Leadership and Management Styles

This assignment provides a comprehensive overview of leadership styles, including distributed leadership, servant leadership, and charismatic leadership. It also examines the role of leadership in managing organizational transformation and learning. The assignment includes various references to research studies and articles that highlight the importance of leadership styles in shaping corporate culture and performance.

Running head: STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT 0
Strategic International Business Management

STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT 1
Table of Contents
Leadership Challenges in Multinational Enterprises.................................................................2
Leadership Styles that Promotes Open Culture.........................................................................3
Factors that hinder the development of Open Culture...............................................................5
Impact of Distributed forms of Leadership................................................................................8
References................................................................................................................................10

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Leadership Challenges in Multinational Enterprises
In today’s competitive business world, multinational enterprises focus on the significance of
effective leadership style of their executive officers in order to gain a competitive advantage.
Due to globalisation and digitalisation, operations and functions of multinational enterprises
are continuously changing. Professor Ed Schein suggested that effective leadership styles can
assist organisations in maintaining an open culture that is crucial to their success (Levy,
2015). The companies have to consider different factors that hinder the development of their
open culture. This essay will evaluate the importance of upward communication and senior
level behaviour in multinational enterprises based on an interview given by Professor Ed
Schein. This essay will analyse the article written by Paul Levy on CEO behaviour which was
upload by ‘The Conversation’ called “Has the CEO really changed or is it business as usual?”
This essay will examine different leadership styles that facilitate the open culture in
organisations and discuss the factors that are likely to hinder the development of open culture
in a firm. Further, this essay will discuss the potential impact of emerging of more distributed
forms of leadership styles in multinational enterprises.
Today’s business environment is continuously changing due to various aspects such as
globalisation, large number of competitors, impact of social media, emerging markets,
exponential rate of change, new technologies that are influencing businesses, and others. The
factors influence the business of multinational corporations along with affecting the role of its
senior leaders (Iles, Chuai, and Preece, 2010). Schein provided in his interview that executive
officers in multinational companies are facing new challenges which require them to change
their leadership styles. He emphasised the importance of upward communication and the
behaviour of senior leaders and how they affect a firm’s effectiveness. The Great man theory,
macho and hierarchical leadership theory has changed for more responsive, authentic,
inclusive and humble view of senior leaders in multinational firms. In today’s business
worlds, senior leaders face challenges such as leading and managing change, lack of honest
feedback, implementing innovative approach, lack of effective communication channels,
assessing training and development requirements, performance management, lack of honest
feedback, managing internal stakeholders and politics, and others (Javidan and Dastmalchian,
2009). In order to address these challenges, agility, flexibility to respond, speed of defining,
resilience, ability to adapt, and executing strategic priorities is crucial. These factors change

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the way MNCs are operating, and it creates new challenges for the leadership of senior-level
executives.
The way multinational corporations operate is continuously changing due to a shift from
management and control focus to the alignment focus on the firm. Organisations focus on
motivating their employees to improve their performance and achieve common corporate
objectives rather than forcing them to perform better. The importance of Corporate Social
Responsibility (CSR) is growing among modern corporations, and the senior level
management focuses on fulfilling firm’s corporate responsibilities (Groves and LaRocca,
2011). Organisations focus on improving customer relations rather than maximising their
profits in order to sustain their growth. The number of jobs on contract is increasing which
allow enterprises to cut their operations costs and increase their investment in the welfare
policies of their employees. In order to effectively address these challenges, senior level
management is required to improve their leadership styles. With the growing requirement of
skilled labour, the management focuses on improving employee retention rate which provides
them a competitive advantage over others (McDonnell, et al., 2010). For example, Google
has implemented an employee-centric approach in which it provides a number of benefits to
its employees such as free teaching, free food, flexible working hours, long maternity leaves,
and others to improve its relationship with them which improve its retention rate (Battelle,
2011). Therefore, the way MNEs are changing, leadership challenges associated with them
are changing as well.
Leadership Styles that Promotes Open Culture
Traditionally, the idea of business culture was often dismissed by the top-level management
and top executives considered it as unquantifiable, soft and a waste of valuable time.
However, industries and media landscape have changed the traditional approach, and the
management in modern corporations focus on implementing effective programs for
promoting open culture in companies. A number of studies have proved the importance of an
open culture in corporations and how management can use it to sustain the firm’s future
growth (Greenstein, 2012). Open culture is defined as a concept in which knowledge spread
freely among employees and the growth of the company comes from altering, enriching or
developing existing work based on collaboration and sharing (Ayman and Korabik, 2010).
Schein emphasised the importance of upward communication and how modern leaders did
not pay attention to it. Schein provided that effective management require a collaborative

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effort between employees and leaders (Levy, 2015). Employees assist managers in
understanding the key issues in the organisation that negatively affects their productivity and
leaders can implement appropriate strategies for tackling such issue. Open culture provides a
number of benefits to modern corporations such as improve communication, motivated
employees, effective relationships, lack of disputes, faster achievement of organisational
goals, effective change management, and others. As per Schein, managers can improve their
leadership styles to promote open culture in the organisation.
There are a number of effective leadership styles which promotes open culture in the
company, such as Servant, Charismatic, Laissez-Faire, Affiliative, Participative and others.
Levy (2015) provided that CEOs in the traditional modern of leadership such as Top-down,
macho and hierarchical are changing and more humble, inclusive, responsive and authentic
view of senior leaders is growing between enterprises. Servant leadership style focuses on
putting the needs of others first and helping them develop their skills in order to assist them
in performing as highly as possible (Mittal and Dorfman, 2012). Robert Greenleaf provided
in 1970 that a servant leader focuses on fulfilling the demands of employees first and serving
them rather than fulfilling his/her own interest. Effective implementation of servant
leadership style promotes open culture in a firm because employees feel that they are a curial
part of the company. Managers fulfill the requirements of employees which motivates them
to perform better and improve their overall performance (Melchar and Bosco, 2010). Schein
highlighted the importance of upward communication in his interview, and he provided how
open culture enable employees to share their opinions with the managers. Servant leadership
encourages employees to give their feedback to leaders because of availability of effective
communication channels (Pekerti and Sendjaya, 2010). Therefore, implementation of servant
leadership assists managers in establishing an open culture in the organisation which leads to
sustaining its future growth.
Another leadership style which promotes open culture in companies is Charismatic leadership
style. Charismatic leaders focus on inspiring the people around them and encourage them to
“do things together”. The attitude and personality of charismatic leader play a crucial part in
the establishment of an open culture since it inspires passion and action in others (Wilderom,
van den Berg, and Wiersma, 2012). Charismatic leaders are often visionaries, much like
pacesetters and innovators. They have clear vision regarding their goals and purpose which
motivates others to follow them as well. The inspiration creates a positive and open culture in
the company since employees are motivated to achieve common organisational objectives.

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Schein stated that it is necessary for leaders to forget their ego and work with employees to
find creative and innovative solutions for business issues which lead to sustaining their
growth (Avolio and Yammarino, 2013). Similarly, charismatic leaders focus on establishing
positive communication with employees in order to understand their issues and finding
creative solutions for addressing such problems which positively influence their performance.
On the other hand, Laissez-Faire leadership style focuses on providing very little guidance to
employees as long as they are achieving the organisational target (Rafiq Awan and
Mahmood, 2010). Instead of inspiring employees to perform better as per Charismatic
leaders, Laissez-Faire style focuses on delegating responsibilities and allowing employees to
take business decisions which establish a positive culture since employees feel like a part of
the company.
Daniel Goleman gave the concept of affiliative leadership style in 2002 which provides that
the leaders should build effective teams in which members feel connected to each other
(Hadjithoma-Garstka, 2011). The primary objective of affiliative leadership style is to
develop harmonious workgroup culture which helps employees in solving disputes. The
harmony between employees reduces the number of organisational disputes which resulted in
developing an open and positive work culture. Employees feel connected with colleagues and
managers which resulted in creating positive upward communication channels that lead to
improving their performance and sustaining firm’s growth (Chapman, Johnson, and Kilner,
2014). Similarly, Participative leadership style focuses on taking employees inputs during
decision-making process which resulted in establishing an open culture in the enterprise in
which employees feel confident to give their opinion regarding existing and future
organisational policies (Dorfman, et al., 2012). Participative leaders boost the morale of
employees because they provide them the option to contribute to the decision-making process
in the firm. Effective participative leadership style helps employees in accepting changes in
the organisations since they play a role in the process. Participative leaders promote
collaboration in work, encourage sharing of ideas, and conflict resolution which leads to
establishing an open culture in the enterprise (Gharibvand, 2012). It also assists in improving
upward communication in a company since employees share their views and opinions with
managers during decision-making process which creates an open culture in the organisation.

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Factors that hinder the development of Open Culture
There are a number of factors which hinders the development of open culture in corporations
that resulted in negatively affecting the performance of employees. Lack of effective open
culture increases various issues in the organisation such as workplace disputes, worker
absenteeism, discouraged employees, negative relationship between management and
workers, reduction in firm’s performance, lack of upward communication, difficult in
managing change, and many others (Mortara and Minshall, 2011). Managers are required to
assess various factors which negatively affect the development of open culture in the
company. Schein provided that one of the key factors which negatively affect the
development of an open culture in corporations is the ego of managers. Leaders who consider
themselves above their followers failed to establish an open culture in their organisations.
Employees did not feel connected to their leader which discourages them from
communicating their issues with managers. Egoistic behaviour of leaders negatively affects
the upward communication in the organisation because employees did not feel safe while
sharing their issues with the manager (Gebauer, Edvardsson and Bjurko, 2010). They did not
feel connected with the leader, and they fear that sharing their issues might negatively affect
their position the company. Schein stated that egoistic behaviour of managers negatively
affects the performance of employees and the company as a whole due to lack of upward
communication (Schein, 2012). He stated that management is a collaborative effort and
leaders require losing their ego in order to develop an open culture in the company which
positively influence the performance of employees and the corporation.
Lack of communication channels between employees and managers is another factor which
hinders the development of open culture in a company. Employees feel discouraged if they
are not able to share their issues or problems regarding the working environment in a firm.
Generally, senior level management develops policies for employees without involving their
opinion in the process (De Vries, Bakker-Pieper, and Oostenveld, 2010). Such policies did
not necessarily address the issues faced by employees because the management did not
involve their opinions or collect their feedback. Lack of effective communication policies
also resulted in increasing organisational disputes. A high number of conflict between
employees results in decreasing the productive performance of employees (Zulch, 2014).
Demotivated employees did not focus on fulfilling organisational goals; instead, it hinders the
development of open culture in the firm. Managers should focus on creating a working
atmosphere in which internal communication is easy and free flowing because it is ideal for

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culture creation. Difficulty in the establishment of an open culture arises when speaking to
one another become forced, un-enjoyable and difficult for employees. An open culture
requires that employees are able to freely share their thoughts and opinions regarding the
issues that they face in the organisation to senior level management. Effective culture can be
fostered and easily achieved through the recruitment and selection process.
Another factor which hinders the development of open culture in corporations is that no one
in the firm talks about the culture. The senior-level managers should discuss regarding the
internal culture in a company and focus on implementing policies that promote the
establishment of an open culture (Zehir, et al., 2011). The top-level executives should take
appropriate steps for developing and establishing a positive culture in the enterprise because
it cannot be established without their support. Poor discipline is another factor which
negatively affects the development of open culture in the enterprise. For example,
undisciplined environment makes it easy for unethical behaviour to prosper which discourage
employees in a firm. If the senior level management did not act in time to punish or remove
unethical employees, it will discourage ethical employees to perform better. Employees are
more likely to avoid organisational policies if they see that the management did not punish or
remove unethical employees for their behaviour (Sanchez, et al., 2013). It resulted in
increasing disputes between employees, and they are less likely to comply with
organisational policies which hinder the development of an open culture.
Hypercompetitiveness between employees also results in creating barriers for the
establishment of positive and open culture in a company. For example, if a firm’s culture
rewards its employees who pursue personal advantage rather than focusing on their
contribution to the performance of the entire team, it will result in hinders the development of
an open culture (Chen, Lin, and Michel, 2010). In this case, employees might overstep ethical
boundaries in order to get ahead of their competition which leads to increasing organisation
disputes. Friendly competition between employees assist in improving the performance of
workers, but when the competition gets too competitive, it negatively affects the development
of an open culture. Lack of empathy among employees and management is another factor
which adversely influences the development of an open culture in an enterprise. Human
interaction between top-level managers and employees is necessary since it is a fundamental
requirement to create relationships as well as culture (Baumeister and Masicampo, 2010). For
example, understanding and being empathetic towards employees and co-workers assist in
strengthening the relationship between them which resulted in creating an open culture in the

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enterprise. Managers should determine and understand these factors since they negatively
affect the development of an open culture in a company. They should implement effective
policies for addressing these factors in order to establish a positive and open culture in the
enterprise.
Impact of Distributed forms of Leadership
Distributed leadership is defined as mobilising leadership expertise at different levels in order
to generate more opportunities for building and changing capacity for improvement. The
concept of distributed leadership primarily concerned with the practice of leadership instead
of defining different leadership roles or responsibilities. It promotes organisational learning
which is crucial for developing employees’ capabilities and sustaining the growth of an
enterprise (Harris, 2011). Distributed leadership approach focuses on understanding the
influence of leadership and it affects different individuals in a firm. It equates with collective,
extended and shared leadership approach which assist in building the capacity for
improvement and change. Modern leaders focus on implementing distributed leadership
approach for addressing various organisational challenges and implementing an open culture
in the firm. The popularity of distributed leadership is growing among modern leaders, and
new forms of distributed leadership are emerging. For example, MacBeath (2005) provided
six different forms of distributed leaders which include pragmatic, formal, opportunistic,
cultural, strategic and incremental. Distributed leadership approach focuses on various factors
such as upward communication, open culture, leadership challenges and others in order to
implement policies for improving employees’ performance and sustaining firm’s growth.
Levy (2015) provided that modern executives are accepting the importance of new leadership
approaches, but the pace of change is considerably slow. Most leaders avoid implementing
these policies which resulted in negatively affecting the effectiveness of their leadership
style. Increase in a number of distributed forms of leadership resulted in positively affecting
the leadership styles of modern leaders. The impact of increase in distributed form of
leadership will enable managers to assess various leadership challenges faced by them
(Bolden, 2011). Such information will assist them in implementing effective policies for
addressing leadership challenges that assist in sustaining the firm’s future growth. Schein
provided that most of the senior executives did not understand the importance of
collaboration with employees and how it can assist them in effectively operating the
corporation. The behaviour of leaders also plays a crucial role in effective implementation of

STRATEGIC INTERNATIONAL BUSINESS MANAGEMENT 9
effective distributed leadership style. With new emerging forms of distributed leadership
styles, leaders will be able to effectively handle different issues faced by them while
operating a multinational enterprise. They will be able to effectively address the challenges
faced by them due to globalisation and digitalisation (Lumby, 2013). Therefore, emerging of
distributed forms of leadership will assist managers in improving their leadership style and
effectively addressing the challenges faced by them while operating multinational
corporations.
In conclusion, multinational enterprises are changing due to various factors such as changing
market requirement, fluctuating political factors, requirement of innovation, challenges
relating to employees, impact of social media and other. These factors create new leadership
challenges for managers such as managing organisational change, employee disputes,
performance management, lack of honest feedback, and others. There are various leadership
styles which facilitate the open culture as provided by Schein such as Servant, Charismatic,
Laissez-Faire, Affiliative, Participative and others. There are various factors which hinder the
development of an open culture in the enterprise such as poor communication,
hypercompetitiveness, disputes, lack of empathy, not providing importance to organisational
culture and others. Emerging distributed forms of leadership positively influence managers
since it assists them in establish a positive organisational culture, addressing leadership
challenges, and others. Managers should implement effective policies for improving their
leadership styles which result in improving employees performance and sustaining the
company’s future growth.

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