Contingency Theory and Global Leadership

Leadership is a challenging area that encompasses numerous influences, factors, beliefs, principles, and values. However, with the growing scope of international businesses and an ever increasing competition in the corporate field, the quality of global leadership becomes the defining feature of sustained profitability and brand recognition. According to Mendenhall, Osland, Bird, Oddou and Maznevski (2008), “we are witnessing the disappearance of the international dimension of business.

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For commercial and practical purposes, nations do not exist and the relevant business arena becomes something like a big unified home market” (p. 33). Today’s reality is that global leadership is not a sufficient category to guarantee success in global business. Because companies go global and virtual and leadership styles vary across situations and contexts, only contingency approaches to global leadership can have the potential to facilitate companies’ transition to a higher level of quality performance.

The importance of global leadership can be traced back to the emergence of international and, later, global business forms in the middle of the 1950s. According to Toyne and Nigh (1997), with the growing internationalization of businesses, many scholars became particularly interested in how corporate bodies could successfully operate in diverse cultures. Today, the importance of global leadership is taken for granted. Multinational companies like Coca-Cola and McDonald’s realize that leadership approaches and styles can vary greatly across business contexts (Lussier & Achua, 2012).

While some employees prefer self-centered, autocratic leadership approaches, others welcome the use of participative models of leadership and organizational decision making (Lussier & Achua, 2012). The support of global contingency models continues to grow, since business leaders in different countries and cultures display a variety of opinions regarding the role of corporate hierarchy, subordinates’ engagement in decision making, as well as the managerial modus operandi (Muczyk & Holt, 2008).

Needless to say, leaders who operate in global contexts face unique challenges. These challenges make them distinctly different from their colleagues, who operate at national and international business levels. One of the greatest challenges in global leadership is distance, which can occur in many different forms (Youssef & Luthans, 2012). Global leaders are faced with the challenge of physical and structural distance; the latter grows from variations in the dimensions of organizational structure, such as span of control, departmentalization, and others (Youssef & Luthans, 2012).

Psychological and social distance between global leaders and members of virtual teams should also be considered (Youssef & Luthans, 2012). It is not uncommon for global leaders to perceive substantial differences in power and status that undermine the development of closer, transparent organizational relations. No less unique to global leadership is the challenge of cultural differences. Youssef and Luthans (2012) write that cross-cultural differences predetermine the uniqueness of employee reactions to various organizational goals and decisions. At times, global leaders tend to minimize or deny the importance of cross-cultural differences, turning these cultural challenges into a major barrier to success (Youssef & Luthans, 2012).

Certainly, technologies bring members of virtual teams closer to each other. However, such technologies can be equally beneficial and damaging. Variations in technology use and proficiency present global leaders with another serious challenge (Kayworth & Leidner, 2002). Moreover, even in the presence of advanced technologies, communication dynamics can be distorted significantly, coupled with the unrealistic cultural expectations and technophobia (Kayworth & Leidner, 2002).

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All these situations justify the importance of contingency leadership in global contexts. The contingency approach implies that effective leadership cannot be universal (Sanchez-Runde, Nardon & Steers, 2011). At a global scale, contingency approaches entail the need to adjust leadership behaviors in ways that suit the unique local needs and environments (Sanchez-Runde et al., 2011).

Contingency approaches to global leadership imply that leaders treat themselves as being culturally embedded rather than equipped with the most traditional management and leadership features and skills (Sanchez-Runde et al., 2011). Contingency leadership crosses the boundary of culture, since global leaders are expected to be flexible and adjust their talents and approaches to the circumstantial needs of their followers. Because situational variables and culture have huge impacts on employee performance, many companies train their managers and leaders to collaborate with foreign followers, in order to make them successful globally (Lussier & Achua, 2010).

Contingency leadership remains one of the most heavily explored leadership constructs. Still, the current knowledge of its best practices is rather scarce. According to Northouse (2012), leaders should use a number of important criteria to judge the quality and complexity of various organizational situations and adjust their leadership styles accordingly.

In essence, every global leader must ask three questions related to (1) leader-member relations, (2) task structure, and (3) leader position’s power (Northouse, 2012). These questions should be asked in the order presented above, creating a good approach to managing leadership complexities at a global scale. The answers to these questions will point to the best intersection of various leadership decisions, increasing their benefits for the entire organization.

Despite the growing awareness of global contingency leadership, personal examples of this leadership style are but few. Contemporary organizations apply to the benefits of contingency leadership without thinking too deep into them. One notable example of such leadership practices is when a newly appointed leader of a large corporation develops a new global strategy that is tailored to the unique cultural needs and traditions of its international departments and affiliates.

Still, it is wrong to believe that such models of global leadership can benefit the organization in the long run, because it is not enough to expose followers to their own cultural values. Much more important is creating an atmosphere of multiculturalism and flexibility, since followers in geographically dispersed company departments must know how to cooperate and collaborate with their colleagues from other countries.

Contemporary leaders successfully adopt contingency leadership models to manage their global organizations. Lussier and Achua (2012) describe the figure of Indra Nooyi, CEO of Pepsico Global, a person of South Asian origin and a professional deeply committed to flexibility and situational changes in global leadership. Unfortunately, the ways in which Nooyi uses the contingency leadership model are rather unclear, except for the fact that she wears traditional clothes on holidays (Lussier & Achua, 2012).

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Here, the figure of Jack Stahl, former CEO at Revlon and Coca-Cola, also deserves attention. The distinctive feature of Stahl’s leadership is his ability to focus on situational details (Prewitt, 2007). Stahl refutes a popular assumption that, in the present-day world, contingency leaders cannot be physically aware of all situational variables. In Stahl’s view, the growing volumes of data facilitate the delivery of contingency leadership initiatives, while the leader’s task is to adjust the information systems to the unique needs of the organization (Prewitt, 2007).

Based on what has been discovered in this work, I would take a number of actions to implement the contingency leadership model. First, as Stahl recommends, I will rely on the information processing systems to get a full view of each particular organizational situation. Second, given that even the best information systems do not provide a complete picture of the leadership situation, I will apply to the benefits of employee engagement which, as I believe, will also serve as a valuable source of situational information.

Employee engagement is a relevant approach to finding and eliminating every possible mismatch between situation and leadership style, since employees are empowered to identify, inform, and eliminate these mismatches with the constant support of the global leader (Northouse, 2012). At the same time, I will use the contingency leadership criteria proposed by Northouse (2012) to decide whether any specific style will be suitable in problematic situations.

In conclusion, contingency leadership is a suitable and potentially advantageous approach to global leadership. It is no secret that global leadership is a challenging area, which encompasses numerous values, principles, traditions, and models. Therefore, global leaders are expected to be flexible and ready to adjust their leadership decisions and style to the unique situational requirements.

The current state of research offers a number of recommendations to apply contingency leadership in practice. Yet, because contingency is synonymous to uniqueness, no best practice can be regarded as “universal” in the best sense of this word. Information processing capabilities and employee engagement can become the two key sources of information about the situational variables influencing leadership decisions at a global scale. Nevertheless, global leaders can never expect to be fully aware of the most problematic organizational situations.

References

Kayworth, T.R. & Leidner, D.E. (2002). Leadership effectiveness in global virtual teams. Journal of Management Information Systems, 18(3), 7-40.

Lussier, R. & Achua, C. (2012). Leadership: Theory, application & skill development. Boston: Cengage Learning.

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Mendenhall, M.E., Osland, J.S., Bird, A., Oddou, G.R. & Maznevski, M.L. (2008). Global leadership: Research, practice, and development. NY: Taylor & Francis.

Muczyk, J.P. & Holt, D.T. (2008). Toward a cultural contingency model of leadership. Journal of Leadership & Organizational Studies, 14, 277-286.

Northouse, P.G. (2012). Leadership: Theory and practice. Thousand Oaks: SAGE.

Prewitt, M. (2007). The situational leader. Strategy and Business. Web.

Sanchez-Runde, C., Nardon, L. & Steers, R.M. (2011). Looking beyond western leadership models: Implications for global managers. Organizational Dynamics, 40, 207-213. Web.

Youssef, C.M. & Luthans, F. (2012). Positive global leadership. Journal of World Business, 47, 539-547.

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