6.3 The GLOBE Framework

3. How are regions of the world categorized using the GLOBE framework, and how does this categorization enhance understanding of cross-cultural leadership?

A second important cultural framework, the Global Leadership and Organizational Behavior Effectiveness (GLOBE) project provides managers with an additional lens through which they can better understand how to perform well in an international environment. While the Hofstede framework was developed in the 1960s, the GLOBE project developed in the 1990s is a more recent attempt to understand cultural dimensions.⁸ The GLOBE project involves 170 researchers from over 60 countries who collected data on 17,000 managers from 62 countries around the world.

Similar to Hofstede, the GLOBE researchers uncovered nine cultural dimensions. However, basing their work on Hofstede’s cultural dimensions, it is not surprising to note that five of these dimensions are similar to those uncovered by Hofstede, namely 1) uncertainty avoidance, 2) power distance, 3) future orientation (degree to which society values the long term) 4) assertiveness orientation (masculinity), 5) gender egalitarianism (femininity), 6) institutional, and 7) societal collectivism (similar to individualism/collectivism). The only two cultural dimensions unique to the GLOBE project are performance orientation (degree to which societies emphasize performance and achievement) and humane orientation (extent to which societies places importance on fairness, altruism, and caring).

Similar to Hofstede, the GLOBE researchers categorized countries into clusters of countries with similar cultural characteristics. This categorization provides a convenient way to summarize cultural information for a larger number of countries and simplifies the task of the international manager attempting to manage effectively in countries within clusters. Because the clusters include societies with similar cultural profiles, similar cultural adaptations can be made. Although the GLOBE study identified ten clusters, we will discuss only the seven clusters most relevant for international managers: the Anglo cluster, the Confucian Asia cluster, the Germanic Europe cluster, the Nordic Europe cluster, the Latin America cluster, the Middle East cluster, and the sub-Saharan cluster. Table 6.6 shows these various clusters and the countries in each cluster.

To compare how the different clusters rate different forms of leadership, the GLOBE researchers considered six leadership profiles:

• charismatic type (degree to which the leader can inspire and motivate others)
• team oriented (degree to which the leader can foster a high functioning team),
• participative type (degree to which leaders involve others in decision-making)
• humane-oriented type (degree to which the leader shows compassion and generosity)
• autonomous (degree to which the leader reflects independent and individualistic leadership)
• self-protective (degree to which the leader is self-centered and uses a face-saving approach)

Table 6.7 shows how the various clusters rank these leadership types.

Table 6.7 provides further insights to understand how cultural differences affect preferences for leadership styles.⁹ Consider, for example, the Nordic Europe cluster, including Scandinavian countries such as Denmark, Finland, and Sweden. These countries have low levels of masculinity, low levels of power, and high individualism. It is therefore not surprising to see that individuals in such societies prefer leaders who are more charismatic and who demonstrate participative leadership tendencies. The least preferred style for this cluster is the self-protective leader, which is more representative of individualist cultures.

Countries in the Latin American cluster (which includes some of the emerging markets of Argentina, Mexico, and Brazil) tend to be more collective, have high power distance, and have high uncertainty avoidance. It is therefore not surprising that leaders who are successful in this cluster are those who make decisions collectively, who treat their subordinates with formality, and who display charisma.

The countries in the Middle East cluster (which includes countries such as Egypt, Morocco, and Turkey) tend to score high on uncertainty avoidance, high on collectivism, and medium on power distance. As a result, because of the high levels of uncertainty avoidance, subordinates are often reluctant to make decisions that involve risk, thereby explaining the high ranking for autonomous leadership style. Thus, it is not surprising that the Middle East cluster prefers leaders who are less participative. Furthermore, the preferred leadership style in this cluster behaves in a collective manner and tries to maintain harmony because of the high level of collectivism.

Although there are cultural differences between clusters, it is important to see that the clusters do share some similarities. For example, the charismatic leadership style is preferred in all clusters except the Middle East cluster. In addition, Table 6.8 shows that the humane-oriented leadership style is preferred in all but the Nordic Europe cluster.

In contrast, leadership styles based on individualist tendencies, such as the autonomous and the self-protective types, tend to be least preferred.

The GLOBE team also found that a number of traits, such as being honest, trustworthy, positive, and dynamic, were viewed positively worldwide and were endorsed irrespective of national culture. Similarly, leadership behaviors such as being a loner, egocentric, and dictatorial were viewed in a negative light by all clusters. Table 6.8 shows which traits are viewed as positive and which are viewed as negative by the various clusters.

Summary

In this section, we have learned about the various tools that managers can use to understand and prepare for cross-national differences and how they impact behaviors of employees across multinational corporations. We’ve also seen that there are many similarities among cultures. Relying solely on such frameworks to understand a culture can be misleading, however. In the next section, we discuss some of the dangers of cultural stereotyping and examine the need to be cautious and to take into account the interaction between a nation’s culture and its social institutions.

Concept Check

1. Describe how the GLOBE tools can be used by managers to prepare for cross-national situations.
2. What are the similarities and differences among clusters?

Managing Change

Negotiations in Malaysia and China

You are a rising star in your company, and your CEO asks you to accept an exciting and promising assignment in Malaysia and China, during which you will meet with representatives of your company’s local affiliates. In Malaysia, you are introduced to the company executives in a flashy ceremony. You understand that the affiliate’s CEO is named Roger, and you have a great time socializing with him. You even decide to show your fondness for him by calling him “Rog.” However, later you find that your host’s name is actually Rajah.

After your trip to Malaysia, you go to China. You are welcomed lavishly by the local affiliate’s executives and are invited to several important meals. Over the next few days, you seem to be spending time mostly at lunches or dinners. Whenever you try to discuss specifics of your products, you find that your hosts are more interested in eating and drinking. You attempt to provide your hosts with contracts that your company has drafted, but you are not successful.

Despite your reservations, you return home feeling strongly about your efforts. However, your CEO soon asks to meet with you. During the meeting, she mentions that neither the Malaysian company nor the Chinese company is interested in doing further business with your company. In fact, both companies decide to go with competitors. The CEO wants to know what happened, and you need to figure out what went wrong.

Discussion Questions

1. Discuss where the United States, Malaysia, and China stand on Hofstede’s cultural dimensions.
2. What are the implications of the above differences for how business is conducted in Malaysia and China?
3. How can these cultural differences explain why you were not successful? What should you have done differently?