Contingency Theory And Hofstedes Five Cultural Dimensions

Nowadays, organizations exist in the competitive business environment where there’s rapid development which lead to high failure rate and difficult to stand up among the strong competitive environment. Turbulent business environment caused lots of organizations to face bankruptcy; however, there are still many successful organizations which have great success through their hard work. For those successful organizations, the main objectives are to maximum their competitive advantage and increase their market shares in the market place. However, such aim cannot be accomplish without the combination of instrumental and conceptual knowledge in their management practices. In fact, every successful organization needs competent people who have the all- around knowledge of leadership.

Every business has a person to lead the organization to achieve success. The ability of this person to lead is essential to sustain the performance and growth of any businesses. Such person is sometimes seen as a charismatic leader, or even a competent manager can help to growth a business by manage the employees and operation effectively. In fact, the person who was seen as a leader of the organization is mostly the CEO of that organization, the decision and every single action that the CEO take will have massive impact on every single employee within the organization. The ability of a CEO to become a leader is essential in today competitive environment since CEO which has the ability to lead and create follower can create a vision for the organization and every people in that organization will be unite to achieve that vision. Mullins (2005) and Huczynski & Buchanan (2007) also pointed out the important of leadership existing in the organizations. Hence, this essay will focus on the instrumental and conceptual knowledge of leadership by comparing two leaders from different culture and situation.

1.0 Introduction to Leadership

Leaders are perceived as the heart of a business which inspire the whole organization and create vision for that particular business. Leadership is no longer a new word in the organization, but it is still a controversial word that many scholars concern with, because of the role we assume it plays in the organization is crucial. And there is always lack of the competent leadership in the society. In that case, lots of authors and scholars define the term of leadership through their understanding. In 1950, through long times study, Stogdill defined the term of leadership as “the process of influencing the activities of an organized group in its efforts towards goal- setting and goal achievement” (cited in Huczynski & Buchanan, 2007: p. 716). According to Robbins & Decenzo (2005: p. 240), leader may be defined as “persons with managerial and personal power who can influence others to perform actions beyond those that could be dictated by those persons’ formal (position) authority alone”.

Moreover, as leader in the recent year, their responsibility is coordinating the others and followers at most of the time. From goal focus to human behaviour focus, or from autocratic leaders to democratic leaders, they all demonstrated that leadership is more and more important for any organizations.

Leaders versus Managers

However, there are distinguishing between leaders and managers which we should realize before analysing the leadership within the organization. Some argue that manager is not a leader, but the roles of a manager require them to become a leader (Huczynski & Buchanan, 2007). As Robbins & Decenzo (2005: p. 244) suggest “not all leaders are managers, nor are all managers leaders”. There are differences between a manager and a leader, manager manage but a leader lead. Robbins & Decenzo (2005: p. 239) defined manager as “persons whose influence on others is limited to the appointed managerial authority of their positions to reward and punish”. Manager manage the rules, follow the procedures and manage everything according to the system and structure establish by the company, they manage the people by the power and authority they have, people are managed not because of the manager, it is because the authority and power that the manager have. However, some argue that leader can create follower and make people to believe without any power or authority, people are willing to follow the leader on their own behalf and will (Huczynski & Buchanan, 2007).

Thus, there are no clear line that separate a manager and a leader, a CEO can have the characteristic of both which make them more competences to manage and lead the company to a greater success. It is undeniable that in today competitive environment, both leading and managing role are critical success factor for a CEO to have in order to achieve greater achievement (Kyle, 2004; Kotter, 2001). As De Wit & Meyer (2004: p. 497) argue, “Every leader must perform some managerial functions, even though every manager cannot take a leadership role”. Wit & Meyer (2010) argues that:

the leader controls the allocation of the attention focus of the participants in the organization … in any organization where managers dominate, structured rules tend to influence the allocation of attention, but the leader will try to capture the attention focus of the participants so that their attention is allocated to the areas that the leader considers important.

Leaders to Discuss and Compare

This paper will discover two successful leaders Jeff Bezos from the west and Akio Toyoda from the east by comparing their leadership style and other aspects related to leadership in order to discover the differences of leadership in different culture and background.

Jeff Bezos from the West

“Jeff Bezos is the founder, president, chief executive officer and chairman of the board of Amazon.com” (New York Daily News, 2008). He founded Amazon.com in 1994, and launched in 1995. As a founder and CEO of Amazon.com, Jeff Bezos is a pioneer in e-commerce (Spiro, 2009). As shown in Fair (2002):

At the end of 1999, Amazon had raked in over a billion dollars in sales … in 2001, Amazon reported a fiscal loss of $1.4 billion, and had laid off over 200 workers in the last year … Instead of giving up, Bezos had an idea: recruit other companies to sell their products online through Amazon as well. The idea worked. Companies such as Target, Toys R Us, Old Navy, and many others have agreed to sell their items through Amazon. Although Amazon is not directly responsible for inventory through these companies, they do get part of the sales, creating a profit for all involved. Since the inception of the idea, Amazon is now back on its feet and remains one of the most popular online vendors in the world today.

Akio Toyoda from the East

According to Los Angeles Times, 2009:

Toyota tapped Akio Toyoda, grandson of the Japanese automaker’s founder, as president of Toyota … The U.S.-educated Toyoda, 52, is the first founding family member to take the helm at Japan’s No. 1 automaker in 14 years. He promised a reaffirmation of the company’s core principles, such as valuing ideas from the ranks — a management approach called kaizen, [also known as “Toyota Production System”] that has made Toyota’s production methods famous in industry circles around the world.

2.0 Comparison of Leadership Style and Culture

2.1 Participative Leadership Style and Charismatic Theory

Jeff Bezos is more like a charismatic leader that practiced participative leadership style. Although he faced some obstacle in the early years, he managed to overcome the entire problem and bring Amazon to become one of the most innovative companies in the e-commerce industry. He launched Amazon.com and being persistent in persuading his aspiration, one of the characteristic of leader as describe by Mullins (2005). Jeff Bezos has the criteria as a charismatic leader as he has the ability to create a vision for the future and make everyone within Amazon believe in his visions that make him a charismatic leader. “A vision should create enthusiasm, bringing energy and commitment to the organization” (Robbins & Decenzo, 2005: p. 246), while Ingbretsen (n. d.) argues that a charismatic leader has the ability to articulate a vision that touches an emotional chord with an audience. Jeff Bezos manages to lead people by making them believe that his innovative idea of online bookstore will be a success. He had prove his vision are achievable and people believe in him since he lead everyone in the company to work hard and achieve the goal and objective to become the innovative player within the e-commerce industry, and people believe in him since he managed to turn the situation of Amazon around. As Robbins & Decenzo (2005: p. 247) suggest, “Charisma leadership appears to be most appropriate when the followers’ task has an ideological component or when the environment involves a high degree of stress and uncertainty”.

However, based on the other perspective that goes against charismatic theory, Raelin (2003) suggest that follower will follow the charismatic leader is just because the publicity make the leader look so powerful and great. The fancy packaging with the help from media had made the charismatic leader look like a legend, a myth that everyone believe is true. Levesque & McNeil (2003, p. 215) strongly argue that “as followers interact, they begin to define a social reality of leadership representing special mythical qualities endowed only by very special people”. Raelin believes that “followers are predisposed to look for a cause and a leader for whom they can become true believers” (2003, p. 66).

The critics for charismatic leader are that without massive publicity, there will be no charismatic leader; people will not recognize that leader at all. If Jeff Bezos is not good at making himself high profile by attending conferences, posting his own comment or opinions on the web, attending public events, accept a lot of interview and so on which make him highly expose to the media and make publicity for himself and the company as well, there will be no quoted as a “charismatic leader” for him. He was being quoted as a charismatic leader as people know what he done through the media and all the fancy publicity which make him look as great as a hero. There are many leaders around the world, even if we do not know their names or what great things that they have done, it didn’t make them less an effective or great leader. Charismatic is not the only recognition for a great leader, people recognize the leader that they respect within their heart, even without the media spreading that leader legend, people will still respect that leader, even he or she is not a charismatic leader. Indeed, “some of the most significant CEO in the history of the visionary companies did not have the personality traits of the archetypal high-profile, charismatic leader” (Forster, 2005, p. 30).

2.2 Autocratic and Collaborative Leadership Style

On the other hand, Akio Toyoda practiced the autocratic leadership style and until now, the belief of autocratic leadership style still remain within the organization and most managerial level personnel practiced the same autocratic leadership style to manage their people. The main reason autocratic is effective at Toyota mostly based on the power-cultural that Japan always have. “Akio Toyoda as president of Toyota is reaffirming its commitment to collaborative culture and methods” (Rosen, 2009). Although being autocratic, Akio Toyoda practiced Genchi genbutsu or “see it for yourself” fits squarely into collaborative culture and methods of Toyota (Liker, 2004).

As leaders, Akio Toyoda suggests that manager needed to hold themselves accountable for all their decisions, which they required their people to execute very quickly. Collaborative leadership and autocratic style of Akio Toyoda doesn’t make him stay away from their unique “kaizen” production method, but to collaborate more with the implementation of lean production plant which was known as the “Toyota Production System” (Liker, 2004). Toyota Production System distinguished from its competitors and hard to duplicate since it is underpinned by just-in-time delivery (JIT); product quality; employee flexibility and the elimination of waste. This unique lean production system was buttressed by principle such as teamwork, continuous improvement, quality circles and employee development.

2.3 Traits Theory

Although both leaders practiced different leadership style, they have their own personality traits that made them a great leader. First of all, based on the instrumental knowledge, the traits theory also call traits- spotting is argued even in recent years, for the reason of that leader is nature born or make. Although, there are thousands of successful leaders existing in the world, all of them have their own traits which can be summarize as six leadership traits including ambition and energy, desire to lead, honesty and integrity, self- confidence, intelligence and job- relevant knowledge. Hence, instrumental knowledge indicated that “the traits are the distinguishing personal characteristics of a leader” through six leadership traits (Robbins & Decenzo, 2005: p. 256). However, not every leader has all of the personal traits instead of maybe some of them. And lots of examples tell us that leader with different traits also can obtain successful in every area. For instance, Jeff Bezos and Akio Toyoda have total different characteristics and personal traits, but both of them acquired big successful in the business world.

However, in contrast with the instrumental knowledge, the conceptual knowledge holds that it is difficult to identify whether any people is naturally born with trait, or they might just gain those ability through their life experience and learn from it. Besides, different countries which have different culture will need leader with different characteristic. Thus, every leader which is required in different country will need to have different trait. For example, people from the Western countries and people from the Eastern country will have different culture or ways of doing things (Hofstede, n. d.). Thus, different leadership style need to be implement in different countries, if that particular countries are afraid of uncertainty and have a high level of avoidance for confusion, such as China, Japan and others, the Autocratic style might be more appropriate. Therefore, there is no one universally accepted set of traits for all leaders. Every single individual are different, their ability and skills, knowledge and experience will be different as well and they will be accepted in the mind of different people which appreciate their traits.

2.4 Behavioural Theory

The most popular behavior style theory should be Blake and Mouton’s Grid which is based on the idea that different in leadership approach are a function of concern for people and concern for production emerged during the 1960s (Doyle & Smith, 2001). According to behavioral theory, it is easy to find out which style the leaders are belonging to by identifying the behavior. For example, leadership styles are another important aspect from the management process where different country will have different management style. Huczynski & Buchanan (2007) suggest that leader cannot use the same leadership style in their various locations around the world due to the cultural and behavior differences. Japanese leadership style differs from those in the U.S and the most common is that Japanese (Akio Toyoda) and U.S (Jeff Bezos) leader have a basically different philosophy of managing people. For example, Jeff Bezos is heavily individual-orientated and will praised individual with great performance in front of everyone. However, a Japanese saying is, “the nail that sticks out gets hammered down” which mean that no individual should stand out from the group. Giving out individual reward system in Japan could embarrass a Japanese worker and is not accepted at Japan. Western motivation models are culturally individualistic, applying them to a collectivistic culture is probably inappropriate. As Fujisawa, co-founder of Honda Motor Company stated, “Japanese and American management is 95% the same and differs in all important aspects” (Keeley, 2001, p. 18; Erez & Gati, 2004).

U.S leadership style is not appropriate at Japan where the Japanese employees are unable to accept or tolerate participative and individual orientated leadership style. Mintzberg & Westly (2001) suggest that Japanese worker dislike emphasize on individual performance and more toward group-orientation, and will felt appreciate if their leader can pay some attention to them at work and also concern a little bit about their personal life, like what Akio Toyoda did as a leader at Toyota. Akio Toyoda was more willing to allow poor performance to continue for a time so that those who were involved would learn from their mistake and to harvest loyalty among employees.

The example above clearly showed that there are clearly different ways to work in different culture and it is important for leader to understand such differences and manage the employees based on their own culture. Huczynski & Buchanan (2007) argues that leadership styles vary from company to company. There are many different styles of leadership that can bring success to an organization but organization has to make sure that their leadership style is right for the business. Which leadership styles to practice depend on many factors, but the most determine factors that has the biggest influence on management style will definitely be culture and behavior.

2.5 Contingency Theory and Hofstede’s Five Cultural Dimensions

Fiedler and his associates bring out the contingency theory which combines leadership style and situation during 1960s. In Fielder’s model, the good performance of the group depends on the interaction of the leadership style and the favorable situation, and a good leadership must be flexible and adaptable in order to appropriate different situation within the organization no matter how hard or soft situation (Huczynski & Buchanan, 2007). Thus, there is no single style of leadership which can match to all situations; even the most effective leadership behavior should depend on the situational factors.

Hofstede (n. d.) commented that:

Western countries have characteristics of high individualism, medium uncertainty avoidance, high masculinity, low to medium power distance, and low long-term orientation. [Thus, based on the situation, it is best for Jeff Bezos to practiced participative leadership style in USA. On the other hand, eastern countries such as Japan] was found to have characteristics of low individualism, high uncertainty avoidance, high masculinity, high power distance, and high long-term orientation

Hence, it is more appropriate for Akio Toyoda to practiced autocratic leadership style to suit the cultural and situation at Japan. In order to compare the different culture of USA and Japan, Hofstede’s Cultural Dimensions of USA and Japan will be as the following (Hofstede, n. d.):

Source: Geert Hofstede, Cultural Dimensions, www.geert-hofstede.com

3.0 Conclusion

In conclusion, it is undeniable that Jeff Bezos is a great CEO which made Amazon a famous and innovative online company globally. However, it is too narrow to believe that charismatic leader is everything since Akio Toyoda is still a great leader without being a charismatic leader. Jeff Bezos is a charismatic leader, it might be his style to be one, but charismatic leader style is not suitable for everyone or in different culture, background and country, it might not be essential. Therefore, there is no one universal accepted leadership style that is the most effective one. Great leader are not only charismatic leader, anyone who was seen as a great leader, no matter what his leadership style was, is nothing less an effective leader if they were not quoted as one.

Thus, culture differences play a significant role whereby leaders must consistently aware of the cultural change and react to the situation in order to lead their staff with the most appropriate type of leadership. Without acknowledging to the aforesaid, one will never be a good leader.