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Relevance of leadership theories in the context of culture and workplace practices in India


Its not only Western enterprises that expand globally, enterprises from emerging countries are doing the same more and more organizations are expanding from a local to a global market space. Especially India is establishing itself as economic center and is rapidly becoming the new global economic superpowers. An understanding of local culture and how it affect Western leadership practices and behavior is key in order to become a successful leader, as Western enterprises continues to establish themselves into these emerging markets. In the very same way as enterprises from emerging markets need to understand the local culture when they establish themselves in Western countries. The aim of this report is to investigate what cultural factors/dimension that affect leadership in the context of multi countries as well as to investigate behavioral styles and practices leaders operating in India and see how Western leadership theories are relevant to these set up.

Relevance of leadership theories in the context of culture and workplace practices in India

In todays world we have emerged from the industrial age, into the information age where knowledge is our most valuable assets. The rapid technological development that have enabled this information age is also affecting the pace at which change is happening in the world. The pace of change is rapidly increasing and in order for organizations to be successful they need to keep up with this pace (Schwarz & Brock, 1998). In a recent business leader review with more than 400 senior executives around the world, fortyone percentages believed that new players from emerging markets will be the main development that will have impact on the business over the coming five years (Accenture, 2010). Their conclusion is understandable, as there have been a big change in the economic power ranking during the last 20 years. The BRIC (Brazil, Russia, India, and China) countries economy has emerged and their economical power will continue to increase pushing down the economic super powers U.S. and Japan further as time goes (World Economic Forum, 2009; Accenture, 2009). The emergence of a world characterized by multiple centers of strong economic power and activity, such as the changes described above is normally referred to as a multi-polar world. As this goes on change is constant and leaders in the new economy needs to adapt new strategies in order to be successful in this economy (Accenture, 2007).

The Other Country

With a significant rise in intercultural business across the world, understanding the other culture and learning skills to adapt to the other culture becomes essential. In this report the India is the other country.

Relevance of leadership theories in the context of culture and workplace practices in India As India, which is traditionally an Eastern high-context culture, also becomes integrated with the rest of the world due to this globalization phenomenon, it becomes imperative for the Indian workforce to be equipped with cross-cultural communication skills to work not just within the country, but also overseas in Western low-context cultures such as Australia. This is a skill to be adapted by not only the Indian workforce, but by the workforce in the other culture too (such as Australia), as they prepare to work overseas, such as in India. Such cross-cultural adaptation is now a necessity, not a choice, and this places many demands on both the Indian and Australian workforce (Hebbani, 2008).

Culture and Practices in the workplace: Difference between India and Australia
As many Indian executives [and employees in the general workforce] lack exposure to other cultures, they find it hard to adjust to a multicultural environment (Sachitanand et al., 2006). Hence, it important to understand how people belonging to different cultures, react to a given situation. For instance, differences in customary greetings may cause offence in an intercultural encounter and might be interpreted as being rude behavior (Chaney & Martin, 2004). In addition, it is important to realize that intercultural encounters between business people, does not occur in a bubble. As per Gudykunst, Yang & Nishida, (1985), when people from different cultures work together, there are three major factors which could potentially influence each ones communication: (a) the cultural difference itself (i.e., cultural similarity/dissimilarity), (b) one person is likely not speaking in his or her native language (i.e., linguistic and non-linguistic factors), and (c) previous experience in the other culture. All these factors can also have the potential to influence communication outcomes in intercultural business interactions (Hebbani, 2008). Over two decades ago, Hofstede (1984) undertook a landmark study to examine key dimensions on which 67 national cultures differed and identified four main dimensions: (a) power distance (PD), (b) uncertainty avoidance (UA), (c) individualism/collectivism (I/C), and (d) masculinity/femininity (M/F). Each country was scored on these four dimensions thereby providing an empirical framework for understanding cultural differences.

Relevance of leadership theories in the context of culture and workplace practices in India Table 1 (see below) shows that India when compared with Australia ranked high in PD, similar in UA, moderately collectivistic (Australia was highly individualistic with the second highest score after the US), and both cultures were slightly masculine. These scores meant that as a whole, Indians accepted hierarchy as appropriate and accepted that positions of power came with power and privileges that could not be questioned (PD), felt less threatened by uncertainty (UA), were more a we culture than I culture, and accepted gender roles more rigidly with men expected to be strong and assertive striving for material success to some degree as compared to women (M/F) (Singh, 1990). By comparison, Australians accepted flatter hierarchies and greater equity at work (PD), felt somewhat more threatened by uncertainty (UA), were an I culture rather than a we culture (I/C), and somewhat accepted gender roles more rigidly with men expected to be strong and assertive striving for material success as compared to women (M/F). These scores for Australia were also supported in a comparatively recent study by Teoh, Serang & Lim (1999). In summing up, both cultures appear to have similar scores on the M/F dimension, somewhat similar scores on the UA dimension, but have significantly different scores on the other two dimensions namely, PD and I/C. Table 1 Hofstedes Index Scores for Australia and India Country PD Index Australia India 36 77 Rank 41 10-11 UA Index 51 40 Rank 37 45 I/C Index 90 48 Rank 2 21 M/F Index 61 56 Rank 16 20-21

Note. The data in all columns are from Cultures Consequences (p.500), by G. Hofstede, 1984, London: Sage. While Hofstedes research is considered to be a valuable contributor to the study of intercultural business communication, Triandis (1995, 2004) extended Hofstedes individualism and collectivism typology into this decade by extending the previous dimensions. The new

Relevance of leadership theories in the context of culture and workplace practices in India dimensions were namely, horizontal individualism (HI), vertical individualism (VI), horizontal collectivism (HC), and vertical collectivism (VC). Thus, the two dimensions of individualism and collectivism now included horizontal and vertical measurement of social relationships at the cultural and individual level of analysis. The purpose of this measurement was to gauge differences between people with a preference for hierarchy or for equality within cultures which had a tendency to be individually or collectively oriented (Hebbani, 2008). Horizontal and vertical dimensions were thought to exist in both individualist and collectivist cultures at opposite poles of a continuum. Vertical relationships were construed as structurally hierarchical with members of the culture accepting inequality and acknowledging the importance of social rank or status (Triandis & Gelfand, 1998), while horizontal relationships were construed as structurally egalitarian with members accepting interdependence and equal status for all (Triandis, 1995). Triandis (1995) categorized India as a VC culture (i.e., accepting inequality and ranking) and Australia as a HI culture (i.e., people should be similar on most attributes including status). Sivadas, Bruvold & Nelson (2008) in their empirical study that compared India and the US classified India as a VC1 and HC culture2. Triandis (2004) lists several examples of such implications. For example, Managers in collectivist cultures [India] are not as concerned with performance as managers in individualist cultures are [Australia], but they are more concerned with interpersonal relationships than managers in individualist cultures are (p.91), and also that employees in collectivist cultures are more loyal and have high commitment towards the organization. One could speculate that with increased globalization over the past decade and the resulting increase in intercultural contact between cultures, the scores for these two countries might have altered to some extent, even though the scores for India continue to support the categorization that it is still a HC culture, where some people feel that certain people have a higher status and so are entitled to more respect than others of lower status (Martin & Chaney, 2006).

1 2

Sivadas, Bruvold & Nelson (2008), say that India is a VC culture due to influences from its caste system. Parallels can be drawn that Australia and the US are both HI cultures. This conclusion can be drawn based upon classifications by Hofstede (1984), Triandis (1995) and Sivadas, Bruvold & Nelson (2008) who found that the US is an HI culture.

Relevance of leadership theories in the context of culture and workplace practices in India

Relevance of Leadership Theories in India Behavioral Theories

This theory emerged during the 1940s and lasted to sometime during the 1960s (Sashkin, 2003). This theory steps away from the fact that leaders were born and recognized that leaders could be made. The theory looked at what behaviors leaders have and what they actually do. Several people have contributed with research and models within the area of behavioral theory. Some of the more common mentioned once are McGregors Theory X and Theory Y, Likerts System 14, and Blake and Moutons Managerial grid. McGregors Theory X and Theory Y is considered part of the behavioral theory by most literature, even though it is not really a leadership theory (Kliem, 2004). This theory is a simple two style behavior theory where Theory X stands for task-oriented behavior and Theory Y for people-oriented behavior. A leader of type X has a very negative view of his or her subordinates. Workers are thought of to be lazy, unmotivated, unreliable, untrustworthy, without ambition, unintelligent and are reluctant to change. The leader believes that their subordinates cannot be trusted and need clear directives and close supervision. Subordinates perform the work in order to receive economic, rewards or to avoid punishment and threats. The work itself is not believed to be a motivation for the workers (Ljungberg & Johansson, 2010). This behavior style is authoritarian and the leaders take the decisions by them self. This is a leadership style for an organization that is very hierarchical. Rensis Likert performed research during the 1960s into organizations in order to find a leadership style for high performance teams. Likert looked at two different styles called employee centered and job centered. Likert constructed a scale with four different leadership styles called system 14. System 1 is a very task oriented style with a very negative view of the subordinates. Leaders use threats and punishment to get subordinates to perform their work.

Relevance of leadership theories in the context of culture and workplace practices in India System 2 leaders have some confidence in their subordinates but all decisions are still made by the leaders. System 3 leaders have much more trust and confidence in their subordinates and delegate some decisions. System 4 is a very people oriented style with complete trust and confidence in the subordinates. This includes group decisions and building supporting relationship with the subordinates. Likert concluded that most high performing teams corresponds with the employee centered style system 4 so this is the most appropriate approach (Kleim, 2004). One of the more interesting aspects in the Globe and Hofstede studies is the Power Distance dimension. If we decide to look into power distance from a responsibility point of view, the survey results taken by Ljungberg & Johansson (2010) show that the leader is seen as sole primary responsible for a task outcome scored 67% in India. Shared responsibility between leader and team scored 11% in India. As power distance also affect the decision making process, the survey results showed that in India, 56% leaders decided after consultative input from their employees, followed by 22% leaders without any input from others (Ljungberg & Johansson, 2010). This result concludes that India has a higher power distance and that the leader is the one who is responsible. When we look at power distance and relate to this to behavioral theory we could conclude that McGregors Theory X leadership style is more applicable for India in regards to the need of more clear directives and closer supervision. The same connection can be made to Likerts scale where India would be System 1 or 2. McGregor and Likert state that Theory Y or System 4 leadership is the most efficient for high performance while theory X and or System 1 leadership will not sustain high performance in the long run. If this was correct India would not have the ability to create high performance teams in the long run. At the same time we can see in Hofstedes study, the cultural dimension values (as it should be) that it is a desire to have a lower power distance in India. If the desire for lower power distance would lead to increased effectiveness it supports the result and statement of

Relevance of leadership theories in the context of culture and workplace practices in India behavioral theories that people-oriented leadership style is preferred when trying to create high performing teams in the long run. As behavioral theory also states that a certain type of leadership style is preferred in order to achieve high performance and our research material indicate that different styles are needed depending on the culture, this theory is not really applicable for multi-culture leadership. We can conclude that India wants to move more toward Theory Y leadership from the Globe studies.

Situational Leadership/Contingency Theories

Situational leadership, or contingency theory as it is also called, emerged during the late 1960s to late 1970s. This leadership theory steps away from the thinking that there is one specific leadership style that is the optimal one and recognize that the optimal leadership style depends on, or is contingent on, the situation. This theory states that a leader may better use a task oriented approach while in other situations it may be better with a more people oriented approach depending on the situation. Situations could also occur where a dual approach meaning both task and people oriented, and in other cases a leaders may be better of delegating decisions completely to their subordinates (Sashkin, 2003), (Dunn, 2007). Several models have been created within situational leadership as well. Some of these are Hersay and Blanchards model, Robert Houses Path-Goal theory, Vroom and Yettons normative model, and Fiedlers model (Ljungberg & Johansson, 2010). Hersay and Blanchard situational leadership model (originally called Life Cycle Theory of Leadership) from 1969 consists of four different leadership styles that a leader could assume depending on the ability and motivation of the follower (Sashkin, 2003). These leadership styles are called: Telling / Directing (S1) Selling / Coaching (S2)

Relevance of leadership theories in the context of culture and workplace practices in India Participating / Supporting (S3) Delegating / Observing (S4)

S1 should be used when the follower readiness is low (low ability and low motivation) which requires a high task focus (low relationship orientation) from the leader. S2 should be used when the follower has some readiness (some ability and motivation) which requires both a high task and relationship focus from the leaders. S3 should be used when the follower has high some readiness (high ability and some motivation) which requires a high relationship focus (low task focus) from the leaders. And S4 is recommended for situations where the follower has high ability and high motivation, which requires a low task and relationship focus from the leader (Cecil, 2007). Vroomand Yetton defined a situational leadership model called the Normative model (Miner, 2005). This model is regarding decision making and which style a leader should apply depends on circumstances and time constraints of the decision. The five different leadership styles by Vroom and Yetton are: A1: Problem solving and decision making by the leader with available information at the time A2: Leader retrieves necessary information from subordinates and then makes the decision by himself/herself. C1: The leaders shares problem with relevant subordinates and retrieves suggestions and ideas individually from them, and then makes decision himself/herself. C2: The leader shares the problem at hand with the subordinate group and gathers their collective ideas and suggestions, and then makes the decision himself/herself. G2: The leader share problem with subordinates and facilitates a group discussion and tries to reach a consensus decision. The leader accepts decision supported by the group. The survey results by (Ljungberg & Johansson, 2010) show that there is cultural dimension to the situation as well. In India, leaders use mostly S1 (Telling/Directive) scored 45%, then S2 (Selling/Coaching) scored 23% and use the least of S3 (Participating/Supporting) and S4 (Delegating/Observing). We do not believe that the task characteristics change due to culture nor

Relevance of leadership theories in the context of culture and workplace practices in India do the abilities of the subordinates change, so therefore there must be cultural aspect to explain the difference in result. One of the reasons why S1 leadership style is the style mostly used in India may be the difference in power distance. Vroom and Yettons normative model uses another evaluation to decide on the most appropriate leadership style. The use of leadership style depends on the required quality of the decision and the need, or difficulty, for acceptance among the subordinates. The need or difficulty for acceptance among subordinates could clearly be dependent on cultural aspects. It is found from the survey results (Ljungberg & Johansson, 2010) that in India there is a much higher tendency to conform to the rest of the group or with the manager. It is simply because in India to get people on board is not needed due to the cultural difference in this in-group collectivism. In India 22 % rewards are designed for the advantage of the group (Ljungberg & Johansson). From our multi-cultural perspective the normative model is in a sense a better situational model as it includes at least one aspect, the difficulty for decision acceptance (in-group collectivism), that is culturally dependent. However we believe there are more cultural aspects that needs to be included for it to be a good model for multi-cultural leadership.

According to Storti (2007), as Westerners and Indians work more closely together and in greater numbers than ever before, the opportunities are vast, but so is the cultural divide. Misunderstandings, misinterpretations, missed deadlines and frustration due to cultural differences can raise havoc on successful interactions. Any Westerner conducting business with Indians, and any Indian trying to figure out the West, will recognize the challenge of such intercultural interactions. While there are quite a few books written on doing business in India, doing business between the US and India (Makar, 2008; Storti, 2007), and conducting business in Australia3, there are no books specifically on how to do business between India and Australia.

For example, see Culture Wise Australia: The Essential Guide to Culture, Customs and Business Etiquette by David Hampshire published in 2007 by Survival Books.

Relevance of leadership theories in the context of culture and workplace practices in India We can conclude that adaptation to local culture is crucial for leaders to be successful. This is supported by almost every source of information that we have looked at. As a result, managers and leaders are recommended to attend cultural training in one way or another to better understand the environment they are expected to operate in, as well as to better be able to melt in and be able to take formal as well as informal discussions that are appreciated by the local employees. Adaptation required due to differences in power balance and decision making styles. Hofstedes study supports the difference in hierarchy structure and decision making style used in India compared to Australia or more generally Anglo countries. It is also notable from our findings that when in India, Western leader will be required to micro-manage and follow-up the work from subordinates to a much higher extent than he/she is used to. Additionally they need to takeon a more complete responsibility for the result of the execution, even when working on an executive level. One finding supported by Hofstede is that consensus decision making does not work well with a high power distance and should hence not be practiced in India. Situational theory is clearly the one leadership theory that contributes the most to multicultural leadership as its one of the few theories that reflects that different leadership behavior is needed in different situations. However, some of the models within this category, e.g. Hersay and Blanchard, would improve by also considering cultural aspects such as power distance as part of the situation to be assessed.

Relevance of leadership theories in the context of culture and workplace practices in India

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