Abstract
The increasing importance and practice of strategic leadership can easily be seen as a rational and logical response to growing complexity and volatility in the task environments that organizations confront. Undoubtedly, this is partially true, but a strategic leadership response is also supported and encouraged by the cultural assumptions, beliefs, and values embedded in many Western societies. It is not without significance that strategic leadership has become so widely adopted in national cultures that legitimize individualism, power distance, risk-taking, and future-orientated behaviors. These cultural dimensions support and encourage strategic leadership, but what happens when this leadership model is applied, or imposed, in different national cultural contexts? This chapter tries to answer this question by considering national culture and the perception of the strategic leadership construct.
TopIntroduction
The growth of strategically-focused organizations – with the rising importance of strategic planning, strategic management, and strategic leadership – can be seen as a logical and rational response to the increasingly complex and chaotic task environment within which businesses operate. Of course, a strategically-focused approach is not something new: organizations have always been concerned with their future and with the best strategic ways of envisaging and reaching that future. However, a sea-shift in economic complexity and market volatility towards the end of the 20th century focused minds and placed renewed emphasis on strategy (Hitt, 1998). In the last 30 years there has been an unprecedented increase in economic discontinuities, blurring of the boundaries that had previously separated business sectors, growing ferocity in competitive markets, and economic and business landscapes reshaped by global opportunities and international challenges (Geissler & Krys, 2013; Hitt, Haynes, & Serpa, 2010). From a rational and logical perspective; it is hardly surprising that, as we moved into the 21st century, strategic leadership became the most discussed, researched, and advocated response for the complexities of the age (Boal & Hooijberg, 2000; Dinh et al., 2014; Vera & Crossan, 2004).
Rational and logical paradigms, however, set unrealistic boundaries for strategic reorientation and impose significant constraints on strategic leaders. The new economic and global landscapes are increasingly complex, chaotic, and turbulent – they require a higher degree of adaptive learning on the part of strategically focused organizations and more creative sense-making from their strategic leadership (Boal & Schultz, 2007; Marion & Uhl-Bien, 2001; Paarlberg & Bielefeld, 2009). The complex environments that are currently faced – and which will continue to be faced in the future – require strategic leaders to shift their focus from the static abstractions of business entities, which might be amenable to a simple logic of manipulation, to the more subtle dynamics of organizations peopled by real people, who operate under quite different assumptions and understandings. Truly adaptive strategic leaders are challenged to “navigate the unknown effectively [through] the abilities to anticipate, challenge, interpret, decide, align, and learn” (Schoemaker, Krupp, & Howland, 2013, p. 131).
The need for strategic leaders to develop more complex responses to human behavior is crucial, and a failure to do so can be disastrous. For example, mergers and acquisitions (M&As) are often prompted by a simple consideration of strategic logic; however, these “logical” ventures often flounder because strategic leaders fail to appreciate the significant cultural and people-centered challenges involved. For example, interviews with more than 100 senior executives involved in 700 M&As during the period 1996-1998, revealed that 83 percent of these strategically-justified initiatives produced no additional shareholder value, and more than half actually destroyed value (Kelly, Cook, & Spitzer, 1999). The cool, distanced, and rational logic of strategy does not guarantee optimal corporate advancement simply because it fails to appreciate the shifting dynamics, inherent paradoxes, and embedded subtleties of complex people-filled organizational and task environments (Smith, 2014; Smith & Lewis, 2011; Smith, Lewis, & Tushman, 2011).
When strategically-justified M&As falter it is usually because strategic leaders have failed to anticipate differences in organizational cultures, interpret and learn from them, and decisively implement programs of cultural integration (Bjorkman, Stahl, & Vaara, 2007; Lakshman, 2011; Shaver, 2006). This is true for domestic M&As, but it is doubly true for the international and cross-national M&As, where differences in organizational culture are compounded by those of national culture (Gill, 2012; Malhotra, Sivakumar, & Zhu, 2011; Perrault, 2013). Even as the M&A is being contemplated, strategic leaders need to appreciate that “employees’ reactions in the form of emotions, intentions, and behaviors varies across cultures” (Gunkel, Schlaegel, Rossteutscher, & Wolff, 2015, p. 405).
Key Terms in this Chapter
Strategy: An intended course of action designed to attain specific ends that are considered desirable or advantageous. Strategy is fluid and continuously revised. It is informed by past experience, present insights, and future expectations.
Globalization: The ongoing world-wide trend towards increased economic, financial, and trade integration across national boundaries. Globalization: (1) Recognizes the need for a relaxation of exclusively nation-centered and self-serving policies and perspectives; (2) Responds to a reconsideration of a world economy that is increasingly interconnected and interdependent; and (3) Promotes the unimpeded flow of labor, goods, and services in ways that enhance the growth and development of the global community without unduly harming its individual members.
Global Mindset: The informed and expansive appreciation of the inherent diversity and culturally mediated forces that characterize international markets, organizations, and strategies. A global mindset allows us to move beyond the limits of our pre-existing behavior and ethnocentric thinking and to function effectively with the difference and diversity that we encounter.
Leadership: The art of communicating a vision – which might initially seem distant and unattainable – and of inspiring, motivating, and empowering individuals to recognize, accept, and realize that vision.
National Culture: A distinctive set of values and assumptions generally held by members of a national group. These can include attitudes towards power-distance, masculinity-femininity, individualism-collectivism, and uncertainty or risk avoidance. National culture dimensions can be quantified and expressed as country-specific indices; however, it is important to remember that this is a statistical average and that there is considerable individual variance and overlap with other national cultures. National culture dimensions should provide guidance when communicating and interacting with members of that group, not to pre-judge or stereotype.
Culture: A set of discernible assumptions, attitudes, conceptualizations, and values possessed by members of a specific group that is transmitted through socialization and communication involving key symbols, narratives, stories, and a recalled past.