Carlos Slim-Leadership Styles and Personality

Introduction

The leadership styles of the successful business leaders have attracted many academicians. Especially the leadership styles of tycoons like the Russian monopolists and oligarchies (Kets De Vries, 2000). There are various researches that have tried to identify a link between personality traits and leadership style (Kornør & Nordvik, 2004; Bono & Judge, 2004). Further research has also identified a difference in leadership styles due to variances in culture of the leader (Hofstede, Deusen, Mueller, & Charles, 2002 ; Martínez & Dorfman, 1998). Another study specifically deals with the effect of personality traits on entrepreneurial leadership style (Zhao & Seibert, 2006). These researches show that there has been extensive understanding regarding the approaches towards identifying a leadership style and to the leader’s personality. In this paper, I will use these researches on leadership style to establish a link between the personality traits of a leader as identified through previous work, and link it to my present study wherein I will do a case study analysis of Carlos Slim.

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As we have seen earlier, the personality of Carlos Slim through the Big Five model of leadership has demonstrated that he appears to be low on extraversion and average on neuroticism. He is high on openness to experience and is low on agreeableness. Slim is high on conscientiousness. With this brief understanding, I will now present the problem statement for the study.

So the problem for the present study is to identify the leadership style of Carlos Slim using my understanding of his personality which is demonstrated using Big Five personality Trait theory. Thus, we divide the study into three sections. First, we will do a brief review of the literature and then identify the hypothesis that we can construct through our understanding of the literature. This will lead to a discussion of the various leadership styles that Carlos Slim demonstrated using his personality traits and his other works.

Literature Review

Personality of a person is thought to have a significant effect on the development of the person’s leadership style, especially that of an entrepreneur (Zhao & Seibert, 2006, p. 259). I use entrepreneurial leadership style as a main potent for our study as I believe that Carlos Slim’s empire has been developed from an entrepreneurial venture and thus requires understanding from standpoint.

Kornør and Nordvik (2004) have studied the correlation between personality traits of a person to the leadership behavior of the individual. They have used Norwegian leaders as their sample for the study and have used Big Five Personality Trait theory and factor and correlation analysis for the research (Kornør & Nordvik, 2004, p. 50). In their study, they identified three common factors which affect leadership style, viz. “looking for new possibilities,” “hard-working,” and “dealing with people”, which they believe affect the leadership style the most (Kornør & Nordvik, 2004, p. 53). Their study shows that individuals who have high degree of extraversion and are open to experience are open to Change (2004, p. 53). High conscientiousness in personality indicates that the person has their attention on getting things done (2004, p. 53). According to their study, extraversion and conscientiousness are the best predictors of leadership style (2004, p. 53). But van Eeden, Cilliers, and van Deventer (2008) found that is a leader uses transformational or transactional leadership style depends on his interpersonal style and social ethics. From this research, we come to our first hypothesis.

  • Hypothesis 1: Carlos Slim’s personality demonstrates a transformational leadership style.

Bono and Judge (2004) conducted a meta-analysis to understand the relationship between leadership personality and their inclination to become transactional or transformational leaders. They used the Big-Five model of personality and they were related to the three dimensions of transformational leadership i.e. charisma, intellectual ability and individualized consideration (2004, p. 903) and with three dimensions of transactional leadership i.e. “contingent reward”, “management by exception–active”, and “passive leadership” (2004, p. 903). Their study revealed that extraversion in character of a leader has a strong influence and most strongly correlates to transformational leadership characters (2004, p. 908). They believe that extraversion and its dimensions “dominance and positive emotionality” can be used as dimensions of extraversion while analyzing the character of a transformational leader (2004, p. 908). Thus, we reach our second hypothesis:

  • Hypothesis 2: As Carlos Slim did not have an extraverts’ personality, he was more of a transactional leader than a transformational leader.

Cultural differences affect leadership styles as it affects the goals of the leaders (Hofstede, Deusen, Mueller, & Charles, 2002 , p. 784). Goals affect the personality of the person (2002 , p. 787). Research has demonstrated that different leaders from different nations have different goals. So Hofstede et al. (2002 ) have shown that in Latin American countries the inclination of the leaders “tycoons” are “growth of the business, this year’s profits, continuity of the business, personal wealth, power, honor, face, reputation” (2002 , p. 793). Their study shows that it is distinctly different from US culture of doing business with a leader. From Hofstede et al.’s study we come to our third hypothesis.

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  • Hypothesis 3: Carlos Slim’s leadership style has the growth of the following characters of the business, personal wealth, power, and reputation.

Methodology

The methodology adopted for this research is case study analysis. A case study analysis is a valid qualitative methodology. In this research, we use this qualitative methodology to understand the leadership style and their dependence on personality traits through a case study model of Carlos Slim. I choose Carlos Slim as his story is intriguing and has not been studied so far. Further being the third richest man in threw world, he has made a journey from being a stockbroker to building a conglomerate singlehandedly. He has shown exceptional leadership and strength of personality in doing so. In this study, we thus use a case study approach to understand the leadership style of Carlos Slim.

Discussion

This section aims to discuss the various aspects of Carlos Slim’s life and demonstrate the validity of the hypothesis taken for the research. Here I will discuss each of the hypotheses taken and analyze them using case study methodology.

Hypothesis 1: Carlos Slim’s personality has been found to be one who is hard working. A conscientious person has a strong sense of direction and works very hard to achieve it. Carlos Slim is a person who does this. These people are conscious, self-disciplined, and tend to be neat in their work. Slim seems to be a person who represents these characters. Slim’s dedication to his business and his entrepreneurship venture has shown that he is a man dedicated to his goal. He is a tycoon who believes in building his company and works stringently to achieve his goal. His capacity to work hard and adhere to his goal can be best described through the following statement: “Slim, long known for his ability to spot undervalued companies and turn them into efficient, profitable enterprises, has often been called the “Warren Buffett of Latin America.” (Smith, 2007, p. 3). Thus, this indicates that Slim demonstrates a characteristic blend of hard work, dedication, and focus. Further, He is open to changes that occur in his business as well as life. One foremost example of this is his insistent anonymity from the media was removed once he featured as the richest man in the world in 2007: “… Slim only this year has given up a long habit of cultivating anonymity. He has even begun talking regularly to the press. Perhaps he realized his ascension to Forbes’ No.1 spot would fan public interest; perhaps he has grown less protective of his privacy as he retires and bequeaths his business interests to his children” (Winter, 2007, p. 36). This shows Slim’s acceptance to change and intention to change with need.

Further, there is emphasis that Slim has valued interpersonal relationships which have been demonstrated through his interactions with politicians and another business alias, for which he has been criticized to use his connections to meet his goals. His increasing use of interpersonal relationships has been demonstrated in his interactions with President Carlos Salinas: “…he exploited his close relationship with former President Carlos Salinas to acquire Telmex from the Mexican government in 1990” (Winter, 2007, p. 36). Apart from this Slim has been accused of being unethical by suffocating competition and utilizing interpersonal relations (Winter, 2007, p. 36). But he is ethical when it comes to utilizing the company’s money and the following austerity:

Described by some who have met him as disarming, austere, and even humble” (Winter, 2007, p. 36)

The famous Slim thrift-he used to show up for business meetings wearing a cheap calculator watch-extends across the entire company…One tenet translates into English as follows: “Maintain austerity in prosperous times (in times when the cow is fat with milk); it accelerates corporate development and avoids the need for drastic change in times of crisis.” (Mehta, Bergtraum, Neering, & Ruiz, 2007, p. 23)

This shows a contradictory character of interpersonal relationships as well as a person who is ethical not uses company’s money but to utilizes relations to meet his goals. Slim has a very strong sense of goal orientation which actually leads him to use his relations. This analysis shows that Slim has a very strong urge to get the job done, but in order to do so he often trespasses the ethical line. This shows that my first hypothesis that Slim is a transformational leader does not hold true as Slim works hard but wrongly utilizes his relations and uses unethical means to achieve his goals. This indicates that Slim does not demonstrate the characters of a transformational leader holding the first hypothesis wrong.

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Hypothesis 2: previous hypothesis proves that Slim is not a transformational leadership, but does that provide that he is a transactional leader? No. the second hypothesis has been taken to understand the same. Slim has demonstrated his character as an introvert. Slim’s earlier anonymity from the media and then his shows that his aversion to be an open book and deal with all. He kept his whereabouts, operations, dealings, and strategies a closely guarded secret. He seldom gave interviews or appeared before media. His workings were so secretive that he reached United States unannounced and quietly went about doing his business dealings (Winter, 2007, p. 36). His appearance before media is just a recent phenomenon after he has been stated as the world’s richest man; “Slim only this year has given up a long habit of cultivating anonymity” (Winter, 2007, p. 36). Clearly, this shows that Slim has an introvert character. Following Bono and Judge (2004) it can be stated that Slim being an introvert tends more to be a transactional leader than a transformational leader. Thus, I dub that Slim is a transactional leader, holding my second hypothesis to be true.

Hypothesis 3: cultural effect on leadership style of Slim is apparent through his business. Slim’s contention is to deal with profits which are seen through his company’s insistence on cost-cutting (Mehta, Bergtraum, Neering, & Ruiz, 2007, p. 23). His insistence on leading a simple lifestyle while working hard is shown through the following: “has gone out of his way to be understated. Other Latin American tycoons tend to ride around in black SUVs with tinted windows and security details, even when they’re abroad. On a recent trip to Washington, Slim rented a modest Ford sedan…” (Winter, 2007, p. 36). Another aspect of cultural influence is seen through Slim’s attitude towards philanthropy when he criticized Bill gates as Santa Clause: “Long scornful of charity—he once criticized Gates and others for acting like Santa Claus because they gave away too much money” (Winter, 2007, p. 36).

But his character shows a distinctly Latin American character when it comes to accumulating personal wealth. His personal wealth is at $59 billion (Winter, 2007, p. 35) and has majority shares in “at least 222 companies” (Winter, 2007, p. 36). This shows that he has a distinct character to collect wealth. He cares about his reputation and that is why Slim has undertaken to provide to the world a view of his life and business to the world:

When Slim granted an interview to USA Today in April, he made the reporter promise he would deliver to his editors an “improved” baseball box score design that Slim had specially created for the newspaper’s sports pages. Whatever his motives, Slim worked the media circuit like a Hollywood star” (Winter, 2007, p. 36).

Slim is a powerful man and likes being powerful. He utilizes it to gain his objective. His sense of power is shown when he states the following while discussing in his misplay with political allies to gain a deal: “Slim dismisses the whole controversy as irrational. “We won because we paid more,” he says, by about 8 cents per share” (Winter, 2007, p. 36). Slim has shown a great affinity towards having power at hand which is also shown through Slim’s giant conglomerate and economic power in Mexico (Winter, 2007, p. 37).

Thus, Slim’s character is heavily dependent on his cultural background. This finding holds true the third hypothesis, stating that culture has an influence on leadership style which has also been found by Hofstede et al.’ findings (2002 ).

Conclusion

Slim’s personality develops a transactional leadership style in him which is heavily inclined towards the cultural traits that have been instilled in him. Slim’s entrepreneurial leadership style still prevails with his holding most of the shares and following a family line of business. Further, he is a leader who is an introverted but hard-working and has low ethical sense. This demonstrates that Slim follows a transactional leadership style. Another finding that must be highlighted through this research is Slim’s stress on attaining power in business even at the cost of performance shows that he is more of a transactional leader than a transformational leader.

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Works Cited

Bono, J. E., & Judge, T. A. (2004). Personality and Transformational and Transactional Leadership: A Meta-Analysis. Journal of Applied Psychology Vol. 89 No. 5 , 901-910.

Hofstede, G., Deusen, C. A., Mueller, C. B., & Charles, T. A. (2002 ). What Goals Do Business Leaders Pursue? A Study in Fifteen Countries. Journal of International Business Studies Vol. 33 No. 4 , 785-803.

Kets De Vries, M. F. (2000). A Jpurney into the “Wild West”: Leadership Style and Organizational Practices in Russia. Organizational Dynamics (Spring) Vol. 28 No. 4 , 67-81.

Kornør, H., & Nordvik, H. (2004). Personality traits in leadership behavior. Scandinavian Journal of Psychology Vol. 45 No. 1 , 49-54.

Martínez, S. M., & Dorfman, P. W. (1998). The Mexican Entrepreneur. International Studies of Management & Organization Vol. 28 No. 2 , 97-124.

Mehta, S. N., Bergtraum, L., Neering, P. A., & Ruiz, L. (2007). Carlos Slim. (cover story). Fortune , pp. 22-29.

Smith, G. (2007). Carlos Slim’s Fat Fortune. Business Week Online , p. 3.

van Eeden, R., Cilliers, F., & van Deventer, V. (2008). Leadership styles and associated personality traits: Support for the conceptualisation of transactional and transformational leadership. 253-267.

Winter, B. (2007). How Slim got Huge. Foreign Policy vol. 163 , 35-42.

Zhao, H., & Seibert, S. E. (2006). The Big Five Personality Dimensions and Entrepreneurial Status: A Meta-Analytical Review. Journal of Applied Psychology Vol. 91 No. 2 , 259-271.

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