Leading Ethically in a Culturally Diverse Global Environment

Leading Ethically in a Culturally Diverse Global Environment

Laurie A. Yates
DOI: 10.4018/978-1-4666-7476-9.ch015
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Globalization has amplified interdependence among nations, creating an increasing need for leaders to function in a variety of cultures. Leaders face ever-expanding complexities and challenges, many of which include ethical dimensions. Lapses in ethical leadership in recent decades have resulted in the destruction of companies and harm to individuals, societies, and economies. Although many leadership theories have been offered to date, scholars and practitioners still search for answers to failed leadership. A recent theoretical construct of ethical leadership has been proposed that may offer a solution (Brown, Trevino, & Harrison, 2004; Trevino, Brown, & Hartman, 2003). This chapter addressed these issues by exploring ethical leadership as a viable theory that may be considered for use across cultures. Research consisted of interviews with experienced international managers who also held MBA degrees. The results led to recommendations for international managers in leadership positions as well as directions for future research.
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As the world shifts towards an integrated economic system, barriers to cross border trade and investment continue to decline. The world is no longer comprised of separate, protected national markets that look to their own citizens for trade and commerce. In the last few decades, growing economic interconnectedness has produced global businesses, virtual organizations, and migrating labor forces (Hill, 2011; Menipaz & Menipaz, 2011). Rapid technology advances and changing political systems have fueled the speed of globalization (Friedman, 2006). These change mechanisms have provided complexity to the evolving role of global business leaders. In this increasingly global environment, different cultures find themselves in much greater contact than in the past. This presents new leadership challenges and creates a need to understand various cultures (Javidan & Dastmalchian, 2009). Simultaneously, the twenty-first century witnessed failed leadership and the collapse of giant companies such as Enron, WorldCom, and Arthur Andersen. The financial mortgage crisis of 2008 presented a further sign of ethical lapses in organizational leadership. Ethical business practices and leadership are topics central to the discussion of these broken organizations and systems (Prilleltensky, 2000; Thomas, Schermerhorn Jr., & Dienhart, 2004).

These events and the changing landscape serve as a backdrop to the continual search for a universal theory of leadership. Many theories have been offered but one decisive definition has yet to emerge (Avolio, Walumbwa, & Weber, 2009; Ciulla, 1995; Northouse, 2013). A somewhat new model, ethical leadership, has been the source of recent study and research (Brown, Trevino, & Harrison, 2005; Trevino, Brown, & Hartman, 2003). This research furthers these endeavors by introducing national culture and global application in an effort to ascertain whether ethical leadership can meet the needs of the changing world economic environment.

The rise of global companies raises a question as to whether or not leadership theories can be applied universally across various cultures. International managers who function across national borders have little guidance on how to lead in different cultures (Hill, 2011). Leaders need to display skills that reflect adaptability and flexibility. Equally important, they need to establish effective communication and trust within their organizations. Leadership styles that foster trust can be an important factor in developing effective, high performing organizations (Johnson, Shelton, & Yates, 2012). New data on effective leadership practices and styles may be beneficial to global organizations.

This study examined the theory of ethical leadership and its cross cultural viability. Findings from the Global Leadership and Organizational Behavior Effectiveness (GLOBE) research project were used as a foundation upon which to test cross cultural leadership dimensions (Chhokar, Brodbeck, & House, 2007; Javidan & Dastmalchian, 2009; Javidan, Dorfman, DeLuque, & House, 2006). Ethical leadership theory was examined for compatibility with these dimensions. This study also sought to determine whether findings of universally desirable and culturally contingent leadership attributes from the GLOBE project paralleled two components of ethical leadership discovered through empirical research, transformational and transactional leadership. A qualitative study was conducted through interviews of international managers to obtain data on these questions. With the following research questions as guidance, this study sought to explore ethical leadership in a global context.

  • Research Question 1: Could ethical leadership be a viable cross cultural leadership style?

  • Research Question 2: Do the transformational and transactional dimensions of ethical leadership parallel universally desirable and culturally contingent leadership attributes respectively?

Key Terms in this Chapter

Culture: Shared motives, values, beliefs, identities, and interpretations or meanings of significant events that result from common experiences of members of collectives and are transmitted across age generations.

Organizational Leadership: The 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.

Ethics: Judgments about the rightness or wrongness of human behavior.

Ethical Leadership: The demonstration of normatively appropriate conduct through personal actions and interpersonal relationships, and the promotion of such conduct to followers through two-way communication, reinforcement, and decision-making.

Universally Desirable: Effective leadership characteristics and styles which are common across national cultures or borders.

Transformational Leadership: A style of leadership in which followers are motivated and empowered to accomplish more than originally expected and to reach their highest potential.

Culturally Contingent: Specific leadership characteristics and styles that are unique to national or area specific groups of people with identifiable customs and traditions.

Leadership: The influencing process of leaders and followers to achieve organizational objectives through change.

Transactional Leadership: Use of rewards and punishments to influence follower behavior and outcomes. Leaders convey desired expectations for performance standards and incentives in order to motivate followers to achieve specified goals.

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