National cultures affecting management

Requirements for successful leadership in the face of cultural difference can be derived from the theoretical background, since the issue of leadership is closely related to the people being led and therefore also to their cultural understanding. As leadership tasks, as mentioned earlier, include influencing, motivating and enabling employees to contri-bute to the success of the organization, applying a leadership style to a foreign culture would be likely to have disastrous effects. This is due to the fact that the leadership in-terpretation, as any other inin-terpretation, differs immense from culture to culture (see e.g.

Hofstede & Hofstede 2005: 56–57). In order to be able to act as a role model, as a man-ager in the best case scenario should do, the acceptance of the manman-ager is one of the most important issues. The acceptance of a manager usually makes him/her the (infor-mal) leader of the organization. However, this acceptance can only be obtained if the leader and the people being led share the same cultural understanding. That does not mean that they have to share the same culture, but that they need to understand each other.

For a long time in history, leadership was seen not to be dependent on cultural aspects but on the personal style of those leading an organization (Lindell & Rosenqvist 1990:

2; Gray & Starke 1984: 235). This leadership theory was a universalist theory (as op-posed to contingency theories) and it was called The “Great Man” Approach (Gray &

Starke 1984: 235). As globalization became more evident and international organiza-tions created close relaorganiza-tionships between organizaorganiza-tions and people in different parts of the world, the fact that cultural aspects influence leadership became more and more evi-dent (Thomas 2008: 3). The style of leadership favored by a specific society may result in disastrous effects when the same style is applied to people of a very different cultural background, even if both are part of the same organization (Mead 1990: 23). Today many dramatic economic failures stress the importance of cultural aspects for interna-tional businesses. Cultural differences are a major source of problems in internainterna-tional trade and projects carried out by people from different cultural backgrounds.

It has also been proven in several other studies that national culture clearly influences management (see e.g. Gallie 1978; Hofstede 1982; Maurice, Sorge & Warner 1980). In addition to these studies, Bass and Burger (1979) found in an investigation covering twelve countries that national boundaries more often than not make a considerable dif-ference in managers, goals, predif-ference for taking risks, leadership style and so on.

Moreover, it has also been found in a research by Griffeth, Hom, DeNisi and Kirchner (1980) that 52% of all variances in managers’ attitudes and behaviors could be ac-counted for by their nationality. Therefore, it is not really a question about if national cultures affect management and leadership styles, but how and why they affect them.

(Lindell & Arvonen 1994: 2.)

Lindell and Arvonen (1994: 5) combined in their investigation Hofstede’s findings for different cultural dimensions (power distance, individualism, masculinity and uncertain-ty avoidance) with task-oriented, employee-oriented and development-oriented man-agement styles. Task-orientation and employee-orientation correspond to 9.1 and 1.9 respectively on the managerial grid, while development-orientation is the so called

“third management style”, in which the manager has ideas about changes and progres-sion, initiates projects, urges developments and so on (Lindell & Rosenqvist 1990: 25).

The development manager has a strong ego, is a fearless decision maker, makes deci-sions quickly, accepts new ideas without resisting, but also informs subordinates about the results of the organization and states clear and distinct goals (Lindell & Rosenqvist 1990: 25).

However, Lindell and Arvonen (1994: 5) combined the four cultural dimensions of Hofstede with the three management styles in order to be able to predict the manage-ment style in a certain culture. The combination of Lindell and Arvonen can be seen in Table 1.

Table 1. Cultural dimensions combined with management styles (Lindell & Arvonen 1994: 5)

Cultural dimension Management style High power distance Task-orientation

Low power distance Employee-orientation, development-orientation High individuality Development-orientation

Low individuality Task-orientation, employee-orientation High masculinity Task-orientation

High femininity Employee-orientation High uncertainty avoidance Task-orientation

Low uncertainty avoidance Development-orientation

It has been claimed that an autocratic management style is more effective in authorita-rian cultures, and that a democratic management style likewise is more effective in democratic countries (Bass 1990: 789). Lindell and Arvonen (1990: 5–6), on the other hand, propose that in countries with a high power distance organizations are governed more through structures and systems and therefore the managers are most likely more task-oriented. Likewise, in countries with a low power distance more consultation and an employee-oriented management style are probably used (see Table 1). Following the same pattern, different cultural dimensions correspond to certain management styles.

For this thesis, it might be interesting to see how Finland and Sweden do in this regard.

According to Hofstede and Hofstede (2005: 56–57; 91; 134; 183–184) Finland has slightly higher power distance than Sweden (33 compared to 31, where the index base is 100), Sweden has slightly higher individuality than Finland (71 compared to 63), Fin-land has higher masculinity than Sweden (26 compared to 5) and FinFin-land has also high-er unchigh-ertainty avoidance than Sweden (59 compared to 29).

In countries with low power distance, subordinates do not depend on managers as much as in countries with high power distance. Low power distance implies a mutual depen-dence between the manager and the subordinates and it is preferred that the manager

consults the subordinates when making decisions. Subordinates and superiors are seen as more or less equal and their roles in the organization are interchangeable. Not only is the power distance short, but also the emotional distance between them is short and subordinates can rather easily approach and even oppose the managers. In countries with low power distance, organizations are usually decentralized with little hierarchy and a limited number of management levels. (Lindell & Arvonen 1994: 5.)

In countries with a high(er) power distance, organizations concentrate the power as much as possible in the hands of a few persons. Subordinates are more dependent and there are many superiors, structured in a hierarchy. All communication between supe-riors and subordinates is initiated by the supesupe-riors and the emotional distance between superiors and subordinates is large. Therefore, it is unlikely that the subordinates will connect directly with or oppose the superiors. (Lindell & Arvonen 1994: 5.)

Moving on to the individualist dimension, in countries with a high individualism index it is important to have personal time for oneself or the family, to have freedom to adopt one’s own approach to the job, to have challenge, and to have aspiration to leadership and variety. Also identity and self-orientation, as well as emotional independence of the individual from the organization are strongly associated with individualism. Low indi-vidualism, on the other hand, imposes that managers endorse “traditional” points of view and they tend not to support employee initiative. Group decisions are also consi-dered better than individual decisions in countries with low individualism. (Lindell &

Arvonen 1994: 6.)

For the masculinity dimension it is so that masculine countries tend to value income, social recognition, advancement and challenges more than feminine countries, in which social aspects of the job, security of employment and working conditions are more im-portant (Hofstede & Hofstede 2005: 132). In countries classified as feminine (i.e. with low masculinity index) conflicts are often solved by compromise and negotiation and families raise their children to be modest and loyal (Lindell & Arvonen 1994: 6).

Finally, regarding the uncertainty avoidance, countries or cultures with a low uncertain-ty avoidance people are more risk-taking, stronger motivated for achievement and they believe in success, while in cultures with high uncertainty avoidance index people are more worrying about the future and preferences for clear requirements and instructions.

High uncertainty avoidance also indicates that conflicts in the organization are undesir-able. (Lindell & Arvonen 1994: 6.) So, due to different values, different cultures adopt certain management styles. The management styles adopted can roughly be described by the above. There is, however, much more to say about this matter, but for this thesis, the brief summary above is enough.