Challenges of the 21st Century
for Leadership Qualifications:
Reflections and Responses
Raymond Saner & Lichia Yiu
This article focuses on the assumed impact of globalisation, especially in the field
of business and trade, and how globalisation will affect public and private sector
leadership and hence indirectly leaders in society. Subsequent to some reflections
on the impact of globalisation on leadership, the article postulates a few key changes
which developments in the world economy might have on leadership theory and
practice.
Non-partisan Approach to Leadership Theory
Leadership theory has evolved over the last fifty years in the Western
context.1 We agree with most scholars who postulate a difference
between leadership and management and who see leadership as being
one of the four management functions (planning, organising, leading
and controlling). Management so defined is broader than leadership.
A manager can be a manager without being a true leader if he/
she, for instance, lacks the ability to influence others. In reverse, there
are also leaders who are not managers. The best example is the informal
leader of a group.
We further agree with the majority of scholars that different leadership
theories have made valuable contributions to the understanding
of leadership, but that no single theory can exhaustively explain
leadership behaviour nor predict accurately leadership potential. At
best, it is wise to draw on the totality of the established leadership
75
Asian Journal of Public Administration
theories and concepts in order to best explain the complex phenomena
of leadership behaviour. Such a list of established theories would
include classical leadership theories (trait, behavioural, situational);
behavioural leadership theories (two-dimensional, leadership grid,
charismatic, transformational, transactional and symbolic leadership);
and situational leadership theories (contingency, leadership continuum,
path-goal, normative, situational and leadership substitutes).
These theories are addressed in some detail by Lussier (1997: 388-
414).
We also concur with most scholars and practitioners with international
work experience that the above mentioned established theories
have to be further expanded and broadened to accommodate crosscultural
variance. Since the ground breaking empirical study of
Hofstede (1980), it is appreciated that US based leadership theories
clearly do not apply to many non-US situations and have to be adapted
to local norms and values in order to become accepted and hence be
effective. Hofstede (1980: 259) pointed out for instance that trying to
develop "leadership" as if it were an independent characteristic which
a person could acquire is naive: leadership is a complement to
subordinateship. Cultural values are present in both the leader and
the subordinate, hence cultural differences also necessitate a cultural
adaptation to fit a country's predominant cultural prelerences (Yiu &
Saner, 2000).
According to Hofstede (1980: 259):
. . . the only US leadership theory which allows for a certain
amount of cultural relativity, although indirectly, is Fiedler's
'Contingency Theory of Leadership' which states that different
leader personalities are needed for 'difficult' and 'easy'
situations, and a cultural gap between superior and subordinates
is one of the factors that makes a situation 'difficult'.
However, his theory does not consider the kind of cultural
gap-
Hofstede has four key concepts in describing cultural value differences.
The one which pertains to leadership is "power distance". Power
distance refers to the degree of inequality between leader and subor-
76
Challenges of the 2 lit Century for Leadership Qualifications
dinate. The stronger the inequality, the stronger the dependency need
of the subordinate and concomitantly the stronger the form of hierarchical
orientation of leadership. Countries with high power distance
preferences according to Hofestede's findings are, for instance, France,
Latin countries and most Asian countries.
US leadership theories, according to Hofstede, have been developed
out of a cultural context consisting of medium power distance.
US leaders would hence demand more prerogatives than for instance
Scandinavian and German leaders whose power distance values are
lower than the US averages. On the other hand, most Asian leaders
would adopt a more paternalistic-autocratic behaviour which, in turn,
would be complemented by a more deferring behaviour of Asian subordinates,
since most Asian countries show a preference for high power
distance values.
Globalisation and Postmodernism: The New Challenges
for Leadership Theories
Following Hofstede's (1991: 23-48) views, cultural value preferences
get past on from generation to generation via parenting, schooling
and general societal organisation. In other words, deeply held value
preferences do not change very fast, if at all. On the other hand,
Hofestede links values preferences to certain patterns of development
and contexts in which countries exist. For instance, factors
closely associated with low power distance are (a) country location
at northern hemispheric latitude, (b) mostly small sized countries,
and (c) relative wealth and positive economic development.
The first factor, latitude, is difficult to change. The second might
undergo changes since increasing globalisation also means concentration
of decision making power according to economies of scale,
be this in the economic or political sphere (eg, EU regional integration).
The third factor is even more variable since different economic
policies could lead to different wealth creation (eg, increasing middle
class). To take an example, despite being located in the tropical part
of the hemisphere, Singapore has been able to increase wealth through
smart economic policies and socio-political engineering (high power
distance, but less so compared to Indonesia and Malaysia).
77
Asian Journal of Public Administration
Assuming a future scenario consisting of continued globalisation
of the world economy and increasing postmodern convergence of
culture, it could be argued that power distance values will converge
over time. In some countries, power distance might increase (eg, small
Scandinavian countries due to integration into Europe) with concomitant
centralisation of decision making in Brussels In other countries,
power distance might decrease due to increasing wealth, economic
development and improvement of access to education by the
population at large. In addition, the proliferation of information and
communication technologies are also stimulating this process of power
distance reduction.
Taking this gradual convergence model a step further, a possible
hypothesis is that leadership behaviour will gradually become more
harmonious or similar across the globe. The integration of world cultures
and economies would necessitate a transition period where different
cultural models co-exist until they gradually become more similar.
While moving towards more convergence, one would have to
anticipate the development of a new or global way of conducting
business and government. This new standard would not necessarily
mean "Americanisation" but rather "hybridisation" of existing dominant
cultural modes. The final result of this integration process due
to globalisation cannot be determined at this point, but trends should
become apparent provided globalisation continues and postmodern
cultural formation does not get interrupted (eg, through wars).
Should the integration process continue, we could anticipate a
more hybrid form of organisation and management that, in turn, would
make it possible to discern globally acceptable leadership models
and management practice models.
Major Developments Favouring the Convergence Perspective
What follows are two trends which point at growing convergence:
first in the field of business, and second in the field of public administration.
78
Challenges of the 21st Century for Leadership Qualifications
Globalising World Economy: Globalising Business Practices
Globalisation as measured by worldwide foreign direct investment
flows is galloping ahead (Saner, Yiu & Sondergaard, 2000). It appears
unaffected by Asia's financial crisis, and transnationalisation is
also speeding forward (UNCTAD, 1998). Companies today are increasingly
conducting business across OECD countries, newly emerging
markets (Eastern Europe, China) or newly industrialised economies
(Southeast Asia, South America).
Increased globalisation has led to the development of a multitude
of standards that govern business behaviour. It is no longer sufficient
to know the business and legal conditions of a global company's
headquarter country and those of some of the countries wherever it
might operate its foreign subsidiaries. Multilateral and intergovernmental
organisations are increasingly defining industry standards that
become mandatory framework conditions for global companies wherever
they might operate. Business decisions increasingly have to comply
with such international standards no matter whether a global company
is American, French, Japanese or Chinese. For example, a global
company's price dumping strategy might be illegal according to
the trade rules of the World Trade Organisation (WTO), and another
company might get access to foreign IT markets thanks to regulations
agreed at the International Telecommunications Union (ITU).
A company might get help in protecting its patents thanks to multilateral
agreements signed at the World Intellectual Property
Organisation (WIPO), while another global company might have its
unfair industrial relations practices criticised by countries which have
signed the labour conventions of the International Labour Organisation
(ILO).
The Internet has also changed greatly the power relationships
between multinational companies and their non-business stakeholders
(Saner, Yiu & Levy, 1999). Non-governmental organisations
(NGO's) as well as civil societies in general are putting demands on
global companies for more information and more transparent business
practices. At the same time, they are using IT to exert influence
deep into the structures of global companies.
Global managers manage business operations but do not neces-
79
Asian Journal of Public Administration
sarily know how to manage non-business stakeholders in all the countries
they operate in. They need urgently to learn to manage complex
political-economic environments. Failures in coping with non-business
related issues could easily lead to crisis, open conflicts, or missed
business opportunities.
Facing such challenges, global companies require business competencies
that most global managers have no background or training
in. The competencies needed to deal with foreign country interests,
multiple domestic and foreign pressures groups or international conflict
demand that global companies acquire organisational competency
in non-business domains such as business diplomacy management.
Whether state owned (eg, France's global companies like
Electricite de France) or privately owned (eg, the German-American
automaker Daimler-Chrysler), the global companies have to learn to
cope with business and non-business environments around the world.
This gradual adaptation to diverse environments is a process which
has also become mandatory for global companies of emerging economies
like China (eg, CITIC) and India (eg, Tata). The managers of
all these companies will inevitably develop new leadership styles
which will allow cultural adaptation and leadership effectiveness
across the globe. What exactly will be this new global leadership
model, nobody knows yet!
External forces for change due to globalisation have been supplemented
by internal demographic and composition changes within
firms. Competitive organisations (public or private) increasingly
employ a younger, highly skilled and knowledge-based workforce m
order to cope with sophisticated operational requirements. Traditional
high power distance leadership styles will not go down well with
these young professional knowledge workers who expect to have a
greater say in how to organise and perform their tasks They can work
independently, are also used to working in global project teams, often
virtual, and do not have the same attachment to their organisations
as their forefathers.
These knowledge workers will exhibit a different style of
subordinateship or followership which, in turn, causes a change of
leadership. They will demand greater participation in the decision
80
Challenges of the 21st Century for Leadership Qualifications
making process and want to be recognised for their competence. As
global citizens, they are mobile and will contribute to the forces of
convergence of a leadership model by voting with their feet.
Globalising Public Administrations: Globalising Government Reengineering
Analogous to the growing competitiveness experienced by multinational
companies due to the globalisation of markets, many OECD
countries experience competitive pressures to modernise their public
administrations and to make government functions more efficient and
effective. Governments have come to the conclusion that effective
and efficient policy making and policy implementation are keys to
attracting foreign investment and inevitably are required to keep investments
within the boundaries of their countries.
In addition, the citizens of many OECD countries demand from
their civil servants more public services at a faster speed, at high
quality, and at affordable prices. All these demands and expectations
have put enormous work pressure on OECD civil servants at times
when their job security is increasingly being replaced by time limited
contracts which have to be renewed based on job performance evaluations.
Switzerland's parliament, for instance, recently decided to
follow the government's suggestion to abolish "life time job security"
and to replace old civil service contracts with time limited contracts
comparable to the private sector. In other words, the hiring and
firing of civil servants will become easier for top government officials
which, in turn, puts more pressure on them to increase the performance
levels of their own departments and bureaux. Hiding behind
the excuse that their employees cannot produce faster and better
services due to the supposedly unchangeable rule of "Swiss iron rice
bowl" or "Swiss iron fondue pot" is a thing of the past. Civil servants
and their respective top leaders are expected to increase performance
levels which, in turn, requires a more private sector type leadership
role.
Since the late 1970's, government reforms have been pioneered
in different OECD countries mostly labelled as New Public Management
(NPM) or Government Re-engineering. The countries leading
81
Asian Journal of Public Administration
these government and public administrative reforms have been New
Zealand, the UK, the US, Canada, The Netherlands, and Germany.
Switzerland has also seen a dramatic increase in NPM reforms over
the last 10 years at national, provincial and municipal levels (Saner,
Yiu & Levy, 1999).
There is no agreed theory of NPM. However, there are some key
features, including, for example (Osborne & Gaebler, 1993), the need
for government to be catalytic, community-owned, competitive, mission-
driven, result-oriented, enterprising, anticipatory, decentralised,
and market-oriented.
The major functional requirements for NPM type civil servants
include an ability to define strategic goals and programmes, to allocate
resources according to defined and agreed goals, and to guide
and control in a goal and result-oriented manner. They should also
have the ability to identify citizen or customer needs, to communicate
actively with citizens and customers, to include politicians in
the management process, to assist political decision makers in strategic
thinking, and to motivate and empower their teams of civil servants.
The new public manager should be able to direct the administration
in its effort to be competitive in its market and to establish an
organisational culture with a distinct service orientation. To fulfil this
new role, a NPM civil servant should acquire a base of knowledge,
skills, values and attitudes of the kind addressed here. Leadership in
this context is moving toward a convergence with the business leadership
model.
Possible Solutions to the Challenges of Leadership
Cross-sectoral Job Rotations of Top Leaders
Faced with simultaneous competitive challenges in the economy and
in government administration, some OECD countries have increasingly
reverted to "know-how" transfers between the public and private
sectors. Traditionally, it has been the practice in France, the UK
and the US to facilitate cross-fertilisation between business, government,
foreign service and academics, and to make sure that knowl-
82
Challenges of the 21st Century for Leadership Qualifications
edge acquired in any of these different fields of expertise is diffused
across professional boundaries.
Different routes leading from the Foreign Service to business
appointments can also be observed: for instance, when former ambassadors
get appointed as vice presidents for international relations
of global companies. Another variant is the move by former ambassadors
to become partners of law firms, investment firms, consulting
companies, or policy advisory agencies; and the reverse occurs when
US presidents nominate influential and often wealthy businessmen
to the role of ambassador. These different variants are also being practised
by continental European countries as well as by many other
countries.
Globalisation and increased interconnectedness of the world
economy have blurred the boundaries between business and public
administration. Increasingly, business has to be mindful of non-business
stakeholders in different communities, while governments have
to be mindful of economic efficiency and social effectiveness. This
mutual convergence has made the contextual factors of leadership
practices imperative.
Hybrid Leadership Roles of Top Managers of Global Companies
According to Hofstede (1991: 213), in the context of globalisation,
two organisational roles are of particular importance for the successful
coordination of a multinational company:
• The "country business unit manager" role - "The top person in
a business unit in a country . . . should be able to function in two
cultures: the culture of the business unit, and the corporate culture
which is usually heavily affected by the nationality of the
global corporation".
• The "corporate diplomat" role - "Home country or other nationals
impregnated with the corporate culture, multilingual, from
various occupational backgrounds, and experienced in living and
functioning in various foreign cultures . . . are essential to make
83
Asian Journal of Public Administration
multinational structures work, as liaison persons in the various
head offices or as temporary managers for new ventures".
The role of the "country business unit manager"' is clear and the
functions are well documented by Hofstede. In contrast, the role of
"corporate diplomat" needs further clarification. Hofstede seems to
assume that a multinational company has a distinct home base and a
parent culture. While transnational companies certainly originate from
a specific place and country, they progressively become transnational
with increasing growth and foreign direct investment.
Transnational corporations (multinational companies with top
level decision making being decentralised world-wide) tend to be
multidomestic, have many homes, and become increasingly stateless
or nationless as they operate above the nation-state and across national
borders. Consequently, the organisational practices of a
transnational corporation become less influenced by the original parent
company's enterprise culture. This globalising impact is not confined
just to large organisations; it exists in virtually every industry.
Hence, the role of a corporate diplomat should also include those
managers who perform an important integration function as gobetweens
of different company-wide projects which could well be
located in different parts of the world: for instance, managers who
function as a member of one group and the project leader of another
group. Such managers have to integrate horizontally within a cluster
of projects and to integrate vertically (upward and downward) by
representing the interests of different project groups within the
organisation at large. ABB's Global and Country Key Account Manager
is an example of this.
The corporate diplomats could also be trouble-shooters in staff
(not line) positions and perform ad hoc tasks across the boundaries
of a transnational corporation. These managers might, for instance,
have interfacing responsibilities along the supply chain and perform
a corporate diplomat function since they have to deal with the divergent
legal, regulatory and cultural norms and standards of a
transnational company's various international subsidiaries.
A typical example is found in Motorola's China operation. The
components to be shipped to China for final assembly and delivery
84
Challenges of the 21st Century for Leadership Qualifications
cannot be released by the manufacturing unit in the US until payment
has been received. While this practice might be common in the US, it
differs with the common practice in China that payments will only be
issued after the goods have been received and tested. Therefore, the
warehouse manager has to liaise with Motorola's finance department
as well as with Motorola's China-based sales manager in order to get
the shipment out to China. As the corporate diplomat in this instance,
the manager has to explain the corporate rules and to find ways to
accommodate local practices.
The corporate diplomat's role thus emerges within a multinational
company when integration takes place across professions, functions,
roles, tasks, and various geographic and cultural boundaries.
Corporate diplomats perform the integration function across geographic,
national and cultural boundaries. They are the ones who perform
the integrating function not only concerning the task domains,
but also concerning the informal domains so that shared meaning can
be created out of the mosaic of diverse cultural configurations of a
transnational company.
Linking Pin Role of New Public Managers
NPM means increasing decentralisation of decision making and a
closer orientation towards the needs of the citizen/customer. Public
managers need to understand the precepts of NPM and learn to perform
an integration role to keep the decentralised government functions
from fragmenting. This role is analogous to Likert's (1961) concept
of "linking pin", introduced as a qualification of the "principle
of supportive relationships" in which "the leadership and other processes
of the organisation must be such as to ensure a maximum probability
that in all interactions and all relationships with the organisation
each member will, in the light of his background, values and expectations,
view the experience as supportive and one which builds and
maintains his sense of personal worth and importance" (Likert, 1971:
286).
Likert's linking pin is essentially a go-between who serves the
function of integration. Likert was concerned with the level of productivity
and hence he related linking pins to high performing man-
85
Asian Journal of Public Administration
agers who functioned as effective integrators. He believed a manager
can only perform well if he successfully represents his group's interests
upward in the hierarchy. The linking pin is a member of one
organisational unit/group for which he serves as an ambassador. The
linking pin should integrate across organisational units and ensure
vertical linkages upward in the organisation. These ideas are increasingly
valid for government officials faced with the challenges of NPM.
Concluding Comments
Leadership models will further develop as we see further integration
of the world economy, which will force multinational companies to
be effective and efficient in different markets of the world. Leaders
of such globalising companies, whether from OECD or developing
countries, have to learn how to broaden their leadership competencies
in order to be successful in business and non-business environments.
In a similar way, many top government officials are faced with
the need to be more proactive and more open to the public in order to
better support their own national companies who depend on competent
government support for their multinational operations. This, in
turn, requires them to be more informed of the globalising influences
of the world economy and to be more sophisticated in dealing with
foreign business representatives, foreign government officials, and
representatives of standard-setting inter-governmenial institutions.
More and more cross-professional and cross-sector transfers of
leaders can be expected. At the same time, a growing number of top
managers working inside multinational companies need to know how
to act as corporate diplomats or representatives in many different
countries and businesses and to be "at home" in different countries.
Equally challenging is the role of government officials faced with
NPM reforms. They have to learn to discharge ever more complex
responsibilities, to enjoy and make use of an increasing level of autonomy,
to define goals, and to motivate civil servants who increasingly
are no longer attached to "iron rice bowl" expectations. To do
all this within the context of a more market oriented public administration,
the new public managers have to learn to focus less on day-
86
Challenges of the 21st Century for Leadership Qualifications
to-day operations and more on integration and cooperation within an
increasingly less bureaucratic public service. They have to serve as
linking pins within government and also increasingly between government
and external constituencies, especially citizens and economic
actors.
This growing need to be effective as a leader in multiple settings
(private and public), in increasingly larger numbers of different countries
(in the case of multinational companies), and in a constantly
transforming public service (as a result of NPM reforms) seems to
suggest the following:
• It will become less and less possible to rely on simple management
and leadership concepts. Tomorrow's business and government
situations will be changing at an ever-increasing speed. This
means continuous learning of new skills and knowledge and, concomitantly,
an unlearning of old recipes. Solutions which worked
today might be the problem tomorrow.
• Leaders have to learn to manage dilemmas and to accept that
many of tomorrow's challenges will mean that several solutions
might be possible or that, at best, different solutions have to be
kept alive throughout the increasingly complex process of modern
business management and modern government administration.
To use an analogy from theatre, leaders have to learn to
expand their repertoire and to include in their kit the know-how
of classical, modern to postmodern theatre in order to be effective
leaders today and potential leaders for tomorrow's uncertainties
(Saner, 1999).
• What is said here is also true for scholars of leadership development
and leadership training. Theories and training modules have
to reflect the increasing complexity of contemporary life and provide
support for leaders, but not anymore in regard to sure and
safe recipes which do not live up to the challenges of tomorrow's
complexities. Leadership models should become flexible enough
to accommodate tomorrow's certain uncertainties but still practi-
87
Asian Journal of Public Administration
cal and useful enough to provide help and orientation for increasingly
challenged leaders, be they in the private or public sector
or both.
Note
1. This article is a further elaboration of a presentation given by the authors
during an international conference held in Shenzhen in Januar\ 2000 organised by
the National School of Administration, Beijing, and co-organized by the Bureau of
Personnel of Shenzhen, the Institute of Administration of Shenzhen, and the
Shenzhen Assessment and Recommendation Center of Senior Executives. The topic
of the conference was "Challenges of the 21st Century to Leaders: Methodology of
Assessing Leadership Quality".
References
Fiedler, F E 1967. A Theory of Leadership Effectiveness, New York, McGraw-Hill.
Hofstede, G 1980. Cultures Consequences: International Differences in Work-Related
Values, London, Sage Publications.
Hofstede, Geert 1991. Cultures and Organizations: Software of the Mind, London,
McGraw-Hill.
Likert, R 1961. New Patterns of Management. New York, McGraw Hill.
Likert, R 1971. "The Principle of Supportive Relationships", in D S Pugh (ed),
Organisation Theory, London, Penguin Books.
Lussier, N 1997. Management Concepts, Applications, Skill Development, Springfield,
South-Western College Publishing.
Osborne, D & Gaebler, T 1993. Reinventing Government: How the Entrepreneurial
Spirit is Transforming the Public Sector. Reading, MA, Addison-Wesley.
Saner, R 1999. "Organizational Consulting: What a Gestalt Approach Can Learn
from Off-Off-Broadway Theatre", Gestalt Review, 3(1).
Saner. R, Yiu, L & Levy, P 1999. "Quality Assurance and Reforms of Public Administration:
New Developments in Switzerland", Paper presented at the annual
conference of the International Institute of Administrative Sciences, Sunningdale,
UK.
Challenges of the 21st Century for Leadership Qualifications
Saner, R, Yiu, L & Sondergaard, M 2000. "Business Diplomacy Management: A
Core Competency for Global Companies", Academy of Management Executive.
14(1).
UNCTAD (United Nations Conference Training and Development) 1998. World
Investment Report: Trends and Determinants. New York. Geneva.
Yiu, L& Saner, R 2000. "Determining the Effectiveness of Global Managers: Propositions
for Further Research. Human Resource Development Quarterly. 11(3).
Raymond Saner is President, Organisational Consultants Ltd, Hong Kong, and Lichia Yiu is
President, Centre for Socio-Economic Development, Geneva
89
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment