive intelligence can also be used to generate industry and stakeholder analyses (Gibbons & Prescott, 1996). Huber (2004) has predicted that all but the largest firms will increasingly out-source competitive intelligence gathering services in the future. From an international standpoint, vicarious search is particularly insightful in that many corporations considering internationalization attempt to emulate successfully internationalization approaches and strategies of companies already operating on an international stage. Ryanair, an Irish-based low-cost airline, emulated Southwest Airlines business strategy, corporate strategy, and several value chain activities. Ryanair’s chief executive, Michael O’Leary, engaged in vicarious search to identify stateof-the-art operating practices to minimize turnaround time; Ryanair even adopts a similar market penetration approach to Southwest Airlines, by introducing new routes only after revenue has been maximized on existing routes. As another example, the former CEO and founder of Superquinn (an Irish grocery chain) Fergeal Quinn borrowed many of his principles of superior customer service from supermarkets around the world, particularly American chains. Grafting Executives can acquire information by grafting individuals or organizations that possess or have access to particular types of information (Huber, 1991).

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Grafting involves importing, from outside the organization, an individual or organization with specialized information or knowledge. Geletkanycz and Hambrick (1997) discussed two primary forms of grafting, namely the intraand extraindustry importation of executives to serve on the top management team. One of the more common examples of grafting occurs in hightechnology startups. When they reach a specific stage in their growth, it is often necessary to bring in experienced managers who may know less about the technology but more about how to run a business. For example, Eric Schmidt of Novell was hired by Google to help manage the process of going public with stock. In addition, interlocking directorships are an important form of grafting, as is the employment of external consultants. External management consultants play two important roles in this respect: boundary spanning and knowledge intermediation between management practice and research (Nippa & Petzold, 2002). Also, grafting can involve joint ventures with other firms (Huber, 1991) or the acquisition of firms in product segments or markets a company wants to enter. The information being grafted through an acquisition often involves a new technology developed by a smaller, entrepreneurial startup. Grafting is an especially useful search mechanism in the context of internationalization and international expansion. Oftentimes corporations lack an appropriate understanding of local and regional conditions; an American or European corporation diversifying geographically into an Asian country lacks a practical hand-on experience of local operations, customers, regulations, culture, and so forth. Gaining the requisite knowledge and experience can be obtained by grafting either individuals or other corporations, in the form of mergers, acquisitions, and alliances. An excellent example of grafting individuals is how Toys R Us hired Den Fujita to gain knowledge and experience of the stringent regulatory marketplace of Japan, characterized by restrictive laws regarding the size of retail stores, and unique customer habits. Den Fujita was among the first to begin to import foreign luxury goods into Japan in the early 1950s; in 1971, McDonalds hired Fujita to assist them in introducing US fast food into Japan. Fujita succeeded to bring McDonalds successfully into Japan, and on the basis of this reputation, Toys R Us recruited Fujita as their first choice on the basis of his reputation. Grafting can also involve acquisitions and alliances. European companies, such as Unilever and Nestle, have attempted to gain a foothold in the US ice-cream industry have used several acquisitions; Nestle acquired Dreyer, whereas Unilever acquired Ben & Jerry’s. Though beneficial in terms of market development and positioning, these acquisitions also represent an important search probe, providing both hands-on experience


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and knowledge with regard to regional conditions. That said acquisitions are expensive efforts and encounter a high failure rate; a more prudent, and somewhat less expensive form of grafting is that of alliances, which can range from purely contractual to joint venture-based operations with crossholdings of equity. Experimental Search Experimental search is a deliberate, environmentally intrusive (Daft & Weick, 1984) initiative used to explore the environment. It differs from its experiential counterpart in that it is intentional and prospective. Instead of searching prior experience for feedback (e.g., Aguilar, 1967), experimental search involves proactively generating new feedback. It can be formally defined as the systematic generation and examination of new information that does not currently exist (Garvin, 1993). Some commentators even argue that the very nature of the relationship between the environment and organizations is experimental in nature (e.g., Hedberg, 1981). Experimental search is explorative in nature and, according to Baum, Li, and Usher (2000), involves concerted variation and planned experimentation. Examples of experimenting behavior can range from test marketing a new product to gain information about its acceptance by customers to announcements of a strategic decision designed to gather information about reactions by competitors and financial analyst (e.g., floating a ‘‘trial balloon’’). In high velocity environments in which effective planning cycles shrink from years to months, experimentation may be a particularly important tactic. In the absence of being able to plan with any accuracy, simply trying something to see what happens may be an important way to acquire information. A prime example of this is Akamai, whose CEO George Conrades absorbs uncertainty in a turbulent environment by simply acting to see what happens (Carr, 2000, p. 122). A company with a 90-day long-term planning horizon, Akamai is a ‘sense-and-respond organization’ with a ‘‘very active feedback loop between the company and its customers’’, which allows it to ‘‘get immediate feedback, learn from it, and adapt’’ (Citrin, 2002, p. 49). This is the essence of experimental search behavior. Another notable case of experimental search is that of Yahoo! Sigismund (2000, p. 116) described Yahoo!’s growth strategy as a ‘‘series of guided experiments in natural selection’’ in which log files were used to track how people used the web site. This allowed Yahoo! to experiment by adding links in areas of high consumption and develop an understanding of how the new links were used and which were popular. In international corporations, experimental search can take a variety of forms including test-marketing, exporting, and licensing. Test-marketing is a

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useful search mechanism for generating feedback on nondurable/consumer; many American corporations use Ireland as a test market for broader Western European economies, which provides valuable feedback on consumer tastes and habits. Other forms of experimental search include exporting and licensing. Both forms of international mode of entry can serve as a valuable search mechanism, providing information on local marketplaces, without incurring the expense of acquisitions.

INFLUENCES ON EXECUTIVE SEARCH We have proposed that there are two modes of scanning behavior, viewing and search. Although most of our attention has been devoted to search rather than viewing, an important question concerns what factors influence executives to move from passive viewing to active search. Aguilar (1967) felt that the primary determinant of which environmental scanning strategy executives adopted would be what he termed the rule of efficiency: ‘‘y scanning would never be intensified beyond the point where its marginal costs just equal the marginal gains which the information provides’’ (p. 24). Even so, he recognized that it was very difficult for executives to calculate marginal costs and benefits with accuracy. Instead, Aguilar (1967) argued that benefit and cost considerations would be captured imperfectly by three sets of ‘‘rules’’ that influence whether scanning involves viewing or search: issue-, information-, and capacity-related. Benefits were largely reflected in the issue-related rules and costs in the information and capacity-related rules. His predictions remain largely untested with respect to the question of viewing vs. search. However, we believe they also have relevance to predict whether executive search is exploitative or explorative in nature. In Fig. 1 a conceptual model of the influences on executive search is presented. This model builds on some of Aguilar’s (1967) earlier thinking and moves beyond his ideas to incorporate additional influences, many of which have been identified in previous research on scanning (see Table 1 for an overview). We believe that the influences on executive search behavior reside at four levels of analysis: the issue, the individual, the organization, and the environment.

Issue-Related Influences on Search Behavior Aguilar (1967) suggested that the nature of the issue facing executives could have an important influence on what executives pay attention to and the

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Reconceptualizing Executive Environmental Scanning and Search Influences on Search

Level of Analysis Issue

• Scope and magnitude • Urgency • Long-term implications

Individual

• Executive characteristics

Organization

• • • •

Environment

• Availability of information • Uncertainty • Analyzability

Adequacy of existing information Scanning capability Competition for scanning attention Strategic orientation

Fig 1.

Types of Search Behavior

Exploitative Search • Experiential • Organizational • Affiliative-internal Explorative Search • Affiliative-external • Vicarious • Grafting • Experimental

A Model of Executive Search Behavior.

sources they consult. We also believe that characteristics of the issue at hand can also influence whether search is exploitative or explorative. For example, the scope and magnitude of the issue may suggest that sources of information available from past experience or within the organization may not be sufficient. Issues that are broad in scope and of greater magnitude may influence executives to search in a more explorative fashion by consulting outside contacts (external affiliative search), acquiring information about competitors (vicarious search or grafting), or experimentation. Similarly, issues with greater long-term implications for the organization may be more likely to prompt explorative rather than exploitative search. When issues are urgent, executives might look to past experience (experiential search) or inside the organization (organizational search and internal affiliative search) in the short-term. Depending on what they may find, search would be expanded to external sources (explorative search). In contrast, issues that are low in urgency would be less likely to prompt a search and, when they do, be limited to local searches. Individual-Level Influences on Search Behavior Previous research on scanning has examined a number of individual-level influences on behavior, including the executive’s functional background, hierarchical level, tenure, education, and cognitive processes (see Table 1). Although some of these influences like functional background have greater relevance to where executives seek information (cf. Dearborn & Simon, 1958), we are more interested here in how executives search for information.

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Two influences seem particularly relevant in this regard and can serve to illustrate the importance of examining individual-level influences in future research on scanning. Although our focus has been on executive search behavior, hierarchical level is likely to have an important influence on search strategies. The higher an executive is in the organization, the closer they are to the external boundary and thus the greater their access to information from sources external to the organization. High-level executives are more likely to have greater visibility in the industry, take part in industry associations and conferences, or serve on the board of directors of other companies. Thus, we believe that higher-level executives might be more likely to engage in explorative search than lower level executives who may have less access to outside information resources, with one exception. Hambrick and Fukutomi (1991) argued that executives at advanced stages of their tenure (i.e., convergence and dysfunction) rely less on external sources of information, which may help explain Miller’s (1991) finding that long tenure of the CEO and firm financial performance were negatively related. Even though the personality characteristics of individual executives have not been studied extensively before, it seems likely that they would have an important influence both on the propensity to search and the process through which search is conducted. For example, executives differ in terms of their need for affiliation, extraversion, and level of involvement in groups and activities external to the organization (e.g., industry associations, conference board). In addition, executives are likely to differ in their likelihood of acting on opportunities for gathering information that might be useful to the firm. One important personality characteristic that has been linked to scanning is locus of control. Locus of control pertains to whether an executive attributes outcomes to internal or external forces (Rotter, 1966). Executives with an external locus of control are more likely to attribute events and outcomes to external, uncontrollable forces, whereas executives with an internal locus of control are more likely to attribute events and outcomes to their own actions and behavior. Miller, Kets de Vries, and Toulouse (1982) observed that internals employed more scanning devices. Building on Miller et al.’s (1982) findings, Hodgkinson (1992) argued that internal executives are more likely to belong to firms who place an emphasis on strategic planning and thus have a need to vigorously collect information about the environment. In an earlier study, Welsch and Young (1982) found that those entrepreneurs with an internal locus of control preferred using a wide variety of information sources but discounted the value of personal sources


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of information. In general, we believe that executives with an internal locus of control are more likely to engage in explorative vs. exploitative search behaviors because they are more likely to be proactive and see more value in searching for information that they can act on. In contrast, executives with an external locus of control may be less proactive since any information collected is less likely to be seen as something that can be acted upon.

Organizational-Level Influences on Search Aguilar (1967) suggested that several organizational characteristics have an impact on scanning, including the adequacy of existing information, the scanning capability of the organization, and the number of issues competing for scanning attention. When existing information is adequate, the scanning capacity of the firm is low, and there are a large number of issues competing for scanning attention, we would predict that executives would be more likely to engage in exploitative search than explorative search. The organization level variable most often studied in the context of scanning is the strategic orientation of the firm. With the exception of Hambrick (1982), studies have consistently found a relationship between firm strategy and scanning (Fabian, 2003; Hagen & Amin, 1995; Jennings & Lumpkin, 1992) . Most recently, Garg et al. (2003) suggested that, due to the constraints of bounded rationality, executives scan in accordance with the dominant logic of the firm. We believe that an organization’s strategic orientation is also likely to influence the type of search in which executives engage. This can be most clearly seen in Miles and Snow’s (1978) strategy typology by contrasting defenders and prospectors. Defenders are organizations with limited market domains but who are highly expert in their narrow range of operations. In contrast, prospectors continually search for new opportunities and frequently experiment. We would argue that defenders are more likely to rely on and exploit existing information than seek out new information. Thus, the scope of search of defenders will be more limited with an emphasis on experiential, organizational, and internal-affiliative search behaviors. In contrast, prospectors are more likely to engage in search of a broader scope because they are searching for new product, market, and/or technological capabilities. Consistent with this, Barringer and Bluedorn (1999) found that corporate entrepreneurship, a trait indicative of prospectors, predicted scanning intensity and Katila and Ahuja (2002) reported that executives in prospector organizations widen their scope of search. We, therefore, predict that executives in prospector

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firms are more likely to search using the explorative methods of externalaffiliative search, vicarious search, grafting, and experimental search.

Environmental Influences on Search Aguilar (1967) noted that the likelihood of search behavior is determined by the availability of information in the external environment. Information in the environment varies in richness and scarcity (Hedberg, 1981). We would predict that when the availability of external information is low, executives would engage more in exploitative than explorative search behaviors. Consistent with this prediction, O’Reilly (1982) found that perceived accessibility rather than quality of information was more highly related to information search and usage. Thus, when external information is perceived as less accessible relative to internal information, executives are more likely to engage in exploitative search behavior even though higher quality information may reside outside the organization. The influence on scanning behavior that has received the most attention in recent years is perceived environmental uncertainty (e.g., Daft et al., 1988) and the closely related concept of environmental analyzability (i.e., Daft & Weick, 1984). Daft et al. (1988) found that as environmental uncertainty increases so too does the utilization of all information sources, particularly external and personal sources (cf. Daft & Weick, 1984). We argue that as the environment becomes less analyzable, executives are less inclined to engage in experiential, organizational, and internal-affiliative search and more likely to use external-affiliative search, vicarious search, grafting, and experimental search. Each of these behaviors relies either on the expertise of sources, both personal (affiliative) and impersonal (grafting) external to the organization or the actions of other firms (vicarious search). Moreover, Daft and Weick (1984) argued that in environments perceived as unanalyzable, executives tend to actively solicit feedback from the environment ‘‘through experimentation and trying to impose ideas upon the environment’’ that ‘‘reflect feedback about selected environmental initiatives’’ (p. 290). Also, Aragon-Correa and Sharma (2003) argued that managers facing uncertain environments ‘‘tend to be more proactive, take greater risks, and use more innovative strategies than managers in less turbulent environments’’ (p. 77). Proactive behavior, risk-taking, and innovativeness necessitate explorative search behavior, because such activity feeds on information unrelated to current operations, outside the organization. In contrast, executives operating in environments of relative stability, low uncertainty, and high


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analyzability are more likely to exploit existing information sources and leverage the benefits of experiential, organizational, and internal-affiliative search, internal sources of information (Daft & Weick, 1984).

DISCUSSION One goal of this chapter is to reinvigorate research on executive environmental scanning by broadening our understanding of scanning behaviors beyond what has been studied in the past, with special emphasis on executive search in the context of internationalization. We believe the ideas set forth in this chapter make several important contributions to scanning research. First, we have attempted to simplify and clarify the meaning of scanning by defining it to include both viewing and search. Although Aguilar (1967) recognized that scanning could be either passive (viewing) or active (search), he and subsequent researchers have emphasized viewing to the exclusion of search. Drawing on the knowledge acquisition literature in organizational learning, we have identified several search behaviors that differ in terms of whether they are essentially exploitative or explorative. In addition to drawing an explicit linkage between environmental scanning and organizational learning theory, we have also shown that there is a relatively unexplored but potentially valuable linkage between environmental scanning (affiliative search) and network theory. Second, this chapter offers two important implications for executive search in a global context. In the first instance, the accelerating pace of globalization has significantly complexified the task of executive search; in a global environment, it is not sufficient for executives to passively scan the environment, relying merely on outdated information systems and redundant friendship networks. These sources, while useful for other purposes, cannot provide executives with the scope and depth of information needed to understand the global competitive landscape. This chapter advances a framework of search behaviors that can guide executives in acquiring the information necessary to succeed in a global business context. And second, this chapter recognizes executive search as an integral, indeed foundational, stage of the internationalization process. Existing theories of international management recognize the importance of surveying the determinants of national advantage in each local marketplace, formulating an international corporate strategy, and selecting an appropriate mode of entry given local conditions. Successfully managing these processes necessitates carefully directed executive search. This chapter set forth a theoretical model that

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comprehensively, yet parsimoniously, represents the core set of global executive search behaviors. In surveying the determinants of national advantage, top executives can rely on vicarious, grafting, and affiliative search processes to gain a realistic perspective of local economic conditions, competitive dynamics, consumer habits, and regulatory implications; to assess competitive conditions, experimental search may provide some novel insights. In devising international corporate strategy and choosing a mode of entry, executives can rely on experiential search processes to examine what has worked well in the past if already international, or vicarious search to explore other corporations’ international strategy. If others are adopting a multidomestic orientation, this may be a telling indicator that there are important country-wide differences that must inform strategic decisionmaking processes. Third, we have advanced current theory by developing several predictions that can guide future research in trying to develop a better understanding of the factors that can influence how executives search for information. Given that executives have a variety of ways to search for information, it is important to know how choices are made among alternative methods of search. Aguilar (1967) argued that the choice of search method primarily rested on cost-benefit considerations related to the issue at hand, the adequacy and availability of information, and the organization’s scanning capabilities. Building on past research on scanning, we identified factors that can influence search behavior at the level of the issue, individual executive, organization, and environment. We believe that Aguilar’s (1967) ideas, which have yet to be comprehensively tested, deserve future empirical attention. We also believe that executive search behavior can and is influenced by a host of factors not anticipated by Aguilar. By setting forth tentative predictions we hope to encourage additional research in this area. In addition to the research questions outlined earlier, we believe there are additional questions that deserve future attention. An important avenue for future research is to understand environmental scanning as a process. Of immediate interest is the relationship between viewing and search. Does viewing precede search? Does noticing intervene viewing and search? Can executives balance both viewing and search activities simultaneously? In addition, there has been little attention given to the functionality of scanning. Does scanning serve to improve operations or create new opportunities? When executives undertake the scanning process, what are they trying to accomplish and how successfully do they do so? Depending on the function, are different methods of scanning differentially effective? There


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are a host of unanswered questions about the scanning process that must be answered before a comprehensive theory of environmental scanning can be developed. In addition to the theoretical questions that should be addressed, we believe there are important methodological considerations that should also guide future research. To a remarkable degree, empirical research on environmental scanning has followed the methodology used by Aguilar (1967) in his pioneering study. The problem with adhering so closely to one methodology in scanning research is that it may introduce a monomethod bias that limits our understanding of the behavior. Moreover, it is likely that the methodology commonly used is the reason why information received is more often studied than information sought. We believe that future research would benefit from alternative methodologies, including longitudinal data collection that will allow the examination of scanning as a process and more qualitative methods that may reveal additional ways in which executives scan their environment. Scanning the environment is an essential task of executives and it is important that we develop a better understanding of the scanning process and the factors that influence it. Although Aguilar (1967) pioneered this effort and the researchers who have followed have contributed to the knowledge base about scanning, it is time to move beyond existing frameworks and methodologies in an effort to increase our understanding of this critical process.

NOTE 1. In Aguilar’s (1967, p. 212) study, he asked executives ‘‘Please try to recall a recent instance y in which you became aware of an event that occurred outside the company.’’ Similarly, Daft et al. (1988) asked executives to rate how often executives received useful information about specified sectors of the environment, the form of the information (written vs. personal), and the source of the information (internal vs. external). Although Aguilar asked executives whether the information received was solicited or unsolicited, subsequent studies have largely ignored this variable.

ACKNOWLEDGMENT This research was funded by the Irish Advisory Board to the Michael Smurfit Graduate School of Business, University College Dublin.

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FROM ERROR PREVENTION TO ERROR LEARNING: THE ROLE OF ERROR MANAGEMENT IN GLOBAL LEADERSHIP Marcos Alonso Rodriguez and Mark A. Griffin ABSTRACT Transformational, charismatic, and related leadership theories play an important role in understanding how leaders motivate better performance. However, these approaches have paid surprisingly little attention to the management of error in organizations. In fact, current studies in transformational leadership tend to define the management of error as one of the negative features of leadership. Preventing error and learning from error is a high profile leadership role in a wide variety of global industries, and therefore, it is important that leadership theories encompass this critical task. We draw on different streams of research to provide a more integrated and positive approach to leadership and the management error. Studies of error management culture provide insights into the organizational systems that are important for responding and learning from error. We discuss how error learning culture can inform the leadership behaviors that will enhance learning from error. We also draw on regulatory focus theory to show how managing error can be differentiated from other leadership activities. The integration of these ideas with current leadership theory provides a more comprehensive Advances in Global Leadership, Volume 5, 93–112 Copyright r 2009 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1535-1203/doi:10.1108/S1535-1203(2009)0000005008

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MARCOS ALONSO RODRIGUEZ AND MARK A. GRIFFIN

framework for understanding the role of leadership when error management is critical. We present this integrated framework and discuss how cultural factors are likely to shape the role of error management in a variety of global contexts.

INTRODUCTION High standards of quality and safety are important requirements for the manufacture and delivery of products and services in the global market. Although quality standards are often set by supranational bodies (i.e., International Organization for Standardization), they often lack jurisdiction. Therefore, complying with international standards is not compulsory worldwide, and each country (or region) can apply their own laws and regulations. In a global context, developing countries must strive to meet reliable and consistent standards that satisfy markets demands (Glover & Siu, 2001). For example, the People’s Republic of China has experienced a number of problems with product quality, possibly arising from the need to respond to rapid changes in the market place (Tjosvold, Yu, & Hui, 2004). How do leaders manage safety and reliability in a global context? Surprisingly, current leadership theories pay little attention to the processes through which leaders avoid major errors or manage day-to-day imperatives for reliability. Contemporary theories of leadership, such as transformational leadership theory, emphasize emotions, values, and the role of the leader creating a more motivating work environment (Rafferty & Griffin, 2004). These theories are powerful explanations of the mechanisms by which leaders can transform their subordinates’ beliefs and attitudes to achieve performance beyond expectations. However, less attention is paid to the way leaders rectify errors or control deficiencies in the performance process. Although contemporary leadership theories themselves specify that managing activities such as detection of errors is a necessary precondition for transformational change (Bass & Avolio, 1993), the operationalization and measurement of these behaviors frequently assumes that they are negative in character and effect. Several authors have called for a revision of the way transformational leadership theories approach the management of error (Hinkin & Schriesheim, 2008a; Judge, Woolf, Hurst, & Livingston, 2008). In particular, the construct ‘‘management by exception’’ (MBE) has been treated in contradictory and inconsistent ways across theories and empirical studies.

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MBE refers to the degree in which the leader takes a corrective action on the basis of results of leader–follower transactions (Judge & Piccolo, 2004). MBE is further divided into two categories of behavior depending on the timing of the intervention. Active MBE involves the leader monitoring the environment and actively searching for and acting on errors that are about to happen. Passive MBE refers to the leader taking corrective action once the problem has occurred (Antonakis & House, 2002; Howell & Avolio, 1993). Despite the conflicting results found in the literature regarding the impact of MBE on followers’ performance (Howell & Hall-Merenda, 1999) and the explicit acknowledgment that ‘‘it is hard to conceive of an effective leader who would not monitor performance and take corrective action when such action was required’’ (Howell & Avolio, 1993, p. 892), scholars have presupposed an inexorable connection between MBE and negative deeds such as coercion or punishment (Tejeda, Scandura, & Pillai, 2001). This assumption leads inevitably to ascribing a negative connotation to MBE that has persisted in the literature (Garman, Davis-Lenane, & Corrigan, 2003; Hinkin & Schriesheim, 2008a, 2008b; Tejeda et al., 2001) and is reflected in its measurement (Yukl, 1999). Most measures of MBE focus on intrusive and controlling forms of monitoring while omitting the behaviors that the leader might display when correcting mistakes or problems. Clearly, if MBE was the only behavior displayed by a leader and it was coupled with a continuous criticism of followers’ actions, it would likely provoke feelings of animosity and lower the motivation and effort of followers (Bass, 1985). However, MBE can be accompanied by a great array of behaviors (Yukl, 1999) including ‘‘transforming’’ ones or those aimed at developing subordinates’ skills and abilities. Furthermore, research indicates that contingent negative, or aversive reinforcement, can be turned into a positive feature if it is perceived as fair and consistent, helps to clarify performance standards, takes into account the subordinate’s skills, abilities, and knowledge, and is accompanied by the issuance of rewards for appropriate actions (Podsakoff, Todor, Grover, & Huber, 1984). Two areas of research suggest that it is time to reconsider the role of MBE. First, the assumed negative effects of MBE on followers are questionable (Hinkin & Schriesheim, 2008a; Judge & Piccolo, 2004) as reflected in the most recent meta-analysis of the transformationaltransactional theory, which has shown mild positive relationship between (active) MBE and subordinate perception of leader effectiveness and satisfaction with the leader (r ¼ .13 and .24 respectively; Judge & Piccolo, 2004). Second, enactment of MBE appears not to be only essential but also

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expected in certain professions, organizational cultures, or environments (Garman et al., 2003; Howell & Hall-Merenda, 1999). The fundamental idea behind MBE is not new to transformationaltransactional leadership theory. Behaviors encapsulated in the construct of MBE have been discussed and included in several taxonomies of leadership (Fleishman et al., 1991). In addition, monitoring and control activities have been regarded as crucial determinants of leader performance (Morgeson, 2005) because they allow the leader to be aware of potential or actual problems and adopt the necessary adjustments for solving them (Fleishman et al., 1991; Zaccaro, Rittman, & Marks, 2001). However, these insights have not been incorporated into most contemporary studies of transformational leadership. To develop a more balanced view of error prevention, we propose that the leader’s motivation to influence followers is influenced by the situational regulatory focus (Higgins, 1997) adopted by the leader. Regulatory focus theory (Higgins, 1997) provides a framework to understand why in certain situations monitoring subordinates and providing contingent feedback (i.e., MBE) might be the most appropriate leadership style. In addition, following one of the principal tenets of the transformational-transactional paradigm, we argue that the display of transformational behaviors does not prevent, but complements, the enactment of transactional behaviors. This complementary relationship is essential for the attainment of specific organizational goals such as ensuring quality or improving safety records. We consider that the latter goals prompt the leader to assess the situation as one of avoiding failure, in contrast to other goals in which the situation is assessed as one of approaching success (i.e., reaching a bonus target). Regulatory focus theory (Higgins, 1997) is, therefore, a valuable framework developing a better understanding of the motivation for individuals to approaching success or avoiding failure.

Regulatory Focus Theory The distinction between approach and avoidance motivation has been the central tenet of different schools of philosophy since prominent ancient Greek thinkers proposed that the primary guide for human conduct was the pursuit of pleasure and the avoidance of pain. Since approach and avoidance motivation differs as a function of the valence of the end-state, the consequences of a given event or potential event determines behavior. When the valence of an event is positive, behavior is energized by approach


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motivation. Otherwise, when the consequences are expected to be negative, behavior is energized by avoidance motivation. This distinction has been a key concept for most theorists of motivation who have acknowledged the role played by the pleasure-pain dichotomy in one or another form (Elliot, 1999) to the extent that they are referred to as ‘‘the building blocks of behavior’’ (Carver, 2006, p. 105). Regulatory focus theory (Higgins, 1997) extends previous theory on the hedonic principle by assuming that two self-regulatory systems with different goal-pursuit strategic means serve different primary needs such as the need of nurturance and the need of security. The two different systems guiding goal-directed behavior are named promotion and prevention focus. The strategic means corresponding to each system are eagerness and vigilance, respectively. Promotion focus regulates the achievement of rewards and it is concerned with the presence or absence of positive outcomes. People operating under a promotion focus regulate their behavior toward advancement, aspiration, and accomplishments. In contrast, prevention focus regulates the avoidance of punishment and is concerned with the absence or presence of negative outcomes. People operating under prevention focus regulate their behavior towards protection, safety, and responsibilities. Regulatory focus is conceived to be both a chronic disposition and a situational state. Higgins (1997) suggested that the chronic state emerges during early stages of life due to the different patterns of parenting. However, despite the chronic focus, all individuals can adopt either of the regulatory foci in a given situational context such as the workplace. For example, if cues present in the workplace facilitate the framing of a situation in ‘‘loss versus non-loss’’ terms, it is likely that the individual would adopt a situational prevention focus. In contrast, a promotional situation focus is elicited when the contextual cues facilitate the framing of a situation in ‘‘gain versus non-gains’’ terms (Kark & van Dijk, 2007; van Dijk & Kluger, 2004). Research indicates that an individuals’ chronic regulatory focus can be overridden by powerful contextual variables present in the workplace, therefore creating a specific regulatory focus at work. This regulatory focus at work is moderately stable over time (Brockner & Higgins, 2001; Wallace & Chen, 2006) since it is the product of individual differences (e.g., personality) and those situational variables that can be either likely to be constant over time (e.g., organizational culture) or specific to a given situation (e.g., task characteristics; see Brockner & Higgins, 2001). Thus, regulatory focus at work can swing from promotion to prevention and vice versa depending on cues present in the environment at a given point of time.

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One way leaders can shape the regulatory focus of their subordinates is a function of their inherent position as role models, which engenders a social learning process. Subordinates interpret the priorities of work processes through observation and interaction with leaders (Bandura, 1986), who send messages related to which practices and behaviors are expected and valued (Guzzo & Noonan, 1994; Schein, 1992). In addition, the use of language and the administration of feedback have also been discussed as powerful tools inherent to the leadership position that influences the subordinate adoption of a promotion or prevention regulatory focus (Brockner & Higgins, 2001). Previous researchers have linked transformational and transactional leadership styles to promotion and prevention focus (Brockner & Higgins, 2001; Kark & van Dijk, 2007). These authors argue that transformational leadership style is motivated by a promotion focus since both concepts are characterized by a pursuit of accomplishments and aspirations, while transactional leadership is motivated by prevention focus due to the concern with deviations, safety, and security. Nonetheless, as we have noted earlier, transformational and transactional styles of leadership are not necessarily in conflict. The superior outcomes of transformational leadership are partially derived from an appropriate use of transactional behaviors. However, virtually no research has tried to understand the motivational principals leading to the use of these behaviors and in particular MBE.

Linking Prevention Focus and Management by Exception Transactional leadership behaviors are characterized by establishing consequences and contingencies on subordinates’ actions that help to clarify the meaning of transformational leadership behaviors (Hinkin & Schriesheim, 2008a). Active MBE involves the proactive intervention of the leader to avoid or correct problems or errors (Garman et al., 2003). Recognizing or discovering an exception that might endanger performance levels is likely to orient a leader’s regulatory focus to one of prevention. In other words, the leader adopts a vigilant strategy aimed at avoiding potential barriers or hazards to ensure correct task completion (Wallace & Chen, 2006). Previous research suggests that situational prevention focus is positively related to safety performance (Wallace & Chen, 2006; Wallace, Johnson, & Frazier, in press) since there is a sensitivity toward the presence of punishment that in turn favors a strategy to complete tasks in a safe and secure manner to prevent, or at least minimize, the presence of negative outcomes.


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Alertness and Ensuring Performance Collecting information regarding the status of the work effectiveness and productivity of subordinates is a critical leadership behavior (Fleishman et al., 1991; Yukl, Gordon, & Taber, 2002; Zaccaro et al., 2001). Additionally, leadership monitoring of the internal and external work environment facilitates the acquisition of accurate and fair information about subordinates’ performance (Komaki, Desselles, & Bowman, 1989), goals, task requirements (Hackman & Walton, 1986), and environmental changes (Kozlowski, Gully, Salas, & Cannon-Bowers, 1996) and forecasts the presence of negative or positive events that may be imminent (Hackman & Walton, 1986). Thus, monitoring provides the leader with information that can be used for communicating instructions, expectations, and behavioroutcome contingencies (Zohar, 2002). Komaki et al. (1986) and Mattila, Hyttinen, & Rantanen (1994) reported that managers who spend more time monitoring were rated more effective in terms of financial and safety performance since they provided more frequent feedback. Overall, monitoring allows leaders to detect deviations and to resolve uncertainty in work processes, thus promoting security in the workplace at the sake of controlling others (Bass, 1985; Kotter, 1990). Furthermore, the negative outcomes derived from the controlling aspect of monitoring might be translated into positive ones when monitoring is encapsulated within a broader system intended to improve employees’ skills and abilities (Holman, Chissick, & Totterdell, 2002). Drawing on similarities between monitoring and Lazarus and Folkman’s (1984) cognitive theory of psychological stress and coping, we propose that leaders promote learning in the workplace through a process that includes MBE (see Table 1). Lazarus and Folkman (1984) identify two critical mediators, cognitive appraisal and coping, in the stressful person– environment relationship and their immediate and long-term consequences. Cognitive appraisal is a process through which the individual assesses if a particular encounter with the environment is relevant to his or her wellbeing. The theory distinguishes between two different cognitive appraisals: primary and secondary. During the former, the individual assesses if there is a potential benefit or detriment with a particular encounter with the environment. In secondary appraisal, the person evaluates what can be done to avert the situation by preventing or overcoming the harm or to improving the prospects for benefit. In a similar vein, we argue that monitoring facilitates the leader to be aware of exceptions that may affect the work processes. Then, when the

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Table 1.

Similarities between Lazarus and Folkman (1984) and the MBE Process.

Description

Evaluation whether there is anything at stake Can anything be done to overcome or prevent harm? Activities that focus on directly changing the elements of the stressful situation

Lazarus and Folkman (1984)

Relevance of MBE

Primary appraisal

General monitoring

Secondary appraisal

Attention on exceptions Management by exception

Problem-focused coping

leader recognizes an exception that may result in negative outcomes, he or she might put more emphasis on altering the expected negative course of action by directly tackling the exception. As we have noted earlier, monitoring the internal and external work environments facilitates the leader acquisition of information that may have implication for team functioning (Morgeson, 2005). The scope of information that can be obtained is broad, ranging from gathering accurate information about team performance (Komaki et al., 1989) to an awareness of environmental changes (Kozlowski et al., 1996). Furthermore, monitoring activities can also provide the leader with information regarding negative events that are about to happen (Hackman & Walton, 1986). We consider that exceptions are events that fall in this latter category. We define exceptions as ‘‘organizational deficiencies, originated by the acts of one or more individuals, that, without intent of causing harm, depart form organizational rules, compromising the safety of the originator(s), coworkers, clients, and/or the organization itself.’’ Therefore, exceptions include wide extension of concepts such as threats (Jackson & Dutton, 1988), human error (Reason, Parker, & Lawton, 1998), early warning indications (Zakay, Ellis, & Shevalsky, 2004), organizational deviations (Vaughan, 1999), and problems (Downs, 1967). Exceptions need to be addressed as soon as they are recognized because they are likely to result in undesirable outcomes. Exceptions entail an observable deviation from shared expectations that, if corrected, might be later on treated as near misses (Ramanujam & Goodman, 2003). However, if not corrected, they might result in incidents (Perrow, 1984), accidents (Perrow, 1984), disasters (Turner & Pidgeon, 1997), crises (Shrivastava, 1987), or latent errors (Ramanujam & Goodman, 2003). So far, we have described a process resulting in MBE behaviors. These behaviors are motivated by framing the situation as one of ‘‘loss


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versus non-loss’’ in which the main objective of the leader is to avoid a detrimental outcome while regaining control over an exception that has been recognized. This process is consistent with an error prevention strategy. That is, the attempt of preventing erroneous actions whenever possible (Reason, 1990) to reduce the development of negative consequences. Overall, MBE fulfills the function of avoiding negative error consequences by facilitating error anticipation, early error detection, and quick error handling. Over-reliance in MBE can be ineffectual in the long term since they may hamper employee development and the organizational learning. MBE needs to be understood as an immediate resource to be used when the situation demands it, and if exerted, it needs to be encapsulated into a broader strategy aimed at promoting learning from errors. Within this broader context, MBE can be a catalyst for learning to occur and we explain this process of learning from errors next.

LEADERS, ERRORS, AND LEARNING Leaders play a key role in enabling employees to learn from their errors because their position allows them to overcome the barriers impeding learning (Cannon & Edmondson, 2005). Impediments to learning from errors can be found embedded in technical systems or can be related to the interpersonal work context (Cannon & Edmondson, 2005). In both instances, leaders can influence the process by modeling their individual approach to the policies, practices, and procedures that the organization rewards, supports, and expects (Naumann & Bennett, 2000). Cannon and Edmondson (2005) argue that enabling organizational learning from failure (e.g., error) requires the management of three independent but interrelated processes: identifying failure, analyzing failure, and deliberate experimentation (p. 300). As we have noted earlier, although it is desirable that subordinates recognize their own errors, this is not always possible (e.g., lack of knowledge, unawareness of the problem). Errors are a disruptive event that can trigger a set of negative consequences affecting the person as well as organizational outcomes. Therefore, managers need combine their active role when errors and their consequences are appraised with a sensitivity toward subordinates’ needs when coping with the experience and consequences of error. To some extent, the behaviors necessary to successfully manage both needs demand a certain degree of behavioral complexity (Denison, Hooijberg, & Quinn, 1995) since

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monitoring or controlling activities might be in conflict with innovation or developing activities. To profit from errors, they need to be framed as relevant learning opportunities (Cannon & Edmondson, 2005; Sitkin, 1992; Zhao & Olivera, 2006). Thus, managers need to send unequivocal messages that learning from errors is expected, valued, and rewarded, facilitating, therefore, the adoption of a learning orientation among subordinates although their natural tendency might be otherwise (Cannon & Edmondson, 2001). Research also indicates that when employees perceive that errors yield learning benefits for themselves, they will be more motivated to report them on their own volition (Zhao & Olivera, 2006). However, a learning orientation cannot be taken for granted despite being promoted in formal organizational procedures and policies. Similar to the tension found between safety and productivity (Wallace & Chen, 2006; Zohar, 2000), learning and productivity goals may be at odds with each other. This might be especially true in demanding environments where productivity demands compromise, not only learning objectives but also the right to work in a safe work environment (Wallace et al., in press). Therefore, a learning orientation needs to be regularly supported through the observation and interaction of the employees with their leader, who needs to transmit a consistent message regarding the behaviors and practices that he or she expects, values, supports, and rewards. The goal of learning from error needs to be encapsulated into a broader objective aimed at developing employees. Managers cannot expect to engage their subordinates in learning from their own errors if other aspects of employee development are ignored. Thus, practices such as providing time-off to attend developmental activities (Maurer & Tarulli, 1994) or stimulating employees to put in practice newly learned skills (Ford, Quinones, Sego, & Sorra, 1992) need to concur with their messages regarding the importance of learning from errors or with the provision of constructive feedback (Dragoni, 2005). If a situation demands rapid intervention, the manager can either take a more active role and rectify the problem by himself or herself or specify direct instructions to the individual on how to correct the error and avoid its repetition. Although this sequence of events also promotes learning (single-loop learning), the manager risks only addressing the superficial aspect of a deep problem, thus ignoring the underlying causes that led to his or her intervention, and exacerbating the negative consequences of being found responsible for an error. Thus, despite the fact that the solution might be acceptable in the short term, there is an associated risk of falling into a vicious circle in which the solution only exacerbates the problem


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(Edmondson, 1996) and in which the actions can be deemed as punitive by the group members. The deleterious effects of the manager being punitive toward errors are well documented in the literature (e.g., Edmondson, 1996). The prospect of committing an error is a threatening event that can incur an array of material and personal costs (Zhao & Olivera, 2006). The tendency in punitive cultures is to attribute errors to undesirable personality traits, lack of knowledge and skills, and low cognitive ability (van Dyck, Frese, Baer, & Sonnentag, 2005), thus admitting one’s own errors or being found responsible of an error can endanger one’s personal image (e.g., self-esteem), interpersonal relationships, and career prospects (Cannon & Edmondson, 2005; Edmondson, 1999; Zhao & Olivera, 2006) Therefore, in such environments, employees might become reluctant to disclose their own errors (Zhao & Olivera, 2006) or more prone to engage in counterproductive work behaviors such as covering-up errors (van Dyck et al., 2005). Ironically, research in the medical setting (Meurier, Vincent, & Parmar, 1997) suggests that nurses in punitive environments who opt for not reporting errors are also likely to avoid both seeking social support and devising a course of action to effectively deal with the negative consequences of the error. In addition, errors generate strong negative emotions such as guilt, shame, or fear (Cannon & Edmondson, 2005; Edmondson, 1996; Rybowiak, Garst, Frese, & Batinic, 1999), which can impair learning because they tend to divert the attention toward oneself and away from the task (Keith & Frese, 2005). Individuals working in punitive cultures toward errors develop a tendency to ignore or cover up errors because the threats they may face if they disclose their own errors are likely to outweigh the benefits (Edmondson, 1996; Zhao & Olivera, 2006).

From Error Prevention to Error Learning Fortunately, research focused on investigating how organizations can profit and learn from their errors converge in situating managers as important figures that through their actions and attitudes can revert, or at least diminish, the negativity conveyed by errors. Organizations, and hence managers, can adopt two strategies to deal with errors: error prevention and error management (van Dyck et al., 2005). Error prevention tries to eradicate the presence of errors by establishing mechanisms (e.g., human factors, system engineering) aimed at reducing the occurrence of errors. Although error prevention can yield a certain degree of success in eliminating errors (e.g., in stable environments), it is based on an unrealistic tenet because errors

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cannot be totally eradicated (Prumper, Zapf, Brodbeck, & Frese, 1992; Reason, 1997). Whenever people are involved in a process, errors are expected due to the fallible nature of human cognition (Do¨rner, 1996; Norman & Brobow, 1975). In addition, solely relying on error prevention is likely to be deleterious to the organization in the long term. First, error prevention hinders learning (Sitkin, 1992) and innovation (van Dyck et al., 2005), and its controlling aspect might represent an obstacle for experimentation (Huber, 1991). Second, error prevention is likely to steer into a culture of blaming and punishment in regard to the presence of errors that may exacerbate the strain caused by errors and in which counterproductive work behaviors (e.g., covering-up errors) might become the norm (see earlier). Finally, a pure error prevention diminishes the degree to which errors are anticipated, and less attention is likely to be devoted to training aimed at ‘‘knowing’’ how to deal with and recover from errors; thus, when (even minor) errors appear, they can cause severe damage (Frese, 1991). Although research has traditionally focused on error prevention (Argyris, 1985; Wilpert, 1995), the advent of error management theory (Frese, 1991) has prompted scholars to look at the error process in a different fashion. Error management departs from error prevention in both its acceptance of errors as an intrinsic part of organizational life and in decoupling the error itself from its consequences. Error management places attention on dealing with the error and its negative consequences rather than trying to do away with errors (van Dyck et al., 2005). In addition to effectively handling and containing negative consequences, error management aims at increasing the speed at which errors are reported and detected and to ensure that learning occurs (van Dyck et al., 2005). Despite the great differences in their key mechanisms for maintaining safety, error prevention and error management are not incompatible, and it is expected that their combination can produce synergistic outcomes. However, enabling both systems might require managers to posses a certain degree of behavioral complexity (see earlier). Error prevention has been suggested to be the first line of defense serving two fundamental features (van Dyck et al., 2005): ensuring the quality of production and services and enhancing safety in the organization. Since errors are ubiquitous to organizational life, when they surface, error management represents a second line of defense aimed at controlling the negative consequences of the error and preventing the re-occurrence of the error in the long term. High Reliability Organizations (HROs) are examples of organizations that employ similar systems of defense. HROs are characterized by dealing with hazardous systems and complex technologies in which outstanding


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specialized knowledge and management skills are necessary to safely meet production demands (Roe & Schulman, 2008). These are organizations in which errors, accidents, and failures can have catastrophic consequences and have nurtured a pervasive shared mindfulness toward conditions that might causally lead to error and failure (Weick & Roberts, 1993). This collective mindfulness or ‘‘culture of reliability’’ (Roe & Schulman, 2008) permits employees to adopt an active and vigilant attention to potential errors (Weick, Sutcliffe, & Obstfeld, 1999). Some of the principal features of HRO are the constant search for improvement, the assumption that reliability is not fungible, and the belief that key organization properties such as attention, coordination, and mutual trust across interdependent units need to be maintain over time and cannot be treated as given (Roe & Schulman, 2008). Reliability is understood as ‘‘the ability to plan for shocks as well as to absorb and rebound from them in order to produce services safely and continuously’’ (Roe & Schulman, 2008, p. 5), entailing, therefore, great degrees of anticipation and resilience. As Weick and Sutcliffe (2001, p. 14) have stated ‘‘the signature of HROs is not that it is error-free, but that errors don’t disable it.’’ In similar way, companies aiming at profiting from errors need to be consistent in their assumptions across all levels of the organization. A fundamental pre-requisite is to accept errors as an intrinsic feature of the organization that although not desirable can appear at any moment, and although conveying negative consequences, it can also yield positive outcomes. These beliefs about errors need to be not only captured in formal organizational policies and documents (e.g., vision) but also reflected in daily activities and procedures. van Dyck et al. (2005) argue that free and fluid communication about errors might constitute the most important error management practice. Communication about errors facilitates the development of a shared awareness of high-risk situations, the rapid detection of errors, the precise diagnoses of the situation, the seek and offer of interpersonal help, and the effective handling of errors (Cannon & Edmondson, 2005; Hofmann & Lei, 2007; Seifert & Hutchins, 1992; Tjosvold et al., 2004; van Dyck et al., 2005) . The combination of these features abate the negative consequences associated with errors (van Dyck et al., 2005) while enhancing the organizational viability and performance (Sitkin, 1992; Cannon & Edmondson, 2005). As we have noted earlier, talking about one’s errors is a threatening behavior that entails a certain degree of risk because it can create an evaluative or social threat for the individual (Hofmann & Lei, 2007). To

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engage in open communication regarding errors, employees must trust their managers. Trust can be defined as ‘‘one’s expectations, assumptions, or beliefs about the likelihood that another’s future actions will be beneficial, favorable, or at least not detrimental to one’s interest’’ (Robinson, 1996, p. 576). Thus, if a manager is trusted, employees will be more willing to put themselves at risk when communicating about errors (Mayer, Davis, & Schoorman, 1995). In addition to trust, research indicates that psychological safety is a key enabler for effective learning processes (Edmondson, 1999). Team psychological safety refers to the shared perception that members of a team are safe for interpersonal risk taking (Edmondson, 1999). Psychological safety is characterized by a climate of interpersonal trust and mutual respect, which facilitates team members to ask questions, seek feedback, experiment, reflect on results, and discuss (potential) errors or unexpected outcomes of actions (Edmondson, 1999, p. 353). As for any organizational climate, team members are likely to pay attention to one another’s attitudes and behaviors, but they are particularly attentive to manager’s attitudes and behaviors (Tyler & Lind, 1992), which, therefore, exert an important influence in shaping the degree of a team psychological safety. Transformational leaders are likely to develop a shared perception of psychological safety among their subordinates throughout the engagement in supportive and developmental behaviors (Edmondson, 1999).

GLOBAL ISSUES The main challenges for error prevention and quality management are universal; errors are a natural feature of organizations. However, if they are well managed, they can yield outcomes that surpass learning. Specifically, Van Dyck et al. (2005), in a study involving Dutch (n ¼ 65) and German (n ¼ 47) companies, found that organizations with a positive approach toward errors had better indices of economical performance. In addition, studies conducted in other cultural settings provide some evidence that support the generalizability of the mechanisms for preventing and learning from error. For example, in a study involving 107 teams from the city of Shanghai (People’s Republic of China), Tjosvold et al. (2004) found that teams were able to learn from their mistakes as long as they took a problem-solving orientation based on developing cooperative goals within the team. In contrast, competitive and independent goals were found to induce blaming, which did not enhance learning from mistakes. Findings


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from this study are particularly relevant since they challenge previous research indicating that in a collectivist-oriented culture such as China, problem-solving approaches are interpreted as threats. It appears, instead, that Chinese organizations might benefit from problem-solving approaches when discussions are conducted skillfully and respectfully. This study highlights the importance of open communication, psychological safety, and a mutual purpose to overcome the barriers that impede learning from errors. In addition, it also suggests that in both Western and Chinese societies people might need to be familiar with the social norms that prevail in other cultures if they are to establish successful intercultural relationships (Yang & Kelly, this volume). Future research should also examine the role played by non-Western leadership styles (e.g., transformational leadership) in facilitating learning from error. For example, a leadership style labeled ‘‘paternalistic leadership’’ (Westwood & Chan, 1992) is an effective leadership style in non-Western cultures (Pellegrini & Scandura, 2008) that is especially widely spread in the Chinese culture (Cheng, Chou, Wu, Huang, & Farh, 2004). This leadership style, which stems from cultural Chinese traditions (e.g., confucianism and legalism), combines strong authority with concern and considerateness (Westwood & Chan, 1992). Paternalistic leadership style is characterized by three dimensions named benevolent [shi-en – granting favors], moral [shuhder – setting a moral example], and authoritarian [li-wei – inspiring awe and fear] (Cheng et al., 2004). Cheng et al. (2004) found that when high authoritarian leadership style, that is, leader behaviors that assert authority and control and demand obedience without dissent, was combined with high benevolent leadership, employees tend to be more compliant with the leader. This finding leads us to question what would be the subordinates’ attitudes and behaviors if paternalistic (high in authoritarian and benevolence leadership styles) leaders increase the degree that subordinates are expected to learn from errors. Nonetheless, authoritarian leadership in the Chinese context has also been linked to abusive supervision (Aryee, Chen, Sun, & Debrah, 2007). The role played by authoritarian leadership in Chinese culture merits further investigation (Pellegrini & Scandura, 2008). Finally, research indicates (Glover & Siu, 2001) that Chinese managers with a paternalistic leadership style face a challenge if they are to successfully adapt current Western practices of quality management that require the active involvement of employees to avoid quality-related problems at all levels in the company. However, similar challenges are faced by Western leaders who opt for relying on Western human resources practices or for any leader maintaining a single cultural viewpoint.

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MBE seems to be an important leadership behavior for preventing errors. In addition, leaders can extend the benefits of MBE to help establish a learning organization. However, to ensure positive outcomes, it is necessary to emphasize the importance of how error is understood and communicated in different cultures.

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CULTURE, CORRUPTION, AND THE ENDORSEMENT OF ETHICAL LEADERSHIP Christian J. Resick, Jacqueline K. Mitchelson, Marcus W. Dickson and Paul J. Hanges ABSTRACT In this chapter, we propose that society- and organization-level social context cues influence the endorsement of ethical leadership. More specifically, we propose that certain organizational culture values provide proximal contextual cues that people use to form perceptions of the importance of ethical leadership. We further propose that specific societal culture values and societal corruption provide a set of more distal, yet salient, environmental cues about the importance of ethical leadership. Using data from Project GLOBE, we provide evidence that both proximal and distal contextual cues were related to perceptions of four dimensions of ethical leadership as important for effective leadership, including character/integrity, altruism, collective motivation, and encouragement.

Labour to keep alive in your breast that little spark of celestial fire called conscience. – George Washington

Numerous high-profile scandals in both corporate and political arenas have borne witness to the enormous impact of organizational leadership, Advances in Global Leadership, Volume 5, 113–144 Copyright r 2009 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1535-1203/doi:10.1108/S1535-1203(2009)0000005009

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particularly regarding the ethics of leadership. The fallout from these scandals has been immense. Several of the world’s largest and seemingly most successful organizations no longer exist, tens of thousands of jobs have been lost, and personal savings and retirement accounts have been decimated. Another notable fallout from these scandals has been the erosion of the public’s trust and confidence in corporate leaders. Jacobe (2002), for one, discussed the results of a Gallup poll finding that 91% of respondents believed that corporate leaders do what is best for themselves, and only 51% of respondents viewed corporate leaders as honest and ethical. This mistrust of leadership has also affected investor confidence. For example, a TowersGroup (2002) poll found that 43% of active investors were less trusting of the stock market in the wake of the Enron case. In the aftermath of these scandals, a clear picture of the importance of the ethics of leadership began to emerge. Namely, that organizations generate enormous amounts of social power, the control of which is placed predominantly in the hands of their leaders (Emler & Cook, 2001); how leaders use this power impacts the entire community of stakeholders that organization serves. Ethical leadership addresses leaders’ character, integrity, and how they use their social power. Ethical leadership involves a sense of stewardship to others that entails giving consideration to the rights and needs of followers, demonstrating character, integrity, and a broad ethical awareness, and taking actions and making decisions that serve the interests of the group more so than the personal interests of the leader (Brown & Trevinõ, 2006; De Hoogh & Den Hartog, 2008; Gini, 1997, 1998; Gottlieb & Sanzgiri, 1996; Kanungo & Mendonca, 1996; Petrick & Quinn, 1997; Resick, Hanges, Dickson, & Mitchelson, 2006; Trevinõ, Brown, & Hartman, 2003). Ethical leaders role model ethically appropriate conduct, and actively promote ethical conduct by establishing standards and holding others accountable to these standards (Brown, Trevinõ, & Harrison, 2005). Further, the perceptions that people form about ethical leadership are a particularly important element of the ethical leadership influence processes as they have a profound impact on whether ethical leadership is accepted, promoted, and practiced, or simply ignored (Trevinõ et al., 2003). The perceptions that both leaders and nonleaders form about ethical leadership are likely to vary considerably. For example, in several of these scandals organizational leaders intentionally put their personal political and financial interests ahead of the interests of the companies they led. In other situations, as Alan Greenspan (2002) commented in his semiannual monetary report to the U.S. congress, the ethical judgment of many leaders may have been overwhelmed as they became caught up in the sense of

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‘‘infectious greed’’ that emerged in the general culture of business. However, many ethical lapses are likely the result of leaders acting amorally, where they fail to consider ethical implications, as opposed to intentionally acting immorally (Thomas, Schermerhorn, & Dienhart, 2004). The ethical implications of the strategic and operational decisions that leaders face are often complex and not readily apparent. Leading ethically becomes increasingly challenging when the prevailing norms of the situation do not provide clear guidance on the importance of making ethical decisions. The norms and expectations of the environment become increasingly unclear, and even contradictory, when doing business across national boarders. This is particularly apparent for ventures and transactions between firms in developed and developing economies, which are becoming more and more common. As companies are increasingly operating in global competitive and economic environments, ‘‘the primary venue for ethical debates in the future will more and more be the world stage’’ (Carroll, 2004, p. 114). Leaders and their organizations are, therefore, more than ever likely to face the demand for and challenge of leading ethically across cultural boarders. Although Resick and colleagues (Resick et al., 2006; Keating, Martin, Resick, & Dickson, 2007) have provided some evidence that the importance people attach to ethical leadership varies across societal cultures, relatively little is known about the social context factors that encourage or hinder the promotion of ethical organizational leadership. In this chapter, we propose that specific facets of organizational culture and societal culture, along with the prevalence of corruption in society, provide multiple levels of social context cues that people use to form beliefs about the importance of ethical leadership for effective leadership. We propose that organizational culture values provide proximal contextual cues that people use to form perceptions about ethical leadership. In addition, we propose that societal culture and societal corruption provide a more distal, yet still salient set of cues associated with the importance attached to ethical leadership. Using data from Project GLOBE (Global Leadership and Organizational Behavior Effectiveness) we examine these relationships in a multisocietal and multiorganizational sample.

ETHICAL LEADERSHIP The notion of ethical or moral leadership has been discussed for centuries (see Bass & Steidlmeier, 1999). However, there have been relatively few

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attempts to conceptually define the domain of ethical leadership in either the academic or popular press literatures on leadership. Gini (1997), for one, suggested that ethical leadership addresses how leaders use their social power in terms of the types of decisions they make, actions they engage in, and the ways they influence others. Bass and Steidlmeier (1999) went on to state that the ethics of leadership rests on three pillars: (a) leaders’ moral character, (b) the ethics of the values contained in a leader’s vision, and (c) ethical implications of their actions. Brown et al. (2005) have presented a social learning approach to ethical leadership, which involves modeling and promoting ethical behavior, using transactional leadership to set standards of conduct, and recognizing and rewarding ethically appropriate behavior. In a study of ethical leaders beliefs across 10 societal culture clusters, Resick et al. (2006) identified 4 important dimensions of ethical leadership through a review of the theoretical conceptualizations of ethical leadership and analysis of the GLOBE leadership scales. These dimensions include: (a) character and integrity, (b) altruism, (c) collective motivation, and (d) encouragement. In this chapter we build on Resick et al.’s work by examining the specific societal and organizational contextual factors that impact perceptions of ethical leadership. Therefore, we focus on these four dimensions of ethical leadership and review each in brief below.

Character and Integrity Character refers to ‘‘the pattern of intentions, inclinations, and virtues’’ that provides the ethical or moral foundation for behavior (Petrick & Quinn, 1997, p. 51). Bass (1956) suggested that leaders’ character becomes apparent in acts of humility, loyalty, virtue, generosity, and forgiveness. Bass and Steidlmeier (1999) added that character demands a ‘‘commitment to virtue in all circumstances’’ (p. 196). Integrity is a fundamental component of character (Fluker, 2002; Petrick & Quinn, 1997), and entails the ability to both determine, as well as engage in morally correct behavior regardless of the external pressures that may be present (Emler & Cook, 2001). Moreover, Morrison (2006) maintained that leader integrity is a critical factor for ensuring the effective management of ethical dilemmas across cultures. Leader character and integrity are important components of ethical leadership because they are personal characteristics that influence the choices and actions that leaders make and ways that leaders use their social power.


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Altruism A primary focus of ethical behavior is a concern for ‘‘the common good’’ (Potts, 2002, p. 44). In turn, ethical leaders have a people-orientation and focus on ‘‘serving the greater good’’ (Trevinõ et al., 2003, p. 19). Moreover, Bass and Steidlmeier (1999) noted that the moral foundations of the influence process encompass both moral intentions (altruistic intentions) and moral consequences (costs and benefits for others). Altruism involves engaging in behaviors intended to help others without expecting any external rewards (Macaulay & Berkowitz, 1970) or regard for one’s personal welfare (Krebs, 1982). Moreover, Kanungo and Mendonca (1996) suggested that leaders with altruistic motives have a sense of identification with and respect for their followers, and thus provide the ethical foundation of leadership.

Collective Motivation Ethical leaders focus on the greater good of the group over self-serving interests, and seek out consequences that maximize the benefits and minimize the costs for the group, organization, and society. In turn, ethical leaders also motivate followers to engage in collective pursuits that place the interests of the group ahead of their own (Bass & Steidlmeier, 1999; Gini, 1997). As such, ethical leadership involves focusing on the group’s interests and motivating followers to: (a) become committed to the collective pursuits of the organization, and (b) willing to put forth effort to accomplish the organization’s goals.

Encouragement Ethical leaders are encouraging and empowering so that followers gain a sense of personal competence that allows them to be self-sufficient (Bass & Steidlmeier, 1999; Gini, 1997). They use empowerment strategies that motivate followers to work toward the collective interests of the group, as well as enable followers to gain a sense of personal competence and self-efficacy. Kanungo and Mendonca (1996) added that ethical encouragement and empowerment strategies are important antecedents of followers’ perceptions that the leader’s intentions are in the best interest of the group.

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At the most fundamental level, Ciulla (2004) noted that ethical leadership involves leading in a manner that respects the rights and dignity of others, which is consistent with Kantian deontological ethical philosophy. Though these four dimensions of ethical leadership do not address the promotion of ethical accountability aspect of ethical leadership, demonstrating integrity, placing the greater good above self-serving interests, motivating followers to serve the interests of the group, and building followers’ confidence and selfefficacy are consistent with the perspective offered by Ciulla (2004). Although ethical behaviors have been identified as important components of leadership (Morgan, 1989), and an important aspect of managerial success (Mortensen, Smith, & Cavanaugh, 1989), there are continuous signs of leaders demonstrating a general lack of concern for the ethical implications of business practices and decisions –that is, signs of unethical leadership are prevalent. The costs of unethical leadership are immense (Thomas et al., 2004). In contrast, ethical leadership may play an important, undiscovered role in leader and organizational success as ethical leadership has been linked to higher levels of organizational commitment (Brown et al., 2005) and optimism about the future of the organization (De Hoogh & Den Hartog, 2008). Yet, the importance that people attach to ethical leadership is likely to vary considerably (Trevinõ et al., 2003). To more fully understand this issue of both societal and organizational importance, research is needed that examines the social-contextual factors that are associated with beliefs about the importance of ethical leadership.

SOCIAL CONTEXT AND ETHICAL LEADERSHIP At any one time, multiple levels of environmental forces (e.g., organizational, societal, and work group) are operating to shape the social context in which people live and work, any or all of which may impact beliefs about leadership. The expectations that people have about leaders and leadership play an integral role in the leadership process because these expectations influence the types of people who are accepted as leaders, the amount of discretion and authority that leaders may exercise, and the loyalty of followers (Lord & Maher, 1991; Lord, Brown, Harvey, & Hall, 2001; Lord, Foti, & DeVader, 1984; Offermann, Kennedy, & Wirtz, 1994). According to implicit leadership theories (ILT), people develop prototypes containing the characteristics that differentiate leaders from nonleaders, and effective leaders from ineffective leaders (Lord & Maher, 1991).


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Previous research has found systematic variation in leadership prototypes based on societal culture (Chong & Thomas, 1997; Den Hartog et al., 1999; Gerstner & Day, 1994; Javidan, House, & Dorfman, 2004; O’Connell, Lord, & O’Connell, 1990), organizational practices and values (Dickson, Resick, & Hanges, 2006), hierarchical level (Lord et al., 1984), and task type and target gender (Hall, Workman, & Marchioro, 1998; Karakowsky & Siegel, 1999). Lord et al. (2001) contended that multiple levels of the contextual environment constrain the attributes that people use to define what a leader is, the characteristics and styles that constitute effective leadership, as well as the behavioral scripts and frameworks that leaders use as they influence and lead others. These contextual factors serve as a frame of reference for determining the behaviors that are encouraged or discouraged within a particular situation, and therefore should also influence the endorsement of ethical leadership among people working and living within those environments. The multiple levels of environmental forces also impact the ethical awareness of people. These forces become a point of reference for personal values, beliefs, and sensitivities to issues of an ethical nature (Dickson, Smith, Grojean, & Ehrhart, 2001; Jackson, 2001; Trevinõ, 1986; Victor & Cullen, 1987; Vitell, Nwachukwu, & Barnes, 1993).

Societal and Organizational Culture Culture represents the rules of the environment by providing a set of norms, values, and expectations that encourage or inhibit behavior in that particular setting (Hofstede, 2001; Rousseau, 1990; Schein, 1992; Schwartz, 1994). Culture, at both societal- and organizational-levels, has a considerable relationship with the types of leaders that are perceived as effective in that setting (Hunt, Boal, & Sorenson, 1990; Lord et al., 2001; House & Javidan, 2004). Both organizational (Trevinõ, Butterfield, & McCabe, 2001) and societal culture values (Beauchamp & Bowie, 2001) also provide cues about the ethical expectations in a particular context. Focusing specifically on ethical leadership, only one study that we are aware of today has examined the beliefs about ethical leadership across societal cultures. Across 10 societal culture clusters identified by GLOBE researchers, Resick et al. (2006) found that character/integrity, altruism, collective motivation, and encouragement were universally supported as facilitators of effective leadership; however, the degree of support varied across societal clusters. Nonetheless, their research did not examine specific

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facets of culture that may explain this variation, nor did they examine variation at the organization-level. In the current research, we examine relationships between four culture values – collectivism, humane/people orientation, uncertainty avoidance, and performance orientation – and the endorsement of ethical leadership. Collectivism is a well-established culture dimension that refers to the extent to which people view their lives as interconnected with other members of a social system, such as a society or organization (Hofstede, 1980, 2001). In collectivist cultures, individuals are connected to strong, cohesive ingroups, which provide support and protection in exchange for loyalty. Alternatively, in individualistic cultures, the ties between individuals are loose, people are expected to take care of themselves, and responsibility is to one’s self or immediate social group. Individualism-collectivism has been examined extensively at the societal-level, and has also begun to emerge as an important aspect of culture at the organization-level. For example, Gelfand, Bhawuk, Nishii, and Bechtold (2004) suggested that in individualistic organizations, members have a sense of independence and develop short-term relationships with their employers, organizations are primarily concerned with employee performance and not personal welfare, jobs are designed to maximize autonomy, decisions are made by individuals, and motivation and rewards programs are individually based. In collectivistic organizations, members develop a sense of interdependence and seek longterm relationships with their organizations, organizations are concerned about employee welfare, jobs are designed to integrate social and technical aspects, decisions are made by groups, and motivation and rewards are based on group contributions, equity, and welfare. In terms of ethics and ethical leadership, Jackson (2001) found that ethics-related attitudes varied based on individualistic-collectivistic culture distinctions. Jackson suggested that the expectation of loyalty inherent in organizational cultures likely induces values of obligation and moral duty toward organizations and coworkers. Likewise, Vitell et al. (1993) suggested that managers in highly individualistic cultures are less likely to give consideration to formal codes of ethics and overall ethical norms in developing business plans or in business transactions than managers in more collectivistic cultures. In contrast, Parboteeah, Bronson, and Cullen (2005) found that members of collectivistic societal cultures were less likely to justify ethically suspect behavior. More specific to organizational culture, Trevinõ et al. (2001) found that organizational cultures emphasizing selfinterest were negatively correlated with members’ ethical awareness and positively correlated with unethical conduct.


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In collectivistic societal and organizational cultures, the shared norms, values, and expectations emphasize a sense of a shared fate between members and the organization, and both the organization and members are expected to engage in actions that benefit the organization and its members over individual success. As such, we suggest that the endorsement of ethical leadership is positively related to the degree of emphasis on collectivism values in organizational culture and societal culture, and offer the following hypotheses. Hypothesis 1a. The endorsement of ethical leadership as important for effective leadership is positively related to organizational culture emphasis on collectivism values. Hypothesis 1b. The endorsement of ethical leadership as important for effective leadership is positively related to societal culture emphasis on collectivism values. A humane orientation is another facet of culture that appears to have particular relevance to the endorsement of ethical leadership. A humane orientation addresses a societal or organizational orientation toward the fair, altruistic, generous, and caring treatment of people (House & Javidan, 2004). Previous research has emphasized the importance of these values by considering similar societal-level values, such as feminism, which emphasizes the quality of life and caring for others (Jaeger, 1986; Hofstede, 1991) and Schwartz’s (1999) self-transcendence, which includes aspects of tolerance, mutual concern and support as well as loyalty. Schlo¨sser et al. (2007) found societies higher in humane orientation perceived members as more thoughtful, considerate and more agreeable. In high humane-oriented organizations, relationships between workers are often informal, organizational practices reflect a greater amount of individualized consideration, and there is mutual respect between the organization and its members (Kabasakal & Bodur, 2004). Specifically regarding ethics, Trevinõ, Weaver, Gibson, and Toffler (1999) found that an environmental emphasis on the fair treatment of employees was negatively related to the engagement in unethical conduct. Moreover, Parboteeah et al. (2005) found that members of collectivistic societal culture were less likely to justify ethically suspect behavior. Ethical leadership involves respecting the rights and dignity of others (Ciulla, 2004) and demonstrating courtesy, civility, and citizenship toward their followers (Fluker, 2002). It stands to reason that people who are members of societies and organizations with cultures characterized by norms and values

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emphasizing fairness, building good employee relations, and providing social support will view ethical leadership as important for effective leadership. Therefore, we offer the following hypotheses. Hypothesis 2a. The endorsement of ethical leadership as important for effective leadership is positively related to organizational culture emphasis on humane orientation values. Hypothesis 2b. The endorsement of ethical leadership as important for effective leadership is positively related to societal culture emphasis on humane orientation values. Performance orientation addresses the degree to which a society or organization supports and promotes achievement, innovation, and performance improvements (Javidan, 2004). In performance-oriented cultures, there is a strong emphasis on setting and achieving high standards (Javidan, 2004). Though not directly included in prior cross-cultural investigations, similar aspects of societal culture, which emphasize achievement and high standards, have been considered including the protestant work ethic (Weber, 1998), achievement values (Schwartz & Bilsky, 1987), and more distantly related masculinity/femininity (Hofstede, 1980, 2001). Performance orientation, however, differs from these perspectives as it is concerned with ‘‘drive for performance improvement and challenging goals’’ (Javidan, 2004, p. 265). When cultures emphasize a performance orientation, people likely expect other members of the society or organization to live up to high standards. Members seem especially likely to form high expectations for their leaders, expect leaders to be actively involved in developing staff, bring members together to help the group succeed, and focus on the group’s interest over a self-serving want for power or wealth. In addition, leaders may also be held to high standards of conduct, and people view character as an important element in effective leadership. Therefore, we propose the following hypotheses. Hypothesis 3a. The endorsement of ethical leadership as important for effective leadership is positively related to organizational culture emphasis on performance orientation values. Hypothesis 3b. The endorsement of ethical leadership as important for effective leadership is positively related to societal culture emphasis on performance orientation values. Uncertainty avoidance addresses tolerance for ambiguity (Jackson, 2001), and refers to ‘‘the extent to which members of a culture feel threatened


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by uncertainty or unknown situations’’ (Hofstede, 1991, p. 113). In high uncertainty avoidance cultures, members tend to experience higher levels of stress when faced with ambiguous situations (Hofstede, 2001). Additionally, people in high uncertainty avoidance cultures are expected to adhere to group norms more than people in low uncertainty avoidance (or uncertainty tolerant) cultures. In addition, countries with a high uncertainty avoidance culture tend to accept higher levels of social and economic regulation, and when people encounter unfamiliar situations they seek rules and regulations to avoid ambiguity (Jackson, 2001). In terms of ethical practices, managers from high uncertainty avoidance cultures may be more likely to consider codes of ethics and ethical norms in making decisions than managers from low uncertainty avoidance cultures (Jackson, 2001; Vitell et al., 1993). Further, Vitell et al. (1993) went on to suggest that members of societies high in uncertainty avoidance tend to be intolerant of deviants, and therefore individual actions need to be perceived as desirable by most members for that person to continue to be part of that social group. As ethical leadership involves a focus on group interests along with building confidence and self-efficacy in members which likely help to reduce individual uncertainties, we suggest that ethical leadership will be viewed as important for effective leadership in societies and organizations with cultures reflecting high uncertainty avoidance and offer the following hypotheses. Hypothesis 4a. The endorsement of ethical leadership as important for effective leadership is positively related to organizational culture emphasis on uncertainty avoidance values. Hypothesis 4b. The endorsement of ethical leadership as important for effective leadership is positively related to societal culture emphasis on uncertainty avoidance values.

Societal Corruption Societal corruption is an aspect of society that directly impacts the lives of citizens of those countries, as well as business practices throughout the private sector (Transparency International, 2001). We suggest that societal corruption is another important societal-level element of the social context that provides cues about the importance of ethical leadership, as well as ethical behavior in general, throughout society.

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Corruption involves the exploitation of authority for personal gain. In government and public institutions, Doh, Rodriguez, Uhlenbruck, Collins, and Eden (2003) defined corruption as ‘‘the abuse (or misuse) of public power for private (personal) benefit’’ (p. 115). Direct forms of corruption involve bribery, kickbacks, favoritism, nonindependent partnerships, control of information, bureaucratic delays, and directly unproductive behavior, and they represent costs to people doing business within that environment (Doh et al., 2003; Transparency International, 2001). To conduct business effectively in societies where corruption is prevalent, individuals and organizations are often placed in situations where they need to contribute some form of bribe or special favor for the ‘‘privilege’’ of doing business there. Leaders are placed in a particularly vulnerable position because of their responsibilities for representing the organization’s interests to the local stakeholders. As these practices become accepted ways of conducting business overtime, they guide the types of behaviors that are expected of leaders to be successful in that society. In turn, leading ethically will likely be viewed as less central for a leader to be effective. Therefore, we propose the following hypothesis. Hypothesis 5. The endorsement of ethical leadership as important for effective leadership is negatively related to the level of corruption in a society.

METHOD Participants Data for this study were derived from the GLOBE Research Program database [see House, Hanges, Javidan, Dorfman, & Gupta (2004) for detailed summaries of the project goals, strategies, and methodologies]. In brief, GLOBE’s team of social scientists surveyed approximately 17,370 middle managers from 951 organizations representing 3 different industries (financial services, food services, and telecommunications) across 62 different societies during the mid-1990s. The current study uses a subset of 9,132 middle managers from 312 organizations in which at least 7 managers completed both leadership and culture surveys, and representing the 39 countries for which societal corruption data were available. As part of the Project GLOBE data collection process, all participants completed measures of leadership beliefs. Then, approximately one-half of


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the participants from each organization completed an organizational culture measure (Form A respondents) whereas the remaining one-half of the participants completed a societal culture measure (Form B respondents). For the present study, data regarding the endorsement of dimensions of ethical leadership were obtained from both Form A and Form B respondents, data regarding organizational culture were obtained from Form A respondents only, and data regarding societal culture were obtained from Form B respondents only. Measures Ethical Leadership GLOBE’s leadership measures asked participants to rate a series of attributes and behavioral descriptors (e.g., autocratic, benevolent, and visionary) on a 7-point scale ranging from 1-This behavior or characteristic greatly inhibits a person from being an outstanding leader to 7-This behavior or characteristic contributes greatly to a person being an outstanding leader. Ethical leadership was not one of the forms of leadership originally examined by GLOBE researchers. However, Resick et al. (2006) derived a measure of ethical leadership dimensions through a combination of a q-sort exercise and exploratory factor analyses. They identified four dimensions which closely align with theoretical perspectives on ethical leadership and demonstrated measurement equivalence across cultures. These factors included, character/ integrity (4 items; a ¼ .74), altruism (4 items, a ¼ .66), collective motivation (5 items, a ¼ .76), and encouragement (2 items, a ¼ .73). For the present study, we first conducted a confirmatory factor analysis based on responses from the subset of 9,132 participants using structural equation modeling procedures in Mplus (2.01). The fit of a model in which each item was constrained to load only on its respective factor fit the data well (CFI ¼ .94; RMSEA ¼ .05). Fig. 1 identifies the items, factor loadings, and intercorrelations among factors. Culture Values GLOBE’s researchers developed scales to measure nine facets of culture. The same facets of culture were measured at both the organizationaland societal-levels. A key distinction between the sets of culture scales are the referent points for each item. Scales measuring organizational culture asked respondents to indicate the extent to which a series of items describe the way things should be in their organization. In contrast, the societal

Sincere

.71 .63

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Trust

Character/ Integrity

.66 Just .63

.50

Honest Generous Fraternal

.72 .59

Altruism

.74

.53 Compassionate .50

Confidence Building

.71

Collective Motivation .49

Team Building .61 Motive Arouser .70 Group Orientation

.73

.63

Communicative Encouraging

.82

Encouragement

.70 Morale Booster

Fig. 1.

Items and Factor Loadings for the Ethical Leadership Dimensions from the Confirmatory Factor Analysis.


.67

.73

.42

Modest


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culture scales asked respondents to indicate the extent to which a series of items describe the way things should be in their country. A 7-point response scale (1 ¼ strongly agree and 7 ¼ strongly disagree) was used for both sets of measures. For the current study, we used five of GLOBE’s culture dimensions, including: (a) collectivism I – institutional collectivism, (b) collectivism II – ingroup collectivism, (c) uncertainty avoidance, (d) humane orientation, and (e) performance orientation. Institutional collectivism assessed the extent to which the organization or society encourages and rewards cooperative behavior, and the collective distribution of resources. In-group collectivism examined the degree to which people are encouraged to express pride, loyalty, and cohesion within either their work organization or society. Uncertainty avoidance addressed the extent to which people seek rules, policies, and rituals to avoid uncertainty in their work organization or society. Humane orientation addressed the degree to which either their work organization or society encourages and rewards fairness, generosity, altruism, caring, and kindness to others. Performance orientation examined the extent to which either the work organization or society promotes and rewards performance excellence and improvements. A detailed discussion of the culture scale development and validation was provided by Hanges and Dickson (2004). GLOBE researchers reported generally acceptable levels of internal consistency reliability for both the organizational and societal culture scales. They also reported evidence of acceptable levels of within organization agreement for the organizational culture scales and within society agreement for the societal culture scales using index rwg(j) (James, Demaree, & Wolf, 1984, 1993) and intraclass correlation coefficients [ICC(1)]. Scale properties are summarized in Table 1. Societal Corruption To indicate the level of corruption in society, we used data from the Corruption Perceptions Index (CPI; Transparency International, 1995, 1996, 1997). The CPI indicates the degree to which corruption is perceived to exist within a society by focusing on perceptions of corruption in governmental offices and among public officials. The CPI scores are developed using a composite of survey responses from business people, academics, and country analysts. A minimum of four surveys are used for each country. The scores range from 0, indicating a high level of perceived corruption throughout society, to 10, indicating very low levels of perceived corruption in society. For each society, we calculated a 3-year average CPI score by taking the mean of the scores reported for 1995–1997, the same

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Table 1. Measurement Properties of the GLOBE Culture Scales and Correlation among Societal Culture and Societal Corruption. Culture Dimension

Institutional collectivism In-group collectivism Humane orientation Performance orientation Uncertainty avoidanceb

Organizational Culture

Societal Culture

No. of Items

ICC (1)

a

ICC (2)

No. of Items

ICC (1)

a

ICC Correlation (2) with CPIa

5

.23

.43

.93

4

.30

.77

.95

.51

6

.29

.63

.95

4

.13

.66

.87

.16

4 4

.21 .27

.61 .61

.92 .94

4 4

.10 .15

.70 .90

.84 .89

.07 .07

4

.36

.60

.96

5

.38

.85

.96

.85

Notes: Measurement property data from Hanges and Dickson (2004). Correlation with CPI ¼ zero-order correlation between facet of social culture and a 3-year average Corruption Perceptions Index score (1995–1997). p r .01. a High CPI scores indicated lower levels of societal corruption. b High uncertainly avoidance indicates higher tolerance for uncertainty.

period of time during which the GLOBE data were collected. Correlations between societal culture values and the 3-year average CPI scores are summarized in Table 1. Analytical Strategy Throughout this chapter, we propose that the importance people attach to various aspects of ethical leadership is related to culture and corruption phenomena that exist in multiple levels of their contextual environment. Testing these relationships require a nested data structure where individuals are nested within organizations that are nested within society. Therefore, we used hierarchical linear modeling (HLM; Bryk & Raudenbush, 1992) to examine the extent to which the endorsement of each dimension of ethical leadership was related to organizational culture, societal culture, and societal corruption. HLM enables researchers to account for covariation that exists among respondents’ scores within each organization and each society. Following the analytical approach used in Project GLOBE, a series of HLM analyses were conducted for each dimension of ethical leadership.


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For each analysis, a specific facet of culture was examined at the organization-level and the same facet of societal culture and societal corruption were entered together at the next (societal) level. Unlike the GLOBE project, however, we conducted grand-mean centering in our HLM analyses. This centering decision allowed us to first examine the effects associated with the proximal, organizational-level context, and then determine if the more distal, societal-level context variables explain any of the remaining variance in ethical leadership beliefs after accounting for the proximal effects.

SUMMARY OF FINDINGS Table 2 summarizes the HLM analysis results for the collectivism aspects of culture. Beginning with institutional collectivism culture values, which reflect the degree to which the organization or society emphasizes cooperative behavior, results provide evidence of both organizational- and societal-level effects, but only for specific dimensions of ethical leadership. For example, the endorsement of character/integrity was unrelated to the degree of emphasis on institutional collectivism at the organizational culture level (b ¼ .10, ns), but more positively linked to the societal level emphasis (g ¼ .29, p r .01). In contrast, the collective motivation dimension of ethical leadership was positively endorsed in organizations with cultures emphasizing institutional collectivism values (b ¼ .14, p r .05), but essentially unrelated to institutional collectivism at the societal culture level (g ¼ .16, ns). The emphasis on institutional collectivism culture values at either the organizational- or societal-levels were unrelated to the endorsement of the altruism or encouragement dimensions of ethical leadership. In-group collectivism values, which reflect a focus on loyalty, cohesion, and pride in group membership, were found to be important contextual cues associated with the endorsement of ethical leadership, particularly at the organizational culture level. The emphasis on in-group collectivism values in organizational cultures was positively and significantly related to the endorsement of character/integrity (b ¼ .30, p r .05), altruism (b ¼ .22, p r .05), and encouragement (b ¼ .38, p r .01). In-group collectivism culture values were found to have a particularly important association with the endorsement of collective motivation at both the organizational culture (b ¼ .33, p r .01) and societal culture levels (g ¼ .17, p r .05). The emphasis on in-group collectivism at the societal culture level was unrelated to the endorsement of the remaining dimensions of ethical leadership. Based on

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Table 2. Relationships between Organizational Culture, Societal Culture, and Societal Corruption and the Endorsement of Dimensions of Ethical Leadership – Collectivism Culture Dimension. Predictors

Coefficient

Institutional Collectivism Character/integrity First-level effects Organizational institutional collectivism .10 Second-level effects Societal institutional collectivism .29 Societal corruption .05 Altruism First-level effects Organizational institutional collectivism .16 Second-level effects Societal institutional collectivism .17 Societal corruption .11 Collective motivation First-level effects Organizational institutional collectivism .14 Second-level effects Societal institutional collectivism .16 Societal corruption .04 Encouragement First-level effects Organizational institutional collectivism .05 Second-level effects Societal institutional collectivism .22 Societal corruption .06 In-Group Collectivism Character/integrity First-level effects Organizational in-group collectivism .30 Second-level effects Societal in-group collectivism .01 Societal corruption .02 Altruism First-level effects Organizational in-group collectivism .22 Second-level effects Societal in-group collectivism .08 Societal corruption .11 Collective motivation First-level effects Organizational in-group collectivism .33

Standard Error

t

.07

1.30

.10 .02

2.87 2.94

.09

1.82

.14 .03

1.14 4.45

.06

2.44

.12 .02

1.40 2.06

.09

.61

.14 .02

1.57 2.26

.08

3.92

.11 .02

.05 1.35

.09

2.59

.14 .02

.60 5.64

.05

6.13


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Table 2. (Continued ) Predictors Second-level effects Societal in-group collectivism Societal corruption Encouragement First-level effects Organizational in-group collectivism Second-level effects Societal in-group collectivism Societal corruption

Coefficient

Standard Error

t

.17 .01

.07 .01

2.39 1.36

.38

.08

4.80

.06 .03

.13 .02

.44 1.46

Note: Table contains HLM coefficients. pr .05; pr .01.

these results, we concluded that partial support was found for Hypotheses 1a and 1b. Although these findings provide some indication of the relationships between collectivism values and the endorsement of ethical leadership, the relationships may be more nuanced that captured in the present study. Future research should further explore these findings by examining the relationships between horizontal and vertical collectivism (Triandis, 1995) with the endorsement of ethical leadership. Humane orientation values were another organizational culture value found to have important implications for the endorsement of ethical leadership. The emphasis on humane orientation values in organizational cultures was positively related to the endorsement of character/integrity (b ¼ .29, p r .01), altruism (b ¼ .40, p r .01), collective motivation (b ¼ .23, p r .01), and encouragement (b ¼ .28, p r .01). After accounting for the emphasis on humane orientation values in organizational cultures, the societallevel emphasis was unrelated to the endorsement of any of the ethical leadership dimensions. Thus, we concluded that Hypothesis 2a was supported whereas Hypothesis 2b was not supported. Results are summarized in Table 3. Turning now to the performance orientation culture values, results again indicated stronger effects for the proximal, organization-level culture values. An emphasis on performance orientation values in organizational cultures was positively related to the endorsement of character/integrity (b ¼ .17, p r .05) and encouragement (b ¼ .21, p r .05). In addition, the endorsement of one of the core motivational components of ethical leadership, collective motivation, was related to an emphasis on performance

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Table 3. Relationships between Organizational Culture, Societal Culture, and Societal Corruption and the Endorsement of Dimensions of Ethical Leadership – Humane Orientation Culture Dimension. Predictors Character/integrity First-level effects Organizational human orientation Second-level effects Societal human orientation Societal corruption Altruism First-level effects Organizational human orientation Second-level effects Societal human orientation Societal corruption Collective motivation First-level effects Organizational human orientation Second-level effects Societal human orientation Societal corruption Encouragement First-level effects Organizational human orientation Second-level effects Societal human orientation Societal corruption

Coefficient

Standard Error

t

.29

.08

3.65

.06 .02

.20 .02

.28 .98

.40

.08

5.30

.31 .08

.20 .02

1.60 4.40

.23

.07

3.15

.20 .02

.18 .02

1.12 .93

.28

.08

3.13

.12 .03

.21 .02

.56 1.60

Note: Table contains HLM coefficients. po.05; po.01.

orientation in organizational cultures (b ¼ .25, p r .01) and societal cultures (g ¼ .24, p r .05). An emphasis on performance orientation in societal cultures was unrelated to the endorsement of either character/integrity or encouragement, and neither the organizational or societal culture emphasis was related to the endorsement of altruism. We therefore concluded that partial support was found for Hypotheses 3a and 3b. Results are summarized in Table 4. Results indicated that the endorsement of these four dimensions of ethical leadership was unrelated to the emphasis on uncertainty avoidance values in organizational cultures. Focusing on societal culture, results indicate that altruism more strongly endorsed (g ¼ .43, p r .01) in societies that were

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Table 4. Relationships between Organizational Culture, Societal Culture, and Societal Corruption and the Endorsement of Dimensions of Ethical Leadership – Performance Orientation Culture Dimension. Predictors Character/integrity First-level effects Organizational performance orientation Second-level effects Societal performance orientation Societal corruption Altruism First-level effects Organizational performance orientation Second-level effects Societal performance orientation Societal corruption Collective motivation First-level effects Organizational performance orientation Second-level effects Societal performance orientation Societal corruption Encouragement First-level effects Organizational performance orientation Second-level effects Societal performance orientation Societal corruption

Coefficient

Standard Error

t

.17

.08

2.05

.17 .03

.12 .01

1.35 2.05

.01

.08

.07

.19 .10

.15 .02

1.24 5.26

.25

.06

4.18

.24 .03

.11 .01

2.11 2.01

.21

.08

2.56

.10 .04

.15 .02

.67 2.02

Note: Table contains HLM coefficients. pr .05; pr.01.

more tolerant of uncertainty (i.e., less uncertainty avoidant). Uncertainty avoidance values, at either the organizational or societal culture level, was unrelated to the endorsement of any of the remaining dimensions of ethical leadership. Therefore, we concluded that Hypothesis 4a was not supported and Hypothesis 4b was partially supported. Results are summarized in Table 5. Because societal corruption operates at a similar social contextual level as societal culture, we simultaneously examined the effects of corruption and societal culture in the HLM analyses. As noted previously, higher scores on the CPI indicate less corruption throughout society. Across facets of societal culture, societal corruption had the most robust relationships with the

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Table 5. Relationships between Organizational Culture, Societal Culture, and Societal Corruption and the Endorsement of Dimensions of Ethical Leadership – Uncertainty Avoidance Culture Dimension. Predictors Character/integrity First-level effects Organizational uncertainty avoidance Second-level effects Societal uncertainty avoidance Societal corruption Altruism First-level effects Organizational uncertainty avoidance Second-level effects Societal uncertainty avoidance Societal corruption Collective motivation First-level effects Organizational uncertainty avoidance Second-level effects Societal uncertainty avoidance Societal corruption Encouragement First-level effects Organizational uncertainty avoidance Second-level effects Societal uncertainty avoidance Societal corruption

Coefficient

Standard Error

.07

.06

1.00

.24 .05

.17 .04

1.43 1.19

.07

.06

1.19

.43 .01

.13 .03

3.17 .33

.09

.05

1.89

.18 .04

.13 .03

1.36 1.27

.06

.08

.74

.13 .02

.17 .05

.75 .40

t

Note: Table contains HLM coefficients. pr .05; pr .01.

altruism dimension of ethical leadership. The endorsement of altruism was negatively related to CPI scores, indicating that altruism was endorsed as important for effective leadership in societies where corruption was more prevalent. However, this finding is in the opposite of the hypothesized direction. In addition, results provided some indication that character/ integrity and collective motivation were more strongly endorsed in societies with lower levels of corruption as both dimensions of ethical leadership were found to be related to societal corruption when examined in conjunction with institutional collectivism and performance orientation societal values. Therefore, we concluded that partial support was found for Hypothesis 5. Results are summarized in Tables 2–5.


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THEORETICAL AND PRACTICAL IMPLICATIONS The findings from the current study contribute to the small, but growing literature on ethical organizational leadership by providing empirical evidence that multiple levels of social phenomena are linked to beliefs about the importance of four dimensions of ethical leadership. We now examine these findings and their implications more closely. In organizations with cultures emphasizing in-group collectivism values or humane orientation values, each dimension of ethical leadership was endorsed as important for effective leadership. Members of these organizations, which emphasize values of pride and loyalty, or fairness and generosity, respectively, may expect their leaders to treat subordinates fairly, demonstrate integrity, boost morale, and encourage people to do what is in the best interest of the organization as a whole. In contrast, members may greet more self-serving leaders with resistance and be less willing to legitimize their authority. The character/integrity, collective motivation, and encouragement dimensions of ethical leadership were also endorsed as important for effective leadership in organizations with cultures emphasizing performance-oriented values. Perhaps the focus on performance creates an expectation that effective leaders motivate staff to achieve high standards of performance, become engaged in their work, and develop their subordinates by boosting self-confidence and encouraging self-sufficiency. Furthermore, members may hold high expectations of their leaders’ conduct and character. When these forms of leadership have been met with success, they likely further reinforce the importance among the organization’s members. Turning now to societal cues, findings indicate that societal culture and corruption have a more nuanced set of relationships with the endorsement of ethical leadership. For societal culture, relationships varied by culture facet and ethical leadership dimension. For example, the emphasis on institutional collectivism values in societal cultures was associated with the endorsement of character/integrity, but not the remaining three dimensions of ethical leadership. Societal culture values emphasizing in-group collectivism and performance orientation seemed to be particularly closely aligned with the endorsement of one ethical leadership dimension, collective motivation. The emphasis on achievement, and building group pride, loyalty and cohesion in society are closely aligned with leader behaviors that involve team building, motive arousing, and confidence building. Societal cultures emphasizing greater tolerance for uncertainty were also related to the endorsement of altruism as important for effective leadership.

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In addition, societal corruption was most closely aligned with the endorsement of the altruism dimension of ethical leadership. However, the finding was opposite of the hypothesized direction; altruism tended to be endorsed as important for effective leadership in societies with higher levels of corruption. This is an interesting set of findings, particularly given the strong correlation between uncertainty avoidance (r ¼ .85, p r .05) indicating corruption was more prevalent in more societies with values that are tolerant of uncertainty. Perhaps when there is a high tolerance of ambiguity in society, people expect that their leaders will be more tolerant of employees’ needs or struggles as well. Similarly, when corruption is widespread, people may need favors from their managers to accomplish their work and also need managers who are able to get favors from others for the group to be successful. As a result, people come to believe that effective managers are fraternal, generous, and compassionate toward their staff, leading people to endorse this dimension as important for effective leadership. Alternatively, because of the prevalence of corrupt practices throughout the society’s structure, people put faith in the leaders of their work organizations to be generous and have their interests at heart. Regarding societal corruption, findings also provide some indication that character/integrity and collective motivation are more strongly endorsed as important for effective leadership in societies where corruption is less prevalent. In these societies, perhaps people are accustomed to their leaders, in all aspects of society, behaving honestly and in less self-serving ways. People likely form expectations from a young age that good leaders have integrity, look out for the interests of the group, and encourage members to also look out for the group’s interests, not primarily their own. The prevalence of corruption throughout a society may create a demand that leaders be altruistic, and de-emphasize leader integrity or encouraging behaviors. The fewer significant relationships between societal culture and corruption with ethical leadership may be due in part to our analytical strategy. We examined the effects of societal-level variables after accounting for organization-level effects. We suggest that this analytical approach is most appropriate as the organization-level context provides a proximal set of contextual cues that are critical pieces of information people use to form cognitive networks that contain their understanding of the attributes of effective leaders (Hanges, Dorfman, Shteynberg, & Bates, 2006), or in this case the attributes of effective ethical leaders. Societal culture and corruption are more distal forces that serve as important but less immediate cues. Therefore, our approach allowed us to identify the important societal-level cues after accounting for cues in the more proximal organizational context.


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These findings have critical implications for preparing managers for expatriate assignments or for conducting business with customers, clients, or suppliers across national boundaries, especially in societies with more widespread corruption. Companies that want to remain competitive in the world economy are facing increased pressure to enact standards of ethical conduct and social responsibility (Transparency International, 2001), which is likely particularly difficult in countries where corruption is commonplace in the extra-organizational environment. For example, while leader integrity is essential for effectively managing ethical dilemmas across culture (Morrison, 2006), integrity is likely to be less valued in societies where ethical dilemmas are most likely to occur. To develop and maintain ethical leadership and business practices in societies where the larger culture values are not encouraging of ethical leaders or where corruption is widespread, leaders likely require more direct coaching and mentoring from more senior management. Brown and Trevinõ (2006) suggested several processes and strategies organizations can use to encourage ethical leadership within organizations, include attracting ethical leaders by emphasizing ethical characteristics in recruitment and selection, and the role modeling of ethical leadership by strategic management. Looking across both the organizational- and societal-levels, findings indicate that organizational culture provides a particularly powerful set of cues that guide beliefs about ethical leadership. Moreover, Petrick and Quinn (1997) suggested that in countries where widespread corruption exists, internal organizational environments become increasingly important for fostering ethical business practices. The definition of what is an ethically acceptable act is often defined locally, within the values and practices of a particular organization (Dickson et al., 2001). As such, people often look to their organizational culture to determine the expectations for ethical conduct in a particular setting (Thomas et al., 2004; Trevinõ et al., 2001). Our findings indicate that organizational cultures emphasizing in-group collectivism, humane orientation, and performance orientation are important contextual characteristics encouraging ethical leadership and likely ethical conduct in general. As such, we suggest that the management of the organizational culture is critical for supporting the development and enactment of ethical organizational leadership. Management of organizational culture is likely to be particularly important for multinational corporations and joint-ventures in countries where fewer laws and regulations protect foreign economic interests or corruption is more pronounced. Organizational culture provides a mechanism for making salient expectations for ethical leadership and ethical conduct when the norms and values in the societal setting may be less

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supportive. Shaping organizational cultures to value practices such as fair and just employee treatment, cohesion and support, and achieving standards of excellence provide a context where several of the fundamental components of ethical leadership are likely to be encouraged, and the importance of ethical leadership is made salient. There are also a number of limitations to the current study. Perhaps the two greatest limitations involve the archival nature of the data set and the breadth of coverage of the ethical leadership construct. First, the GLOBE leadership scales were not initially developed to address ethical leadership, and as a result the dimensions did not cover some of the important aspects of ethical leadership such as leaders’ ethical awareness or management of ethical accountability (Resick et al., 2006). Future research should expand on these findings by including measures of ethical leadership that address the full breadth of the construct. Second, this research focused specifically on beliefs about ethical leadership. Future research efforts should examine both the endorsement and the enactment of ethical leadership in relation to organizational and societal contexts. Another limitation involves the use of the CPI, which focuses on corruption among public officials and in government offices. A measure of societal corruption that directly addresses corruption in business practices may provide a more relevant indicator of how corruption within a society is related to business practices. A final set of limitations focuses on the potential for the results to be inflated due to common method bias as the data regarding organizational culture, societal culture, and leadership beliefs were all derived from selfreport questionnaires. Similarly, there are some same-source effects for culture and leadership data that could also be inflating the results. Two characteristics of the data may help to mitigate concerns about method biases. First, within each organization one-half of the participants completed societal culture scales, one-half of the participants completed organizational culture scales, and all participants completed the leadership scales. As a result, there was not a complete same source effect at either the organizational- or societal-level. Moreover, GLOBE researchers found that within organizations, there tended to be no systematic differences in the responses across individuals who completed Form A or Form B indicating that both groups tended to have similar responses to the leadership scales (Hanges & Dickson, 2004). However, the impact of common method bias or same source effects cannot be ruled out. Future efforts could address these concerns by examining both objective indicators of organizational culture, such as structures, laws, and formal practices, along with members’ reports of the cultural norms and values.


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CONCLUSIONS Along with directing their organization’s operating and financial success, organizational leaders also have responsibility for managing moral or ethical business conduct among their employees (Barnard, 1938; Brown, 2007; Cullen, Victor, & Stephens, 1989; Mautz & Sharaf, 1961). Yet, when faced with global competitive pressures and increasing demands for immediate financial success, it is easy to see how leaders may unintentionally (or even intentionally) fail to consider the ethical implications of the array of decisions they face on a daily basis. Though numerous factors affect beliefs about ethical leadership, and in turn, the types of leadership that are expected, accepted, and practiced, our findings suggest that culture and corruption play key roles in this process. Ethical leaders are also role models of the organization’s ethical expectations (Brown & Trevinõ, 2006). The effects of ethical leadership at top organizational levels appear to trickle down to influence managers’ ethical leadership and employees’ deviant and citizenship behavior (Mayer, Kuenzi, Greenbaum, Bardes, & Salvador, 2009). Thus, ethical leaders provide another set of social contextual cues associated with ethical beliefs and behavior. The values that leaders encourage and model and the ways that leaders use their social power influence the values the members share and practices that become expected (Grojean, Resick, Dickson, & Smith, 2004). When members share win-at-any cost, self-focused values the social norms that emerge likely overwhelm the good intentions of both leaders and nonleaders alike. By contrast, sharing values that encourage people to focus on the greater good of their actions, to treat others fairly, and to achieve high standards of performance and conduct appear to help keep alive a spirit of conscience and integrity that provide a foundation for effective global ethical leadership.

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DEVELOPING BALANCED LEADERSHIP TEAM – AN ULTIMATE CHALLENGE IN GLOBAL COMPANIES SUCCEEDING IN A HYPER-COMPETITIVE GLOBAL ECONOMY Zenglo Chen GLOBAL BUSINESS ENVIRONMENT Organizational leadership in global corporations has always been a challenging task for several decades. It has become even more stressful and difficult in recent years. Global economy hallmarked by open trade, friendly tariff practice, and relatively easier flow of capital, intellectual property, and low-cost labor brought tremendous benefit to consumers while intensified global competition among global companies. Since 1985, there has been a sharp increase in the number of companies that Standard & Poor calls high risk. The forecast for most companies is continued chaos with a chance of disaster. The most common advice you heard over the years has been ‘‘to get comfortable with it.’’ Global competition is now ranked No. 1 challenge and business driver followed by focus on customer, operating efficiency, and innovation. Advances in Global Leadership, Volume 5, 145–158 Copyright r 2009 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1535-1203/doi:10.1108/S1535-1203(2009)0000005010

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Global competition is quantumly more complex and unpredictable than domestic competition with unfamiliar and varying degree of government regulations, trade practices, and market velocity without even considering political instability. Adaptability to the constant shift of different operating environment is as important as proactive planning mandated by global company’s headquarters on an annual basis. It has been, however, a constant battle between balancing global needs and local needs (either national- or regional-based). Providing effective and efficient check and balance has never been so challenging and also critical to propel sustainable profitable growth in global companies. Focus on customers. In the name of giving what consumer wants, on the one hand, we acknowledge the importance of national- or geographic-based customers, and on the other hand, we are facing the complexity of operations brought by proliferation of Stock Keeping Unit (SKU) items, which can be deadly for operating efficiency, thus negatively impact earnings. Focusing on customers can also mislead or even delay the proactive innovation. As we knew, customer can be notoriously short-sighted. If Motorola follows the customer survey, it probably would have never invented cell phone industry and exited its TV business. On the other hand, we may invent something too early and live ahead of our time, thus failed as a corporation with annual fiscal responsibility. Operating efficiency. Gaining maximum operation efficiency, thus reduce cost and maximize profit has been going on for the past two decades. Through constant core business process reengineering, organization restructuring, Lean Six-Sigma, automation, and outsourcing capital intensive manufacturing operations to specialty and low cost regions or countries, we have increased productivity significantly. Most recently, the seamless mobility technology connecting person-to-person, home-to-work, work-to-auto, and artificial intelligence in the upcoming decade will even make operating efficiency to the next era. On the other hand, operating efficiency has little to do with the top-line growth and can also quickly reach a point of diminished return within a defined period. Worse, lean and cost-containment mentality can ‘‘spill over’’ to product innovation area consciously or subconsciously which can lead to stifle innovation, marketing sales campaigns vital to corporate growth. Operating efficiency without top-line growth propelled by innovation is meaningless and counter-productive. Innovation. The creativity that harvests profit is the foundation of capitalism vitality and backbone of ever-lasting free-enterprise, which created nations of wealth, countless tycoons, and corporate icons both famous and infamous. Coca-Cola, TV, PC, cell phone, Internet, Blackberry,

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iPod, cholesterol-busting drugs, Junk-bond created the entire generation of consumer demands and beyond. Innovation through internal R&D or external acquisition has become the ultimate engine for top-line growth. On the other hand, innovation can easily become blind creativity forgetting that customer and profit are the goals for innovation. Numerous innovation efforts failed and costly enough to make many global companies go under in the past decades. Focusing on customer, operating efficiency and product innovation with competing interest among each other has formed a mysterious Bermuda triangle for a global company which can be both a royal road to heaven and an unexpected path to hell. Balancing these three business drivers at different market, for different customers, and at different corporation life cycle is truly an art. Looking back, sustainable growth must be achieved by successful balance of these three drivers over long-term, not by 3–5 years of performance. For a global company, it introduces an additional complexity factor – the internationally competitive ‘‘terrain’’ or different geographically based competitors. Using an analogy, a global company was like riding on a caravan pulled by three untamed horses and moving from one ‘‘terrain’’ to another one at a moment of notice. Using Coca-Cola as an example, a company with 120 years of history has been enjoying its success until recent decade when suddenly encountered necessity to balance the demand of three conflicting business drivers: focus on customer, operating efficiency, and product innovation which is at the same time compounded by intensified global competition from 200 countries it operates. It has a complex supply chain from farm to customer. Each part of supply chain has different owners and collectively form the Coca-Cola system with more than $90 billion revenue a year. What makes it more complex is that different part of system has different priority on a particular business driver. For example, Coca-Cola Company emphasizes more on innovation, while Coca-Cola bottlers, in general, emphasize more on efficiency and customer. This can create certain degree of misalignment between a bottler and the Company. For example, maximize operating efficiency for a bottler can lead to insufficient sales force development and delay of costly new product line setup. On the other hand, driving innovation for the Coca-Cola Company can downplay operational efficiency. Balancing different business drivers within a member of supply chain, between different members of supply chain, and in different market (developed, developing, or emerging) can be challenges for the Coca-Cola system supply chain. Successful management of these drivers to maximize the entire system revenue, market share, profit, and return on invested

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capital is instrumental to realize sustainable profitable growth. On the opposite side, failure to manage these conflicting business drivers and competing interest of different member of supply chain can impede sustainable growth of entire Coca-Cola system. In financial terms, a global company is not only monitored by its market share growth, revenue growth, but also measured by its profit growth, return-on-net-asset growth, return-on-invested-capital growth, and finally the operating cash flow condition. There is never a time in analyst history that a global company is scrutinized by all these measures at the same time. So, the price is high, and casualty is also high for the caravan drivers, ala global company top leadership. The tenure of CEO is shorter and shorter. Change has become discontinuous and constant in both ‘‘caravan’’ and its ‘‘drivers.’’ Industry consolidation has gone hyper; supplier today can become a customer or even a competitor tomorrow. The change is constant and unpredictable, the pace is faster, the stake is high, and the mistake is often unforgiving. So, what is the leadership requirement to succeed in this new and chaotic era?

LOOKING FOR A FEW BALANCED LEADERS Leadership has been recognized as the most important factor to deal with the global economy in the 21st century of economy. Long ago, Day and Loyd (1986) already indicated that senior leadership accounts for 45% of organizational performance. Leadership, as a subject to study mostly often by those at the top (i.e., executive level of employees in a corporation) either formally or informally, has existed for at least thousands of years. The basic leadership principles are universal and timeless. It is all about how one leads people to accomplish a set of goals for the group while members of group temporally suppress their individual needs and wants. Effective leadership means effective followership, vice versa is also true. Leadership and followership as a duality are the two opposite ends which cannot have the one without the other. The dynamic tension between these two opposite forces shaped different kind of leadership dynamics and leadership styles. In modern time, situational leadership theories first time acknowledged the different dynamics of leadership depending on the followership, ala ‘‘situation.’’ According to situations leadership theories, effective leaders apply the correct leadership style for a given situation and the style is not necessarily constant. Vroom (2003) articulated how a manager should


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involve followers in a decision depending on the type of decisions, speed requirements, and other factors. Hersey, Blanchard, and Johnson (2000) articulated how a manager should change his/her leadership style depending on the type of tasks, maturity of followers, and other factors in their situational leadership theory. Burns (1978) laid out his transactional leadership which suggests that leaders motivate individuals by providing a reward structure that meets the follower’s immediate needs. It believes that there is an exchange of valued goods and services between a leader and a follower. What gets measured and rewarded gets done. This prompts most of organizational change that starts with performance management and reward system. On the other side of duality, Burns (1978) also advocated importance of transformational leadership which a leader provides vision and empowers followers to achieve those visions. In the transformational leadership, both the leader and the follower are transformed to a higher level of motivation and morality beyond materialistic reward and recognition. Research on transformational leadership indicates that there is a strong correlation between transformational leadership styles and follower commitment, loyalty, and satisfaction (Lim & Ployart, 2004). So the phrase goes like what gets inspired and empowered gets done. It is not either or. Transactional and transformational leadership are thus viewed as both important. Jim Collins (2001) boldly stated that right strategy came out only as the outcome of the right leadership in place which is contrary to the decades of belief that strategy first, then leadership. After studying 1437 public companies, a theme of differentiating factors emerged. The No. 1 factor is the level 5 leadership defined as a duality balance between fierce performance resolve and strong compassion toward people which is more like a resurfacing of traditional leadership dimension of task orientation vs. relationship orientation coming out decades before Jim Collins. Again, contrary to widely praised charismatic leadership in the decades before him, true balanced leaders leading those sustainable growth companies are often self-effacing and shy away from lime light. The No. 2 factor to have the right people on board and escort wrong people off board (bus). Only the third factor came upon as right strategy – No. 1, No. 2 in its chosen industry or exit hailed by former GE Chairman Jack Welch. On another dimension, Greenleaf (1977) developed servant leadership which emphasizes serving others’ interest vs. self-interest. This theory has strong functions in Christian beliefs and is rooted in ethical and compassionate behavior toward all humans. Jim Collins also mentioned that level 5 leaders put organizational interest above his/her own interest. On the other

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hand, the other side of story is also true. Research shows that many executives think ‘‘it is all about me’’ (Spreier, Fontaine, & Malloy, 2006) as main motivation to succeed. In consideration of inherited limitation of mankind, while one struggles to benefit self-interest, the entire humanity also benefits from his/her personal endeavor which seems to be a much more realistic and practical than idealistic view for most corporations. The Wall Street does not consider a leader’s motivation as long as he/she delivers the expected earnings quarter after quarter. Kaplan and Kaiser (2003) laid out the virtues and vices of leadership styles. Their research indicates that taking one leadership approach to the extreme while neglecting its complement leads to imbalance and ineffectiveness. The versatile, and therefore effective, leaders can draw upon the virtuous aspects of each approach to suit the circumstances at hand. Table 1 is from their work. Kaplan stated that versatility – which is the absence of imbalance – is the most important leadership quality in the long run. An example is that exceptionally directive or tough in a turn-around or crisis is critical while can be significant liability in the early stages of strategic alliance and partnership. Versatility is in short supply. He claimed that less than 20% of all senior leaders can be qualified as versatile even after decades of investment in management training and development efforts to develop such quality. Furthermore, Mike Lombardo and Bob Eichinger’s work (2004) operationlized this model and influenced thousands of Western corporate practitioners. The lack of balance in leadership is linked often to the ideal of overdoing and is well known to individual mangers. This is often hard to be accepted in the practice of management. The argument is often how you can be overly ethical, overly performance focused, or overly developing direct reports. We often forget that every success requires a resignation. Each leader has a very limited bandwidth (time, energy, and other personal resources) in comparison with his/her job demand in a global company. While focusing on one dimension of business, it will be undoubtedly to voluntarily or involuntarily ignore another dimension of business. In summary, duality in leadership seems to be a theme over the years to deal with real world challenges. Not only in leadership, but also in life, ancient Greek philosophy and Chinese philosophy both observed that to have good, there must be evil. Balance or mid-way is the ultimate weapon to have sustainable life. There is no such thing called right or wrong, it all depends on the situation requirements.

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Table 1.

The Virtues and Vices of Leadership Styles.

Forceful Leadership Vice

Virtue

Dominant to the point of eclipsing subordinates Doesn’t hear and value others’ opinions Insensitive

Rigid; demoralizes others

Takes charge; in control Takes stands and articulates them clearly Makes tough calls, including those that have adverse effects on people Holds others accountable

Strategic Leadership Vice

Virtue

Looks down the road too much Hopelessly conceptual and impractical Too ambitious

Recklessly risk taking

Focused on setting long-term strategy Thinks broadly; focused on big picture Expansive; aggressive about growing the business Take bold moves

Enabling Leadership Vice

Virtue

Abdicates responsibility for oversight Takes no clear stands

Empowers subordinates; able to delegate Listens to others’ opinions and ideas

Overly accommodating

Compassionate; responsive to others’ needs and feelings Understanding

Doesn’t hold others accountable

Operational Leadership Vice Myopic; has tunnel vision Bogged down in details Too conservative and limiting

Satisfy status-quo

Virtue Focused on getting short-term results Knows the specifics of how things work Respects the limits of the organization’s capability Reliable year after year

Source: Kaplan and Kaiser (2003).

LOOKING FOR LEADERS TO MAXIMIZE THEIR INNATE GIFTS While leadership experts have been arguing the importance of balance, Marcus Buckingham and Donald Clifton (2001) brought research based on their study of over 2 million people, claiming that the focus should be to maximize one’s strengths, not to fix one’s weaknesses. Their theory is based on 34 signature themes and advocate to develop one’s top five signature themes where one is gifted (innate quality). Their point of view is that rather

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than lamenting someone who is not good at, we should focus on maximizing one’s natural strengths. Suddenly, the overuse of strengths becomes a positive thing. They do not worry about imbalance and believe that the fear is groundless. In their book, they quoted an interview with a religious leader. The prioress of a Benedictine convent described her philosophy of life this way: I try to live my life in such a way that when I die and my Maker asks, ‘‘did you live the life I gave you?’’ I can honestly answer yes.

They believe that authentic leadership comes only from fully accepting one’s uniqueness in leadership. Rather than adjusting one’s leadership style to the situation, they argue that there should be mutual discovery process and look for the situation that can maximize one’s innate strengths. Indeed, from my own 16 years of experience in executive assessment and observation, it seems someone is always specially wired to do something well without much effort. Someone is uniquely excelled at technical aspects of work. Another one is naturally interpersonally savvy and communicative while some others are just simply an operational genius. The higher up you go, the more uniqueness in one’s leadership is evident. No matter how much effort we try to correct one’s weakness, the end result seems to be less optimal or short-lived. Once an executive coach is out of door, relapse often happens. This does not mean that fixing one’s weakness never works. The question is always whether it is most cost-effective way to accomplish the objective against a fast-moving clock of competition. With intensifying global competition and uncertain situational leadership demands, since mid-1980, global corporations have been pouring millions of dollars every year to restore the balance of their senior leaders. It literally created the entire 1-on-1 coaching industry in early 1990s. The U.S. Newsweek at one time even predicted that in the future, behind every successful senior executive, there would be a psychiatrist following him or her. It is, however, quite common to find that countless of senior executives eventually derailed and unable to keep the pace of change even if being coached to a great extent. In my short career span, I witnessed at least half-a-dozen of Chairmen, CEOs, and CEO contestants working with top notch coaches were all left abruptly, fired by CEO, or told to leave by the board. Even worse, in many corporations, executive coaches were perceived as the last ditch to save a derailing executive who is often too late. I am not proposing that coaching does not work; what I want to emphasize here is that one’s ‘‘readiness’’ to be coached from both capability and


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motivation point of view may impact the ultimate success of a coaching engagement. With limited bandwidth, one probably can focus only on one thing, either maximize strengths or reduce one’s liability of weakness. This probably explained the rationale behind Kaplan’s earlier claim on the scarcity of leadership versatility. Eighty percent of senior executives are often one-hit wonder, and it will always be that way. Jim Collins also claimed that it is extremely difficult to develop level 5 leadership (balanced leadership) due to more or less a result of innate or early career experience. In my 16 years of experience working in HR field across five different global companies, there might be only two senior HR leaders whom I met can be qualified as versatile on the most critical leadership dimensions of duality. One thing is clear that we all acknowledge that balanced leadership is the most important thing to excel in a global economy. The second thing is becoming evident that versatility is more an innate quality than developable quality at the most senior executive level. In a fast-moving global economy, how can we do to increase the batting average of balanced leadership on our bottom line?

DEVELOPING BALANCED INTACT LEADERSHIP TEAM AT THE TOP We all make mistakes, but we do not make the same mistakes. We all excel something; we do not excel on the same thing. It will be more cost-effective to develop a balanced leadership team than a balanced individual. Although we continue to develop each of our executive team members to become more versatile, we shall focus most of our energy to develop a versatile executive team. Thus, the balance in this sense is really for the entire leadership team. Members within a team are complimentary to each other. In another word, the ultimate challenge of effective leadership at the top is to appreciate each other’s strengths and be aware of own limitations. Hardly a single leader can be versatile, but a team can achieve the same effect at the top. An example is given in Table 2. The implication to future executive leadership development is presented in Table 3. Clearly, the paradigm 4 is a much more practical and realistic one to meet ever changing global leadership demands. In conclusion, it is a win-win solution that net is a balanced team instead of forcing each individual leader to have broad coverage and to be versatile.

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Table 2. Senior Leadership Team Members CEO

A Balanced Leadership Team.

Strategy/ Enabling/ Operational Forceful Duality Duality Strategic

COO GM 1

Enabling Relationship Forceful Forceful

Operational Strategic and operational GM 2 Operational Enabling Relationship Head of Strategic Enabling marketing Relationship Head of supply Strategic and Forceful chain operational Head of R&D Strategic Forceful Net Balanced Balanced

Table 3. Paradigm

Individualistic/ Collectivistic Duality

Long-Term vs. Short-Term Duality

Self/Other Serving Duality

Collectivistic

Long

Self-serving

Collectivistic Individualistic

Short Balanced

Others serving Others serving

Collectivistic

Long

Self-serving

Individualistic

Long

Self-serving

Individualistic and Short collectivistic Individualistic Short Balanced Balanced

Others serving Self-serving Balanced

Paradigms in Executive Leadership Development. Focus

Nurture

Individual

Nature Balanced leader Balanced leadership team

Individual Individual Team 1st, individual 2nd

Solution

Motto

Fix weaknesses or developing competencies Maximize strengths Restore leadership balance and versatility Ensure balanced and versatile leadership team while maximizing single leader’s strengths

Let’s work on your developmental needs Let’s maximize your strengths Let’s develop you a wellrounded, balanced leader Let’s develop a balanced leadership team while maximizing single leader’s strengths

Here comes the underlying challenge, the pre-requisite of having a balanced team is that each member must have a strong self-awareness of own strengths and limitation and most importantly heightened appreciation of the complementary characteristics of other members on the team. There is a clear need and want from members of a team to strive for appreciation of the opposite. Otherwise, the team intervention can be more a liability than benefit. I have witnessed numerous failed interventions due to lack of basic appreciation toward each other. ‘‘None or All’’ is recommended as a rule of

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thumb when trying to develop a balanced senior leadership team. If they cannot appreciate each other, the more realistic way is to develop balanced leaders at individual level than at a team level even if it is definitely less optimal in coping intensified uncertain global business environment. On another observation, it is often more challenging to adopt the balanced leadership team approach in an U.S.-based global company due to its inherited national culture to honor more on individualistic single leader behaviors than a collective group orientation for success. In today’s global economy, there is an added complexity namely crosscultural dimension. Hofstede’s cross-cultural dimensions are probably the most well-known. Here is a depiction of cross-cultural dimensions (Table 4) and specific illustration to compare a few national cultures (Table 5).

Table 4.

Duality of Major Culture Dimensions.

Dimensions (High vs. Low) Power distance Individualism Masculinity Uncertainty avoidance Long-term orientation

Definition

Degree of inequality among people that a country considers normal Degree to which people in a country prefer to act as individuals rather than as members of groups Degree to which people prefer tough values such as assertiveness, performance, success, and competition, a traditionally male-related role Degree to which people prefer structured situations (clear rules) over unstructured situations (ambiguity) Degree to which people prefer to think and plan delicately toward future

Source: Hofstede (1993).

Table 5.

Cultural Differences among the USA, China, Hong Kong, Japan, and Russia.

Country

Power Distance

Individualism

Masculinity

Uncertainty Avoidance

USA China Hong Kong Japan Russia

Low High High Average Very high

Very high Very low Very low Average Average

High Average High Very high Average

Low Average Very low Very high Very high

Sources: Hofstede (1993) and Chen (1996).

Long-Term Orientation Very low Very high Very high High Very low

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A PROCESS TO DEVELOP BALANCED LEADERSHIP TEAMS AT THE TOP This is a proposed high-level process to build a balanced leadership team at the top. Step 1: As a team, develop a strong business case why balanced leadership is necessary to win the market place. Step 2: Identify leadership capability requirements to achieve sustainable growth. Step 3: Identify type of balance absolutely critical for the entire team to meet leadership capability requirements. In particular, focus on identifying type of leadership balance or versatility absolutely critical for the entire team’s success (not individual). For example, duality 1: strategic vs. operational; duality 2: enabling relationship vs. forceful; duality 3: self-serving vs. others serving; duality 4: learning focused vs. results focused Step 4: Assess the pre-requisite to become a balanced leadership team. Is each member able to appreciate and truly leverage self-strengths and other’s strengths or are we more a band of individual leaders driven mainly by individualistic achievement? The quickest way to understand the pre-requisite is to understand what qualities are NOT helpful. Recently, Daven Morrison and his colleagues (2008) have identified characteristics of executives, which help sustain success. The findings are similar to Jim Collin’s (2001) work, yet Morrison also asked about those who have just missed or derailed late. Dr Morrison’s interviews identify two groups of executives: scoundrels and stewards. Scoundrels are thinly veiled opportunists who are merely out for themselves and are unable to think of the role they play as anything other than a ‘‘self-aggrandizement revenue stream.’’ Stewards on the other hand think of their role as something entrusted to them by the employees, customers, and share-holders who are responsible to leave the organization better than they found it. In his interviews, he heard several perspectives on Andy Fastow (former CFO at Enron), which he believes highlights how the shift works and can be avoided. Andy Fastow might not have been salvaged but, on occasion, this shift from steward to scoundrel can happen despite the executive’s best intent. To avoid this shift, it is critical to have data related to interpersonal ‘‘minefields.’’ This information must be more objective than 360 feedback. Dr. Morrison has outlined how a deeper understanding can be made in an article on judgment where he ties ideas about these mindfields together. In particular, he highlights two team derailing elements of an executive


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profile: hyper-competitiveness and perfectionism. Furthermore, Morrison argues avoidance of these two derailers must be made with personal insight and trusted sounding boards. The leader’s task is to avoid a conscious or subconscious drift to being a scoundrel. Step 5: If the team is dominated by membership with individual achievement, revert back to other paradigms in executive leadership development as described in Table 5. If most of our members have strong enough self-awareness, are able to appreciate own strengths and also others’ strengths, stay on track to map out team chart for individual member strengths against leadership duality requirements. Step 6: Develop an action plan for each team member to maximize his/her strengths and appreciate other members’ strengths at the same time. Develop a team performance output scorecard. Step 7: Follow-up for 12 months. The old adage about change was that it would take 18 months to change a person, and 5–10 years to change an organizational culture. With this renewed team approach toward balanced leadership by learning to appreciate and leveraging each other’s strengths, I hope to shorten the timeline required to achieve the goal to become a balanced leadership team. It seems that this process is not new in terms of leveraging each other’s strengths. Why doesn’t it happen more often at the top of corporate echelon? The root cause is mostly often due to lack of prerequisite for it to happen. Most of team building at the top failed due to strong personality involved for individual team members. The readiness is must to engage in this kind of member interdependence approach. How to increase the team readiness? A few tips I learned over the years might be relevant here. Model and advocate self-appreciation – think more of my own good than my own fault. Model and advocate other appreciation – think more of my peer’s good than his/her fault. Model and advocate humbleness – think more of my success depending on the strength of my peers complementary to my own fault. Paradoxically, it is the self-admission of own faults, but not dwells on it, that enables us to appreciate and leverage other’s strengths. The key is to practice everyday in thought and behaviors, in formal and informal interactions. One day at a time to walk the talk.

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Whenever we talk about the difficulty in balance, people often quoted F. Scott Fitzgerald ‘‘The test of a first rate of intelligence is to hold two opposing ideas in the mind at the same time still remains ability to function.’’ I hope that we will no longer need to quote Mr. Fitzgerald, once we have moved our developmental focus from an individual leader to the intact leadership team. Let us acknowledge how unique each of us is and accept who I am, especially whom I am not, and be able to see how my peer is unique in his/her own right. Then, let us leverage the asset from each of us and those who are different from us. Whichever corporation is able to overcome this challenge, it will benefit tremendously by gaining competitive advantage in this constant changing, uncertain, and unforgiving global economy.

REFERENCES Buckingham, M., & Clifton, D. (2001). Now, discover your strengths. New York: The Free Press. Burns, J. M. (1978). Leadership. New York: Harper & Row. Chen, Z. (1996). An American guide to working with Chinese managers: Enhancing effectiveness through culture understanding. Consulting Psychology Journal, 48(3), 162–170. Collins, J. (2001). Good to great. New York: HarperCollins. Day, D., & Loyd, R. (1986). Executive leadership and organizational performance. Journal of Management, 14, 453–464. Greenleaf, R. K. (1977). Servant leadership. Mahwah, NJ: Paulist Press. Hersey, R., Blanchard, T., & Johnson, D. (2001). Management of organizational behavior. Upper Saddle River, NJ: Prentice-Hall, Inc. Hofstede, G. (1993). Cultural constraints in management theories. Academy of Management Executive, 7, 91. Kaplan, R. E., & Kaiser, R. B. (2003). Developing versatile leadership. MIT Sloan Management Review, Summer, 19–26. Lim, B., & Ployhart, R. (2004). Transformational leadership: Relations to the five-factor model and team performance in typical and maximum contexts. Journal of Applied Psychology, 89(4), 610–621. Lombardo, M. M., & Eichinger, R. W. (2004). For your improvement – A guide for development and coaching. Miinneapolis, MN, USA: Lominger Limited, Inc. Morrison, D., Morrison, C., & Limbardi, D. (2008). Know thyself: Judgment capability factors. Public Management Magazine, 90(8). Spreier, S. W., Fontaine, M. H., & Malloy, R. L. (2006). Leadership run amok. Harvard Business Review, June 11. Vroom, V. H. (2003). Educating managers for decision making and leadership. Management Decision, 41(10), 968–978.

THE MEANING AND IMPORTANCE OF LEADERSHIP IN STRATEGIC ALLIANCES William Reinfeld INTRODUCTION Strategic Alliances (SAs) have become widely used by global businesses for pursuing strategic goals.1 Because of the special nuances that can make these kinds of joint ventures (JVs) effective means for achieving challenging strategic goals, they are generally more difficult to establish and manage. Some of the larger, more successful users of SAs recognize the special nature of these relationships and some such as Cisco and Pfizer have even created high-level divisions or departments in their organization explicitly focused on planning, pursuing, and managing outside strategic partnerships. These units not only monitor the alliances (in some cases, dozens at a time) but also develop tools and insights that will allow the organization to engage in SA more successfully. Nevertheless, most companies considering or engaging in SAs do not fully understand or appreciate the special nature of this strategic approach. Consequently, they do not pay enough attention to consider whether or not this is the right move for them, whether or not they have the appropriate resources and other prerequisites and whether or not they are prepared to make the commitments required for success. Once they enter the alliance, they then often fail to monitor and manage their commitments effectively. In short, many SAs never meet their full potential or fail entirely. Advances in Global Leadership, Volume 5, 159–194 Copyright r 2009 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1535-1203/doi:10.1108/S1535-1203(2009)0000005011

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A valuable literature has been emerging concerning SAs, their uniqueness, the key factors leading to their success and reasons for failure.2 Insufficient attention, however, has been given to identify the role of leadership in ensuring the effectiveness alliance strategies. Although some may argue that the importance of leadership is subsumed in much of the guidance given on how to plan and execute alliances, the special considerations of what is meant by leadership in the context of a collaborative effort and what may be done to ensure its role in an effective SA need to receive more explicit attention. This chapter attempts to provide such insights. What is Covered in this Chapter? In the next section, we describe what we mean by SA. The definition is important as the concept refers to a special subset of JVs where the emphasis is on collaboration and the motivation is strategic. The arrangements are fluid and success depends on the ability to cooperate – often with parties who could pose a threat. Under these conditions, leadership has a number of special requirements. Following the section on defining SA, we develop a framework for analyzing the leadership requirements in SAs. The framework is important as it introduces several dimensions by which to examine SAs and their leadership requirements. From each dimension, different requirements emerge. One dimension refers to the leadership perspective – either the organization or the individual. The second dimension refers to the various stages in the life cycle of the SA. The final dimension refers to the composition, namely dyad or network. After establishing the framework, we examine the challenges arising within each dimension of the framework and the leadership requirements for meeting those challenges. We try to focus on those capabilities that go beyond the ones required for leadership in general. Finally, we draw some conclusions as to how organizations can develop the capabilities required for leadership in this important set of activities and how it can measure its effectiveness in performing the leadership roles.

WHAT ARE SAs? As world markets become more integrated, technology more complex, consumer demands more stringent, and time-to-market more essential,

The Meaning and Importance of Leadership in Strategic Alliances

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organizations have had to modify their strategic thrusts to include quick and effective acquisitions of what they need to meet these challenges. Generally speaking, these missing elements may include access and insights into unfamiliar markets and distribution channels in these markets; access to lower cost or more secure inputs; specific technology or development of new technical platforms; additional products or services that will enable delivery of seamless solutions rather than products; new skills, relationships, insight/ knowledge, scale, etc. For businesses in emerging markets, the missing elements might also include senior management capabilities and recognizable brand names. Acquiring these missing elements becomes a strategic objective for the organization that may even supercede its financial objectives in certain cases. A number of approaches may be taken in acquiring these missing elements, including:

Developing them internally Acquiring them on the open market Acquiring them through M&A, or Accessing them through collaborating in SA. In this context, an SA may be thought of as A relationship linking two or more organizations for the purpose of creating and capturing value through mutually beneficial sharing of technologies, skills, products, markets, information, or other assets/capabilities.

In terms of structure or arrangement, an SA can be thought of as a JV, between two or more organizations, that may involve equity participation but more often does not. Whereas most SAs may be thought of as JVs, not all JVs are SAs. The latter are not meant to be permanent arrangements. Rather, they are focused primarily on achieving specific near-term strategic objectives of the partners, e.g., new lines of business, new markets, new technology, knowledge, competitive positioning, and ending when these objectives are reached. Thus, an SA may be considered to be A governance structure for managing an incomplete (open-ended) contract between two or more organizations in which each partner has limited control and the emphasis is on collaborating to reach a mutually agreed on goal – possibly for different (but compatible) objectives.

Selecting the right approach to acquire the missing elements for executing a strategic objective (from among the four options, above) depends on a

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thorough appraisal of each option, on a case-by-case basis. As a minimum, this appraisal should include: Identifying the broader benefits and costs, including the impact on time, financial performance, competitive positioning, risk, control, existing operations, and other externalities and longer-term implications, Determining how prepared the organization is to meet the challenges associated with each option, Determining how willing and able the organization is to commit the resources required for each option, and Determining whether or not the organization has appropriate leadership capability to execute the strategy.3 Generally, the advantages of SAs are that they allow an organization to obtain its missing strategic elements in a less binding way and often faster than other options; they can create synergy and thereby yield greater value than expected; they allow for risk sharing; and enable valuable learning opportunities. Their greatest limitations generally include requirement to share control; great dependence on trust; open-ended arrangements; potential cultural conflicts; and difficulties associated with measuring the all-important indirect benefits and costs. Strategic alliances can be formed between or among any of the ‘‘players’’ in an organization’s Net.4 They can be forged with competitors, suppliers, customers, complementors, or groups among any or all of these. In short, an SA is a collaboration with any partners with whom the organizations see a win-win outcome from cooperating. When these alliances are formed between partners of different countries, as they increasingly are, we refer to these arrangements as Cross-Border Strategic Alliances (CBSAs). With whom an organization seeks to collaborate and how the alliance is designed is determined largely by the strategic intent of the collaboration. Doz and Hamel have categorized strategic intent, or value-creating logic, into three useful foci,5 namely co-option, co-specialization, and learning and internalization. Each partner has a dominant strategic reason, or logic, for entering the alliance but also often has secondary objectives. Also, each of the partners may have different strategic objectives and priorities, which is all right, as long as they are compatible. Consequently, the alliance must consider a balance of multiple design objectives and considerations. Success of an SA is not measured in terms of longevity, but in terms of whether or not its strategic objectives have been achieved. The median life of an SA is generally thought to be around seven years, and a large number of alliances end in the acquisition of one partner by the other – sometimes this


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is a key objective of the alliance. Although there are many conditions required for an SA to be successful in achieving its objectives, the following are usually considered to be the most important: Good relationship among partners. This includes selecting the right partners to begin with (i.e., compatible and complementary) and then spending sufficient time and energy in building the relationship (i.e., developing trust, communicating effectively, willingly sharing control, and making adjustments in the arrangements, when necessary). The challenges in maintaining good partner relationships are greater in CBSAs than in alliances among partners from the same or similar cultures. In general, they require more time and greater sensitivity in getting to know and understand each other. Clearly defined and realistic goals. This includes ensuring that the goals of each of the partners are clearly thought out and understood by the other partners. The goals of the partners need not be the same, and indeed they rarely are, but they must be compatible. The partners must also share a common goal for the alliance. Expectations of contributions, achievements, and rewards must be realistic and agreed on by all partners. The challenge is to discuss these matters carefully before launching the alliance and to agree on how to measure them. The very nature of SAs suggests that these concepts often are not readily defined or tracked by traditional metrics. Appropriate design and structure. This includes effective governance and a comprehensive management agenda – including clear demarcation of responsibilities, mechanisms for learning, communicating, benchmarking, dispute resolution, etc. These three prerequisites as well as nearly all the additional key factors for success, discussed later, depend on strong and effective leadership. As defined here, leadership refers to both the organization engaged in the partnership and the individuals within the organization that take part in forming and managing the SA. Since SAs are collaborative efforts among two or more organizations and since successful SAs require effective leaders, the effectiveness of the alliance is dependent on the ability of these leaders to interface effectively and not to attempt to dominate each other. In other words, the success of an alliance relies on sharing leadership roles and on leaders identifying where and how to show their leadership within the partnership.

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A FRAMEWORK FOR EXAMINING THE LEADERSHIP ROLE IN SAS To describe and discuss the role of leadership in SAs, we have developed a framework for showing various aspects of an SA that allow us to identify specific challenges and requirements for effective leadership. The framework consists of three components: Leadership perspective Stages in the SA life cycle Configuration. By leadership perspective, we make a distinction between (1) the individuals engaged in the alliance and (2) the parent organizations. This distinction is important for discussing leadership qualifications, as it is the capabilities of both that determine the success of the alliance. If the required capabilities reside in only one of the two, the venture is more likely to fail. In fact, one can think of the organization (as composed of its policies, resources, culture, etc.) and the individuals driving the SA as collaborators in the effort of pursuing them. Within an industry, organizations are usually referred to as leaders if they dominate the market, are consistent first movers, or possess unique core competencies. However, to be effective in launching successful SAs, the organization need not be the dominant player within their field. In fact, many smaller and emerging organizations in fields such as biotech and advanced information technology are engaged in numerous successful SAs. As we will show, later, leadership characteristics important for an organization’s success with SA refer to their policies, culture, infrastructure, and top executive moves in forging and supporting SAs with appropriate partners.6 Within an organization, individuals may be thought of as leaders if they have vision, inspire others, and make things happen by mobilizing and directing resources and making decisions in the best interest of their organization. However, within an alliance, the leadership performance of the individual also depends on his ability to enlist cooperation from the partner and to make decisions in the best interest of the partnership. These capabilities go beyond those required for successful leadership in general. We therefore have to develop desirable leadership profiles and qualifications for both the organizations and the individuals as they pertain to SAs.


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The second area that must be considered when discussing the role and requirements of leadership in SA deals with the stages in the life cycle of the alliance. SAs evolve through distinct stages: (1) developing the initial strategic intent and selection of the alliance option; (2) identifying partner selection criteria, evaluating candidates, and selecting a partner; (3) negotiating and designing the alliance; and (4) managing the alliance. Each of these stages has its own challenges and unique leadership implications for the organization, and the individuals engaged along the way and therefore need to be looked at separately. The third area we use for examining SA leadership implications concerns partnership configuration. For the purpose of this study, we distinguish between dyads, or two partners, and networks, or multiple partners.

OVERALL LEADERSHIP CAPABILITIES REQUIRED FOR SAs An Organization’s Capabilities We have already indicated that an organization need not necessarily be a market leader in its field or Value Net to possess the necessary leadership capabilities for engaging in successful SAs. So, then, what capabilities should an organization have to be effective in executing SAs? Table 1 identifies the principal responsibilities/activities associated with effective leadership in this area; Table 2 indicates the capabilities, knowledge, information, and resources associated with effective SA leadership. Summarized, later, are the most important overall requirements for effectiveness. These qualifications, naturally, are in addition to those required for an organization to be successful in other aspects of its business.7 Pursue value-creating goals. That is, the organization must look beyond immediate gains and obvious returns and seek relationships, knowledge, and capabilities that will place it in a stronger position. Pursuit of these higher-order benefits means that throughout the various stages of the alliance, the organization should base its evaluations and decisions on value-related goals and not be side tracked by more immediate and obvious benefits and costs. High-level commitment to SA as an important vehicle for achieving value and the organization’s goals. The organizations that have been most successful with SAs are those where the importance of this vehicle for

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Table 1.

SA Leadership Responsibilities & Activities. Principal Responsibilities/Activities

Perspectives Stages Overall

Parent organization

Establish overall SA philosophy/culture Set overall SA goals/direction/strategy Develop capabilities for SA Sustain leadership in core competencies Coordinate alliance portfolio

Individuals

Anticipate/identify: opportunities/conflicts Communicate: vision/purpose/direction Inspire: trust/harmony/support/synergy Deliver desired results Feed results/data/insights into database

Formulate and pursue strategy Set SA guidelines: objective/scope/partner/ resources

Identify missing capabilities for executing strategy Select best approach to acquire missing capabilities Ensure strategic alignment

Exploring for partners

Support exploration activities

Define needs/priorities/partner requirements Promote organization’s strengths/value to partner Develop insights into partner goals/capabilities/ needs Assess relationship fit Establish foundation for relationship

Negotiating/design of Alliance

Enter partnership Support/approve negotiated arrangements/ designs

Coordinate experts (legal/financial/technical) Reflect organization’s interests/philosophy Create incentives for cooperation/collaboration

WILLIAM REINFELD

Strategy formulation

Management

Structure acceptable arrangements Select appropriate team Transfer relationship knowledge to implementers

Oversee SA on behalf of stakeholder interests Employ appropriate governance structure/design

Oversee SA on behalf of organization Look for further opportunities for value added Evaluate performance by intent/expectations Promote resolution of open issues Identify required adjustments Protect core competency position

Supervise/coordinate SA team Maintain/audit partner relationship Meet alliance expectations/goals/targets Identify issues/required adjustments Achieve effective use of resources Avoid/resolve conflicts Learn from the collaboration Transfer value back to parent organization

Manage multiple SA Provide resources as needed Maintain relationships with partner organizations Exit SAs, as appropriate


Execution of SA Governance

Commit resources

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Table 2. Perspectives

Leadership Requirements Profile for SAs.

Parent Organization Capabilities

Overall/ throughout

By stages Strategic formulation

Capabilities (in addition to usual leadership qualities)

Knowledge/information/resources

Management of collaborative efforts Evaluation of difficult-to-quantify metrics Best practices and benchmarks Players/dynamics of organization’s Value Net

High-level commitment/ sponsorship for SA Corporate culture supporting SA Recognized/valued core competencies Progressive/ proactive strategies Seek ‘‘real value added’’Broad definition of benefits/costs Create trust Cultural sensitivity Flexibility

Philosophy and guidelines for types of alliances and partners Know how to create value Experience with SAs SA-related infrastructure: tools/ data/training/studies, etc. Qualified leaders/staff for SA Assets/capabilities/competencies to trade in a SA

Build consensus Effective in loosely defined structure Tolerance for ambiguity Value-driven Able to manage co-leadership Resolve conflicts Gain trust of partners Cultural sensitivity Flexibility

Set visionary goals/directions Deal proactively with change Seek value creation

Well articulated priorities and criteria Strategic Master Plan Requirements for strategic fit SWOT of players in their Value Net (customers, suppliers, complementors, substitutors)

Address the right questions Lateral thinking Resourceful

Strategies of key players in their Value Net Planning/forecasting tools Value-chain analysis Available resources

Create shared vision

Relationships with players in their Value Net Statement of own objectives/ capabilities/needs/ priorities Insight into candidates’ objectives/capabilities/needs Objective assessment of your bargaining power

Quickly obtain candidates’ trust/ confidence Good judge of people/ organizations Good salesman Good sense of timing Inspiring

Partner decision-making participants/process Partner’s goals/objectives Partner’s capabilities Partner’s needs/priorities Partner SWOT

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Partner exploration

Individuals

Knowledge/information/resources

Willing to approach negotiation as a give and take Willing to commit resources/ attention required Willing to leave some arrangements open-ended

Benchmarks

Structure acceptable arrangements Navigate to successful conclusions Balance determination/strength and flexibility/understanding Establish organization’s value to partner

(More on points in Partner Exploration, above) Metrics for measuring qualitative elements

Design

Support design team

Stay results/goal oriented Create climate of openness Reach consensus Enlist and mobilize ‘‘best’’ team

Deep knowledge of/skills in management Creative in adapting measuring mechanisms

SA execution phase Governance

Influence organization’s decision makers re need for adjustments Influence alliance management

Reports from the alliance Balanced Scorecards

Develop/empower/incentivate team members Read signals Close gaps between performance/ expectations Ensure on-going buy in Stay on track/avoid distractions Look for new collaborative opportunities Inspire team to take advantage of learning opportunities

Project management Appropriate learning environment Balanced Scorecards

Management

Empower governing team Respond with conviction Meet commitments Address conflicts of interest Allow partner to learn Make adjustments Increase commitments, if necessary

Empower and support decisions of SA management team Recognize value contribution of participating individuals

Progress in meeting milestones


Negotiating/design Negotiation

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achieving its goals is recognized and supported throughout the organization, from the highest levels on down. These organizations generally have a well-articulated philosophy concerning collaborations, an overall SA strategy and guidelines as to what kinds of partnerships they will pursue. Many of these organizations also maintain an SA infrastructure that includes data banks, case studies, insights from all previous alliances, training programs, etc. Not all organizations can justify this level of commitment. The important point, however, is the high-level recognition and commitment to enhancing the capabilities in undertaking SAs. Organization culture that encourages mutually beneficial cooperation, internally. Flowing from the high-level commitment to SAs, the organization must have an appropriate and strong culture that encourages its members to support collaborative efforts. This includes not only policies, goals, and mechanisms but also attitudes and actions that give recognition and rewards for being good team players while recognizing that individuals have their own self-interests to pursue and protect. Focus on developing and maintaining core competencies on which to leverage. An organization’s core competencies not only allow it to distinguish itself in its competitive environment but are also the bargaining chips used in negotiating an SA. Thus, a potential conflict arises if part of the organization’s contribution to the partnership requires sharing this asset and if this is a competency that the partner could pick up and by doing so weaken the organization’s competitiveness. This situation can easily happen, for instance, if an organization’s core competency is a particular technology and its partner picks up that capability in the course of the relationship. In fact, it can happen with respect to nearly any of the capabilities and competencies introduced by partners in the alliance. Choosing the right partners and designing the alliance to avoid this loss from occurring is one approach successful organizations are taking.8 Additionally, however, an organization that consistently leverages on the same core competencies (to have the benefit of multiple core competencies through their partner) must also conscientiously seek to enhance the value of that asset as well as look for new competencies that can be developed from the organization’s basic capabilities. Appropriate organization culture for obtaining trust of the partners. The organization’s policies, decisions, reputation, and behavior concerning matters related to trust, credibility, and cultural sensitivity must make a favorable impact on the partners. High morale and ethical standards are important. The organization must show that it is flexible. If the alliance is


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a CBSA, the organization must show that it appreciates and respects cultures different than their own and, in fact, places value on learning more about the partner’s culture.

An Individual’s Capabilities The qualities and capabilities associated with leadership in individuals are well documented. We try here to distinguish which capabilities are particularly important for being successful in leading collaborative efforts, particularly where the participants represent different organizations – often competitors. Tables 1 and 2 provide a summary of major responsibilities and prerequisites related to SA. Later, we highlight the most important capabilities required for individuals to be effective leaders throughout the SA experience.9 Value driven. The individuals leading these ventures must think in terms of and be driven by the ‘‘real value’’ being sought – how to create it and how to capture it (i.e., seeing to it that what is learned will be used). In collaborations of the type we are discussing here that ‘‘real value’’ is usually difficult to measure as it can entail strategic objectives (e.g., competitive positioning, new markets, new products) or benefits that accrue outside of the alliance (e.g., a new business model for the organization, new technology platforms, knowledge/insights into future markets). This requires an ability to see the larger picture of where the organization seeks to go with this venture and focusing on how it can reach those results most effectively. It means evaluating all options or decision points in terms of the ultimate benefits and costs associated with the objectives and not being side-tracked by situations or considerations that are not in the best interest of achieving those objectives. Tolerance for ambiguity and effective in loosely defined structures. Since SAs may be thought of as incomplete or open-ended arrangements between the partners, their leaders cannot get bogged down by concepts, terms, and scope that have not been finalized – unless that ambiguity creates conflict or impedes progress of the partnership. Many definitions and terms (e.g., tasks, contributions, milestones, sharing of rewards) need to evolve as the collaboration proceeds. The decision-making structure may also need to remain flexible, particularly at first, since most alliances deal with unexplored territory and evolving relationships. Although they need to stay aware of unresolved or open issues, effective leaders have to

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understand the intent behind these issues, appreciate why firm answers cannot be reached at the start, and proceed with the venture while looking for viable answers. In situations where leaving terms and scope open or loosely defined is in the best interest of progress that must be tolerated. As the terms and scope will likely have to change as the alliance evolves, the effective leader must remain flexible as well. Build consensus and resolve conflicts. Collaborations bring together partners with complementary capabilities seeking some shared goals. However, more likely than not, they also have overlapping capabilities, differing perspectives and divergent (while, hopefully, compatible) objectives. These backgrounds can lead to divergent views and possible conflicts. A critical capability for leaders of collaborative efforts throughout the life of the alliance is to be effective in building consensus. If the differences lead to conflicts the leader has to be able to resolve these as effectively as possible. Since unresolved conflicts are the major reason for failure of alliances, this role is of utmost importance. Having confidence in the leader’s abilities in this area should give the organization more conviction to end the alliance if a resolution is not coming forward. Manage co-leadership. Collaborations mean that capable parties cooperate in a mutually beneficial venture. We have been stressing the importance of leadership in this endeavor. If each of the partners represents successful organizations, there should be leaders from each side engaged in the alliance. Thus, another critical success factor here is that a leader is able to manage co-leadership. This does not mean stepping back or yielding unwillingly. It does require making appropriate compromises, showing a willingness to share control, using good judgment as to when and where to insist, being able to substitute as a facilitator when appropriate, and always using the ultimate objectives as the guide for evaluating one’s position. Leaders having sole authority do not generally face these challenges. In an SA, however, they are always present. Ideally, the division of where each party will take leadership roles can be agreed on early in the relationship. However, if it involves an area where no clear leadership assignment is possible or one which was not contemplated in advance, the effective leader will listen and weigh carefully what the other parties have to say, present his views and if the views still differ calculate the benefits and costs of the next move. Interpersonal skills. The interpersonal skills required to be an effective leader in SA are the same as in any leadership situation. Again, however, it must be stressed that in influencing members of a group who


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originate from or belong to a different ‘‘home team’’ requires additional sensitivities that take these differences into account. Of particular importance here is the ability to gain trust and to show cultural sensitivity, especially in a CBSA. Gaining the trust of people who are being asked to contribute something (knowledge, skill, effort) from their treasure chest (organizational or personal) to another (possibly competitive) party requires respect for and appreciation of what the other party is contributing, assurance that it will not be misused, and an openness as to what is being done. As for cultural sensitivity, the effective leader must also show respect for differences and an interest in learning from the other party.

STAGES OF ALLIANCES AND LEADERSHIP IMPLICATIONS Having looked at overall capabilities required for organizations and individuals to be effective leaders in pursuing SAs, we now take a closer look at what particular responsibilities, challenges, and requirements are associated with each stage in the life of an SA, referring, again, to Tables 1 and 2.

Establish Strategic Foundation The first stage of an alliance concerns its conception, as part of an organization’s strategic planning. Strategic thrusts most likely to involve alliances are those either dealing with objectives that require departures from the organization’s traditional lines of pursuit and capabilities or knowledge that the organization is missing. We can use the three valuecreating logics introduced by Doz and Hamel to identify examples.10 Co-Option This type of alliance seeks to create value or gain competitive edge in its Value Net through ‘‘co-opting’’ or uniting members, usually, multiple partners. Examples of strategic objectives sought through co-option include Building critical mass – e.g., a software company partnering with a network of hardware companies.

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Sharing platforms – e.g., a brokerage firm sharing its platform with a network of agents. Strengthening structural position in an industry or market – e.g., comarketing by an alliance of airlines. Sharing risks – e.g., developing a new IC chip. Pre-empting others – e.g., establishing favorable standards for a new technology. Co-Specialization The strategic focus of this type of alliance is for the organization to achieve value through partnering with others whose capabilities are ‘‘complementary’’ to theirs. These types of alliances are usually aimed at such objectives as entering new markets, launching new products, redefining the business, and adding competitive advantages. A partner’s own resources or capabilities are leveraged by those contributed by the others. Examples of strategic objectives sought in co-specialization include Filling resource gaps to gain cost leadership, product or market diversification, or differentiation – e.g., a manufacturer partnering with a firm strong in new product development. Exiting from activities in which the organization has no unique competence and finding a partner that does – e.g., partnering with logistics provider. Adding capabilities to create new business opportunities – e.g., retailers partnering with credit card companies. Learning/Creating Knowledge This type of alliance is primarily intended to provide partners the opportunity to gain value-creating competence and/or knowledge, through learning from, or together with, the other partners. It on competence and/or knowledge that would otherwise be difficult to acquire. Although this may be one of the objectives in the other types of alliances as well, in this category of SA, it is the principal objective. Examples of learning objectives include Acquiring knowledge that has to be developed in specific environments – e.g., consumer marketing in China. Tacit learning of skills that are difficult to acquire without exposure – e.g., ‘‘brainstorming’’ or innovativeness.


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Exploring entirely new fields – e.g., biotech, pharmaceuticals, universities, and others exploring new cures. Organization Leadership Requirements Some of the more important capabilities required for organizations to be considered leaders in establishing and pursuing specific strategic initiatives at which the SAs are aimed include Set visionary goals/directions – Leading organizations’ strategy formulation activities employ broad visionary perspectives of their external and internal environments. They explore future directions (i.e., changes) on the basis of sound knowledge about the present and insights into future trends. Deal proactively with change – Leading organizations shape trends by anticipating challenges associated with change and then mapping strategies to which others in their Value Net respond. This requires not only vision but also a good grasp of their own strengths/weaknesses and those of the other players in their Value Net. Seek Value Creation – The strategies of these organizations are built around opportunistically creating value. Thus, they use broader definitions of benefits and costs (i.e., indirect and secondary) and look for synergistic relationships with other members of their Value Net. Individual Leadership Requirements Some of the more important capabilities required for individuals to perform leadership roles in establishing strategic foundations for SAs include Think strategically – Individuals who successfully take a leadership role in strategic formulation are skilled in identifying and dissecting the issues concerned with achieving the strategic objectives of the organization. Most often this means being skilled in asking the questions leading to solutions and a strategy. Think laterally – A leader in strategic formulation needs to be able to think creatively in different dimensions and unencumbered by traditional or conventional concepts. For example, thinking about how to change the game rather than winning in the existing game, for example, ‘‘reinventing’’ the business, extending the value-added scope of the business, changing the competitive platform. Utilize available resources creatively – This capability refers to formulating strategies that creatively identify and access resources from a wide

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network, both inside and outside of the organization. The strategies therefore leverage on the resources immediately available and are not constrained by their limitations.

Find Partner(s) Once a decision has been made to pursue an alliance, the next set of tasks is to find a suitable partner, or partners. Suitable partners may be defined as those that Can and are willing to provide the alliance the needed capabilities Are compatible in terms of strategic as well as cultural considerations. Agree on how together they can create value for the alliance and on how each will contribute to its success. Agree on how to overcome natural rivalries that are likely to arise, particularly among competitors. Show willingness to be open and flexible in the course of the alliance. The first step in finding a partner is concerned with preparing to identify the ‘‘right’’ candidate. This involves articulating what the organization is seeking (in terms of capabilities/compatibilities/other criteria) and, if possible, assigning relative weights of importance to each of the criteria. As for the general criteria, one can use the three value-creating logics (discussed earlier) to identify the critical capabilities sought in the partnerships. For instance For Co-option alliances, partners whose contributions tilt the competitive balance in favor of the partnership. For Co-specialization alliances, partners whose contribution is the uniqueness of what they bring. For Learning/Creating knowledge alliances, partners whose critical contribution can be readily internalized. The next steps in the process involve approaching and having frank exchanges with potential partners to explore possible collaboration; learning as much as possible about them to determine whether there would be a good fit; and then selling the concept of this particular collaboration to them if they appear to be an appropriate partner.


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Organization Leadership Requirements Executing these steps effectively does not require any particular leadership capabilities of the organization beyond those already mentioned. It does, however, require the organization to have important information and knowledge concerning itself and the potential partners (Table 2). Individual Leadership Requirements The tasks performed in this stage of pursuing the alliance may be thought of as similar to ‘‘assessing and beginning a courtship’’ and to ‘‘making a sale.’’ Thus, the leadership qualities of individuals required for success are the same as those for being a good ‘‘pied piper’’ and getting people to want to join your team. These include Well-informed and prepared before making initial contact – Before meeting potential partners, an effective leader must have a well thought out value proposition, based on reasonable hypotheses about their goals/needs and an indication of how the potential results could be of value to them. Other required capabilities include openness and sincerity in trying to accommodate the potential partners’ interests and knowing as much as possible about them – capabilities, strategy, culture, other alliances they may have, etc. Good sense of timing – As in any selling situation, knowing when to move on to the next step in the process of ‘‘making the sale’’ is essential. This is as much of an art as a science. Gather critical information and insights – This stage of creating the alliance involves more than data gathering. It requires ‘‘reading between the lines’’ to substantiate preliminary impressions or hypotheses concerning capabilities and collecting sufficient insight or information needed to make a decision. It also involves exploring and testing for compatibility on broad strategic and philosophical issues, for example, possible hidden objectives/intentions, real expectations, values, principles. Judge, evaluate and make good decisions regarding relationships – Another essential qualification for effectiveness in this task is the leader’s ability to make insightful assessments of the organization’s people and culture during a limited exposure. This involves picking up subtle signals and evaluating the interpersonal compatibility of the organizations. Gain confidence of potential partner – Having decided to seek a partnership with a particular candidate, the leader of this task must be effective in gaining the confidence of that organization that he and his

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organization have the capabilities and compatibilities in which they are interested.

Negotiate and Design the Alliance Once potential partners have agreed to form an alliance, the next stage involves negotiating and designing the alliance. Although these two sets of activities are performed together, we consider them separately here as they represent two somewhat different dimensions of the process of forming and agreeing on the partnership and therefore have different implications as to what qualities are required for effective leadership. Negotiation Negotiating a collaborative effort requires a somewhat different set of tactics and skills than other negotiations. Most notably, it should be viewed as a ‘‘give and take’’ process aimed at establishing an equitable and operational agreement for a win-win relationship. It should not be viewed as deal making or as bargaining for the best position. Nevertheless, establishing a desirable position for one’s organization in the alliance is an essential objective of the negotiation. Criteria for desirability, however, should be in terms of ability to achieve the organization’s goals and creating a favorable environment for success of the collaboration. It should be viewed as an iterative process, employing reasonable compromises in pursuit of an effective and workable plan for achieving goals. Although negotiations should not be seen as venues for bargaining, it is important for negotiators to estimate their relative strengths in terms of the value they bring to the relationship vis’ a vis the value of the partner. Thus, the negotiator must not only know the potential partner’s value, he must also be sure the partner knows his value to him. These values are usually not readily quantified and need to be defined/estimated in discussions before and during negotiation. Before the negotiation, the responsible parties should also have a thorough appreciation of the other organization’s decision-making process, identifying who makes the decisions in the relevant domains and how. Having a good idea of their negotiating style and any history with previous alliances can be helpful as well.If the negotiations are for a CBSA, it is essential for participants to fully understand and be comfortable with


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cultural differences, for example, the role and importance of negotiations, proper protocol and deportment, communications, formality. Organization Leadership Requirements The requirements for effective organization leadership in negotiating an SA involve issuing appropriate guidelines and principles supporting alliances, namely Willing to approach the negotiation as a give and take process. Willing to commit the resources/attention required to achieve goal. Willing to leave some arrangements open-ended. Individual Leadership Requirements Capabilities required to be an effective leader in negotiating an SA, in addition to those already mentioned, include Structure acceptable terms/arrangements – Mapping out and executing a successful strategy for reaching an equitable agreement requires not only information, as mentioned earlier, but also the ability to use that information effectively, namely placing a value on what can be offered to the prospective partner, knowing what the prospective partner can offer in return, knowing how to use these ‘‘bargaining chips’’ and ultimately structuring acceptable arrangements. The ability to do this successfully is as much art as science. Navigate negotiations toward successful conclusion – Without dominating the negotiation, an effective leader should be able to guide it along toward reaching a favorable conclusion, as efficiently as possible. This requires being a good listener, the ability to put matters in perspective, staying focused and having a good sense of timing – not to rush and not to stay too long on a dead issue. The negotiation should be started with a clear review of mutual goals or needs and the leader should periodically summarize where the discussions have led and what still needs to be covered. Unresolved issues need to be identified and cleared for all participants. Balance determination/strength and flexibility/understanding – The skilled leader in a negotiation of this kind should be able to show convincingly where his organization stands firm and where they are willing to compromise. Consistent principles and resolve together with a show of sensitivity will help the leader strengthen his position. He must be able to bring ‘‘untouchable’’ or sensitive issues to the table, be ‘‘up front,’’ share

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information willingly and promote trust. Since the negotiation of an SA leaves a number of issues open and subject to adjustment down the road as the partners learn more, the leader must be effective in identifying and clarifying these issues and in obtaining agreement to revisit them at the appropriate time in the future. Lead the negotiating team – Generally, effective negotiation requires participation of a team from each organization. This team should consist of whatever expertise is needed to cover important issues as thoroughly as possible, that is, legal, technical, marketing, operations, finance, etc. The key players who will have major responsibility in the alliance should be part of this process, as they will have to deliver what is agreed to in the negotiation. The effective leader will assign different aspects of the negotiation to the most appropriate team member and must ensure the entire team is pulling in the same direction. Establish organization’s value to partner – A critical component in negotiating an SA is for the partner to appreciate the value of the negotiator’s organization to him. This involves the negotiator establishing that he has correctly identified important needs of the partner and that his organization has the capabilities to address those needs. He also has to provide an indication of the uniqueness of these capabilities or how difficult it would be for the partner to obtain them through some other means. Design Designing the alliance involves the partners jointly mapping out how the SA will operate. It is part and parcel of negotiation and the first true test of how well the partnership may work. Design of SA can be more complex than design of other arrangements. To begin with, they depend on the ability of the partners to collaborate, agree to make on-going contributions, engage in joint decision making, and work with an incomplete contract that cannot be fully specified at outset. Furthermore, key concepts (such as compatible strategic goals, cooperative/ appropriate partners, tacit learning) can be more vague and difficult to specify. As a minimum, the design should cover Structure. Structure is defined from two perspectives: economic structure (i.e., equity or non-equity capital); and legal structure, which deals with contractual matters. Non-equity alliances, which cover the majority of SAs, are more difficult to govern effectively since no ownership is


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involved, and they therefore lack the basic ground rules for governance. Equity alliances are the most appropriate structure when partners intend to make deep commitment of tangible assets. Objectives/Scope. The objectives of an alliance refer to the set of goals and targets shared by the partners. Although they each have their own reasons for entering into the partnership, the partners must map out a set of common goals and targets. The boundary defining the objectives is the scope. One can think of the objectives and scope of an SA having three dimensions: strategic objective/scope, referring to areas of interest (i.e., products, markets, capabilities, knowledge, etc.). Economic objective/ scope, referring to accrued benefits (i.e., patents, market share, revenues, sales by parent organization, etc.); and operational objectives/scope, referring to specific activities (i.e., R&D, marketing, production, etc.). Aligning the various dimensions of objective/scope to fit the expectations among the partners is one of the great challenges in designing the alliance. Agreeing on objectives and scope also requires agreeing on critical assumptions concerning markets, technologies, competitive environment, strategic perspectives, etc. Governance. This is the process by which high-level managerial decisions are made in the SA. It therefore determines how the alliance is controlled. Governance is even more critical in SAs than in independent organizations because of the complexity and uncertainty inherent in alliances and their open-ended nature, because they consist of partners with multiple objectives/interests and because they often involve no equity. Members of the governing board are typically employed by the partners’ organizations – creating potential conflicts of interest. Distribution of control among members of the board is often assigned to the partner organization according to areas it finds of strategic importance or in which it has particular competence. In such cases, each partner needs to identify where he wants to influence decision controls. Management agenda. The partners must agree at the outset, as best they can, on a number of critical day-to-day operational matters. The original management agenda is likely to be modified as the partners learn about each other and the targets they expect to meet. Key subjects that need to be covered and agreed on include Tasks – the day-to-day working responsibilities of each partner. How to divide and share tasks is largely dependent on having strategic foresight and insights into each partner’s strategic scope. Tasks should be assigned to most appropriate partner. Difficulties arise most often when there are joint tasks.

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Schedule – a timetable of anticipated ‘‘critical events’’ along the road to meeting the partners’ expectations. This includes interim milestones, such as test runs or minimum number of subscribers, as well as preplanned periodic meetings and key decision-making points for determining future directions. If relevant and agreeable, the expected duration of the alliance might be agreed upon at this time as well. Mechanisms for measuring progress – the indicators that the alliance is moving toward its objectives. This can be more art than science. It is important for the SA to have some achievable near-term targets so as not to have to wait too long before progress can be identified. Alliances failing to recognize this often find their organizations lose interest in the alliance. Since progress in an SA is often not measurable in financial terms, many SA use a Balanced Scorecard for determining increases in net value. Mechanisms to identify contributions – indicators of what each partner is contributing toward achieving the alliance objectives. This will depend on the strategic intent of the alliance and may not refer to financial contributions. Assigning values to contributions and determining the extent to which they have been made can be extremely difficult. They may involve hard-to-value assets, such as relationships and tacit skills, or ambiguous contributions, such as industry-wide recognition. Discussing each partner’s expectations at the outset and agreeing on contributions and how they may be recognized can help limit these difficulties. Mechanisms for resolving conflicts and tensions – steps and procedures to address issues that threaten the relationship among the partners. Conflicts and tensions usually arise around areas of perceived value. In Co-option alliances, conflicts typically develop around sharing of ‘‘economic rent’’ among members; in Co-specialization alliances, tensions typically develop around the value of each partner’s contributions vs. the benefits each draws; and in Learning alliances, conflicts typically develop around one partner, feeling he is contributing more to the learning of the others than he is getting from them. Alliance design can try to minimize these tensions by discussing how they would deal with these possible situations Termination. SAs are not meant to last and for various reasons all eventually end. Triggering events may include natural completion or planned termination, failure to meet critical expectations, change in parent organization, breech of agreement, etc. Proper planning for their termination, during the design and negotiation phase, should help make


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this natural phenomenon occur more smoothly. This involves setting clear termination goals on matters such as transfer of ownership, how to value assets and liabilities at time of termination, how to deal with issues such as brands, know how, relationships, etc. Individual Leadership Requirements In addition to the qualities identified for effective leadership in negotiating, successful leadership in designing an SA, considering the challenges identified earlier, include Stay results- and goal-oriented – An effective leader of this process must be adept at making decisions according to criteria of achieving results (value) that the organization wishes ultimately to derive. Incentivate others – The leader must have a sense of how to motivate participants and create incentives to generate the synergy that is expected. This can be challenging in situations where participants feel they are not benefiting adequately in comparison with what they are contributing. The design has to address this possibility. Deep knowledge of and skills in management – It is especially important for the leader of this effort to be skilled in project management and team leadership. Creative mechanisms for measuring non-quantifiable components – As many of the components of an alliance (contributions, results, rewards, etc.) are not readily measured, the skilled leader of the design effort must be creative and resourceful in finding proxies and benchmarks for measuring progress and sharing rewards. Manage the Alliance Successful management of SAs involves the same fundamental principles as managing any organization, team, or project. However, because of their special nature, SA management poses several additional challenges: Measuring performance against partnership criteria as well as that of the parent organization. Tracking difficult to quantify and vaguely defined inputs and outputs. Managing people on joint tasks from a different organization. Dealing with multiple sets of parents, having different objective, cultures, systems, etc. Collaborating and sharing knowledge and control with another organization (possibly a competitor).

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Internalizing in the parent organization what is learned from the partner(s). Making adjustments to previously agreed-upon commitments, expectations, procedures, etc. Many of these challenges can be tempered by maintaining good partner relationships. In fact, in alliances that have failed, poor or damaged relationships between partners are cited as the principal cause (nearly 2/3) for failure.11 The reasons most often cited for poor relations include

Breakdown in trust Unresolved conflicts Lack of respect or understanding Loss of interest Inability to deal with poor strategy, planning, legal/financial terms and conditions.

These deteriorating conditions most often stem from ‘‘gaps’’ that are not dealt with effectively when they arise. The ‘‘gaps’’ may involve misunderstandings about definitions, perspectives, rules and assumptions; insecurities among some people who see the partnership as a threat; differences between actual skills and the partner’s expectations; differences between actual and expected outcomes; etc. Organization Leadership Requirements Effective SA leadership by the organization in managing individual alliances depends on two major requirements: Empower and support SA governance and management teams – In addition to supportive infrastructure and organization commitment, the effective organization also needs to empower the SA governance and management teams and support their decisions. Day-to-day leadership of the alliance has to have the full support of the organization in order to be effective. Give recognition to the value contributions made by individuals engaged in the SA – Unless the organization shows that it places high importance on SA and gives recognition to those who participate, team members may think of their participation in the alliance as a diversion in their career.


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Individual Leadership Requirements Effective leadership by individuals during this phase calls for some additional qualifications to those listed so far: Create/manage appropriate environment for collaborating and learning – Synergy and value enhancing knowledge are two of the most important benefits of an alliance. They both depend on the leader’s ability to create and manage appropriate conditions for these to evolve, including an openness to learning, a tolerance for redundancy (i.e., overlapping information) and mistakes and encouragement to share ideas, etc. Pick up signals about the alliance as it proceeds and take appropriate actions – The effective leader constantly looks for signals (positive and negative) concerning how the alliance is proceeding, evaluates them and takes appropriate action. Often, these actions involve making adjustments to earlier agreements or expectations. Thus, SA management may be viewed as a continuous series of cycles of learning, re-evaluation and readjustment – generally around the environment (e.g., assumptions, market conditions), tasks, the collaborative process, partners’ contributions, and goals/expectations. Bridge gaps/manage expectations – Inevitably, alliances experience gaps stemming from misunderstandings and differences in expectations. Addressing these effectively requires a clear understanding of each partner’s ultimate goals for entering the alliance, maintaining an open dialogue about reasons for deviations in plans, maintaining good communications, showing flexibility and a willingness to make adjustments.

Manage Multiple Alliances A typical global organization may, and usually does, engage in many alliances simultaneously. Some of the larger multinational firms have hundreds of strategic partnerships, which may account for as much as half of total their total revenues. These organizations view their portfolio of collaborations as a key resource or asset and an important competitive factor, similar to brand, technology, R&D capacity, management talent. It can even enhance the organization’s attractiveness to investors. In general, the more alliances an organization has, the more it extracts from them and the better they become at managing them. As their SA portfolios grow in

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size and complexity, they develop corporate philosophies and preferences that shape the strategy for the kinds of partnerships they seek.12 Important alliance portfolio objectives for organizations includeStrategic fit among alliances. The strategic directions and position of the alliances need not be the same (and seldom are), but they cannot be in conflict with one another Synergies across multiple alliances. The broader the application of core competences and technologies across the alliance portfolio, the stronger the nodal position. Maintaining leadership in the core competences. Building SA capability across the organization. Avoid stretching resources (technical, financial, management) devoted to alliances to thin. As SA portfolios of organizations have grown in size, value, and complexity, the organizations have recognized the importance of institutionalizing the activities surrounding SAs. Organizations considered as leaders in the use of SAs are building capabilities for integrating them into their corporate strategy, finding partners, designing/negotiating partnerships, managing the alliances, etc.13 Many of the most experienced firms have centralized alliance activities in a corporate unit that may include

Vice president, alliances Corporate alliance directors Alliance GMs Alliance facilitators Alliance audit teams Alliance data base manager Corporate alliance council Internal consultants External advisors.

Organization Leadership Requirements To achieve the objectives of maintaining a balanced portfolio of multiple SAs, an organization’s leadership capabilities must include Favorable overall SA philosophy, strategy and culture – This means giving appropriate recognition to SA as a core capability, knowing exactly the types of alliances and relationships fit and viewing each partnership in terms of the SA portfolio.


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Monitoring all alliances continuously – The monitoring as to consider whether the alliance still creates value, whether its objectives are still relevant, and whether there is still a strategic fit. Evaluate each SA in terms of the total portfolio/network of alliances – Includes balancing risks across alliances.

ALLIANCE NETWORKS AND LEADERSHIP IMPLICATIONS So far, our discussion has been concerned mostly with dyad SA. However, alliance networks, encompassing clusters of organizations, have become increasingly important. The complex nature of these SA presents additional challenges and requires some leadership capabilities above those for dyads. Similar to dyads, SA networks connect organizations within a common Value Net by either formal or informal arrangements for the purpose of achieving greater value through these connections.14 In many industries, major competitive strategies are being shaped around such collaborative networks to compete against other competitive networks or against large conglomerates/trading companies, such as the chaebols and keiretsu. Unlike conglomerates, the entities in these alliance networks are connected through cooperative agreements of their alliance design rather than cross-holdings of debt and equity. This allows them to achieve many of the same strategic objectives as conglomerates without the financial interdependence and liabilities involved with the latter. Examples of these powerful competitive networks can be seen in the steel, automobile, pharmaceuticals, communications, retail, and other major industries throughout the world. How alliance networks are organized depends, in part, on one of four principle driving force behind them: Knowledge-creating networks – expanding know-how and capabilities (e.g., R&D in broad based fields), developing sector-wide standards (e.g., PDAs), creating new basic technologies/services (e.g., e-Trade), new products/services (e.g., Mips). Value chain networks – providing economies of scale or vertically integrated logistics services (e.g., purchasing cooperatives, shared utilities, supply-chain management), integrating the whole supply chain for the customer (e.g., Dell Computer).

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Market space expansion networks – creating new product/service concepts or expanding the geographic reach (e.g., new shopping formats, extended services), combining/integrating services with products (e.g., Amazon). Competitive positioning networks – building critical mass that can effectively create momentum in influencing customers, suppliers, competitors, or regulators (e.g., co-marketing, co-purchasing, lobbying with regulators). Although most of the issues in leading and managing network SA are the same as with dyads, the complexity usually increases exponentially with number of partners, as there are multiple objectives, partners of varying sizes and cultures, greater numbers of possible conflicts of interest, greater required coordination, etc. Alliance networks must also address the issue of selecting additional members. How these and other issues are handled depends on how the network was formed. If it was started by one of the members or a small core, then they become the ‘‘Orchestrator’’ and may be seen as the natural leader. If the network evolved without a designated originator, then addressing some of the key issues can be more problematic. In designing an appropriate management/governance structure for an alliance network, the objective must be to facilitate communications, supervision, and decision-making. Several directions can be taken: Structure the alliance network as an independent, freestanding organization, with independent management. This may not fit if partners are not sharply focused on specific results and well-defined tasks. It usually works best when partners are of relatively equal status and the network is built as a federation of individual members (e.g., Pan Asia – an eCommerce alliance) Structure the alliance network around a core member (or members) who have been designated for the role of leader by the partners and who acts as the group’s major decision maker (e.g., in the 1980–1990s, more than 170 network SAs consisting of IC designers, hardware/software manufacturers, and others competed to set the standard for RISC ICs. Some were led by single companies such as Sun and HP, others such as MIPS had consortia leading the alliance) Assign multiple leadership roles according to core competencies essential to the alliance. A problem with this arrangement is that usually no entity has overall coordinating responsibility with this kind of arrangement. Engage a third party to perform these management and coordination functions. This may be appropriate where no single member has either all


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required characteristics or interest to perform the core role, or where trust or conflict of interest may stand in way. Consulting firms offer such thirdparty management Rotate the leadership role among the partners. Although this may sound like the most equitable solution, it can also be the weakest among the choices as it works only if each of the partners has strong leadership skills available and if the procedures and mechanisms for leading are well spelled out. It also requires a strong governance to handle disputes and failings of the leader. Regional or economic alliances of nations (e.g., ASEAN and EEC) often have this kind of arrangement. Whichever approach is taken, the core or nodal organization(s) must, as a minimum, assign individuals who possess good leadership and management skills. If the nodal organization is acting as more than a facilitator, they should also have vision, unique resources, and good negotiating skills. Network orchestrators such as Cisco, Pfizer, Intel, and others, who launch and lead successful SA networks, must have some special capabilities in order to be successful. According to a McKinsey study,15 the following characteristics were present in every functioning network: Uniform standards governing the exchange of information Rigorous performance standards maintained mostly through customer evaluations and partner incentives Sharing of benefits generated by the network with all the partners Development and testing of new opportunities with network partners. To be a successful orchestrator of an SA, network requires capabilities to achieve the following key success factors: Detached self-appraisal – The organization must make a realistic assessment of its strengths and weaknesses (and subsequently of the alliance) to identify the most appropriate partners to include in the network as they seek to become the preeminent player. Convince organizations to join the network – To enlist designated organizations, the orchestrator may have to convince invitees of the value they will derive and the competency the orchestrator has in leading the network. Sometimes the key is a common platform developed and controlled by the orchestrator, which allows the members to share information and communicate effectively through prescribed procedures and standards.

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Close relationship with the network’s ultimate customers – Unless a leader in this network has cultivated a strong potential buyer of the networked product, it is unlikely they will be able to attract other members. Effective in enforcing performance standards – The orchestrator has also to ensure that performance meets desired standards and if not to take appropriate steps. This can be a challenging role that requires particular capabilities and influence, especially when network members are formidable players in their fields. Share the values – The orchestrator must look out for the relevant interests all the partners in the network. He must design a reward system that creates incentives for the partners to not only remain in the alliance but also seek ways to strengthen the partnership.

CONCLUSIONS In this chapter, we have tried to show the meaning and importance of leadership as it applies to SAs. Strategic collaborations among organizations in pursuit of value-creating objectives are increasingly seen as essential in rapidly changing environments where it is not practical for organizations to pursue these on their own. Thus, they form partnerships in which each party makes specific contributions that fill gaps, reduce/share risk, or in some way create synergy and enhance value for the partnership. SAs are built around strategic objectives of the partners to create value (usually more broadly defined than in monetary terms); they are not meant to be permanent; benefits are not necessarily shared equally among partners; they are governed by incomplete and open contracts; and they depend heavily on participating organizations showing flexibility and willingness to share control. In many sectors, the ability to enter into these arrangements and execute them successfully are seen as critical for success and those organizations that are best at it consider this capability and the alliances they have as among their key assets. There are a wide variety of SAs, depending on the strategic intent and whether they are formed between two or more partners, but they all share similar success factors. What is more, beneath all of the prerequisites for success is the importance of solid and effective leadership – referring to both the organizations themselves and the individuals navigating the alliances. Effective SA leadership profiles for both organizations and individuals share most of the basic capability requirements for leaders in any situation.


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However, given some of the unique features of SAs, a number of additional requirements leaders must be met to succeed in deriving the full potential from these joint collaborative ventures. Highlighting a few of the most challenging requirements discussed in this chapter: For organizations seeking to position themselves in an effective SA leadership role, key requirements include High-level commitment/sponsorship for SA, creating a culture that promotes behavior in support of SA throughout the organization and is recognized by potential partnering organizations Creative strategic initiatives that recognize and draw on the valuecreating potential of the entire Value Net Efforts to maintain dominance in core competencies that are used as bargaining chips in structuring SA Strategy/policy for developing/managing a portfolio of SAs and for maintaining the resources (human, infrastructure, relationships, etc.) required for making SAs a core competence of the organization. For individuals guiding the creation and execution of SA, additional key leadership requirements include Ability to be effective in a co-leadership role, build consensus and gain trust of partners (over whom the individual has no authority and who sometimes may be a competitor) Work effectively within a loosely defined/evolving structure full of ambiguities that require contributions from and sharing control with other organizations and that aims for goals with difficult-to-quantify values Ability to stay focused on the higher-order and ultimate objectives of the alliance and assess contributions and results in terms of their impact on these objectives Ability to detect potential conflicts early and to work toward achieving acceptable resolutions Unless an organization has already had considerable experience with SA, it is unlikely that it will possess these institutional capabilities or to have individuals who can meet the criteria identified earlier. Some of these capabilities can only develop as the organization gains experience with alliances and recognizes the value they can provide. These capabilities, therefore, should become targets the organization seeks to achieve as they strive to elevate their commitment to SAs. Responsibility for this area should be assigned to a senior officer, just as IT, Finance, HR, and other critical organizational functions are. This leader can then set about

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developing strategy, policies, resources, and capabilities required for the organization to be successful in these ventures. Once the organization has decided to elevate SA to a high level, it can focus on attracting and cultivating the leadership requirements among its staff. As a first step toward this end, the organization should develop SA leadership profiles along the lines suggested here and use these profiles both for specifying the capabilities being sought and for measuring performance. The profiles can also be used for determining training requirements. Finally, as many of the leading organizations have done, consideration should be given to launch a program to build knowledge bank for use in shaping and managing SA. The information, data, and insights collected should be used in improving SA capabilities and performance. It may include information such as Profile information on leadership, partners, etc. Balanced scorecards for measuring performance of individuals, alliances, etc. Best practices and benchmarks in various activities around which the alliances are formed Complementarities charts that can be used in evaluating bargaining chips Corporate alliance policies Sample proposals/contracts Alliance leadership and management training programs Case studies Post mortems. As noted earlier, learning is an important value derived from SA. Alliances not only offer unique opportunities to gain insights into other organizations, but they also provide lessons and insights into for how to form and execute these partnerships successfully. Capturing that knowledge and using it constructively can help develop the effective leadership needed for successful SAs.

NOTES 1. We should note that although our primary focus in this chapter is on strategic alliances among businesses, the observations and principles discussed here apply to alliances of other kinds as well, such as geopolitical, economic, and NGOs.


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2. See, for example, Doz and Hamel (1998), Bamford, Gomes-Casseres, and Robinson (2003), Segil (2004), Yoshino and Rangan (1995), Friedman and Tregoe (2003). 3. See Hsieh and Yik (2005). 4. The Value Net arrays all the groups with which an organization interacts to create value for itself and the group. For a given business, the members of its Value Net include its customers, suppliers, complementors, and substitutors. 5. See Doz & Hamel, Alliance Advantage: The Art of Creating Value through Partnering. 6. Appropriate match ups among organizations are important, but they depend on their compatibility and the specific strategic intent of their alliance. Compatibility considers characteristics such as the partners’ relative competitive positions, their strategic alignment with each other, and cultural fit. Thus, a small firm with little market share and no particular first-move history can play a leadership role in forging an alliance with an appropriate partner as long as it possess some of the key qualifications for organization leadership in alliances. 7. Cisco and Eli Lilly are good examples of how highly successful organizations approach this important strategic activity. Cisco attributes its success to several key factors: (1) consistent executive support, from the CEO on down; (2) strong partner – culture throughout the organization; (3) extensive infrastructure to support development and maintenance of alliances; and (4) coordination of central management (e.g., overall alliance framework, global governance, new partner formation, training, technology development) and decentralized management (e.g., managing partner relations, customer activities, operations). 8. Corning, for example, will only partner with companies who would have little interest in developing the competency Coning brings to the partnership. 9. Many of these qualities and capabilities parallel those associated with leadership of an organization. However, it is important to note here that we are referring to the individual’s capabilities independent of the institutional capabilities, and furthermore, the individuals need not necessarily be in policy-making positions in the organization. 10. Ibid., Doz & Hamel, Alliance Advantage: The Art of Creating Value through Partnering. 11. See Ertel, Weiss, and Vision (2001). Managing Alliance Relationships: Ten Key Corporate Capabilities. Vantage Partners 12. Corning, for example, seeks complementarity and co-specialization. They favor alliances that are bilateral, equity-based and stand alones. They aim at developing market applications by leveraging on their core technology competence and they avoid competitive situations in critical products and markets by keeping their partners separate and by maintaining strategic control through technology leadership in alliance networks. Corning’s SAs strategy also includes trying to achieve synergy in core competencies and not stretching technical and other resources too thin. 13. Cisco, which derives nearly 20% of its revenues from SAs and estimates that its ROI on SAs is greater than 30%, is a good example of a multinational that has built a true SA competence. Partnering is a key part of Cisco’s corporate culture, from Chairman John Chambers down the line. Top management requires ‘‘buy-in’’

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to the SA approach from all cross-functional groups – product development, marketing, channels, sales, etc. Since they view SA as one of their core competencies, they promote leadership in this area among their staff and require training in alliance best practices not only for managers, but for all stakeholders – customers and partners, as well. Common goals for Cisco’s SA include creating greater value through: developing new markets and accelerating existing markets; simplifying technical solutions; and developing more complete/customized solutions for customers. 14. They are referred to by a number of names depending on the nature of the arrangement – for example, webs, networks, and constellations. Although most of these clusters seek to enhance value for their participants, we only consider those among them to be strategic alliances if they achieve those objectives through collaboration, making contributions and sharing strategy. Thus, for example, economic webs, such as users of Microsoft Windows, achieve greater value the greater the number of participants and no participant is required to make any contribution to belong to the web. However networks of companies that create alliances as a form of ‘‘collective competition’’ can be considered strategic alliances. A good example of this is the recent Open Handset Alliance, consisting of 47 technology and mobile phone companies (in eleven countries across five industries) committed to accelerating innovation in the mobile sector using the Anroid Platform. 15. ‘‘The Future of the Networked Company,’’ by Remo Hacki and Julian Lighton (2001).

REFERENCES Bamford, J. D., Gomes-Casseres, B., & Robinson, M. S. (2003). Mastering alliance strategy: A comprehensive guide to design, management, and organization. San Francisco, CA: JesseyBass. Doz, Y. L., & Hamel, G. (1998). Alliance advantage: The art of creating value through partnering. Boston, MA: Harvard Business School Press. Ertel, D., Weiss, J., & Vision, L. J. (2001). Managing alliance relationships: Ten key corporate capabilities. Boston, MA: Vantage Partners. Friedman, M., & Tregoe, B. B. (2003). The art and discipline of strategic leadership. New York, NY: McGraw Hill. Hacki, R., & Lighton, J. (2001). The future of the networked company. The McKinsey Quarterly, Number 3. Hsieh, T. Y., & Yik, S. (2005). Leadership as the starting point of strategy. The McKinsey Quarterly, Number 1. Segil, L. (2004). Measuring the value of partnering: How to use metrics to plan, develop, and implement successful alliance. New York, NY: American Management Association. Yoshino, M. Y., & Rangan, U. S. (1995). Strategic alliances: An entrepreneurial approach to globalization. Boston, MA: Harvard Business School Press.

AN INTEGRATED FRAMEWORK FOR ASSESSING, COACHING AND DEVELOPING GLOBAL LEADERS David H. Oliver, Allan H. Church, Rob Lewis and Erica I. Desrosiers ABSTRACT Developing global leaders is one of the most pressing needs for global companies. We present a framework for a more integrated talent management development program. The framework is based on several key principles and includes the use of assessment tools, 70-20-10 development tactics, external coaching, and an emphasis on critical experiences. We focus specifically on key considerations for implementing this type of a framework and the keys to success.

INTRODUCTION For the past decade, the warning bells have been ringing. There is a growing shortage of good leaders, threatening the current and future success of organizations around the world. The War for Talent research was amongst the first to successfully draw attention to this topic (for a review, see Michaels, Handfield-Jones, & Axelrod, 2001), and numerous studies, books and newspaper, or magazine articles have reinforced these findings. Advances in Global Leadership, Volume 5, 195–224 Copyright r 2009 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1535-1203/doi:10.1108/S1535-1203(2009)0000005012

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Today, organizations everywhere are seeking talented individuals who can lead in an ever-increasingly complex and demanding world. Leaders are being asked to execute their agenda in more complex global environments, to achieve results with fewer resources and to lead with less experience and seniority than did their predecessors (Mobley & Weldon, 2006). Rapid growth in many countries outside the traditional economic powers is making competition more fierce and leadership more complex (Hall, Zhu, & Yan, 2001). Today’s global leaders are faced with an environment in which technology is constantly changing, in which they must be increasingly aware of many cultures, and in which markets demand innovation and strong, consistent growth. Couple this with the fact that in many countries, population demographics and values are changing, which alters the available talent pool. Whether it is the aging populations in places like the United States and Western Europe, personal decisions about the willingness to work long hours or relocate for development assignments, or a growing preference to work for local or national companies (e.g., in India, China), the evolving available workforce is adding to the leadership shortage (Hesselbein & Goldsmith, 2006). The good news is that senior executives and other business leaders have been aware of this shortage for some time. In 1997, Tichy reported that CEOs consistently cited the need for quality leaders as one of their two biggest concerns for the future of their organizations. A 2004 Conference Board study of over 500 CEOs found that on a list of 62 major challenges in their organizations, availability of talented managers ranked sixth and succession planning eighth (Lombardo, 2005). Given the visibility to this problem from senior leaders, it is not surprising that many organizations are attempting to do something about this shortage. In a separate Conference Board survey (Kramer, 2005), 77% of executive respondents said their companies have tried to accelerate the development of their global talent. Furthermore, a survey of CEOs by the Economist Intelligence Unit (2006) found that senior corporate leaders reported spending an average of 20% of their time on talent management, although many admit that this is done in a piecemeal fashion rather than a strategically aligned one. In our view, the momentum for change is in place, and the need is for comprehensive strategies to address this leadership shortage. While the specific tactics and tools being used to address this talent development crisis vary across companies, and some approaches are more comprehensive than others, the information we present in the following sections is an attempt to bring many of these tactics together by providing an integrated framework for leadership development. Before we begin, however, it is

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always important to remember that the competitive advantage is not in the ideas but in the ability to execute them in dynamic organizational environments.

Hiring Externally versus Developing Internally First and foremost, our approach is based on the assumption that massive hiring of external talent is not the solution for the global talent shortage. Instead, we believe that organizations must have comprehensive strategies for growing leaders internally. This is rooted in several realities of work. One, there is a relatively small proportion of key talent on the market, which makes hiring top talent externally an expensive and competitive approach. As Charan, Drotter, and Noel (2001) point out in The Leadership Pipeline, ‘‘hiring gifted people makes sense as a tactic but not as a strategy’’ (p. 5). This is particularly true in emerging markets such as China, where The Economist reported that 40% of organizations experienced difficulties finding suitable senior managers (The Economist, 2007). Organizations are also realizing (if they were not already aware of the issue many years ago) that even high-potential leaders need sufficient time within an organization to learn its business, core values, and culture and build relationships with key power players before they truly become high-performing contributors. Finally, some organizations are notorious for rejecting outside talent at senior levels, making the external hire even less likely to be successful. Therefore, in our view, organizations should remain on the lookout for top external talent, but their primary strategies should be focused on growing leaders from within the organization.

Common Themes Emerging in Strategies As organizations seek to address this leadership challenge, we have seen several common themes emerge. First, assessment tools, which have been used effectively for years for selecting external candidates, are now being used for identifying and developing internal leaders. As a result, numerous tools (some old and some new) are being touted as effective instruments for identifying high potentials. Kramer (2005) reported that 61% of companies were working to strengthen their leadership pipelines by improving assessment of their global leadership talent. Second, organizations are increasingly relying on both internal and external executive coaches to

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support their leadership development initiatives. As Valerio and Lee (2005) point out, today’s executives are expected to be challenged with tasks, and coaching is seen as an effective way to support their development. Third, the formal classroom style approach to learning continues to be a model that many organizations are using to contribute to the development of their highpotential leaders. Finally, organizations are increasingly using planned critical experiences to ensure executives both receive and optimize the development opportunities from each assignment (Lombardo & Eichinger, 2002). The combination of these approaches can create a fairly complex landscape. While all of these provide value on their own, organizations cannot really meet the demands of developing global leaders without a comprehensive development strategy. In fact, the companies who are best at developing global leaders tend to develop and implement creative, multifaceted programs and continually adapt them to meet their changing leadership development needs (Kramer, 2005). But there is not a ‘‘one size fits all’’ formula, and companies have to find the right mix or approach for their unique company cultures and strategic priorities. The purpose of this chapter is to highlight several of these key tools and tactics and present a framework for integrating multiple leadership development approaches into a broader talent development agenda. We focus specifically on applying this leading-edge thinking in a meaningful and practical way, including addressing some of the obstacles that organizations are likely to face. The examples and observations we will describe are taken from our own experience both in consulting and in implementing a similar framework in a large multinational organization. While our model is not perfect, and we will be the first to admit that it remains an evolving work in progress, we believe this holistic approach represents a significant step in the right direction toward meeting the global leadership demands organizations are facing.

AN ORGANIZING FRAMEWORK The organizing framework we will present here is not complex. In fact, its simplicity is part of its appeal. At their core, effective development strategies should focus on identifying the leaders with the highest potential, developing them according to sound development tactics, and moving them to gain critical experiences, thereby optimizing their development (Fig. 1).

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Identify

Fig. 1.

Develop

Move

Identify–Develop–Move Model.

This simple framework is rooted in three key principles. These serve as the foundation of the model and are the first step in operationalizing the development approach. Specifically, 1. Organizations must effectively differentiate potential (independent of performance). 2. Once high potentials are identified, development for those high potentials must be focused and planned to optimize their growth as leaders. 3. The best development comes from a combination of 70% on-the-job learning, 20% coaching and feedback, and 10% formal training (Lombardo & Eichinger, 2002). Throughout this chapter, we will examine key considerations for each phase of the integrated framework. In the Identification phase, we will discuss the role of assessment tools in identifying talent and the various ways these tools can be used. We will focus on considerations for using assessment tools internally, including issues of validity, concerns of users, and the use of tools in decision-making. The Development phase takes a deeper look at the 70-20-10 framework (Lombardo & Eichinger, 2002), which states that on-the-job learning (i.e., critical experiences), coaching and feedback, and formal development programs are all critical for the growth of leaders. The discussion of critical experiences provides a nice segue into the third component of the overall framework, which is Movement. Here, we will discuss the value of moving leaders for development and both the individual and the organizational challenges to planning and facilitating such developmental moves. Finally, we will conclude with a discussion of the importance of having the organizational culture support the development of key leadership talent and the need for senior leader sponsorship in driving and sustaining these efforts.

Identify Effective development is costly. If it wasn’t, developmental opportunities would likely abound for all. However, with the high price of development, organizations must be strategic in their approach, directing the most

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resources toward those individuals with the highest potential for future success and broader leadership roles in the organization. Differentiating and focusing on these high-potential employees can help ensure their development experiences are optimized for the long-term good of the organization. Unfortunately, identifying potential is much easier said than done. The simplest way to identify potential is to rely on the observations and judgments of managers. The obvious drawback is that these judgments are often flawed since managers are easily influenced by factors such as the context and the manager’s previous experience (e.g., Murphy & Cleveland, 1995). Incorporating a more systematic review process, including a calibration process with more senior leaders, increases the effectiveness of these decisions, but it is still a process based solely on human judgment. Psychometric tools that measure cognitive ability or various personality attributes can add an objective perspective into the process. These tools have been very successful in predicting job performance (see Schmidt & Hunter, 1998, for a review), and the Managerial Progress Studies at AT&T showed that assessment center technology could be used in conjunction with assessments to effectively to predict long-term leadership success (Bray, Campbell, & Grant, 1974). Other tools and data points can also be incorporated effectively into the decision-making process, including performance ratings, 360-feedback results, and even a leader’s employee opinion survey results for his or her unit or function (Fig. 2). An additional benefit of psychometric tools is they can offer a different perspective into a leader’s strengths and development needs, thereby enhancing self-awareness. Tools that measure observable behaviors such as a 360-feedback instrument provide insight into what a leader does. Personality assessments can then explain why the leader does what he or she does. Taken together, these tools provide an insightful look into how a leader impacts those around her and where she should focus her development.

Line Leadership Perspective

HR Leadership Perspective

Identifying Potential

Assessment Data

Fig. 2.

Data Sources for Identifying Potential.


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Effective Use of Assessment Tools in the Identification Process With so many options for aiding in the identification of potential, we would like to focus on keys to effectively integrating various tools into the process. This is not intended to imply that selecting or developing the appropriate assessment tools is an easy process. On the contrary, the process is time-consuming and requires careful research and due diligence. However, much has been written about psychometric properties and validation, and for the purposes of this chapter, our focus is on what the organization does after selecting the appropriate tool. In other words, we believe that well-developed, valid tools are necessary but not sufficient for successfully identifying and developing future leaders of the organization. The way the tools are introduced to the organization and integrated into the succession planning or talent management process, including how the results are used by others for development and decision-making, are equally important to the success of the effort as the properties of the tools themselves. Clearly define how the data will be used. A critical first step is determining how the assessment results will be used to aid in the identification of high potentials and then designing a process that properly supports this objective. Some managers are notorious for finding ways to use bits and pieces of results to justify a previously held belief. Even well-intentioned managers can misinterpret results or take them out of context and as a result make bad decisions. Therefore, a set of clear and well-defined guidelines will help ensure the best use of the data. For example, in what form should the data be presented to decision-makers? Are several key dimension scores appropriate? Or is there a way to combine the data into a formula that provides an index score? (And, of course, are the tools valid predictors of the target criterion?) The decision will depend on several factors oftentimes unique to the assessment, but in general, the objective should be to provide enough detailed information to improve decision-making without overcomplicating the process (rarely do we suggest sharing any form of raw data). Once established, these processes and protocols need to be supported with sufficient training and communication and overseen by functional experts with enough influence to ensure the established rules are followed. Defining how the data will be used also includes concerns about confidentiality, as this has significant implications for the integrity of the talent development agenda. The use of various assessment tools can create a wide array of reactions. They can be seen as providing valuable insight into the self, a complete misrepresentation of the person, a threat to the job security of an employee, or all of the above. When assessment data is shared

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beyond its intended audience or in inappropriate ways, it can have serious consequences (and in some cases like in the European Union, legal implications). Employees can quickly lose faith in the process and in their management and often feel powerless to do anything about it. These concerns are real, and the impact can be devastating when these ‘‘test takers’’ are the company’s most valued resources – their high potentials. To alleviate some of these concerns, organizations must fully respect their own rules and not use the data improperly. Use pilot studies to test the validity and the acceptance of the tools. To be of value, any assessment tool used in a talent management program needs to show a meaningful relationship to some performance or potential outcome. Much like research used for employee selection, a carefully crafted validation study (cf. Guion, 1997) can help establish linkages between assessment scores and employee potential (the main difference being the focus on predicting potential vs. performance in a particular job). For example, an internal study at PepsiCo found strong relationships between various scales on our assessment tools and independent talent ratings made by managers as well as actual employee performance in past years (Church & Desrosiers, 2006). Other external research has found similar relationships when linking assessment tools to other various outcomes (Hogan & Holland, 2003). When done correctly, these types of validation studies provide evidence for key decision-makers that the tools are valuable in their talent management strategies, and they also serve to meet the legal and professional requirements for assessments present in many countries. Pilot studies are also critical for testing the acceptance of the tools in an organization. For example, our example cited earlier also included reactions of the executives who participated in the assessment process and received a written and verbal debrief with an external coach. Feedback from executives on the overall assessment process was very positive. Despite the 3 hours required to complete the assessments, executives found the tools to be interesting and enjoyable and the feedback report and session to be surprisingly accurate, insightful, and relevant to their development as leaders. Most felt the assessment process helped them to better understand their strengths as well as opportunity areas, and they planned to leverage their new insights when crafting their development objectives for the following year. Interestingly, the only negative comments we heard were that many of the participants would have liked more time with the external coach to better understand their assessment results and the implications for their development. This pilot study provided good insight into a concern that was fairly easy to address in the subsequent broader application of the tools.


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That said, as many of us have experienced, not all reactions to assessment tools are positive. Negative experiences from the past can linger in a corporate culture for years. Some cultures can even be so averse to assessments that any mention of them creates immediate resistance – we have heard some senior executives refer to this phenomenon as ‘‘organ rejection.’’ Or, in other cases, early positive reactions can evolve over time depending on how the tools are communicated and used. Regardless, establishing or reestablishing credibility can be very difficult. Therefore, it is important that organizations keep close tabs on the perceptions of the instruments, how they are communicated and how they are used. Therefore, pilot studies (or validation studies, depending on the nature of the research design) are valuable in that they provide evidence that the data collected improves decision-making. They are also valuable for judging how employees will react to assessments and sensing what tweaks the organization can make to ensure they are well-accepted (e.g., ensuring additional feedback on the results). Introduce the tools as part of a broader strategic plan. Earlier, we discussed the importance of having a well-articulated strategy for using assessment tools. Successful integration starts with a detailed understanding of the current tools and processes (and more specifically, how they are interpreted and understood by line management) and then finding the right way to articulate the connections between the assessment and development framework. By framework, we are referring to various tools and processes that help define what success looks like in the particular organization (e.g., leadership characteristics, functional competencies, values statements, performance management programs). The goal is to bring new assessment insights into the company’s existing talent management program without overwhelming or confusing leadership with new terminology. In some cases, test publishers and vendors are open to ‘‘re-branding’’ or customizing their measures as long as the changes do not affect the integrity of the tools, which makes it easier to make these linkages (others are not, which can be problematic if trying to fit these tools into an existing framework). Once these decisions are made, the next step is to test the linkages with a sampling of executives and then carefully begin communicating the updated model. We also recognize that in some cases, there might not be a framework or the existing framework might be functioning so poorly that a better strategy might be to replace it completely with the introduction of a new set of validated tools. Part of the strategy should also incorporate how the tools will be introduced into the organization. Using the tools as part of a high-potential

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development program is one approach. By starting with the best of the best, it sends a clear message that the tools are not being used to ‘‘fix’’ people with performance or potential concerns, but rather to invest in and facilitate the development of those thought of as having the greatest potential. We also believe it makes sense to start slow and not use the assessments too broadly too quickly. In our experience, there are a lot of early lessons when introducing tools, and a more measured approach allows time for adjustments to the strategy and process. Finally, senior-level sponsorship is one the most important keys to success when introducing these types of tools. Senior leaders need to believe in the value of the tools and they need to be consistent role models for their proper use. While we realize that in general some industries might be more accepting than others when it comes to assessment for evaluating leaders, there are many cases in which senior leaders are uncomfortable or even opposed to using formal assessment tools (as it can be perceived as a form of taking power away from them). Moreover, in global settings where attitudes toward assessment tools and their use are likely to vary by country and culture, the challenges (and importance) of senior leader sponsorship are magnified. Strong and on-going senior-level support for the tools and their use are critical for ensuring the assessment tools are trusted for the identification and development of high potentials. Summary of the Identification Stage In summary, assessment tools used with the right strategy and proper application can add tremendous value to an organization seeking to identify and develop leaders. Successful programs start with a solid strategy for how to use the tools, and they stick to it. Implementation also requires significant pre-work to align the language of the tools with the language of the organization. Then, the tools should be integrated at a reasonable pace to deal with reactions and concerns along the way. All are important steps for ensuring the tools are well received and become valuable components to support the development of future leaders. If an organization chooses to incorporate assessments into its talent management process (and we think they should), the following questions are worth considering. Key questions to consider: 1. Do the assessments adequately predict potential? Do the assessments have credibility with test takers and key decision-makers (i.e., are they ‘‘face valid’’)?


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2. How (if at all) will the data be used for decision-making? Will it be used in absolute terms (pass, no pass), as an input, or as part of a formula? 3. Who is the person (or people) responsible for overseeing the process? Who has access? What kind of training is appropriate for the decisionmakers? 4. Will the data be shared with the employee? Will the employee get a proper debrief on the results of the assessment and how they can use it for development? Is there a chance for re-testing? 5. Do the tools effectively link in to the existing talent management structure or framework? Is it simple enough for easy communication? Easy to pass along to others? 6. How scalable are the instruments? Can they be used with many people (e.g., costs, time, resources)? 7. Are senior executives familiar with the instruments and their purposes and are they supportive?

Develop The next key piece of our integrated talent management framework is the Develop phase. After improving the probability of success by identifying the individuals who are most likely to succeed at the highest levels in the organization, the next critical step is focusing on development for this group. The Develop phase emphasizes one of the key principles discussed earlier in this chapter – that the most effective learning and development comes from a 70-20-10 distribution. Based on the work of Lombardo and Eichinger (2002), this model posits that 70% of development occurs from on-the-job, hands-on learning. In other words, experience is the best teacher. Research and leading-edge thinking over the past 20 years have clearly supported the importance of critical experiences in the development of executives (Lombardo & Eichinger, 1989; McCall, Lombardo, & Morrison, 1998; McCall & Hollenbeck, 2002). This experience-based learning is complemented with 20% of development from coaching, mentoring, and feedback. The final 10% of development is acquired through more formal learning situations (e.g., classroom, books, e-modules). Taken together, these three tactics lead to the most robust development and learning (Lombardo & Eichinger, 2002). Lombardo and Eichinger (2002) also refer to the importance of hardships and estimate that effective development of high potentials typically

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includes 25% hardship experiences. These hardships include things like learning from poor decisions, experience career ruts or missed promotions, and successfully managing difficult direct reports (Lombardo & Eichinger, 2002). Because these hardship experiences are more difficult to plan proactively, however, our focus is on 70-20-10, with the assumption that occasional hardship experiences will occur naturally along the way, particularly as leaders stretch to learn and apply new skills in new situations. It is important to note that the 10% label is not meant to downplay the significance of formal training or to suggest that formal training should only receive 10% of the development budget. Instead, it is an acknowledgment that the majority of learning comes from hands-on experience, but that formal training and development programs are an effective way to infuse new ideas and knowledge into the organization. From our experience, in a fast-paced global environment, it is one of the few places leaders get a chance to step back from the day-to-day responsibilities of their jobs and reflect on their own development. Formal Training, the 10% of Development ‘‘Formal training’’ is meant to cover a wide range of training programs, from specialized skills training to broad-level leadership development programs. In some form or another, all of these programs can add value to an individual’s career development, and organizations need to determine where they need to focus for developing high-potential leaders. However, for this particular discussion, we are focused on high-potential leaders who generally already have deep functional expertise. Therefore, we concentrate on one particular type of formal training program – the leadership development program for high potentials. The keys to a successful implementation of such a program for developing leaders are described in the following paragraphs. Ensure complete and active senior leader sponsorship. Successful development programs follow a number of principles. First, the program must have a senior-level sponsor (preferably the CEO) who is supportive and actively engaged in the effort. This participation includes everything from involvement in the development of the program’s content as well as being present for the program itself (Tichy, 1997). In fact, to be really effective, the senior leader needs to be emotionally present as well, actively engaging throughout the program, sharing personal insights and experiences, and demonstrating to participants that the purpose of the program is personally important to him or her. All of this helps establish the credibility of the


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message and the program. Participants will then embrace the message that the program’s contents are relevant to them in their current and future roles. The involvement of senior leaders should also allow participants to interact with the leaders whose positions they aspire to hold in the future, providing role models for these high-potential leaders of the organization. Design programs to be on-going learning events. An age-old problem with formal training events is ensuring the content is transferred back to the job when training is over (Kraiger, 2002). Therefore, an important component of successful programs is ensuring that they are on-going rather than one-time events. Programs should provide participants with ways to apply their new skills and knowledge in practical, job-relevant ways. Some of the ways of doing this include relevant pre-work and a mix of jobrelated case studies and exercises throughout the formal sessions. Then, following the formal training, one approach for ensuring participants is applying their new learnings by utilizing experienced external coaches or facilitating follow-up sessions (also known as reconnects) with senior leaders in the organization. Place heavy emphasis on self-reflection and self-awareness. Third, successful programs often have a heavy emphasis on self-reflection and self-awareness. For busy executives, this time away from the stress of their daily jobs likely provides a rare opportunity to think carefully about their own behaviors and performance and their impact on others. We have found that this is a great time to introduce assessment tools such as 360-feedback, personality assessments, style inventories, and other instruments intended to diagnose participants’ strengths and development opportunities in a number of areas. Ideally, the participants should meet with feedback experts to help them fully interpret their assessment reports and to gain insights from the results. The goal is for participants to understand their leadership strengths and developmental opportunities as well as how their leadership style impacts others with whom they work. Although this is not a new concept and has been the basis for leadership programs for decades (e.g., Burke, Richley, & DeAngelis, 1985), it is important that not just anyone is providing the feedback but rather a trained professional, This point in a program is critical, as it encourages participants to gain new personal insights they will be able to use in their careers. Again, this is the type of unique self-reflection that participants would not ordinarily get on the job – another reason training programs are an essential part of any development effort. Ensure a global focus, with an eye to the future. If a program is intended to develop global leaders, it should have a clear global focus. First, the content

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of the program should include issues that leaders will have to deal with as they take on more multinational responsibilities. For example, the program can include internal leaders from around the company or cutting-edge external speakers with global perspectives to help build a broader knowledge base. Second, participants in this type of program should be from various regions of the world, representing diverse elements of the business, and the program should be designed to maximize interaction. This allows participants to interact with not only senior leaders but also other leaders in similar positions from other parts of the world. In addition to establishing valuable business relationships, networking with international peers can provide participants with a broader perspective of the business concerns of leaders across the organization. Finally, successful programs support the development of leadership skills that transcend changes in the business environment. With constant changes in technology and the world economy, it can be a significant challenge to develop executives for the future – not the present or recent past. The management literature is full of examples of companies in the technology industry, for instance, that invested millions of dollars over a number of years in developing talent, but ultimately ended up with leaders who were very good at managing for outdated technology and business structures (Sherman, 1995). Sustainable programs should focus on an adaptable set of leadership skills that are not rendered obsolete by changes in the business environment. In turn, the program design should be adaptable over time, adjusting to the changing demands on global leaders. As an example of the power of a program following similar principles, below we highlight an internal study of our own leadership program using our global employee opinion survey. The study occurred over a three-year period, with the first survey administered in Year 1, the high-potential leadership program conducted in Year 2, and the survey administered again in Year 3. Through confidential coding of the data, we were able to isolate the responses of (1) high potentials who attended the program and (2) high potentials who had not (yet) been invited to the program, essentially establishing a control group. The results showed that not only did program participants’ perceptions regarding the organization improve following the completion of the program but their scores increased to a much greater extent than did other key leaders. Participants felt more optimistic about their career opportunities, that they were getting better coaching and feedback and that they were being provided better opportunities to improve their skills. The compelling part is that these scores were higher than the control group a full year after they attended the program and clearly

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shows the impact this type of effort can have. These findings are displayed in Fig. 3. Summary. In summary, organizations planning the development of formal training programs to build leadership bench should consider a number of important factors. They should determine the level of the organization for which the training is best suited and ensure they have support from senior leaders to establish and reinforce the effort. The most successful programs also utilize the participants’ valuable time away from their busy schedules to focus on gaining self-awareness of their strengths and opportunities. Finally, programs aimed at developing global leaders should include leaders from a variety of geographic regions and focus on issues relevant to leading in a constantly changing global business context.

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Leader Perceptions Before and After a Leadership Development Program.

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Key questions to consider: 1. What level in the organization is best suited for the program? Is the content focused on a specific functional skill or generalized leadership competencies? Is it global in nature? 2. Do you have support from senior leaders within the organization? Will they commit to the long-term success of the program and its participants? 3. Does the program focus on and provide for sufficient self-awareness and self-reflection? 4. Is there a method for tracking participants’ long-term progress? What is the evaluation strategy?

Coaching and Feedback, the 20% of Development According to the developmental framework described earlier, coaching and feedback should account for approximately 20% of development and is best seen as the bridge between formal learning programs and on-the-job experiences and learning. In its broadest sense, this represents simply feedback from others and includes all kinds of sources (e.g., internal coaches, external coaches, managers, peers, mentors). It can be verbal and qualitative (e.g., a discussion with a manager or mentor) or more formal and quantitative such as in a 360-feedback process. Regardless of the methodology, the obvious benefit is that it provides leaders with a sense of how they are doing from a perspective other than their own. It also helps them focus on the behavioral changes needed to continue their development journey. We strongly believe that managers have an ongoing responsibility to develop others around them by providing developmental feedback, and we also believe that 360-feedback systems are critical for providing a different kind of input. Our focus here, however, is on external executive coaches for several reasons. First, the use of external coaching for developing leaders is growing rapidly. Organizations are using coaches for a variety of factors, including intense competition in the marketplace that puts a focus on speed and flexibility; the need to develop international work forces; and flatter, rapidly changing organizations that do not provide the same opportunities for more traditional development (Valerio & Lee, 2005). Second, we see external coaching as a way to differentiate development tactics for key highpotential leaders and offer them something beyond the normal development opportunities, with the intent of optimizing their growth. In our minds, this shift from treating coaching as a ‘‘fix-it’’ solution to using coaching for


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developing high potentials is a change in the right direction that many organizations need to make. Executive coaching is by no means a new profession. Estimates are that coaches have been working with individuals in organizations to improve performance for the last 50 years, although it was not until at least the late 1980s that it began to be called ‘‘coaching’’ (Valerio & Lee, 2005). Despite the 50-year history, there is relatively little consistency in many areas of the profession. There are vast differences in the backgrounds and qualifications of people who call themselves coaches, how the services are delivered, and how common it is to use an executive coach in various parts of the world. We have also noticed distinct differences in how organizations attempt to manage coaching, with some taking a decentralized approach where individual coaching engagements are initiated and supervised by local line or HR managers. In these cases, there is little or no connection to one another or any central point. Other organizations have taken a more formal and centralized approach and attempted to align the coaches into a network with standard practices, policies, and even fees. Regardless of the approach, the use of external coaches represents a substantial investment. Organizations that take a decentralized approach might be surprised at the total amount they spend on coaching. A more centralized approach to managing coaching programs is likely to yield better visibility to the total cost, but might also receive more scrutiny once the financial costs are totaled. Nevertheless, we believe that because of the appeal and value of coaching, and because companies are constantly looking to optimize their resources, the trend will be for more organizations to look to some form of centralization to manage their coaching resources. Our suggestions for using executive coaching in developing leaders are based on this assumption of a trend toward centralization. Identify the right coaches for development of global leaders. The need to identify the right coaches to support the development of your leaders is obvious. Factors such as the coach’s qualifications, experience working with specific needs or situations, and the coach’s understanding of the industry and the organizational culture are just a few considerations. These considerations are further complicated by the fact that there are no formal certifications or licensure for coaches, and therefore, the quality of coaches varies greatly (Valerio & Lee, 2005). When the leaders work all over the world, the challenges are magnified. In many of the faster-growing markets (e.g., Brazil, Russia, India, and China) where the coaching profession is in earlier stages of development, the limited number of coaches means good local coaches are likely to be hard to find, busy, and may even work for one of your competitors.

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Perhaps one of the most difficult challenges we have faced is finding executive coaches who understand both the local culture and the much broader multinational perspective. The more distinct the leader’s culture from the company’s home culture, the harder it is to find a coach who understands both perspectives and is capable of bridging the gap between the two. Multinational companies need global leaders who are effective in their home countries, but also have the skills and awareness to operate on a global basis across multiple countries and cultures. Finding coaches capable of supporting this kind of development is the first and sometimes most difficult step. It requires frequent networking and a heavy reliance on local HR leaders to help identify potential coaches. Once identified, the coaches need to be screened from both a ‘‘headquarters’’ perspective and the local country perspective. Align the coaches and build a global network. The primary advantage of a global coaching network is not to manage the costs but to align the selected coaches against a common goal of developing global leaders of the future. Having a common language and approach here is critical. In this sense, coaches become change agents for the organization. This starts with some form of certification and alignment program, where coaches are introduced to key aspects of the organization. For example, we developed a program to introduce coaches to our organizational culture and values, core people processes (e.g., performance management processes, 360-feedback), to clarify expectations of leadership, and to provide education on our assessment tools and the role they play in developing global leaders. If local HR professionals are involved in the certification and if the program includes group activities such as sample case studies, it provides an opportunity to see the coaches ‘‘in action’’ and help in the pairing of coaches and leaders in future assignments or deciding that certain coaches are not a good fit for your organization. As companies build global coaching networks, they also need to be mindful of the work required to maintain them. As coaches return to their home countries and begin their coaching assignments, they naturally become more connected to the local business they support. Technology makes it easier to stay connected around the globe, and periodic communications and updates from the central office help reinforce the importance of the global perspective. Local HR also needs to play a key role in supporting the process and providing guidance where necessary. And finally, to the extent those coaches can be given the opportunity to work with a variety of leaders and across boundaries into other businesses, they will develop a broader appreciation of the global business. In our view,


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organizations should treat external coaches like additional people resources and seek to provide them experiences and development opportunities so that they too can grow with the leaders of the organization. In the end, coaches who know the company leaders and culture can provide invaluable insight on how to operate effectively in that environment. At the same time, companies have to be careful the coach is not perceived as ‘‘too connected’’ and therefore not a trusted source for individual high-potential leaders. Create consistency in the program, but leverage the skills and expertise of individual coaches. There are clear advantages to creating consistency in a coaching program for key leaders of the organization. The same priorities are emphasized, the experiences are similar, and coaches and coaching assignments are more aligned with the vision of the organization. At a minimum, we believe a global network should provide clear guidance on the basic coaching process, the types of assessment tools that are used in a given organization, and the way updates are reported and shared with the organization. For example, coaching assignments should follow a basic protocol of contracting, assessments and insights, coaching for development, and some form of closeout after a specified period. Coaches should also avoid bringing in new assessments and tools into the process if they will cause confusion or complicate the organization’s global approach to developing leaders. At the same time, utilizing coaches around the world also means allowing for unique and locally relevant approaches to get the greatest benefit from the assignments. Cultural or local business norms may require a coach to approach a situation in ways that that might not work as well in other parts of the business. Coaches also bring in a wealth of knowledge and new perspectives that provide learning opportunities for individual leaders and the organization. Therefore, our recommendation is to establish clear expectations with the coaches about the approach so that they know what is appropriate in the context of the global approach, encourage them to come forward with new ideas and suggestions, and give them enough autonomy to progress the assignment as they see fit. In the end, managing a coaching network is a delicate balance between control and autonomy. Establish expectations for success and hold all key stakeholders accountable. Our final recommendation for successfully using coaching seems trite, but it is true: hold the key stakeholders accountable. For the leaders, this means setting clear expectations and holding them accountable for investing the mental and physical energy into understanding themselves better, working with their coach to create development plans, and making concerted efforts to apply these behaviors on the job. For HR, it is

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ensuring that the assignment stays on track, that the coach has proper access to resources, and that the development plans are aligned with the development needs as identified by the organization’s succession planning process. The leader’s manager needs to be actively involved in the assignment, providing additional support and coaching, and maybe most importantly ensuring the leader is getting opportunities to try out (and sometimes fail with) new behaviors on the job. Finally, in the case of the coaches, it is applying their coaching skills to foster development of the leader and providing periodic updates on actions taken and progress made. These updates should focus on the strengths and development needs of the leader, the development tactics he or she was focused on during the assignment, and the progress made toward those objectives (we do not favor asking for an overall evaluation of the leader’s potential). This provides the company reasonable assurance that development is occurring, and it is occurring at a rate above that which would have happened otherwise. Summary. Coaching and feedback, or more appropriately ‘‘feedback from others,’’ is the bridge between formal development programs and learning on the job. In this chapter, we have focused on the role external coaches can play to support this aspect of the talent development agenda. These coaching resources are most effective when they are carefully screened according to the needs of the organization, organized into a network, and aligned to the talent development agenda of the company. Finally, ensuring that all key stakeholders are aware of and held accountable for their responsibilities is the other key to making the most of external coaching for developing high-potential leaders.

On-the-Job Learning through Critical Experiences, the 70% of Development We have saved the discussion of the 70% critical experiences for last in the Develop phase because we believe it is the most crucial for development and it provides the best segue into the third phase of our applied model (i.e., the Move component). The concept of on-the-job learning through critical experiences is based on the work of Lombardo and Eichinger (2002), who assert that leaders learn the most difficult job skills when faced with new challenges on the job. As they explain, ‘‘what happens after hiring a person (in terms of development experiences) has as much or more impact on longterm worth as anything that has gone before’’ (p. 69). They define 11 types of development jobs (e.g., cross-moves, fix-it opportunities, international assignments) that promote the development of various competencies.


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Knowing that experiences are critical for development, the challenge for organizations is how to operationalize a process that encourages (or in some cases, actively plans) development through experiences. We believe an important early step is creating a culture that believes in the value of critical experiences for development and then building a process to support and sustain it. We have identified three key steps to effectively leverage the value of critical experiences for development. Change perceptions that career success means the next promotion. One of the biggest barriers to learning from experience is a culture in which the focus is on the next step up the career ladder. Too often, it seems, leaders get focused on obtaining a bigger office, a more prestigious job title, or responsibility for a larger group or business, and lose sight of the fact that gaining the right experiences and building the appropriate skills are the most effective ways to grow a career longer term. This is magnified in developing markets, where success and financial rewards often take center stage. Regardless of what is driving this mindset – organization culture, economic conditions, or human nature – leaders and organizations need a shift in thinking to adequately take advantage of and benefit from development experiences. In The Leadership Pipeline, Charan et al. (2001) clearly articulate the importance of gaining certain skills before moving on to the next level of the organization. They point out how leaders who are promoted without obtaining the necessary skills essentially block the pipeline for others and stunt the development of the organization’s leadership. To ensure leaders are gaining the right skills, decision-makers and the leaders being impacted need to understand and buy into the importance of building certain skills before progressing through the pipeline. If the high-potential leaders do not get it, they are likely to become dissatisfied with their upward mobility rate and leave the organization. They need to understand they are considered key talent and that the philosophy is designed to maximize their development and long-term potential with the organization. There are several key tactics that can help instill and reinforce this mindset among high potentials. One very simple step is to provide real examples of successful leaders in the organization and their career paths. In our experience, successful career paths rarely resemble a simple climb up the rungs of a ladder and instead look more like a lattice or spider web. Second, those responsible for talent management in the organization should clearly define the experiences and skills needed at various levels so that leaders understand the expectations and also have a reference point to check their development progress. Finally, the key leaders (e.g., managers, mentors,

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HR) supporting the development agenda need to understand and believe in the approach and subsequently reinforce the importance to the next generation. When these next-generation leaders have obtained the experiences and skills, the organization needs to reward their faith and achievements by moving them to the next level. Encourage leaders to learn from experiences. Part of building a culture that thrives on learning from experience is helping leaders understand how they can learn from experiences. The research on learning agility clearly indicates that high potentials tend to be more learning agile than others. In other words, they perform better in first-time situations, they get more out of experiences, and they are more likely to apply what they learned in new situations (Lombardo & Eichinger, 2002). Leaders can also be coached to apply more ‘‘learning agile type’’ behaviors such as taking time to reflect after various experiences to identify the key learnings, looking for parallels or similar situations in which to apply to these learnings, reading more broadly and continuously expand their mindset, and seeking out as many new experiences as possible. While we believe the assertion by Lombardo and Eichinger that learning agility does differentiate potential, we also believe that leaders can benefit by learning to be more learning agile as well. Develop a Critical Experiences framework and a process to support its use. As we stated in our discussion of changing the mindset around development, it is important to clearly define and articulate the critical experiences needed for ‘‘development experiences.’’ Defining development experiences does not have to start from scratch in each organization, as there is likely a definable domain of critical experiences across organizations (see Lombardo & Eichinger, 2002, for a list of 11 key experiences they have identified). Much like our earlier discussion on assessment instruments, we feel a better use of time is to identify the experiences from existing sources, adjust the language to meet the culture of the organization, and then focus on other aspects of creating the framework versus creating one’s own unique list from scratch. Once the key critical experiences are identified, the next steps are to identify the key competencies that can be developed through those experiences, and then to identify the key jobs in the organization that will provide these experiences (for a more detailed discussion, see Lombardo & Eichinger, 2002). McCall (1988) described a very similar process referred to as ‘‘corporate development profiling’’ – dissecting the various aspects of an organization (e.g., functions, geographies) based on the development experiences they provide. By creating this matrix of critical experiences and competencies, and mapping it to key jobs, key decision-makers are provided with a valuable


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tool for planning people moves, and individual leaders are provided a road map to help identify the critical experiences they need to gain to move along their intended career paths. One particular challenge we have seen with critical experiences is that because they tend to be focused at a relatively high level in the organization (e.g., mergers and acquisitions, start-ups), many junior-level leaders do not feel they are in a position to gain those experiences and therefore get developed. We believe the solution to this concern is to talk about critical experiences as a dynamic process of learning (as opposed to a ‘‘check-thebox’’ exercise) where to eventually master an experience, the leader needs exposure to it at various levels. In the case of a start-up experience, a junior leader might not be in charge of the start-up, but she could gain valuable experience by being on the start-up team, thereby better positioning her to lead a start-up in the future. In summary, we believe that experience really is the best teacher, and organizations should continue to leverage experiences to grow global leaders. In the case of all leaders, this means helping them understand the value of learning from experience, what it looks like in terms of defined experiences, and what they can do to get the most from experiences. In the case of high-potential leaders, the organization should take a more active role by aggressively planning for critical experiences to promote development so that leader growth can be optimized. This leads us to the third component of the model, Moving leaders for development.

Move The third phase in our talent management framework is Move. Once the talent has been identified and resources and support provided to ensure an emphasis on development, it is critical that the organization begins executing against the experience plans created. In short, the Move phase is all about taking action to develop leadership talent by moving them to new experiences where they can learn and grow further. The key from an implementation perspective is that moves for high potentials should be planned and identified so that leaders maximize the experiential learning. This is in contrast to placing leaders in roles that match their strengths, where they might be highly successful but would learn very little (Lombardo & Eichinger 2002). This paradigm switch can be difficult for some to accept, despite the fact that its origins are based on decades-old research (McCall et al., 1998).

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It goes against many traditional forms of staffing, both external and internal. The typical external hiring model, for example, is laser-focused on finding the individual with the right capabilities to perform in a given role. Similarly, internal staffing approaches in some organizations (e.g., particularly those where functional competencies are extremely important, such as in the health-care and technology industries) fill roles by matching competencies to the requirements of a role. Under this Move phase, however, it would be better to find a truly high-potential leader and hire (or place) him into a role that is outside his primary expertise or experience to expand his learning. Unfortunately, this phase is often difficult to execute, particularly in large, complex organizations. Leaders often have limitations on when and where they can go for development assignments. For example, challenges moving dual-income couples, people caring for aging parents, employees with children of a certain age, and so on can all place added strain on the process. Moreover, the emerging workforce is less willing to move for a promotion (Smith & Clurman, 1997). As a result, executing this stage effectively requires a cultural shift for many organizations. This shift is described in more detail in the following paragraphs. From Filling Open Jobs to Creating Thoughtful Developmental Opportunities Many organizations operate their talent management process largely from a supply and demand perspective. As a result, the standard approach to movement is to begin with a list of open jobs. Sometimes, this also includes a list of people needing a new assignment. The process may also include a set of key positions that need to have detailed succession plans. This approach is by its nature very short-term focused. It is essentially getting the bodies in the chairs, and in many companies, speed of filling open roles is the critical measure of success (vs. what type of talent was placed in those roles). While this is fine and necessary to some degree from a productivity perspective, it does not maximize the goal of global talent development. From a broader talent management perspective, to execute the Move phase well, organizations need to begin thinking proactively about creating individual experience plans for future leaders based on the most significant leadership role the organization sees them reaching (e.g., sometimes referred to as ‘‘future back,’’ ‘‘destination,’’ or ‘‘end-state’’ planning). This means approaching the staffing process with a more planful and disciplined mindset. All jobs provide experiences of some form or another. As noted earlier, the key is determining which jobs provide what experiences and


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matching that set of characteristics with what the individual needs to maximize development. From an internal planning and staffing perspective, this means approaching the talent discussion with a clear understanding of where key talent is expected to be in 5 or 10 years, understanding how many moves they have left given their level of experience, and a working knowledge of what various jobs deliver. It also means being prepared to keep jobs open (unfilled) longer if required to match an experience to a high potential who needs it, and being ready to create or restructure roles to ensure they provide the experiences needed for that individual. This concept can be challenging for organizational leaders to embrace (and sometimes costly as well), but it is this type of thinking that provides an additional level of strategy to the bench building and senior leadership development process. From Keeping Your Best in Your Own Backyard to Facilitating Cross-Business Moves The second type of culture shift needed to support the Move phase of our framework concerns the tendency for successful leaders to want to keep (or some might say ‘‘hoard’’) their very best talent to ensure their own continued success. This is often done at the expense of building long-term bench for the company. Although not all experiential learning requires moving to a new role in an organization (i.e., you can change an existing role by adding new accountabilities or reporting relationships to ensure further development in that position), moving across functions, business units, countries, and divisions in an organization will likely provide an enhanced learning experience. Given that the issue inherent in releasing talent to other parts of the organization is typically one of self-preservation on the part of senior leader, the solution to ensuring that cross-business moves become a reality is adjusting what you reward. If senior leaders are recognized and rewarded, at least in part, based on the quality and quantity of talent they have placed in other parts of the organization (as well as the degree to which they welcome incoming talent in their organization), they are more likely to support the talent management approach. By putting metrics in place that track talent movement across boundaries, it is possible to drive this behavior change and reduce the tendency for senior leaders to hold on to their best people. That said, it is important to be thoughtful about the metrics that are developed. If done well, high-quality talent will more likely be moved through different developmental roles in the organization. If done poorly, however, other bad behaviors can develop. For example, measuring just

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movement itself (vs. high potential movement) can lead to a phenomenon known as ‘‘passing the trash.’’ Similarly, if other factors and gatekeepers are not also considered (such as readiness to move, criticality of the role staying open for long, and availability of a ready backfill), you might end up having a senior team that moves their leaders too quickly through various roles that can result in reduced learnings and even failure. In sum, getting the metrics right is critical to driving the Move phase. Stretching Your Best Talent through Adding More Work versus Providing Appropriate Support and Resources In some organizations, particularly those with aggressive growth agendas, it can be a badge of honor to have more work than can actually be accomplished. This often translates to high-potential leaders who take on (or get assigned) additional responsibilities to continue their development. While changing their accountabilities or adding special projects are indeed legitimate ways to develop talent in an existing role (as noted earlier), the potential issue here is one of overload. More specifically, in some cases, adding more accountability but no new resources to support the extra workload can lead to serious unintended consequences. These include burnout, performance issues, suboptimal learning from the role, and even turnover. Therefore, balance is critical. It is important to understand how large the stretch is and the leader’s capability to incorporate and be successful with the expanded accountabilities. The point is that the emphasis should be on the nature of the work and the experiences provided, not on the amount of work. This issue is also important to understand when moving talent into new and different roles as well. In these cases, however, the challenge is ensuring that the team of direct reports represents the right mix of capabilities to ensure a successful stretch assignment for the new leader. For example, it is not usually a prudent idea (with some exceptions, such as turnaround situations) to replace both a leader and his or her entire team at the same time. This can result in too much change and a lack of continuity that can interfere with a successful learning experience (and potentially sustained performance as well). The best approach here is also one of balance. More specifically, when a role is identified as a key learning destination, it is important to consider the people above and below that role and the level of stability they bring to the equation. A leader being placed in a new crossfunctional assignment, for example, needs to have a direct report team that is both strong and stable so that the new leader can learn from them. If she is building toward becoming a functional leader, she will value and enjoy the


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learning process from her team (Charan et al., 2001). This is another reason why it is so important that careful consideration be given to both the people and the roles themselves when planning for experiences. Key questions to consider: 1. Do you have a means for capturing and tracking mobility considerations? 2. What types of jobs are best staffed with qualified professionals and what types are best for developing high-potential leaders? Are there current incumbents who are potentially blocking roles? 3. What are the factors that should be considered when implementing talent movement metrics? 4. How do you know when you have the right level of stretch for someone in a new or enhanced assignment?

IMPORTANCE OF SENIOR LEADERSHIP IN CREATING A TALENT DEVELOPMENT CULTURE Although we have described the importance of senior-level sponsorship for developing global leaders at various stages in the process throughout this chapter, we wanted to conclude the discussion with a few more points on the topic. As with most organizational processes and interventions, the extent to which the CEO and his or her senior-level leaders actively and willingly own the talent development process is one of the most important criteria for success (Kramer, 2005). Few of the processes described throughout this chapter can be successfully implemented without senior leaders who are truly engaged in driving talent development. Moreover, even in an organization with limited or no processes, assessment tools, or leadership development and coaching programs, the senior leadership team can still drive talent development through their words and actions. It is all about behaviors. Clearly, there is a strong link between senior leadership behavior and the organizational culture that is created (Schein, 1985). Their actions are both direct and immediate but can often be iconic and the basis of stories over time as well. While having a supporting set of integrated tools, processes, and systems is needed to bring talent development to life, the best development suite in the world will not help develop global leaders if the senior team does not believe this is a critical goal. For some organizations,

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this may require leading a significant change agenda that makes it truly ‘‘stick’’ in the culture (Kotter, 2002). What leaders attend to is what the organization will attend to, as this sends a clear message about what is considered most important. They must be personally engaged in the process, and the more passionate about it the better. Listed below is a sampling of some the ways senior leaders can personally demonstrate their commitment and help shape a true talent development culture: Communicate frequently, broadly, and passionately about the importance of talent development. Link talent development to the strategic objectives of the organization so that it becomes an integral part of every business plan review. Create time and have an agenda for formal talent review and planning discussions. Ensure that formal plans that will build bench for the organization (through some formal process) are created and executed. Break down and remove barriers (people, politics, processes) that get in the way of building leaders. Hold other leaders accountable for talent development and movement within and across the organization. Personally get involved in teaching your own perspective on leadership to others. Identify, coach, and mentor a short list of ‘‘superstars’’ and help them understand what it means to be a global leader.

SUMMARY In summary, developing global leaders requires a holistic approach to talent management. We described a model of ‘‘Identify-Develop-Move’’ and touched on many key considerations for implementing that model. Through this framework, we have tried to incorporate many elements of good talent management, including the role of assessments, the 70/20/10 development ratio, leveraging critical experiences (including placing leaders in jobs to get these experiences), and the use of executive coaching. If the past is any guide, the importance of developing global leaders will only increase, doing so will get more challenging and complex, and organizations must be willing to explore, try new approaches, and make corrections along the way if they are to keep up in the global marketplace for leaders. As we stated at the beginning, the companies who win in this battle will not be the ones who


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have identified the tactics, tools, and processes, but those who integrate them into a framework and actually deliver on those strategies.

REFERENCES Bray, D. W., Campbell, R. J., & Grant, D. L. (1974). Formative years in business: A long-term AT&T study of managerial lives. New York: Wiley. Burke, W. W., Richley, E. A., & DeAngelis, L. (1985). Changing leadership and planning processes at the Lewis Research Center, National Aeronautics and Space Administration. Human Resource Management, 24, 81–90. Charan, R., Drotter, S., & Noel, J. (2001). The leadership pipeline: How to build the leadershippowered company. San Francisco: Jossey-Bass. Church, A. H., & Desrosiers, E. I. (2006). Bring on the high potentials – Talent development at PepsiCo. Paper presented at the 21st Annual Conference of the Society for Industrial and Organizational Psychology, Dallas, Texas. Economist Intelligence Unit. (2006). The CEO’s role in talent management. White Paper by The Economist Intelligence Unit, in cooperation with Development Dimensions International. Guion, R. M. (1997). Assessment, measurement, and prediction for personnel decisions. Mahwah, NJ: Lawrence Erlbaum Associates. Hall, D. T., Zhu, G., & Yan, A. (2001). Developing global leaders: To hold on to them, let them go! In: W. H. Mobley & M. W. McCall, Jr. (Eds), Advances in global leadership (Vol. 2, pp. 327–349). Oxford, UK: Elsevier Science. Hesselbein, F., & Goldsmith, M. (Eds). (2006). The leader of the future: Visions, strategies, and practices for the new era. San Francisco: Jossey-Bass. Hogan, J. C., & Holland, B. (2003). Using theory to evaluate personality and job performance relations: A socioanalytic perspective. Journal of Applied Psychology, 88(1), 100–112. Kotter, J. P., & Cohen, D. S. (2002). The Heart of Change: Real-Life Stories of How People Change Their Organizations. Boston, MA: Harvard Business School Press. Kraiger, K. (2002). Creating, implementing, and maintaining effective training and development: State-of-the-art lessons for practice. San Francisco: Jossey-Bass. Kramer, R. J. (2005). Developing global leaders: Enhancing competencies and accelerating the expatriate experience. [Research report]. New York: The Conference Board. Lombardo, M. M., & Eichinger, R. W. (1989). Eighty-eight assignments for development in place. Greensboro, NC: Center for Creative Leadership. Lombardo, M. M. (2005). Developing talent: The magic bullets. Strategic HR Review, 4(2), 3. Lombardo, M. M., & Eichinger, R. W. (2002). The leadership machine. Lominger Limited, Inc. McCall, M. W., Jr. (1988). High flyers: Developing the next generation of leaders (pp. 84–87, 89–90). Boston: Harvard Business School Press. McCall, M. R., & Hollenbeck, G. P. (2002). Developing global executives: The lessons of international experience. Boston, MA: Harvard Business School Press. McCall, M. W., Lombardo, M. M., & Morrison, A. M. (1998). The lessons of experience: How successful executives develop on the job. Lexington, MA: Lexington Books. Michaels, E., Handfield-Jones, H., & Axelrod, B. (2001). The war for talent. Boston: Harvard Business School, McKinsey & Co.

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Mobley, W. H., & Weldon, E. (Eds). (2006). Advances in global leadership (Vol. 4). Oxford, UK: JAI Press. Murphy, K. R., & Cleveland, J. N. (1995). Understanding performance appraisal: Social, organizational, and goal-based perspectives. Thousand Oaks, CA: Sage. Schein, E. H. (1985). Organizational Culture and Leadership (3rd ed.). San Francisco: Jossey-Bass. Schmidt, F. L., & Hunter, J. E. (1998). The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 85 years of research findings. Psychological Bulletin, 124(2), 262–274. Sherman, S. (1995). How tomorrow’s leaders are learning their stuff. Fortune, November 27. Smith, J. W., & Clurman, A. (1997). Rocking the ages: The Yankelovich report on generational marketing. New York: HarperBusiness. The Economist. (2007). Manpower. The Economist, January 5. Tichy, N. M. (1997). The leadership engine: How winning companies build leaders at every level. New York: Harper-Collins. Valerio, A. M., & Lee, R. J. (2005). Executive coaching: A guide for the HR professional. New York: Pfeiffer Publishing.

DEVELOPING GLOBAL LEADERS: THE ROLE OF INTERNATIONAL EXPERIENCE AND CULTURAL INTELLIGENCE Kok-Yee Ng, Linn Van Dyne and Soon Ang ABSTRACT Globalization requires business leaders who can manage effectively in multicultural environments. Although many organizations assume leaders will enhance their multicultural skills through international assignments, it is unclear how leaders translate these international experiences into knowledge and skills that enhance their effectiveness. Based on experiential learning theory (ELT), we propose that cultural intelligence (CQ) is an essential learning capability that leaders can use to translate their international experiences into effective experiential learning in culturally diverse contexts.

Managing the ‘‘global leadership gap’’ is one of the major concerns of corporations operating in today’s global business environment (Sloan, Hazucha, & Van Katwyk, 2003). Two recent Economist Intelligence Unit (2006, 2007) CEO briefings based on survey data from over 1,000 senior executives across 40 nations identified lack of high quality talent that can


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operate in multiple cultures as the greatest challenge facing global organizations. These findings underscore the importance of designing effective global leadership development programs that enable firms to build right-talented employees who have the capability to perform and lead effectively in culturally diverse situations. International assignments have been consistently advocated as the primary vehicle for developing global leadership skills (Davies & Easterby-Smith, 1984; McCall, 2004; McCall & Hollenbeck, 2002; McCall, Lombardo, & Morrison, 1988; McCauley, Ruderman, Ohlott, & Morrow, 1994; Osland, 2001). Hall, Zhu, and Yan (2001) argued that international assignments are a powerful means of leadership development because they provide opportunities for global leaders to experience surprises that will stimulate reflection and exploration that are crucial for learning. Traveling on business trips, working in cross-cultural teams, going on expatriate assignments, and managing foreign or regional offices are examples of how global leaders gain experience dealing with different cultures (Dalton & Ernst, 2004). Increasingly, both organizations and individuals are recognizing the value of such international assignments. For instance, multinational firms emphasize international assignments as part of global leadership development programs, with many firms requiring high-potential leaders to have at least one important international assignment to acquire relevant experience (Hall et al., 2001). In support of this view, several studies have found that the international experience of CEOs was positively related to corporate financial performance of international firms (Carpenter, Sanders, & Gregersen, 2001; Daily, Certo, & Dalton, 2000; Sambharya, 1996). Global leaders also report benefits of international assignments. In a survey conducted by Gregersen, Morrison, and Black (1998), 80 percent of respondents indicated that the opportunity to live and work abroad was the most powerful experience that helped them develop their global leadership capabilities. Likewise, Mendenhall and Oddou (1988) reported that expatriates indicated benefits of overseas assignments for their leadership capabilities, including having a more global perspective of the firm’s business operations and an increased ability to communicate with and motivate people from different cultural backgrounds. Although the importance of international assignments for global leadership development is undebatable, questions on how to effectively maximize leaders’ learning and development from such assignments remain. As Hall and colleagues (2001, p. 328) remarked, ‘‘It is no longer a question of whether you need to use international assignments for leadership development – it is a question of how to make the best of them.’’ Reflecting a similar concern,

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McCauley (1986, p. 20) cautioned that ‘‘Events provide a stimulus to learn; the actual response of learning itself is never a sure thing.’’ Hence, more research is needed to understand factors affecting the effectiveness of learning from the experiences gained through international assignments. In response, recent research has begun to pay attention to individual factors that affect how much individuals learn from their international assignments (Leslie & Van Velsor, 1996; Spreitzer, McCall, & Mahoney, 1997; Van Velsor, Moxley, & Bunker, 2004). For example, Spreitzer and colleagues (1997) described ability to learn as including taking a proactive approach to learning, adapting to changes in the environment, learning from mistakes, and seeking and using feedback to make sense of the work environment. Van Velsor and colleagues (2004) highlighted other relevant characteristics including cognitive abilities, self-esteem, self-efficacy, and personality traits such as openness to experience and conscientiousness. Van Dyne and Ang (2006) described differences in global leader initiative to span structural holes as a key characteristic that differentiates those with high performance and positive reputations from those who do not thrive in international assignments. What is still unclear, however, is how or what processes allow leaders to learn from their international experiences. Without a fuller, theoretical understanding of the processes that enable effective learning from experience, research is unlikely to guide practice on how organizations and leaders can best design and use international assignments for leadership development. Without this understanding, we are also less likely to articulate what capabilities global leaders need to learn from their international experiences and why these capabilities are important. These gaps prompted us to ask several questions. What theoretical frameworks can inform research on the processes that enhance experience-based learning? How do global leaders translate their international and crosscultural experiences into knowledge and skills that enhance their effectiveness? What attributes enhance the capabilities of global leaders to learn from their experiences? In response to these questions, this chapter aims to provide a deeper and more systematic understanding of (i) the processes that translate global leaders’ international experiences into learning and enhanced effectiveness and (ii) the individual leader attributes that enhance their learning processes. Our point is that despite the popular emphasis on international assignments as a means of providing developmental experiences for global leaders, we know very little about the processes through which these experiences are translated into learning and effectiveness. Articulating the learning processes and differences in leader capabilities to learn from experience

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should help organizations and individuals better leverage their international assignments for developing global leadership capabilities. To this end, we integrate two streams of research to inform our research questions. First, we apply experiential learning theory (ELT; Kolb, 1984) to expound on the processes that translate global leaders’ developmental experiences into learning. Defined as the ‘‘process whereby knowledge is created through the transformation of experience’’ (Kolb, 1984, p. 38), ELT has immense potential to enhance the field’s understanding of how global leaders learn from their developmental experiences. Surprisingly, however, few management papers have done so. In our model, we build upon Kolb’s (1984) formulation of ELT to explore the blackbox between international experience and the learning outcomes of enhanced knowledge and skills. Second, we examine how the novel construct of cultural intelligence (CQ; Earley & Ang, 2003; Ang & Van Dyne, 2008a), defined as an individual’s capability to function and manage effectively in culturally diverse settings, affects the leader’s experiential learning cycle. CQ, with its specific relevance to unfamiliar cross-cultural contexts, is a capability that should affect learning effectiveness in the context of international assignments. Our focus in this chapter, on CQ as a learning capability, offers a fresh perspective to existing research on CQ, which has examined CQ for its impact on expatriate adjustment (Templer, Tay, & Chandrasekar, 2006), interpersonal trust (Rockstuhl & Ng, 2008), consequences of short-term business travel (Tay, Westman, & Chia, 2008), and performance outcomes (Ang et al., 2007). Thus, beyond informing the literature on global leadership development, our model also presents an additional reason why CQ is important for global leaders. Fig. 1 presents an overview of our model. Concrete Experience Motivational CQ Behavioral CQ Active Experimentation

Cognitive CQ Meta-Cognitive CQ Motivational CQ Behavioral CQ

Reflective Observation Cognitive CQ Meta-cognitive CQ Abstract Conceptualization Cognitive CQ Meta-Cognitive CQ

Fig. 1.

Learning Stages in the Experiential Learning Theory and Enabling CQ Capabilities.


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In the following sections, we elaborate on our theoretical model on how CQ capabilities will affect global leaders’ ability to learn from their experiences. Specifically, we begin with a brief review of ELT (Kolb, 1984), followed by its application to global leadership development. We then describe the four-factor conceptualization of CQ and consider its role in global leader learning processes. We conclude with a discussion of implications for organizations and future research.

THEORY DEVELOPMENT Experiential Learning Theory ELT argues that experience plays a central role in learning and development. Kolb’s (1984) formulation of ELT draws on the work of prominent educational and organizational scholars, including John Dewey, Kurt Lewin, and Jean Piaget, who share the common view that learning involves integrating experience with concepts and linking observations to actions (see especially Dewey, 1938). There are at least three reasons why the ELT theoretical framework should inform existing research on developing global leaders through international assignments. First, unlike traditional learning theories that focus on learning as behavioral or cognitive outcomes, ELT emphasizes learning as a process (Kolb, 1984). This process-oriented theory is consistent with our focus on understanding the intervening mechanisms that translate global leaders’ experiences into enhanced skills and knowledge. Second, ELT views learning as a holistic process of adapting to the world that goes beyond cognitive and perceptive faculties. Instead, learning requires the integrated functioning of the total person, which includes thinking, feeling, perceiving, and behaving. Furthermore, learning involves transactions between the person and the environment, where each influences the other in a reciprocal manner (Kolb, 1984). These premises of ELT parallel the nature of international assignments, where leaders have real responsibilities and goals to achieve in complex and dynamic environments. Third, ELT views learning as a continuous process where knowledge is continuously derived from and tested against the learner’s experiences. This implies that relearning, such as changing or modifying old ideas and integrating old ideas with new ones, is an important component in learning (Kolb, 1984). We argue that this emphasis on a continuous and dynamic cycle of learning is particularly crucial for global leaders given the uncertainties and complexities of culturally diverse business settings.

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Kolb’s (1984) ELT proposed a four-stage learning process based on two fundamental processes that enable learning from experience: (1) grasping the experience and (2) transforming the experience. Both dimensions are essential for learning because having (grasping) an experience without doing anything with it (transforming) is not sufficient. On the contrary, transformation cannot be done without an experience that can be acted upon. Based on these two central components of grasping and transforming experience, the four-stage learning cycle comprises two dialectically related modes of grasping experience – concrete experience versus abstract conceptualization – and two dialectically related modes of transforming experience – reflective observation versus active experimentation. Concrete experiences and abstract conceptualization are different ways of grasping the experience. Concrete experiences focus on tangible elements of the immediate experience, while abstract conceptualization relies on conceptual interpretation and symbolic representation of the experience. Likewise, reflective observation and active experimentation are two different ways of acting upon the experience. Reflective observation relies on internal processing, while active experimentation emphasizes actual manipulation of the external world. Put together, Kolb’s ELT model portrays a learning cycle where the learner ‘‘touches all the bases’’ of experiencing, reflecting, thinking, and acting – in a recursive process that is responsive to the learning situation (Kolb & Kolb, 2005). Specific tangible episodes or events (concrete experiences) are the basis for descriptive processing (reflective observations), which are then assimilated and distilled into conceptual interpretations (abstract conceptualization) that become the basis for action (active experimentation). This fourth step (actively testing ideas in the real world) generates new experiences for the learner and triggers another cycle of learning (concrete experiences, reflective observation, abstract conceptualization, and active experimentation).

Experiential Learning in International Assignments International assignments offer global leaders valuable developmental experiences. However, not all international assignments are equally developmental in nature (Oddou, Mendenhall, & Ritchie, 2000), nor are all leaders equally likely to learn from these experiences (McCauley, 1986). For instance, company international travel policies that emphasize short-term overseas

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assignments with efficient use of time and financial resources often dilute or wash out developmental opportunities for the leader (Oddou et al., 2000). Likewise, individual leader learning ability and personality traits influence whether learning opportunities are maximized during overseas assignments (Dalton & Ernst, 2004). To date, the literature on global leadership development has recognized that both organizational and personal factors are important boundary conditions that can affect the usefulness of international experiences for developing leadership capabilities. Research, however, has not sufficiently considered how these organizational and individual factors influence learning processes and learning effectiveness. This is, in part, due to the absence of a theoretical framework that depicts how global leaders learn and develop from their experiences. We suggest that ELT addresses this critical gap and hence has the potential to advance understanding of global leadership development. Specifically, we contend that merely providing global leaders with the concrete experiences of international management or cross-cultural interactions does not ensure learning. Applying CQ to ELT allows us to propose that whether and how much global leaders learn and benefit from crosscultural and international experience depends on whether they follow through with all four stages of experiential learning: concrete experiences, reflective observation, abstract conceptualization, and active experimentation. We argue that both organizations and individuals play important roles in ensuring that all four components of the ELT model are activated. In the next section, we discuss how individual CQ capabilities can affect the learning cycles depicted in ELT. Then later in the section on practical implications, we consider what organizations can do to facilitate effective experience-based learning.

Cultural Intelligence A major objective and highlight of this chapter is our focus on CQ as a set of learning capabilities that allows global leaders to maximize their learning from international experiences. This focus is consistent with the major thrust of ELT research that examines individual differences in preferences and abilities to engage in the four modes of learning. Examples include the Learning Style Inventory (Kolb, 1999a, 1999b), the Adaptive Style Inventory (Boyatzis & Kolb, 1993), and the Learning Skills Profile (Boyatzis & Kolb, 1991). In essence, ELT suggests that individuals who are able to

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adapt their learning styles to balance the creative tensions and integrate the dual dialectics of grasping experience (immediate and concrete experiences with abstract conceptual interpretation) and transforming experience (reflective observation with active experimentation) will be more effective learners (e.g., Mainemelis, Boyatzis, & Kolb, 2002). Building on this stream of research, we position CQ as a set of learning capabilities that influences the extent to which individuals engage in the four learning modes of experiencing (grasping), reflecting (transforming), observing (grasping), and acting (transforming) when exposed to crosscultural learning opportunities. Focusing specifically on CQ, rather than on generic learning styles, fits the international context of our research questions on global leader learning and effectiveness. In the next section, we review Earley and Ang’s (2003) conceptualization of CQ and then build on this to discuss CQ and effective experiential learning for global leadership development. CQ refers to an individual’s capabilities to function and manage effectively in culturally diverse settings (Earley & Ang, 2003). CQ is a timely concept given the prevalence and importance of effective cross-cultural interactions and management. The theory of CQ is drawn from Sternberg and Detterman’s (1986) framework of multiple intelligences, which integrates multiple perspectives of intelligence to propose four complementary ways of conceptualizing individual-level intelligence: (a) metacognitive intelligence refers to awareness and control of cognitions used to acquire and understand information; (b) cognitive intelligence refers to knowledge and knowledge structures; (c) motivational intelligence acknowledges that most cognition is motivated and thus focuses on the magnitude and direction of energy as a locus of intelligence; and (d) behavioral intelligence focuses on individual capabilities at the action level (behavior). This framework is noteworthy because it recognizes multiple forms of intelligence, unlike traditional research that has focused narrowly on linguistic, logical-mathematical, and spatial intelligence, and ignored forms of intelligence related to self-regulation and interpersonal relations (Gardner, 1993). Drawing on these contemporary perspectives on intelligence, Earley and Ang (2003) conceptualized CQ as a multidimensional construct with mental (metacognitive and cognitive), motivational, and behavioral components (see also Ang & Van Dyne, 2008b). Metacognitive CQ is the capability for consciousness and awareness during intercultural interactions. It reflects mental capabilities to acquire and understand culturally diverse situations and includes knowledge of and control over individual thought processes (Flavell, 1979) relating to culture. Relevant capabilities include planning,


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monitoring, and revising mental models. Those with high metacognitive CQ are consciously aware and mindful of cultural preferences and norms before and during interactions. They question cultural assumptions and adjust mental models during and after experiences (Nelson, 1996). While metacognitive CQ focuses on higher order cognitive processes, cognitive CQ focuses on knowledge of norms, practices, and conventions in different cultural settings acquired from education and personal experiences. This includes knowledge of economic, legal, and social systems of different cultures (Triandis, 1994). Individuals with high cognitive CQ are able to anticipate and understand similarities and differences across cultural situations. As a result, they are more likely to have accurate expectations and less likely to make inaccurate interpretations of cultural interactions (e.g., Triandis, 1995). In addition to mental capabilities that foster understanding of other cultures, CQ also includes the motivational capability to cope with ambiguous and unfamiliar settings. Motivational CQ is the capability to direct attention and energy toward learning about and functioning in situations characterized by cultural differences and is based on the expectancy-value theory of motivation (Eccles & Wigfield, 2002) that includes intrinsic motivation (Deci & Ryan, 1985) and self-efficacy (Bandura, 2002). Those with high motivational CQ experience intrinsic satisfaction and are confident about their ability to function in culturally diverse settings. The fourth aspect of CQ recognizes that cultural understanding (mental) and interest (motivational) must be complemented with behavioral flexibility to exhibit appropriate verbal and non-verbal actions, based on cultural values of a specific setting (Hall, 1959). Thus, behavioral CQ is the capability to exhibit situationally appropriate actions from a broad repertoire of verbal and non-verbal behaviors such as being able to exhibit culturally appropriate words, tones, gestures, and facial expressions (Gudykunst, Ting-Toomey, & Chua, 1988). A major contribution of this approach is that CQ provides a theoretical framework that can be used to integrate the previously fragmented research on intercultural competencies (Gelfand, Imai, & Fehr, 2008). To date, CQ research has extended the conceptualization and theoretical grounding of CQ (e.g., Ng & Earley, 2006; Triandis, 2006) and has begun to examine relationships with cultural adaptation and performance (Ang et al., 2007), expatriate effectiveness (Templer et al., 2006; Janssens & Cappellen, 2008; Kim, Kirkman, & Chen, 2008; Shaffer & Miller, 2008), personality (Ang, Van Dyne, & Koh, 2006; Oolders, Chernyshenko, & Stark, 2008), intercultural training (Earley & Peterson, 2004; Harris & Lievens, 2005),

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and multicultural teams (e.g., Earley & Mosakowski, 2004; Janssens & Brett, 2006; Rockstuhl & Ng, 2008).

CQ and Experiential Learning Capabilities Unlike existing research on CQ that has theorized and demonstrated the importance of CQ for performance in the cross-cultural contexts, this chapter focuses on CQ as a set of learning capabilities that are important for global leaders. Specifically, we consider how the four CQ dimensions affect an individual’s likelihood to engage in the four stages of experiential learning – concrete experience, reflective observation, abstract conceptualization, and active experimentation. Fig. 1 summarizes the CQ dimensions that have direct relevance for the four experiential learning stages. Concrete Experience Experiential learning begins with a concrete experience. Individuals, however, differ in level of involvement and the degree to which they enjoy learning from concrete experiences (Black, 2006). According to Kolb (1984), individuals with an orientation toward concrete experience are open to new experiences, emphasize feeling rather than thinking, and function well in unstructured situations. In the context of international assignments, individuals differ in their degree of cultural involvement and hence the amount and quality of crosscultural experiences they have. Stahl and Caligiuri (2005), for instance, suggested that expatriates who adopt an emotion-focused coping strategy tend to avoid contact with host country locals to deflect culture shock. These individuals are therefore less likely to benefit developmentally from their international assignments because they have fewer concrete experiences to serve as the basis for learning. We suggest that two CQ dimensions – motivational CQ and behavioral CQ – will affect the amount and quality of concrete experiences leaders seek during international assignments. Social cognitive theory (Bandura, 2002) suggests that individuals who are more confident of their ability to complete a particular task are more likely to initiate effort, persist in their efforts, and perform better. Given that intercultural interactions are typically stressful because of unfamiliar cultural norms and cues (Mendenhall & Oddou, 1985; Oberg, 1960; Shaffer, Harrison, Gregersen, Black, & Ferzandi, 2006), we suggest those with high motivational CQ – those who are interested in and feel efficacious in crosscultural settings – will actively seek cross-cultural experiences during their


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international assignments. This is consistent with Yamazaki and Kayes’ (2004) point that valuing people of different cultures is an important learning skill for engaging in concrete experiences. Conversely, those with little interest or confidence will minimize their degree of cultural involvement, thus restricting the amount and quality of concrete cross-cultural experiences they could learn from. Accordingly, we posit a positive relationship between motivational CQ and seeking concrete cross-cultural experiences, such that individuals with greater motivational CQ are more likely to seek concrete cross-cultural experiences and learn from their international assignments. Gaining concrete experiences requires people to engage with the environment and typically involves interpersonal interactions. As such, those with good interpersonal competencies (Kolb, 1984) are better able to learn from their concrete experiences. Accordingly, we theorize that those with high behavioral CQ – the capability to exhibit appropriate verbal and nonverbal actions in culturally diverse situations – will seek and engage in more crosscultural experiences. Since cultures differ in their norms for appropriate behaviors (Hall, 1959; Triandis, 1994), the ability to display a flexible range of behaviors is critical to creating positive impressions and developing meaningful intercultural relationships (Bhaskar-Shrinivas, Harrison, Shaffer, & Luk, 2005; Gudykunst & Kim, 1984). Building relationships with locals, in turn, creates more opportunities for cross-cultural contact, which facilitates learning (Yamazaki & Kayes, 2004). Accordingly, we suggest a positive relationship between behavioral CQ and seeking concrete cross-cultural experiences such that individuals with greater behavioral CQ are more likely to seek concrete cross-cultural experiences and learn from their international assignments. We do not posit relationships for cognitive CQ and metacognitive CQ with concrete experience. This is because the two mental CQ capabilities emphasize knowledge and analytical processes involved in reasoning about cultural issues. Neither of these mental CQ capabilities contributes directly to seeking concrete experiences. They are, however, critically important for the next two stages of the experiential learning cycle, as described in the following sections. Reflective Observation Reflective observation is the internal processing that occurs when people think about experiences and reflect critically on their assumptions and beliefs. This allows them to understand their role in shaping the experience (Schon, 1987). Reflective observation helps people to describe the situation objectively and develop an understanding of why things happen (Kolb &

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Kolb, 2005). It also allows them to consider different perspectives or views of the situation. We argue that both cognitive CQ and metacognitive CQ are important for reflective observation. Individuals high in cognitive CQ possess elaborate cultural schemas, defined as mental representations of patterns of social interaction characteristic of particular cultural groups (Triandis, Marin, Lisansky, & Betancourt, 1984). Having elaborate cultural schemas with many interconnections enhances conceptually driven information processing (Hanges, Dorfman, Shteynbert, & Bates, 2006; Taylor & Crocker, 1981) and enables more accurate identification and understanding of cultural issues. Bird, Heinbuch, Dunbar, and McNulty (1993), for instance, demonstrated that area studies training aimed at increasing cultural knowledge enhanced accuracy of interpreting social behaviors across cultures because trained participants were less likely to apply their own cultural assumptions to other cultures. Similarly, Ang and colleagues (2007) demonstrated that cognitive CQ enhanced accuracy of judgment and decisionmaking about cross-cultural interactions. Those with high cognitive CQ have greater understanding of differences and similarities across cultural systems. Thus, they are more aware of what cues they should look for. They are also less likely to make negative evaluations of cultural norms and behaviors and are more objective and accurate in their observations of cross-cultural experiences (Osland & Bird, 2000). We thus posit a positive relationship between cognitive CQ and reflective observation of cross-cultural experiences such that individuals with greater cognitive CQ are more likely to reflect on their cross-cultural experiences and learn from their international assignments. We also suggest that reflective observation requires a high level of metacognitive CQ – thinking about thought processes related to cross-cultural experiences. Those with high metacognitive CQ monitor and think about their own assumptions, beliefs, and emotions as well as the way they process external environment and behavioral cues provided by others. They are more active in their cognitive processing of observations as they create new categories in their memory storage and actively consider multiple perspectives in making sense of their experiences (Flavell, 1979). Thus, we theorize a positive relationship between metacognitive capabilities and the learning mode of reflective observation such that individuals with greater metacognitive CQ are more likely to reflect on their cross-cultural experiences and learn from their international assignments. Given that reflective observation emphasizes perceptual and cognitive capabilities, we do not expect motivational CQ or behavioral CQ, which deal


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with the ‘‘heart’’ and the ‘‘body’’ of the learner, respectively (Earley, Ang, & Tan, 2006), to be of direct relevance to this stage of experiential learning. Abstract Conceptualization The third stage of experiential learning requires learners to distill their reflections into more general concepts that can guide their future actions. Abstract conceptualization allows people to build general theories using scientific as opposed to intuitive approaches. Therefore, they emphasize thinking rather than feeling (Kolb, 1984). As with reflective observation, we suggest that cognitive CQ and metacognitive CQ are key to abstract conceptualization. Research in cognitive psychology demonstrates that experts – defined as individuals with extensive knowledge gained from experience – have better-organized knowledge structures with stronger linkages among domain-related concepts. This allows them to conceptualize problems more efficiently and effectively in terms of the relevant principles. In contrast, novice representations tend to be based on salient surface elements (Chase & Simon, 1973; Chi, Glaser, & Rees, 1982). Research also shows that existing knowledge affects knowledge acquisition because the lack of pre-organized schemas to aid in classification of knowledge (Kalyuga, Ayres, Chandler, & Sweller, 2003) causes novices to experience overload in processing new information. Accordingly, we posit that individuals with higher cognitive CQ will be more accurate and effective in developing general ideas and conceptual interpretations of culture. This is because they have more organized and elaborated knowledge structures that enhance their information processing and abstract conceptualization. Without a fundamental understanding of cultural concepts (low cognitive CQ), insights and reflections about particular experiences are less effectively integrated into coherent knowledge structures about culture, thus impeding the formation of higher order concepts and theories. Thus, we theorize that individuals with greater cognitive CQ are more likely to develop conceptual interpretations of crosscultural experiences and learn from their international assignments. In addition, metacognitive CQ is also directly relevant to abstract conceptualization. This is because many cross-cultural situations do not fit typical norms or tendencies, even when expectations are based on scientific and rigorous research (Osland & Bird, 2000). Instead, cultural paradoxes – situations or interactions that involve contradictory norms or behaviors – are common in all cultures. Moreover, Osland and Osland (2006) reported that expatriates who are more involved in the host culture are more likely to encounter paradoxes.

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Thus, we argue that having the metacognitive CQ capability of thinking about thinking is also important for abstract conceptualization. Considering personal assumptions and being open to disconfirming experiences is a form of higher order reasoning that allows individuals to analyze new crosscultural experiences without being biased or constrained by past experiences or expectations (Earley & Ang, 2003). Those with high metacognitive CQ have analogical reasoning capabilities that enable them to translate their insights from a particular experience into more general concepts and interpretations that can be applied to other cultural contexts. Thus, we suggest that individuals with greater metacognitive CQ are more likely to develop conceptual interpretations based on cross-cultural experience and learn from their international assignments. We do not posit relationships for motivational CQ and behavioral CQ here because abstract conceptualization primarily involves mental capabilities. The capabilities of channeling energy (motivational CQ) or displaying appropriate behaviors (behavioral CQ) are less relevant to the mental processes of developing conceptual interpretations. Active Experimentation The last stage of the ELT model is actively testing and experimenting to see if enhanced understanding fits reality. Active experimentation involves a pragmatic focus on influencing the environment and getting things done (Kolb, 1984). Since active experimentation involves the entire person, we expect all four CQ capabilities to be important. First, cognitive CQ and metacognitive CQ are important because they enable learners to organize and map out action plans. Action, without clear goals and plans, is less likely to produce desired outcomes. Thus, those with enhanced understanding of culture (cognitive CQ) and those who have clear plans and strategies for action (metacognitive CQ) are more likely to follow-through and test their ideas and understandings. Accordingly, we theorize positive relationships for cognitive CQ and metacognitive CQ with active experimentation in cross-cultural situations. Second, motivational CQ is also important for active experimentation. Individuals with the desire and self-efficacy to deal with cross-cultural interactions tend to seek and persist in challenging cross-cultural situations (Bandura, 2002). Moreover, given that self-efficacy is a ‘‘generative capability in which cognitive, social, emotional and behavioral subskills must be organized and effectively orchestrated to serve innumerable purposes’’ (Bandura, 1997, p. 37), having high motivational CQ enables learners to carry out sequences of action steps to achieve specific goals (Earley et al., 2006).


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Accordingly, we suggest that individuals with greater motivational CQ are more likely to implement and test their ideas in cross-cultural situations and learn from their international assignments. Finally, since active experimentation typically involves interaction, behavioral CQ is also critical for effectiveness in cross-cultural interactions. One reason is language. Those who are not flexible in their language skills have fewer opportunities for meaningful contact with locals. This limits the quantity as well as quality of their cross-cultural experience and makes it difficult to engage in active experimentation. In addition, having the capability to adapt verbal and non-verbal behaviors to specific cultural contexts provides people with greater latitude for experimentation. In other words, those with high behavioral CQ are less constrained and better situated to implement and test their ideas. Therefore, we posit a positive relationship between behavioral CQ and active experimentation in crosscultural situations such that individuals with greater behavioral CQ are more likely to implement and test their ideas in the cross-cultural situations and learn from their international assignments. Overall, our theory suggests that global leaders need to engage repeatedly in all four stages of experiential learning (concrete experiences, reflective observation, abstract conceptualization, and active experimentation) to maximize their learning from international assignments. In addition, our theory suggests that specific types of CQ capabilities are linked to specific stages of experiential learning. Motivational CQ and behavioral CQ facilitate concrete experience. Cognitive CQ and metacognitive CQ facilitate reflective observation and abstract conceptualization. All four CQ capabilities enhance active experimentation in culturally diverse settings. Our theory also suggests that leaders who are low in specific CQ capabilities will have the tendency to short-circuit the experiential learning cycle. Instead of using all four stages of experiential learning (seeking concrete experiences, developing reflective observations, formulating abstract conceptualizations, and actively testing and experimenting), these individuals may overemphasize some stages at the expense of other stages. This, in turn, will limit their learning and most likely will detract from their effectiveness as global leaders. For instance, leaders with high motivational CQ and high behavioral CQ may involve themselves in many concrete experiences in international settings. However, without the cognitive CQ and metacognitive CQ capabilities, they will not learn fully from their experiences. This is because they lack the observational skills and conceptual understanding to transform their experiences into knowledge they can use to guide them in the future. Conversely, leaders with high cognitive CQ and

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high metacognitive CQ may develop sophisticated understanding of different cultures. Without the motivation or behavioral flexibility to venture out into new cultural settings, they will not encounter powerful and lifetransforming experiences that would stimulate greater learning and development. Instead, cross-cultural learning for these individuals remains an intellectual exercise that lacks the surprises and shocks that often jolt people into discovery and growth (Hall et al., 2001). In sum, we have argued that individual CQ capabilities are important competencies that enhance learning acquired through international experiences. Global leaders who have all four CQ capabilities can balance and integrate the dual dialectics of conceptualizing/experiencing and acting/ reflecting as part of their learning processes. This allows them to balance the creative tensions between grasping experience (immediate and concrete experiences with abstract conceptual interpretation) and transforming experience (reflective observation with active experimentation). It also allows them to be more effective learners. Returning to our primary research question about how global leaders translate experiences into learning, we offer one final, integrative set of relationships. Based on ELT, we suggest that global leaders with high CQ will engage in all four stages of the experiential learning cycle and that these learning behaviors (seeking concrete experiences, reflecting on observations, interpreting conceptually, and actively experimenting) will enhance their learning. This in turn will lead to enhanced global leader effectiveness. Fig. 2 summarizes these relationships.

DISCUSSION Our model, which integrates CQ and experiential learning, offers two sets of key insights for organizational policies and interventions that can help maximize the developmental benefits of international assignments for global leaders. We first discuss the organizational implications stemming from

Cultural Intelligence

Fig. 2.

Learning Behaviors

Learning

Global Leader Effectiveness

Cultural Intelligence, Learning, and Global Leader Effectiveness.

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consideration of ELT, followed by implications arising from consideration of CQ.

Implications Based on ELT Experiential learning suggests that leaders must be engaged by cross-cultural experiences to learn from their international assignments. This is an important point because simply being assigned to an international assignment does not assure that global leaders will actively experience each of the four stages of ELT. Expatriate assignments entail demanding work responsibilities and often include generous pay packages with expensive cars and exclusive homes that can isolate global leaders from the host country culture. Even in short-term overseas trips, Oddou and colleagues (2000) observed that organizational policies that focus on efficient and effective travel can shelter global leaders in a ‘‘bubble’’ that separates them from direct and meaningful contact with the local culture. To avoid this sort of isolation, Kolb and Kolb (2005) emphasized the importance of providing ‘‘space’’ – physical, mental, and psychological – so that global leaders feel they can (and should) participate actively in all four stages of experiential learning. To maximize experiential learning for leadership development, organizations can encourage their leaders to get involved in the host culture in several ways. First, emphasizing concrete experiences should enhance experiential learning. For example, organizations can clearly explain that leadership development is an important component of the assignment. This framing should help global leaders view the experience as more than just another business trip (Oddou et al., 2000) or just another work assignment. Another strategy is to structure international assignments so that they facilitate interdependence with locals. This will provide leaders with more concrete and meaningful interactions with locals, which should increase their sense of being engaged by the local culture (Osland & Osland, 2006). Organizations could also consider rewarding leaders for learning foreign languages and increasing their knowledge of the local culture during their assignments. Each of these should facilitate and encourage cultural involvement (Oddou et al., 2000). The second stage of experiential learning is reflective observation. Global leaders have heavy responsibilities and workload that allow them very little time for reflection. Recognizing this reality, Mintzberg and Gosling (2002) recommended that international management programs should factor in

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modules for personal reflection. Results demonstrated this was extremely useful and revealing for participants. As one manager commented ‘‘It was great meeting myself !’’ (p. 68). Another way to stimulate reflection is encouraging global leaders to be disciplined and keep a journal to document their cross-cultural experiences and learning points (Oddou et al., 2000). By writing down their experiences and thoughts, global leaders are more likely to compare their experiences with their expectations. They also will be more likely to compare their experiences across time and across situations. Thus, organizations can enhance experiential learning by encouraging global leaders to set aside time to reflect on their cultural experiences. The third state of the experiential learning process, abstract conceptualization, also has specific implications for organizations and things organizations can do to enhance learning that occurs as a function of international assignments. For example, organizations can encourage global leaders to work toward forming more general understanding about cultures. As such, training that focuses on inductive logic and reasoning skills can help global leaders make sense of as well as translate their concrete experiences and reflections into more abstract understanding of the culture (Earley & Peterson, 2004). For example, organizations can describe the benefits of developing more abstract and general appreciation of different cultures based on specific personal experiences rather than based on stereotypical tendencies. Organizations can also explain how these sorts of abstract conceptualizations can be applied across settings and used in future jobs. For example, consolidating experiences to form more general guiding principles for effective cross-cultural interaction and leadership should help leaders learn from their experiences. Unfortunately, in preparing global leaders for international assignments, most training programs focus on providing country-specific knowledge (Earley & Peterson, 2004). Although such training is important for anticipating cross-cultural differences, it does not adequately equip global leaders with the capability to engage in abstract conceptualization that can help them understand novel and paradoxical situations. The final stage in the ELT process is active experimentation. This involves attempts to apply newly acquired insights and ideas. Organizations can facilitate this process by providing incentives and resources that encourage global leaders to set specific and measurable developmental goals for exploration and experimentation (Pucik, 2006). They also can make sure that reward systems do not contradict or dampen the importance of development. For example, if goals emphasize short-term business results, global leaders will be less likely to maximize experiential learning opportunities. Another

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organizational option would be to provide coaching and mentoring resources to leaders in their experimentation processes and provide them with feedback. All of these should promote active learning (e.g., McCall & Hollenbeck, 2002; Oddou et al., 2000).

Implications Based on CQ The CQ framework also has important implications for ways in which organizations can enhance learning that results from international assignments. We focus on two areas that are especially salient: selection and training. Selection is the basic mechanism organizations use to get the right people into the right positions (McCall & Hollenbeck, 2002). When organizations view experiential learning and development as important components of international assignments, CQ can serve as an important selection tool. As we have explicated in our model, there are solid theoretical reasons for expecting that those with higher CQ (metacognitive CQ, cognitive CQ, motivational CQ, and behavioral CQ) will be better able to utilize all four stages of the experiential learning process. As a result and as depicted in Fig. 2, they should engage in more learning behaviors that will enhance their learning. In turn, this should lead to higher long-term overall effectiveness. Thus, CQ can be used to select people for overseas assignments when organizations emphasize developmental goals as part of the assignment. The second organizational implication is based on the fact that CQ is a malleable capability that can be enhanced over time through experience and training (Earley & Peterson, 2004). As such, organizations can develop training programs to enhance global leader CQ capabilities. These programs can prepare leaders to deal with unfamiliar cross-cultural interactions and enhance their ability to learn from their cross-cultural experiences. This would entail moving beyond traditional cross-cultural training methods that focus on imparting cultural knowledge (cognitive CQ) and instead emphasize metacognitive CQ, motivational CQ, and behavioral CQ. Earley and Peterson (2004) described training interventions that target these CQ capabilities such as cognitive structure analysis for examining knowledge structures and enhancing awareness and reflection (metacognitive CQ). They also include interventions that help global leaders internalize the goal of getting engaged in the local culture (motivational CQ). Finally, training interventions can also use dramaturgical exercises such as role-plays and simulations involving physical, emotional, and sensory processes to help global leaders enhance flexibility of their actions (behavioral CQ).

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Research Directions In this last section of the chapter, we consider research implications of our integration of CQ and experiential learning. We note that Spreitzer and colleagues (1997, p. 26) concluded that ‘‘perhaps the most important direction for future research is the creation of a theoretical framework for understanding the processes by which end-state competencies and the ability to learn from experience contribute to the development of executive potential’’ (italics added). We suggest that our model that integrates CQ and ELT to delineate specific links between CQ capabilities and the four stages of experiential learning represents an important step toward reaching this goal. This is because ELT and CQ frameworks can enrich our understanding of how global leaders can best learn from their international experiences. Thus, future research should be able to use our model as a guide for empirical examination. Specifically, research can examine the relationships between CQ factors and ELT stages. This should provide valuable insights for the growing literature on learning capabilities. Studies could assess CQ capabilities and test whether specific CQ capabilities facilitate specific learning stages. Given potential problems with self-report bias, these studies should assess CQ and learning stages using multiple methods and sources. Alternatively, research could track individual learning experiences through reflection logs or journals and assess whether learning differs across individuals with varying CQ capabilities. Another stream of research can examine CQ capabilities, different types of experiential learning, training, and leadership development. Here, we recommend quasi-experimental designs that contrast responses to specific training interventions as a function of CQ capabilities. It also would be useful to consider different experiential learning techniques as applied to each of the four stages in the experiential learning cycle. This would allow examination of differences in timing and training techniques. It would be especially interesting to see which of these leads to the greatest improvement in global leadership capabilities as a result of overseas assignments. To do this, researchers could identify two similar groups of global leaders who have been selected for overseas assignments. In one group, this would involve assessment of CQ (Van Dyne, Ang, & Koh, 2008) and experiential learning training before departure. Training would include information on the four stages of learning as well as hands-on skill development targeted at experiencing, reflecting, thinking, and acting. The other group, which would represent the control condition, would involve assessment of CQ followed

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by traditional cross-cultural training that emphasizes factual knowledge of cultures. After, for example, three or six months depending on the length of the international assignments, it would be important to measure CQ capabilities as well as global leaders learning experiences. This would allow comparison of training techniques and would also allow examination of CQ – training intervention interactions.

SUMMARY The primary point of this chapter is that CQ is a set of individual capabilities that allows global leaders to learn from their experiences. Thus, CQ facilitates the transformation of experience into experiential learning. Drawing on ELT, we have argued that mere exposure to cultural diversity and international assignments does not necessarily enhance learning. Instead, global leaders must balance the creative tension of all four stages in the experiential learning process: concrete experiences, reflective observation, abstract conceptualization, and active experimentation. Thus, as Oddou and colleagues (2000, p. 161) commented ‘‘it is not the quantity of travel that is important but rather the quality of the travel experience that aids global leadership development.’’ Consistent with Hall and colleagues (2001), we recommend that organizations should shift their focus from providing experience to ensuring that effective experiential learning occurs for global leaders. Part of this shift requires the recognition that individuals have different propensities and capabilities to learn from their experiences. Those who are culturally intelligent – individuals who possess the cognitive, metacognitive, motivational, as well as behavioral capabilities for dealing with cross-cultural interactions – will gain more from international assignments and exposure to culturally diverse settings.

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AN EXAMINATION OF THE ROLE OF EXPERIENTIAL LEARNING IN THE DEVELOPMENT OF CULTURAL INTELLIGENCE IN GLOBAL LEADERS Ming Li ABSTRACT In recent years, the concept of cultural intelligence has attracted increased interest among scholars and practitioners in global leadership research. This chapter aims to contribute to the understanding of the impact of Experiential Learning Theory on the development of cultural intelligence in global leaders. It proposes a model that addresses the relationship between four modes of experiential learning and four facets of cultural intelligence; and hypothesizes that learning styles exercise a moderating effect on the relationship between international experience and cultural intelligence. Managerial implications for global talent selection and leadership development are also proposed based on the model.

We know how to invest in technology and machinery, but we’re at a loss when it comes to investing in human capital. Peter Senge, 1994 Advances in Global Leadership, Volume 5, 251–271 Copyright r 2009 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1535-1203/doi:10.1108/S1535-1203(2009)0000005014

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In the past 15 years since Peter Senge made this comment, we have learned much more about investment in executive development, especially about global executive development as the international business environment becomes increasingly intertwined (McCall & Hollenbeck, 2002). Companies such as Procter & Gamble typically send employees on international assignments to learn how business is conducted in other countries so that the lessons learned can be applied at home or elsewhere (Schoeff, 2006). The challenges involved with cultural differences have inevitably been encountered by global executives working in other countries or with people from different cultures. Executives who are not prepared to confront these challenges may perform poorly at work and prematurely terminate their job assignment having failed to adjust to their host cultures (Black, Gregersen, Mendenhall, & Stroh, 1999; Black & Gregersen, 1990; Black & Porter, 1991; Black & Stephens, 1989; Caligiuri, 2000). The failure rate of US expatriates is estimated to be between 40% and 55% (Black et al., 1999). The cost of failure usually ranges from $250,000 to $1 million (Hill, 2001). It could cost the company much more in the long run if costs associated with lost opportunities, reduced productivity, and damaged relationships are taken into account (Storti, 2001). Therefore, in the past three decades, there have been numerous studies about what makes global leaders effective. The subject has been explored under many different labels, such as intercultural competency (Fantini, 2000; Gertsen, 1990), cross-cultural competence (Hampden-Turner & Trompenaars, 2000; Johnson, Lenartowicz, & Apud, 2006), cross-cultural adjustment (Gong, 2003; Black & Gregersen, 1991), cross-cultural awareness (Cohen, 2001), intercultural effectiveness (Cui & Awa, 1992; Mamman, 1995; Hammer, Gudykunst, & Wiseman, 1978), intercultural communication competence (Beamer, 1992; Kim, 1991; Wiseman, Hammer, & Nishida, 1989), and intercultural sensemaking (Osland, 2007; Osland, Allan, June, & Mathew, 2000). Researches have produced a list of attributes at three levels: cognitive (e.g., cultural schemata, cultural knowledge, and cultural awareness), affective (e.g., willingness to learn, spirit of adventure, broad interest, and persistence) and behavioral (e.g., flexibility of behavior, communication skills, and social skills). In the continuing search for the qualities possessed by successful global leaders, the concept of cultural intelligence (CQ) was introduced in 2002 (Earley, 2002; Earley & Ang, 2003) to reflect the ability to deal effectively with people from different cultural backgrounds.

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Experimental Learning Theory and CQ

CULTURAL INTELLIGENCE According to Earley and Ang (2003), CQ has both process and content features. They defined the general structure of CQ as consisting of three facets, namely cognitive, motivational, and behavioral elements as illustrated in Fig. 1. Among the three facets earlier, the first, Cognitive CQ, is described as a person’s ability to develop patterns from cultural cues, drawing on both cognitive and metacognitive abilities. Metacognitive ability refers to the processes individuals use to acquire and understand cultural knowledge and make sense of intercultural experiences. It happens when people form strategies before an intercultural encounter, check assumptions during an encounter, and adjust mental maps when actual experiences are different from expectations. Cognitive ability in this context refers to a person’s ability to understand both similarities and differences among cultures. To do so requires general knowledge structures and mental maps about cultures that include information about economic and legal systems, norms for social interaction, religious beliefs, aesthetic values, and language (Ang, van Dyne, & Koh, 2006). Motivational CQ is a person’s interest in experiencing other cultures and interacting with people from different cultures. It includes not only the intrinsic value people place on interactions with people from different


Fig. 1.

Cognitive

Motivational

Behavioral

How and why do people do what they do here?

Am I motivated to do something here?

Can I do the right thing?

Elements of Cultural Intelligence. Source: Earley, Ang, and Tan (2006).

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cultures, but also their belief that they can function effectively in those situations. Motivational CQ directs, focuses and applies energy toward learning about and functioning in cross-cultural situations. Individuals with higher motivational CQ tend to interact more with people from different cultures. And when they confront obstacles, setbacks, or failures, their level of interest and confidence also determines how persistently they will seek to learn from relevant experience (Ang et al., 2006). Behavioral CQ is a person’s ability to appropriately enact selected behaviors in accordance with cognition and motivation, and to exhibit appropriate verbal and nonverbal actions when interacting with people from different cultures. As the old adage says ‘‘Actions speak louder than words.’’ Action is not merely about knowing what is appropriate to do; sometimes people are unable to act in an appropriate manner during an unfamiliar situation because of some deeply held reservations (Earley & Ang, 2003). Behavioral CQ requires individuals to overcome these reservations, and try to adopt appropriate behaviors to interact with people from different cultures. This adaptability of behaviors significantly helps executives improve communication effectiveness, build relationships with others, and lead in a global context. A person high in CQ has high capability in all three of these areas; a deficiency in any one area will lead to a lower overall CQ level. According to past research, CQ predicts cultural adaptation and performance (Ang et al., 2007). Recent studies have also examined its relationship with expatriate effectiveness, intercultural training and multicultural teams (Earley & Peterson, 2004; Janssens & Brett, 2006; Templer, Cheryl, & Chandrasekar, 2006). Thomas (2006) commented that ‘‘maybe it is an idea whose time has come y The potential for defining a cross-cultural facet of intelligence has enormous implications for explaining and predicting the increasingly prevalent cross-cultural interactions that occur in global business settings.’’ CQ is becoming a key intelligence global leaders need to have besides IQ (intelligence), EQ (emotional intelligence), and SQ (social intelligence). Given the importance of CQ in predicting the intercultural effectiveness of global leadership, it is valuable to know more about what contributes to it. Understanding what makes global leaders culturally intelligent will guide multinational organizations to select global talents and leverage organizational resources to develop it. Very little research has been undertaken on this topic. Ang et al. (2006) have examined the relationship between the ‘‘Big Five’’ personality factors and CQ. They found that openness to experience is a crucial personality characteristic that is positively related to all CQ facets; conscientiousness positively relates to metacognitive CQ;


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agreeableness and emotional stability positively relate to behavioral CQ; extraversion positively relates to cognitive CQ, motivational CQ, and behavioral CQ. Yet there are many other factors researchers need to understand for the development of CQ. Earley and Ang (2003) define CQ as a dynamic end state result rather than a born trait, stating that it is an individual’s malleable capability to deal effectively with people from other cultures. Some of a person’s CQ may be ‘‘hardwired’’ at birth, but there remains considerable potential for a person to shape and refine his or her CQ from experience (Earley, Ang, & Tan, 2006).

INTERNATIONAL EXPERIENCE If you want to know about water, do not ask a goldfish. Those who have never experienced another culture nor struggled to communicate through another language, like the goldfish, are generally unaware of the milieu in which they have always existed. Alvino E. Fantini, 2000

International experience has been recognized as the primary vehicle for developing global leadership skills (Jokinen, 2005; McCall & Hollenbeck, 2002). It provides cultural exposure (Crowne, 2008) to develop CQ. As one of the most intense international experiences, the expatriate experience has been the focus of much prior research (Aycan, 1997; Black & Gregersen, 1991, 1999; Caligiuri, 2000; Furnham, 1990; Morley, Burke, O’Regan, & Inwood, 1997; Waxin, 2004; Yamazaki & Kayes, 2004). ‘‘From these experiences, expatriates tend to learn a variety of skills that facilitate success in a new host culture, transform their home culture, and facilitate the transfer of knowledge across cultures’’ (Spreitzer, McCall, & Mahoney, 1997; McCall, Lombardo, & Morrison, 1988). Entering a new culture is often a confusing and disorientating experience, and expatriates are likely to experience culture shock after five months in a new culture (Adler, 2002). Though others might look at culture shock as a barrier, Adler (1975) treats it as a developmental opportunity; an experience that allows individuals first to understand the perspective and position of their own value set, and then to investigate, reintegrate, and reaffirm its relationship to others. Individuals with extensive experience in other cultures are likely to develop comprehensive cognitive frameworks known as schemata, which are defined as sets of cognitions about people, roles, or events that govern social behavior (Fiske & Taylor, 1984), and hence develop higher cognitive CQ. ‘‘Schema theory would predict that people with more cultural experiences would have a larger repertoire of cultural schemas and that their schemas

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would be more complex than those of people with fewer cultural experiences’’ (Endicott, Bock, & Narvaez, 2003). Such people have more complex mental frameworks that help them to develop accurate expectations, form strategies before interacting with people from different cultures, and check assumptions during such interactions. Therefore, it is through experience that global executives develop metacognitive CQ to anticipate, observe, and evaluate different cultures. Research has demonstrated that open, adventurous, and confident individuals tend to take international opportunities (Ang et al., 2006). McCall and Hollenbeck (2002) also documented in their research that one of the changes global executives felt over the course of their global career was an increase in self-confidence. Hence it is important to recognize that individuals develop their confidence to be successful in different cultures from their international experience; in other words, motivational CQ. Knowledge and motivation will never be sufficient to be effective in interacting with people from different cultural backgrounds if the actual behavior that is required in certain situations is not displayed. The complexity of intercultural behavior is such that even if people know what they should do and have proper motivation, it does not always mean that they can behave in such a way. Imagine the case of a tall American businessman who, during a trip to Japan, dined at a traditional restaurant. On entering, he bumped his head on the doorjamb. The next day, the same thing happened. It was only the third time that he remembered to duck. Behavioral changes take time and behavioral CQ inevitably takes time and practice; and global executives are expected to develop their behavioral CQ from day-to-day happenings in their overseas work experience. ‘‘People on international assignments hit their heads on doorjambs many times over the years. Eventually, they learn to duck’’ (Black & Gregersen, 1999). Overall, I propose Hypothesis 1. Cultural Intelligence is developed from international experience. International managers with overseas work experience develop higher CQ than those without it.

EXPERIENTIAL LEARNING THEORY AND ITS RELATIONSHIP WITH CULTURAL INTELLIGENCE Ever since the business boom after the World War II, companies have viewed management as a profession that is learned through experience


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(Jiang & Murphy, 2007). Evidence that people benefit differently from experience has also been confirmed in research focused on the concept of action learners (Bunker & Webb, 1992; Lombardo & Eichinger, 1989; Allen & Young, 1997). Global executives have been shown to learn differently from similar international experiences (McCall & Hollenbeck, 2002). Yamazaki and Kayes (2004) documented an Experiential Model of Cross-Cultural Learning Skills. They proposed that cross-cultural learning competencies are positively related to corresponding dimensions of experiential learning theory (ELT). Thomas and Inkson (2005) also stated that, ‘‘To develop CQ, one must progress through a series of stages ranging from simply reacting to external stimuli to adjusting behavior in anticipation of subtle changes in cultural context, while there are numerous ways to accomplish this goal, including formal education and training, experiential learning is key to increase CQ.’’ Therefore, I draw on ELT to help examine the development of CQ in global leaders.

Experiential Learning Theory In the emerging ‘global village’, ‘multicultural workplace’ and in ‘multinational empires’ where events in places we have barely heard of quickly disrupt our daily work and lives, the dizzying rate of change, and the exponential growth of knowledge all generate nearly overwhelming needs to learn just to survive. David Kolb, 1984

Experiential learning is defined by Kolb (1984) as the process whereby knowledge is created through the transformation of experience. ‘‘Experience is often synonymous with emotions and their deeper meaning’’ (Kayes, 2002). International experiences very often involve emotional adjustment such as culture shock, cognitive adjustment to understand deep cultural meanings, and behavior adjustment to communicate effectively with people from different cultures. According to Kolb, learning is the major process of human adaptation. Experiential learning emphasizes the central role that experience plays in the learning process, and regards learning as a holistic process of adaptation to the world, which involves the integrated functioning of the total organism – thinking, feeling, perceiving, and behaving. CQ as defined by Earley and Ang (2003) also means that an executive is able to observe and comprehend, feels compelled to react, and interacts and executes actions in different cultural context. Both theories mirror each other and overlap greatly in how they frame the ways in which humans adapt to the external world.

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Kolb’s (1984) ELT remains one of the most pervasive theories about how managers learn from experience (Kayes, 2002; Yamazaki & Kayes, 2004). It has been examined by more than 1,800 studies conducted over the last 3 decades in a number of professional areas such as psychology, education, general management accounting, law, and computer science (Kolb & Kolb, 2004). Kolb defined learning as ‘‘the process whereby knowledge is created through the transformation of experience, knowledge results from the combination of grasping and transforming experience’’ (Kolb, 1984). Two fundamental processes, ‘‘grasping the experience’’ and ‘‘transforming the experience,’’ are both essential for learning. He further defined two dialectically related modes of grasping experience, namely concrete experience versus abstract conceptualization; concrete experience relies on the tangible and immediately felt qualities of the experience, whereas abstract conceptualization relies on conceptual interpretation and symbolic representation of the experience. The two dialectically related modes of transforming experience are reflective observation versus active experimentation; reflective observation transforms through internal processing, whereas active experimentation transforms through actual manipulation of the external world. Kolb presents the experiential learning cycle of these four experiential learning modes as in Fig. 2. It describes how immediate concrete experience serves as the basis for observation and reflection, in which the experience is subsequently assimilated into abstract conceptualization, and then formed into active experimentation with the world. Active experimentation both completes the cycle of learning

Fig. 2.

Experiential Learning Cycle. Source: http://www.learningfromexperience.com


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and ensures that it begins anew by assisting the creation of new experiences (Kolb, 1984; Kolb & Kolb, 2005b).

Experiential Learning Modes and Cultural Intelligence Ratiu (1983) conducted research with 250 young executives most of whom had at least 3 years of overseas experience. He discovered the differences in approach of learning between those ‘‘most international,’’ who were highly adaptable in different cultural environments, and other global executives. The former ones were found to adopt a subjective ‘‘microstrategy’’ for learning that was more intuitive, empirical, relational and immediate. They did not assume that things were what they seemed, and they needed to constantly check and recheck against new data of unfolding events. In contrast, the others took a more objective ‘‘macrostrategy’’ which was more analytical, conceptual, theoretical and even withdrawn. They asked why things occur the way they do and placed emphasis less on data collection but more on early explanation and rapid conclusion (Ratiu, 1983). These strategies seem like evidence of preferences for experiential learning modes in making sense of international experience lead to different learning results of adaptation, hence different learning result of CQ. Concrete experience (CE), based on Kolb (1984) focuses on being involved in experiences and dealing with immediate human situations in a personal way. It emphasizes the ability to employ feeling, intuitive understanding in the present reality, and sensitivity toward other people’s emotions and values. Individuals strong in CE abilities excel at relating to people with an open mind and value interpersonal relationships. Interpersonal skills (open, nonjudgmental, respectful, etc.) have been recognized as important capabilities for global leaders (Jordan & Cartwright, 1998; Lobel, 1990). High CE individuals are likely to be interested in new cultural experiences (motivational CQ) and willing to build relationships with people from different cultures, and therefore attain higher levels of involvement with different cultures (Black, 2006). Different cultural environments are ambiguous and perceived by individuals as less structured than their own cultural environment. Based on Kolb (1984), individuals strong in CE abilities perform well in unstructured and ambiguous situations. Phillion (2002) also found that individuals can learn much more about appropriate behavior by experiencing situations. Therefore, it is reasonable to deduce that high CE individuals tend to develop behavioral CQ and perform well in different cultural situations.

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Therefore, I propose Hypothesis 2.1. Concrete experience is positively related to the development of motivational CQ and behavioral CQ. Abstract conceptualization (AC), the dialectical opposite of CE, involves the use of logics, ideas, and concepts. AC abilities require thinking as opposed to feeling, a concern with building general theories as opposed to intuitively understanding specific areas, and adopting a scientific approach to problems. Individuals with strong AC abilities are good at making systematic plans and manipulating abstract symbols (Kolb, 1984). These skills are required for metacognitive CQ which involve the processes individuals use to acquire and understand cultural knowledge (Earley & Ang, 2003) and the control over one’s thinking and learning activities (Flavell, 1979; Swanson, 1990). However, AC does not appear to have a direct relationship with cognitive CQ since individuals focusing on thinking rather than feeling do not seem to have as high of an involvement with different cultures (motivational CQ) as individuals who are high on CE, and therefore do not tend to learn cultural knowledge from direct involvement with the culture. Hypothesis 2.2. Abstract conceptualization is positively related to the development of metacognitive CQ. Reflective observation (RO) focuses on understanding the meaning of ideas and situations by carefully observing and impartially describing them. It emphasizes using reflective understanding to uncover how and why things happen rather than what will work (Kolb, 1984). Individuals with reflective orientation tend to establish metacognitive CQ because they value patience, impartiality and considered, thoughtful judgment (Kolb, 1984); hence they can suspend judgment until multiple cues can be assessed (Triandis, 2006). They then can conduct critical reflection which is essential for learners to understand intercultural events, challenge personal constructs, and build on prior experience and knowledge (Taylor, 1994). These individuals are good at looking at things from different perspectives and at appreciating different points of view (Kolb, 1984) to gain new insight about different cultures. Hence individuals higher in RO will tend to develop higher cognitive CQ. Hypothesis 2.3. Reflective observation is positively related to the development of metacognitive CQ and cognitive CQ. Active experiment (AE), in contrast with RO, emphasizes actively influencing people and changing situations. AE focuses on practical applications of what


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works rather than what is absolute truth; it emphasizes doing as opposed to observing. Those with AE abilities are willing to take risks to get things done and to take responsibility for accomplishing objectives (Kolb, 1984). These action skills are required for behavioral CQ; global executives not only willing to test their ideas, but also adapt behaviors in different culture settings. Therefore, I propose Hypothesis 2.4. Active experiment is positively related to the development of behavioral CQ.

Learning Styles and Cultural Intelligence Ideally learners can ‘‘touch all the bases’’ – experiencing, reflecting, thinking, and acting – to learn from experience. However, in reality few if any individuals can do so. Through different social and learning experiences, they resolve the conflicts between being active (AE) and reflective (RO), and between being immediate (CE) and analytical (AC), and develop a unique possibility-processing structure of learning over time. Kolb named and defined four learning styles – Divergent, Convergent, Assimilative, and Accommodative, which are determined by the extent of emphasis on the four experiential learning modes – CE, RO, AC, and AE. Divergent learning style emphasizes concrete experience and reflective observation. Based on my previous Hypotheses 2.1 and 2.3, executives with divergent learning style would have development potential for all CQ facets. Kolb also stated that the greatest strength of this learning style lies in imaginative ability and awareness of meaning and values (Kolb, 1984). People with this learning style are the best at viewing concrete situations from many different points of view (Kolb & Kolb, 2005a). Therefore, executives with this learning style will tend to check assumptions and adjust mental maps when actual experiences are different from expectations (metacognitive CQ) and use different perspectives to understand both similarities and differences among cultures (cognitive CQ). People with a divergent learning style tend to have broad cultural interests. They are interested in people, tend to be imaginative and emotional (Kolb & Kolb, 2005a), and possess higher motivational CQ. The emphasis in this orientation is on learning by observation rather than action. Hence they will have great potential to understand what behaviors are appropriate in different cultural contexts (Phillion, 2002), but may not be as sufficient in applying these behaviors. Nonetheless, Johnson et al. (2006) commented the measure

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of CQ is concerned more with acquiring appropriate behaviors than with applying them in real-life situations; therefore, it requires more learning the appropriate behaviors than actually testing them out. Overall an executive with divergent learning style does have the prerequisites, or high potential to develop behavioral CQ. Assimilative learning style emphasizes abstract conceptualization and reflective observation. Based on my Hypotheses 2.2 and 2.3, executives with this learning style seem to have potential to develop metacognitive CQ and cognitive CQ, but not motivational CQ and behavioral CQ. Kolb (1984) stated that the greatest strength of this style lies in inductive reasoning and the ability to create theoretical models; in assimilating disparate observations into an integrated explanation. It seems that this learning style will facilitate global executives to assemble different observations into an integrated cultural knowledge; hence develop higher cognitive CQ from experience. However, this learning style is less focused on people. Instead is more concerned with ideas and abstract concepts (Kolb, 1984). Therefore, executives with this learning style do not seem to possess high motivational CQ to be involved with people from different cultures which is treated as a major source of cultural knowledge (cognitive CQ). This learning style does not seem to have particular strength in the development of CQ. Convergent learning style relies primarily on the dominant learning abilities of abstract conceptualization and active experimentation. Based on Hypotheses 2.3 and 2.4, this learning style seems to have potential to develop metacognitive CQ and behavioral CQ, but not motivational CQ and cognitive CQ. Kolb (1984) stated the greatest strength of this approach lies in problem solving, decision making, and the practical application of ideas. This learning style has similar characteristics to the assimilative learning style, in that the preference is for dealing with technical tasks and problems rather than social and interpersonal issues. Hence executives with this learning style are also less likely to acquire cultural knowledge from their interaction with people, and in particular, cultures. They are more likely to acquire cultural knowledge from secondary sources such as films, readings, and formal training sessions. This information may sometimes lead to stereotypical expectations about a particular culture, which are different from real cultural situations. Executives with this learning style emphasize thinking, testing actions, and searching for explanations. What further data they pick up from new experiences tend to confirm their previous conclusions (Ratiu, 1983). Therefore, they do not possess metacognitive CQ to check and recheck their assumptions and take different perspectives. They may appear to be judgmental in their behaviors because


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of such a tendency, and therefore to have low behavioral CQ. People with this learning style should be more effective in specialist and technology careers, not a management career (Kolb, 1984). Overall, this learning style does not appear to be helpful on the development of the four CQ facets in global executives. Accommodative learning style involves the opposite strengths from assimilative learning style, emphasizing concrete experience and active experimentation. Based on my previous Hypotheses 2.1 and 2.4, individuals who adopt this learning style seem to have the potential to develop motivational CQ and behavioral CQ. Kolb (1984) also stated that the greatest strength of this orientation lies in doing things; in carrying out plans and tasks and getting involved in new experiences. The learning adaptation emphasis of this orientation is on opportunity seeking, risk taking, and action. People with an accommodative orientation tend to solve problems in an intuitive trial-and-error manner, relying heavily on other people for information rather than on an analytical or reflective ability. It is best suited for those situations where one must adapt to change circumstances. However, although people with an accommodative learning style are generally at ease with people, they are sometimes seen as impatient and pushy (Kolb, 1984). Based on this explanation, this learning style seems to be a double-edged sword for the development of CQ. One the one hand, executives with this learning style tend to seek new cultural experiences (motivational CQ) and tend to be flexible in their behaviors (behavioral CQ) for dealing with different cultural situations as described by Ratiu’s (1983) ‘‘microstrategy.’’ On the other hand, their pushiness may cause defensiveness from people with a different cultural background, and their impatience may cause them to withdraw from cultural experiences that are frustrating. Their lack of reflection may also lead executives to resort to convenient explanations and make rash conclusions (Ratiu, 1983), and therefore be unable to comprehend deep cultural meanings in their experiences. In consequence, as they may not understand the most appropriate behaviors in those cultural contexts, they simply mimic others’ behaviors, which could be perceived as insincere (Thomas & Ravlin, 1995). Overall, the positive relationship between international experience and CQ, which is proposed in Hypothesis 1 is influenced by the process of learning. I examined the influence of four experiential learning modes on the development of four CQ facets, and then examined possible impact of four learning styles in the development of CQ. It appears that divergent learning style is most positive, and convergent learning style is not positive for the development of CQ. The assimilative and accommodative have both

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positive and negative learning characteristics for the development of CQ; and the overall learning result of these two styles may be in between that of convergent and divergent learning styles. Taken as a whole, I propose Hypothesis 3. Learning styles moderate the level of CQ developed by global executives from their international experience. The relationship between international experience and CQ is more positive when global executives have a divergent learning style; the relationship between international experience and CQ is less positive when they have a convergent learning style. Final Framework Overall, after examining the possible relationships between ELT and CQ, the final framework is concluded as illustrated in Fig. 3. This framework simultaneously considers international experience, experiential learning and CQ. It moves beyond identifying personality traits and characteristics in relation to CQ (Ang et al., 2006; Oolders, Chernyshenko, & Stark, 2008), and focuses on the examination of the experiential learning dynamic in the development of CQ. It begins with analysing the impact of international experience on CQ with focus on overseas work experience. This leads to the discussion of how global executives learn from their international experience, including the relationship between experiential learning modes and CQ, and the impact of different experiential learning styles on the development of CQ; therefore uncovering the role of experiential learning in the development of CQ. It supports the hypothesis that individual differences such as learning styles moderate the experienceleadership performance relationship. This model allows us to (1) understand the developmental nature of CQ. It not only acknowledges the importance of international experience, but also experiential learning in the Experiential Learning H2 & H3 International Experience

Fig. 3.

H1


The Role of Experiential Learning on the Development of Cultural Intelligence.


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development of CQ; (2) empirically test the relationship between ELT and CQ; (3) offer insight for global executives in their global leadership development; and (4) inspect the learning potential of global executives; can serve as a map for global executive selection.

IMPLICATIONS Implications for Global Leaders Not only ‘‘Nature,’’ but also ‘‘Nurture’’: It has been a long running debate as to whether the origin and development of global leadership are best explained by nature or nurture. To date, it is commonly accepted that there are some universal global leadership qualities which can be described as a ‘‘global gene’’ (McCall & Hollenbeck, 2002; Bartlett & Ghoshal, 2003). For all executives who are passionate in developing a global career, it is also important to recognize the nurture side of global leadership – learning from international experience. Based on this model, if international experiences are the source of learning, then it is essential for global executives to gain them. However, gaining international experiences does not in and of itself guarantee that one will learn from them. Monitoring individuals’ experiential learning modes is the key to improve the quality of learning. This model provides insights about the relationships among concrete experience (feeling) and active experiment (acting) with motivational CQ and behavioral CQ; and reflective observation (reflecting) and abstract conceptualization (thinking) with metacognitive CQ and cognitive CQ. Therefore, this model can be used to help global leaders understand the learning process and its impact on CQ. It is an integrated function where global leaders need to pay attention to every process. It is also situational. In different situations, successful global leaders need to pay attention to different experiential learning modes. In situations where there is immediate interaction with people from different cultures, focusing on the intuitive side of learning whereas engaging in a concrete experience is necessary to notify cultural differences and build up relationship. Active experimentation with some risk taking is also necessary to enact specific culturally acceptable behaviors to improve quality of communication. Furthermore, in situations when these individuals need to understand deep and subtle cultural meaning, for example building a strategic long-term partnership, reflective observation and thinking (abstract conceptualization) about the subtle and deep cultural meaning will also be required.

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By uncovering the impact of different learning styles on CQ, executives can self-evaluate their learning styles and understand their potential to develop CQ from possible international experience. Executives can employ the Learning Style Inventory (LSI) which is designed by Kolb (Kolb, 1981; Kolb & Kolb, 2005b) as a self-assessment exercise and tool to understand individuals’ preferred approach to learning and learning style. More importantly, executives can manage their learning modes (CE, RO, AC, and AE) during their international experience to develop CQ. For example, executives with convergent learning style can pay more attention on keeping in touch with their ‘‘feelings’’ and reflecting; watching and listening very carefully and develop interpersonal skills.

Implications for Organizational Practice ‘‘Developing global executives is a strategic business priority. To accomplish this successfully, the right mix of selection, training, and experiential procedures is necessary’’ (Fernandez, 2003). The proposed model has important value for international executive selection and may be used to guide international organizations to form policies and practices to develop potential global leaders. This model strongly endorses the consideration of learning style in assessment and development activities. The assessment of learning style points the way to developmental qualities rather than making decisions based on personality traits alone. Based on the logic of this model, companies will want to give valuable international experiences to people most likely to learn from them. Thus, global potential should be viewed as the ability to learn from experience. People with divergent learning style have the greatest potential to develop CQ and those with convergent learning style are least likely to do so. Previous international experience is also an important factor to consider when companies are selecting and identifying their global high potentials based on the model. Many companies typically need to send their technical experts to overseas operations to transfer knowledge, and then it becomes critical for companies to understand their learning styles and design appropriate developmental opportunities to help them deal with cultural challenges, especially when they have a convergent learning style and do not have much international experience exposure. For development activities such as training and coaching, the model indicates the appropriateness of experiential approach for intercultural


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education. This approach assumes that people learn best from their practical experiences (Kealey & Protheroe, 1996). Experiential activities are best employed so that participants are given opportunities to employ the four learning phases: experiencing different cultures, reflecting cultural values and assumptions, understanding cultural differences and experimenting with different behaviors to deal with different cultural situations. For a variety of reasons, executives do not learn what they need to know about cultures in classroom training. Recently, cross-cultural coaching has become an important development process to unleash the potential of executives (Rosinski, 2003). This model offers a framework and process that coaches can undertake to facilitate the success of global executives. Four experiential learning phases: feeling, reflecting, thinking, and acting can serve as coaching elements in dealing with cultural issues, and hence facilitate developing CQ in global leaders. Given the importance of international experience, it is also important for organizations to establish proper policies and practices to create and utilize experience to develop international executives. Overseas assignments can be designed strategically to develop CQ of global potentials. Short-term overseas assignments (2–3 years), longer-term expatriate assignments (6–7 years), and permanent expatriate assignments all provide individual executives learning opportunity, and a mixture of all three can produce a more shared organizational learning about cultures (Osland et al., 2000). In the meantime, processes such as relocating staff from different foreign affiliation and nationalities, and forming multicultural project teams also creates important learning experiences that enable the interaction of people from different cultures and the development of CQ of employees.

CONCLUSIONS As researchers continuously refine the definition and measurement of CQ (Ang & van Dyne, 2008; Thomas & Inkson, 2004), they start to examine its relationship with ELT (Ng, van Dyne, & Ang, 2009, Thomas et al., 2008). This chapter adds additional theoretical and practical input in the exploration of the dynamic learning process associated with experience and CQ. The model proposed in this chapter acknowledges the dynamic nature of CQ in global leaders, hence emphasizes its importance for the development of global leadership. It offers insight into the role of experiential learning in the development of CQ and recognizes the importance of international experience. Indeed, international experience is the teacher, and therefore

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not only it is important for global leaders to gain it, it is important for organizations to provide it. It is also about experiential learning, managing experiential learning modes determine how far global leaders can go on the way to become culturally intelligent. Ideally they can command all four modes of learning: concrete experience, reflective observation, abstract conceptualization, and active experiment. Yet, in reality each individual forms their preferences in using these four learning modes. This model can guide executives in managing their learning modes based on assessment of their learning styles, to optimize their learning results in developing CQ from international experience.

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LEADERSHIP ASSESSMENT AND DEVELOPMENT IN THE MID-EAST Val J. Arnold INTRODUCTION – SEEDS OF REFLECTION I remember talking with Hugh Stephenson some time in the early 1980s after he returned from a trip to the Middle East. Hugh was in charge of Career Development for NCR and had been assessing the leadership and management skills of NCR leaders in the Middle East. I recall his amusement and his frustration as he remarked on how difficult it was from his Western perspective to interpret leadership motivation and drive when the answers to so many of his questions was tempered by, ‘‘If Allah wills.’’ This led us into a long discussion about assessing across cultures, including the challenge of seeing and interpreting things from a different cultural perspective, and the relevance of the NCR corporate model to leadership effectiveness in the Middle East. It would be another 18 years, however, before I was to gain first hand experience assessing and developing leaders in the Middle East. It was mid-year 2001, and Personnel Decisions International (PDI) was taking on several large assessment projects in Saudi Arabia. Having assessed leaders from many U.S. and European corporations throughout their operations in the United States, Europe, Asia, and Africa, I quickly accepted the opportunity to do the same in the Middle East with a Saudi Arabian organization. Our work started in August, but my first trip was delayed until the airlines began flying again after the September 11th attack in New York. That first trip was preceded by virtually everyone I knew Advances in Global Leadership, Volume 5, 273–295 Copyright r 2009 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1535-1203/doi:10.1108/S1535-1203(2009)0000005015

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questioning my sanity. Those closest to me requested that I not go, and everyone, including me, was worried about security. During my first meeting with the national senior executive team in Saudi Arabia a number of executives made pointed remarks about terrorists and terrorism to test my reactions and commitment toward working in the Middle East. It was memorable indeed; exciting, challenging, everything I expected and more. Now, in 2008, so much has changed in the Middle East with dramatic fluctuations in oil prices, ongoing wars in multiple locations, accelerated economic development throughout the Gulf, and attempts to broaden economies and create jobs which sometimes conflict with the pressures of history pushing to keep some things from changing. Despite having spent 3–4 months of each of the past 6 years working and vacationing in the Middle East, many of the people I know in the United States still express fear for my safety. I continue to explain that most of the places I go in the Middle East have far less violence and crime than the major U.S. cities where I work. When Bill Mobley asked me to contribute observations from my Middle East experiences to this volume of Advances in Global Leadership, I jumped at the chance to capture reflections from the past few years and talk about the impact and exciting challenges of our work. Let me make clear, the reflections and observations in this chapter are my own. They represent the beginnings of one individual’s personal and professional journey working in the Middle East. In trying to understand and make sense of my experiences I have drawn from the reading I have done in getting ready to work in the Middle East as well as conversations with Americans, Europeans, Asians, and local clients working in the region. These reflections are mine and do not represent my company’s views, or the views of my colleagues. Although I believe in the scientist–practitioner model for psychologists, I must admit that my observations draw most heavily from my practitioner role, influenced by the science of our field. I have focused on those things I found interesting, difficult, challenging, and rewarding working in Middle Eastern cultures. The focus on things I found challenging might cause some of the observations to appear critical, although that is not my intent. I also expect that many of my observations will sound familiar to those working in leadership assessment and development across cultures. I have worked for my firm, PDI, for 28 years. PDI is a global firm, with offices in the United States, Europe, Asia, India, and the Middle East. Our work in the Middle East has grown dramatically in the past decade. For the past seven years, I have been working primarily in the Middle East, taking groups of consultants from our offices in the United States, Europe, and

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Asia into the Middle East to assess, train, and develop leaders at a variety of companies in a variety of countries. Our work opportunities have concentrated mainly in the oil and gas, petrochemical, and banking sectors, but with a variety of other industrial and service sectors represented. The greatest amount of our work has been in Saudi Arabia, Bahrain, UAE, Kuwait, Qatar, Oman, and Egypt.

The Dangers of Generalization I want to acknowledge again the personal nature of these observations and the inherent limitations of the generalizations I convey. These reflections are based on my experiences filtered through discussions with my coworkers and clients about their experiences. As the saying goes, all generalizations are lies, including this one. While writing, I could not state a single generalization without thinking of all the exceptions to that generalization, and realizing that each generalization probably says as much or more about me as it does about those I work with in the Middle East. Generalizations deal with an averaging of experience and mask the underlying complexity and differences behind them. This flies in the face of one of our field’s basic findings, that when we measure people on a variety of variables, we typically find greater differences within a culture and within its various groups than between cultures. Trying to summarize a people or a culture as one thing, with one set of observations, cannot do justice to reality. Some of my observations may sound judgmental to those from a Middle East culture, reflecting as they do my Western lenses, just as the reflections I hear in the Middle East about Western culture have at times sounded judgmental to me. All generalizations over simplify, but somewhere within may still be a few nuggets of truth. My experiences in the Middle East are bound by numerous constraints, lenses through which I view and try to make sense of my experiences All our work is done in English, which is a second language for a majority of the people with whom we work. Most of my work has been done in a handful of very large organizations, either global or multinational in scale and scope. Most of my work has been done with Arabs, only one of the people groups in the Middle East. I am Christian, Western, and from a low context culture background working with Islamic, Eastern, high context culture clients.

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One last context comment; within the Middle East, cultures differ remarkably. Though commonalities do exist, my experience has taught me that Oman’s culture is different from the UAE’s, which is different from Bahrain’s, which is different from Saudi Arabia’s, etc.

HISTORICAL AND PSYCHOLOGICAL LANDSCAPE Of Course Culture Matters This is not fundamentally a chapter about culture, although culture influences everything I talk about. For reading on culture, you can refer to research works such as the ongoing Globe studies (www.thunderbird.edu/ wwwfiles/ms/globe/) or wonderful first person accounts like The Arab Mind by Raphael Patai (Hatherleigh Press, New York, 2002). Tribal, Bedouin, and colonial influences shape much of the cultural context of the Middle East. The tribal culture, with its emphasis on family, personal relationships, and connections pervades everything. Many of my clients come out of a culture rich in trading experience where everything appears to be negotiable. This, of course, influences how leaders deal with consultants as well as peers and followers. Shame avoidance, the importance of image, religion, and Arab cultural pride are core to understand how leadership assessment and development are practiced in the Middle East. The strong emphasis on hospitality makes meeting and greeting a delight. In initial meetings the Arabs are typically warm and inviting. The emphasis on a host making others feel welcome, the offering of tea, and of taking time to connect can be delightful, or it can be frustrating to the foreigner who just wants to move straight to business. Wasta is Arabic for connections, pull, influence, clout. Connections matter. Leadership comes with opportunities and obligations to take care of those from your extended family and those under your authority. As organizations grow and compete on a global scale, as they gain exposure to western management practices, they seem to develop more expectations that decisions are to be made based on performance rather than wasta. Large organizations fight wasta and strive for openness and transparency based on competence, but that means swimming against a powerful, central cultural stream. Leadership flows from centralized authority and leaders are responsible for decisions and taking care of people. Leadership is typically not shared; sharing can appear to be a sign of weakness, and often the leader’s power is


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quite strong, if not absolute. Those under authority look to the leader for direction, decisions, and expect that their own welfare will be considered. Fairness is important to all, especially in an environment where a western view of fairness may be in conflict with cultural norms of wasta.

Islam Infuses All In the United States, separation of church and state is a legal issue. Although there can be disagreements around its implementation, separation of church and state is fundamental to how we view government and freedom. Within Islam, there is to be no separation of mosque, state, personal, private, it is all one. Islam forms the context for how most people think: how they view themselves, their work, their family, and their government. To be a good worker, a good leader, one needs to be a good Muslim. They are intertwined and permeate life in a way that is difficult for those not raised with that mindset to understand. The emphasis on family from both Islam and the tribal culture makes for very family–friendly companies in the organizations where I have worked.

High Context Culture, the Arabic Language, and Avoidance of Shame Influence Everything I come from a low context culture where it is the responsibility of speakers to be clear – to make themselves understood. The speaker explicitly communicates expectations, desires, and goals in an attempt to help others understand. English is primarily denotative, and it is fairly easy to be explicit if one chooses. The Arabs live in a high context world where much more responsibility lies with the receiver to understand the message. What is said, not said, and what is to be understood relies much more on context that the receiver is expected to understand and interpret correctly. The Arabic language is more connotative, evocative, and less explicit than English. This is visible, for example, in boss/subordinate relationships where bosses may give only general hints as to what is expected and it is the subordinates’ responsibility to figure it out. Combining a high context culture with high shame avoidance colors the delivery of negative feedback, corrective feedback, and dealing with conflict. ‘‘Why would I give someone negative feedback and create an enemy for life?’’ a leader once remarked to me. One principal driver for seeking our

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leadership assessment services in Middle Eastern organizations has been the desire for the company to get better, or sometimes independent, information regarding performance and potential. To avoid shame, and to avoid personal conflict, leaders give mainly positive feedback if they give any at all. In analyzing PDI’s 360 data from the Middle East, we find people rate themselves and rate others about one-half a standard deviation higher than we see in our US and European data. In Middle Eastern organizations performance records typically suggest that everybody is above average and no one underperforms, making it difficult to use this performance data to make solid business decisions about personnel. With few discriminators among people in the performance review records to guide personnel decisions, leaders are left with the cultural norms that emphasize personal relationships. Where one of the primary responsibilities of leaders is to take care of their tribal members, whom you know can be more important than what you can do. Psychological Mindedness is Not a Priority The human potential movement and subsequent psychologizing of life that occurred in many western countries after World War II had much less impact in the Middle East. The groups we work with seem much less psychologically minded. They do not tend to think in terms of motives or drivers, and they often have a less psychologically textured view of people’s inner workings. Asking an Arab leader to think about what motivates his people, or what drives them, often leads to a few socially desirable sound bites but precious little of the insight I have come to expect of the best western corporate leaders. I have found many Arab leaders assume that their people share the same motives that they have and therefore they are less likely to seek to uncover individual differences in their people. The cultural expectations in this regard are just different. An External Locus of Control Influences Leaders and Followers One of the more challenging aspects of the culture for me has been working with leaders with a high external locus of control. In the west, we typically look for leaders who can ‘‘make things happen,’’ who have a strong sense of self-efficacy and the ability to affect their environment and the people they lead; in the Middle East, the person in authority may respond very differently. Let me give you some examples.


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Inshala (or Enshala) and An External Locus of Control For the devout Muslim, Allah is in control, unknowable, unsearchable, totally other, and totally sovereign. Although humans can and should try to do their best, things will only happen if Allah wills it. The phrase inshala means God’s will, and as used at the end of any statement of intent, it recognizes the theological point that this will only happen if God wills it. This worldview of a God in control, sovereign, and transcending human understanding and rules, frames the Middle Eastern environment very differently from the Western environment with which I am most familiar. Part of the core cultural mythology of the United States is that anything is possible if one tries hard enough, works hard enough, or is creative or clever enough. In the Middle East, one is never truly in control of one’s destiny, no matter how hard one may try. One is expected to do one’s best, however, if God wills something different, God’s will always triumphs. An external locus of control can appear to rob some leaders of the willingness and ability to demand accountability. If a planned goal or action is not attained, it may be because God did not will it, not that an individual did not try hard enough or persist enough.

You Need to Talk to My Boss About That Behaviors that in the west might be described as indecisiveness or passing accountability upward are understandable when put into their cultural context. In the Middle East where authority is indeed concentrated in the leader, few subordinate leaders are willing to push back on authority or do something they fear their boss might not approve. Leadership tends to be personal, loyalty is personal, and disloyalty or usurping of authority is taken very seriously. At the national level, it can be life or death. At a corporate level, it can be career life or death.

Shame Avoidance: When Doing Nothing can be the Safest Route Given the duty to follow the boss’ lead, and the need to not bring shame to others or oneself, it can be better to do nothing than to make a mistake. If you do as expected, well that is just expected. If you stick your neck out and do something good, but it was not what your boss wanted, it can be seen as negative. The one thing you cannot be blamed for is faithfully following set policy, procedure, and direction. If one is unsure, doing

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nothing may be the safest course. Some work cultures have such a strong mistake-avoidance norm that it is difficult to get things done until the boss tells you, ‘‘do this.’’ In those work cultures, policy and procedure govern life. Although it may appear common sense to deviate from policy or procedure, career safety resides in following procedure. Even if things spin out of my control, if I was following procedure, I cannot be blamed. If I deviate, the most that can be expected is forgiveness. If I deviate and anyone objects, I may be left without support to fend for myself. When shame avoidance is combined with a work culture in which there are few differentiators in the performance management records, one of the things that can make people stand out, that can differentiate, is mistakes. At its worst, it can be much better from a career perspective to avoid mistakes and take your chances with wasta than to set yourself apart by making an error, and hence earn the only visible performance differentiator. I have been amazed in a few management meetings when leaders seem to be far better at remembering and emphasizing mistakes people have made, and hence why they should not be promoted, than in identifying the outstanding accomplishments that suggest a person should be promoted.

An External Locus of Control Can Undermine Development Working with leadership development can be interesting in this context. An external locus of control response to encouragement to take responsibility for self-development can lead to, ‘‘Okay, so develop me.’’ From the individual’s perspective, if there is anything missing in my performance, it must be because the company or my boss has not developed me enough. This view was expressed succinctly by one leader who, on learning he had multiple development needs identified in an assessment center, shook his head and expressed disappointment in how this highlighted the organization’s failure to develop him. He explained that if the organization had developed him properly, the results would have been very different. Development can quickly devolve to the lowest common denominator of ticket punching. ‘‘I went to the course, I’ve been developed.’’ Or, ‘‘There isn’t a course in it, so I can’t be developed.’’ In my Middle East experience, a sense of self-efficacy, of being able to do something on my own to develop myself is rare. Although I have met self-development driven leaders in the Middle East, I have simply encountered fewer of them. It is not that leaders do not want to develop, far from it; it is just that the emphasis tends to be on the organization developing me versus me driving my own development.


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I have seen a trend across the past 3–4 years of younger leaders looking to develop themselves, a trend I hope continues because the challenges facing business and industry in the Middle East are no less daunting than anywhere else in the world.

REFLECTIONS ON INTRODUCING ASSESSMENT CENTERS IN THE MIDDLE EAST Why Assessment Centers? Our Middle Eastern clients were looking for the gold standard, the best practices in assessing talent. They needed an assessment methodology that would provide an independent, objective, transparent approach to understanding the current capabilities and future potential of their leadership resources, one that would be rigorous and credible from a professional standpoint, but also one that would be feasible and ‘‘face valid’’ to the participants and the executive sponsors. Assessment center methodology, using multiple methods (e.g., structured tests, interviews, and business simulations) and multiple independent observers (each simulation conducted by different coach) offered the best solution. This approach facilitates looking at not just one or two pieces of data but rather seeing the themes that occur across multiple opportunities to demonstrate performance as observed by independent, trained coaches not influenced by previous knowledge of the individual. The centers we created for our Middle Eastern clients were typically several days in length and included abilities tests, interest and motives inventories, background/personal history inventories, individual interviews, and several business simulations based on scenarios fully customized to reflect the key challenges, features, and culture of their business. The Importance of an External Impartial Source (Typically Western, Always Non-Tribal, Independent, with No Personal Agenda y) Why would very large highly successful Middle Eastern companies call in an American firm to help them assess their leaders? Here I can only speak from my experience. PDI is a global leader in developing custom assessment centers, and this has drawn companies to us. However, an important additional attraction emphasized by two of our larger Middle East clients was their desire to gain the expert opinion of an independent third party.

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They were looking for someone not connected to any of the national families; someone having no separate agenda; someone willing to provide high quality, unfiltered, independent perspectives on leaders and their potential. As we began working with several of the large Middle Eastern companies, we asked about bringing in local partners. In many parts of the world, we seek to develop alliances with local experts who can help us provide high quality services that fit local cultural requirements. Here, the response was ‘‘No.’’ In the tribal culture, family loyalty tends to transcend most other obligations, including the impartiality and data-based decision making at the heart of assessments. We have been told that our work earns credence, in part because of our reputation, and in part because we are not connected in any way with the people we are assessing. The westerners are seen as free from any wasta agenda.

Free from Tribal Obligations It is hard as a westerner to fully appreciate the power of family relationships, the extended networks of obligation that govern lives in the Middle East. One of the examples I was provided of the power of tribe and the responsibility of wasta concerned a senior leader from one company who was from a rural part of the country. I was told that, in the extreme, his daughters might become unmarriageable if he did not follow through with tribal expectations and requests for jobs and promotions. Family obligations often trump other rules. You help each other out, it is the way things work. Without organizational controls, promoting a person from one family into leadership within an organization may lead to populating that part of the organization with people from that extended family. As consultants from outside the tribal system, part of our value is having no obligations to any of the national families. Of course, that can be as much a threat as value. Leaders who are accustomed to having their way may not want independent data on performance and competence interfering with their decisions. It should be noted that we encounter this in the United States, Europe, and Asia as well as in the Middle East.

Independence from Cultural Obligations as Both Asset and Liability This independence has both an upside and a downside. On the one hand, we are not bound by local obligations and habits or tribal influence. On the


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other hand, while we do not carry the cultural baggage, we are always vulnerable to the accusation, ‘‘You don’t understand our culture.’’ Naturally, this can also be a useful way to explain away assessment results that a person does not like. Not understanding the culture is always real to some extent. One challenge in creating assessment centers is developing business simulations that are close enough to organizational reality that they allow participants to demonstrate their capabilities. We rely on our client to look at the business scenarios and supporting simulations we create based on their initial input to confirm that they reflect organizational reality. We also strive to conduct follow-up validation research to look at assessment predictions to confirm the accuracy of results. As we look at who makes the culture misunderstanding argument against assessment results, we tend to find, as you might expect, that people who do well in an assessment think it is great and those who perform poorly think we do not understand how things really work here. In the first two years of leadership assessment at one organization, approximately 80% of attendees said they had gained a clearer and more helpful picture of their strengths and development needs, that everyone had been treated fairly, and that it had been a helpful development experience. Still, if you do well, you have faith in the results; if you do not do well you are more likely to think the results are not accurate. It appears to be universal that no one argues that we misdiagnosed his or her strengths. It is only the development needs that invoke argument.

The Challenge of Gaining a Sense of Ownership from Local Leaders When Everything is Delegated to Expats Is Sex Work or Pleasure? One of the few jokes I have been told by a Saudi Arab has a reporter asking a Frenchman, a German, and a Saudi if making love to your wife is work or pleasure. The Frenchman immediately says ‘‘Pleasure’’ while the German replies ‘‘Work.’’ The Saudi has to think a while before concluding, ‘‘It must be pleasure, if it were work, we would hire an expat to do it.’’ The punch line rests on a reality, that historically, Arab wealth, in particular oil wealth, has been used to hire expats to do routine hands-on work while allowing the local Arabs to manage. Expats are typically hired either to do menial work or for technical expertise that cannot be found locally. Particularly in Saudi Arabia, you see career ambitions focusing mainly on leadership and managerial work. We quickly found that most of the companies with which

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we worked relied heavily on expats for many things, Human Resources expertise being one of them. In building the business simulations at the heart of assessment centers, we use data from the organization including their near and long-term business challenges, their strategies for meeting those challenges, and what is required of their key leaders to convert those strategies into reality. This is typically done, in part, through structured interviews of key company leaders. Of necessity, we look to the organization to define their direction, their strategy, their challenges, their corporate culture, and what needs to be accomplished. To build the assessment simulations we translate their challenges and strategies down to the specific behaviors required from leaders to make them happen. We sort those behaviors into related groups or competencies, and we work with the organization to define the specific level of behavior or skills required to meet the company’s standards.

Gaining Ownership by Consulting Everyone and Emphasizing General Agreement We found it no more difficult getting this strategic performance data in the Middle East than elsewhere. Leaders enjoy talking about their organization. Our challenge was getting the Arab leaders to look carefully at our summary of their input and give us their critical feedback. This was the kind of work they hired expats to do, and they were more than willing to delegate this work to their expat experts and rely on their analyses. However, this approach interferes with developing a strongly felt ownership of the results, and can allow some executives to maintain plausible deniability around subsequent acceptance of assessment results. When building an assessment center, in the Middle East, as elsewhere, we want to gain wide agreement and broad ownership from corporate leadership. We need this ownership to get the required support for implementing and leveraging this major change effort. One of the skills we see in savvy leaders is gaining a general sense of what is acceptable or doable before crafting their final decision thus facilitating effective execution. Our work is similar. We need to gain general agreement among leaders to get broad acceptance of the work we do. We need key leaders to confirm that we have accurately understood the organization’s challenges, strategy, and culture, and we have translated them into simulations that allow leaders to demonstrate their skills in meeting those challenges. Although we need key leaders to feel ownership, getting the executives to


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care about our work, to dig in and make it their own in a culture where hands-on detail work is often delegated to others has been a challenge. Over time, we have learned to present data to small groups in bite-size chunks, fully allowing discussion and sharpening, going forward only when we get group consensus, thus increasing the odds that we have accurately heard and translated the executives’ views and that they will take assessment results seriously.

The Challenge of Creating and Conducting Business Simulations across Cultures The Strain of Living in Two Cultures On the one hand, large business organizations in the Middle East are attempting to build world-class competitive cultures. Large global companies in the Middle East are influenced by both western leadership literature and the western leadership guru culture. In many areas, these companies are trying to do things in a manner that is more consistent with global business culture. Examples include promoting leaders based on competence and accomplishment, not relationships, and establishing a culture in which leaders can give corrective feedback without allowing conflict to destroy relationships. In this sense, they are moving toward a global corporate culture that incorporates more of what some perceive as western ideas. On the other hand, many of these western-influenced practices that the companies say they want to adopt fly in the face of their national culture. As noted previously, ‘‘Why should I give someone negative feedback and create an enemy for life?’’ Where leadership is personal, feedback is personal. Criticism is not taken as an impersonal comment about my work, but as a direct indicator of how the individual giving the feedback feels about me and it reflects their intentions toward me. Local leaders are often expected to live the norms of a more globalized business culture at work, and then step into a very different national culture when they go home. This is not unique to the Middle East, however, I suspect that the distance between the expected behaviors at work and those at home and in the community may be greater than many other places. To build an effective assessment, we create a business case scenario and accompanying simulations based on what the organization tells us about its business challenges, strategies, and intended direction. However, this conflict between adopting global best practices and the subsequent tension with local and national culture can provoke a reaction to assessment

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feedback that ‘‘This isn’t realistic.’’ ‘‘You don’t understand our culture.’’ ‘‘That is not the way we do things here.’’ Hence, the feedback we deliver can be accurate based on the direction the company says it wants to go, while also being perceived as not realistic due to a conflict between the intended organizational change and normative behaviors in the local culture. This is a natural bind that comes with change, especially change which goes against the grain of cultural norms.

REFLECTIONS ON CONDUCTING ASSESSMENT CENTERS IN THE MIDDLE EAST ‘‘You Mean You Really Expect Us to Take This Seriously?’’ As we introduced assessment into Middle Eastern companies and began dealing with participants who had never experienced assessment centers, we ran into unexpected obstacles. For example, participants were accustomed to ‘‘being developed.’’ They went to courses where they could show up without doing any of the pre-work, talk from their experience during the course, and leave ‘‘developed’’ without any consequences beyond punching their attendance ticket. They knew they would not be embarrassed. That would go against the culture, and, if that happened, the culturally insensitive instructors would be discredited and would not be invited back. So, despite initial attempts to get people to take centers seriously, for example, read the business case before coming, at first people would show up, not apply themselves, and consequently demonstrate poor performance. Imagine their surprise, shock, disbelief, and anger. This, in turn, led to interesting reactions such as ‘‘Everything is Negotiable, What do I Need to do to Get You to Change this Rating?’’ Followed by, ‘‘You Know, if You Take This Information back to Management, It will Totally Undermine Your Credibility’’.

In cultures rich in trading history, everything is negotiable. The initial participants were not terribly worried about not doing well. They expected to be able to explain to their coach what had happened and have their ‘‘grade changed.’’ To say the initial participants were incredulous that we were not open to changing our ratings dramatically understates some of the early interactions. Participants expected that their explanation of what they were trying to do or had meant to do would set things straight. When that did not work, their reactions often shifted to explaining that the results were


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not accurate because the assessor had obviously not known how to play their role in the simulation correctly. This early incredulity quickly led to participants returning to their organization and attempting to discredit the source. For many, their combination of low self-awareness and high external locus of control made it difficult to accept any performance results less than they had expected. Looking at it from their perspective, they had never received direct feedback that they needed development in any skill area. They had great confidence that the reason for their poor results must lay outside of themselves; hence, it must have been the consultant doing something wrong or the consultant’s unwillingness to understand and accept what they had really intended that led to these incorrect results. It certainly could not have been the result of their performance in the simulations. We struggled initially with helping participants and the organization understand the behavior-based methodology of assessment centers. We cannot read minds and we do not know what you were intending to do. We watch what you actually do, your behavior, and give you feedback on what you actually did in the simulation. We rate behavior against performance standards set by the company. We quickly learned that ‘‘What I was intending to do y’’ was what mattered most to many participants. They had great difficulty understanding why we would not sit with them, listen to their explanations of what they were intending, and then use their explanation of intentions to shape our ratings and feedback. How can this be accurate if you only base it on my behavior and not what I was thinking or intending? Depending on the organization, it has taken 2–4 years for participants to stop trying to negotiate changes in assessment ratings.

Helping Participants with Change For many participants, the assessment center experience is the first place anyone has given them direct feedback, and especially direct feedback that is less than totally positive. Although we try to be compassionate, and culturally sensitive, our job is to be clear and direct about our observations. It is what we are asked to do by the organization. Middle Eastern leaders are not unique in disliking direct feedback; however, they have typically had less experience with it. In our introductions to each center we do our best to prepare participants for a new experience that involves direct feedback. For example, we discuss a model we hope will help participants understand and also legitimize their

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reactions: SARA – Shock or surprise, Anger, Rejection, and we hope, eventual Acceptance. We use the SARA model to warn participants that they are likely to hear new things about themselves and they are likely to get angry and reject what is said when they hear something unexpected. Put yourself in their shoes. Imagine you have gotten nothing but positive feedback, or the only negative feedback directed your way has been so indirect that you could not be sure of the message. You have had to rely on nonverbals, hints, and guesswork to figure out what your boss or others were trying to say. Here is a foreigner telling you that you did not meet the organization’s performance expectations for a particular competency during an assessment center simulation. In the first few years, feedback resulted in more heat than light, more argument than thoughtful consideration from most participants. One of the delightful evolutions we have seen in several organizations is that we now get some participants who ask questions about negative feedback in an exploratory way, attempting to understand why we might give them that feedback. As their organization has accepted and appropriately and effectively used the assessment information, the context of the assessment center has changed for participants. We do not get people trying to discredit the centers as much now; participants realize the centers and use of center results have been accepted by the organization.

‘‘Let Me Give You Some Reasons Why This isn’t Relevant’’ or ‘‘Let Me Tell You Why That’s Not Correct’’ When giving negative or developmental feedback in a center, we are often told we do not understand the culture and that things do not really happen that way in the real world. Participants are always at least partially correct on both points. I do not think there is any way I can understand what it means to be a Muslim Arab. There are nuances to how relationships unfold and how things actually get done that depend on factors such as organizational level, age, tribe, and family relations within a tribe, as well as your sect within Islam that cannot be easily understood by an American or European or Asian who has not grown up in the culture and does not speak Arabic. However, in constructing the assessment center, their company has defined expected standards of performance in clear behavioral terms. As trained observers of behavior, we can tell people what we have observed in a


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business simulation and help them understand where their behavior falls on a continuum within a behaviorally anchored rating scale. The ‘‘you don’t understand’’ can be said in any culture and any assessment. Working across cultures and languages, this observation must be taken seriously and with humility. However, our follow-up research and my experience in taking our observations back to the organization’s executives give me confidence in the results. That is, the simulations do tap the behaviors the company is interested in and, by and large, the results rarely come as a surprise to those who know the person in the work place. I typically ask senior management who are looking at the data, ‘‘Are there any surprises?’’ Although there are occasional exceptions, I have been amazed at the robustness of center results and how often management tells me, ‘‘No, you’ve described the person quite well, you’ve put into words something that I’ve tried to capture but couldn’t.’’ Are the data perfect? No. Are the assessment data better than what the organization had before? Yes. Can the data be used to help inform decisions? The data have been used effectively in several organizations, particularly when, as we counsel, assessment data is incorporated with other information. Contacts within the organizations tell us that the people decisions made in the organization are better today because of the use of center data.

The Importance of Calibration in a Culture of Suspicion y Many of our participants appear suspicious and quickly see conspiracies in things. In talking with one another during a center they decide that this coach is tougher than that coach; this coach played it differently than that coach. Participants often believe that their results depend more on who their simulation coaches were than on their own performance. Calibration of coaches’ ratings and calibration regarding how simulations are performed are critical to the validity of all assessment centers. Effective calibration of how we play a role in a simulation and how we categorize and rate the subsequent behavior form part of the foundation that allows us to compare different people’s performance across many different occurrences of a center. We work hard to train new coaches to a standard of playing each simulation role and consistently scoring behavior using behaviorally anchored rating scales. We periodically work on calibration exercises to ensure, as best we can, continuity and comparability. We let the participants know this, and our work to keep calibrated is more important here than anywhere else I have worked in the world. Our context: working with

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naturally suspicious groups that look for reasons outside of themselves for why results were different than expected.

Security of Assessment Center Materials in a Tribal Culture In a tribal society, your loyalty to the family can transcend most other commitments. It is the responsibility of family members to help each other. Early on, we found participants MUCH too willing to help family members who would be attending future assessment centers. We have taken stronger precautions to maintain security of materials than we do elsewhere. One of the things we do is conscientiously retrieve simulation materials immediately after each simulation. Initially we found some people coming in with ‘‘cheat sheets’’ giving them guidelines and what to look for and how to handle the simulations. This willingness, or rather obligation, to help family members makes giving feedback more challenging after a simulation. We want to help participants understand how we viewed them in the simulation and specifically why we saw them that way, but we have learned we must take care in discussing the specific dynamics of the simulation in any way that gives them an ‘‘answer key’’ that they can give to the next participant. We have also periodically updated our simulations in ways that maintain comparability, but make circulating cheat sheets harder to use.

Validity of Results in Assessing across Cultures We always prefer to validate our work through follow-up research. Such research requires the cooperation and participation of the client organization and involves a time investment from its leaders. Too often, despite the client’s stated intentions to conduct follow up research, once leaders become comfortable with using assessment results, other organizational issues take priority. From the beginning of our work, as I have presented assessment results to organizational executives my first question has been ‘‘Are there any surprises?’’ This has led to very interesting discussions. During the first few presentations of assessment results to a business team, someone might comment, ‘‘Yes, I’m surprised that Ahmad didn’t do well since he’s considered one of our best people.’’ This beginning often led to a healthy discussion in which the people who knew Ahmad best would observe that


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they were not surprised and talk about why. This happened repeatedly, which has led me to believe that one of the major benefits of assessment center data in this culture has been to allow a different kind of conversation among leaders about their people; a broader ranging and more behaviorally specific discussion of individuals than had occurred previously. It simply had not been acceptable to say critical things about people in leadership discussions. The norm appeared to be, ‘‘You don’t say anything about my people and I won’t say anything about yours.’’ As aforementioned, in two of the organizations with which we have worked, over 80% of their leadership had above average ratings in the formal performance appraisal system. The independent information from assessment centers provided an opportunity for leaders to talk about what was really happening in the work place instead of reflexively supporting their people and/or repeating the same conclusions about the person who made a mistake 12 years ago. One of the more memorable conversations took place at a very senior level in my early days of presenting assessment data. A senior executive expressed surprise at the poor performance of one of the center participants. A lengthy conversation ensued in which it came out that he had worked with this person 15 years earlier when they were both engineers and he had come to respect the other person’s performance as an engineer. It was eye opening for that senior leader to hear that this person who had been a great engineer 15 years ago, fell short today in the very different role of organizational leader. This conversation would likely never have taken place without the assessment data to trigger it and give cultural cover to others to talk about his recent performance in a managerial leadership role.

Starting an Assessment Center in the Middle East Our Arab clients live in a very social world, both at work and at home. When we can, we like to start our centers with an extended orientation and follow it with an opportunity for participants to meet, and we hope bond, with their coaches. The orientation has evolved over time to address typical questions we have gotten before, during, and after the centers. We typically get fewer questions during center kick offs today in the organizations where we have been conducting centers for 3–6 years. The participants take the experience very seriously now because they realize their management takes the information seriously. They are aware that the data are used, as one data point among many, in making critical decisions about their careers.

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Presenting Assessment Data to the Organization: What did Management Need to Know? In every organization I have worked in the Middle East, the introduction of assessment centers and follow-up consulting on individual development based on assessment results have been new to the culture. A few of the organizations had rolled out 360 questionnaires before using assessment centers and 360 feedback instruments comprised their main experience with assessment. I am convinced that much of our success at introducing assessment to these large Middle Eastern organizations has been due to a broad based ongoing program of education on all aspects of assessments. For example, in one organization, we started with the senior management team conducting half-day programs on the nature of assessment centers, the difference between performance and potential, and the strengths and limitations of assessment center data. In discussing assessment methodology, why it works, and its limitations we facilitated a discussion of ‘‘should we do this here? Can this work here?’’ The workshops were rolled out to all VPs and eventually to all leaders in key management roles. These workshops took place over the first year and a half of our work, and the core messages were repeated again and again in the following years as well. To this day, we continue the process of educating the organization on appropriate uses of assessments by including a brief educational component on the topic of assessment before presenting the new assessment data to business executives. In the beginning, key messages were repeated for at least 2 years, and in one organization 3 years, until we heard the executives repeating the same messages to their work groups.

The Building Blocks of Competence We discussed individual competence resting on a difficult-to-change foundation of personality, motivational drivers, and intellect. This was critical because the culture appeared to assume that the only reason a person did not do well on the job or in a center was 1. They had not been sufficiently developed, the belief being that everyone could perform effectively, at any level, if they were only developed sufficiently. 2. They had not been sufficiently motivated, hence the popular belief in paying someone more money or promoting them to increase their motivation. Unfortunately, for some individuals, a promotion did not motivate, it only took their lack of competence to a higher-level role.


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Performance and Potential are NOT the Same Thing Current performance does not always predict performance at the next level. Current performance is a good predictor of future performance in similar situations when tackling similar challenges. However, when job requirements change significantly, for example, from individual contributor to supervisor, past performance may not be the best predictor of future performance.

Assessment Should be Only One Data Source and Used in Combination with Other Information about the Individual What do you do when you lack effective data about performance or you do not have faith in your performance appraisal data? When more than 80% of current and future leaders are rated as above average on performance appraisals, you do not have quality information for succession and promotion. When it is not possible, or at least not easy, to say critical things about people, one of the few things left to help discriminate among individuals are the high profile mistakes that set one person apart from the others. Hence, in such an environment one high-profile mistake can effectively end career progression. In considering how to use assessment information in people decisions, we discussed two major errors that could be made: one is dismissing data with which you disagree, and the other is accepting assessment results as ‘‘truth’’ without considering other data you have on the individual. One key message to organizational leaders was, ‘‘If the assessment data agree with what you already know about the person, you should act with confidence.’’ ‘‘If it surprises you or you disagree with it, do not assume either perspective is correct, rather, be a good scientist, a good engineer, and search out the correct answer through more investigation and follow up.’’

Do Not Focus Only on ‘‘Those Poor People’’ with the Weakest Results In the first few years of introducing assessment center data, we had to fight the automatic reaction of management to skip right to the poorest performers and spend all of leadership’s time talking about what they could do to develop poor Fahad. The problem was, Fahad had often been promoted well beyond his level of competence, and the issue was not lack of development. It appeared across companies that their initial cultural belief

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was that anyone could develop any skill and rise to any level, hence, doing poorly in the center was only due to a lack of appropriate attention and instruction. This example of focusing on the weakest performers is one aspect of a cultural orientation towards compassion for individuals where leaders take personal responsibility for advancing their people. The plus – the company invests in and gives multiple chances to people. The minus – it is hard to ‘‘bite the bullet’’ and recognize when someone has reached, or been promoted beyond, their maximum potential.

The Danger of Misusing Assessment Data Despite our emphasis that assessment is only one data point, it is easy for the leader who wants to take action on an employee but does not have confidence in other current data to rely solely on assessment results. For some leaders, it is easier to blame adverse personnel decisions, for example, lack of promotion, on assessment results than take personal responsibility for the decision. ‘‘Why wasn’t I promoted?’’ ‘‘Well, you didn’t do well in the assessment center.’’ We have worked hard to emphasize that assessment results represents just one data point, albeit a strong one, but one that needs to be combined with and used within the richer context of organizational data and experience. If several leaders discuss and agree, based on behavior and performance, that is great. If a leader wants to use assessment data alone to justify a decision, then assessment becomes vulnerable to misuse.

Why the Rich Get Richer – Investment in Development Often Shows the Greatest Pay Off in Leaders with the Most Potential Instead of focusing on the weakest performers and how to help them, we encouraged leadership to focus on their strongest performers and think through how to leverage and extend their strengths. Pouring your development resources preferentially into your bottom performers is like putting money into a no interest account (a difficult analogy in Muslim countries where interest accounts are forbidden). We encourage development for all, but with resources preferentially focused on critical talent pools and top performers where the organization is likely to realize the greatest


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return. This message has seen increasing acceptance in the organizations we have worked in the longest. The Proof of High Potential is in the Subsequent Performance, Not the Initial Assessment For those leaders whom the organization views as having strong potential, whether due to their assessment center results, the organization’s assessment, or both, we encourage using stretch assignments to test the individual’s potential. Assessment centers allow individuals to show what they can do when they focus on doing their best, not necessarily what the individual chooses to do day-to-day on the job. Centers are a test of maximum performance, of motivated performance, not necessarily of typical performance. Assessment gives a snapshot of one point in time. We encourage the organization to test assessment results by giving stretch assignments to strong performers and then to make longer-term career judgments based on how individuals respond to the stretch challenge.

SUMMARY REFLECTION Introducing assessment centers into new organizations in the Middle East has been challenging and rewarding both personally and professionally. One expat, on retiring, told me that our work had done more to positively transform how his organization dealt with people than anything else he had seen during his 25 years. For organizations that desire better information to aid in predicting future performance and potential, assessment centers offer some of the best technology available. For organizations that want independent data to add to their perspectives on performance, assessment centers add clear value. For consultants wanting to experience a new culture, one that welcomes with warmth and hospitality, while also holding on to many suspicions: ‘‘Are you really independent? Does this really work here? Are you truly committed to doing business in this part of the world?’’ – the Middle East offers it all.


ASSUMPTIONS IN KOREAN ORGANIZATIONS AND THEIR IMPLICATIONS IN A CROSS-CULTURAL SETTING Inju Yang and Aidan Kelly ABSTRACT Korean organizations’ attempts to transplant home management practices directly to their overseas operations have not been received positively by foreign staff; the application of hierarchical Confucianist management principles has led to high reliance on expatriates in Korean overseas operations and failed integration with both local staff and local markets in host country. In this conceptual chapter, we examine the significance of strong informal social ties (based on the unique social psychology of jeong, woori and nunchi) as cultural control in the Korean workplace and develop this as a novel explanation for Korean management discomfort in overseas settings. Promotion of weak social ties with local staff is suggested as more appropriate for achieving goals of exploring local expertise and knowledge.

Korean supervisors are perceived less favorably by foreign subordinates overseas on a wide range of attributes, including competence and


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trustworthiness (Ahn, 1998; Paik & Sohn, 1998; Waxin, 2004). Korean managers are less willing to reflect employees’ suggestions in management (Lee, Roehl, & Choe, 2000), and the number and the authority of local staff are limited (Ahn, 1998). It appears that Korean companies overseas are reluctant to modify their home practices to accommodate the cultural specificities of the host country (i.e. headquarters mentality: Ahn, 1998; Paik & Sohn, 1998). These yield an impression that Korean managers do not trust local nationals, which in turn, elicits resentment by host personnel (Ahn, 1998; Paik & Sohn, 1998). As a consequence, Korean employers find it difficult to recruit and retain talented local personnel (Paik & Sohn, 1998). Therefore, Korean companies’ expansions to overseas have encountered many challenges especially in relation to human resource management (HRM) of local staff, despite much domestic economic growth in Korea. Several attempts have been made to explain these issues, such as hierarchical orientation of Korean companies (Alston, 1989; Chang & Chang, 1994); inflexible HRM systems (Paik & Sohn, 1998); low level of localization (Ahn, 1998); and little international exposure of Korean managers (Waxin, 2004). However, we assert that even though these explanations stand as they are, they overlook a crucial aspect of the work setting: workplace expectations and interactions between Korean managers, their foreign subordinates and colleagues, and the consequence of those interactions. In particular, we focus on the critical role of strong informal social ties (based on the unique social psychology of jeong, woori and nunchi) in maintaining control in the Korean workplace. The significance of these ties can be developed to explain Korean management discomfort in overseas settings. In the first section of this conceptual chapter, we review management practices of Korean organizations and the underlying assumptions relating to work attitudes. In addition to hierarchical Confucianism manifested in seniority-based and authoritarian structure of the organization, the important notion of harmony in Korean organizations is examined from an affective aspect through some indigenous Korean notions such as ‘jeong’ in the form of affect-based relations, ‘woori’ in the form of interdependent self, and ‘nunchi’ in the form of high work ethic. Informal social ties as a cultural control mechanism facilitate affect-based harmony mainly through informal interactions. In the second part of chapter, the implications for Korean practices overseas in the context of cross-cultural management are presented. Finally, some practical considerations for Korean managers are discussed.

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CHARACTERISTICS OF KOREAN MANAGEMENT Although there has been a New Human Resource Management (NHRM) trend to transform Korean companies toward performance-based management (Bae, 1997; Park & Yu, 2000), traditional ‘seniorityism’ remains in large numbers of firms (nearly 43% based on Park & Ahn’s survey in 1999), and the remaining companies still adopt either seniority-based plus some performance factor, or performance-based plus some seniority factor, rather than purely performance-based pay and promotion systems (Bae, 1997). This is not surprising given the fact that performance-based management is in conflict with traditional Korean values (Chang, 2002). Confucianism, Buddhism, Taoism and Shamanism, as the primary religions and philosophies in Korea and other East Asian countries, have placed the importance of the good-of-the-group (collectivism) in society (Dollinger, 1988; Ralston, Holt, Terpstra, & Yu, 1997; Waley, 1938) ahead of good-of-the-individual (individualism). Among these philosophies, Confucius’ teaching about the importance of the group and hierarchical relationships (Dollinger, 1988; Waley, 1938) is a primary influence within Eastern societies (Engardio, 1995; Pye, 1985). Among other qualities, collectivism purports to provide group support (Yang & Bond, 1990) and to share equally in its rewards (Nove, 1994).

Confucian Management As an elaborate code of social ethics, Confucianism’s impact on Korean (and other East Asian) culture has been pervasive (Lee, 1998c). Confucianism Even before Confucianism became the official philosophy of the Joseon dynasty in Korea (1392B1897), Confucianism endured as the basic social and political value system for the past thousand years in East Asia (Deuchler, 1992; Lee, 1998a, 1998b; Mattielli, 1977; Yum, 1987). During the Three Kingdoms (B.C.37–688) and the Koryo Kingdom in Korea (918–1392), Confucianism contributed to the establishment of social and political principles for the privileged classes through formal Confucian institutions (Lee, 2001a, 2001b). As early as 372 A.D., third level universities (taehak) in Korea taught the Confucian classics (Yum, 1987).

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Human relationships occupy a central place in Confucian philosophy (Chung, 1970; King & Bond, 1985; Lee, 1998b, 2000; Oh & Kim, 2002). As a consequence, Korean culture as a whole can be viewed as a relationship culture, and the family serves as the most important prototype in human relations (King & Bond, 1985; Lai & Lee, 2003; Lee, 2000; Redding & Hsiao, 1995). Among the Five Cardinal Relations articulated by Confucius (between king and subjects, father and son, elder brother and younger brother, husband and wife, and between friends), three are based on family (King & Bond, 1985). Confucianism emphasizes compliance to societal norms and to family/group expectations as the basis for proper human relationships in society (Fukuyama, 1995; Yum, 1987).

Confucian Values Confucian values reinforce authority, hierarchy and harmony among employees in Korean organizations (Chung, Lee, & Jung, 1997; Lee, 1998b). These Confucian values are reflected in the traditional Korean management practices of seniority-based reward systems, hierarchical order, paternalistic leadership, lifetime employment and harmony-based management (Kim, 1992; Lee & Yoo, 1987).

Seniority System The emphasis on seniority in Korea is in line with the Confucianist values of tradition and respect for experience and heritage (Lee, 1998b; Moore & Ishak, 1989; Paik & Sohn, 1998; Rowley, 2001). As built-in virtues, age and experience are highly respected and given priority treatment (Paik & Sohn, 1998). This is reflected in seniority-based HRM in Korea (Bae, 1997; Lee, 1998b; Rowley, 2001) which is used to create and maintain organizational stability and to facilitate organizational learning (Paik & Sohn, 1998). Seniority-based systems, and by the same token, lifetime employment, prevail from the graduate level recruitment process, gongchae, which is carefully carried out once or twice a year in Korean companies (Chung, Lee, & Jung, 1997; Lee, 1998a). The recruitees go through one to three months at boot-camp like training as groups, where corporate values and group loyalty are instilled and the newcomers transform themselves into corporate people even before starting on the job training for another year or so. All those who join the company in the same year form strong bonds with each other and in general move up the corporate ladder at the same pace based on their years of service (Paik & Sohn, 1998).


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Hierarchies Decision-making in Korean firms is typically highly centralized (Chen, 1995; Lee & Yoo, 1987; Paik & Sohn, 1998). Even though the concentration of authority has resulted partly from the integration of ownership and management in most Korean companies (Chen, 1995; Lee, 1998c; Lee & Yoo, 1987; Mensik, Grainger, & Chatterje, 1990), this is also an attribute of the Confucian teaching of respect for authority (Paik & Sohn, 1998). Confucianism prescribes hierarchical relationships among people to maintain stability in the family and state (Lee & Yoo, 1987), and in companies, this takes the form of bureaucratic control through well-defined organizational hierarchies and centralized decision making (Chen, 2001; DeMente, 1988; El Kahal, 2001; Jonathan, 1985; Koo & Nahm, 1997; Rhee, 1985; Somers, 1995; Sommer, Bae, & Luthans, 1996). The decisions made by superiors are rarely challenged in public, although subordinates need to use their own judgment as management directives tend to be more general than specific (Chen, 1995; Paik & Sohn, 1998). Paternalistic Leadership – Reciprocity Despite the first impression of Korean leadership style as highly authoritarian, management tradition in Korea has taken the form of fairly benevolent paternalism (Chang & Chang, 1994; Lee, 1998, 1998c; Paik & Sohn, 1998). In the Korean ideological tradition, there were no attempts made to make a ruler’s power absolute (Brandt, 1987); if a government violated Confucian teachings, for example, by obstructing social harmony, subjects were justified in challenging the authority (Brandt, 1987; DeMente, 1988; Hahm, 1986; Yum, 1987). Social harmony is only realized when each individual complies with the Confucian morality of reciprocal obligations imposed on all parties concerned (Lee, 1998c, 2001a, 2001b; Yum, 1987). Korean managers are expected to reciprocate subordinates’ respect by showing paternalism or empathy, not only for professional tasks and but also for personal needs and feelings (Chung et al., 1997; Kim, Sohn, & Wall, 1999; Lee, 1998a; Mensik et al., 1999; Paik & Sohn, 1998; Rae & Rowley, 2001).

Affect-Based Harmony Although seniorityism, hierarchical order and lifetime employment are realized as formal aspects of Korean management practices, paternalistic leadership and harmony are mainly pursued through informal structures among employees. Informal structures here can be broadly characterized as

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unofficial and emergent (Waldstrøm, 2001), among others, with normsbased control mechanisms (Farris, 1979), reflecting social familiarity and affective ties among members (Morand, 1995); and informal networks like the nervous system of a living organism (Krackhardt & Hanson, 1993). Korean leadership is heavily influenced by the key value of collective social harmony, or inhwa (Chen, 1995; Mensik et al., 1999). Inhwa is the most desirable state, in the community or at work (Chang, 1983). As an important way to achieve harmony-oriented leadership, Korean managers have a concern for the emotional environment of the group (Kim et al., 1999; Song & Meek, 1998) and try to interact with subordinates on an informal basis (Chen, 1995). Informal Interactions Another traditional value in Korean culture is relation-based behavior, or yongo (Chung et al., 1997), building closeness between people (Mensik et al., 1999). A strong sense of belonging promotes harmony within groups (Chung et al., 1997) by fostering trust among colleagues in peer relations and informal interactions (Lee, 1998a). This sense of belonging can be based on commonality, such as shared educational backgrounds, regional origins, group/organization membership or frequent contacts/socialization. Informal events where teams and groups spend time together outside the formal work place are common throughout Korean organizations (Chu, 1991; Yang, 2006). Not only are informal social gatherings with colleagues frequent, for example, three or four evenings per week till midnight, but also information shared in these events is varied, ranging from work-related topics to private issues (Yang, 2006). In addition to these regular social gatherings, by attending other activities such as company picnics, weddings, housewarming, funerals and birthday parties, group members show support and empathy toward each other, and blur distinctions between formal and informal domains (Lee, 1998a; Yang, 2006). Social ties of one kind, for example, friendship, can be used for different purposes, for example, moral and material support, work and non-work advice (Adler & Kwon, 2002). Affective Relations – Jeong Confucianism in Korea is rooted in the issues of human nature and feelings (Chung, 1995; Lee, 2001a, 2001b). The Korean word jeong, which has its origins in Confucian philosophy, has notions of happiness, anger, worries, sadness, joy, hate and fear as seven emotions of humanity as defined in Confucianism. Kim (1993) posited that jeong is an unconsciously formed psychological bond with somebody or something through contacts over


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time. Jeong is the fundamental base of Korean relationships (Lim, 1993) and has reinforced the prevalence of affective emotions, similar to family ties. Sympathy and concern for others are two major characteristics of those who practice jeong (Choi & Choi, 1990). Jeong is promoted by a non-rational and emotional view of the world, for example, paternalism and favoritism (Hangyeore, 2000; Lee, 2000) and binds social relations in Korea. Lack of emotional involvement is seen as coldness or lack of caring. The pervasiveness of jeong in Korean society stems from the fact that the family in Korea serves as the most important prototype in human relations (King & Bond, 1985; Lee, 1990). Korean adolescents view parental control as an indication of warmth (Kim, 1992). Therefore, intense involvement and inter-dependence among family members becomes an essential ingredient in Korean society. In addition, the perceived homogeneity of society and culture (e.g., virtually no racial or ethnic minorities: Lee, 1998a, 1998b), and total norm conformity leads to the formation of jeong and feelings of ‘‘sameness’’ in terms of social interdependence and emotional support (Park, 1990), allowing Koreans to view social (and work) relations as nothing more than an expansion of this family relationship (Lee, 1990). The abundant existence of jeong in Korean society engenders a management style that blurs the line between work life and personal life. Personalized relationships are an integral part of HRM practices in Korean companies (Paik & Sohn, 1998). Effective managers are supposed to take good care of their employees, based on personal relationships, and in return, subordinates devote their personal service to the supervisors and the organization. Interdependent Self – Woori In the world of jeong relationships, individuals are imperfect partial beings (Choi, 1991; Choi & Choi, 1990), and this leads to strong feelings of collective identity, or woori, among interactants. Under Confucianism, mutual dependence between people is necessary; therefore, people are ideally always indebted to each other (Yum, 1994). Naturally, people conceive of themselves predominantly in terms of their roles in relation to significant others and self is defined by the relationship with in-group members (self as interdependent self: Markus & Kitayama, 1991). As jeong grows through formal and informal interactions, woori belonging becomes stronger, and the instrumental, work-related nature of relationships (i.e., instrumental ties facilitating the transfer of physical or financial resources) within the group changes to a more affective basis (i.e., expressive ties providing friendship and social support: Tichy, Michael, & Fombrun, 1979; Ibarra & Andrews, 1993). In this sense, woori is related to

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the concept of strong ties (Granovetter, 1973) involving emotional intensity when the relationship involves intimacy (mutual confiding) and a significant investment of time. It also affects the flow of information, influence and solidarity available to the members (characteristics of social capital by Adler & Kwon, 2002) facilitating learning and the complex managerial routines in Korean organizations. Furthermore, woori can be understood as the basis of group social capital, that is, the set of resources made available to a group through group members’social relationships within the group’s social structure (Oh, Chung, & Labianca, 2004), providing interactants with access to work advice, performance feedback, decision-making, etc. through informal social ties within and outside of work places. Finally, woori allows interactants to subscribe to shared norms, emotional attachment and attributions of responsibility for outcomes of collective action, as a result of organizational identification (Dutton, Dukerich & Harquail, 1994), referring to a cognitive linking between the definition of the organization and the definition of self.

Position – Face Face is an image of self as a matter of reputation and appearance accorded by others (Bloodworth, 1980; Goffman, 1955; Yang, 1945). Ho (1976) defines face as ‘‘the respectability and/or deference’’ for a person ‘‘by virtue of the relative position he/she occupies in his/her social network’’ (p. 883), and Kim & Nam (1998) note that face as a defensive mechanism is more about ‘‘fitting-in’’ and not ‘‘standing-out’’ to secure the person’s social legitimacy as a group member. To save face, individuals should maintain their position in the group’s hierarchical network; for example, exhibiting piety toward parents, rendering loyalty to superiors and preserving harmony with group members (Chang & Chang, 1994; DeMente, 1988; Mao, 1994; Rhee, 1985). According to Confucianism, stability in social hierarchy should be obtained through the vertical relationships between two groups of people and the duties and obligations of each group (Tu, 1984). Face transactions, for example, showing respect to seniority, looking after juniors etc., take place under the norm of reciprocity (Mao, 1994), although the higher one’s status is, the more sensitive one becomes to saving one’s face (Bloodworth, 1980; Ho, 1976; Yang, 1945). The pressure to conform to the expectation of others (which is the essence of face control, Morgan, 1986), and long-term reciprocal face transactions, play an important role in creating, maintaining, and strengthening complex social networks (Reeder, 1987) in most Korean organizations.


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High Work Ethic – Nunchi Koreans often attribute their high levels of hard work and long working hours (Steers, Shin, & Ungson, 1989) to the social pressures and the expectations of their boss and peers (Janelli, 1993). Confucianism emphasizes the value of effort (Paik & Sohn, 1998), and this is manifested in the behavior and mentality of most Koreans in the form of euiyok, or ‘‘will’’ (Paik & Sohn, 1998). In line with emphasis on group harmony or consciousness (Mensik et al., 1999), those who fail to demonstrate a strong work ethic are discovered and disciplined, usually through very effective informal means (Paik & Sohn, 1998) not just by management but also by peers. Although formal means are rarely invoked (Paik & Sohn, 1998), informal social ties are used to address performance problems and personal issues, if necessary, by utilizing nunchi, or the ability to reading another’s mind and being perceptive and considerate (Lee, 1997; Robinson, 1985). A close personal relationship between people allows them exercise nunchi that is, to be able to read each others’ mind and to react to the needs of the other without explicitly asking (Choi, 1997); in other words, without consequently risking each other’s face (Yum, 1987). As such, managers are supposed to look after employees’ professional and personal needs while in return subordinates show a high work ethic and initiative in most Korean work places with implicit informal nunchi-based checks and balances. Group Harmony – Conflict Management Koreans agree that conflict must be managed with close consideration for group harmony (Kim et al., 1999). The principle of group harmony is derived from Confucian ideas stressing smooth and constructive interpersonal relations (Paik & Sohn, 1998). Kim et al. (1999) in their study describe how both leaders and subordinates personally assist others in maintaining or re-establishing harmonious interactions in the event of conflicts in the workplace; neither the leaders nor the subordinates rely heavily upon rules, policies and procedures for managing disputes. Lee (2002) also finds that while the conflict management styles used in Korean organizations are varied depending on the disputants’ relative status, in general management choose a collaborative style. Informal social ties are utilized as people are highly sensitive to the possibility of losing social face in public; they avoid open conflict, so that they and their conflict partners need not fear disrespect and alienation (Cocroft & Ting-Toomey, 1994). Nunchi, in the form of consideration and susceptibility to others, can help develop a cooperative context for conflict discussion as well.

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Cultural Control Organizational control is about monitoring the behavior of organization members and providing feedback to correct any discrepancies from desired behavior (Jaeger, 1983, p. 92). Control style can be either formal and bureaucratic, relying on the use of explicit formal rules and regulation (Weber, 1946) and/or informal and cultural, relying on an implicit organization wide culture (Jaeger, 1983). Although most Korean companies have a tall hierarchical organizational structure (Gray & Marshall, 1998) with vertical concentration of decisionmaking power at the senior levels of management (Chen, 1995), employee behavior is controlled through embedded Confucian traditions without explicitly written rules or procedures (Jang & Chung, 1995). Without explicit formalized rules or procedures (Lee, 1998a, 1998b; Lee & Yoo, 1987), personalized relationships that is informal social ties are used as an effective means of control (Paik & Sohn, 1998). Public obligations toward work expectations in the group are often an effective means of informally controlling the potentially shirking behavior of its members (Paik & Sohn, 1998). The collective is used to maintain and control work effectiveness.

KOREAN MANAGEMENT IN CROSS-CULTURAL SETTINGS As reviewed at the previous section of the chapter, Korean management practices are mainly influenced by Confucianist management principles based on seniority and hierarchical order; affect-based harmony founded on jeong, woori, nunchi; and cultural control mechanisms facilitated by informal social ties. What then are the implications of applying these culturally embedded managerial attitudes in a cross-cultural setting? How do nonKorean subordinates and colleagues perceive these practices? What are the challenges? In the following sections, we are going to try to explore these questions and propose some answers. The Role of National Culture in Organizations Contrary to the country-of-origin theory that MNCs exhibit, the national characteristics of the home country (Chang, 1988; Guest & Hoque, 1996; Hu, 1992; Lowe, 1998; Pearson, Chatterjee, & Okachi, 2003; Ruigrok & van


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Tulder, 1995; Schneider, 1988; Whitley, 1992), the convergence theory argues that as nations become industrialized, their cultural values change more toward those of the Western capitalistic economies (Dimaggio & Powell, 1983; England & Lee, 1974; Kordonsky, 1992; Negandhi, 1979, 1985; Pascale & Maguire, 1980; Shmelev, 1991; Yip, 1992). Reconciling these two different views, Ferner (1997) notes that HRM development or employee communications are more susceptible to the imprint of countryof-origin factors, whereas wage, hours of work, forms of job contract and redundancy procedures are subject to local institutional arrangements. This is in line with Aycan (2000a), Fischer, Ferreira, Assmar, Redford, and Harb (2005) and Ostroff and Bowen (2000), who propose that the national culture of the MNC influences work attitudes and behavior mainly indirectly through organizational practices.

Communication Intercultural communication occurs whenever a message producer and a message receiver are from different cultures (Porter & Samovar, 1988). Much of our daily communication follows familiar scripts and people tend to take their own culture as natural until they encounter something different (Gudykunst & Kim, 1995). Verbal and non-verbal language as the forefront communication tool reflects interactants’ tacit cognition and culture. One example would be the different taken for granted ways of displaying respect by different cultural groups (Boje, Oswick & Ford, 2004; e.g., reactive tokens of those brief verbal and nonverbal responses: Clancy, Thompson, Suzuki & Tao, 1996; turn-taking rules: Clyne, 1994; listener-ship within the power dimension: Scheu-Lottgen, & Hernańdez-Campoy, 1998). The Korean language and communication style are extremely sensitive to the nuances of hierarchical human relationships. Korean is full of honorifics, the use of different levels of speech in addressing persons of elderly, junior or equal rank. Age and status as built in virtues in Korea are reflected in its language. The importance of social relationships in Confucian societies such as Korea and Japan has promoted the differentiation of linguistic codes to accommodate highly differentiated relationships (Yum, 1985). Kowner (2002) highlights Japanese’ feelings of status violation in cross cultural interactions. Likewise, many Korean supervisors might feel status-violation in the interaction with overseas staff. Furthermore, the assumption of jeong, woori and nunchi between interactants in Korea confines the thinking and communication behavior

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of Korean managers. Vagueness (high context: Hall, 1976) is a form of politeness to dissolve or avoid embarrassing situations, that is, losing face, and ‘‘anticipatory communication’’ (Lebra, 1976) emphasizing listener’s role of interpretation is common in Eastern culture. In the same vein, Koreans often hesitate to answer ‘‘Yes’’ or ‘‘No,’’ preferring to keep silent or noncommittal (Pak, 1973) as making decisions (‘‘Yes’’ or ‘‘No’’) depends on harmony or balance between interactants and situations. Foreign subordinates could construe this reserved use of verbal language as incompetence. Tyler (1995) and Tyler and Davies (1990)’s study of Korean teaching assistants (TA) in the United States describes American undergraduates’ perception of Korean TAs as being too vague and lacking authority, whereas the Korean TAs strove to present themselves as modest to preserve the American students’ face.

Management Practice Although there are few studies of cross-cultural issues in Korean MNCs, there is a wealth of literature relating to Japanese MNCs overseas (Bartlett & Ghoshal, 1989a, 1989b; Bartlett & Yoshihara, 1988; Ferner, 1997; Johansson & Yip, 1994; Kopp, 1994; Lincoln, Kerbo, & Wittenhagen, 1995; Tung, 1982). Japan shares similar national traits of hierarchical Confucianism and collectivism with Korea, so that it is possible to make insights relating to Confucianist management practice. High reliance on Japanese expatriates and the failure to integrate local managers are frequently reported, for example, limited career advancement of local staff (Ferner, 1997; Fukuyama, 1995; Lincoln et al., 1995). Several explanations are given such as late internationalization of firms (Ferner, 1997); the lack of trust toward foreigners (Fukuyama, 1995) and the lack of commitment of local staff (Lincoln et al., 1995). In addition, Lincoln et al. (1995, p. 428) claim that Japanese MNCs rely heavily on Japanese expatriates as social control devices for the strong but informal centralized co-ordination (Bartlett & Ghoshal, 1989a, 1989b; Bartlett & Yoshihara, 1988; Johansson & Yip, 1994; Kopp, 1994; Lincoln et al., 1995; Tung, 1982). Cultural control activities such as face-to-face informal assessment (Ferner, 1997) do not travel well as these are conditioned to more homogeneous and collectively oriented employees (England, 1975; Ferner, 1997; Hofstede, 1983; Lincoln et al., 1995; Nakane, 1970). As a consequence, Dedoussis (1995) argues that Japanese foreign subsidiaries perform only relatively low value-added activities. Likewise, local staff in most Korean organizations overseas is only expected to implement a plan made at the top (Korean) management


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level. Foreign subordinates might know enough to finish tasks given, but do not know why they are doing it (Paik & Sohn, 1998). In addition, while Korean managers may give general and vague directives (i.e., high context culture) to the local staff (who are comfortable with low context culture), the absence of informal social ties due to lack of intense interactions between Korean managers and foreign subordinates in Korean MNCs means that there is no opportunity to fill the void of missing information (details of directives from supervisors, feedback and opinion from subordinates). As we have seen, one of Korean management’s most important goals is to achieve group harmony. However, Hong (2005) finds that Koreans tend to choose an avoidance strategy in intercultural conflict partially because of language incompetence (see also Morris & Wilkinson, 1995: Japanese managers’ high concern in communicating across cultures). However, we argue that avoidance becomes the ‘‘default’’ management style for crosscultural conflict in overseas Korean organizations mainly due to the absence of the informal social ties which are commonly used in Korea as a resolution mechanism. As a result, there is often a lack of transparent conflict management practices which are understood and accepted by both Korean and foreign staff. Moreover, Korean managers are more likely than U.S. managers to personally take the blame for unit failure (Nam & Mowday, 1993) as a sign of modesty or collective responsibility. However, this attitude may have adverse affects as it might appear to non-Korean workers to be admitting incompetence. Similarly, whereas Koreans are more accepting of and show greater confidence in unfavorable or negative feedback (this could be explained by reciprocal respect developed towards each other in long-term relationships), Americans and other Caucasians however display the opposite pattern (Diener, Suh, Smith, & Shao, 1995; Fry & Ghosh, 1980). As a result, foreign subordinates may experience strong negative emotions when Korean managers give unfavorable feedback, whereas Koreans do not find Western logic or reasoning (e.g., avoiding blame and claiming credit at all times) to be particularly persuasive or credible (Tung, 1991).

CONSIDERATIONS FOR KOREAN MANAGERS OVERSEAS Socialization Most Korean managers do not feel comfortable working with foreign employees (Ahn, 1998), while supervisory and co-worker support is one of

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the most significant factors for the job satisfaction of Korean expatriates (Waxin, 2004). Asian expatriates scored the lowest on psychological wellbeing in cross-cultural settings, resulting from smaller social network size and less frequency of contact with locals (Wang, & Kanugo, 2004). This is contrary to American and European expatriates’ balanced and active social network, based on weak ties, providing the individual with informational and instrumental support (Granovetter, 1973; Lin, 1982, 1983).

Seeking Alternatives for Cultural Control Control in Korean organization is often exercised without formalized rules or procedures. Korean companies usually have no clearly assigned jobs for individual employees and no clear-cut job descriptions for them (Lee, 1998b). Korean managers prefer contracts or agreements to be loose and flexible, so that modifications can be made with a minimum of fuss and bother. The spirit of the contract is more important than the letter, which is simply a matter of common sense for most Koreans. Korean may feel that anticipating and specifically providing for every possible outcome indicates a lack of mutual trust (Lee, 1998c). However, to accurately predict exactly how the respective positions of the parties will change over time would be only possible among tight homogeneous group members. Most overseas operations are made up of people holding different attitudes and expectations according to their cultural background. It would, therefore, be not possible for both sides to predict accurately how the respective positions of the parties will behave. It would be beneficial for Korean managers as employers to lay down clear contracts and job descriptions to follow rather than to expect local employees to improvise and guess unwritten roles. This way both parties know what to expect/be expected at work. The lower degree of formality and standardization in traditional Korean management practices with their emphasis on high managerial discretion (cf. Lee & Yoo, 1987) would only be seen ad-hoc or even at-whim management by foreign staff who are familiar with and expecting formalized rules and procedures based on their (western) values. Similarly, Koreans often attribute their hard work to the social pressures present in the organization that force them to meet the expectations of their boss and peers by working long hours (Janelli, 1993). Peer pressure through personalized relationships is used as an effective means of control (Paik & Sohn, 1998) and is deeply entwined in Korean culture. Informal social ties are used to address performance problems and personal issues,


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if necessary, by utilizing nunchi, or the ability to read another’s mind, and by being perceptive and considerate (Lee, 1997; Robinson, 1985). Strong informal social ties through intense informal interactions also promote group cohesion in most Korean organizations. However, these strong ties require heavy (emotional, financial and time) investment, and a tight homogeneous cultural belief between interactants, which may not be feasible to achieve in a cross-cultural environment. Korean organizations could promote weak social ties facilitated by moderate interactions and adopt a clearer management communication style. For example, developing and announcing extended operation scheduling, so that overtime requirements will not come as a surprise can also be helpful in most Korean overseas organization. Expatriate Korean managers should be trained to accept behavioral differences and adjust their management styles to the local culture (Paik & Sohn, 1998). Furthermore, Korean employees’ hard work, long hours and high motivation could also be an attempt to demonstrate their willingness to follow managerial control and to make a good impression on them (Jang & Chung, 1995). In most Korean companies, authority is concentrated in senior levels of managerial hierarchies, with major decisions requiring a formal procedure of approval from top levels of management (Chen, 1995). Those who have been promoted during their extended service in the company can also exert powerful influences on the company management (Chung et al., 1997). These practices are based on seniority and lifetime employment (Chung et al., 1997; Lee, 1998a), are not practical or achievable for most foreign staff. Therefore, it would not be fair for Korean managers to expect local staff in host countries to show same level of work ethic back home. In fact, expecting duties beyond contracts would lead possible clash/conflicts of (cultural based) expectations and prone to elicit frustration among foreign staff. Finally, Korean staff is not offended by criticism and usually feel easy about receiving feedback from their colleagues and supervisors, even if it is negative (Jang & Chung, 1995). This is because Koreans assume relationships are long term by nature, and they perceive a certain element of conflicts as being necessary to understand and benefit each other eventually. However, given that the level of mutual trust that can be created between Korean managers and foreign staff is limited in most Korean organizations overseas where there is little chance of building long-term relationships due to the short tenures of Korean expatriates, negative comments toward foreign staff would not be well received. In fact, local staff will typically take such conflicts personally and may develop a negative perception of the manager as unprofessional blurring informal and formal domain.

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Positioning in International Market The globalization process in Korean organizations has taken more of a ‘‘learning by doing’’ approach rather than an intended strategic approach (Bae, 2004). As a consequence, most Korean firms have transplanted headquarters’ practices directly to their overseas operations without regard for cultural differences (Ahn, 1998; Bae, 2004; Paik & Sohn, 1998). Again, in a similar Confucian cultural context, Japanese subsidiaries have been most successful in rural areas where values are more similar to those of the Japanese in terms of group orientation, family-oriented traditions and work values with a relatively stable workforce (Beechler & Yang, 1994; JETRO, 1991; Pfeffer, 1983; Yang, 1992). This approach has been feasible while foreign subsidiaries remained relatively peripheral operations (Dedoussis, 1995). However, attempts to export culturally embedded national HR systems without appreciation of local cultures encounter growing challenges as Korean and Japanese MNCs try to expand (Ahn, 1998; Bae, 2004; Beechler, & Yang, 1994; Dedoussis, 1995; Paik & Sohn, 1998) and strive to take advantage of local expertise and knowledge. Although large cultural distance may create difficulty at the micro level because of the possibility of misunderstanding and slow adaptation between managers (Black & Mendenhall, 1992), it may be beneficial at the macro level for multinational companies to the extent that it facilitates learning (Ghoshal, 1987; Morosini, Shane, & Singh, 1998). It therefore makes sense to retain foreign staff and make them feel that their contributions are valued. There is no one-size-fits-all solution for overseas management practices overseas; MNCs should consider the right levels of coordination and integration of local staff (Beechler, 1990) and develop an appropriate management system in the overseas subsidiaries, if necessary, depending on the importance of their resources (Blau, 1964; Pfeffer & Salancik, 1978; Thompson, 1967).

CONCLUSION Korean management practices exercise informal (social) mechanisms underpinned by embedded national traits, namely hierarchical Confucianism and affect-based harmony. These characteristics, resulting in strong ties, function effectively in the home country enhancing organizational communication and stability. However, in a cross-cultural setting involving a diverse workforce, the cultural expectations of Korean managers and their


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subordinates are generally at odds. Mainly due to the absence of intense informal social interaction, Korean managers and their non-Korean workers do not share the intense affective connection fostered by jeong. The high-context communication style of Korean managers is not well understood by most foreign staff, and there is no mechanism to resolve frustration or conflict in Korean MNCs resulting in conflict avoidance. Although culturally embedded emotional sensitivity to others (in the form of jeong) in Korea allows members to form strong bonds, this requires constant and heavy interaction and consumes quite amount of interactants’ resources (e.g., emotion and time). Although the strategies of Korean MNCs move toward exploiting local expertise and knowledge, Korean organizations overseas should consider adopting formalization to foster weak ties with locals to promote coordination.

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SERVANT LEADERSHIP IN CHINA: CONCEPTUALIZATION AND MEASUREMENT Jian-Min Sun and Biying Wang ABSTRACT This article verified the construct of servant leadership and validated a measure developed in Western culture. Results from exploratory factor analysis (EFA) (N ¼ 285) produced a five-factor model – altruistic calling, emotional healing, persuasive mapping, wisdom, and community stewardship with less items than the original measure. Confirmatory factor analysis (CFA) (N ¼ 304) indicated that the 5-factor servant leadership model fits the data best. Correlation analysis of the supervisorsubordinate paired sample (N ¼ 209 dyads) showed that servant leadership has more common features with transformational leadership and less with paternalistic leadership; the predictive power of servant leadership was roughly equivalent to that of transformational leadership but higher than that of paternalistic leadership when predicting criterion variables such as overall satisfaction and deviance behavior. Our results totally demonstrated that the revised servant leadership scale in Chinese culture has higher reliability and validity, which could be used for subsequent studies as an effective instrument.


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322

JIAN-MIN SUN AND BIYING WANG

INTRODUCTION The Purpose of the Study The construct of servant leadership can be traced back to 1970s in Western countries, which first referred to the idea of the servant as leader, demonstrating that the servant leader is servant first, and with the natural feeling that one wants to serve, to serve first (Greenleaf, 1970). Servant leaders respect the dignity and value of the followers, and take serving others as first important responsibility (Spears, 2004), so that it could meet the physiological, psychological, and affective needs of the followers (Reinke, 2004). Although the ideas of this construct can easily be found in the recent literature by leadership theorists, it has not been an important empirical research topic in the Western literature until recent years (Dennis, Winston, & Bruce, 2003; Laub, 1999; Page & Wong, 2000; Patterson, 2003; Russell & Stone, 2002). A few assessment instruments for servant leadership have been developed (Barbuto & Wheeler, 2006; Dennis & Bocarnea, 2005; Dennis et al., 2003; Liden, Wayne, Zhao, & Henderson, 2008), which made it more feasible to conduct the empirical research and comparative research. People would doubt if there is any significance or value for the servant leadership as a new kind of leadership style? Could other existing leadership theories substitute it? Barbuto and Wheeler (2006) compared servant leadership with transformational and leader-member-exchange (LMX) leadership theories based on the nature of theory, role of leader, role of follower, moral component, outcomes expected, on the individual level, interpersonal level, group level, organizational level, and societal level. A correlation analysis was made with a sample of 468 employees and proved that servant leadership is different from transformational and LMX leadership theories. Graham (1991) postulated that servant leadership exceeds Bass’(1985) transformational leadership at least in two ways: (1) its recognition of the leader’s social responsibilities to serve those people who are marginalized by a system and (2) its dedication to followers’ needs and interests, as opposed to those of their own or their organization (Sendjaya & Sarros, 2002). Therefore, there is theoretical implication to conduct an empirical research on the construct of servant leadership in a different culture. As for the practice in business world, it is reported that lots of top-ranked companies, such as Southwest Airlines, TD Industries, Synovus Financial, and many others, have their servant leadership practices according to Fortune’s January 2000 ‘‘Top 100 Best Companies to Work For in America’’

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and Fortune 2001 annual survey of ‘‘top employers’’ (Levering & Moskowitz, 2000, 2001). In addition, a large number of contemporary organizations in the world are developing themselves into learning organizations. Bass (2000) supposed that ‘‘The strength of the servant leadership movement and its many links to encouraging follower learning, growth, and autonomy, suggest that the untested theory will play a role in the future leadership of the learning organization.’’ Therefore, servant leadership as a kind of leadership value has important implications for the leaders in all kinds of organizations, especially for business managers. In Chinese language, the word ‘‘public servant’’ always makes people think of Chinese cadres of communist party. In all ages, there were many viewpoints to describe the Chinese cadres’ image, such as ‘‘Let’s bend our back to the task until our dying day,’’ ‘‘Cadres should remember the servant image in their single word and deed and they should think of well-being of the masses in their any single movement and action.’’ ‘‘Serve the people heart and soul’’ has been a slogan for a few decades in the whole society, especially amongst the members of Communist Party of China. As a matter of fact, ‘‘serving the people’’ has been the credo and mission of Communist Party of China from the very beginning, as Karl Marx first used the word ‘‘public servant’’ to refer to the man of mastering the Paris Commune. The significant state leaders in China all come up with their own standpoints about public servant: Mao Ze-dong put forward ‘‘following the mass line,’’ Zhou Enlai pointed out ‘‘Chinese cadres are public servant of the people, and should share happiness and sorrow with the people,’’ Deng Xiaoping highlighted repeatedly ‘‘leadership is service.’’ The important thought of Three Representation proposed by Jiang Zemin and Scientific Outlook on Development by Hu Jintao are both the new requirements to Chinese leaders, especially the Communist Party cadres, which are both manifestations of serving the people. Chinese government has always been stressing the value of serving the people, and writing this requirement to the Party Constitution, ‘‘Chinese cadres are mainstay of the Party’s cause, and also are public servants’’ (Zhang, 2007). Servant leadership frequently appears in Chinese news media and some of the academic journals and magazines. Unfortunately, there are few concrete specifications and evaluation criteria for the Chinese cadres about servant leadership for practice and research. People only have a vague understanding to this abstract concept due to the lack of specific operational indicators. No servant leadership measures have been developed in the Chinese setting for the selection and evaluation of cadres, which made it difficult to conduct empirical studies about this important construct in China. It is thus

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worthwhile to employ a Western-developed measure to conduct research in China and test its applicability under Chinese context. As a leadership value or leadership style, servant leadership has been fundamentally referred to public administrative and religious leaders. It is also worthwhile to explore if we could extend it into the business organizations and whether it would have great effects on enterprise development. There is no empirical study yet about servant leadership in Chinese academia up to now, except several articles about theoretical reviews and suggestive discussions. Therefore, it is a practical way to adopt the idea from the Western academia to clarify the construct and make an indigenous validation of the measure for servant leadership in the Chinese context.

Conceptualization and Connotation of Servant Leadership Servant leadership was first introduced by Professor Greenleaf of MIT in 1970, who had worked in AT&T for more than four decades with outstanding leading and managing experiences (Greenleaf, 1970). He gained his intuitive insight from a book called Journey to the East by Herman Hesse (1956) and then developed the concept of servant leadership. The book tells a story of a band of men who make a long mythical journey to the East. The central figure of the story is Leo, who does menial chores of the group as a servant and also sustains the group with his spirit and song. Leo makes all things go well by means of his super abilities until he disappears one day. Then the group falls into disorder and chaos without the servant Leo, and the journey is abandoned. Many years later, one of the group members, also the narrator of the story, found that Leo was the true great leader launching and sustaining the journey. Under the illumination of the story, Greenleaf (1977) believed that servant leaders are leaders who put other people’s needs, aspirations, and interests above their own (Sendjaya & Sarros, 2002), and whose profound sense of leadership ‘‘begins with the natural feeling that one wants to serve, to serve first,’’ to make their followers to ‘‘grow healthier, wiser, freer, more autonomous, and more likely themselves to become servants.’’ In this study, the following conceptual definition for servant leadership is proposed: servant leadership is a distinct leadership style which focuses more on the good of followers than on the self-interest of the leader (Spears, 1998; Laub, 1999). Most of the researchers agree that servant leaders respect the dignity and vale of the followers and take serving others as first

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important responsibility and try to meet the physiological, psychological, and affective needs of the followers.

Servant Leadership Theories Since Greenleaf (1970) proposed the concept of servant leadership, there was only anecdotal evidence to support the concept in Western academia in the earlier stage (Bowman, 1997). For example, Spears (1998), solely based on the work of Greenleaf, summarized 10 characteristics of servant leadership: listening, empathy, healing, awareness, persuasion, conceptualization, foresight, stewardship, commitment to the growth of people, and building community. Thereafter, the most typical analytical research was done by Russell and Stone (2002). Based on the analysis and summary, they put forward a hypothetical construct model of servant leadership portraying the servant leadership theory (shown in Fig. 1). According to Neuschel (1998), ‘‘the image of the leader is not his superficial self but rather the sum total of a system of values demonstrated over time.’’ Consequently, values as the core beliefs that determine an individual’s behavior principles constitute the starting point serving as the independent variables in the model of servant leadership. The dependent variables are nine functional attributes of servant

Independent

Dependent/Independent Variable

Variables

Servant Leadership

Values

Functional attributes

Core Beliefs

Vision, Honesty, Integrity, Trust,

Principles

Service, Modeling, Pioneering,

Subsequent Dependent Variable

Organizational Performance

Appreciation of Others, Empowerment

Moderating Variables Accompanying attributes Employee Communication, Credibility, Competence,

Organizational

Stewardship, Visibility, Influence, Persuasion,

Culture

Attitudes & Work Behaviors

Listening, Encouragement, Teaching, Delegation.

Fig. 1.

Servant Leadership Model. Source: Russell and Stone (2002).

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leadership, which are operative qualities, characteristics, and distinctive features belonging to leaders and observed through specific leader behaviors in the workplace, and also determine the form and effectiveness of servant leadership. The values of leaders incarnate through the functional attributes of servant leaders. In addition, 11 accompanying attributes impact on the translation of values into functional attributes, which appear to supplement and augment the functional attributes, and not secondary in nature, rather, they are complementary and, in some cases, prerequisites to effective servant leadership. Therefore, the accompanying attributes are moderating variables and affect the level and intensity of the functional attributes (Russell & Stone, 2002). According to the model, servant leadership is also a controllable variable that affects organizations, which ultimately becomes an independent variable that affects the subsequent organizational performance as dependent variable. Additionally, mediating or intervening variables, such as organizational culture and employee attitudes, may influence the effectiveness of servant leadership and have a governing effect upon organizational performance (Russell & Stone, 2002). The servant leadership model provided with certain theoretical basis for the later researchers through inductive thinking and model construction. The construct of servant leadership appealed wider attention of academics in the recent years. More empirical studies have been emerged based on a few measures or scales developed in those studies. Page and Wong (2000) developed a conceptual framework for measuring servant leadership including four components: personality, relationship, task, and process. The personality component concerns the character of the leader and is related to having a servant heart and serving others with integrity and commitment; the relationship component concerns building up others; the task component concerns doing the work of a leader such as visioning and decision-making; the process component concerns improving organizational processes, for example, modeling and team building (Dennis et al., 2003). Based on an extensive study of the literature and their own practical experience on servant leadership, Page and Wong (2000) originally developed a pool of 200 items for servant leadership. After eliminating unnecessary items, 99 items were remained as a scale, which were classified into 12 distinct categories with 5–11 items per category. But it failed to conduct factor analysis and reliability test to the items and the scale. Dennis et al. (2003) based on 99 items of Page and Wong (2000), developed a three-factor model measure of servant leadership by doing factor


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analysis, which finally contains 23 items. The three factors are empowerment (a ¼ .97), service (a ¼ .89), and vision (a ¼ .94). Patterson (2003) had developed a working theory of servant leadership, which created a platform for more specific research by defining the values that she called the component ‘‘constructs’’ of servant leadership on which servant leadership is based (Dennis & Bocarnea, 2005). She argued that component constructs included agepao love, acts with humility, altruistic, visionary for the followers, trusting, serving, and empowering followers. Based on Patterson’s theory, Dennis and Bocarnea (2005) following DeVellis (1991) ‘‘Guidelines in Scale Development’’ developed a 22-item instrument for servant leadership and validated five factors of the measure with 1075 samples including agepao love (a ¼ .94), empowerment (a ¼ .94), vision (a ¼ .89), humility (a ¼ .92), and trust (less than two items, and no a value). Cumulative variance explained by the measure was 71% in the study. Although the abovementioned researches above have drawn some valuable conclusions, there are still many limitations. (1) Some data came from the internet survey, which made the representativeness of the samples under question. (2) The lack of validation of the measures, which made the future use of those instruments unreliable. (3) The structure of servant leadership construct need to be further clarified and identified. Therefore, it is not yet without suspicions about the construct structure and the reliability and validity of the measures developed in the abovementioned studies. Barbuto and Wheeler (2002), based on literature review, especially on analytical research of Greenleaf (1970) and Spears (1995), induced 11 potential characteristics of servant leadership, including calling, listening, empathy, healing, awareness, persuasion, conceptualization, foresight, stewardship, growth, and community building. They further developed an instrument for servant leadership according to DeVellis (1991) ‘‘Guidelines in Scale Development,’’ validated the construct, and proved empirical validity by comparing servant leadership with transformational leadership and LMX theory with leader-subordinate paired sample composed of 80 leaders and 388 subordinates. Both exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) showed that servant leadership was a five-dimension construct: altruistic calling (a ¼ .77, .82), emotional healing (a ¼ .68, .91), wisdom (a ¼ .87, .92), persuasive mapping (a ¼ .83, .87), and organizational stewardship (a ¼ .83, .89). The construct was validated with both leader and subordinate samples. The scale consists of 23 items. Liden et al. (2008) verified a seven-factor model with factor analysis and multilevel hierarchical linear modeling analysis. Their scale included 28

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items with 4 items for each factor: conceptual skills (a ¼ .81, CFA sample; a ¼ .80, hierarchical linear modeling HLM sample); empowering (a ¼ .80, CFA sample; a ¼ .77, HLM sample); helping subordinates grow and succeed (a ¼ .82, CFA sample; a ¼ .83, HLM sample); putting subordinates first (a ¼ .86, CFA sample; a ¼ .86, HLM sample); behaving ethically(a ¼ .83, CFA sample; a ¼ .82, HLM sample); emotional healing (a ¼ .76, CFA sample; a ¼ .78, HLM sample); and creating value for the community (a ¼ .83, CFA sample; a ¼ .84, HLM sample). This is the most rigorous empirical study up to date and also proposed a multilevel approach for analyzing servant leadership. But it is not without limitations, such as its cross-sectional design compromised the causal inference of the study; the lower power for detecting group-level effects. The limitations in the abovementioned studies may undermine not only the generalizability of the research results but also the potential further application of the assessment instruments developed in those studies. After comparing several instruments, we selected the scale of Barbuto and Wheeler (2006) as the research instrument to be validated in Chinese setting because this measure not only has better reliability and validity but was verified by different samples with different criteria.

METHOD Samples This research included two samples. Sample 1 was supervisor-subordinate paired sample from Beijing region in China, using supervisor questionnaire and subordinate questionnaire (explained in detail below) as instrument, in which, supervisor questionnaire included self-report scales about leadership and their overall and life satisfaction and supervisors’ evaluation to their subordinates about performance and behavior; subordinate questionnaire contained self-report scale about satisfaction to supervisor and perceived organizational support. Sample 2 consisted of supervisors from different organizations in several provinces in China, using leadership style questionnaire (only including servant leadership scale from supervisor questionnaire explained in detail below) as instrument. Sample 1. Sample 1 was supervisor-subordinate paired sample from 25 organizations in Beijing region in China, including private, state-owned and overseas-funded enterprises, and several public institutions. Two hundred and eighty-five supervisors were included (response rate ¼ 81.4%) in the

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sample. With respect to the supervisor respondents, 57.4% were male, average age of the respondents was 35.2 years. In terms of their education, 60% of the respondents had college education. Average organizational tenure was 11.5 years and the average job tenure was 4.6 years. There were 256 general employees (response rate ¼ 73.1%) in the sample. The demographic breakdown for the employee respondents was as follows: male, 40.1%, average age was 27.6 years, 43.5% had college education. The average organizational tenure was 4.1 years and the average job tenure was 1.6 years. The effective paired sample sizes were 209 dyads eventually with at least one subordinate per supervisor. Sample 2. Sample 2 was 304 supervisors (response rate ¼ 86.9%) in 20 organizations from Beijing, Sichuan, Anhui, Guangdong, and Liaoning provinces in China, including different industries such as machine building, electronic communication, and banking. With respect to the respondents, 37.4% were male, the average age was 33.6 years, and 52.5% of the respondents had college education. The average organizational tenure was 5.7 years and the average job tenure was 2.3 years. Thirty percent of respondents were in state-owned enterprise, 20% in private, 40% in joint ventures and MNCs, and 10% in other organizations.

Procedures Data collections of sample 1 were completed during April–June, 2008, which were entrusted to 70 participants of an adult business education class the authors taught. The 70 participants were employees or supervisors of some organizations, who had some work experiences and broader social relations. They were asked to find paired respondents of managers and subordinates within their organizations to complete the questionnaire for a scientific research only. Before the formal survey, we had instructed them the details and essentials about questionnaire survey, conducted specific training about questionnaire survey, and handed out enough copies of paper instructions and questionnaires to them. Seventy participants were required to complete the survey task in their work organizations in their spare time within two weeks. Either the authors or the 70 research assistants would be facilitators on site when the survey was done. In sample 1, data of supervisors were gained with supervisor questionnaire (explained in detail below) by supervisors’ self-report evaluation about leadership and their overall and life satisfaction and supervisors’ evaluation to their subordinates about performance and behavior; data of

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subordinates were produced with subordinate questionnaire (explained in detail below) by self-report evaluation of satisfaction to supervisor and perceived organizational support. Those subordinates did not know being evaluated by their supervisors in sample 1. The returned two kinds of questionnaires were matched by research assistants. Each research assistant was only invited to collect three–five dyads to survey to guarantee the response rate. Data collection of sample 2 was completed with leadership style questionnaire (only a part of the supervisor questionnaire explained in detail below), which was by e-mail and airmail based on a random sampling. Data collection of sample 2 was conducted by the researchers in August 2007.

Measures This research used supervisor questionnaires, subordinate questionnaires, and self-report servant leadership scale. Some of measures were from Western literatures, which need to be translated into Chinese language. For the sake of translation accuracy, Chinese–English back-translations were employed, including servant leadership and transformational leadership scales, life satisfaction scale, contextual and task performance scales, and deviance behavior scale. Specific steps were as follows. (1) Three doctor candidates were invited, who majored in applied psychology with acceptable English proficiency and did not know the content and purpose of this research beforehand, to translate the original English scales into Chinese. Then, a formal Chinese version was made after the three translators made an extensive discussion of all the translations to get agreement. (2) Two other doctor candidates were invited, who majored in organizational behavior with good English proficiency, to retranslate the agreed Chinese version of the scales into English and got a final agreed English version. Then, one of the authors compared the back-translated English version with the original English one, found out the differences between them, and corrected the corresponding differences in the Chinese version. (3) Two junior faculty members in organizational behavior were invited to compare the original and the retranslated English scales to guarantee the translation versions were equivalent in the meaning. Finally, the formal questionnaires of this research were composed. Reponses to all measures were scaled with six-point Likert scale from 1 (strongly disagree) to 6 (strongly agree). Supervisor questionnaire. Supervisor questionnaire included servant leadership, paternalistic leadership and transformational leadership


331

scales, overall and life satisfaction scales, contextual and task performance scales, and deviance behavior scale, in which, three leadership scales and two satisfaction scales were supervisor’s self-rating, and the performance and deviance behavior scales were supervisor’s ratings to their subordinates. Servant leadership was measured with a 23-item servant leadership scale developed by Barbuto and Wheeler (2006). Example items include ‘‘This person sacrifices his/her own interests to meet my needs,’’ ‘‘This person is good at convincing me to do things.’’ Paternalistic leadership was measured using 15-item scale of Cheng, Chou, Huang, Farh, and Peng (2003), which was originally developed in Chinese language under Chinese setting and included three factors and five items per factor: benevolent leadership (a ¼ .88), moral leadership (a ¼ .90), and authoritarian leadership (a ¼ .79). Example item includes ‘‘he/she cares about my personal life and family life.’’ Single-factor measure with 12 items (Bass, 1985, 1999) was used to rate transformational leadership (a ¼ .89). Example items include ‘‘Specifies the importance of having a strong sense of purpose,’’ ‘‘Considers the moral and ethical consequences of decisions.’’ Overall satisfaction was measured using single-factor scale with six items developed by Tsui, Egan and O’Reilly (1992) (a ¼ .73), which is originally designed for Chinese sample. Life satisfaction was assessed by single-factor scale with five items by Diener, Emmons, and Larsen (1985) (a ¼ .86). Contextual and task performance were evaluated by 8-item (a ¼ .85) and 12-item (a ¼ .82) scale, respectively, from Williams and Anderson (1991). Example items include ‘‘Fulfills responsibilities specified in job description,’’ ‘‘Helps others who have been absent.’’ Deviance behavior was measured by nine-item scale revised based on the deviance behavior scale of Judge and Ilies (2006) (a ¼ .92). Example item include ‘‘Come in late to work without permission.’’ Subordinate questionnaire. Subordinate questionnaire included satisfaction to supervisor and perceived organizational support scales. Satisfaction to supervisor was measured by four items adopted from Spector (1997) (a ¼ .87). Perceived organizational support was assessed adopting 17 items developed by Eisenberger, Fasolo, and Davis-LaMastro (1990) (a ¼ 87). Example items include ‘‘The organization is willing to help me when I need a special favor,’’ ‘‘The organization takes pride in my accomplishments at work.’’ Leadership style questionnaire. Leadership style questionnaire only included servant leadership scale, which was a part of supervisor questionnaire. The details about the scale have been shown earlier.

332


RESULTS Exploratory Factor Analysis Data of servant leadership from sample 1 were used for an EFA. The specific steps were as follows. (1) To test appropriateness of sampling, Kaiser-MeyerOlkin KMO test was conducted. The results showed that the data were suitable for factor analysis (KMO ¼ .89, w2 ¼ 3282.52, df ¼ 253, po.001). (2) Oblique rotation of the principal components method was used to extract factors because of certain inter-correlation among the factors. With eigenvalues more than 1 as extraction principles, items that had cross-loading of more than 0.35 on several factors at the same time and whose discrepancy between cross-loading values was less than 0.2 were deleted. A five-factor structure indicated in Table 1 was produced eventually. Table 1 indicates that eigenvalues of the rotated five factors were all more than 1 with 70.27% cumulative variance explained, and loadings of each item on the intended factors were between .57 and .92. Item 22 had cross-loading and discrepancy between cross-loading values approached .2. To produce an efficient and reliable scale with equivalent items per factor in this study, item 22 was retained. Factor analysis results demonstrated that servant leadership was also a five-factor construct in China. We named those five factors as altruistic calling, emotional healing, wisdom, persuasive mapping, and community stewardship. The construct in China with three items per factor is different from that of Barbuto and Wheeler’s (2006) only in the number of items.

Confirmatory Factor Analysis To validate the 15-item servant leadership scale in China, CFA was performed using sample 2 with maximum likelihood estimation. The best model needs to be determined through model comparison. EFA was conducted with servant leadership data of sample 1 by extracting compulsorily 1, 2, 3, and 4 factors from 15 items and produced 4 alternative models before CFA. In addition, it is possible that there is no common component among 15 items, which is another alternative model-null model. Then, the hypothesized five-factor model needs to be compared with the other five alternative models. The results of CFA are summarized in Table 2, which demonstrates that five-factor model was the best model than the other five alternative ones according to several goodness-of-fit indices. Thus, the five-factor model of servant leadership derived from sample 1 was confirmed by sample 2.

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Table 1.

The Results of EFA for Servant Leadership Scale with Oblique Rotation (N ¼ 285).

Items

F1

q7: I am talented at helping employees to heal emotionally q8: I am a person that could help employees mend their hard feelings q6: I am good at helping employees with their emotional issues q15: I encourage employees to dream ‘‘big dream’’ about the organization q16: I am very persuasive q14: I offer compelling reasons to get employees to do things q3: I sacrifice my own interests to meet employees’ need q1: I put employees’ best interests ahead of my own q2: I do everything I can to serve employees q13: I seem to know what is going to happen q10: I am good at anticipating the consequences of decisions q12: I seem in touch with what’s happening q23: I am preparing the organization to make a positive difference in the future q21: I see the organization for its potential to contribute to society q22: I encourage employees to have community spirits in the workplace Eigenvalues Percentage of variance explained (Cumulative: 70.27%)

F2

F3

F4

F5

.92

.04

.08

.09

.01

.83

.05

.08

.01

.01

.79

.16

.11

.14

.01

.03

.89

.06

.08

.03

.21 .04

.69 .67

.16 .02

.19 .22

.10 .07

.00 .02 .08 .06 .01

.05 .07 .07 .05 .12

.90 .72 .69 .06 .12

.07 .08 .12 .92 .62

.24 .19 .15 .15 .26

.15 .23

.26 .32

.15 .07

.57 .06

.07 .84

.23

.17

.01

.04

.78

.06

.41

.05

.24

.59

2.45 16.36

2.24 14.90

2.02 13.45

1.97 13.15

1.86 12.42

Notes: F1 is emotional healing; F2 is persuasive mapping; F3 is altruistic calling; F4 is wisdom; F5 is organizational stewardship. Bold values are accepted loadings of the items on the corresponding factors.

Construct Validity of Servant Leadership Scale Construct validity is the degree of scale measuring a theory or a trait. Thus, this study needs to verify the construct validity of servant leadership scale from internal consistency reliability, factor validity, convergent validity, and divergent validity. Descriptive statistics and correlation analysis were performed for servant leadership, paternalistic leadership, and transformational leadership data from sample 1 using SPSS 15.0. The results in Table 3 indicate that the reliabilities of three kinds of leadership scales ranged from .66 to .89, conforming to the requirement of psychometrics.

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Table 2. Model Null One-factor Two-factor Three-factor Four-factor Five-factor


Fit Indices of Alternative and Hypothesized Models from CFA (N ¼ 304). w2

df

w2/df

GFI

AGFI

RMSEA

NNFI

CFI

PNFI

613.19 289.89 251.69 326.70 186.45 131.39

105 90 89 90 84 80

5.84 3.22 2.83 3.63 2.22 1.64

.73 .88 .89 .86 .92 .95

.69 .84 .86 .82 .89 .92

.15 .09 .08 .09 .06 .05

.00 .54 .62 .46 .75 .87

.00 .61 .68 .53 .80 .90

.00 .45 .50 .40 .56 .60

Notes: GFI, goodness of fit index; AGFI, adjusted goodness of fit index; RMSEA, root mean square error of approximation; NNFI, non-normed fit index; CFI, comparative fit index; PNFI, parsimony normed fit index. Bold values are accepted indices for the corresponding models.

Table 3. Means, Standard Deviations, Correlations, and Reliability of Servant, Paternalistic, and Transformational Leadership Subscales (N ¼ 285). Subscales 1. 2. 3. 4. 5. 6. 7. 8. 9.

Altruistic calling Emotional healing Wisdom Persuasive mapping Organizational stewardship Benevolent leadership Moral leadership Authoritarian leadership Transformational leadership

M 4.28 4.23 4.56 4.70 4.55 4.12 4.80 3.63 4.59

SD

1

2

.88 .73 .85 .46 .87 .67 .26 .47 .71 .30 .50 .79 .42 .44 .75 .34 .40 .70 .26 .22 .78 –.02 .12 .62 .40 .53

3

4

5

.71 .62 .40 .29 .32 .21 .62

.79 .46 .33 .30 .21 .65

.66 .33 .20 .15 .56

6

7

8

9

.78 .34 .65 .17 .12 .64 .38 .41 .28 .87

Note: The figures in diagonal line are reliabilities of scales. Bold values are reliabilities of the corresponding scale. Correlation is significant at the 0.01 level (two-tailed).

Factor validity of servant leadership scale. Tables 1, 2, and 3 indicate that factor loadings of each item in corresponding factors were higher ranging from .57 to .92, factor structure of servant leadership was clear, and cumulative variance explained is more than 70%. Five-factor model of servant leadership was significantly better than the other five alternative ones, and the goodnessof-fit indices exceeded the primary requirements of psychometrics. Each subscale was significantly correlated with each other. All of above evidences adequately revealed that servant leadership scale had higher factor validity. Convergent and divergent validity of servant leadership scale. Table 3 indicates that the subscales of servant leadership all had certain correlations


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with paternalistic leadership subscales and transformational leadership scale. The correlations of servant leadership subscales with paternalistic leadership subscales (r ¼ .02B.46) were all significantly lower than those with transformational leadership scale (r ¼ .40, .53, .62, .65, .56). Thus, servant leadership, paternalistic leadership, and transformational leadership not only shared some common tenets but also had some differences. The correlations of paternalistic leadership subscales with servant leadership subscales were all different, in which the correlations of benevolent leadership with servant leadership subscales were strongest (r ¼ .29B.46), but the correlations of authoritarian leadership with servant leadership subscales were lowest (r ¼ .02B.21). Thereby, servant leadership had more common components with benevolent leadership and less with authoritarian leadership. Evidences from all of the above showed that servant leadership scale had good convergent and divergent validity.

Empirical Validity of Servant Leadership Scale Concurrent validity of servant leadership scale. To test the concurrent validity of servant leadership scale, and to compare the difference among three kinds of leadership scales in concurrent validity, overall satisfaction (a ¼ .87) and life satisfaction (a ¼ .86) of supervisors, and contextual performance (a ¼ .90), deviance behavior (a ¼ .93) and task performance (a ¼ .78) of employees rated by their supervisors were selected as criteria. Reliabilities of criterion scales as shown in the parentheses above conformed to the primary requirement of psychometrics, which were acceptable as measures. Data from sample 1 was analyzed using SPSS 15.0, and the results are summarized in Table 4. It can be seen from Table 4 that five factors of servant leadership had significant correlations with five criterion variables in addition to several exceptions: altruistic calling and emotional healing all correlated significantly with five criterion variables; wisdom, persuasive mapping, and community stewardship correlated significantly with the other four criterion variables except deviance behavior. Thus, servant leadership scale had good concurrent validity. By comparing the concurrent validity of servant leadership, paternalistic leadership, and transformational leadership scales, it could be concluded that the correlations of servant leadership with overall satisfaction, life satisfaction, and task performance were higher than those of paternalistic leadership

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Table 4. The Correlation Analysis of Servant Leadership with Criterion Variables (Concurrent Validity Test) (N ¼ 285). Subscales

Self-Rating of Supervisors

Rating Outcomes of Supervisors to Employees

Overall Life Contextual Deviance Task satisfaction satisfaction performance behavior performance Altruistic calling Emotional healing Wisdom Persuasive mapping Organizational stewardship Benevolent leadership Moral leadership Authoritarian leadership Transformational leadership

.23 .26 .25 .35 .40 .21 .29 .04 .44

.19 .25 .16 .22 .27 .23 .13 .01 .31

.34 .26 .25 .32 .39 .23 .19 .02 .39

.21 .15 .08 .00 .03 .05 .04 .12 .07

.21 .18 .26 .29 .15 .09 .21 .13 .37

The correlation level is 0.05 (two-tailed test). The correlation level is 0.01 (two-tailed test).

and lower than those of transformational leadership. Servant leadership had stronger correlations with contextual performance and deviance behavior than those of paternalistic and transformational leadership, but the correlations of benevolent and moral leadership with deviance behavior and task performance, and transformational leadership with deviance behavior were not significant, which need to be explored in the future. Predictive validity of servant leadership scale. Since the results of Table 4 are from the data of supervisor questionnaire in sample 1, the relations of variables could be influenced by common methods bias. To gain more objective criterion data and to meet the statistical requirements of predictive validity, this study adopted supervisor-subordinate paired sample, with 209 effective dyads totally. The criteria include employees’ satisfaction to supervisors and perceived organizational support. Reliability test to data of sample 1 showed that the Cronbach’s coefficient alpha of criterion scales were 0.88 and 0.92, respectively, which indicated the criterion scales were effective measures. The correlation values of servant leadership with criterion variables are given in Table 5. According to Table 5, the correlation values of wisdom and persuasive mapping with employees’ satisfaction to supervisors were approaching the significant level of .05 ( p ¼ .065, .06); emotional healing had significant correlation with employees’ satisfaction to supervisors at .05 level. Wisdom,

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Table 5.

Correlation Analysis of Servant Leadership with Criterion Variables (Predictive Validity Test) (N ¼ 209).

Leadership Subscales

Altruistic calling Emotional healing Wisdom Persuasive mapping Organizational stewardship Benevolent leadership Moral leadership Authoritarian leadership Transformational leadership

.Employees’ Satisfaction to Supervisors

Perceived Organizational Support

.03 .17 .13 .13 .05 .09 .09 .03 .16

.05 .12 .20 .22 .14 .20 .10 .08 .21

Notes: The correlation values of employees’ satisfaction to supervisors with wisdom and persuasive mapping are approaching the significant level of 0.05 and were 0.065 and 0.06, respectively. The correlation level is 0.05 two-tailed test). The correlation level is 0.01 (two-tailed test).

persuasive mapping, and community stewardship all had significant correlations with perceived organizational support at .01 level. Subscales of paternalistic leadership had no significant correlation with employees’ satisfaction to supervisors, and only benevolent leadership had significant correlation with perceived organizational support at .05 level. Transformational leadership had significant correlations both with employees’ satisfaction to supervisors and with perceived organizational support. Due to adopting paired samples, same-source bias was controlled to the utmost. Thereby, the results of this study well revealed that servant leadership scale had higher predictive validity, and its predictive power was between paternalistic leadership and transformational leadership.

DISCUSSION The Construct of Servant Leadership In the current study, two groups of samples were used to verify and revise the scale of servant leadership developed by Barbuto and Wheeler (2006). The results showed that the scale had satisfactory internal consistency reliability and loadings of each items in corresponding factors conformed to the

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requirement of psychometrics; five-factor model had good construct validity, with each factor involved three items only. The connotation of each factor was basically as delineated by Barbuto and Wheeler (2006): altruistic calling describes a supervisor desires to serve for his employees, puts employees’ interest ahead of his/her own, and always sacrifices his/her own interests to meet employees’ need. Emotional healing describes a supervisor has relevant skills for emotional healing and the abilities to help employees to recover from hard feelings or psychological trauma. Wisdom is embodied in that a supervisor cares for what is happening, who is good at gathering information from environment, and has the ability to predict the future. Persuasive mapping seems to be an ability of persuading and guiding the employees through some ways beyond formal authority. Community stewardship describes the extent that a supervisor makes organization contribute positively to the society by fostering his employees community spirit in workplace. According to cultural psychology and indigenous psychology, any concept of leadership may include transnational universal and local specific actions, in which, the former is universally applicable, but the latter has cultural limitations, only applying to local groups (Yang, 2000). The results of this study reflected the similarities and diversities of Chinese and Western understanding of servant leadership to some extent. ‘‘Interim provisions of Party and government leading cadres assessment’’ and ‘‘regulations on selecting and appointing Party and government leading cadres’’ (Writing group of ‘‘Handbook about Laws for Public Servants’’ (Version of annotation), 2008), which were issued in 1998 in China, stressed that leading cadres need to be assessed from morality, ability, diligence, performance, and integrity. Therefore, leading cadres should put the public interests ahead of his/her own and serve for the people heart and soul; they should solve practical problems for the masses and have the abilities to control the overall situation and deal with complex issues; they should listen modestly to various viewpoints from the masses, insist on ‘‘from the people, to the people’’ and stay realistic, pragmatic, and responsible; they also should have the abilities to lead the people to get rich and explore the road to wealth for the people as illuminati. In a word, the above assessment requirements to Communist Party and government leading cadres in China are very similar to the meaning of servant leadership concept in Western countries. Since the supervisors in enterprises are strict with themselves unconsciously according to the assessment standard for Party and government leading cadres in such a social cultural atmosphere, it is not surprising that servant leadership concept is also a five-factor construct in China. The items of each factor of servant leadership in China reduced to three items; some items, such as ‘‘I am


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one employees would turn to if they had a personal trauma’’ in emotional healing factor and ‘‘I believe that our organization needs to function as a community’’ in community stewardship, were removed, which are perhaps related to validity of item itself and social culture. For examples, seeking help from the leaders or the bosses is a kind of proactive and normal behavior for most of the Chinese employees, having nothing to do with supervisor’s emotional healing abilities, which implies that this item is less reasonable in Chinese setting. Undoubtedly, more indigenous studies based on grounded theory are needed to verify the cultural features of servant leadership.

The Comparison of Servant Leadership, Paternalistic Leadership, and Transformational Leadership Transformational leadership was chosen in this study to be compared with servant leadership because it has been extensively studied in both the Western and the Chinese cultures and demonstrated strong correlations with positive work–related outcomes such as satisfaction and job performance (Bono & Judge, 2003; Lowe, Kroeck, & Sivasubramaniam, 1996; Padsakoff, MacKenzie, Moorman, & Fetter, 1990). The results from this study indicated that the correlations of servant leadership subscales with transformational leadership were significantly stronger than those of with paternalistic leadership subscales. Furthermore, the predictive power of servant leadership was equivalent to that of transformational leadership but higher than that of paternalistic leadership when predicting satisfaction and perceived organizational support. This means servant leadership has more common traits with transformational leadership, but less ones with paternalistic leadership. Liden et al.(2008) proposed that servant leadership resembles idealized influence and intellectual stimulation in transformational leadership. For examples, servant leaders set an example for followers to emulate, inspire followers with enthusiasm and inspiration, and actively encourage followers to challenge the status quo and express divergent views. Bass (1997) had stated that the notion of servant leadership has partial similarity with the concept of the ‘‘socially oriented transformational leader’’ who focuses on ‘‘moral uplifting of followers.’’ The results of this study did show higher correlation between servant leadership and transformational leadership and provided some kind of support for the above arguments empirically. However, the correlation between servant leadership and transformational leadership was not so higher that they could substitute for each other, which indicated that

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servant leadership and transformational leadership are different leadership styles, verifying the assertion of Graham (1991) to some degree. Paternalistic leadership is a relatively new conceptualization about leadership primarily in Asian countries, especially in China (Cheng, Huang, & Chou, 2002; Cheng et al., 2003; Farh & Cheng, 2000; Liang, Ling, & Hsieh, 2007). Three dimensions were identified for paternalistic leadership: authoritarian, benevolence, and moral. This construct is up to date and considered a best fit to traditional Oriental culture. It has assumed (Cheng et al., 2002; Farh & Cheng, 2000) that leaders may show up a leadership style combining strict discipline and authority with paternal benevolence and moral integrity in Chinese culture. The results in the present study demonstrated that benevolent, moral, and authoritarian leadership had, respectively, the strongest, moderate, and the weakest relationship with servant leadership. In addition, authoritarian leadership had negative correlation with altruistic calling, showing that they run counter to each other. In conclusion, servant leadership only had moderate or low correlation with paternalistic leadership. This implies that servant leadership is a different construct from paternalistic leadership not only on the conceptual level but on the prediction level for some of organizational behaviors such as satisfaction and deviance behavior. Thus, these three kinds of leadership styles not only had similarities but had differences also. Making a simultaneous comparison of these leadership styles may help us understand their similarities and differences more clearly. Although the predictive power of servant leadership was less than that of transformational leadership in some way, we cannot deny the values of existence of servant leadership just from this point. According to the meaning of transformational leadership, it seems to be more suitable for functioning under revolutionary and turbulent situations such as the practical situation at the present stage in China. Servant leadership indeed demonstrated predictive power for some organizational behaviors and it would be worthwhile to explore the proper situation in which servant leadership would perform best.

Strengths and Limitations One advantage of this study lies in verifying and revising the servant leadership scale in Chinese culture for the first time using paired samples that could control same-source bias to the full. The other strength of this study was the comparison of servant leadership, paternalistic leadership, and transformational leadership simultaneously in one study. Thus, the

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results of this study could more effectively prove the implications of servant leadership concept and the usefulness of those related constructs. Despite this study was ground-breaking empirical one about servant leadership in China, there are still some limitations need to be mentioned. (1) The results of this study on individual level showed that the predictive power of servant leadership was not as good as transformational leadership. However, predictive criteria on individual level did not provide adequate evidences for the above conclusion according to the principles of scientific research. Whether servant leadership has better (or worse) predictive validity on group or organizational level requires multilevel research. (2) The samples used in this study were most from profit organizations, and the results were more generalizable for this kind of organizations. However, from the essential of servant leadership and the practices about public servant concept in China, servant leadership is likely more proper for Communist Party leaders and government organizations or non-profit organizations. Further study may collect data from different kinds of organizations to find out the context effect on servant leadership. (3) The concrete connotations will be distinct in different cultures from the viewpoint of cultural studies. This study only revised the Western-developed scale and verified some common facets about servant leadership in Chinese and Western settings, which was not enough for the development of a concept in a different culture. Moreover, the unique features of servant leadership in China differing from those of the Western were not be touched. Grounded research need to be used to probe into this problem. (4) More attention needs to be paid to the antecedents and outcomes of servant leadership. It is necessary to adopt longitudinal research and experimental

CONCLUSIONS The current study succeeds in verifying a five-factor structure of servant leadership in Chinese culture, including altruistic calling, emotional healing, persuasive mapping, wisdom, and community stewardship. Servant leadership, paternalistic leadership, and transformational leadership have similarities and differences, but servant leadership shares more common features with transformational leadership and less with paternalistic leadership. The predictive power of servant leadership is equivalent to that of transformational leadership but higher than that of paternalistic leadership when predicting criterion variables. The revised servant leadership scale in Chinese

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culture has satisfactory reliabilities and validities, available for subsequent researches as an effective instrument.

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CONCLUSIONS Ming Li, Ying Wang and William H. Mobley The global business world today is going to knock any leader off her horse more than once. She must know how to get back in the saddle again. Jack Welch (2005), Winning, p. 90

In the current economic crisis, the decline in confidence of business leaders, especially leaders of financial institutions, is highly evident. According to a 2008 survey taken by the Center for Public Leadership at Harvard Kennedy School, 80 percent of the American people believe there is a leadership crisis in the U.S. today; and only 45 percent reported confidence in business leaders (George, 2008). Some leaders have had trouble getting on the global leadership ‘‘horse’’; others have not attempted to get on this horse; others have been knocked off by the current economic or other crises. The need for global leadership is acute. It is important for organizations and nations that global leaders arise, develop, and persist in these challenging times and that students of global leadership persist if not accelerate their pursuit of new and better ways to conceptualize, measure, and develop global leadership effectiveness. Shifting from Jack Welch’s metaphorical horse to that of a leopard, the metaphor Morgan McCall framed in Volume 2 of the Advances in Global Leadership (AGL) series (Mobley & McCall, 2001), we see the leopard’s spots as characterizing our bits of knowledge about global leadership. In these challenging times, as the ‘‘global leadership leopard’’ fades deeper into the uncharted woods, seeing and connecting its spots has become even more challenging. The authors’ insights presented in this volume have clarified some of the leopard’s spots, suggested some new spots, and made some connections among the spots. Advances in Global Leadership, Volume 5, 345–355 Copyright r 2009 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1535-1203/doi:10.1108/S1535-1203(2009)0000005018

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ETHICAL LEADERSHIP Hogan and Benson’s chapter in this volume used the CEO of both Nissan and Renault Ghosn, who was born in Brazil with Lebanese heritage, educated in France, worked in the U.S., and then resurrected a major Japanese firm, as an example to support the view that the principles of leadership are formal and not culture specific. Campbell (2006) earlier had argued that some leadership principles are universal and timeless, such as ethics and integrity. Ethical leadership is critically important in our global society today. The fact that ethical and moral issues have contributed to the falling of banks and financial institutions on Wall Street and in many other parts of the world tells us that ethical leadership is a prerequisite for the health of the global market. Financial institutions are required to engage in global thinking and acceptable standards of behavior to regain a stable and safe global financial market (Garten, 2008). Resick, Mitchelson, Dickson, and Hanges, in their chapter in this volume, emphasized the importance of global leaders to manage moral and ethical business conduct among their employees, in the course of directing their organization’s operating and financial success. ‘‘Global leaders, including those of financial institutions, should be authentic leaders focusing on serving their clients and all the institution’s constituents, rather than charismatic leaders seeking money, fame, and power for themselves’’ (George, 2008); but also leaders should manage the ethical conduct of their employees. Ethical acts are often defined within the values and practices of a particular organization, and people often look to their organizational culture to interpret the expectations for ethical conduct in a particular setting (Thomas, Schermerhorn, & Dienhart, 2004). Among the numerous factors that affect beliefs about ethical leadership, the findings of Resick et al.’s study in this volume suggest that in-group collectivism, humane orientation, and performance orientation are important contextual characteristics that should be emphasized in an organizational culture to encourage ethical leadership and likely ethical conduct in general.

BALANCED LEADERSHIP Hogan and Benson’ chapter also illustrated several leadership failure examples in the current financial crisis. These failures are characterized by merely focusing on firms’ financial performance, reducing cost quickly and

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ruthlessly, lacking of long-term vision, encouraging risky investment decisions, recruiting people to support their plans based on only technical competencies without considering people skills, lack of relationship skills and interpersonal sensitivity, and unwillingness to accept responsibility for problems. Apparently these leaders are imbalanced in task versus people leadership, as well as many other aspects. Chen’s chapter in this volume focused on a leadership that can create a balance between leaders and followers, between strategy and execution, between being goal-oriented and flexibility, a balance of different personalities, different genders, and different cultures. Although we all have ‘‘bright side’’ and ‘‘dark side’’ in our personality as documented by Hogan and Benson in their chapter in this volume, we all have certain strengths and skills, as well as development opportunities and weaknesses. It is more costeffective to develop a balanced leadership team than a balanced individual based on Chen’s chapter in this volume. Building a balanced global leadership team should be a goal of many organizations especially those of collective cultures. In considering a balanced leadership team, gender balance is highly important to control risks and balance short-term financial performance and long-term people-oriented leadership. He and colleagues (He, Inman, & Mittal, 2008) found men tend to take more risks on decisions related to gain when they perceive they have more resources and skills to resolve issues; conversely, women are more sensitive to risks when they have more such resources and skills to make loss avoidance decisions. Men are also found to be more active in trading common stock shares than women (Barber & Odean, 2001). In Bartram’s chapter in this volume, he reported that men tend to be higher on ‘‘enterprising and performing’’ and ‘‘leading and deciding’’ competencies. Women on the other hand are generally higher on ‘‘supporting and cooperating’’ competencies and on ‘‘organizing and executing.’’ Charan (2008) recommended in his new book Leadership in the Era of Economic Uncertainty: New Rules for Getting the Right Things Done in Difficult Times that ‘‘Leaders must be prepared to make strategic, structural, financial, and operational changes – many of them drastic – in a hurry, and with information that is at best incomplete.’’ For this purpose, both ‘‘leading and deciding’’ competencies and ‘‘organizing and executing’’ competencies are required in an organization. Hence, organizations should proactively manage gender balance in their leadership team and organization. In the first volume of Advances in Global Leadership, Nancy Adler stated the ‘‘feminization’’ of global leaders and of global leadership is a significant

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development in our understanding (Adler, 1996). Research in the past credits women with qualities such as empathy, helpfulness, care giving, interpersonal sensitivity, acceptance of others, an orientation toward the collective interest and toward integrative goals such as group cohesiveness and stability, and a preference for open, egalitarian, and cooperative relationships. These qualities have already been regarded as important in global leadership literatures.

CULTURAL INTELLIGENCE Besides ethical leadership and balanced leadership, previous AGL volumes and other research in global leadership have suggested other universal qualities that are required for effective global leadership, such as openmindedness, adaptability, ability to deal with ambiguity, and very importantly, the ability to effectively deal with cultural differences. This latter ability is labeled as intercultural sensitivity (Bennett, 1986), intercultural competence (Gertsen, 1990), and more recently as cultural intelligence (CQ) (Earley, 2002; Earley & Ang, 2003). ‘‘An outsider has a seemingly natural ability to interpret a person’s unfamiliar and ambiguous gestures in just the way that person’s compatriots and colleagues would’’ (Earley & Ang, 2003). CQ is as important to work with people from different cultures as emotional intelligence (EQ) is to work with people from the same culture (Goleman, 1998). Val Arnold, in this volume, reflected on his experience in leadership assessment and development in the Middle East. He offered insight into the challenges of conducting such consulting services in a region characterized by a collective culture. The difficulty experienced by a consultant in collecting real information, and in making independent evaluation and feedback, can lead some to ponder, ‘‘Does it really work here?’’ Indeed, when we ‘‘lift our own cultural blinders as we examine leadership in the global context’’ (Mobley & McCall, 2001, Conclusions, Volume 2). We do find that leadership in different parts of the world requires some special qualities. For example, mirroring Middle Eastern culture, another collective culture, Korean culture is summarized by Yang and Kelly in their chapter in this volume, as hierarchical Confucianism and affect-based harmony. These cultural characteristics result in strong social ties, which function effectively in Korea. However, in Korean multinational companies operating in foreign countries, the local staff often finds it challenging to share affective connection with Korean managers and to understand the high context

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Korean communication style. Hence Yang and Kelly proposed to promote weak social ties between the Korean managers and the local staff to get optimal utilization out of local expertise and knowledge. If we move to China where Confucian culture originated, serving others’ needs was embedded in the culture for thousands of years. Sun and Wang’s study in this volume recommended that the five-factor servant leadership (altruistic calling, emotional healing, persuasive mapping, wisdom, and community stewardship) that can be traced back to 1970s in Western leadership study also applies to Chinese culture. The results tell us no matter what cultures leaders are from, they need to attend to others’ needs, instill trust and empathy, and make proper use of power. Servant leadership is likely to be another universal quality of global leaders. We confirm both some of the universal and cultural specific qualities global leaders need to possess and develop. CQ as a critical component of global leadership assists global leaders to understand both cultural differences and cultural similarities, and most importantly, to develop an adaptable and versatile leadership quality.

‘‘SCANNING’’ THE EXTERNAL ENVIRONMENT In times of uncertainty, it is not only important to have the ability to stay positive, calm, and confident, it is also equally important to stay attuned to the external environment. Heavey, Mowday, Kelly, and Roche in their chapter stated that it is inadequate for executives to passively scan the global environment; merely relying on outdated information systems and redundant friendship networks. These cannot provide executives with the scope and depth of information needed to understand the global competitive landscape. They argued that managers facing uncertain environments tend to conduct explorative search behaviors, that they are more proactive, take greater risks, and use more innovative strategies than managers in less turbulent environments (Aragon-Correa & Sharma, 2003). They proposed a framework of search behaviors that can guide executives in acquiring the information necessary to succeed in a global business context. For example, adopt experiential search behaviors to examine what has worked well in the past and adopt experimental search behaviors to gather some novel insights. The information gathered from both types of search behaviors can guide various managerial decisions on internationalization such as choice of location, corporate strategy, and mode of entry.

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ERROR MANAGEMENT The falling of financial institutions has brought our attention to financial risk management. The accidents in coal mining, toy production, and other manufacture industries, even in high reliability organizations such as airlines, equally demand attention on error management. However, very little attention on error management has been paid by current leadership theories. Alonso-Rodriguez and Griffin’s chapter in this volume seeks to begin filling this gap. They proposed a method combining both error prevention and error management that can produce synergistic outcomes. Error prevention is suggested to serve as the first-line defense to ensure the quality and safety of production and services; and error management serves as the second line of defense aiming at controlling negative consequences of the error and preventing the reoccurrence of the error in long term. In error management, error learning enables organizations to learn from failure. Such a learning orientation is a critical component of global leadership. To foster this orientation, leaders need to demonstrate trust, create an organizational culture where employees perceive psychological safety; therefore, error is openly communicated and then is turned into learning opportunities. Such a collaborative approach in managing errors is highly valuable for global organizations and leaders to continuously improve quality and safety of their products and services.

MANAGING STRATEGIC ALLIANCE Previous volumes of this series have addressed the issue of leading strategic alliances (SAs) (see e.g. Isabella & Spekman, 2001). SA can be an effective approach to achieve competitive advantage and has been employed in many industries such as automotive (Trumbull, 2009), real estate (Alter, 2009), and IT (Anonymous, 2008). Apart from the three prerequisites – good relationships among partners, clearly defined and realistic goals, and appropriate design and structure – that SA need to succeed, a special set of leadership skills is required to make it work. Reinfeld’s chapter in this volume concluded that these additional key leadership requirements include: Ability to be effective in a co-leadership role, build consensus, and gain trust of partners (over whom the individual has no authority and who sometimes may be a competitor).

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Work effectively within a loosely defined/evolving structure full of ambiguities that require contributions from and sharing control with other organizations and that aims for goals with difficult-to-quantify values. Ability to stay focused on the higher-order and ultimate objectives of the alliance and to assess contributions and results in terms of their impact on these objectives. Ability to detect potential conflicts early and to work toward achieving acceptable resolutions.

DEVELOPMENT OF GLOBAL LEADERSHIP Learning from Experience? As a major stream of global leadership study, experience has been well examined in its role of developing global leadership (e.g. McCall & Hollenbeck, 2002; Mobley & Weldon, 2006). The long debate of ‘‘nature’’ or ‘‘nurture’’ of global leaders has arrived at common agreement that it is in part by nature and, in part, grows from experience. In addition to the various leadership qualities identified in this series and elsewhere, global leadership develops by experiencing the global arena. The ability to extract meaning from and to learn from international experiences is critical in this process. Executives and organizations should ensure that ten years of international experience is not one year of experience ten times over. Li proposed in her chapter in this volume, a model of the role of experiential learning in the development of CQ in global leaders. If experience is the teacher, individuals with divergent learning style have the most advantage to develop into a culturally intelligent global leader. Ng and colleagues in this volume proposed CQ as a learning agility to develop global leadership. They framed the four facets of CQ as components of the four experiential learning stages in learning from international experience. The examination of the same coin from two sides offers us the same insight that it is important for global leaders to learn from their international experience to develop their global leadership. Given reflection of experience is the primary vehicle for developing leadership, Oliver and colleagues in their chapter proposed a holistic approach to select and develop talents. It incorporates ‘‘Identify-DevelopMove’’ by not only emphasizing the identification of talents but also

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providing resources and support to develop them. A 70/20/10 development ratio is regarded as most effective where 70% of development occurs from on-the-job and hands-on learning, 20% of development from coaching, mentoring, and feedback, and the final 10% of development through formal learning situations such as classroom, books, and e-modules. Typically, they recommended applying the ‘‘move’’ part to develop talents by moving them to new experiences where they can learn and grow. The moves should be carefully planned, so that leaders can maximize their experiential learning. This approach can be complemented by Li’s framework, so that companies can identify those most likely to learn from new experience, and individuals can monitor their learning habits to best learn from their new roles. It can further be enhanced by Ng and colleagues’ model which proposes specific ways through which organizations can encourage their leaders to get involved with other cultures and facilitate them through the four experiential learning stages to best learn from international assignments.

LOOKING INTO THE FUTURE After identifying and connecting some of the leopard’s spots in this volume, where do we go from here? Looking beyond the doom and gloom of the financial crisis and downturn, the earthquake in Sichuan China and the bushfires in Australia, we also see the positive nature of globalization. We are privileged to have such an interconnected world that allows us to relate and learn no matter where we live. We all need to share global responsibility in dealing with issues in economy, environment, and talent development to make the world a better place and foster a ‘‘global mindset’’ (Herbert, 2000). Hogan and Benson in their chapter discussed culture and leadership in Toyota, which they deem as the best led firm in the world. It is characterized as long-term perspective on long-lasting returns from investment rather than quick short-term returns on investment, a conservative but flexible strategy, value of Kaizen which refers to continuous and steady improvement in processes as well as products and never being satisfied, emphasis on research and development, teamwork, customer service, and openness about mistakes, and overall cultivate a culture that emphasizes quality, customer focus, and respect for the staff. Future research is encouraged to examine global leadership requirements under different organizational contexts to achieve long-term vision and sustainable growth. We believe Dickson, Hanges, & Lord (2001) model is a good framework to move global leadership study forward in that some leadership principles

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are universal, but others are variform. For example, the principles are common but are expressed differently in different cultures. In the previous volumes of Advances in Global Leadership, our authors have substantially enhanced our knowledge in these two aspects. In this volume, we have continued to explore our knowledge about global leadership under this framework. Hogan, Benson and Johnson proposed a Leadership Value Chain as a common principle for leadership in that leadership is a function of personality, leadership is a key determinant of organizational effectiveness, and Leadership Value Chain explains the process leadership influence organizational effectiveness. Moreover, we have also mapped out more common principles such as ethical leadership, balanced leadership, CQ, servant leadership, environmental scanning, and error management. Some cultural-specific applications in Korean, China and Mid-east cultures are also addressed in this volume. Future research is encouraged to continue searching the common and cultural specific qualities for effective global leadership. Even though experience has been recognized for its importance, international experience research in the past tends to rely on rather simple measures based on frequency or year count (Bhaskar-Shrinivas, Harrison, Shaffer, & Luk, 2005). Yet, international experience is much more than the length of time spent overseas, and more penetrative studies need to be conducted to gain a better understanding of the depth and breadth of international experience. Besides overseas assignment, life experience through having friends from different cultures, having partners from different cultures, travel experience, overseas education experience are all key components of international experience. Beyond these, quality of overseas experiences and level of involvement are all important factors that need to be examined to understand the depth of experience. Hence, future research could continue to study the relationship of these experience elements and global leadership. In the mean time, experience can be positive and negative, these two types of experience creates different dynamic in developing global leadership. Intuitively, it seems that positive international experience should enhance individuals’ global leadership in a constructive manner. Having negative experiences creates much different dynamics since these experiences can often frustrate international executives, cause stress (Lazarus, 1993), and culture shock (Adler, 2002). Effective coping and adaptation skills are critical in those moments. Negative experience often relates to challenges executives are not fully prepared for. Nonetheless ‘‘challenging experience force people to learn new things, bland experience do not’’ (McCall & Hollenbeck, 2002). Future study is encouraged to

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understand the dynamic of both positive and negative experience in developing global leadership. A qualitative study in combination with a quantitative study could provide most insight. Learning from experience, of course, is another major direction to understand such a dynamic. Ng, Van Dyne and Ang’s chapter and Li’s chapter both help us uncover the possible learning process. Future research can follow their path to conduct quantitative and qualitative research to test the relationships have been hypothesized and others. Multiple methods are encouraged to be adopted for example psychometric instruments, learning logs, interviews, experiment, and so on. The leopard will still be in the uncharted woods by the time this volume is published. It has been adapting to this challenging time, growing a more intricate pattern and making some spots more difficult to see. And still, some of the spots whose importance has been less obvious in the past have dramatically increased in significance and relevance today. In our quest to better know the leopard, certain key spots have been emphasized, and some new connections have been made in this volume. While the searching and adapting continues, it is important to remember history tells us that after a crisis we always move to a stronger position than before. This is because we have a better understanding of the territory and a newfound appreciation for our recent learning and experiences. The leopard will grow more visible as we charter these thorny woods, and perhaps one day we will get to know all of its spots. We hope this volume offers some useful insights to guide the process toward steadily demonstrating the qualities, behaviors, and contexts that contribute to successful global leadership.

REFERENCES Adler, N. J. (1996). Global leadership – woman leaders. In: W. H. Mobley, M. J. Gessner & V. Arnold (Eds), Advances in global leadership (Vol. 1, pp. 49–73). Stamford, CT: JAI. Adler, N. J. (2002). International dimensions of organizational behavior (4th ed.). Mason: Thomason, South-Western. Alter, S. (2009). Techniques for tough times. Journal of Property Management, 74(1), 5. Anonymous. (2008). Edgar online, Inc.; EDGAR online and Zephyr Financial forge strategic alliance. Atlanta. Aragon-Correa, A. J., & Sharma, S. (2003). A contingent resource-based view of proactive corporate environmental strategy. Academy of Management Review, 28, 71–88. Barber, B. M., & Odean, T. (2001). Boys will be boys: Gender, overconfidence, and common stock investment. Quaterly Journal of Economics, 116(Feburary), 261–292. Bennett, M. J. (1986). A developmental approach to training for intercultural sensitivity. International Journal of Intercultural Relations, 10(2), 179–195.

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Bhaskar-Shrinivas, P., Harrison, D. A., Shaffer, M. A., & Luk, D. M. (2005). Input-based and time-based models of international adjustment: Meta-analytical evidence and theoretical extensions. Academy of Management Journal, 48(2), 257–281. Campbell, D. P. (2006). Globalization: The basic principles of leadership are universal and timeless. In: W. H. Mobley & E. Weldon (Eds), Advances of global leadership (Vol. 4). Oxford, UK: Elsevier. Charan, R. (2008). Leadership in the era of economic uncertainty: The new rules for getting the right things done in difficult times. New York: McGraw-Hill. Dickson, M. W., Hanges, P. J., & Lord, R. G. (2001). Trends, developments and gaps in crosscultural research on leadership. In: W. H. Mobley & M. W. McCall (Eds), Advances in global leadership (Vol. 2). Oxford: JAI/Elsevier Science. Earley, C. P. (2002). Redefining interactions across cultures and organizations: Moving forward with cultural intelligence. Research in Organizational Behavior, 24, 271–299. Earley, C. P., & Ang, S. (2003). Cultural intelligence: Individual interactions across cultures. Standford: Stanford University Press. Garten, J. (2008, April 4). Global thinking is needed on financial regulation. Financial Times, p. 11. George, B. (2008, November 9). Failed leadership caused the financial crisis. U. S. News & World Report. Gertsen, M. C. (1990). Intercultural competence and expatriates. International Journal of Human Resource Management, 1(3), 341–362. Goleman, D. (1998). Working with emotional intelligence. London: Bloomsbury Publishing. He, X., Inman, J. J., & Mittal, V. (2008). Gender jeopardy in financial risk taking. Journal of Marketing Research, 45(4), 414–424. Herbert, P. (2000). Creating a global mindset. Thunderbird International Business Review, 42(2), 187. Isabella, L. A., & Spekman, R. E. (2001). Alliance leadership: Template for the future. In: W. Mobley & M. W. McCall (Eds), Advances in Global Leadership (Vol. 2). Oxford UK: JAI/Elsevier. Lazarus, R. S. (1993). From psychological stress to the emotions: A history of changing outlooks. Annual Review of Psychology, 44(1), 1–21. McCall, J. M. W., & Hollenbeck, G. P. (2002). Developing global executives – The lessons of international experience. Boston, MA: Harvard Business School Press. Mobley, W. H., & McCall, M. W. (2001). Conclusions. In: W. H. Mobley & M. W. McCall (Eds), Advances of global leadership (Vol. 2, pp. 385–388). Oxford, UK: JAI. Mobley, W. H., & Weldon, E. (2006). Conclusions. In: W. H. Mobley & E. Weldon (Eds), Advances in global leadership (Vol. 4). Oxford, UK: JAI/Elsevier. Thomas, T., Schermerhorn, J. R., & Dienhart, J. W. (2004). Strategic leadership of ethical behavior in business. Academy of Management Executive, 18(2), 56–66. Trumbull, M. (2009). Fiat and Chrysler enter into strategic alliance. The Christian Science Monitor, Jan 21, p. 2. Welch, J., & Welch, S. (2005). Winning: The ultimate business how-to book. New York: HarperBusiness.


ABOUT THE EDITORS William H. Mobley is professor of management and advisor on executive education at China Europe International Business School in Shanghai. He is also an experienced executive and management consultant and coach working primarily with executives and leadership teams based in China and the Asia Pacific region. He is the president and managing director of the Shanghai-based Mobley Group Pacific (MGP). MGP focuses on executive assessment for selection and development; executive coaching; organizational design, culture and effectiveness; China business entry and development. He earned his BA degree in psychology and economics from Denison University in the United States and his Ph.D. degree in psychology from the University of Maryland, College Park. He has also been awarded honorary degrees from the University of Americans in Pueblo Mexico and the University of Akron and is an honorary professor at the Chinese University of Hong Kong. He has served as a visiting professor at National Taiwan University, Hong Kong University of Science and Technology and as a visiting fellow at Cornell University. He is the author of Employee Turnover: Causes, Consequences and Control (Addison Wesley) and executive editor of Advances in Global Leadership (JAI/Elsevier). He is a registered organizational psychologist and a fellow of APA, APS and the Society for Industrial Organizational Psychology. Bill previously served as corporate manager of HR Research and Succession Planning for PPG Industries; as dean of the College of Business Administration and later president of Texas A&M University; as managing director of PDI Asia Pacific; and president of the Global Research Consortia Ltd. He currently serves on the Board of Directors of several companies and foundations in Hong Kong, China and the United States. He is a U.S. representative on the Pacific Economic Cooperation Council (PECC). Ying Wang is a Ph.D. candidate at Institute of Work Psychology, The University of Sheffield, UK. She obtained a BA degree in Russian language and literature from Fudan University in China, an MA in Organization Studies and an MSc in Psychological Research Methods from the University of Warwick in UK. She has worked at China Europe International Business 357

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School and at Mobley Group Pacific, engaging in consulting and research on cross-cultural personality measurement, assessment center, and organizational culture. She has presented on the annual conference of Society for Industrial and Organizational Psychologist and has published on Harvard Business Review China. She received a Dorothy Hodgkin Postgraduate Award cosponsored by the Economic and Social Research Council in UK and SHL Group to undertake her doctoral research. Ming Li received her Ph.D. from the Michael Smurfit School of Business at University College Dublin. Her major research interest is in the development of intercultural competency for managers operating in a global environment. She has been serving in Mobley Group Pacific Ltd (an RHR International Affiliate) as a Senior Consultant on executive assessment, and leadership and organizational development. She received her Bachelor’s degree from the Management School of Shanghai Jiaotong University and a Master of Business Studies degree from the Michael Smurfit School of Business, UCD. She has worked as a research assistant for the China Europe International Business School, Shanghai. Her papers have been presented at international conferences such as the Academy of Management Annual Meeting, the International Congress of Applied Psychology, International Congress of Cross-Cultural Psychology, Society of Industrial and Organizational Psychology, etc. She is a member of Academy of Management, International Association of Cross Cultural Psychology, and International Academy of Intercultural Research.

ABOUT THE CONTRIBUTORS Soon Ang (Ph.D. Minnesota) is Goh Tjoei Kok Distinguished Chair of Management and Head, Division of Strategy, Management & Organization at the Nanyang Business School, Nanyang Technological University, Singapore. Her research interests are in cultural intelligence, global leadership, and outsourcing. She has published extensively in Academy of Management Journal, Journal of Applied Psychology, Information Systems Research, Organization Science, Management Science, MIS Quarterly, and Social Forces, and serves on editorial boards including Management Science, Organization Science, Applied Psychology, Decision Science, Information System Research, MIS Quarterly, etc. She has pioneered and coauthored two books on cultural intelligence (Stanford University Press) and coedited the Handbook of Cultural Intelligence (ME Sharpe). She was recently awarded the prestigious Distinguished International Alumni Award by the University of Minnesota for her academic leadership and scholarship record. Val J. Arnold, during his 28 years at PDI, he has specialized in the assessment, development, and coaching of executives and their teams. His interest in the leader’s character, integrity, values, and the constructive use of power shapes his succession management work with Boards and senior executives. Dr. Arnold’s consulting experience ranges from small, familyowned businesses to Global 100 companies working in North America, Europe, the Pacific Rim, the Middle East, and Africa. An accomplished speaker and respected authority on international executive assessment and development, he has presented his work on these topics to a wide range of business and professional groups. Before joining PDI, Dr. Arnold managed executive development at a Fortune 100 company. A licensed psychologist, Dr. Arnold completed his Ph.D. in Counseling Psychology at the University of Minnesota in 1976. Dave Bartram is research director of the SHL Group Ltd. Before joining SHL in 1998, he was Dean of the Faculty of Science and the Environment, and Professor of Psychology in the Department of Psychology at the University of Hull. He is past-President and a Council member of the 359

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International Test Commission (ITC) and Chair of the European Federation of Psychologists Association’s (EFPA) Standing Committee on Tests and Testing. He is President of the International Association of Applied Psychology’s Division 2 (Assessment and Evaluation). He is the author of several hundred scientific journal articles, papers in conference proceedings, books and book chapters in a range of areas relating to occupational psychology and assessment. He received the award for Distinguished Contribution to Professional Psychology from the BPS in 2004 and was appointed Special Professor in Occupational Psychology and Measurement at the University of Nottingham in 2007. Michael J. Benson Ph.D., is manager of Leadership Assessment & Development for Johnson & Johnson located in New Brunswick, New Jersey, USA. He is responsible for partnering with the Johnson & Johnson Family of Companies to design leadership assessment and development solutions. His current responsibilities include developing and deploying systems and processes focused on leader identification, selection, and development across the enterprise. Before joining J&J, Mike worked as a Senior Consultant for Personnel Decisions International, a large global HR consultancy, where he focused on new product development targeted at utilizing past experiences as a means to accelerate individual leader development. Additionally, he spent 12 years as a military officer in the United States Air Force. The majority of his work focuses on leadership skills & traits, leadership development, identification of high potential talent, and linking leadership (and leadership development programs) to organizational effectiveness and performance. He received his Ph.D. in Industrial & Organizational Psychology from the University of Minnesota and is a member of the American Psychological Association, Society for Industrial & Organizational Psychology, and Academy of Management. Zenglo Chen is currently an executive director at Lenovo Group Inc. He has extensive experience in talent management, particularly in the areas of leadership competency modeling, executive assessment and selection, succession planning, executive coaching, performance management, and leadership training. Additional competencies are in the areas of organization structure redesign and change management. Zenglo began his career at RHR International Company, an international executive leadership development consulting firm (1993–1998) and then joined Motorola (1998–2004), Kraft Foods (2004–2005), and The Coca-Cola Company (2006–2007) before coming to the Lenovo Group Inc. He also taught corporate culture change and talent management as an adjunct professor at

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Northwestern University’s Masters Program in Learning and Organization Change (Chicago, USA). Currently, he is on the Ph.D. dissertation advisory committee in the organizational management program at Capella University, USA. Zenglo received his BS degree in psychology at Beijing Normal University. He earned his MA in cross-cultural psychology and his Ph.D. in organization psychology (1993) from the University of Vermont. He is a professional affiliate of the Society of Consulting Psychology, a division of American Psychological Association. Allan H. Church, Ph.D., is vice president of Talent and Organization & Management Development for PepsiCo. He is responsible for leading the design of enterprise wide talent management and people development processes. Allan joined PepsiCo in December 2000. Previously he spent 9 years as an external OD consultant working for Warner Burke Associates where he designed 360 feedback and organizational survey interventions for Fortune 100 clients. Allan also spent several years at IBM. On the side, he has served as an Adjunct Professor at Columbia University, a Visiting Faculty Scholar at Benedictine University, and is a past Chair of the Mayflower Group. An active writer, he has authored 4 books, 20 book chapters, and over 120 practitioner and scholarly articles. Allan received his Ph.D. in Organizational Psychology from Columbia University. He is a Fellow of the Society for Industrial–Organizational Psychology and the American Psychological Association. Erica I. Desrosiers, Ph.D., is director of Organization and Management Development for PepsiCo, located in Purchase, New York. Erica joined PepsiCo in 2004. Before that, she ran the OD function for a small software company in Chicago and spent several years working as an external consultant for Saville and Holdsworth. Erica’s primary focus at PepsiCo is executive talent development, leading the organization’s global 360 degree feedback process and building up an executive coaching practice. She received her Ph.D. in Industrial–Organizational Psychology from Purdue University and lives in Connecticut with her family. Marcus W. Dickson is professor of Industrial/Organizational Psychology at Wayne State University in Detroit, Michigan. His research interests focus on leadership and culture (both societal and organizational). He served as Research Assistant and Co-Principal Investigator on the GLOBE study of leadership and culture. He has also served as Co-Principal Investigator on a National Institute of Drug Abuse grant on leadership and culture issues in substance abuse treatment clinics. His work has appeared in the Journal of

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Applied Psychology, Applied Psychology: An International Review, Advances in Global Leadership, and other journals and book series. He has received SIOP’s Distinguished Contributions in Teaching Award. Mark A. Griffin is professor of Work Psychology in the Institute of Work Psychology at the University of Sheffield. He received his Ph.D. in Industrial/Organizational Psychology from The Pennsylvania State University and has published his research in journals such as Academy of Management Journal, Journal of Applied Psychology, Leadership Quarterly, and Personnel Psychology. He is currently Associate Editor for the Journal of Management. Mark has managed large-scale organizational studies in areas such as leadership, safety, work performance, organizational climate, and work stress. His research seeks to understand the role of leadership at multiple levels of analysis, and how leadership influences the performance and well-being of individuals, teams, and organizations. Paul J. Hanges is professor of Industrial/Organizational Psychology and is currently the Associate Chair/Director of Graduate Studies for the University of Maryland’s Psychology Department. He is also an affiliate of the University of Maryland’s R. H. Smith School of Business and the Aston Business School (Birmingham, England). He received his Ph.D. from the University of Akron in 1987. His research focuses on testing and strategic human resource management, diversity and organizational climate, cross-cultural leadership, and mathematical/computational modeling. He has published 60 articles and book chapters as well as one book. Paul’s publications have appeared in such journals as Advances in Global Leadership, American Psychologist, Applied Psychological Measurement, Applied Psychology: An International Review, Journal of Applied Psychology, Journal of International Business Studies, Psychological Bulletin, and The Leadership Quarterly. He is on the editorial board of the Journal of Applied Psychology and The Leadership Quarterly and a fellow of the American Psychological Association, Association for Psychological Sciences, and the Society for Industrial/Organizational Psychology. Ciaran Heavey is a PhD candidate and instructor-in-residence in the Department of Management at the University of Connecticut. His research interests focus on strategic entrepreneurship, top management teams, organizational ambidexterity, and research methods in strategic management. His research has been published in the Strategic Management Journal and the Journal of Management Studies.


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Robert Hogan, Ph.D., president of Hogan Assessment Systems, is an international authority on personality assessment, leadership, and organizational effectiveness. He was McFarlin Professor and Chair of the Department of Psychology at the University of Tulsa for 14 years. Before that, he was professor of Psychology and Social Relations at The Johns Hopkins University. He has received a number of research and teaching awards, and is the editor of the Handbook of Personality Psychology and author of the Hogan Personality Inventory. Dr. Hogan received his Ph.D. from the University of California, Berkeley, specializing in personality assessment. Dr. Hogan is the author of more than 300 journal articles, chapters and books. He is widely credited with demonstrating how careful attention to personality factors can influence organizational effectiveness in a variety of areas – ranging from organizational climate and leadership to selection and effective team performance. Dr. Hogan is a fellow of the American Psychological Association and the Society for Industrial/Organizational Psychology. Aidan Kelly is professor of business administration at the Michael Smurfit School of Business at University College Dublin. He has also held teaching appointments at Melbourne University, The Hong Kong University of Science and Technology and the China Europe International Business School, Shanghai. His teaching and research interests include organization structure and design, cross-cultural management and leadership. Rob Lewis, Ph.D., is manager of Organization & Management Development at PepsiCo International. In his current role, he manages global HR programs such as 360-degree feedback, organizational surveys, and executive coaching across PepsiCo’s international divisions. In previous roles, he has provided 360-degree feedback coaching for managers at Fortune 500 firms and conducted applied psychology research for the U.S. Department of Defense. He received his Ph.D. in Industrial–Organizational Psychology from the University of Connecticut, where his dissertation research focused on cross-cultural differences in the accuracy of leadership self-assessments made by global executives. His other research interests include employee engagement, executive coaching effectiveness, and performance assessment. Ming Li received her Ph.D. from Michael Smurfit School of Business at University College Dublin. Her major research interest is in the development of intercultural competency for managers operating in a global environment. She has been serving in Mobley Group Pacific Ltd (an RHR

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International Affiliate) as a senior consultant on executive assessment, and leadership and organizational development. She received her Bachelor’s degree from the Management School of Shanghai Jiaotong University and a Master of Business Studies degree from the Michael Smurfit School of Business, UCD. She has worked as a research assistant for the China Europe International Business School, Shanghai. Her papers have been presented at international conferences such as the Academy of Management Annual Meeting, the International Congress of Applied Psychology, International Congress of Cross-Cultural Psychology, Society of Industrial and Organizational Psychology, etc. She is a member of Academy of Management, International Association of Cross Cultural Psychology, and International Academy of Intercultural Research. Jacqueline K. Mitchelson is assistant professor of Industrial/Organizational Psychology at Auburn University. Her primary research interests are in leadership and organizational culture, work-family conflict, and individual differences. In her research on leadership and culture, she is interested in the leadership process and followers’ cognitive, behavioral, and emotional responses to leader communications. Further, her interests include crosscultural leadership processes, in particular, considering the intersection between the individual leader and the organizational and societal culture in which the leader is embedded. Her work has been presented in over 25 regional, national, and international conferences. Richard T. Mowday is a professor emeritus at the Lundquist College of Business at the University of Oregon. He has previously served on the faculty at the University of Nebraska, Dartmouth College, the University of Washington, University College Dublin and St. George’s College. His teaching and research interest focus on strategic leadership in organizations. Kok-Yee Ng is an associate professor in Management at the Nanyang Technological University. She received her Ph.D. from Michigan State University, with a major in Organizational Behavior and minor in Industrial/Organizational Psychology. Her research interests are mainly in cross-cultural organizational behavior, focusing on cultural intelligence, leadership, and teams. She has published in Academy of Management Journal, Journal of Applied Psychology, Management Science, MIS Quarterly, and Organizational Behavior and Human Decision Processes. David H. Oliver, Ph.D., is vice president, Talent Sustainability for PepsiCo Americas Foods. He is responsible for staffing, diversity, and various aspects of organization and management development, including organizational


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surveys, 360 feedback, performance management, and leadership development. He has also worked in organizational capability for Frito-Lay and PepsiCo International. Before PepsiCo, he worked at GTE (now Verizon), where he led test development and validation efforts for selection. He is a member of the Society for Industrial and Organizational Psychology and has published and presented articles in the areas of leadership development, executive coaching, organizational surveys, and employee selection. David received his Ph.D. in Industrial and Organizational Psychology from the University of Southern Mississippi. William Reinfeld is managing director of EW-Alliances and Vice President of Access International Capital – affiliated firms that focus on cross-border strategic alliances and transactions. He is a business and economic strategy specialist, whose consulting experience spans 40 years. He currently teaches international business strategy to graduate students and executives at CEIBS and Fudan University, in Shanghai, National Chengchi University in Taipei, and the Fletcher School of Tufts University in Medford MA. He has been living and working in Greater China since 1987, when he moved to Taiwan to establish Arthur D Little’s consulting practice in the region. He later joined Andersen Consulting (Accenture) and was responsible for establishing and building their Strategic Services practice for Greater China. Dr. Reinfeld has published numerous reports, articles and chapters in books concerning strategy as well as economic development. He earned a B.S. degree from Carnegie Mellon University and M.S. and Ph.D. degrees from Yale University. Christian J. Resick is assistant professor of Management and Organizational Behavior with the LeBow College of Business at Drexel University in Philadelphia, Pennsylvania. His research is aimed at understanding how people interact with and influence various aspects of their work environments, including cultures, climates, leaders, and teammates, along with the implications for various aspects of organizational behavior. A particular focus of his work examines the meaning, endorsement, and enactment of ethical leadership across cultures. Christian’s work appears in journals such as the Journal of Applied Psychology, The Leadership Quarterly, and the Journal of Business Ethics. He received his Ph.D. in Industrial/Organizational Psychology from Wayne State University. Frank Roche is the Philip Berber Family professor of entrepreneurship at the Michael Smurfit School of Business at University College Dublin and Deputy Principal of the College of Business and Law. His research interests

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are in the areas of environmental scanning and corporate entrepreneurship, and family business succession issues. Marcos Alonso Rodriguez is a doctoral candidate in the Institute of Work Psychology at the University of Sheffield. His research investigates the role of leadership in error management for organizations across a range of industries. Jian-Min Sun is a professor of OB/HR in the School of Labor and Human Resource and an adjunct professor in the School of Business at Renmin University of China. He was a Fulbright visiting scholar in the College of Business at University of Florida in 2007–2008. He received his Ph.D. in Psychology from Beijing Normal University. His research focuses on personality and performance, leadership, human resource management, and cross-cultural differences in the business field. His works appear in journals such as Strategic Management Journal, Journal of Applied Social Psychology, Leadership and Organizational Development Journal, Sociological Review, Journal of Social Psychology, Management World, etc. Linn Van Dyne, professor, Michigan State University (Ph.D. University of Minnesota), has two major research programs: proactive employee behaviors involving initiative and cultural intelligence. She is associate editor of Organizational Behavior and Human Decision Processes and on editorial boards of Academy of Management Journal, Journal of Applied Psychology, Personnel Psychology, Journal of Organizational Behavior, Academy of Management Perspectives, Human Relations, and Management and Organization Review. She is a fellow in the Society of Organizational Behavior and has published in Academy of Management Journal, Academy of Management Review, Journal of Applied Psychology, Organizational Behavior and Human Decision Processes, Research in Organizational Behavior, and other outlets. Before becoming an academic, she held a variety of managerial positions (including director of World-Wide Human Resources; director of Compensation, Benefits, and International Personnel) in for-profit manufacturing firms and not-for-profit service organizations. Inju Yang is a Ph.D. candidate in organization behavior at Smurfit School of Business, University College Dublin, Ireland. She holds an MBA from Smurfit School of Business, University College Dublin, and a bachelor’s degree in Korean language and literature from Sogang University, Korea. She has experience working with international companies and semigovernment bodies in Hong Kong and Korea.


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Biying Wang is Ph.D. candidate of School of Labor and Human Resource at Renmin University of China in Beijing, and also Lecturer of School of Business at Jiangxi Normal University in Nanchang, Jiangxi Province of China. Her primary research interest is in leadership and organizational performance, organizational socialization, organizational justice, and construction of competency model. Her work appears in Chinese journals such as Applied Psychology, Psychological Exploration, and Chinese Human Resource Development, and the proceedings of the sixth Asian annual symposium of international human resource development and 2008 annual conference of Chinese social psychology.


TABLE OF CONTENTS FROM VOLUME 1 PREFACE William H. Mobley

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INTRODUCTION M. Jocelyne Gessner, Val Arnold and William H. Mobley

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PART I. CONCEPTUAL PERSPECTIVES INTRODUCTION M. Jocelyne Gessner and Val Arnold

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TRANSCULTURAL GLOBAL LEADERSHIP IN THE TWENTY-FIRST CENTURY: CHALLENGES AND IMPLICATIONS FOR DEVELOPMENT George B. Graen and Chun Hui

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GLOBAL LEADERSHIP COMPETENCIES FOR THE TWENTY-FIRST CENTURY: MORE OF THE SAME OR A NEW PARADIGM FOR WHAT LEADERS REALLY DO? John R. Fulkerson

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GLOBAL LEADERSHIP: WOMEN LEADERS Nancy J. Adler

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ALTERNATIVES TO INDIVIDUAL CONCEPTIONS OF GLOBAL LEADERSHIP: DEALING WITH MULTIPLE PERSPECTIVES H. Peter Dachler

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DEVELOPING GLOBAL LEADERS: A EUROPEAN PERSPECTIVE Tove Helland Hammer

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RECONCILING I/O PSYCHOLOGY AND EXECUTIVE PERSPECTIVES ON GLOBAL LEADERSHIP COMPETENCIES Richard J. Ritchie

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A CORE OF GLOBAL LEADERSHIP: RELATIONAL COMPETENCE Barbara D. Clark and Michael G. Matze

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PART II. RESEARCH PERSPECTIVES INTRODUCTION M. Jocelyne Gessner and Val Arnold

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CULTURAL INFLUENCES ON LEADERSHIP AND ORGANIZATIONS: PROJECT GLOBE Robert J. House, Paul J. Hanges, S. Antonio Ruiz-Quintanilla, Peter W. Dorfman, Mansour Javidan, Marcus Dickson, Vipin Gupta and GLOBE Country Co-Investigators

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WHEN EAST MEETS WEST: LEADERSHIP ‘‘BEST PRACTICE’’ IN THE UNITED STATES AND THE MIDDLE EAST Terri A. Scandura, Mary Ann Von Glinow and Kevin B. Lowe

235

THE MORAL COMPONENT OF EFFECTIVE LEADERSHIP: THE CHINESE CASE C. Harry Hui and George C. Tan

249

Table of Contents from Volume 1

IN SEARCH OF THE EURO-MANAGER: MANAGEMENT COMPETENCIES IN FRANCE, GERMANY, ITALY, AND THE UNITED STATES Joy Fisher Hazucha, Sarah A. Hezlett, Sandra Bontems-Wackens and Amy Ronnqvist

371

267

PART III. MANAGEMENT/ACTION PERSPECTIVES INTRODUCTION M. Jocelyne Gessner and Val Arnold

293

LEADERS COACHING ACROSS BORDERS Mary Dee Hicks and David B. Peterson

297

GLOBAL LEADERSHIP: THE INSIDE STORY Karen L. Otozo

317

DEVELOPING JOINT VENTURE LEADERSHIP TEAMS Zhong-Ming Wang

337

TECHNOLOGY IN EXECUTIVE LEARNING John Baum and Leland Russell

355

ABOUT THE EDITORS

371


373



ix

INTRODUCTION William H. Mobley and Morgan W. McCall, Jr.

1

PART I. INTERNATIONAL PERSPECTIVES ON LEADERSHIP INTRODUCTION: INTERNATIONAL PERSPECTIVES ON LEADERSHIP: A LEOPARD IN THE DARK WOODS Morgan W. McCall, Jr.

9

A SERENDIPITIOUS SOJOURN THROUGH THE GLOBAL LEADERSHIP LITERATURE George P. Hollenbeck

15

TAKE ME TO YOUR LEADER Howard R. Crabtree

49

TRENDS, DEVELOPMENTS AND GAPS IN CROSS-CULTURAL RESEARCH ON LEADERSHIP Marcus W. Dickson, Paul J. Hanges and Robert G. Lord

75

TRANSFORMATIONAL AND TRANSACTIONAL LEADER BEHAVIORS IN CHINESE ORGANIZATIONS: DIFFERENTIAL EFFECTS IN THE PEOPLE’S REPUBLIC OF CHINA AND TAIWAN Xiao-Ping Chen and Jiing-Lih Fahr

101

373

374


LEADERSHIP IN CHINA: RECENT STUDIES ON RELATIONSHIP BUILDING Dean Tjosvold and Chun Hui

127

LEADERSHIP AND THE PURSUIT OF STATUS: EFFECTS OF GLOBALIZATION AND ECONOMIC TRANSFORMATION Jone L. Pearce, Raul R. Ramirez and Imre Branyiczki

153

PART II. LEADING INTERNATIONAL TEAMS AND ALLIANCES INTRODUCTION: LEADING INTERNATIONAL TEAMS AND ALLIANCES: CONNECTING THE LEOPARD’S SPOTS AT A DISTANCE William H. Mobley

181

OVERCOMING TIME AND DISTANCE: INTERNATIONAL VIRTUAL EXECUTIVE TEAMS Laree S. Kiely

185

ALLIANCE LEADERSHIP: TEMPLATE FOR THE FUTURE Lynn A. Isabella and Robert E. Spekman

217

PERCEPTUAL DISTANCE: THE IMPACT OF DIFFERENCES IN TEAM LEADER AND MEMBER PERCEPTIONS ACROSS CULTURES Cristina B. Gibson, Jay Conger and Cecily Cooper

245

THE CHALLENGES OF LONG-DISTANCE LEADERSHIP: A VIEW FROM ASIA Alison R. Eyring

277


375

PART III. DEVELOPING GLOBAL LEADERS INTRODUCTION: GROWING THE LEOPARD’S SPOTS: DEVELOPING GLOBAL LEADERS Morgan W. McCall, Jr.

303

BUILDING A LEADERSHIP PIPELINE Charles J. Corace

309

DEVELOPING GLOBAL LEADERS: TO HOLD ON TO THEM, LET THEM GO! Douglas T. Hall, Guorong Zhu and Aimin Yan

397

ADVANCES IN GLOBAL LEADERSHIP: THE WOMEN’S GLOBAL LEADERSHIP FORUM Nancy J. Adler, Laura W. Brody and Joyce S. Osland

351

CONCLUSIONS William H. Mobley and Morgan W. McCall, Jr.

385

ABOUT THE EDITORS

391


395


407



ix

INTRODUCTION William H. Mobley and Peter W. Dorfman

xiii

PART I: FOUNDATIONS OF GLOBAL LEADERSHIP INTRODUCTION Peter W. Dorfman

3

STRATEGIC LEADERSHIP IN GLOBAL BUSINESS ORGANIZATIONS: BUILDING TRUST AND SOCIAL CAPITAL Michael A. Hitt, Barbara W. Keats and Emre Yucel

9

ISSUE LEADERSHIP THEORY AND ITS IMPLICATIONS IN GLOBAL SETTINGS Kibok Baik GLOBAL TALENTSHIP: TOWARD A DECISION SCIENCE CONNECTING TALENT TO GLOBAL STRATEGIC SUCCESS John W. Boudreau, Peter M. Ramstad and Peter J. Dowling COMPETENCE, NOT COMPETENCIES: MAKING GLOBAL EXECUTIVE DEVELOPMENT WORK George P. Hollenbeck and Morgan W. McCall, Jr. 377

37

63

101

378


PART II: CROSS CULTURAL PERSPECTIVES INTRODUCTION Peter W. Dorfman

123

INFLUENCE TACTICS ACROSS TWELVE CULTURES Jeffrey C. Kennedy, Ping-Ping Fu and Gary Yukl

127

CULTURAL ADAPTABILITY AND LEADING ACROSS CULTURES Jennifer J. Deal, Jean Leslie, Maxine Dalton and Chris Ernst

149

LEADERS’ SOURCES OF GUIDANCE AND THE CHALLENGE OF WORKING ACROSS CULTURES Peter B. Smith

167

THE CHINESE LEADERSHIP THEORY Wenquan Ling and Liluo Fang

183

CORPORATE CULTURE AND ORGANIZATIONAL EFFECTIVENESS: IS THERE A SIMILAR PATTERN AROUND THE WORLD? Daniel R. Denison, Stephanie Haaland and Paulo Goelzer

205

PART III: PROCESSES, PRACTICE AND DEVELOPING GLOBAL LEADERS INTRODUCTION William H. Mobley

231

STRATEGIC MANAGEMENT OF GLOBAL LEADERSHIP TALENT Elaine B. Sloan, Joy F. Hazucha and Paul T. Van Katwyk

235


379

CREATING AND SUSTAINING BALANCE IN GLOBAL BUSINESSES: A PRACTITIONER VIEW John Hofmeister and Sarah Parker

275

INFLUENCE AT A DISTANCE: LEADERSHIP IN GLOBAL VIRTUAL TEAMS Don D. Davis and Janet L. Bryant

303

DEVELOPING GLOBAL MANAGERS: INTEGRATING THEORY, BEHAVIOR, DATA AND PERFORMANCE Joseph J. DiStefano and Martha L. Maznevski

341

LEADERSHIP DEVELOPMENT IN ASIA: A PERSONAL VIEW Linda E. Laddin

373

CONCLUSIONS William H. Mobley and Peter W. Dorfman

387

ABOUT THE EDITORS

391


393


401


405



ix

INTRODUCTION William H. Mobley and Elizabeth Weldon

xiii

PART I: FOUNDATIONS OF GLOBAL LEADERSHIP INTRODUCTION: FOUNDATIONS OF GLOBAL LEADERSHIP Elizabeth Weldon CULTURE AND LEADERSHIP: A CONNECTIONIST INFORMATION PROCESSING MODEL Paul J. Hanges, Peter W. Dorfman, Gary Shteynberg and Archie L. Bates, III EMOTIONALIZING LEADERSHIP IN A CROSS-CULTURAL CONTEXT Birgit Schyns and James R. Meindl STRATEGIC VERSUS DIFFUSION PERSPECTIVES OF ORGANIZATIONAL CULTURE: IMPLICATIONS FOR EMPLOYEE COMMITMENT AND EXTRA ROLE BEHAVIOR IN THE CHINESE CONTEXT Chen-Bo Zhong, Hui Wang, Anne S. Tsui, Jiing-Lih Farh and Bor-Shiuan Cheng REFRAMING GLOBAL MINDSET: FROM THINKING TO ACTING Vladimir Pucik 381

3

7

39

59

83

382


GETTING MORE THAN YOU EXPECT: GLOBAL LEADER INITIATIVE TO SPAN STRUCTURAL HOLES AND REPUTATIONAL EFFECTIVENESS Linn Van Dyne and Soon Ang

101

GLOBAL LEADERS AS EXPERTS Joyce S. Osland and Allan Bird

123

GLOBALIZATION: THE BASIC PRINCIPLES OF LEADERSHIP ARE UNIVERSAL AND TIMELESS David P. Campbell

143

PART II: LEADING GLOBALLY INTRODUCTION: LEADING GLOBALLY Elizabeth Weldon

161

ETHICAL STANDARDS AND GLOBAL LEADERSHIP Allen Morrison

165

THE MINDSET OF GLOBAL LEADERS: INQUISITIVENESS AND DUALITY J. Stewart Black

181

BUILDING GLOBAL COMPETITIVENESS IN A TURBULENT ENVIRONMENT: ACER’S JOURNEY OF TRANSFORMATION Stan Shih, J. T. Wang and Arthur Yeung

201

ARE YOU READY TO LEAD GLOBAL LEARNING? Xavier Gilbert and Peter Lorange

219

LEADERSHIP DEVELOPMENT WITHOUT BORDERS Neil Sendelbach and Michael R. McGrath

229


383

THE AGILE LEADER: CONDITIONS FOR SUCCEEDING IN CHINA Juan Antonio Fernańdez

255

POSITIVITY IN THE MIDDLE EAST: DEVELOPING HOPE IN EGYPTIAN ORGANIZATIONAL LEADERS Carolyn M. Youssef and Fred Luthans

277

CONCLUSIONS William H. Mobley and Elizabeth Weldon

293

ABOUT THE EDITORS

301


303


313


317


321

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