CH-14-15 Motivation in Multinational Companies – Multinational Management: A Strategic Approach : Chapter Notes

This Document Contains Chapters 14 to 15 CHAPTER 14 MOTIVATION IN MULTINATIONAL COMPANIES Learning Objectives •Recognize how people from different nations perceive the basic functions of working •Explain how people from different nations view the importance of working •Understand how the national context affects the basic processes of work motivation •Apply common theories of work motivation in different national contexts •Design jobs for high motivational potential in different national cultures Introduction •All managers must motivate their subordinates to accomplish organizational goals •Multinational companies need to constantly be aware of what workers seek in their work environments and adjust rapidly to satisfy those needs Work Values and the Meaning of Work •Before we can motivate or lead people from different cultures, we must understand what work means to people from different societies •Two basic questions to answer •How important is work in people’s lives? •What do people value in work? How Important is Work in People’s Lives? •To answer this question, several major international research projects studied thousands of workers from different occupations and from several countries •One survey question surrounds Work centrality – overall value of work in a person’s life (when compared to other activities such as leisure, family, community, and religion) •Five social institutions have negative effects on work centrality (namely the extent of socialism, the degree of industrialization, the degree of union strength, the accessibility of education, and extent of social inequality) •Uncertainty avoidance and masculinity had negative effects on work centrality •The cultural dimension of individualism had positive effects on work centrality •Survey that attachment to work typical of most industrialized societies is reaching its limit •In post-industrialized societies, people are now more concerned with qualify-of-life issues and individual self-expression •Higher levels of work centrality are closely correlated with average number of hours worked per week in the country •In general, high levels of work centrality may lead to dedicated workers and effective organizations •Work obligation norms – degree to which work is seen as an obligation or duty to society •In general, societies that have high work obligation norms expect their citizens to view work as an obligation or a duty Exhibit 14.1 Work Obligations Norms for Selected Countries (Shows the levels of work obligations in various societies surveyed by the World Values Survey) •Many of the emerging economies, such as India, Turkey, Poland, and Bulgaria, show very high levels of work obligation norms •More developed economies such as the Netherlands, the U.S., and Germany have much lower work obligation norms What Do People Value in Work? •Two important work values are extrinsic work values and intrinsic work values •Extrinsic work values – preference for the security aspects of jobs, such as income and job security •Intrinsic work values – preference for openness-to-change job aspects, such as autonomy, being able to take initiative and be creative Exhibit 14.2 Preference for Extrinsic Work Values (For selected countries in the World Values Survey) Exhibit 14.3 Preference for Intrinsic Work Values (For selected countries in the World Values Survey) •The most important finding is that people from different nations did not express the same preference for extrinsic and intrinsic work values •Most of the emerging economies rate extrinsic work values very high •Many of the developed societies rate extrinsic work values much lower •Many of the countries that rated extrinsic work values highly also rated intrinsic work values highly •When crafting their motivational strategies from a local workforce, multinational managers must not assume that people from different nations express the same preference for work values Exhibit 14.4 Importance Rankings of Work Characteristics in Nine Countries (Shows the priorities given to different job characteristics vary by country) •In spite of pay being a dominant function of work for many of the transitions and developing nations, no country rated pay as the most important work characteristic •Conclusions from Meaning of Work Study and more Current WVS/EVS Study •In some societies, work is very central and absorbs much of a person’s life •All people hope to receive certain benefits from work and money alone is not enough •Societies differ in the degree to which they regard work as an obligation to society •Many of the emerging economies that value extrinsic work values such as income and job security also place high value on intrinsic work values •The first key to successful motivational strategies in multinational companies is understanding the differences among countries in the functions of work, work centrality, and the priorities given to different job characteristics •Multinational mangers must understand that people from different countries often have different reasons for working and different priorities regarding the important attributes of their jobs •To use the knowledge of national differences in work attitudes for motivational purposes, a multinational manager also needs to understand how basic motivational principles work in the multinational environment Work Motivation and the National Context The Basic Work Motivation Process •Motivation concerns all managers - managers want their subordinates motivated to achieve organizational goals •Towards this end, managers choose incentives (e.g., pay, promotion, recognition), punishments (e.g., salary reduction) and chose work designs (e.g., simple or complex tasks) •Managers usually respond positively to people (e.g., with raises) who help the organization achieve its goals and negatively (e.g., with bad evaluations) to employees who fail to help the organization achieve its goals Exhibit 14.5 The Basic Work Motivation Process and the National Context (Presents a picture summarizing the psychological process that most experts use to explain work motivation) •Motivation – a psychological process resulting in goal-directed behavior that satisfies human needs •Need – a feeling of deficit or lacking that all people experience at some time •Goal-directed behavior – one that people use with the intention of satisfying a need •People use the work setting to satisfy many needs - e.g. to provide food and shelter •Many motivation theories assume that people will work harder if more of their needs can be satisfied on the job •When we do things that affect others, people react positively or negatively •Reinforcement – reactions to a person’s behavior that encourage the person to continue the behavior •Punishment – consequences of a person’s behavior that discourage the behavior National Context and Work Motivation: A Brief Introduction •National context influences all steps of the motivational process (see Exhibit 14.5) •Cultural values, norms, and supporting institutions influence the priority people attach to work in general and the types of needs that people hope to satisfy at work •National context helps to define the behaviors that provide legitimate ways to satisfy needs •National context also influences reactions to goal-directed behaviors at work •National culture and social institutions influence the levels of satisfaction workers expect to receive in an organization and how committed they are to their organization and its goals Theories of Work Motivation in the Multinational Context •Work motivation theories attempt to show how the basic motivational process apply to a work setting •Two basic types of motivation theories: •Need theories •Process theories The Need Theory of Motivation •Need theory – of motivation, assumes that people can satisfy basic human needs in the work setting •Four popular need theories 1. Maslow’s hierarchy of needs 2. ERG theory 3. Motivator-hygiene theory 4. Achievement motivation theory Exhibit 14.6 Need Theories of Motivation (Gives a summary and comparison of these four theories and also shows the characteristics of jobs that can satisfy the types of needs identified by them) Maslow’s Hierarchy of Needs •Hierarchy of needs theory – statues that people have five basic types of needs: physiological, security, affiliation, esteem, and self-actualization •Basic five needs follow a hierarchy from lower levels to higher levels •Once one need is satisfied, it no longer motivates us •Current opinion on Maslow’s approach suggests that the need hierarchy does not work in sequence – nor do all available jobs in a country provide activities re4quired to meet all levels of needs Alderfer’s ERG Theory •ERG theory – simplified hierarchy of needs, growth needs, relatedness needs, and existence needs (see Exhibit 14.6 for a comparison with Maslow’s theory) •In ERG theory, frustration of a need motivates behavior to satisfy the need •If a person who cannot satisfy higher-level needs will seek to satisfy lower-level needs Motivator-Hygiene Theory •Motivator-hygiene theory – assumption that a job has two basic characteristics: motivators and hygiene factors •Assumes that a job has two basic characteristics: motivators and hygiene factors •Motivators include the characteristics of jobs that allow people to fulfill higher-level needs •Hygiene factors include those characteristics that fulfill lower-level needs •Motivating factors arise from the context or the actual tasks that people perform on the job •Hygiene factors focus on the context or setting in which the job takes place •Hygiene factors bring people to neutral state of motivation •Only the opportunity to satisfy higher level needs (motivators) bring motivation Achievement-Motivation Theory •Three key needs as the basis of motivation: needs for achievement, affiliation, and power •Achievement-motivation theory – suggestion that only some people have the need to win in competitive situations or to exceed a standard of excellence •High achievement people have the need to win, set their own goals, and seek challenging situations •It is assumed that achievement motivation is fixed in early childhood and that difference cultures have different levels of achievement motivation Needs and the National Context •There are both similarities and divergence in the needs that people from different nations seek to satisfy from working •Similarities of needs across cultures occur because people tend to group needs into similar clusters or categories •Regardless of national background, people see their work-related needs grouped in ways that match the broad groups proposed by need theories of motivation •National groups vary in two ways on how people see needs being satisfied at work •People from different countries do not give same priorities to needs •Even if they have the same needs, people may not give the same level of importance to satisfying these needs Exhibit 14.7 Rankings of the Importance of Job-Related Sources of Need Satisfaction for Seven Countries (Illustrates some of the differences in the priorities given to job-related sources of need satisfaction by people from a group of nations) •Can multinational managers use need satisfaction as a motivational tool? •Yes, if multinational managers take into account the needs that people seek to satisfy in the work setting •What differences in need satisfaction might multinational managers expect to find in different countries? •As exhibit 14.7 shows, people from different nations do not necessarily assign the priorities as suggested by needs theories •Although most need theories suggest that higher-levels of needs (self-actualization) should be most important, many sources of satisfying self-actualization needs had only moderate importance •How can a multinational anticipate needs differences in countries on which there is little information? •Anticipate needs based on cultural norms and values and institutional conditions Exhibit 14.8 Hofstede’s Dimensions of National Culture and Motivators at Work (Shows some of the motivators at work, as identified by Hofstede, for different types of national cultures) Applying Need Theories in Multinational Settings •Points to consider in adapting needs theories to the international context: •Identify the basic functions of work in the national or local culture •Identify the needs considered most important by workers in the national or local culture •Sources of need fulfillment may differ for the same needs •Understand the limitations of available jobs to satisfy needs Process and Reinforcement Theories of Motivation •Three major process theories of motivation: expectancy theory, equity theory, and goal setting theory •Process theories – of motivation, arising from needs and values combined with an individual’s beliefs regarding the work environment •These theories receive fewer applications in the international setting than do needs theories Expectancy Theory •Expectancy theory – assumption that motivation includes people’s desire to satisfy their needs and their beliefs regarding how much their efforts at work will eventually satisfy their needs •Work motivation is a function not only of an individual’s needs or values but also of an individual’s beliefs regarding what happens if you work hard •Assumes that part of motivation is an individual’s desire to satisfy his or her needs •Level of motivation also depends on people’s beliefs regarding how much, or if, their efforts at work will eventually satisfy their needs •The three factors that make up expectancy theory: expectancy, valence, and instrumentality •Motivation = Expectancy x Valence x Instrumentality •Expectancy is an individual’s belief that his or her effort will lead to some result •Valence is the value you attach to the outcome of your efforts •Instrumentality refers to the links between early and later results of the work effort Applying Expectancy Theory in Multinational Settings •Two key issues in applying expectancy theory in the multinational company •Identify which outcomes people value in a particular national or local cultural setting •Find culturally appropriate ways of convincing employees that their efforts will lead to desirable ends Equity Theory •Equity theory – proposal that people perceive the fairness of their rewards vis-à-vis their inputs based on how they compare themselves to others •People have no absolute standards for fairness in the input/output (effort/reward) equation •Workers who believe that they are under rewarded reduce their contribution to the company (e.g., take longer breaks) •Over rewarded workers increased their work input, at least in the short run Applying Equity Theory in Multinational Settings •The first issue to consider is the importance of equity norms in a society •Three principles of allocating rewards that vary in different cultural settings: the principle of equity (based on contributions), the principle of equality (based on equal division of rewards), and the principle of need (based on individual needs) •A review of cross-national reports on the three principles of reward allocation suggests the following •Equity norms prevail in individualistic cultures •Equality norms prevail over equity norms in collectivist cultures •The principle of need may prevail over equity in certain conditions Exhibit 14.9 Rewards from Peers for Contributions to a Student Group Project (Shows an example of how the fairness of equity or equality rewards can affect even students’ responses to grades relative to contributions) •Final issue to consider in applying equity theory is the cultural differences in beliefs regarding the sources of a person’s contributions to work •In some cultures, age, social status, and family membership may be more important inputs to work than the actual effort and performance on the job Goal-Setting Theory •Goal setting theory – assumption that the mere existence of a goal is motivating •When they meet or exceed goal, people feel competent and satisfied •Principles of goal-setting •Set clear and specific goals •Assign difficult but achievable goals •Increase employee acceptance of goals •Provide incentives to achieve goals •Give feedback on goal attainment Applying Goal-Setting Theory in Multinational Settings •Some experts believe that goal setting works to some degree regardless of location •Setting goals does affect behavior in a positive direction •Cultural expectations vary •Should subordinate participate with managers in setting the goals? •Is it better to set goals for groups or for individuals? •In more individualistic cultures, such as in the U.S., setting individual goals may prove more effective than setting goals for a work group •Workers in collectivist cultures may respond better to higher levels of participation in goal setting than people from more individualistic cultures •In cultures high on power distance, worker participation in setting goals may not produce positive effects Exhibit 14.10 Cultural Effects on Performance by the Degree of Participation in Goal Setting (Demonstrates some of the outcomes that can occur when people from different cultures have varying degrees of participation in the goal-setting process) Reinforcement Theory •Most managerial applications of reinforcement theory focus on operant conditioning •Operant conditioning – model proposes that, if a pleasurable consequence follows a behavior, the behavior will continue, whereas if an unpleasant consequence follows a behavior, the behavior will stop •Represents the basic way people learn •Focuses on the observable behavior and not on the psychological processes that affect people’s motivation •Three steps •Antecedent comes first and stimulates behavior •Behavior follows antecedent •Pleasant or unpleasant consequences follow the behavior Exhibit 14.11 Management Example of Operant Conditioning Process and Types of Consequences (Shows the three steps in the operant conditioning process) •Positive reinforcement occurs when management responds with a rewarding consequence •Negative reinforcement increases desired behavior by eliminating some negative consequence •Punishment occurs when something unpleasant occurs after a behavior •Extinction occurs when a manager ignores a behavior •Most management applications of reinforcement theory use positive reinforcement to encourage behaviors desired by management •To reinforce behaviors, managers have an array of organizational rewards (e.g., material rewards like pay, benefit rewards like company car, status rewards like prestige office, and social rewards like praise) Applying Reinforcement Theory in Multinational Settings •The evidence from most U.S. studies suggests that positive reinforcement works •The challenge for the multinational manager is to understand not only how work values influence potential rewards but also to identify the organizational rewards available in a national setting •National cultures and social institutions define acceptable and legitimate rewards •When multinational managers can find culturally and institutionally appropriate reinforcers, reinforcement theory does work Key Points in the Multinational Application of Process and Reinforcement Theories •Expectancy theory: The major key is identifying the appropriate work rewards that have positive valence for employees in a national setting •Equity theory: The multinational manager must assess the importance and meaning of the principle of equity in a national context. •Goal setting theory: Depending on cultural norms, goal setting may be more effective when assigned to groups rather than individuals •Reinforcement theory: The rewards people value at work may influence the types of reinforcers useful to managers in different cultural contexts Motivation and Job Design: U.S. and European Perspectives •Job design attempts to make work more motivating by changing the nature of jobs •Early theories focused primarily on making a job as fast and efficient as possible •Contemporary views take into account the psychological effects of tasks on workers A U.S. Approach: The Job Characteristics Model •Job characteristics model – suggests that work is more motivating when managers enrich core job characteristics such as by increasing the number of skills a job requires •The job characteristics model sees three critical psychological states as motivating •First, a person must believe that his/her job is meaningful (important or valuable) •Second, a person must believe that he/she is responsible or accountable for the outcome of the work •Third, a person must understand how well he/she has performed •Core characteristics of a job that lead to the motivating psychological states include •Skill variety •Task identity •Task significance •Autonomy •Feedback •Not all people respond positively to jobs with enriched job characteristics •The model suggests that jobs with high motivational potential work best for people who have a strong need for personal growth and who have the appropriate knowledge and skills to perform the job well Exhibit 14.12 A Motivating Job in the Job Characteristics Model (Gives a picture of how the model works when a job has a high potential for motivating workers) A European Approach: Sociotechnical Systems •Sociotechnical systems (STS) approach – focuses on designing motivating jobs by blending the social system (i.e., organizational structure, culture) with technologies •The STS approach focuses on the autonomous work group •Autonomous work group – team or unit that has nearly complete responsibility for a task •The STS approach builds into a job many of the same US motivational job characteristics •However, in a crucial difference with the U.S. approach, the team’s tasks rather than the individual worker’s tasks become the focus job enrichment Choosing Job Enrichment Techniques in Multinational Settings •Distinction between individualistic and collectivist cultures determines the choice of job enrichment techniques •One explanation of why team-based job enrichment may not work well in individualistic cultures is that people in individualistic cultures just do not work as well in groups (see Exhibit 14.13 for an example of this phenomenon) Exhibit 14.13 Comparing the Performance of Chinese, U.S., and Israeli Managers Working Alone and in Groups (Shows that team-based job enrichment may not work well in individualistic countries) •Why does performance drop off with the use of teamwork in more individualistic cultures? •Social loafing – people put out less effort when they work in groups •Why? o First, working in groups, people do not feel responsible for group outcomes and feel less pressure to perform o Second, workers in groups often believe that the group will make up any slack in their personal efforts o Third, people give their own work and interests priority over the group’s •However, in individualistic cultures, social loafing has less of a detrimental effect on a group’s performance when individuals (vs. groups) are held accountable for performance Summary and Conclusions •Motivating workers in diverse settings is a constant challenge for multinational managers •As a guide to developing motivational techniques in multinational settings, this chapter addressed several key issues •First, this chapter showed some of the available information on international differences in work centrality and the importance of work in several different nations •Second, the chapter reviewed the basic processes of work motivation and how these processes are influenced by the national context •Third, the chapter reviewed classic theories of motivation and the multinational applications of each approach •Fourth, the chapter considered both U.S. and European approaches to designing jobs with high motivational potential •Most views of motivation in this chapter were “made in the U.S.A.” •Many of the psychological theories that underline common U.S. approaches to motivation have culture-free assumptions and research support; that is, they attempt to explain human behavior independently of cultural setting •Each job situation requires an understanding of unique organizational, regional, and occupational cultures as well as individual differences of each employee Chapter 14 Case Notes Wipro Technologies Europe (B) Synopsis Vivek Paul was hired to run the IT division of Wipro, and to develop Wipro Technologies into a leading provider of software services to the world’s largest corporations. He was a native of India, yet was educated and had worked in the United States for many years. Paul faced a number of challenges in achieving this goal, but the most immediate challenge was hiring key talent - someone at the helm of Wipro Technologies Europe who had established relationships and held credibility with the employees at Wipro Technologies’ Indian operation centers. He wanted someone who knew the Indian corporate culture and who had the cross-cultural sophistication that comes from extended expatriate experience to be the director of Wipro Technologies Europe. Sudip Nandy was the perfect fit for such an assignment. This story illustrates the cultural challenges of transforming an Indian company to enhance its global effectiveness. This case discusses some of the methods Wipro and Nandy used to leverage diversity in the workforce to create a competitive advantage for the firm. It further describes some of Nandy’s ideas for business growth. The Wipro case series illustrates the importance of national culture and ethnicity issues to everything a large corporation does--including its own culture of origin, the cultures of its potential customers, and the cultures of its employees. The cases lend themselves well to the unfolding of the Hofstede cultural model during class Context in Case This case can be used to exemplify the cultural challenges of changing an Indian company into a global competitor. Issues that are discussed include: cross-cultural relations, diversity management, global effectiveness, human resources, organizational behavior, leadership, organizational development, software industry, and workforce inclusion. Wipro illustrates the importance of national culture and ethnicity issues to everything a large corporation does – including its own culture of origin, the cultures of its potential customers, and the cultures of its employees. The case lends itself well to unfold the Hofstede cultural model during the class. Case Discussion Questions 1. What has Sudip Nandy done to enhance Wipro’s global effectiveness? Sudip Nandy has implemented several strategies to enhance Wipro’s global effectiveness: • Leveraging Cross-Cultural Competence: Nandy's understanding of both Indian and Western corporate cultures has enabled him to bridge the cultural gap between Wipro's Indian operations and its European market. He has utilized this cultural competence to build trust and collaboration among diverse teams. • Hiring Key Talent: Nandy focused on recruiting individuals with experience and established relationships within both the Indian and European business environments. By appointing leaders who understand the nuances of cross-cultural interactions, he has fostered effective communication and collaboration. • Diversity Management: Nandy emphasized the importance of diversity within the organization. He encouraged inclusive practices that recognize and value different perspectives, which has led to innovative solutions and a more adaptable workforce. • Global Growth Strategies: He has developed strategies aimed at expanding Wipro’s presence in Europe by identifying market opportunities and tailoring services to meet the specific needs of European clients. This involved understanding local business practices and preferences. • Fostering a Global Mindset: Nandy has worked to instill a global mindset within Wipro Technologies by promoting international collaborations and cross-border projects, encouraging employees to think beyond local markets. 2. How effective do you predict they will be? Why? I predict that Wipro Technologies under Nandy’s leadership will be moderately effective in enhancing its global effectiveness for several reasons: • Cultural Integration: Nandy’s cross-cultural expertise is likely to foster better integration between Indian and European teams, reducing misunderstandings and enhancing collaboration. This integration is essential for successful global operations. • Talent Retention and Development: By focusing on hiring individuals with established local networks and cultural insights, Wipro can effectively tap into the European market. However, the effectiveness will depend on how well these leaders are integrated into Wipro’s corporate culture. • Adaptability to Market Dynamics: Nandy’s strategies for tailoring services to meet local needs will enhance Wipro’s competitiveness in Europe. If the organization can remain agile and responsive to market changes, it is likely to see positive outcomes. • Potential Challenges: Despite these strengths, challenges such as resistance to change from existing employees, differing management styles, and potential cultural clashes may hinder effectiveness. How well these challenges are managed will ultimately determine success. 3. What additional steps do you think Nandy could take to further develop the business by leveraging the differences in the organization? To further develop Wipro Technologies by leveraging organizational differences, Nandy could consider the following steps: • Enhanced Cross-Training Programs: Implement cross-training initiatives that allow employees from different cultural backgrounds to learn about each other's roles, responsibilities, and perspectives. This can foster mutual understanding and respect, leading to better collaboration. • Diversity and Inclusion Initiatives: Establish formal diversity and inclusion programs that not only promote awareness but also actively engage employees in discussions about cultural differences and their impact on work practices. • Mentorship Programs: Create mentorship opportunities where experienced leaders from different cultural backgrounds can guide and support younger employees. This can enhance knowledge sharing and cross-cultural understanding. • Feedback Mechanisms: Develop structured feedback mechanisms to regularly assess how well teams are collaborating across cultures. This feedback can inform adjustments in practices and strategies. • Promoting Global Teams: Encourage the formation of project teams composed of members from different geographic locations. This diversity can drive innovation and enhance problem-solving capabilities. • Celebrating Cultural Events: Promote and celebrate cultural events and festivals from various employee backgrounds within the organization. This can foster a sense of belonging and appreciation for diversity. 4. Ayoub Companies had developed “a hard-drive performance-oriented culture” that attracted top executives from many nationalities. Given this unique group of employees, what strategies would you use to motivate them to continue at such a high performance level? To motivate a diverse group of high-performing executives at Ayoub Companies, the following strategies could be employed: • Performance Recognition Programs: Implement a robust recognition program that acknowledges individual and team achievements. Celebrating successes publicly can reinforce a performance-oriented culture and encourage continued excellence. • Customized Incentives: Develop tailored incentive programs that resonate with different cultural values and motivations. This could include bonuses, flexible work arrangements, or additional professional development opportunities. • Challenging Projects: Provide opportunities for top executives to work on high-impact projects that challenge their skills and allow them to contribute to strategic goals. Engaging work can motivate individuals to maintain high performance. • Career Development Pathways: Establish clear career progression pathways that allow executives to visualize their growth within the organization. Offering opportunities for advancement can encourage continued engagement and performance. • Regular Feedback and Development: Foster a culture of continuous feedback where employees receive constructive criticism and support for professional development. This can enhance performance and job satisfaction. • Fostering a Collaborative Environment: Create an environment that encourages collaboration and knowledge sharing among executives. Building a sense of community can motivate individuals to work together towards shared goals. • Work-Life Balance Initiatives: Recognize the importance of work-life balance and implement policies that support employees’ well-being. A healthy work environment can enhance job satisfaction and motivation. By implementing these strategies, Ayoub Companies can sustain high performance levels among their diverse executive team while fostering a culture of excellence and collaboration. Analysis 1. What has Sudip Nandy done to enhance Wipro’s global effectiveness? Nandy developed original strategies that were quite contrary to what the firm had successfully used before. In doing so, he responded to the core importance of cultural issues – that is, he applied a culture-conscious lens to everything he did, including: •In staffing, searched for people who had a high tolerance for ambiguity and a lot of patience •Encouraged his Indian team to be open to the new relationships with their European counterparts •Restructured Wipro teams to include members from India and members from Europe •Sent new European hires to India upon hiring, and every 3 or 4 months after that to “recharge the contacts” •Reviewed each new hire at the 3 month mark, soliciting feedback from the European employee on what kind of company Wipro was to work for •Encouraged critical content so that Wipro’s processes as they applied to European employees and businesses could be improved. •Adopted Six Sigma as a process not only for technology, but in order to deepen relationships of colleagues working together in Europe; after an initial reluctance, team members “happily” sought more training •Sought to assure continuous improvement in sales, contract and account management processes they used. •Required cultural training before any travel was permitted, which consisted of country-specific, cross-cultural awareness courses that described business cultures by nationality •Invited employees who had gone abroad without training to speak at training sessions •Built into contracts with customers a cultural training that would help all parties communicate •Generally, developed a culture of close monitoring and review 2. How effective do you predict Wipro will be? Why? Wipro has already been very effective, in part because they have comprehensively addressed cultural issues: •Culture issues affect Wipro’s ability to capture, service, retain, and grow contracted work with customers •The firm’s globalization strategy, and success, are intertwined with culture issues •Culture issues affect Wipro’s ability to hire and the company’s hiring needs around the world •Culture issues affect the firm’s employee-to-employee interactions •Culture issues affect employees’ success in cross-national assignments The introduction of Geert Hofstede’s cultural model unfolds very nicely here. Hofstede’s work deals primarily with differences between national cultures. He concludes that national cultures differ along five dimensions and suggests that culture is learned, not inherited. One class strategy is to outline the model on the board and ask the class to map Wipro’s fit into the paradigm. National cultural dimensions “Culture is the collective programming of the mind distinguishing the members of one group or category of people from others” Professor Geert Hofstede conducted one of the most comprehensive studies of how values in the workplace are influenced by culture. He analyzed a large data base of employee values scores collected by IBM between 1967 and 1973 covering more than 70 countries, from which he first used the 40 largest only and afterwards extended the analysis to 50 countries and 3 regions. Subsequent studies validating the earlier results have included commercial airline pilots and students in 23 countries, civil service managers in 14 counties, 'up-market' consumers in 15 countries and 'elites' in 19 countries. In the 2010 edition of the book “Cultures and Organizations: Software of the Mind”, scores on the dimensions are listed for 76 countries, partly based on replications and extensions of the IBM study on different international populations. Dimensions of National Culture The values that distinguished countries from each other could be grouped statistically into four clusters. These four groups became the Hofstede dimensions of national culture: •Power Distance (PDI) •Individualism versus Collectivism (IDV) •Masculinity versus Femininity (MAS) •Uncertainty Avoidance (UAI) A fifth Dimension was added in 1991 based on research by Michael Bond who conducted an additional international study among students with a survey instrument that was developed together with Chinese employees and managers. That Dimension, based on Confucian dynamism, is Long-Term Orientation (LTO) and was applied to 23 countries. In 2010, research by Michael Minkov allowed to extend the number of country scores for this dimension to 93, using recent World Values Survey data from representative samples of national populations. http://geert-hofstede.com/national-culture.html 3. What additional steps do you think Nandy could take to further develop the business by leveraging the differences in the organization? This question may be answered as students work through the Hofstede model and ideas that surface during the exercise. The wide range of culture consciousness that this firm’s managers leverage as part of their globalization strategy make class discussion lively and educationally rewarding. It is also quite rich in terms of issues that can be highlighted in several different teaching strategies. 1. Cultural Competency Training: Implement training programs to enhance cultural awareness among employees. 2. Diverse Leadership Development: Promote diversity in leadership roles through targeted development programs. 3. Collaboration Platforms: Establish tools for cross-functional collaboration and knowledge sharing. 4. Cross-Cultural Project Teams: Form diverse teams to foster innovation and inclusivity. 5. Local Market Engagement: Encourage teams to understand local cultures and customer preferences. 6. Feedback Loops: Create mechanisms for employee feedback on diversity initiatives. 7. Celebrate Cultural Diversity: Organize events to recognize and celebrate cultural differences. 8. Flexible Work Practices: Allow flexible work options to accommodate diverse needs. 9. Mentorship Programs: Pair experienced employees with newcomers from different backgrounds. 10. Global Talent Mobility: Promote talent exchange across regions to enhance cross-cultural understanding. These steps can enhance cohesion, drive innovation, and improve business outcomes. Suggested Reading 1) Hu Yao-Su and Malcolm Warner. “Cross-cultural factors in competitive advantage at home and abroad.” Managing Across Cultures: Issues and Perspectives. Ed. Pat Jont and Malcolm Warner. London: International Business Press, 1996. Chapter 22. 2) Einhorn, Bruce and Manjeet Kripalani. “India 3.0 Its Software Outfits Take on the World.” Business Week (26 February 2001): 44-47. Lessons •Provides a good example of the importance of cultural issues in business •Demonstrates the application of cross-cultural training to a management at all levels •Shows that addressing cultural issues can have a motivating effect on differing cultures CHAPTER 15 LEADERSHIP AND MANAGEMENT BEHAVIOR IN MULTINATIONAL COMPANIES Learning Objectives •Know the characteristics of global business leadership •Describe traditional North American models of leadership including trait theory, behavioral approaches, and contingency theory •Explain the Japanese performance maintenance model •Apply the cultural contingency model of leadership •Develop sensitivity to national cultural differences in preferred leadership traits and effective leadership behaviors •Discuss how national culture affects the choice of leader influence tactics •Discuss how national culture influences subordinates’ expectations regarding appropriate behaviors and the traits of leaders •Explain the role of transformational leadership in multinational settings •Understand how the national culture affects a leader’s attributions regarding subordinates’ behaviors •Diagnose cultural situations and suggest appropriate leadership styles to fit them Introduction •Leadership – ability of an individual to influence, motivate, and enable others to contribute toward the effectiveness and success of the organizations of which they are members •This chapter shows that successful multinational leaders choose effective leadership styles based on an understanding of how national culture and a country’s social institutions affect leadership Global Leadership: The New Breed •The rise of transnational companies and the dependence of even the smallest companies creates a need for a new type of leader •Global leader – one who has the skills and abilities to interact with and manage people from diverse cultural backgrounds •A successful global leader is: •Cosmopolitan: sufficiently flexible to operate comfortably in pluralistic cultural environments •Skilled at intercultural communication: knows at least one foreign language and understands the complexities of interaction with people from other cultures •Culturally sensitive: has experience in different national, regional, and organizational cultures needed to build relationships with culturally different people •Capable of rapid acculturation: rapidly acculturated or adjusted to strange or different cultural settings •A facilitator of subordinate intercultural performance: has a deep understanding of cultural differences in work and living and able to prepare subordinates for successful overseas experiences •A user of cultural synergy: takes advantage of cultural differences by finding a synergy that combines the strengths of each cultural group •A promoter and user of the growing world culture: understands, uses, and takes advantage of the growth international advances in media, transportation, and travel that support the globalization of international business •Emotionally intelligent: accurately perceives his or her emotions and uses them to solve problems and relate to others Three Classic Models: A Vocabulary of Leadership •Models include leadership traits, leader behavior, and contingency leadership Leadership Traits •Trait models of leadership evolved from the debate regarding whether leaders are born or made •Great person theory – leaders are born with unique characteristics that make them quite different from ordinary people •At least in the U.S. successful leader traits are: high intelligence and self-confidence; great initiative; assertiveness and persistence; a great desire for responsibility and the opportunity to influence others; and a high awareness of the needs of others •Contemporary views of leadership suggest aspiring leaders can achieve these traits through training and experience Leadership Behaviors U.S. Perspectives on Leadership Behaviors •North American studies of leadership traits have concluded that traits alone do not make a leader – behaviors leaders use to manage their employees may be more important •Researches identified two major types of leadership behaviors of North American managers •Task-centered leader – one who gives subordinates specific standards, schedules, and tasks •Person-centered leader – one who focuses on meeting employees’ social and emotional needs o Showing a concern for subordinates’ feelings and taking subordinates’ ideas into account •The distinction between person-centered and task-centered leader behaviors also applies to how leaders make decisions •Autocratic leadership – leaders make all major decisions themselves •Democratic leadership – leader includes subordinates in decision making •Consultative or participative leadership – leader’s style falls midway between autocratic and democratic styles •Management and leadership theorist, Rensis Likert, identified four styles of management that also reflect a similar distinction between the task and the person: exploitative/authoritative, benevolent/authoritative, consultative, and participative (See Figure 15.1) Exhibit 15.1 Likert’s Four Styles of Management (Shows how each management style relates to a general leadership orientation, preferred motivational techniques, communication style, decision-making style, and controlling style) •Based on early studies of U.S. workers, it can be concluded that leaders choose behaviors that focus on initiating structure for task completion or on meeting the social and emotional needs of workers Japanese Perspectives on Leader Behaviors •Performance-maintenance (PM) theory – Japanese perspective on balancing tasks and person-centered leader behaviors •Has two dimensions 1. The performance function (P) is similar to task-centered leadership - manager guides and pressures subordinates to achieve higher levels of group performance •The performance (P) side of PM leadership has two components o First, the leader works for or with subordinates to develop work procedures, called the planning component o Second, the leader then pressures employees to put forth more effort and to do good work, called the pressure component 2. The maintenance function (M) is similar to person-centered leadership •The Japanese PM leader focuses on influencing groups while US approach focuses on influencing individuals •PM theory suggests that groups perform best when both P and M are present Contingency Theories •Early models of leadership tended to look for leadership universals •After years of study, experts concluded that there is no one best leadership style for all situations •Contingency theory – assumption that different styles and leaders are appropriate for various situations Fiedler on Leadership Effectiveness •Fiedler’s theory of leadership – proposal that success of task- or person-centered leader depends on relationships between the leader and subordinates, the degree that subordinates’ tasks are easily and clearly defined, and the officially granted organizational power of the leader •As with all contingency theories, effective leadership occurs when the leadership style matches the situation •Task-centered works best when the work situation includes a positive relationship between the leader and subordinates, highly structured tasks, and higher levels of organizational power, and in just the opposite conditions, such as when the job requirements are unclear •Person-centered leadership is required in mixed conditions, such as when a leader has low formal power but has good relationships with subordinates Exhibit 15.2 Predictions of Leader Effectiveness under Different Conditions (Shows the predicted effectiveness of task- and person-centered leadership in different conditions) •The theory’s logic suggests that task-centered leadership works best in situations that are favorable or unfavorable for a leader •In mixed situations, employee commitment and satisfaction become more important and a successful leader must focus more time on people rather than on just getting tasks done Path-Goal Theory •Path-goal theory – four types of leadership styles that a manager might choose depending on the situation •Directive style: give subordinates specific goals, schedules, and procedures •Supportive style: show a concern for satisfying subordinate’s needs and establishing good relationships •Participative style: consult with subordinates; ask for suggestions; encourage participation in decision making •Achievement-oriented style: set goals; reward goal accomplishment •In path-goal theory, the key contingency or situational factors that determine the choice of the best leadership styles are the nature of the subordinates and the characteristics of the subordinates’ tasks Exhibit 15.3 A Simplified Overview of Path-Goal Theory (Presents a simplified overview of path-goal theory) •Key leadership suggestions based on path-goal theory •When subordinates have high achievement needs, successful leaders adopt the achievement-oriented style •Subordinates with high social needs respond best to the supportive leadership style •When the subordinate’s job is unstructured, the theory suggests using a directive style (the leader details very specific job tasks and requirements) or an achievement-oriented style (the leader gives the subordinate responsibility to discover solutions) Traits, Behaviors, and Contingencies •No one leadership trait or behavior that works in all situations •The contingency theory of leadership suggests that successful leaders must diagnosis the situation and pick the behaviors or develop the leadership traits that fit best National Context as a Contingency for Leadership Behaviors •Most experts on leadership in multinational companies argue that a contingency perspective is required •The first step in understanding how to adjust one’s leadership to a multinational situation comes from understanding what local managers do to lead successfully in their own countries •The second step is using this knowledge to modify your leadership style appropriately The National-Context Contingency Model of Leadership: An Overview •National-context contingency model of leadership – shows how culture and related social institutions affect leadership practices (summarized in Exhibit 15.4) Figure 15.4 A National-Context Contingency Model of Leadership (Summarizes the national-context contingency model of leadership) •To be successful, leaders must modify their behaviors or develop particular leadership traits depending on two key contingencies •The characteristics of their subordinates •The nature of their work setting •In the multinational setting, the basic components of the contingency leadership model (leader behavior and traits, subordinate characteristics, and the work setting) are affected by the national context •How leadership behaviors, traits, and contingencies are affected by the national context: •Leader behaviors and traits: national culture, business culture, and social institutions define the array of preferred and acceptable leader behaviors and traits for managers •Subordinate characteristics: national and business cultures influence workers’ needs and levels of achievement motivation •Work setting: culture and social institutions affect the choices managers make in designing organizations and subunits Leadership Traits and Behaviors in the National Context •Different cultures have different images of what distinguishes successful leaders •There is also evidence that some leader behaviors and traits are cultural universals •Leadership has different evaluation connotations from one society to another •The U.S. places a very important premium on leadership •In Japan, CEOs attribute organizational success to their subordinates •In Germany, the engineer, rather than the manager, is the cultural hero •In France, the distinction between management and worker reflects social class •In the Netherlands, a desired leadership trait is modesty •In the Chinese family business, the leader is the patriarch, the oldest male head of the family •Latest research on cross-national research in leadership is called GLOBE (Global Leadership and Organizational Behavior Effectiveness) (reference GLOBE study in Chapter 2) •The GLOBE team found that most people, regardless of cultural background, believe that some traits and behaviors lead to outstanding leadership, while other traits and behaviors prevent managers from leading successfully Exhibit 15.5 Culture-Free Positively and Negatively Regarded Leadership Traits and Behaviors from 60 Countries (Shows a list of universally acceptable or disliked behaviors and traits identified by the GLOBE study) •The GLOBE research also identified leadership styles that are relevant to leadership in cross-cultural settings: team-oriented, self-protective, participative, humane, and autonomous •The team-oriented style characterizes a leader who is an integrator, diplomatic, benevolent, and works collaboratively with the team •The self-protective leader is self-centered, status conscious, procedural, and a face saver •The participative leader is a delegator and encourages subordinate participation in decisions •The humane style characterizes leaders who have modesty and a compassionate orientation •The autonomous leader is individualistic, independent and unique, and is expected to act in self-interested fashion Exhibit 15.6 GLOBE’s Study Clusters and Countries Included in Each (Shows the country clusters in the GLOBE study) Exhibit 15.7 Culturally Contingent Beliefs Regarding Effective Leadership Styles (Shows how leadership behavior styles vary across clusters representing a large sample of nations representing Asia, Africa, Europe, the Middle East, and North America) •There are differences in the various leadership styles based on cultural differences •Team-oriented leaders are preferred in Latin European, East European, and Southern Asian societies •Anglo, Nordic European, and Germanic Europeans have the highest score on participative leadership •Southern Asian countries scored the highest on the humane oriented leadership •The clusters with the highest score on autonomy are the Germanic and Eastern European clusters •All country clusters felt that self-protective leadership hindered effective leadership •Leadership characteristics and behaviors vary because the national context produces differences in the repertoire of behaviors and traits available to managers National Context and Preferred Leader Influence Tactics •US managers favor seven major influence tactics – tactical behaviors leaders use to influence subordinates •Assertiveness: being forceful, directive, and demanding •Friendliness: being friendly, humble, and receptive •Reasoning: using logical arguments, providing reasons, and using plans •Bargaining: offering favors and exchanges •Sanctioning: using threats, rewards, and punishments •Appeals to a higher authority: appeals for help to higher authorities and sending problems to higher authorities •Coalitions: building support for ideas by networking and using friendships •Research study found that most mangers, regardless of cultural background, use the same general types of influence tactics but different nationalities favor some over others Exhibit 15.8 Preferred Leader Influence Tactics in Four Countries (Shows the favored tactics of Taiwanese, Japanese, Australian, and British managers) National Context and Subordinates’ Expectations •Subordinates’ expectations – expectations regarding what leaders should do and what they may or may not do •Subordinates accept or reject certain leader behaviors as legitimate prerogatives of leadership •The cultural and institutional setting provide a framework for people to interpret leader behaviors •Power distance has profound effects on subordinates’ expectations regarding leaders Exhibit 15.9 Subordinates’ Expectations under Three Levels of Power Distance (Shows Hofstede’s ideas on how subordinates from countries with three different levels of power distance respond to leadership issues) •In countries with high power distance, such as in Latin and Asian countries, subordinates expect autocratic leadership •In low power-distance countries, such as Sweden and Norway, subordinates expect the leader to be more like them •Strong uncertainty-avoidance norms may cause subordinates to expect the leader to provide more detail in directions •The classic contingency view of leadership and the national-context contingency model of leadership can provide multinational managers a guide as to when and how to adapt leadership styles to different national context Contemporary Leadership Perspectives: Multinational Implications Transformational Leadership •Most experts agree that to achieve a great organization, managers must adopt a higher-form of leadership •Transformational leadership – managers go beyond transactional leadership by articulating a vision, breaking from the status quo, providing goals and a plan, giving meaning of a purpose to goals, taking risks, being motivated to lead, building a power base, and demonstrating high ethical and moral standards •The transformational leader: •Articulates a vision •Breaks from the status quo •Provides goals and a plan •Gives meaning or a purpose to goals •Takes risks •Is motivated to lead •Builds a power Base •Demonstrates high ethical and moral standards •Transformational leaders succeed because subordinates respond to the leader with high levels of performance, personal devotion, reverence, excitement regarding the leader’s ideas, and a willingness to sacrifice for the good of the company •They seem to arise when organizations need change or face a crises •Although transformational leaders exist in all countries, the same leadership traits and behaviors may not lead to successful transformational leadership in all countries •GLOBE project found that charismatic leadership attributes, such as encouraging, trustworthy, positive, confidence builder, and motivational were all perceived as universal attributes •The charismatic leader is decisive, performance oriented, visionary, inspiring for subordinates, and willing to sacrifice for the organization Attributions and Leadership •Attribution approach to leadership – emphasis on what leaders believe causes subordinates’ behaviors •The most important attribution for leaders is that of responsibility for work performance •In determining how to respond to subordinates’ behaviors, leaders make two key distinctions in attributions: the external attribution and the internal attribution •The external attribution explains a person’s behavior based on factors outside the person and beyond the person’s control (e.g., natural disasters, illness, faulty equipment, etc) •The internal attribution explains a person’s behavior based on the characteristics of the person (e.g., personality, motivation, low ability, etc) •In making an attribution decision, the leader responds to the subordinate based on that assumption •If the subordinate’s behavior is based on an internal attribution, the manager tends to correct or reward the worker •If the attribution is external, the leader modifies the work environment •Successful leadership requires making the correct attributions regarding subordinate behavior •Fundamental attribution error – assumption by managers that people behave in certain ways because of internal motivations rather than outside factors •Very strong assumption in Western culture •Challenge for the multinational leader is to understand the cultures of subordinates sufficiently well to avoid serious attribution errors Getting Results: Should You Do What Works At Home? •What happens if leaders do not adapt to local conditions? •One study suggested that home-based leadership styles do not work very well in other cultural settings Exhibit 15.10 Leadership Behaviors and Job Performance of U.S. Managers in the Unties States and in Hong Kong (Shows the correlation between managerial performance and leadership behaviors for two groups of U.S. managers, one working in the United States and one working as expatriates in Hong Kong) •One potential reason what many managers (especially from the U.S.) fail in international assignments may rest on their inability to modify their behavior and adopt leadership styles congruent with the cultural setting The Cultural Context and Suggested Leadership Styles •No simple formula identifying how to lead in every national context •Some recent writings suggest some general recommendations •The dimensions of national culture suggested by Hofstede seems to be very relevant Exhibit 15.11 National Cultures and Recommended Leadership Styles (Shows experts Hofstede and Rodrigues’ recommended leadership styles for different cultural settings) •Power distance is important for leadership because it affects both subordinate and superior expectations regarding the leader’s degree of directiveness or task orientation •The uncertainty avoidance norm also affects the range of acceptable leadership styles •Ultimately, each multinational manager must diagnose the institutional, organizational, and cultural situations that may affect the success of their leadership style •Successful global leaders remain flexible and highly sensitive to the national context Summary and Conclusions •All managers who work for multinational companies should strive to become global leaders, unconstrained by national or cultural limitations and able to adjust to any national context •Traditional leadership theories can provide the base to understand leadership: trait theories, leadership behaviors, and contingency theory •The national context contingency model of leadership extended traditional contingency theories to show how culture and social institutions affect the leadership process •The national context also affects leadership contingencies indirectly •The chapter reviewed the international implications of contemporary views of leadership, focusing on the transformational leader and leadership attributions •Although it is impossible to identify all cultural and situational factors that affect the choice of leadership style, this chapter sensitizes the multinational manager to the array of complex cultural issues facing today’s global leader Chapter 15 Case Notes Cheung Yan: China’s Paper Queen Synopsis In 1985, Cheung Yan started a small scrap paper brokerage in Hong Kong. When the market didn’t look large enough for what she wanted to achieve, she moved to the U.S. in 1990 to start a paper recycling unit called America Chung Nam. After discovering that there was a large market for business in China, she established a company called Nine Dragons, in China. The company grew rapidly, and by 2009, was projected to be Asia’s top producer of packaging paper, and the first in the world in terms of production capacity. Case Discussion Questions. 1. What is strategic leadership? Strategic leadership involves influencing an organization’s direction and ensuring that it adapts to changing environments while achieving long-term goals. It encompasses the ability to envision the future, communicate that vision, and inspire others to work toward it. 2. What would constitute key strategic leadership actions? What are the key elements of a “Balanced Scorecard?” • Key strategic leadership actions include setting a clear vision, making informed decisions, fostering a strong organizational culture, and ensuring effective communication. The key elements of a Balanced Scorecard include: • Financial Perspective: Measures financial performance and profitability. • Customer Perspective: Assesses customer satisfaction and market share. • Internal Business Processes: Evaluates operational efficiency and effectiveness. • Learning and Growth: Focuses on employee training, knowledge management, and innovation. 3. How has Cheung Yan seen success as a strategic leader? What are the qualities she possesses? • Cheung Yan has seen success as a strategic leader through her visionary thinking, adaptability to market changes, and ability to identify and seize opportunities in the paper recycling industry. Her qualities include: • Entrepreneurial Spirit: Willingness to take risks and pursue new markets. • Innovative Mindset: Ability to implement creative solutions in her business strategies. • Strong Networking Skills: Building relationships across international markets. • Resilience: Overcoming challenges and setbacks in her business journey. • Visionary Leadership: Articulating a clear vision for her companies and inspiring her teams. These aspects contribute to her reputation as “China’s Paper Queen” and her significant impact on the industry. Analysis 1. What is strategic leadership? Strategic leadership is refers to the activity of anticipating, envisioning, planning and organizing for the future. A strategic leader looks beyond the current situation to foresee future changes that will impact the organization. From there, one must envision a future strategy to (in worst case) limit their negative impact, or (in best case) take advantage of them, and then develop a plan to execute that strategy. The strategic leader then organizes resources around that plan of action, and inspires others to carry out the plan as envisioned. Strategic leadership takes a look at the bigger, or the “whole” picture, to balance resources and energy amongst the differing priorities for the greater good of the organization. The keys to successful strategic leadership are formulation of the plan, and then execution of that plan. Success in the execution of the plan relies heavily on the leader’s ability to influence others to carry it out. One of the ideas discussed in this chapter is that of “transformational leadership.” The most successful strategic leader exhibits characteristics of a transformational leader. 2. What would constitute key strategic leadership actions? What are the key elements of a “Balanced Scorecard?” Aside from what was discussed in question #1 above, many of the behaviors and characteristics of transformational leadership, as identified in the text, could be considered key strategic leadership actions, because transformational leaders are often the most successful strategic leaders. They are: •Articulates a vision •Breaks from the status quo •Provides goals and a plan •Gives meaning or a purpose to goals •Takes risks •Is motivated to lead •Builds a power base •Demonstrates high ethical and moral standards According to the Balanced Scorecard Institute, a balanced scorecard is “a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organizational performance against strategic goals.” Historically, a firm’s success was often only based on how well it met financial objectives. The balanced scorecard adds in non-financial dimensions to the performance measurement tool – customer, learning and growth, and internal business processes, as seen in the diagram below. *Diagram taken from the Balanced Scorecard Institute [www.balancedscorecard.org ] 3. How has Cheung Yan seen success as a strategic leader? What are the qualities she possesses? Cheung Yan’s success as a strategic leader is reflected in the fact that she and her company have been such a huge success, as judged by any measure. There is a certain strength in the argument that companies that are wildly successful, especially over the long-term, are led by successful strategic leaders. Specifically, Cheung Yan has shown evidence of many desirable qualities, including, but not limited to: •The ability to set a vision – she wanted to be the leader in the paper-making business •The ability to inspire others – she has been successful in communicating that vision to the workforce, and inspiring them to be productive •Willingness to take risks – she moved to the US when she felt the Hong Kong market wasn’t big enough, invested in bank loans to enter the China market, etc. •Flexibility to adapt to change – when she saw that the Chinese market offered a promising opportunity, she shifted focus and set up shop in China •Ability to manage resources – she effectively managed resources and created programs and processes to ensure efficient and effective operational management •Demonstrates high ethical and moral standards, and corporate and social responsibility – cooperated with the government, operated in a manner that was environmentally friendly, supported local charities, etc. Overall, Cheung Yan has demonstrated an entrepreneurial mindset, self confidence, respect for others, and high values and morals. She clearly knows how to set a vision, lead others in that vision’s direction, and ensure that the execution of the strategic plans are efficiently carried out by her managers and employees. Lessons •This case explores the concept of strategic leadership and the transformational leader •This case demonstrates the importance of a strategic vision and the capabilities a leader must possess to ensure that vision is realized •We get a glimpse into the balanced scorecard Instructor Manual for Multinational Management: A Strategic Approach John B. Cullen, Praveen K. Parboteeah 9781285094946