Humanistic leadership: Lessons from Latin America

Anabella Davila
a,1,
*, Marta M. Elvira
b,1,2
a
EGADE Business School, Tecnologico de Monterrey, Av. Fundadores and Runo Tamayo, n/n, Valle Oriente, Garza Garcia, N. L. 66269, Mexico
b
IESE Business School, Universidad de Navarra, Camino del Cerro del Aguila, 3, 28023 Madrid, Spain
Research on leadership in Latin America has followed two main
streams. The rst encompasses studies in the cross-cultural
perspective that use a quantitative approach based on national
cultural dimensions (e.g., Howell et al., 2007). The second includes
studies that use a qualitative approach to examine Latin Americas
context singularities based on in-depth and cross-cultural case
studies (e.g., DIribarne, 2002), participant observation (e.g.,
Osland, De Franco, & Osland, 1999), and ethnographic or semi-
structured interviews (e.g., Lindsley & Braithwaite, 1996; Rodri-
guez & Rios, 2008). Although both streams build on different
methodological paradigms, ndings are very consistent. Latin
Americans tend to score high on authority and collective or group-
related cultural dimensions and values relative to their U.S. or
European counterparts. The amalgamation of these two cultural
dimensions and values produces a particular leadership style in
which personal and social relationships are key to working and
leading employees effectively: that is, paternalistic leadership
(Davila & Elvira, 2005).
Despite considerable attention to the study of Latin Americas
work culture, most research still relies on few cultural dimensions.
This results in a unitary and established set of values and behaviors
at a broad, society-wide level of analysis. For this reason, some
scholars such as DIribarne (2001) are skeptical of great-scale
comparisons that aim to characterize cultures by the values
obtained in any one dimension. Because changes in the economic
opening of the Latin American region have attracted multinational
corporations (MNCs) from various continents over the last three
decades, and because of the extensive technological advances
introduced in rms, the organizational context seems to determine
strongly the extent to which managers emerge with particular
leadership roles. Although we distinguish studies on managers
from those that focus on leadership styles and roles, the
organizational level of analysis can also explain diversity in
leadership styles. Therefore, to understand todays leadership in
the Latin American context, one should consider the process of
transformation in business organizations and related labor culture
changes.
Leadership styles in Latin American businesses today appear to
balance both the individual and economic perspectives of
organizations. If common cultural frameworks ability to explain
concrete leadership transformations in Latin America is limited,
the need arises to expand theory and concepts with greater
explanatory value. We propose two theoretical lenses, stakeholder
management and cultural hybridism as fruitful avenues to study
the transformation of leadership in Latin America today. Through
these lenses, we will highlight the new humanism (Davila & Elvira,
2009b) and pragmatism (Santiso, 2006) perspectives, to build on
our proposal for conceptualizing leadership transformations in
Latin Americas complex environment.
To assess the applicability of these theoretical models to study
leadership in Latin America, we divide this article in three parts.
First, we overview the psychological, sociological and historical
perspectives behind what is called paternalistic leadership style
in Latin America. Then we introduce alternative theoretical
frameworks providing fruitful avenues to further this research.
We conclude with a research agenda for future studies on the
topic.
Journal of World Business 47 (2012) 548554
A R T I C L E I N F O
Keywords:
Stakeholder leadership
Paternalism
Cultural hybridism
Latin America
Diversity
A B S T R A C T
We review the psychological, sociological and historical explanations underlying leadership styles in
Latin America. A fundamentally paternalistic style relies on social bonds based on reciprocity and
stresses workers expectations. Transformations in leadership styles in Latin America require
consideration of alternative theoretical approaches such as stakeholder management and cultural
hybridism, beyond cross-cultural frameworks. Viewing employees as key stakeholders implies a
legitimate concern for workers beyond the employment relationship. From a hybridism perspective,
diversity is a critical concept that applies to organizational ownership arrangements, management
practices, cultural backgrounds, and socio economic contextual changes surrounding leadership styles.
2012 Elsevier Inc. All rights reserved.
* Corresponding author. Tel.: +52 81 8625 6150; fax: +52 81 8625 6098.
E-mail addresses: anabella.davila@itesm.mx (A. Davila), melvira@iese.edu
(M.M. Elvira).
1
These two authors have contributed equally to the manuscripts development.
2
Tel.: +34 91 211 3000; fax: +34 91 211 3251.
Contents lists available at SciVerse ScienceDirect
Journal of World Business
j ou r nal h o mepage: w ww. el sevi er . co m/ l oc at e/ j wb
1090-9516/$ see front matter 2012 Elsevier Inc. All rights reserved.
doi:10.1016/j.jwb.2012.01.008
1. Paternalistic leadership in Latin America
International studies of leadership in Latin America generally
use cross-cultural frameworks searching for comparative traits
and values. Besides the well-known Hofstedes dimensions to
describe managerial behaviors (Hofstede, 1982), recent GLOBE
studies have identied additional cultural attributes linked to
leadership style trends in the region (Howell et al., 2007; Javidan,
Dorfamn, de Luque, & House, 2006). Both approaches provide the
bases to understand national cultural values, and classify leader-
ship categorizations including preferred qualities in leadership
styles among Latin Americans. Overall, cross-cultural studies
describing Latin American managers have been highly consistent:
authority and group relations score high in the denition of
leadership. In addition, within a context dened by complex
economic, social and political structures, the content of these
dimensions often becomes associated with a paternalistic leader-
ship style.
Various denitions exist for paternalistic leadership within
organizations, a concept increasingly embraced by researchers.
Consistent with our approach, Pellegrini and Scandura (2008) have
recently found evidence for the effectiveness of paternalistic
leadership in North American business contexts, beyond the
Middle Eastern, Asia Pacic and Latin American regions typically
associated with this model. These recent studies suggest that
paternalistic styles may positively inuence organizational com-
mitment regardless of the cultural context. Thus, rening the
conceptualization and measurement of paternalistic leadership
might lead to a construct generalizable across cultures. For Latin
America in particular, the psychological, sociological and historical
explanations underlying this style are briey explained below.
From a psychological perspective, Latin American managers
leadership style tends to be paternalistic in the sense of protecting
working relationships and making decisions for workers (Davila &
Elvira, 2005; Rodriguez & Rios, 2009). This paternalistic approach
to leadership typically results in centralizing authority and
creating symbiotic relationships of superiorsubordinate work
that provokes dependability of mutual loyalties (Martinez, 2005).
Researches nd that treating workers as offspring often results
from a tacit assumption that employees are unable to make their
own decisions, lack appropriate education or are unwilling to take
risks (Rodriguez & Rios, 2009). This assumption could be based on
the collective understanding of Latin American societies that sees
individual development through the moral support of a group but
includes the nuclear and extended family as well the surrounding
community (Paz, 1950; cited in DIribarne, 2002). In Mexico, for
example, a sense of community since pre-Hispanic times is well
documented (Leon-Portilla, Barrera, Gonzalez, de la Torre, &
Velasquez, 1964). Social norms dictated that community members
worked for the common good and that community governance
depended on members accountability. Thus, community members
are expected to reach self-development within the community to
maintain the concept of collective order (Leon-Portilla et al., 1964).
At a society-wide level, research suggests that due to the
scarcity of institutions to protect work relationships and of
resources to enforce labor rights (Bensusan, 2006), workers need
to develop social bonds with superiors: such bonds replace
institutional forms of employment protection (Davila & Elvira,
2005). Thus, paternalism creates an organizational atmosphere
where trust develops and envelops the work relationship based on
personal ties to superiors, especially in small labor markets.
Consequently, there is no need to depend on a legal contract for the
establishment of work commitments (Rodriguez & Rios, 2008).
Instead, psychological contracts emerge between superior and
subordinates where the contract content includes both actors
expectations about what it takes to preserve the employment
relationship. This psychological contract is embedded in a broader
social contract in which person-centered management should take
preeminence over merely prot-centered goals. Further, paternal-
ism based on social bonds within organizations also tends to
produce vertical social networks structures (i.e., between man-
agers and subordinates) that function as replacements of
impersonal bureaucracies and facilitate organizational relation-
ships (Elvira & Davila, 2005).
Against this background, the outcome of a paternalistic
leadership style in organizations is often viewed as leading to a
vicious relationship in which productivity and performance could
be harmed. Recent research shows that as long as the organization
develops a coherent set of human resources policies aligned to
workers expectations, productivity could also be achieved
(Rodriguez & Rios, 2008). Based on two case studies in Chiles
banking industry, Rodriguez and Rios (2008) describe two different
sets of managerial practices that are highly aligned with
maintaining good employment relations. One Chilean-owned
bank, founded in 1937, maintains a family-like social tie with
both workers and clients while simultaneously elevating the
degree of professionalism of its workforce. For example, super-
visors and subordinates write performance agreements, which
specify both quantiable work goals and qualitative outcomes
such as teamwork and maintenance of a positive working climate.
An employee who fails in either goal can be placed in a different
position. At the time of the study, this bank reported the lowest
turnover of Chiles banking sector and ranked among the top rms
in the Best Place to Work for women. The other bank in the study,
Dutch-owned and ranked 11th in Europe, had a transactional
approach to leadership in its Chilean operation and established a
contractual relationship with employees. The contracts content
included salaries and benets according to the local labor market
practices and meets Chilean workers expectations. Additionally,
the bank provided health services, equal opportunities for
promotion and development, and pays competitive salaries with
productivity bonuses. A key theme in both case studies is that in
order to maintain professionalism and provide career development
to the workforce, both banks provide-intensive training before any
organizational changes occur. Thus, regardless of the organiza-
tions original culture, the paternalistic approach appears effective
from a performance viewpoint in Latin America.
From a historical perspective, researchers attribute this
leadership style to that of the old hacienda (privately owned large
farm) in which the patron (ownerboss) besides paying wages,
takes care of his/her workers by providing housing and food
supplies for them and their families. Under this welfare system, the
community living in the hacienda develops strong familial bonds
(Diaz-Saenz & Witherspoon, 2000; Howell et al., 2007; Martinez,
2005; Rodriguez & Rios, 2009). Although it is common to identify
the Latin American old hacienda as the context in which the
paternalistic leadership style emerged, it is rare to nd research
addressing how working relationships and conditions actually
were at that time. We present a brief historiography of the old
hacienda in Mexicos colonial times.
Research does exist on the dynamics of mining and agricultural
organizations of the sixteenth and seventieth centuries. Mining
centers, for example, were established in rural areas and often
hired independent workers, while agricultural organizations, such
as the hacienda, had slaves (Bulmer-Thomas, 2003). After the wars
of independence early in the 19th century, labor markets
functioned under the debt peonage systema labor contract that
retained part of workers wages to pay for shelter or other needs,
and attached employees to a haciendas owner for an unlimited
period of time (Alston, Mattiace, & Nonnenmacher, 2009). Under
debt peonage workers were paid so little that they needed to
borrow from owners who, in turn, tried to ensure that workers
A. Davila, M.M. Elvira / Journal of World Business 47 (2012) 548554 549
would not be able to pay back their loans and thus, remained on the
hacienda. Haciendas offered resident peons housing, medical care,
and, in some cases, education for the young.
Although the work environment during this period was often
coercive and favored the hacienda owners interests, workers still
had the opportunity to make choices. Owners had to offer them
incentives that included salaries and other additional payments
(Alston et al., 2009). This debt peonage system generated a
reciprocal relationship that developed into mutual responsibilities
and loyalties. Both owner and servants acquired social obligations,
such as incentives for job performance, protection during down-
turns, and participation in workers family events (Alston et al.,
2009). This paternalistic relationship fullled both the haciendas
need to secure its workforce and the workers needs for protection
in multiple aspects of their lives.
Some studies have highlighted emerging constructs that
represent the social bonds developed in personal relationships
in Latin America and reect hierarchical relationships in the region
potentially originating in colonial times. For example, there is
jeitinho in Brazil and compadrazgo
3
in Chile and in Mexico. The
jeitinho is known as a Brazilian cultural trait used as an adaptive
strategy for problem-solving (Amado & Brasil, 1991; Duarte, 2006).
It is used to blend or break the rules in diverse or difcult situations
using emotional resources such as cordial manners, simile, and
empathy. These are all strong values in Brazilian society. Jeitinho,
thus, becomes a social mechanism within a relationship of
reciprocity. In organizations, it helps make things happen via
emotional mechanisms and avoids highly disliked confrontations
(Duarte, 2006).
Similarly, the compadrazgo is a social relationship based on a
dyadic informal contract among relatives or friends identied
among the Chilean urban middle class. Compadrazgo relies on a
reciprocity system that consists of a continuous exchangegiving
and acceptingof favors framed in a friendship ideology (Lomnitz,
2001). It might be associated with the middle class because it has
the necessary means to give both favors and retribution. This
relationship tends to occur among equals of the same social class:
someone needing a favor approaches another one who can provide
it. It is a way of social solidarity for group survival. Compadrazgo is
the answer to a situation where there is scarcity of resources and in
which the middle class lives; therefore, positive friendship and
cooperative relationships develop among individuals (Lomnitz,
2001).
In organizations, bureaucratic favors consist of preferential
treatment of an individual against the rights or priorities of a third
party. These favors are used in order to obtain something easily and
rapidly. Favors asked and received are legal, although the means to
obtain them may not necessarily be so. Favors are given and
accepted in friendship without guilt feelings. The individual that
makes the favor is conscious of the benet he or she would obtain
in the future through a reciprocal favor (Lomnitz, 2001). While
compadrazgo affects the middle class in Chile, in Mexico it reaches
all socioeconomic classes and is institutionalized by ctitious
kinship established through baptism, marriage or long-lived
friendships.
Both, jeitinho and compadrazgo are important cultural traits in
Latin American societies that have particular social functions in
organizations such as softening rigid and impersonal bureaucra-
cies through maintaining personal and social relationships, as well
as establishing the foundations for the social contract in which
employment is embedded. Both constructs include habits, values
and behaviors expressing social bonds that work better under a
paternalistic leadership style, because they include the required
emotional tie to the in-group.
In sum, paternalism is a widely researched leadership style in
Latin America, based on social bonds via relationships of
reciprocity. Conceptual approaches to the paternalistic style of
leadership in Latin America stress not only the need to understand
workers expectations for the employment relationship but also
the opportunity to use employment as a means for human
development. Complementing this view, stakeholder models offer
a framework to address the expectations of employees as
stakeholders of the leadership system.
2. A stakeholder management view of leadership
Stakeholder management theory views organizations as con-
stellations of constituencies interconnected by means of diverse
interests and demands (Clarkson, 1995). Managing diverse
stakeholders requires that organizations identify who those are
and how to relate with them. Freemans (1984) denition of a
stakeholder includes any individual or group that could affect or is
affected by the organizations objectives. Research suggests that to
identify stakeholders, they should have the saliency attributes of
power, legitimacy and urgency (Agle, Mitchell, & Sonnenfeld,
1999; Mitchell, Agle, & Wood, 1997). Thus, organizationstake-
holders interaction strategies emerge according to the position of
the organization or the stakeholder in the relationship; or to their
mutual dependency on the resources (Frooman, 1999; Kaler, 2009;
Rowley, 1997).
The stakeholder perspective has often focused on the ethical
obligation of an organization towards its stakeholders focusing on
corporate social responsibility (CSR) (e.g., Clarkson, 1995) and
usually targeting salient stakeholders. In Latin America, where
business organizations play a major role in economic development,
typical stakeholders might lack the necessary attributes to make
their interests and demands visible enough to be addressed by
organizations. We have argued elsewhere the need to consider
relevant the silent stakeholders in this region, which may lack
resources to represent their interests and, therefore, be seldom
noticed by organizations (Davila & Elvira, 2012). In this vein,
effective leaders in Latin American companies should identify
relevant, though perhaps silent, stakeholders interests or
demands, which often include the desire to achieve social
integration. In other words, to manage these relationships
effectively, leaders need to develop horizontal-relationships with
stakeholders in contrast to a vertical-relationship of subordination.
Limited research exists connecting leadership to stakeholder
management theory. Conceptual work has proposed a link
between organizational leadership and new structural forms, such
as the radix organization. In this form, power and authority are no
longer placed in the hierarchy but across diverse rms that
collaborate in a value chain. Within such scenario, leadership
competencies are required to develop cooperative stakeholder
relationships (Schneider, 2002). Specic aspects of the leadership
roles derived from todays stakeholder society paradigm include
being a coordinator and cultivator of relationships inside and
outside the company together with being responsible for the
quality of the relationships (Maak & Pless, 2006). It is easy,
however, to sympathize with the critique to leadership through the
stakeholder lens on the basis of the challenges involved in
satisfying the various interests and demands of diverse stake-
holders: such interests could be in conict or compete not only
with an organizations goals but also with other stakeholders
objectives (McCall, 2002).
One potential way of addressing this challenge consists in
examining the foundations and consequent scope of the stake-
holders interests and demands in terms of their property rights
3
According to Lomnitz (2001) this cultural behavior should not be confused with
the Catholic ritual derived from a baptism or marriage.
A. Davila, M.M. Elvira / Journal of World Business 47 (2012) 548554 550
(McCall, 2002). In Latin America the foundations for sense of
community evolved from a synthesis of the indigenous-Iberoa-
merican colonization process, a search for a national identity, and a
social and economic structure based on primary social relation-
ships (Rodrguez, Majluf, Abarca, & Bassa, 1999). The leadership
style that emerged from this context is paternalism. This style
portraits a legitimate concern for workers beyond the employment
relationship, including their families welfare and quality of life,
and by extension the community. Such concern can be more easily
understood if employees are seen as stakeholders.
Based on stakeholder management, we wonder who are the key
actors are that dene the leadership style. Is what the stakeholder
expects from the leader that denes leadership style? Or is it the
other way around? As research shows, the psychological and social
contracts that frame an employment relationship in a context such
as Latin America means that employees as stakeholders expect and
demand specic behaviors and attitudes from the leader. Similarly,
leaders relate to subordinates engaging in a personal relationship
with expected reciprocity.
Evidence from prior studies highlights at least three critical
aspects of leadership in a stakeholder model as applied to Latin
America: Investment in employeessalary and benet levels as
well as education, training, and development; cooperative efforts
in labor relations; and community-centered CSR practices (vs.
distant global initiatives) (Davila & Elvira, 2012).
The societal approach to paternalistic leadership implies that
workers rights in the region are unprotected by labor institutions,
but instead recur to psychological contracts to maintain employ-
ment conditions. This means that workers lack some common
salient attributes to express their interests and demands to the
organizations and acquire a silent status. Effective business
organizations compensate this assumption, showing social respon-
sibility by granting workers not only salaries and benets but also
extensive training in the most advanced technological systems.
When this happens, workers respond with high productivity and
commitment to the organization (Davila & Elvira, 2009a). These are
management aims that research portraits as difcult to obtain in
advanced, competition-driven industrial societies.
We think this approach is related to a new humanism in
leadership. Prior research suggests that in Latin America,
management practices place the individual at the center of the
organization and society. In general, a philosophical perspective on
humanism is proposed by Pirson and Lawrence (2010) that
emphasizes relational and community-orientation traits. This
approach contrasts with the economistic view of leaders as
conducting constant negotiations to clarify goals and outcomes
with followers, who in turn are considered as resources, rather
than individual human beings.
By contrast, Pirson and Lawrence (2010) present transforma-
tional leadership (Bass & Avolio, 1994) as a good t for the
humanistic paradigm. Transformational leaders actively balance
their personal interests at the same time that they help followers to
do so. Based on moral values, they inspire followers, stimulate
them intellectually and engage them emotionally in the organiza-
tion, facilitating positive long-term relationships and commitment
to common goals. Moreover, humanistic leaders are compelled to
contribute to society in the public arena broadly speaking
(Lawrence, 2007). This ts well the cultural values of Latin
Americas work culture. In the humanistic perspective, individuals,
organizations and the state all play roles in balancing interests and
behaviors.
In fact, in Latin America business leaders take responsibility for
social development one step further. For example, in 2010, 60
Mexican press, electronic media and entertainment rms orga-
nized the rst entrepreneurship country-wide contest. Partici-
pants were non-governmental agencies (NGOs), small companies,
universities and any individual with an initiative to transform their
community. The initiative registered nearly 50 thousand social
oriented ideas and projects around ve themes: quality of life,
community development, environmental protection, good gov-
ernment and transparency, justice and human rights (iMx, 2011).
The results of this initiative highlight how media and entertain-
ment enterprises worked together seeking Mexicos social
transformation; how over two million people might get involved
in such initiative; that more than 50 projects received funds,
strengthening the skills of entrepreneurs with training; and the
Federal government joined the project by doubling the amount
invested in selected projects. Thus, consistent with Pirson and
Lawrences (2010) stress on the role of business to alleviate social
problems as an imperative action, a key lesson from these business
leaders initiative is the need to build alliances to develop a
common understanding of development and prosper together.
Our analysis from this example is that the value placed on
community orientation in Latin America increasingly challenges
organizations to integrate their business goals with those of society
through Corporate Social Responsibility (CSR) programs. The
underlying assumption of reciprocity in personal relationships is
extended to business organizations through CSR practices. For
example, in the CSR perspective, organizations receive resources
from the community and are expected to reciprocate by returning
other resources. The relationship organizationstakeholder is
based on trust and respect for the social contract, and endows
organizations with the necessary social license to operate
effectively in the Latin American context. Thus, CSR is used as a
tool to get closer to social reality. Business organizations are being
educated to promote CSR practices as part of their core
competencies. For example, ProHumana is a Chilean-based
foundation that promotes a culture of social responsibility through
the development of the concept of corporate citizenship engaging
people, institutions and businesses.
We have inductively argued for a stakeholder leadership view
that reects the historical socio-political crisis leading to voice
silent stakeholders and their unfullled primary needs and
demands. A paternalistic leadership style and the value placed
on community contribute toward institutional arrangements that
legitimize the social contract between individuals and organiza-
tions. Upon closer examination, a paternalistic style leadership
that considers followers as stakeholders, based on humanistic
values, reects what we term a culturally hybrid perspective on
leadership. Next, we expand on hybridism to understand the ne-
grain workings of paternalistic leadership style in Latin America.
3. A hybrid approach to leadership
A common approach to hybridism in organizational studies
consists in reviewing indigenous management practices and then
identifying local interpretations of foreign practices. Regarding the
process of hybridization, a number of dimensions have emerged that
we summarize in Table 1. Adaptation, for example, plays a key role to
help distinguish between the convergence and divergence of human
resources management (HRM) practices in Europe required mainly
for the construction of the European Union (Tregaskis & Brewster,
2006). The dimension of coexistence of indigenous and modern
practices has also been proposed as an expression of hybridism in
human resources management (Davila & Elvira, 2005). Amalgamat-
ing has been proposed as an alteration, hybridization outcome that
selects the best of local and foreign practices in Brazilians
manufacturing systems (Wallace, 2004). A pertinent concern here
is to understand the criteria used by local management to acquire
and interpret foreign practices for implementation. Post-colonial
theory (Bhabha, 1994) in organization studies deals with this
A. Davila, M.M. Elvira / Journal of World Business 47 (2012) 548554 551
inquiry, assuming that locals desire to emulate practices perceived
as leading to improved performance.
Post-colonial researchers seek to identify existing cultural
encounters or resistances to predict which parts of a foreign
culture are retained and which ones are discouraged. In a study of
two MNCsSwedish and Americanwith operations in Thailand,
Israel and Mexico, Shimoni (2008) described how Mexican
managers hybrid style favored corporations values and practices
over local ones. Mexican managers used both cultures in a
sequential manner. That is, they accepted consensus, egalitarian-
ism and collaboration between management and employees, but
they returned to local hierarchical practices when making
decisions. These behaviors differed from those of Thai managers,
that reected a separation of the local and MNCs values, and from
those of Israeli managers who expressed constant competition
with the MNC management cultural forms.
From this evidence, we conclude that a fruitful research avenue
would be to understand idiosyncrasies that make Latin America
express distinctive hybridization processes in leadership practices.
First, historical processes developed specic mechanisms of
acceptance and rejection in a society struggling constantly to
resemble Western society while keeping its own plurality (Bonl,
2005). Values of the past that may have apparently disappeared,
such as hierarchy, are still very present in Latin American
organizations. Second, as discussed, a dyadic relationship involving
a paternalistic leadership style is not sufcient to understand
leadership in the region. The role of the group around this dyad
transforms the leader into an in-group member in the community.
Third, identifying local management practices in todays organiza-
tions is challenging because of the ongoing internationalization of
managerial knowledge (Alvarez, 1993), specically the migration
of management ideas through college textbooks (Mills & Hateld,
1998), the business press that inuences local Latin American
managers (de Paula & Wood, 2009), and the epistemological
frameworks that have been used to analyze Latin American
management (Ibarra-Colado, 2006).
These characteristics may help explain the decision criteria
used to adopt foreign knowledge into a hybrid leadership style.
Take for example the introduction of Toyotas (lean production)
and Volvos (human-centered work) manufacturing practices in
the Volvo do Brazil (VdoB) plant as part of Volvos global
manufacturing systems. Wallace (2004) observed how Brazilian
managers implemented only two elements of the Toyota Philoso-
phy through self-management teams in a period of two years: the
creation of space for a new production line and the reduction of
inventories. It seems that VdoB learned, perhaps mimicked, lean
production from its sister assembly plants in Sweden and Belgium,
while preserving the human-oriented factor. VdoB learned lean
production not from Japanese organizations, but from other
European truck manufactures in Brazil, local networks of
academics, suppliers and other MNCs. According to Wallace,
managers identied the elements of both systems that could best
be combined within the Brazilian culture to develop lean thinking
and at the same time keep the human approach to work. The
Brazilian Volvos culture emerged from Brazilian cultural traits of
exibility and the introduction of self-management teams to the
manufacturing process.
Latin America is perhaps unique in the world in terms of
developmental characteristics. Researches often argue that the
perception of Latin America as a homogeneous region is
stereotypical and seek to identify cultural differences among
countries (e.g., Friedrick, Mesquita & Hatum, 2005; Lenartowicz &
Johnson, 2003). Although we acknowledge country differences,
research ndings continue to be highly consistent when countries
are grouped by cultural characteristics (Inglehart & Carballo,
1997). From any perspective, Latin Americans tend to be more
similar than different (Montano, 2000). We might need to conceive
culture not only in unitary terms, but also and at the same time, as
multiple units. In other words, culture in a society develops a
common identity, but by means of the culture, we can identify
individual and group differences. This could serve as basis to
identify emerging elements for the construction of a hybrid theory
of leadership in the region.
To address this concern, we have proposed elsewhere that
diversity is a central element to understand hybrid management
practices in Latin America (Davila & Elvira, 2009b, 2012). Diversity
is embedded in the Latin American region and historians
acknowledge that this characteristic challenged a homogeneous
colonization process of civilization (Bonl, 2005). Colonizers
encountered not only a diverse land both geographically and
ethnically speaking that still exists today. The outcome of this
civilization project that favored minority elites led to the pervasive
social and economical inequality that remains today. According to
the Latin American Economic Outlook 2012, ten Latin American
countries rank among the 15 most unequal economies in the world
(ECLAC-OECD, 2012). Thus, Latin American societies are socioeco-
nomically diverse partly by history and partly as a result of
unsuitable socioeconomic policies.
Categories of diversity are expressed not only at the individual
level but also at the organization level and in broader socioeco-
nomic or political processes that shape complex contexts. Thus,
diversity categories include organizational ownership arrange-
ments, management practices, cultural backgrounds, and socio-
economic contextual changes. In terms of business ownership, we
observe diverse arrangements in the region mergers, acquisitions,
multinationals, international joint ventures, maquiladoras,
4
and
local private rms in which other forms of diversity emerge.
Lindsley and Braithwaite (1996) aimed to understand intercul-
tural communication conict in U.S. maquiladoras operating in
northern Mexico. Their study focused on intra and intercultural
conict based on managers perceptions of communication
problems in everyday work roles and responsibilities. The conict
encounters were perceived differently by Mexican and U.S.
managers. Specically, Mexican managers engaged in daily
inappropriate behaviours, attributed them to their inexperience
and incompetency as managers. In contrast, U.S. managers
attributed inappropriate behaviour to their lack of cultural
awareness. By preserving a harmonic interpersonal relationship
in the presence of others, conictive individual and corporate goals
were overcome and productivity was reached.
Diversity in the workforce could be better understood from the
stakeholders perspective. Our hybrid approach bridges the
Table 1
Hybrid process dimensions.
Hybrid process Denitions Typical outcome Examples
Adaptation Converge Supra-structure European Union and employment policies
Alteration Selection of what can be done Parts of systems are installed Parts of manufacturing systems (e.g., Toyota)
Mimicry Discard ones own and adopt the foreign Contradictions in discourse vs. actions Leadership styles
Coexistence Working with both at the same time Diverse management practices HRM systems
4
Foreign-owned, labor intensive assembly plants in Mexico.
A. Davila, M.M. Elvira / Journal of World Business 47 (2012) 548554 552
leadershipstakeholder relationship. Leaders in the region ac-
knowledge the distinctive characteristics of a diverse workforce
and how these turn into diverse interests and demands according
to a particular context. Changes in Mexican society, for example, in
terms of its internationalization, education and technological
training, are requiring new work competencies from the workforce
that in turn could make Mexicans reach a self-development stage
or more control of their lives (Howell et al., 2007). The same
observation appears applicable in Chile: the more educated the
workers, the more independent and self-condent they are. The
more educated workers were more oriented toward productivity
and performance in the workplace (Rodrguez et al., 1999). This
might transform employees psychological contract of dependency
into a more egalitarian one. In a case study DIribarne (2002)
described how a new and young management team introduced
global high-performance job practices throughout a local Mexican
plant. This practice became hybrid because it needed to be
introduced with methods showing concern for all workers, mutual
support, and a genuine commitment to eliminating differences
without detriment to managing the plant. DIribarne (2001, p. 28)
argued that performing the supervisory role was difcult: the
supervisor must assume the role of the boss without behaving
like a boss.
5
A hybrid approach to leadership questions the denition of best
practices in Latin America. Such practices should be acknowledged
as lessons learned from the eld given the environmental
complexity in which organizations have to function. There is a
need to understand what works in Latin America, granting a space
in our leadership research agenda for the social realities and the
historical development of the region (Davila & Elvira, 2009b).
Santisos (2006) view of pragmatism in Latin America refers to
what is possible in political economy, in contrast of the classic
economic theories that seek to provide magic formulas and lyric
exaltations (p. 4). This can explain why managers change their
style according to the complexity of the situation. Nowadays, Latin
American business organizations are adopting high performing
management and work systems (e.g., Total Quality Management)
and introducing information technology (e.g., ERPs) allowing
managers to learn what works best and lead with an optimistic
attitude of hope. However, paternalistic behavior patterns will
prevail even as new management systems arrive in the region.
Reecting upon paternalistic leadership style in Latin America and
its consequences, in addition to pragmatism, we avoid a merely
utilitarian view of this managerial approach.
4. Conclusions and managerial relevance
After reviewing literature on Latin American leadership models,
we have described novel conceptual lenses that we argue provide a
more accurate depiction of the diversity of leadership approaches
successful in the region. Our view of leadership through the
stakeholder approach opens important avenues for research when
including the human dimension of the individual at the group,
organization and society levels (see Table 2). To understand the
human dimension and individual roles in the context of leadership
studies in Latin America we propose disciplinary approaches
beyond limited cross-cultural business theories. This seems an
unavoidable challenge in order to enrich our knowledge on
leadership in the region.
An important concern for developing leadership competencies
in Latin America is that management education does not reach our
level of analysis. Textbooks and teaching cases continue to portray
an authoritarian-benevolent paternalistic leader based on general
scale dimensions. Similarly, the concepts of paternalism, stake-
holder-focused, and humanistic leadership do not receive atten-
tion in recent handbooks on leadership. One potential explanation
for this absence, we surmise, is that scarcely any studies about
Latin American leadership are published in English (compared, for
example, to other emerging regions such as Asia). Even when
hybrid models are mentioned, those typically refer to combina-
tions of existing leadership models rather than cultural hybridism
(e.g., Gronn, 2011).
For managers, this synthesis of paternalism as a leadership style
in Latin America highlights the value of developing personal and
social bonds with employees. However, these bonds respond to
relationships within certain cultural patterns. For leaders to be
effective, cultural norms must be respected. For example, norms of
reciprocity play a central role in aligning individual commitment to
organizational performance. Organizational policies need to match
the expectations of employees social contract (implicit in the
employment relationship), to facilitate leadership effectiveness.
It is also relevant for managers to consider how leadership roles
in Latin America might develop around key stakeholders. Leaders
oriented to the expectations of diverse stakeholders present skills
and competencies beyond maintaining good personal relation-
ships in the work place. Such leaders acknowledge the role of each
individual within the workgroup and the organization within its
community and society at large. At the individual and workgroup
level, the leadership role requires becoming part of the group while
retaining the responsibility for group performance. At the
organizational level, the leadership role seeks collaboration and
coordination relationships among business units in order to
integrate operations. At the community and social level, the
leadership role might require entrepreneurial initiatives that
contribute to a communitys social development. In general, our
arguments suggest that effective leadership in Latin America is
based on primary social relationships inclusive of diverse
organizational stakeholders.
Leadership styles in Latin American organizations today are
situated at the crossroad of modern management systems with
advanced technologies and a traditional yet diverse cultural
environment. While favoring a paternalistic style, managers also
should consider organizational transformation and workforce
competency in order to balance the human and performance
orientation required for their leadership role. In this region, leaders
encounter diverse interpretations of management practices that
Table 2
Leadership roles with individual employees as stakeholders.
Leadership/stakeholder Leadership at the
individual level relationship
Leadership at the
group level relationship
Leadership at the
organizational level
Leadership at the
community or societal level
Subordinates Paternalistic
Group members The boss Team player
Organization Relationship coordinator Visionary/
Charismatic
Autocratic
Business leaders
Community/
Society
Personal relationships with
members of the community
Cooperative relationships
coordinator
Member of the community:
Social or economic elite
CSR initiatives
5
Translated by the authors.
A. Davila, M.M. Elvira / Journal of World Business 47 (2012) 548554 553
need to be reconciled with productivity requirements. Much work
remains to be done on the leadership research agenda in Latin
America and we hope to have contributed with novel approaches
to encourage the quest.
Acknowledgments
We gratefully acknowledge the support of the Culture, Human
Resources and Society Research Group at EGADE Business School
(Tecnologico de Monterrey, Mexico) and the International
Research Center on Organizations (IRCO) at IESE Business School
(Spain).
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