Cross-Cultural Leadership: Enhancing Organizational Effectiveness

The assignment content discusses various studies and articles that investigate the concept of cross-cultural leadership, its impact on expatriate effectiveness, and the role of subsidiary support and cultural distance in enhancing motivation. The research explores how leaders can create alignment with their team members across different cultures, stimulate communication, and foster a positive global leadership approach.

CROSS CULTURAL
LEADERSHIP
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EXECUTIVE SUMMARY
Summing up the entire report, it can be said that it is very much essential for business
enterprise to understand cross cultural leadership. It assist company in surviving in different
cultural background and environment. In present report, Endon Engineering of UK is expanding
its business operations in Romania, however, due to cultural difference manager is overcoming
various issues.
In this report, explanation will be provided regarding different issues faced by manager.
In this respect, major issue are, language barrier, problem in understanding the culture and needs
of employees, lack of trust among workers for manager, dominance of local trade unions etc.
However, to overcome these issues, manager can take assistance of appropriate leadership style,
transformational leadership which will facilitate change among organization and behavior of its
members. Further, major responsibility of manager is to increase the output with 100 units,
change the single day shift to three shift system, and develop strong relationship with workers at
new entity. Furthermore, the organization can achieve its overall objective of reducing fault rate,
increasing profitability through changing shift timings by various factors crucial for the success.
Therefore, manager can give proper training, motivation to workers in Romania. In addition to
this, by integrating the culture the cultural gap between two countries, Romania and UK can be
bridged.
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1 Identifying and evaluating the organizational and cultural issues that could be faced by
manager of Endon PLC in Romania............................................................................................3
2 Identification and analysis of obstacles to change that might be faced by manager of Endon
company in Romania. .................................................................................................................6
3 Leadership styles for leading change .......................................................................................9
4 Justification of list of critical success factors for successfully engaging at new workplace
with change process...................................................................................................................10
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
The term cross cultural leadership refers to the manner in which leader perform their
functions and handle different situations in recently globalized market. With the expansion of
business in overseas market through integration of economies, it has become important for
leaders of organization to align with global environment and adjust with organizational members
of diversified cultures. The advantage of knowing cross cultural leader is that, it help in leaders
in communicating more efficaciously across culture and geographic boundaries (Boot, 2012). In
present report, various aspects of cross cultural leadership will be studied. In the provided case
study, Endon Engineering PLC a UK based company producing range of mechanical parts for
automotive industry is starting its operations in Romania. In this report, various cultural
obstacles that could be faced by manager of Endon while expanding in Romania would be
detailed out. Further, different leadership approach for leading change at the new manufacturing
facility will be explained.
TASK 1
1 Identifying and evaluating the organizational and cultural issues that could be faced by
manager of Endon PLC in Romania
Since, its inception that Endon Engineering PLC is a UK based company producing range
of mechanical parts for automotive industry. The company is trying to expand in Romania by
acquiring a giant manufacturing facility that would produce spare parts required for major farm
machinery manufacturer. Therefore, it is important for manager to understand the business
environment of UK. Further, the manager can also face various organizational and cultural issues
that can restrict the smooth functioning of Endon in Romania. Therefore, to function smoothly, it
is important for company, to understand cultural diversity. The description of which is as
follows:
Cultural issues
 Language issues: Since, Endon is UK based company, and the major language known by
manager is English therefore, the major problem that would be faced by him is regarding
language (Boot, 2014). From the provided case study, it is clear that manager does not
understand Romanian therefore, he wont be able to give proper directions to employees.
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Thereafter, there will be issues in building interpersonal relationship between manager
and employees resulting into communication gap.
 Trust issues: The other issued faced by manager of Endon will be regarding the
ethnicity. It has been identified that employees of acquired organization do not trust
foreigners hence , it will be difficult for manager to build trustworthy relationship with
employees. Another challenge that would be faced by manager in this respect will be
regarding affinity groups that could not be formed due to lack of trust among manager
and employees (Hudea, 2014). Further, it will be difficult for manager to understand the
needs of prospective acquired company and that cause threat of employee turnover.
 Issues in understanding the needs of customer's: The needs and preferences of
customers of Romania may vary from the customers of UK. Therefore, manager is
required to understand the needs and demands of customer's of host country. Further,
customs, traditions, beliefs etc should be considered importantly as they play an
important role in purchase decisions. Therefore, manager is required to adapt its offerings
to meet the various needs of prospective group of consumers (Stewart and Bennett,
2011). Modification in marketing: The failure of company in modification of marketing
activities as per the change in country may lead to downfall of Endon Engineering in
Romania. Therefore, manager is required to modify the marketing activities as per the
marketing requirement of Romania. Further, significant changes should be done in
branding and marketing strategy as per the marketing and sales needs of host country.
Organizational issues
 Delay of work duties: Since, UK is a large country and is better known for its swiftness
of business dealings and fast pace that is not same in Romania. The employee working in
UK are habitual of completing their work with hectic speed (Van Dyne, Ang and
Livermore, 2010). However, the workers of Romania do not approach their work duties
with high speed and sense of urgency. Therefore, it will result into delay of work, non
completion of work targets and slow production. Further, management of Endon PLC
wants to increase the production from 150 units to 250 so, its important for manger to
ensure speedy production of spare parts in acquired company.
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 Issues in switching shifts: It has been identified that Endon company is planning to
change shift from single day time shift to to 24 hour round the clock production using a
three shift system. Therefore, the manager may face resistance from employees as they
are accustomed to work in single day shift (Ayman and Korabik, 2010). Further, there
may be dissatisfaction among members resulting into increase in employee turnover and
causing negative image of Endon in Romania market.
 Dominance of Local trade union: The manager of company is not acquainted with
Romanian language so it is likely to face problems in understanding the needs of local
trade union. The local union may oppose the control of foreigner and restrict the
workforce in performing their functions in manner desired by company. Since, the
workforce of acquired company is highly influenced by the local trade unions it is
important for manager to build sound relationship with local trade unions (Eagly and
Chin, 2010).
 Improvement in quality assurance system: It is one of the major issue that could be
faced by manager of Endon Engineering PLC. Since, the wastage rate of faulty parts is
too much high, it is important for manager to improve quality assurance system. Further,
for conducting transformation process manager may require additional capital (Hudea,
2014). Therefore, the manager should identify various sources from where funds could be
availed. Thereafter, to reduce wastage rate, it is important for manager to give training
and development sessions to workforce. In this respect, manager is required to identify
the training needs, area of excellence of respective employees etc to give them proper
grooming and attain the stated goals of improving productivity and profitability. Change in legislative practices: The legislative policies and practices of UK and
Romania are different. Therefore, it is important for manger to consider rules and
regulations of Romania while working. This will further help manager in avoiding legal
actions against Endon Engineering PLC. This further requires in depth study of
regulatory framework of Romania by manager of company (Stewart and Bennett, 2011). .
Various responsibilities of manager
The described below are various responsibilities that manager of Endon Engineering PLC
is required to fulfill while working in Romania.
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 To increase the production from 150 to 250 units and thus enhance the profitability.
 To reduce the wastage rate of faulty parts by improving quality assurance system.
 To switch from single day time shift to three-shift system (Hammer, 2011).
 To learn Romanian by attending proper language training.
 To understand the needs of local employees and develop strong interpersonal relationship
with them.
 To develop healthy relationship with local trade unions to avoid their negative dominance
on workers of Endon Engineering in Romania.
 To develop a sense of urgency among the workers of newly acquired company.
 To build trust and sense of acceptance in the minds of workers so the misconception in
the minds of workers regarding foreigners could be overcome (Moran, Abramson, and
Moran, 2014).
 To examine the needs and preferences of target customers in Romania to provide them
services in better manner.
2 Identification and analysis of obstacles to change that might be faced by manager of Endon
company in Romania.
Obstacles to change
There are different obstacles to change that could be faced by manager of the company in
target country. The description of which is as follows:
 Resistance by employees: The company is trying to change the shift timings to 24 hours
round the clock production from a single day timing shift. Therefore, manager may face
resistance from employees regarding working in night shift etc. Further, the employees if
forced to work dis-satisfactorily may leave the organization and increase the turnover of
company (Vivian Tang, Yin, and Nelson, 2010).
 Boundary creation: The difference in culture, customs, traditions and beliefs etc of UK
and Romania may lead to creation of boundary between manager and employees.
Therefore, the workforce of acquired company may isolate the manager of Endon
Engineering from social exchange. Therefore, manager may not develop strong
interpersonal relationship with various work groups leading to unhealthy work
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environment. This may further result into higher absenteeism of workforce in the newly
acquired company (Jogulu, 2010).
 Attitude toward time: The lack of concern towards time and sense of urgency may
cause negative outcomes on the functioning of Endon Engineering in Romania.
Therefore, the manager if forced to work in haste may deteriorate the quality of work and
causing negative impact on the production process. Further, company wont be able to
attain the objective of increase in production with 100 units.
 Lack of knowledge of foreign culture: To implement the proposed changes effectively
within the newly acquired company, it is important for manager to understand the
foreign culture (Dunn, Dastoor and Sims, 2012). Therefore, lack of knowledge of foreign
culture may result into failure of marketing and other business operations in Romania.
 Difference in motivational orientation: To implement the change in production and
other processes successfully in the newly acquired company the manager is required to
make an appropriate use of motivational tools. However, the motivational orientation of
employees of UK and Romania may be different causing lack of motivation among
members. This may further cause resistance towards change among workforce (Chen
and et.al., 2010).
 Lack of understanding of needs of employees: Due to language barrier, manager may
be incompetent to understand the needs of employees. The non fulfillment of needs may
cause dissatisfaction among workforce. Therefore, they may avoid work or leave the
organization causing negative image of company in market. Therefore, the business may
fail in market. Lack of trust and cooperation: It has been identified that workforce of Romania are
suspicious towards foreigners therefore they may not cooperate manager in attaining the
overall objective of increase in productivity and profitability (Thorn, 2012). Therefore,
due to lack of trust, workforce may not agree to change in quality assurance and working
system.
Ways to overcome obstacles in change
Following are various methods through which manager of Endon Engineering can
overcome different obstacles.
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 Proper knowledge of Romania culture: To ensure smooth functioning of the company
in Romania, it is important for manger to develop sound understanding about custom,
beliefs, tradition etc of host country. Therefore, the acknowledgment of culture by
manger will help in developing sound shared understanding and sound cooperation with
the workforce of acquired company (Lakshman, 2013).
 Respect towards foreign culture: The manager is required to accept the cultural
differences between UK and Romania without any judgment. By ensuring the respect
towards culture of foreign culture, manager can inculcate the same feelings in the minds
of employees of host country (Irving, 2010). This will further help in developing trust and
cooperation among manger and workforce which is further beneficial for attaining the
production objectives.
 Team building: The manager can build various teams within the Endon Engineering
PLC. Therefore, by participating in various teams communication gap between manager
and workforce can be reduced. This will further help in identifying the needs and
preferences of employees which can use further used as motivational tool (Peltokorpi,
2010). This will also help in minimizing the resistance among workforce regarding
change in working hour and production process.
 Managing the difference: By managing the cultural differences the manager of Endon
Engineering can implement the proposed changes effectively by using proper strategy for
the acquired company (Muethel and Hoegl, 2010). Therefore, the issue of resistance
among workers regarding change can be easily overcome by managing the cultural
difference. This will also help manager in attaining the objective of increase in
production unit smoothly.
 Training and development session: By making effective use of training and
development sessions manager can improve the skills and abilities of workforce. Proper
training sessions will help in improving the speed of employees that is also important for
getting maximum quantity of spare parts with supreme quality (Thomas and Peterson,
2014). With this aspect, the production process can be improved without affecting the
quality of work.
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 Enhance the interpersonal relationship: It is important for manager to enhance the
interpersonal terms between manager and workforce which will further help in
overcoming the problem of boundary creation between management and workforce. In
this respect, various manager can participate in informal meetings and social gatherings
etc. Therefore, the manager will be able to understand the needs of employees in better
manner which is also helpful in minimizing the employee turnover (Youssef and Luthans,
2012).
3 Leadership styles for leading change
The leadership and motivational orientation of workers of Romania to that of UK may be
different. Therefore, it is important for employees to understand the needs and preferences of
employees. With this aspect, leader can stimulate workforce and get the work done in desired
manner. Since, company is planning to make changes in working pattern from single day time
shift to round the clock production, leadership will be very important. It will further help in
getting consent of workers regarding working in shift timings (Taras, Kirkman and Steel, 2010).
Further with the appropriate use of leadership, manager can induce workforce to develop a sense
of urgency and attain the work targets on time. Therefore, the employees can be stimulated to
work beyond their potential and assist in attaining the overall objectives of Endon Engineering
PLC. However, for leading the changes at newly acquired organization it is important for
manager to make appropriate selection of leadership style. In this aspect, manager can take
assistance of cross cultural leadership. This will further help in understanding the method of
working in globalized market. Further, manager will be able to adjust with the global
environment quickly and work smoothly with diversified range of employees in Romania (Shi
and Wang, 2011).
Broadly there are 5 types of leadership style, participative, transactional, autocratic,
transformational and laissez faire. In participative leadership style, leader ensure the participation
of organizational members in decision making process. However, the final decision in
participative leadership is made by leader himself. Thereafter, in autocratic style, the leader
solely takes major decisions without the consultation of employees. Further, in laissez faire style,
there is decision making authority is divided among workforce (Boot, 2014). Therefore, the
employees take decision on the basis of their own experience and understanding. Further,
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transactional leadership style the leader can use rewards and punishments on the basis of
performance outcomes. Therefore, the manager can use punishments for poor performing
employees and rewards for those performing exceptionally well. Thereafter, in transformational
employees, leader can use motivation and communication to attain the organizational goals.
In the context of Endon Engineering PLC, the manager can use transformational
leadership style. It will further involve greater level of communication between manager and
employees. This will also help in building strong relationship between manager and the
workforce. Therefore, to implement the transformational leadership, manager is required to
motivate employees (Richel, 2014). In this aspect, through training and development sessions,
motivation needs of employees can be determined. Therefore, employees can be induced to work
hard to increase the production units of company. Further, transformational leadership will
require greater involvement of management and workers to attain the overall objectives of
organization. This will also help in bridging the cultural gap of UK and Romania. To ensure
successful implementation of transformational leadership style, manager can delegate the little
important tasks to workforce. This will further boost the morale of employees and help in
reducing the problem of change resistance. Thereafter, transformational leadership will also
assist workers in working beyond their potential (Boot, 2012). Therefore, to implement
transformation leadership, manager can organize regular meetings that will help in minimizing
communication gap and build interpersonal relationship.
4 Justification of list of critical success factors for successfully engaging at new workplace with
change process
In order to engage successfully at new workplace, manager of Endon Engineering PLC is
required to determine critical success factors. They will further help manager in properly
engaging at newly acquired workplace with change process. They can be further determined as
follows:
 People and culture integration: The manager is required to understand the culture
compatibility and variation between culture of Romania and UK. Further, it is important
for manager to communicate the Vision and mission of Endon Engineering to employees
so that, they can understand the company in better manner. The culture integration will
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also assist in minimizing the culture difference and sense of suspicion in the minds of
employees (People integration, 2013).
 Rewards and performance optimization: The manager of company can link the
performance with rewards to stimulate individuals to attain personal goals aligned with
organizational goals. Therefore, workers producing maximum spare parts with fine
quality and lower wastage rate can be rewarded (Thomas and Peterson, 2014).. This will
further assist company in attaining the objective of enhancing the productivity with 100
units.
 Training and on boarding: In order to reduce faulty and wastage rate in Endon
engineering, training and development can be provided to workforce. This will also help
in identifying the skills of workforce so that work can be assigned as per the capability.
Therefore, specialization can be developed among workforce.
 Building relationship with trade unions: The manager is required to conduct meetings
with local trade unions to determine the impact of various business decisions and assess
their opinions on business matters (Muethel and Hoegl, 2010). Thereafter, manager can
use a balanced approach to attain objectives of organization while satisfying the needs of
local trade unions. This will also assist in minimizing the negative influence of union on
workers, threat of strike, lockout etc.
 Stakeholders engagement and communication: The manager can identify the needs of
stakeholders and take significant steps to meet those needs (Irving, 2010). In this respect,
manager can take help of deputy manager and communicate to respective stakeholders
through emails, telecommunications, meeting etc.
CONCLUSION
From the aforementioned report, it can be concluded that in order to execute business
functions smoothly in foreign country it is important for manager to take assistance of cross
cultural leadership. The manager of Endon Engineering can face change resistance from
workforce in Romania. However, the lack of knowledge of Romanian language can be biggest
barrier for manager. Thereafter, to implement change in acquired company manager can take
help of transformational leadership. Further, to attain the objective of increasing production and
reducing wastage rate, manager can use training sessions, linking performance and rewards.
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REFERENCES
Books & Journals
Ayman, R. and Korabik, K., 2010. Leadership: Why gender and culture matter. American
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Chen, G. and et.al., 2010. When does cross-cultural motivation enhance expatriate effectiveness?
A multilevel investigation of the moderating roles of subsidiary support and
cultural distance. Academy of Management Journal. 53(5). pp.1110-1130.
Dunn, M. W., Dastoor, B. and Sims, R. L., 2012. Transformational leadership and organizational
commitment: A cross-cultural perspective. Journal of Multidisciplinary Research.
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Eagly, A. H. and Chin, J. L., 2010. Diversity and leadership in a changing world. American
Psychologist. 65(3). pp.216.
Hammer, M. R., 2011. Additional cross-cultural validity testing of the Intercultural Development
Inventory. International Journal of Intercultural Relations. 35(4). pp.474-487.
Hudea, O. S., 2014. Cross-cultural Leadership. Manager, (19), p.45.
Irving, J. A., 2010. Cross-cultural perspectives on servant leadership. InServant Leadership (pp.
118-129). Palgrave Macmillan UK.
Jogulu, U. D., 2010. Culturally-linked leadership styles. Leadership & Organization
Development Journal. 31(8). pp.705-719.
Lakshman, C., 2013. Biculturalism and attributional complexity: Cross-cultural leadership
effectiveness. Journal of International Business Studies. 44(9). pp.922-940.
Moran, R. T., Abramson, N. R. and Moran, S. V., 2014. Managing cultural differences.
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Muethel, M. and Hoegl, M., 2010. Cultural and societal influences on shared leadership in
globally dispersed teams. Journal of International Management. 16(3). pp.234-
246.
Peltokorpi, V., 2010. Intercultural communication in foreign subsidiaries: The influence of
expatriates’ language and cultural competencies. Scandinavian Journal of
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Shi, X. and Wang, J., 2011. Interpreting Hofstede Model and GLOBE Model: Which Way to Go
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Stewart, E. and Bennett, M., 2011. American cultural patterns: A cross-cultural perspective.
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Taras, V., Kirkman, B. L. and Steel, P., 2010. Examining the impact of Culture's consequences: a
three-decade, multilevel, meta-analytic review of Hofstede's cultural value
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Thomas, D. C. and Peterson, M. F., 2014. Cross-cultural management: Essential concepts. Sage
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Thorn, I. M., 2012. Leadership in international organizations: Global leadership
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Van Dyne, L., Ang, S. and Livermore, D., 2010. Cultural intelligence: A pathway for leading in
a rapidly globalizing world. Leadership Across Differences. pp.131-138.
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Vivian Tang, H. W., Yin, M. S. and Nelson, D. B., 2010. The relationship between emotional
intelligence and leadership practices: A cross-cultural study of academic leaders
in Taiwan and the USA. Journal of managerial psychology. 25(8). pp.899-926.
Youssef, C. M. and Luthans, F., 2012. Positive global leadership. Journal of World Business.
47(4). pp.539-547.
Online
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http://leadershipwatch-aadboot.com/tag/cross-cultural-leadership/>. [Accessed on
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People integration., 2013. [Online]. Available through:<
https://www.pwc.com/us/en/transaction-services/publications/assets/pwc-ma-
integration-people.pdf>. [Accessed on 28th December 2015].
Richel, W., 2014. Leadership From a Global to a Cross-Cultural Perspective. [Blog]. Available
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