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SHP 3393 CROSS CULTURAL MANAGEMENT

Topic: Effective Transformational Leadership across Cultures: The Role of Cross Cultural Communication Competence

LECTURER: ASSOC. PROF DR ROZEYTA OMAR

DATE: March 2011

GROUP MEMBERS :

Ananya Raka Chakraborty Liu Shao Long Nurzatul Izzaty Bt Kamal Bakri Sakinah Binti Zakaria Tay Ke Yin

AH073041 AH0 AH080136 AH0801 AH080163

890223 04 - 5060 890618 13 - 5706 881225 08 - 5432

Semester 2/2011

TABLE OF CONTENTS

Pages

1.0 Introduction 2.0 Transformational Leadership 3.0 Cross Cultural Communication Competence 4.0 Case Study 4.1 China 4.2 Dr. Martin Luther King Jr. 4.3 Japanese Vs. United States 4.4 United States in Mexico 5.0 Conclusion 6.0 References

3-4 5-8 9 - 12 13 - 18

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1.0 Introduction Certainly, we are trying to preserve all of that culture, and get the advantages of being a large company with a broad product line, with stability, worldwide presence, great support, and yet have the advantages that a small software company has. (Bill Gates, American Entrepreneur and Founder of Microsoft Co.) This group assignment is about to discover the importance of having a cross cultural communication competence to be an effective transformational leadership across cultures. Globalization does bring a huge impact in making cross cultural communication happens in organization. Being in the 21st century makes leaders to be aware of the need to have new leadership competencies and one of them is cultural intelligence. As companies are expanding to other countries and nations, the companies are in an increasing demand for new leadership competencies and behaviours in order to cope effectively with global conditions. Managers with high culture intelligence can communicate well with subordinates or other people from different cultures. Therefore, an organizational change is a must in order to have successful leaders of cultures in organization. You must be the change you wish to see in the world, said Mahatma Gandhi (1869-1948), Preeminent leader of Indian Nationalism. So, taking from the quote, the leaders should change by not only having emotional intelligence and intellectual intelligence; leaders too are vital to have cultural intelligence. Globalization means the organizations have increased in workforce diversity and the social environments. The marketplace has been joined by many nations which have different operating systems. A good culturally intelligent leader will be aware of the systems be it in negotiations or pattern of thinking or ways of communicating. As the world is constantly changing, leaders should never stop learning; especially regarding culture. Cultural differences can be a problem for organizations which vary on the way people communicate, negotiate, make decisions, and team work. It is a big mistake for
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any organizations that put aside cultural- related challenges because to sustain the organizations competitiveness, cultural differences should be managed well. Therefore, every organization must train their leaders in cross cultural competence especially in communication to succeed globally because the larger the organization, the more vulnerable it is to the breakdown of communication. Culture is developed, transformed and transmitted through the conscious and unconscious activities of every member in the organization. It is however, the leader's driving force and ability to facilitate preferred mind-sets as well as preserve, create, and transmit the essence of existing culture as he leads his subordinates to new challenges. Culture and leadership augment each other in bringing excellence to the enterprise. (Schein,1997). According to Schein, (1997), there is a relationship between leadership and organizational culture. It is really vital to learn and understand culture that is evolving with globalization. Therefore, it is emphasized that leaders should have culture intelligence whether in the scope of ethnic, racial, and national cultures. Moreover, the diversity of workplace is the more reason for leaders to learn culture. Organization should enhance their training programs by including culture as one of the topics in the program designed for the leaders and subordinate alike. This assignment will explain about transformational leadership and the difference between transformational leadership and transactional leadership. Next, cross cultural communication will be explained thoroughly and three Hofstedes cultural dimensions. Afterwards, to make things clear, four case studies is provided which justify about the difference of leadership in Mexico and China, Japanese and United States and Dr. Martin Luther King Jr. as an example of a transformational leader. This assignment attempts to summarize transformational leadership in having communication competence cross culturally.

2.0 Transformational Leadership

Before viewing the relationship between transformational leadership and culture, let us look further into details about transformational leadership. A comparison between transformational and transactional is discussed for a clearer picture of what transformational leadership is all about. Transactional and transformational is another interesting issues uprising in business world regarding leadership. As you will see, because of transformational leaders are also charismatic, there is some overlap between this topic and the preceding discussion on charismatic traits.

But first, let us look on the transactional leadership. Most leadership models address transactional leaders. These leaders guide or motivate their employees in the direction of established goals by clarifying role and task requirements. It seems that leader is doing everything for subordinates. In basic assumptions, people are motivated by reward and punishment. Social systems work best with a clear chain of command. When people have agreed to do a job, a part of the deal is that they give up all authority to their manager. The prime purpose of a subordinate is to do what their manager tells them to do.

The transactional leader works through creating clear structures whereby it is clear what is required of their subordinates, and the rewards that they get for following orders. Punishments are not always mentioned, but they are also well-understood and formal systems of discipline are usually in place. The early stage of transactional leadership is in negotiating the contract whereby the subordinate is given a salary and other benefits, and the company gets authority over the subordinate.

When the transactional leader allocates work to a subordinate, they are considered to be fully responsible for it, whether or not they have the resources or capability to carry it out. When things go wrong, then the subordinate is considered to be personally at fault, and is punished for their failure. The transactional leader often uses management by exception, working on the principle that if something is operating to
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define and expect performance then it does not need attention. Exceptions to expectation require praise and reward for exceeding expectation, while some kind of corrective action is applied for performance below expectation.

Another type of leader inspires followers to transcend their own self interests for the good of the organization, which is called transformational leaders. They pay attention to the concerns and development needs of employees. People will follow a person who inspires them. A person with vision and passion can achieve great things. The way to get things done is by injecting enthusiasm and energy. This is the basic assumptions under transformational leadership.

Diagram 1: Differences between Transactional and Transformational Leadership

Both of these terms are different in many ways. Above is a diagram that shows a general picture about the differences between both terms. Red side of the diagram explained about transformational leadership and green side is about transactional leadership. Their catalysts for change is the same, only differ in the way they do it. Transactional leadership is based upon a trade of value and upon authority relationships. The leader has something of value or benefits for subordinates, such as salary, or promotion, which is given to the employee in exchange for performance of certain services. The flip side of the exchange of value in transactional leadership is the implication that failure to deliver value can result in negative consequences such as reduction in salary or dismissal. I am the boss, and I tell you what to do. You do it, and I reward you. Fail to do it, and suffer the consequences. It is a zero-sum game. This is the simplest term that can be used to describe transactional leadership.

On the other hand, transformational leadership is based upon the unrestricted acceptance of workers as individuals. The transformational leader creates a bond with his followers. The leader encourages them to take ownership of their work environment and create their own value. As contrasting to transactional leadership, which is authoritative, transformational leadership allows followers to have input into the decisions that affect their lives. Transactional leaders work within the organizational culture, ensuring enforcement of the organizational rules and behavioural norms. In the meanwhile, transformational leaders change the organizational culture and inspire everyone within the organization to continually grow and develop.

Working for a transformational leader can be a wonderful and uplifting experience. They put passion and energy into everything. They care about employees and want them to succeed. This is what currently happening in University Technology Malaysia, Skudai (UTM). The Vice Chancellor of UTM, Professor Datuk Dr. Zaini Ujang has a vision in him, to transform UTM into World Class University. UTM has become a research university as appointed by our prime minister, Y.A.B. Dato' Sri Mohd Najib Tun Razak recently. The Vice Chancellor of UTM changed the traditional

autocratic leadership applied in UTM and changed it into transformational leadership, where it is a good start for UTM as a stepping stone towards success.

Transformational leadership starts with the development of a vision, a view of the future that will excite and convert potential followers, where I have provide an example of UTM Vice Chancellor earlier. This vision may be developed by the leader, by the senior team or may emerge from a broad series of discussions.

The next step, which in fact never stops, is to constantly sell the vision. This takes energy and commitment, as few people will immediately buy into an essential vision, and some will join the show much slower than others. The transformational leader thus takes every opportunity and will use whatever works to convince others to climb on board the bandwagon.

In order to create followers, the transformational leader has to be very careful in creating trust, and their personal integrity is a critical part of the package that they are selling. In effect, they are selling themselves as well as the vision. In parallel with the selling activity is seeking the way forward. Some transformational leaders know the way, and simply want others to follow them. Others do not have a prepared strategy, but will happily lead the exploration of possible routes to the vision.

The final stage is to remain up-front and central during the action. Transformational leaders are always visible and will stand up to be counted rather than hide behind their troops. They show it by their attitudes and actions how everyone else should behave. They also make continued efforts to motivate and rally their followers, constantly doing the rounds, and listening. Overall, they balance their attention between action that creates progress and the mental state of their followers. Perhaps more than other approaches, they are people-oriented and believe that success comes first and last through deep and sustained commitment.

2.0 Cross Cultural Communication Competence There are many cultures around the world with many different forms, rules, values, and beliefs. Communication is important in workplaces for it has shaped the culture and has also been influenced by culture through interaction of people from different ethnic background. When cultural norms are integrated well and promote people respect among themselves and their involvement, then communication will be very efficient and continued participation will be achieved at both sending and receiving ends. There are four categories of cross-cultural communication competence; which are knowledge, motivation, and skills, and non-verbal expressions. First is knowledge that refers to those who should understand the purpose of cultural communication object, context and people's demands for decent behaviour and other information. The correct interpretation of knowledge is communicative language of communication objects and non-verbal communication; are the basis of information. Lack of cross-cultural communication knowledge, a person would not be able to determine their own communicative behaviour in a particular context for the purpose of cultural propriety and effectiveness. Cross-cultural knowledge includes the broad cultural knowledge (relating to national cultural knowledge) and narrow cultural knowledge (relating to a particular culture, knowledge) for example, in understanding the national cultures, there are different cultural patterns and rules of engagement that can help the organisations to be aware of the importance of cultural differences to enhance the sensitivity of crosscultural phenomenon. By understanding the cultural patterns of interpersonal communication, it can help those who understand the impact of cross-cultural communication in the context of communicative behaviour of an object orientation. Cross-cultural communication competence also needs to have a particular culture, knowledge and common sense, such as: the culture is different from the characteristics of other cultures, as well as its mainstream cultural patterns and strengths and so on.

Specific cross-cultural communication objectives and requirements of those who master the specific context of communication of knowledge, such as: cross-cultural business communication and communication are required to master the purpose of business activities related to culture, knowledge, study abroad and learning to master and living related cultural knowledge and so on. There is a framework for cross-cultural engagement (see Figure 1) diagrammatically illustrates the process involved in crosscultural engagement. Secondly is motivation which refers to cross-cultural communication activities and the emotional associations. Different factors influence the emotional effect of crosscultural communication such as human emotions, including feelings and intentions. People are always confused between emotions and thoughts, and feelings are not ideological, but rather people's ideas and experience emotional and psychological reflection. Happiness, anxiety, sadness, madness, nervousness are some of the examples of emotional experiences felt by people cross culturally. Some people are not used to things that are not familiar with other cultures unfamiliar scenery, sound, taste so that they retreat. The organization need to increase the motivation of the workers who work in different countries to experience strange things help to improve cross-cultural communication competence. People from different cultural backgrounds tend to hold a certain trend of view; such a view can help in reducing the communication range of options to take response measures. If before the occurrence of communication, a person holds a negative view of other culture, and then in communication, this negative view of the object will affect the cross cultural communication. Likewise, if the communication intent or purpose is positive, communication between the parties from different countries will be more effective. In the cross-cultural communication skills are manifested in decent, effective communication behaviour. This is the third must-have competence in cross cultural communication. Communication is only required to master the necessary knowledge and cross-cultural communication, holding a positive communicative motivation is not
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enough to complete the cross-cultural communication task, the person must be able to use certain behaviour techniques such as empathy, human warmth, charisma, and the ability to manage anxiety and uncertainty. It is like a person who wants to swim, he will read many books on how to swim and master the knowledge of swimming skills, he has a strong motivation to swim, but he still could not swim, because he has not mastered the skills of swimming. Non-verbal expression is an important mental activity. Communicators should pay attention to each other's culture, body language, time, language, colour, spatial language, and other non-verbal symbols-assisted language tone. Therefore, before leaving the country one should deliberately do some special exercises to improve the use of non-verbal symbol systems. For example, if you are ready to go to Japan, you should bow to his family and friends. This can be done through learning Japanese culture first. In addition, the taste is also a very important non-verbal symbols, before leaving the country, one should understand the purpose of culture on the taste preferences and daily habits, some countries, such as: the United States, like to use perfume or other cosmetics to cover up the body's natural taste, and in many countries people are not used to wearing perfume. Apart from the cross-cultural communication competence, one should learn about Hofstedes culture dimensions to leadership. First is the power distance which is defined as the extent to which a society accepts the fact that power in institutions and organizations is distributed unequally. It has a high impact on the management policies such as in group efficacy and team performance, for example, in low power distance cultures, group members efficacy were equally related to collective efficacy. Power distance in society is also directly related to leadership. For example, subordinates in high power distance societies are more reluctant to challenge their supervisors and more fearful in expressing disagreement with their managers. Managers from low power distance countries tended to use more communication behaviors and were perceived as more approachable than managers from higher power distance countries.

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Uncertainty avoidance (UA) is another dimension identified by Hofstede. UA refers to the degree to which members in a society feel uncomfortable with ambiguous and uncertain situations, and take steps to avoid them. This has several implications for societies. It is found that uncertainty-accepting societies are more innovative than uncertainty avoiding societies. Furthermore managers from high uncertainty avoidance countries, tended to be more controlling, less delegating and less approachable compared to those from low uncertainty avoidance countries. Individualism and Collectivism (IC) were found to vary across cultures. Individualism is people taking care of themselves and looks after their own interests and those of their close family only which is different from people having collectivism culture. Group efficacy and group performance were positively related when collectivism was high for instance, being autonomous, unique, and independent are found to contribute to outstanding leadership in some, but to be undesirable in other cultures. Meanwhile, collectivists tend to have a stronger attachment to their organizations and tend to be more willing to subordinate their individual goals to group goals. Thus, learning these three dimensions which are power distance, uncertainty avoidance and individualism and collectivism is really important in understanding what leadership behaviors, styles, and traits will be useful in various kinds of cultural setting.

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3.0 The Communication Competence Frame in Transformational Leadership A case study was conducted in China to find out how to enhance effective interaction between foreign managers and their Chinese employees. The case study was about cross cultural leadership where it was focused mainly on goal interdependence and leader-member relations in foreign ventures in China. As by UNCTAD (2002) it is found that China has become the largest receiver of foreign direct investment (FDI) during the first years of the 21st century. Since it is not much costly in China and easier to participate in global market many companies are developing subsidiaries and joint ventures in China. To make these organizations effective, multi-national managers must successfully lead local employees who are Chinese. According to Mason and Spice (1987) managers culture strongly influences his/her behaviour. It can be difficult to develop an effective relationship between managers and employees especially if they have diverse culture. According to Adler (2002), an action that appears very reasonable to the manager can appear bias, illogical, and unfair when viewed from the perspective of an employee from another culture. Theory of Leader-Member Exchange In this case study three theories was used to define effective leadership among cross cultural communication between managers and employees. The first theory is theory of leader-member exchange. This theory proposes that the quality of the relationship between a leader and individual employees determines leader effectiveness (Graen and Uhl-Bien, 1995). Garen and his colleagues suggested that leaders tend to develop and maintain LMXs with their subordinates that vary in quality, ranging from in-group to out-group. Wakabayashi et al(1988) argued that recently hired Japanese employees who have developed high quality LMX with their immediate supervisors were positioned as in-group member that made them central to the management system. In contrast those who fail to develop high quality LMX were positioned as out-group members and outside the core of the management system. These studies suggested that LMX theory is both useful in western and eastern contexts.

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Cross-Cultural Leadership Another theory which is about cross-cultural leadership highlighted that the human resource implications of cultural differences, researchers have argued that the most common cross cultural management challenge is to facilitate how culturally diverse people work together. (Adler, 1983; Adler et al., 1986). Effective management of culturally diverse labor forces and maintaining good relationship very much contribute to the success of joint venture. Following the seminal work of Hofstede (1980, 1991), researchers have argued that individualism and collectivism values distinguish society. According to Chatman and Flynn (2001), individualism is social pattern that individuals view themselves as independent and motivated by their own preferences, needs, rights and contacts. On the other hand, collectivism is a social pattern in which individuals regard themselves as belonging to one or more collectives and motivated by norms, duties and obligations that are imposed by collectives. When people from collectivist and individualistic work together, they are likely to experience misunderstanding and frustration. The reason is they have different logical reasoning and preferences for how they should discuss issues. Now, the employees in China are more into collectivist society whereas the managers from western part are from the society which follows individualism. There might be fewer difficulties between Chinese employees and Asian managers comparing to Chinese employees and western managers. Theory of Cooperation and Completion The last theory which is theory of cooperation and completion suggests the ways to enhance interaction between foreign managers and their Chinese employees. It proposes that this theory suggests major conditions that affect whether foreign managers and local employees develop quality LMX relationship. In cooperation, goals are considered positively related. People pursue a common vision and shared rewards, so that the success of one helps other succeed. According to Deutsch (1989), in belief that their goals are compatible, people discuss their opposing position open mindedly and try to integrate their ideas, and work for a mutually acceptable solution, that in turn results in high quality solutions to problems and productive work. In competition, goals are
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believed to be negatively related. People pursue win lose rewards, believing others goal attainment interferes with their success. Studies have specifically have documented that managers with considerable ability to assist employees do so especially when they had cooperative goals (Liu et al., 2004). Managers with cooperative goals provided support and assistance and developed trusting and friendly attitude. Overall, this study tests the role of cooperative goals on LMX relationships between foreign managers and Chinese employees. Cooperative goals between Chinese employees and American managers are expected to strengthen their LMX relationship and contribute to leader effectiveness, employee commitment to the organization and future collaboration. Competitive and independent goals are expected to weaken their LMX relationship. Dr. Martin Luther King Jr. There was another interesting case study conducted based on transformational leadership. The purpose of this paper is to explore the leadership of Dr Martin Luther King Jr. in relation to four characteristics of transformational leadership. The research finds that Dr King personified the four characteristics of transformational leadership. It also illustrates King's leadership legacy through modern works on leadership. The analysis presented assists our understanding of the qualities of and the way we think about, transformational leaders. It emphasizes the importance of building follower confidence; challenging taken-for-granted assumptions; developing follower needs and upholding high moral values. The development of close relationships between transformational leaders and followers is critical to bringing about successful change. By demonstrating trust through understanding the struggles, needs and capabilities of followers, transformational leaders show that they care and value their followers maintains that social similarity between leader and follower can form the basis for a relationship based upon trust, while Shamir et al. (1993) maintains that transformational leaders often point to similarities in background and experience in order to demonstrate belonging to the same collective and to portray themselves as a representative character or role model to that community. In figure 1, here is the transformational leadership process used in the case study to compare with Dr. Martin Luther King Jr.s leadership style.
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Dr Martin Luther King was a great leader is without question. The more outstanding issue revolves around the qualities that King possessed that made him a transformational leader. Such a characterization ascribes a set of personal traits to King: that he inspired followers, built confidence, and empowered them to face difficult challenges; that he encouraged divergent thinking and innovative strategies and solutions; that he catered for the developmental needs of his followers and that he had a high moral standing and engendered trust and loyalty amongst followers. As a transformational leader, King not only inspired legions of followers with his powerful rhetoric, but challenged the status quo and proposed a vision of a better, more inclusive, tolerant future for all citizens. With the framing his vision of a beloved community in the social values and experiences of the people, King provided both hope and meaning to his followers. The importance of inspiring followers and carefully framing messages is clearly understood by modern business leaders. They understand that the message must inspire followers and the delivery of the message must be inspirational. Japanese versus United States Besides verbal communication and language, there are many communication factors that contribute to the successful of cross cultural business such as the countrys core value, beliefs and religions that shaped how the people of the country behave, act and think. It is vital to emphasize on their culture before foreign investors can come to business and management because every country has their own culture in conducting their business. The most noticeable culture in managing business is the way Japanese do their work. The workers there make decision cooperatively and they want to be rewarded as a group. It is contradicted to the United States culture which encourage individual to do decision making, everyone is given equal chance to improve themselves and be rewarded. Thus, when a manager from United States transferred to Japan, he needs to learn Japans culture to adapt with their organizational behavior. It is also applied to Japanese if they want to work in the United States, they need to be low uncertainty avoidance and able to work independently. The different cultures between America and Japan have affected their way of communication, for an American
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businessman who deals with Japanese, they must understand when the Japanese close their eyes during the American presenting his marketing strategy, and it shows that the Japanese is digesting the information delivered by the American. If they do not know the culture of the Japanese, they may feel it is rude to not have eye contact while having conversation. To be an effective transformational leader across the globe, there are several aspects that should be emphasized. According to Howell et al (2003), in order to be comfortable, confident, and be attracted to one another while communicate with, the leader should own some of the similarity in demographic such as age, race, gender and regional origin. By having demographic similarity, it would help the employees to feel the connection and more comfortable to make conversation. Thus, before posting a manager across the country, the organization should determine the demographic and background of the employee. For example, if Americans company wants to put an American manager at their branch in Japan, they should emphasize on the age of their subordinates, as they are prone to age and seniority. The senior the manager, the more respect they put to the manager but if the manager is younger than them, they will feel demotivated and respect the manager less. Thus, some company even provides a class for their employee to learn about the culture of the country that he will be served to facilitate the manager to adapt with the culture and avoid misunderstanding. Leadership Style in Mexico Nowadays, we can see the transformational leadership style has become global. In example, in Mexico the leadership style is autocratic; the leaders behaviour in supervising their subordinates is directive to increase job performance, organizational loyalty and decreased ambiguity. Furthermore, decision making is centralized which only employer make the decision and if the leader asking for their subordinates opinion in decision making, it is seen that the employer is weak. But few years back, as the number of maquiladoras is raising across the country the leaders become more supportive and their leadership style resemble transformational leadership. Maquiladora is factory run by the United States company in Mexico to take the perks of cheap labour and lax regulations. The increasing number of Americans company in their country may
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result cultural change in the way they do their job because when the Americans company open their branch in Mexico, they also brought values and cultures from the originated company in the United States to serve as template in running the business there. These include the transformational leadership style which encourage two ways communication and participating of the subordinates in decision making which is oppose to the prior leadership.

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4.0 Conclusion Globalisation has given a huge impact on leadership across culture as worldwide webs of communication, trade and travel and the international transfer of technology contribute to the convergence of requirements and role models for leadership. Culture changes and become more alike as less developed cultures change as a consequence of the diffusion of ideas and practices from more developed cultures. This is also due to the fact that English has been one the worlds language of business and nowadays, many master of business administration program from English speaking countries has gone global. Thus, in order to interact effectively with diverse followers in given situations, whether they be task or relationship activities, effective global leaders require emotional intelligence and intellectual intelligence; leaders too are vital to have cultural intelligence. Cultural Intelligence, can affect leaders communication effectiveness, strategic planning, decision-making, negotiation, conflict resolution, team building and information sharing, while working with diverse cultural groups and in new global settings. Therefore, to be a competitive player in the global scene, incorporating emotional intelligence and intellectual intelligence and cultural intelligence

competencies is a necessity. Hence as we discuss about communication, language is not the only barrier in managing globalization. There are many factors that hinder effective communication that need to be clarified and clear in order to gain mutual harmony when dealing with the other party that originated from different countries. Iceberg Culture Model can best describe this situation, the visible tip of an iceberg in the ocean can be seen as language, but under the ocean there is the big part of iceberg which is the cannot be seen from the above that contribute to the language. To be an effective leader across the cultures, the managers need to spend their time and actively participate in the culture so that they can learn the internal part. By understand the inner part of the culture, the leaders will get to know the behaviour of the people, therefore the leaders can lead, communicate and understand their employees better.
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References

1 Hu Wenzhong. Culture and Communication [M]. Outside the Teaching and Research Press, 1994. 2 Hu Wenzhong. High a rainbow. Foreign Language Teaching and Culture [M]. Hunan Education Press, 1997. 3 Gao a rainbow. Linguistic and cultural differences in understanding and beyond the [M]. Beijing: Foreign Language Teaching and Research Press, 2000. 4 Lee Yoon-new. On the second language teaching and culture teaching second [A]. Culture and Communication [C]. Beijing: Foreign Language Teaching and Research Press, 1994. 5 Lawrence, Jill (2007) Two models for facilitating cross-cultural communication and engagement. The International Journal of Diversity in Organisations, Communities & Nations

References: 1. China case studie write the reference za!!! hehehe 2. David McGuire and Kate Hutchings (1980), Portrait of a transformational leader: the legacy of Dr Martin Luther King Jr.

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