How is leadership behaviour

influenced by culture?
Marie Gervais, PhD.
July 11, 2011

Culture is confusing. If you think otherwise this introduction to cultural sense-making

by Osland and Bird (2000) should help:

 If U.S. Americans are so individualistic and believe so deeply in self-reliance, why do

they have the highest percentage of charitable giving in the world and readily
volunteer their help to community projects and emergencies?
 In a 1991 survey, many Cost Rican customers preferred automatic tellers over
human tellers because “at least the machines are programmed to say ‘good
morning’ and ‘thank you’”. Why is it that so many Latin American cultures are noted
for warm interpersonal relationships and a cultural script of simpatia (positive social
behavior), while simultaneously exhibiting seeming indifference as service workers in
both the private and public sectors?
 Based on Hofstede’s value dimension of Uncertainty Avoidance, the Japanese have
a low tolerance for uncertainty while Americans have a high tolerance. Why then do
the Japanese intentionally incorporate ambiguous clauses in their business
contracts, which are unusually short, while Americans dot every ‘I’, cross every ‘t’,
and painstakingly spell out every possible contingency? (p. 65).

Not confused yet? Let us tackle the subject of culture in business. Hypothetical
Company Y is wondering how to appropriately brand their corporate culture and in the
process improve their public image. They have spent countless hours reframing their vision,
mission, tag line and value propositions and believe their corporate core values have been
regularly promoted at all levels of the value chain. But when they hire a consultant to do the
cultural audit, the company finds that the corporate “ideal” culture is in reality sabotaged by
the corporate “as is” culture. Shocked, Company Y insists that this has to change. But how?
Problem indicators might be say, low retention of foreign hires at management levels,
shrinking market share, difficulty attracting and retaining qualified candidates, failed
acquisition transitioning, poor innovation, inability to adequately predict market trends or
clarify target markets. Other difficulties could be slow adopting of new technologies, or
negotiating and implementing standardized procedures and policies across global
operations.
These problem indicators bring out further questions of culture when you start to think about
it.

Is culture in business about creating a business story to which everyone can agree
to align their dashboards? Do they perceive of the company business culture as being part
of who they are or just the C-level executive’s fantasy? Does it matter? What about
ethnicity? Or gender? Generational difference? What does culture have to do with breaking
the glass ceiling for women and marginalized populations? Or the link between diversity and
creativity for increasing access to new customer groups? Is it about Corporate Social
Responsibility, equity or parity? Or is it about organizational structure, global impacts or is
culture really all about change management? As was inferred by the Company Y story,
these kinds of questions are increasingly important to consider because they point to both
direct and indirect effects on the bottom line. If manufacturing leaders want their businesses
to stay current, viable and profitable in today’s volatile economy it becomes increasingly
important to make some sense out of the influence of culture on business. Ultimately, given
the importance of leadership to both corporate culture norms and cultural change, how
culture plays out at the executive level matters.

For the sake of context we need a basic understanding of cultural sense-making.

Consider culture as any group. Group members interact with each other. As they interact
over time they create norms that define “our” group. Unconsciously, our group becomes
known to us by “how we do things” and our sense of who we are and what we do creates a
cultural identity. Others recognize the differences between groups by how each variant
“performs” their group interaction norms. At that point we have what is referred to as visible
culture, the paradox being that although group norms are visible to outsiders, they are
usually invisible to those on the inside.

With this understanding of how culture forms, consider that we all belong to a variety
of cultures simply by interacting with people in our lives. We are all members of gender
culture, age culture, professional culture, social class culture, and linguistic culture. There
is: regional culture, urban or rural culture, geographic culture (are you surrounded by
mountains, ocean, dessert, prairie, jungle or forest?), ethnic culture, national culture,
technological culture, dominant/minority culture, racial culture (with emerges in minority
settings under various historical contexts) and traditional/modern culture. This means that
unless we have grown up in a cave or a box, we are all, in a sense, multicultural. Given this
experience with interactions between groups, we should have some capacity to understand
and negotiate across difference. The fact that men and women still don’t understand each
other after centuries of interaction, points to the impossibility of assuming someone else’s
culture as your own. Equally important is that men and women, in spite of finding each
other’s gender mysterious, perplexing and often irritating, have enough common ground to
continue finding new ways to understand and enjoy each other.
In every culture there are positive and negative developments. No culture is relative, neutral
or free from dysfunction. Cultures have contradictions and paradoxes that neither insiders
nor outsiders can explain or solve. Take for example Americans and sex. An hour in front of
the television will reveal both extreme prudishness and sexually explicit material revealing
an uncomfortable coexistence of conflicting and mutually antithetical views. How is an
outsider to understand what the “typical” or “ideal” or “appropriate” sexual cultural norm is
within American culture? It is not possible because the situation is problematic and
unresolved.

The example of Canadians’ apparent appreciation of diversity coexists dissonantly

with overt racism towards Aboriginal people and regular publications about how ‘dangerous’
it has become to populate Canada with undesirable immigrant minorities. Titles such as
“Lies, damned lies and multiculturalism,” (Mansur, 2011) make Canadian popular variants of
“We are the world,” appear hypocritical.

In the business context, a company that wants to focus on increasing women in

upper management may be proud of the fact that a recent survey shows women feel very
welcome in the company, however there has never been a female board member and any
upper level applications by females are rejected on the basis of “fit” to the company culture.
To understand these and other paradoxes, we need to frame the argument in terms of the
influence of national culture on business organizational structures and the dynamics of
cultural norming. According to research done by Li and Harrison (2008) on the influence of
national culture and the composition and leadership structure of director boards, corporate
ownership structures reflect the surrounding national culture’s structure, values and taboos.
We prefer organizations that are consistent with our own cultural orientations (another
explanation for “fit”). We have shared and usually unconscious beliefs, about what is an
appropriate organizational structure and how it should operate. Within the national context,
corporations that reflect most closely the national cultural structure will be considered the
most desirable and receive the most rewards. This spawns a similarity in corporate boards
that allows everyone to understand and agree with one another, but it is not necessarily
more efficient, better at innovating, or more productive because it promotes a kind of group
think mentality.

The same effect has been documented in the GLOBE research on leadership across
cultures. Leadership characteristics are valued differently and manifested differently in
various cultural contexts (Koopman, Hartog and Konrad, 1999). The authors found that
European leadership styles were quite distinct between the North/West and South/East with
regard to: achievement orientation, future orientation, assertiveness, collectivism, power
distance and uncertainty avoidance.

In all European countries, administrative competence was perceived of as an

important leadership quality while autocratic behavior was perceived of as inhibiting
effective leadership. Interestingly, although disliked, autocratic behavior was tolerated more
in upper levels of leadership and less in middle management levels. Within similar regions
there were also differences. Germanic leadership did not see self-centeredness as inhibiting
leadership whereas Anglo countries saw participative leadership as the desired norm and
self-centeredness as problematic. Political history certainly plays a part in these norms. Six
leadership factors emerged strongly with two as the most universally prominent.
Charismatic / value-based leadership and team-oriented leadership were considered the
most desirable, even if in the “as is” version, they were not always present to the expected
degree. Narcissistic, participative, humane and autonomous leadership styles were country
specific with regard to both desirability and practice.

Other influences to both leadership style and organizational structure were:

language, proximity, colonization and the effects of various political systems (socialism,
capitalism, communism), religion, economic systems, economic development, technological
development, political boundaries and historical conflict. Prevailing industry types as well as
when various industries emerged in the country’s history, and climate (heat, rain, snow,
environmental issues) were all additional factors.

Something to further complicate culture in management is that countries are increasingly

influenced by each other and changes to culture are ongoing. In 1999, Serrie documented
Chinese cultural values as following these principles:
1. Emphasis of human relationships over legal agreements.
2. Emphasizing correct behavior and social image.
3. Combining merit and sinecure.
4. Emphasizing modesty and humility.
5. Respect for authority.
6. Discouraging initiative.
However Shapero’s (2010) Eckerd College student interviews with Chinese managers
revealed that the Chinese are evolving quickly into what they call “modern Chinese”, with
personal and material aspirations that are no longer as consistent with their Confucian roots
as the previous generation’s values. Jack Perkowski who has been living and working in
China as the manager of JFP Holdings for 20 years, states that the West ignores Chinese
evolving ways of thinking and doing to its own detriment (2011). He explains that to do
business with a Chinese target market, one needs to understand the Chinese attitude
towards money. Chinese society is divided into those who have more recently acquired
means (400 million at a per capita income of $8000) and those who are living in dire poverty
on 1/10th that amount (900 million). Two sets of prices would be expected under the
circumstances, but both will need to consider the context of limited disposable income.
Perkowski also states that the modern Chinese worker is no longer satisfied with a
paycheck. Education is better and employees want training and opportunities for
advancement. Consequently, Chinese management and foreign companies operating in
China need to consider the current economic situation, past cultural influences and ways to
adjust to new Chinese realities.

A whole series of articles could be devoted to explaining pan-regional, ethnic and

national differences in leadership style preferences, ownership patterns, chief officer
appointments, board membership and organizational structure. Suffice it to say that the
overarching themes that most concern us are:
a) Organizations form around expected national norms and these norms are rewarded to
the degree that they mirror norm expectations. This is significant in that it forms
institutionalized (on both corporate and national levels) barriers to any change.
b) Global interactions across cultural difference will be successful to the degree they are
responsive to tiered, confusing or paradoxical cultural value responses. Osland and Bird
(2000) explain this via the metaphor of a succession of card games. With each new game
the players are dealt a new hand and have a new context in which to make decisions. This
means values choices at one level will be trumped at another level because of contextual
change.
c) Although there will always be differences in corporations and their cultures around the
world, research on the future of work (Frank and Moore, 2010) shows we are generally
moving towards a globalizing structure that is becoming the international business norm.
This structure has been identified as a tendency towards team work, increased interactivity,
and a flattening of hierarchical structures due to increasing interdependence on each
other’s skill sets. It will have high interactivity through sophisticated technological
interaction. And it will require a culture of ongoing learning and responsiveness to change
that has been unprecedented. This means that whatever our national and regional cultural
preferences, we will all need to change at least some past behaviors to work within these
parameters, or risk becoming redundant in the global economy.

One way we can deal with the complexity of cultural context is to create new
corporate cultural stories and to keep telling them until they become part of who we
are. Peter Bregman (2009) writes that cultural change comes with doing story-worthy
things that represent the culture we want to create. Then we let other people tell the story
and watch its influence spread. A second way to influence corporate change is to tell the
stories of what other people did to create the kind of changes we want to see. Perhaps it is
not possible to change a culture with stories, but it may be possible to create the corporate
“climate” that will encourage the growth of what we would like to see. Jack Welch (2005)
and other highly successful managers have found cultural change possible when they
focused on the end user and walked backwards through the company to see how focusing
on that final goal would change “the way we do things around here”. This is a third way to
build a cultural story.

A fourth way is to consider who is not at the table and how to get them there. How do
you know? One way is by asking the missing group members for their stories. Another way
is by matching the story to the results and then reflecting on how to reach different results.
The Bay Area study of Asians as Corporate Executive Leaders (2009), showed that
people’s stereotypes of Asians as upwardly mobile, hardworking achievers needed a reality
check with who was actually at the table. Researchers Gee and Hom found that of the 100
largest companies in an area of the highest Asian population in the USA (41%
undergraduates, 23% overall Bay Area population and 30% in San Francisco and Silicon
Valley) there were 13 Asian CEOs, which looked reasonable at first glance. When this was
further analyzed, the group of 13 was composed of Indian, Pakistani, Bangladeshi,
Japanese, Filipino, Koreans and Vietnamese. Actual Asian CEOs were now 6 of the 100. A
discussion with 50 mixed Asian and non-Asian executives revealed their perceptions of the
root causes:
1. A common misconception that there is “no Asian problem”, when in fact there is a
large gap between entry level employees and opportunity to advance to management.
2. No leadership from the Asian executive community to help Asians advance since it is
culturally assumed that hard work will always result in appropriate advancement.
3. Fear that Asians raising the question of advancement will be considered
troublemakers.
4. Lack of Asian enrollment in executive networks.
5. Passive deference to hierarchical authority, which is viewed as incompetence by non-
Asian decision makers. This means Asians are usually passed over at promotional
opportunity moments.
6. Poor, or only adequate, mastery of English.
7. Lack of political managerial initiative for networking especially outside of Asian circles.
8. Aversion to risk and tendency to avoid challenging assignments where there is a
possibility of loss of face or failure.

A Canadian study (Hong, 2009) revealed similar findings with regard to integration of
immigrants into corporate business management. When participants told the story from their
perspective, they believed that “insufficient English, ethnicity, cultural differences,
incompetence with regards to leadership management skills, and the lack of socialization
into Canadian management expectations” (p. 179) were the main factors for lack of
immigrant advancement.
 If we place this research next to the research on organizational culture it becomes
obvious that there is a dual concern with regard to capacity building for “the future of work”.
On the one hand the cultural influences of corporations are rarely responsive to initiatives
for change and reward and replicate those people and structures that are most like them.
On the other hand, those who wish to be sitting at the table are also practicing the norms of
their cultures in ways that limit their capacity to advance and/or influence corporate culture.
We may be so busy trying to categorize and stereotype each other that we miss the
important information coming to us from the exercise of cultural sensemaking. We dismiss,
ignore, or neglect to reflect upon the complex cues coming from cultural interaction and do
not see the opportunities for responsiveness. Maybe we are simply not interacting enough;
there has been an evolution of cross-cultural interactions that has progressed from killing
people who are different from us, to tolerance, to working and living next to each other. But
that does not mean we are really interacting.

Another consideration is that contextual circumstances make it difficult for various

cultures to even come close to sitting at the table, which is where equity, parity and CSR
come into the picture. Transearch International (2009) research on women and the glass
ceiling found that while men have a long and continuous career path, women who stop to
give birth and care for the children along the way have interrupted career trajectories. Those
few female CEOs who operate at the highest echelons either don’t have children or have a
husband who stays at home with the children. Very few women are willing to sacrifice their
children for their career. This translates into women taking lower risk positions, lower pay,
less hours and less demanding career opportunities so as to better juggle the
responsibilities of motherhood. Biology and societal expectations of mothers adds a barrier
to upward mobility that cannot be explained away.

Consider the immigrant scenario again. If you come from a country where you are
technologically far behind your new country, it can take a while to catch up. Add to that the
difficulties of trying to understand the complexities of operating in English as your third or
fourth language, and the fact that very few “locals” offer to take immigrants under their wing
to mentor them on what is culturally appropriate. This means that it is not so simple to
“interact more with people who are not from your culture”. After a number of cool responses
and outright rejections, it becomes harder and harder to make the effort.

Additionally visible minorities in the USA and Canada are not being hired at parity with
their educational attainments (Konrad, Maurer and Yang, 2005; Catalyst, 2009) in spite of
speaking English as a mother tongue and being culturally congruent with their white peers.
Fortune 500 Black CEOs in the USA were only 10 in 2009. In 2011, six remain. We cannot
rule out the persistent history of discrimination that taints all countries and which is the
cause of unconscious bias whether or not individuals consciously value diversity and
inclusion. Gladwell’s book “Blink” (2005) documents this tendency to bias against minorities
(including minorities unconscious bias against minorities) so clearly and in so many different
contexts that it cannot be ignored as a factor in getting a seat at the table.

One corporate mentorship study (Ragins and Cotton, 1999) showed that no matter
what the formal mentorship arrangement, the same consistent results placed women at a
disadvantage and men mentored by women at a disadvantage. A man mentoring a man
resulted in both promotions and salary increases. A man mentoring a women resulted in
promotions but no salary increase. A woman mentoring a man resulted in neither
promotions nor salary increase and neither did a women mentoring a woman, although
women mentorships resulted in increased confidence in the mentee. Both women and men
preferred a male mentor because systemic bias favored the advancement of men or
brought women closer to opportunities for promotion no matter how qualified the female
mentors were.

On a less depressing note, there is the subject of game changers. The volatile
economy, lack of manpower globally due to shrinking workforce, severe talent shortages,
informed and engaged customer demand, the rise of the BRIC and other developing
economies as forces to be reckoned with, and the exponentially growing capacity to
communicate anything faster than the speed of light through technology, have created an
environment for cultural change. Windows of opportunity are appearing and the resilient and
visionary few who see them are providing others with role model examples.

Heather Riesman, owner and CEO of Indigo books who aggressively took over her
main rival, Chapters while they were attempting to sue her, is a successful woman with
children and a husband who works outside the home. Ursula Burns is the first fortune 500
black female CEO in the USA at the head of Xerox. Indra Noovi as CEO of Pepsico was
able to effect so significant a cultural change in the company’s corporate structure as to
have it embrace a measurable outcomes target of no environmental footprint anywhere in
the world where it has operations. While creating that change she became the richest
woman in the US. Game changers are starting to show up from unexpected places and
when they make new rules and create new growth structures, national cultures will be
affected. The history of cultural change is one of ongoing interaction between structure and
agency. We can only hope that this interaction will become more and more interactive and
responsive as the world struggles to adjust to increasing challenges.

In summary, leadership is influenced by the national cultural norms that surround it. As
we learn to embrace the complexity of cultural paradox we will make more responsive
decisions with regard to incorporating cultural knowing into corporate decision-making. All
cultures have a rocky road ahead in this journey because there is a tendency to do what we
already know and to reject what seems unfamiliar. Mainstream society and its
representatives in C-level corporate teams have a responsibility to consider who is not at
the corporate table and to work to remove barriers to get those seats filled. We need to do
this because the world is increasingly volatile and it will take all brains at the table to deal
with it. As we become more skilled at interacting at a higher, more culturally responsive
level, the collective diversity of experience combined with an improved human relations
climate will create a context conducive to more solid problem solving, decision-making and
increased profits. This is the story we can start to tell ourselves. As it spreads, it will replace
the old stories and create new cultural corporate learning until the culture we desire
becomes the culture “as is”. Manufacturing executives can lead the way. Spread the word.
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